Court Opinion

ID: 4127352
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:25:33.546001+00
Date Added: 2024-06-11T14:33:32.232234
License: Public Domain

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?

                                            1

                                                                                  85-1105

                                       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.)

                                                2

                                                                                         85-1105

       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.)

                                                3

                                                                                         85-1105

             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

   4
      Section 35233 provided: "No member of the governing board of any school district shall be
interested in any contract made by the board of which he is a member."
    Section 35234 provided:
         "Except as provided in Section 35235, no contract or other transaction entered
    into by the governing board of any school district is either void or voidable under the
    provisions of Section 35233, nor shall any member of such board be disqualified or
    deemed guilty of misconduct in office under said provisions, if the circumstances
    specified in the following subdivisions exist:
         "(a) The fact of such interest is disclosed or known to the governing board and
    noted in the minutes, and the governing board thereafter authorizes, approves, or
    ratifies the contract or transaction in good faith by a vote sufficient for the purpose
    without counting the vote or votes of such interested member or members, and
         "(b) The contract or transaction is just and reasonable as to the school district at
    the time it is authorized or approved."
    Section 35235 provided:
         "The provisions of Section 35234 shall not be applicable if the circumstances
    specified in any of the following subdivisions exist:
         "(a) The contract or transaction is between the school district and a member of the
    governing board of that district.
         "(b) The contract or transaction is between the school district and a partnership or
    unincorporated association of which any member of the governing board of that
    district is a partner or in which he is the owner or holder, directly or indirectly, of a
    proprietorship interest.
         "(c) The contract or transaction is between the school district and a corporation in
    which any member of the governing board of that district is the owner or holder,
    directly or indirectly, of five percent (5%) or more of the outstanding common stock.
         "(d) A board member is interested in a contract or transaction within the meaning
    of Section 35233 and, without first disclosing such interest to the governing board at
    a public meeting of the board, influences or attempts to influence another member or
    members of the board to enter into the contract or transaction."

                                              4

                                                                                      85-1105

Education Code with reference to possible conflicts of interest where a school board
member's spouse was a certificated employee of the school district.

              Thus, in Coulter v. Board of Education (1974) 40 Cal.App.3d 445, the
court held that then sections 1174 and 1174.5 permitted a school board to unanimously
vote to increase the salary and benefits of all school district employees despite the fact
that one board member's spouse was a tenured teacher. The court concluded that all
conditions requisite to a finding that the transaction was "just and reasonable" under the
Education Code had been met. The court also held that the conflict of interest provisions
of the Education Code could constitutionally apply and prevail over the more general
provisions of section 1090 et seq. of the Government Code.

              Thereafter, in 61 Ops.Cal.Atty.Gen. 412 (1978) this office was asked (1)
whether a school district board member could participate in contract negotiations with an
employees' bargaining unit to which his spouse belonged; (2) whether the answer would
be different if the spouses had agreed to transform the contract benefits into separate
property; and (3) whether the answer would be different if the spouse were a certificated
as opposed to a noncertificated employee.

              Accordingly, in 61 Ops.Cal.Atty.Gen. 412 (1978) we were faced with the
question as to the effect of Coulter v. Board of Education, supra, 40 Cal.App.3d 445 on
prior opinions of our office. We summarized the pre-Coulter law as follows:

             "Prior to 1974 this office has held that contracts or other transactions
      between a school district and a board member's spouse would fall within
      the proscription of the Education Code conflict of interest provisions. This
      was predicated upon the community property interest of the board member
      in the spouse's contracts, and the proscription found now in section 35235,
      subdivision (a), previously sections 1011.2 and 1175, and subdivision (a)
      thereof. Thus, in 26 Ops.Cal.Atty.Gen. 281, 282 (1955), we held that the
      following contracts or transactions would be prohibited and void by virtue
      of conflicts of interests of the board member:

             "'. . . . . . . . . . . . . . . . . . . . . .

