This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on March 12, 1999, basing its approval solely on the facts and circumstances stated herein.

May a county supervisor's business contract with a city when the county board of supervisors appropriates certain funds to the city?

Your opinion request to the Office of the Attorney General dated February 10, 1999, was referred by that Office to the Mississippi Ethics Commission on February 16, 1999, as your request involves the above issue that concern the Mississippi conflict of interest laws.

State law restricts the Mississippi Ethics Commission to interpreting and issuing opinions on Sections 25-4-101 through 25-4-119, 1972 Mississippi Code Annotated and Article IV, Section 109, Mississippi Constitution of 1890. Therefore, this opinion does not address the Mississippi laws outside the Commission's jurisdiction nor the governmental entity's internal rules and regulations.

The pertinent conflict of interest laws to be considered here are:

Constitutional Section 109 states:

"No public officer or member of the legislature shall be interested, directly or indirectly, in any contract with the state, or any district, county, city, or town thereof, authorized by any law passed or order made by any board of which he may be or may have been a member, during the term for which he shall have been chosen, or within one year after the expiration of such term."

Code Section 25-4-103 (c), (f)(i)(ii), (g)(i)(ii), (h) and (p)(i)(ii)(iii) states:

"(c) 'Business' means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, holding company, self-employed individual, joint stock company, receivership, trust or other legal entity or undertaking organized for economic gain, a nonprofit corporation or other such entity, association or organization receiving public funds.

(f) 'Contract' means:

(i) Any agreement to which the government is a party; or

(ii) Any agreement on behalf of the government which involves the payment of public funds.

(g) 'Governmental' means the state and all political entities thereof, both collectively and separately, including but not limited to:

(i) Counties; and

(ii) Municipalities.

(h) 'Governmental entity' means the state, a county, a municipality or any other separate political subdivision authorized by law to exercise a part of the sovereign power of the state.

(p) 'Public servant' means:

(i) Any elected or appointed official of the government;

(ii) Any officer, director, commissioner, supervisor, chief, head, agent or employee of the government or any agency thereof, or of any public entity created by or under the laws of the State of Mississippi or created by an agency or governmental entity thereof, any of which is funded by public funds or which expends, authorizes or recommends the use of public funds; or

(iii) Any individual who receives a salary, per diem or expenses paid in whole or in part out of funds authorized to be expended by the government."

Code Section 25-4-105 (2) states:

"(2) No public servant shall be interested, directly or indirectly, during the term for which he shall have been chosen, or within one (1) year after the expiration of such term, in any contract with the state, or any district, county, city or town thereof, authorized by any law passed or order made by any board of which he may be or may have been a member."

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.

I have a question about conflict of interest law. Is it a conflict of interest for an elected county supervisor that appropriates county funds, in the form of gaming revenue and/or general fund revenue, to a city to do business with the same city through his personal business.

In addition to the above facts, the Commission's staff was advised that the county supervisor's business is a muffler shop. Also, the Commission's staff was advised that the general fund money concerns the county paying a share of the city's annual cost for mosquito control through an interlocal cooperation agreement. Additionally, the gaming monies are paid by way of local and private legislation that allows the board of supervisors, in their discretion, to pay the city a percentage of the gaming fees the county collects. The county pays the city $55,000.00 annually from the gaming fee monies and the local and private legislation restricts the city's use of the monies to expenditures for public safety, education and related purposes, public libraries or for any other lawful purpose designated by the board of supervisors. A review of the city's last available audit indicates that the $55,000.00 in gaming fees received from the county makes-up approximately 40% of the city's general fund revenues when special purpose grants, such as a block grant and a housing fund program, are deducted. The county has not designated any purposes for use of the gaming funds received by the cities other than those uses set forth in the local and private legislation. The city has in the past used approximately 50%, or slightly more, of its gaming monies for existing bond indebtedness purposes and the remaining percentage to fund a police officer position.

Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is as follows.

A county supervisor's business is not as such prohibited from contracting with a city as the city is a separate governmental entity from the county.

Notwithstanding the above, Constitutional Section 109 and Code Section 25-4-105 (2), both cited above, do prohibit a supervisor from having an interest, direct or indirect, in a contract with the state, or any district, county, city or town thereof, authorized by the supervisor's board during his term or for one year thereafter. [Emphasis added to bold text]

Furthermore, the Mississippi Supreme Court has ruled that an order of a public official's board that appropriates funds that directly or indirectly benefit the public official through a governmental contract is part of the contract authorization process. ⁽¹⁾

The county board of supervisors' discretionary decision to provide the gaming funding to the city in the amount of $55,000.00 annually is of such a significant amount that is does in effect authorize the city's contract with the supervisor's business.

This is true even though the city is currently using the gaming funding for bond indebtedness purposes and a police officer's position. The reason being the gaming monies, being approximately 40% of the city's available general fund revenues, supplant other monies that become available for other purposes including doing business with the supervisor's muffler shop.

Therefore, Constitutional Section 109 and Code Section 25-4-105 (2) will prohibit the county supervisor's business from contracting with the city when the city is receiving the discretionary gaming monies from the county board of supervisors.

Regarding the county general fund monies to be used in the city's mosquito control program, these monies are restricted to a very specific use and would not result in a violation of the conflict of interest laws in and of themselves unless the supervisor's contract with the city was related to the mosquito control program.

The requestor is cautioned to advise the county supervisor that a recusal or an abstention will not prevent a violation of Constitutional Section 109 and Code Section 25-4-105 (2). Even without a board member's vote, the authorization by the member's board nonetheless results in a contract in which the board member has a prohibited interest.
 
 
 
 

Ronald E. Crowe

Executive Director

1. See Frazier v. State , 504 So. 2d 675 (1987) and Cassibry v. State , 404 So. 2d 1360 (1981).