This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
CONFLICTS OF INTEREST -- Purchases and Sales (purchases of highway related products from company owned by a member of a town board of assessment review)
REAL PROPERTY TAXES AND ASSESSMENTS -- Board of Assessment Review (purchases of highway related products from company owned by a member of a town board of assessment review)
GENERAL MUNICIPAL LAW §§ 800 (3), 801, 803: A member of a town board of assessment review who is the sole proprietor of a company that sells highway related products would have an interest in contracts between the company and the town to sell products for use by the town highway department. That interest would not be prohibited. The board member, however, would be required to disclose the interest in accordance with General Municipal Law § 803.
You ask whether a member of a town board of assessment review who is the sole proprietor of a company that sells highway related products would have a prohibited interest in a contract of his firm to sell products for use by the town highway department.
Article 18 of the General Municipal Law (§§ 800 et seq.) contains provisions that relate to conflicts of interest of municipal officers and employees, including town officers and employees (General Municipal Law § 800 [4], [5]). Pursuant to General Municipal Law § 800 (3), a municipal officer or employee has an "interest" in any "contract" with his or her municipality if, among other things, the officer or employee receives a direct or indirect pecuniary or material benefit as a result of that contract. A "contract" for this purpose means any claim, account or demand against or agreement with the municipality, whether express or implied (General Municipal Law § 800 [2]), and would include purchases of commodities by a town (see e.g. 2006 Ops St Comp No. 2006-11, at 32).
Unless an exception set forth in General Municipal Law § 802 applies, an interest in a contract is prohibited if the officer or employee, individually, or as a member of a board, has any of the following powers or duties: (a) to negotiate, prepare, authorize or approve the contract or approve payments thereunder; (b) to audit bills or claims under the contract; or (c) to appoint an officer or employee who has any such powers or duties (General Municipal Law § 801). If an officer or employee has, will have or later acquires an interest in a contract or other agreement, the nature and extent of that interest generally must be disclosed in writing to his or her immediate supervisor and to the governing body of the municipality as soon as he or she has knowledge of the interest or prospective interest (General Municipal Law § 803 [1]). The written disclosure must be included in the official record of the governing body's proceedings (id.).
As sole proprietor of the contracting firm, the board member would have an interest in contracts between the firm and the town (see 2008 Ops St Comp No. 2008-2). The powers and duties of a board of assessment review, however, do not involve the negotiation, preparation, authorization or approval of contracts for the purchase of products for use by the town highway department, the audit of claims under those contracts, or the appointment of individuals having those functions (Real Property Tax Law, article 5, title 1-A, § 522 et seq.; compare e.g. 1992 Ops St Comp No. 92-43, at 109). Therefore, the board member's interests in the highway purchase contracts are not prohibited. Disclosure of those interests in accordance with General Municipal Law § 803 (1) would be required. 1
Accordingly, a member of a town board of assessment review who is the sole proprietor of a company that sells highway related products would have an interest in contracts between the company and the town to sell products for use by the town highway department. That interest would not be prohibited. The board member, however, would be required to disclose the interest in accordance with General Municipal Law § 803.
March 13, 2012
David C. Schubel, Esq., Attorney at Law
Town of Yates
1 Although not raised in your inquiry, a member of a board of assessment review is also required to disclose any direct or indirect interest in any property for which a complaint is filed with the board, in accordance with Real Property Tax Law § 523(3).