              "'(2) Where the wife of a board member would serve as secretary of
      the district, handling records, correspondence, etc.'

             "'(3) Where the wife of a board member would transport pupils to
      the district school, including both her own children and those of certain
      other board members.'

                                                             5

                                                                                    85-1105

             "Our holding in 26 Ops.Cal.Atty.Gen. 281, supra, on these contracts
      applied even if the board member and his wife agreed that their earnings
      should be her separate property. We so held on the grounds that, since the
      wife's separate property was still liable for necessities provided both
      spouses, the husband retained a prohibited interest in his wife's contracts.
      (See Nielsen v. Richards (1925) 75 Cal.App.680; Reece v. Alcoholic Bev.
      Etc. Appeals Bd. (1976) 64 Cal.App.3d 675, 683.) In sum, we held, at page
      285:

            "'We accordingly conclude that a contract between the district and
      the wife of a board member of that district is a contract with the
      community, and, as a matter of law, with the board member itself.'

             "See also 3 Ops.Cal.Atty.Gen. 333 (1944), holding that it would
      require an amendment to section 1011 of the Education Code (now section
      35233, supra) to permit a school board member to serve on a district board
      in the same school district in which his wife is a tenured teacher; letter
      opinion I.L. 65-146, motion of school district board to raise salaries invalid
      for the reason, inter alia, that spouse of a trustee was a tenured teacher."
      (61 Ops.Cal.Atty.Gen. at p. 417.)

              We concluded in 61 Ops.Cal.Atty.Gen. 412 (1978) that Coulter v. Board of
Education, supra, 40 Cal.App.3d 445 did in fact change the result of our pre-Coulter
opinions decided under the Education Code. Accordingly, we concluded that no conflict
of interest would occur under sections 35233 through 35235 of the Education Code and
therefore (1) it made no difference whether there was a spousal agreement or not to
transmute the spouse's earnings into separate property and (2) it made no difference
whether the spouse was a certificated or non-certificated employee. We stated in part:

             "In short, the court of appeal [in Coulter] held that a school board
      member may, without violating former section 1174 of the Education Code
      (now section 35233, supra) vote upon a labor agreement which will
      beneficially effect his or her spouse who is employed by the school district
      so long as the conditions set forth in former section 1174.5 of the Education
      Code (now section 35234, supra) are met by the board member. The court
      of appeal so held being fully aware of the provisions of then section 1175
      of that Code (now section 35233 [35235], supra) and the trial court's
      holding with respect thereto. It also was certainly fully cognizant of
      California's community property laws which would, unless agreed to
      otherwise, give the board member a clear financial interest in the spouse's
      earnings (Civ. Code § 5100 et seq.). No such agreement was alluded to in

                                            6

                                                                                   85-1105

      the case. Thus, it is the opinion of this office that Coulter v. Board of
      Education, supra, 40 Cal.App.3d 445 is controlling on the facts presented
      in the instant request for our opinion. We perceive no distinguishing facts
      from those in Coulter. Furthermore, Coulter considered and applied all the
      pertinent provisions of the Education Code.

              "Insofar as the court of appeal in Coulter did not discuss nor attempt
      to distinguish Neilsen v. Richards, supra, 75 Cal.App. 680, we note that
      that case involved a conflict of interest question with respect to a county
      superintendent of schools, not a school board member. Consequently, the
      case was decided under the predecessor provisions to section 1090 of the
      Government Code, and common law principles, and not the predecessors to
      the present Education Code provisions that are controlling herein.
      Therefore, the Neilsen case cannot be considered to be in direct conflict
      with the Coulter case." (61 Ops.Cal.Atty.Gen. at p. 422.)

