Untitled California Attorney General Opinion

California Attorney General Reports·Decided May 16, 1986·No. 85-1105·Published

Opinion

TO BE PUBLISHED IN THE OFFICIAL REPORTS

OFFICE OF THE ATTORNEY GENERAL

State of California

JOHN K. VAN DE KAMP

Attorney General

_________________________

: OPINION : No. 85-1105 : of : MAY 16, 1986 :

JOHN K. VAN DE KAMP :

Attorney General :

:

CLAYTON P. ROCHE :

Deputy Attorney General :

:

________________________________________________________________________

THE HONORABLE CHARLES R. MACK, COUNTY COUNSEL, COUNTY OF YOLO, has requested an opinion on the following questions under the provisions of chapter 816, Statutes of 1985:

A member of a school district governing board, whose term of office commenced in December 1983, is married to a tenured teacher, whose employment with the school district commenced in September 1983. Does section 1090 of the Government Code prohibit the school district board from entering into an annual collective bargaining agreement with a teachers' association which represents the board member's wife either during his current term of office, or during a future term if re-elected? If not, may the board member participate in the making of such contract?

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CONCLUSIONS

Under the facts stated above, section 1090 of the Government Code literally prohibits a school district board from entering into an annual collective bargaining agreement with the teachers' association during the board member's current term of office. However, such agreement can still be entered into under the "rule of necessity."

If the board member is re-elected, section 1090 of the Government Code would not prohibit the collective bar- gaining agreement by virtue of the provisions of section 1091.5, subdivision(a)(6) of the Government Code.

During his current term of office, the board member should abstain from participation in the making of the annual collective bargaining agreement. He may, however, participate in its making during a future term of office if he is re-elected.

ANALYSIS

This request for our opinion arises from the enactment of chapter 816, Statutes of 1985. That statute made the general contractual conflict of interest provisions of section 1090 et seq. of the Government Code applicable to school board members. Prior thereto, they were governed by special provisions contained in the Education Code.1 Accordingly, section 33233 of the Education Code was repealed and re-enacted to read:

"The prohibitions contained in Article 4 (commencing with Section 1090) and Article 4.7 (commencing with Section 1125) of Division 4 of

1 School board members were, of course, and still are also subject to the conflict of interest provisions of the Political Reform Act of 1974, Government Code section 87100 et seq. That law, however, does not preclude the enactment of or application of nonconflicting additional conflict of interest provisions. (Gov. Code, § 81013.) Additionally, since 1955 (Stats. 1955, ch. 1125, 4), school board members have been subject to the sanctions provided for under the general contractual conflict of interest provisions. Government Code, section 1097 provided, and provides: "Every officer or person prohibited by the laws of this state from making or being interested in contracts, or from becoming a vendor or purchaser at sales, or from purchasing scrip, or other evidences of indebtedness, including any member of the governing board of a school district, who willfully violates any of the provisions of such laws, is punishable by a fine of not more than one thousand dollars ($1,000), or by imprisonment in the state prison, and is forever disqualified from holding any office in this state." (Emphasis added.)

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Title 1 of the Government Code are applicable to members of governing boards of school districts."

Education Code sections 35234 through 35238, which governed contractual conflicts of interest, were repealed.2

Both the California Supreme Court and this office have had the occasion recently to set forth the general provisions and principles governing the operation of section 1090 et seq. of the Government Code. (See Thomson v. Call (1985) 38 Cal.3d 633; 67 Ops.Cal.Atty.Gen. 369, 375-378 (1984); 66 Ops.Cal.Atty.Gen. 156 (1983).) Reference is made to those opinions for a discussion of those principles. Suffice it to say at this point that section 1090 et seq. of the Government Code prohibits any public officer or employee from having any financial interest, direct or indirect, in any contract made by him in his official capacity, or by any board or commission of which he is a member. Excepted from the strictures of this rule are certain "remote interests" set forth in section 1091 of the Government Code and certain "non-interests" set forth in 1091.5 of that code. Where the section 1090 prohibition is applicable, the prohibition acts as an absolute bar to a board or commission entering into the prohibited contract. This is true even if the interested board member completely abstains from any participation in the matter. The one exception to this is if, under the particular circumstances of the case, the "rule of necessity" can be applied. Contracts made in violation of section 1090 are generally void.3

2 Similar changes were made to the parallel provisions applicable to community college district board members contained in the section 72000 series of the Education Code. Section 1125 et seq. of the Government Code governs "incompatible activities" of officers and employers of local agencies. 3 Thomson v. Call, supra, 38 Cal.3d 633 is an excellent example of the manner in which the courts strictly enforce section 1090. In that case Call, a city councilman, was one of the parties to a multiparty transaction with the city whereby a developer agreed to acquire property and donate it to the city for park purposes in exchange for favorable rezoning and the issuance of use and building permits for its development project. The developer acquired Call's property for $258,000.00 for conveyance to the city, which the court characterized as Call having actually sold such property to the city, using the developer "as a conduit." (Id., at p. 646.) The court voided the transaction; permitted the city to retain title to the property; and also required Call to forfeit the $258,000.00 purchase price to the city. The court noted, after having reviewed the authorities: " . . . As we have seen, civil liability under section 1090 is not affected by the presence or absence of fraud, by the official's good faith or disclosure of interest, or his nonparticipation in voting; nor should these considerations determine the civil remedy. (Id. at p. 652.)

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The repealed provisions of the Education Code were to some degree less stringent. Thus, under prior sections 35234 and 35235 of the Education Code, a school board could enter into a contract despite the interest of one of its members if the contract was "just and reasonable", full disclosure had been made publicly by the board member in advance, the contract was not with the board member himself, and his vote was not necessary.4

In relatively recent years both the courts and this office have examined in detail the application of prior sections 35234 and 35235 (then §§ 1174 & 1174.5) of the

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