Agenda - Council - 04/08/1980 - Laserfiche WebLink

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PART I. CONTRACTS C-,eh:raY. Ruin With certain exceptions described below, Minnc.~.c:ta statutes forbid any public officer who is authorized to take part in the making of a sale, lease or. contract-to voluntarily have a personal financial ~nterest in the transaction or oersonally benefit financially from it. (M.5.471.87: 471.89.) Every violation of the provision, by a public officer is raade a.gross misdemeanor {M.5. 471.87) sub- jo. cling, tho officer upon conviction to a possible penalty.of a fine of $1,000 or imprisonment for not more than one year or both. (M.S. 609.03 (2).) " Thc Statutory City Code provides that no member of a councit of such a city may be directly 'or indirectly interested in any contract made by the CounCil ,except as provided in the law referred to aborn,.-(M.S. 412.311.) As is discussed in the fourth. Section of Part 1 of this memo, the city. cc, de sect. iOn. may apply· in some situations in which ~.5. 47]..87 is'not applicable. · ' · ' .. ManY.'h6 .me ·rule charters contain their °wn provis:;or;s on conflict of interest in contracts. Some of these go beyond the statute to include a.~4y cky official Within their scope even though the official has no 'part as such in the making of · ~'h~ contract. These charter provisions are generally valid in their application to situations to which thc statute does not apply; however, the excep- tions provided in M.S. 471,88.and described in · S~c next section apply to alt cities,.notwith~t.and-' ing the provisions of any other statute or',city charter. (M.S, 47~.881.) Because home rule pro- v~sions vary from city to city; they are not dis- .cussed in this memorandum except where specifi- cally indicated. Exceptions · '~here ara. important exceptions to the statu- tory prohibition. The governing body of any city (or ef may port authority, county, town, or school · district) may by unanimous ~ote, contact for goods or services with one of its interested officers in any of the following Cases: .. I~ The designation of a bank or saving~ assoc"tation as an authorized depository for public ..,und; and as a ~ource of borro.wing, i'4o restric- Hen applies to the designation of the depository or the deposit of public funds in the depository as Icng as thc funds are protected in accordance with M.S. Chapter l 18. The 0nly cop. dition attached is that the officer who has an interest in the bank or savings association must disclose that he is a director or emplo;,ee: and the disclosure must be entered in tits minutes of the governmental unit. This dis- closure is to be made when the bank or savings association is first designated or when the officer is :first elected if that occurs later. The disclosure s~rves as notice of .the interest and need not bo made again. " 2. The designation of an official news- paper or the publication of official matters there. tn. This applies only when the newspaper in which the officer is interested is the only one complying with statutoi'y or charter requirements relating .to the designation of publication. In that' case, the newspaper may be designated as the official ncw..qpaper and all official matters~ such as ordi- nances, the city financial statement, council proceedings, 'and election' notices may be pub- lished in it just as if no councilman has a financial interest in the newspaper. Even though a qualified newspaper published el.sewhere in the county circulr~tes generally in the city, the only newspaper published in the city must be.designated even if it is' owned by a council member. (M.S. 332.02~ Subd. 7; A.G. Op. 90aol, LMC 130d Feb. -1967.) job prbting such as printing city station- ery may be done by the c°uncil member-news- paper owner, however, only if it falls within excep- tion 4 or 7 discussed below.. [See'A.G. Op. 90a-'i., LMC 130d, Feb. 21, 1967.) 3. A contract with a cooperative assoda: tion.of which' the officer is a shareholder but not an officer or mar, ager. There is no similar excep- tion in the case .of contracts' with private corpora- lions. . 4. A contract for which competitive bids are not required by. law and where the amount does not exceed..$5000. The condition limiting this .'. exception to contracts for which competitive bids i are not required is now superfluous since under the uniform contracting law bids are never required on contracts of less than $5000. Therefore the exception applies to any contract not exceeding $5000, and is much broader than its predecessor, which only allowed the exception if the commo-. dity or se,wire contracted-for could not otherwise be obtained in the city. . ... : Where.t. he conditions of the statute are met and'the statutory procedure followed, there is no limit on the number of'tramactions of the same type that may be' made ina year... The $5,000 limit applies to each sepaiate transaction, not the total annual purchases from each official. Compare the seventh exception, which is dis- cussed below. The Attorney General has ruled that under this exception, the town board (or a city council) may contract with one of its members to serve