We further pointed out that since Coulter had considered all pertinent provisions of the
Education Code, it in effect sub silentio had concluded that the community property
interest of the board member in his spouse's contract was not a contract with himself
within the meaning of the section 1175, subdivision(a) (later Ed. Code, § 35235, subd.
(a).)
              The significant point for our present consideration is that Coulter v. Board
of Education, supra, 40 Cal.App.3d 445 did not in any way overrule the holding in
Neilsen v. Richards (1925) 75 Cal.App. 680.

              Thus, school boards have been "transferred" for contractual conflicts of
interest purposes from the repealed Education Code provisions to sections 1090 et seq. of
the Government Code with no greater or lesser rights than other officers and employees
with respect to their community property interests in their spouses' contracts and other
financial affairs. This being so, we believe our opinion in 65 Ops.Cal.Atty.Gen. 305
(1982) is now determinative and controls most of the questions presented in this request
for our opinion.

             In that opinion we were presented with the situation where a county
superintendent of schools was elected to a four-year term commencing in January 1979.
As such, he was the employer and appointing power for all classified civil service
employees in his office. His office had entered into a memorandum of understanding
(MOU) relating to wages, hours and working conditions with his classified employees
which was to remain in force until June 30, 1983. The MOU, however was subject to
modification while in force.

                                            7

                                                                                   85-1105

               In August 1981, during his term, he married one of the classified employees
in his office. The question presented was:

              ". . . whether section 1090 of the Government Code prohibits the
       superintendent from agreeing to modify the current MOU, or prohibits him
       from entering into a new one should he be reelected, while his wife
       continued in her civil service employment." (65 Ops.Cal.Atty.Gen. at p.
       306.)

We concluded:

              ". . . that section 1090 prohibits neither of these official actions by
       the superintendent despite his wife's continued employment. As to the
       current MOU, we conclude that the 'rule of necessity' would apply. As to a
       new MOU should he be reelected, we conclude that the 'non-interest'
       exception to section 1090 of the Government Code contained in section
       1091.5, subdivision(a)(6) would apply at such time."                       (65
       Ops.Cal.Atty.Gen. at p. 307.)

               In reaching our conclusion we recognized that MOU's or modifications
thereof were contracts within the prohibition of section 1090 of the Government Code.5
In reaching our conclusion we also recognized that the superintendent, either in making
or participating in the making of an MOU or modifications thereto, would fall within the
prohibition of section 1090. We did so by concluding as we had in our prior opinions
that the superintendent would have an inescapable community property interest in his
wife's earnings and other economic benefits of the MOU, and accordingly would be
"financially interested" in the MOU or its modification.

            Then noting that none of the "remote interests" set forth in section 1091 of
the Government Code were germane, we went on to examine the "non-interests" set forth

   5
    Section 1090 provides:
       "Members of the Legislature, state, county, district, judicial district, and city
   officers or employees shall not be financially interested in any contract made by them
   in their official capacity, or by any body or board of which they are members. Nor
   shall state, county, district, judicial district, and city officers or employees be
   purchasers at any sale or vendors at any purchase made by them in their official
   capacity.
       "As used in this article, 'district' means any agency of the state formed pursuant to
   general law or special act, for the local performance of governmental or proprietary
   functions within limited boundaries."

                                                8

                                                                                           85-1105

in section 1091.5 of the Government Code, and found one to be relevant. That was
subdivision(a)(6) thereof. It provides:

             "(a) An officer or employee shall not be deemed to be interested in a
      contract if his or her interest is any of the following:

             ". . . . . . . . . . . . . . . . . . . . . .
             "(6) That of a spouse of an officer or employee of a public agency in
      his or her spouse's employment or officeholding if his or her spouse's
      employment or officeholding has existed for at least one year prior to his or
      her election or appointment."

              We accordingly found this "non-interest" to be facially inapplicable to the
superintendent during his current term, since the marriage occurred during his term. We,
however, concluded as to the new term that "it would clearly apply."                  (65
Ops.Cal.Atty.Gen. at p. 311.) Thus, during a future term there was no prohibition as to
his entering in an MOU or modification thereof under section 1090 of the Government
Code.

