01-08-2024 CC Agenda Packet - work session

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RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 6/8/2022 Elected Officials and Council Structure and Role Chapter 6 | Page 12 I. Conflicts of interest There are two types of conflicts of interest that a council member may encounter: those involving contractual decisions, and those involving non- contractual decisions. 1. Contracts Minn. Stat. § 471.87. Minn. Stat. § 412.311. See LMC information memo, Official Conflict of Interest, for more information about the exceptions. Public officers are generally prohibited from having a personal, financial interest in any sale, lease, or contract they are authorized to make in their official capacity. There are limited exceptions to this law. City council members, who knowingly authorize a prohibited contract, even though they do not benefit from it, may be guilty of a crime. The council member who would benefit from the contract could also be guilty of a crime if that person entered into it knowing it was prohibited. A.G. Op. 90-E-5 (Nov. 13, 1969). A.G. Op. 90e-6 (June 15, 1988). The attorney general has advised that the conflict-of-interest law applies to any council member “who is authorized to take part in any manner” in the making of the contract. Simply abstaining from voting on the contract is not sufficient. The attorney general reasoned that if the Legislature had only wanted to prohibit interested officers from voting on the contract, it would not have used the word “authorized.” 2. Non-contractual situations See LMC information memo, Official Conflict of Interest, for more information on non- contractual conflicts of interest. There are also situations where council members may find that they have an interest in a non-contractual decision the council will make. This type of interest does not have to be of a financial nature. These non-contractual matters may include such things as council decisions on zoning, local improvements, and the issuance of licenses. Although not generally prohibited by state law, an interested council member most likely should abstain from participating in the council discussion and from voting on these issues. J. Incompatibility of offices State v. Sword, 157 Minn. 263, 196 N.W. 467 (1923). Kenney v. Goergen, 36 Minn. 190, 31 N.W. 210 (1886). Whether a city official can also serve the city or other government entity in some other capacity is a complicated issue. State laws generally do not prevent a person from holding two or more government positions. However, without specific statutory authority, government officials cannot hold more than one position if the functions of the positions are incompatible. 15