You are an elected, uncompensated member of the ABC Regional High School Committee (Committee). The ABC Regional School District (District) comprises the Towns of A, B and C. You represent the Town of A on the Committee. You are also the President of a construction company (Company). The Company, a Massachusetts-based corporation, is wholly owned by a holding company which in turn is owned by you and your brother (you own 50% of the holding company). The Company currently bids on many projects of various state agencies and most of the cities and towns in your county. The Company is interested in submitting a bid proposal for the removal of a fuel tank at the regional high school. The District's business manager will open and review the proposals and award the job to the lowest bidder. The Committee will ratify the contract award. You will not participate as a Committee member in this matter.
Given your position on the Committee, can the Company enter into a contract with the District?
No, unless the position of Committee member is designated as a special municipal employee position by the boards of selectmen of each of the member towns and you avail yourself of the exemption provided in G.L. c. 268A, s. 20(d).
As we have decided on this date in EC-COI-92-26, regional school committees will no longer be considered independent municipal entities for purposes of G.L. c. 268A, but rather instrumentalities of each member municipality. As a member of the Committee, you therefore are a municipal employee of each of the member Towns.
Section 20 prohibits a municipal employee from having a financial interest, directly or indirectly, in a contract made by a municipal agency of the same city or town, unless an exemption applies.
If the Company were to enter into a contract with the District, by virtue of your 50% ownership of the holding company, you would have a financial interest in a contract with a municipal agency (the same municipal agency in which you serve). See EC-COI- 89-22. Section 20 prohibits such a financial interest unless an exemption applies.
Under s. 20(b), a municipal employee is not subject to the prohibitions of s. 20 provided, among other things, that the municipal employee does not participate in or have official responsibilities for any of the activities of the contracting agency. In your proposed situation, this exemption would not apply because the Company seeks to enter into a contract with the same municipal agency for which you have official responsibility.
Section 20, however, contains several additional exemptions which apply only to special municipal employees. The position of regional school committee member may be designated as that of a special municipal employee, if so classified by vote of the board of selectmen or city council of each of the member municipalities.
This result follows the analysis of Commission Advisory No. 5, where we explained that local water and fire district employees (where the district was contained within the boundaries of a single municipality) could be designated by the single municipality's board of selectmen or city council as special municipal employees, even though the selectmen or city councillors might not be involved in any way with the activities of the district.
We now extend this analysis (Commission Advisory No. 5) to regional districts containing more than one municipality, with regard to the designation of their employees as special municipal employees. We recognize that this analysis is inconsistent with our opinion in EC-COI-87-2 where we held (in apparent contradiction to Commission Advisory No. 5) that members of a fire district prudential committee (located within a single municipality) were not eligible for classification as special municipal employees. However, we find that our current analysis is more appropriate in light of the recent decision by the Appeals Court in McMann v. State Ethics Commission, 32 Mass. App. Ct. 421, 428, n. 5 (1992). See EC-COI-92-26.
If members of the Committee are designated as special municipal employees, you may avail yourself of the exemption provided by s. 20(d). Under that exemption a special municipal employee is exempt from the prohibition of s. 20, if he files with the appropriate clerk a disclosure of his interest in the contract and if the board of selectmen approves of the exemption. Therefore, as a special municipal employee in your Committee position, you would need to file with the District Clerk a written disclosure of your interest in a contract with the District. Moreover, you would need to receive the approval of the boards of selectmen of each of the member towns.
To summarize, in order for the Company to enter into a contract with the Committee, you must obtain from the selectmen of each member town (a) the designation of Committee members as special municipal employees; and (b) an exemption from the boards of selectmen pursuant to s. 20(d).