              As to his current term, we applied the "rule of necessity" to permit the
superintendent to enter into modification of the MOU. After reviewing the history of the
rule at some length, we stated:

             "With respect to contractual conflicts of interest the 'rule of
      necessity' may be said to have two facets. The first, which is not involved
      herein, arises to permit a governmental agency to acquire an essential
      supply or service despite a conflict of interest. The contracting officer, or a
      public board upon which he serves, would be the sole source of supply of
      such essential supply or service, and also would be the only official or
      board permitted by law to execute the contract. Public policy would
      authorize the contract despite this conflict of interest.              (See 59
      Ops.Cal.Atty.Gen. 604, 619 n.18, and opinions cited therein.) The second
      facet of the doctrine, exemplified in Caminetti v. Pac. Mutual Ins. Co.,
      supra, [22 Cal.2d 344 (1943)] arises in nonprocurement situations and
      permits a public officer to carry out the essential duties of his office despite
      a conflict of interest where he is the only one who may legally act. It
      ensures that essential governmental functions are performed even where a
      conflict of interest exists.

             "Reasoning from the Caminetti case, and the principles stated
      therein, we believe the superintendent is qualified to act with respect to his

                                             9

                                                                                     85-1105

       employees in cases where only he can legally act, such as with respect to
       the MOU. Otherwise, no action could or would be taken. All of the
       employees of his office would then be denied the benefits of collective
       bargaining under the Rodda Act or the benefits which might be derived
       from the wage adjustments under the current memorandum of
       understanding. The need for the application of the 'rule of necessity' in
       such cases is patent." (65 Ops.Cal.Atty.Gen. at p. 310, fns. omitted.)6

             Nor did we believe that either the superintendent or his wife should be
required to resign to avoid the conflict of interest and the application of the rule of
necessity. With respect to the superintendent, we stated:

               "It might be urged, however, that the 'rule of necessity' should not be
       applied to our facts herein because the superintendent caused his own
       'conflict' by marrying an employee in his office. Our research has disclosed
       no such limitation upon the rule. Furthermore, the application of such a
       limitation would mean that the superintendent should resign to both avoid
       the conflict and assure that essential governmental functions will continue
       to be performed.

              "We believe, however, that at least under the facts herein, the
       superintendent need not resign. First of all, as an elective official, he has
       been placed in office by the people. The electorate have a right to expect
       that he will serve unless he voluntarily resigns from office or is removed
       from office under clearly established procedures for removal (e.g., recall by
       the electorate, see Elec. Code. § 27000 et seq., or removal for willful or
       corrupt misconduct in office, Gov. Code, § 3060 et seq.). Secondly, the
       fact of marriage to an employee in his office constitutes neither a
       disqualification for running for such office nor from continuing in office.

   6
      We would note that the "rule of necessity" is to reflect actual necessity after all possible
alternatives have been explored. Thus, in prior opinions of this office we have concluded in
procurement situations that
        ". . . This rule would apply only in cases of real emergency and necessity. An
    event that can be reasonably anticipated, such as the repeated failure of a [car] battery
    or the necessity for periodic service, would not be considered an emergency." (4
    Ops.Cal.Atty.Gen. 264 (1944); see also 57 Ops.Cal.Atty.Gen. 458, 463-465 (1974).)
    Likewise, if a public entity requires real property for its use which is owned by an officer
who would fall within the proscription of section 1090 of the Government Code (see, e.g.
Thomson v. Call, supra, 38 Cal.3d 633), the entity need not rely upon the "rule of necessity." It
need only exercise its power of eminent domain. (See, e.g. 26 Ops.Cal.Atty.Gen. 5 (1955).)

                                               10

                                                                                         85-1105

       (See Ed. Code, § 1207.) And finally, since the United States Supreme
       Court has recognized that the 'freedom to marry has long been recognized
       as one of the vital personal rights to an orderly pursuit of happiness by free
       men' and that '[m]arriage is one of the "basic civil rights of men."
       fundamental to our very existence and survival' (Loving v. Virginia (1967)
       388 U.S. 1, 12), we should avoid an interpretation of the law which could
       be construed as an impediment to, and a punitive measure taken because of,
       marriage. (See also, Zablocke v. Redhail (1978) 434 U.S. 374 firmly
       establishing a constitutional right to marriage.) The 'rule of necessity'
       permits us to avoid such a construction." (65 Ops.Cal.Atty.Gen. at p. 311,
       fns. omitted.)

And as to his wife, we stated in footnote 10:

               "One might also urge that, alternatively, his wife should resign to
       avoid any conflict. We reject such an alternative for several reasons. First
       of all, any conflict which might arise under section 1090 of the Government
       Code would be with respect to the superintendent's official action, not his
       wife's. Accordingly, she should not be required to resign when she herself
       would be doing nothing legally wrong where only he has acted. Secondly,
       she is a permanent civil service employee. As such she has the right to be
       terminated only in accordance with the 'Merit System Rules for Classified
       Employees of the Santa Cruz County Office of Education,' section 6.600 et
       seq."

               It would seem that our opinion in 65 Ops.Cal.Atty.Gen. 305 (1982) is
virtually on "all-fours" with the situation presented in this instant opinion request.

              We are also presented herein with a collective bargaining agreement to be
entered into pursuant to the Rodda Act (Gov. Code, § 3540 et seq.) in which the husband-
contractor has a financial interest by virtue of his wife's employment with the contracting
public entity. We are also presented with the situation where the wife is a permanent
employee of the public entity by virtue of her tenured status with the school district. As
such, she cannot be terminated by the school board except for cause. (See Ed. Code,
§§ 44884, 44932.) Accordingly, her position is analogous to the permanent civil service
employee-wife we dealt with in 65 Op.Cal.Atty.Gen. 305 (1982).7

   7
     Accordingly, we do not attempt to meet herein any issue which might be raised if the wife
were a non-tenured and hence not a "permanent" school district employee whose "contract" is
renewed from year to year by operation of law. If such were the case, we would have to
scrutinize the underlying contract of employment to determine the ability or not of the district

                                              11

                                                                                       85-1105

               Thus, there appears to be only two real factual differences between the
instant opinion and our 1982 opinion. The first is that in our 1982 opinion we were
dealing with a single officer instead of a multi-member board. The second is that in the
present situation the board member was married at the time he was elected (but still not
long enough to apply the noninterest provision of section 1091.5, subdivision(a)(6) to his
current term).

               In a recent comprehensive opinion on conflicts of interest, this office
anticipated the possibility of applying the "rule of necessity" to a multimember board
under section 1090 where a single member had a financial interest in a contract. We
stated in 67 Ops.Cal.Atty.Gen. 369, 378 (1984) with respect to a possible conflict of
interest of a single member, referring back to our 1982 county superintendent of schools
opinion:

              "If an analysis of a particular contractual situation discloses that the
       supervisor-director has a 'financial interest' in a contract proposed to be
       entered into by the agency which neither qualifies as a 'remote interest' nor
       a 'noninterest' such fact does not mean that the agency board is always
       powerless to enter into contracts which are necessary or proper to carry out
       its statutory duties and powers. Engrafted upon the section 1090
       proscription is the 'doctrine of necessity.' This doctrine was explained in
       detail and applied by this office in a relatively recent opinion, 65
       Ops.Cal.Atty.Gen. 305 (1982). Reference is made to that opinion for such
       detailed analysis. The doctrine permits governmental officers or agencies
       to carry out essential duties despite conflicts of interest where only they
       may act.

              "A perusal of 65 Ops.Cal.Atty.Gen. 305, supra, will disclose two
       bases for the doctrine. One is that it has its origins in the common law.
       The other is one of the presumed intent of the Legislature. This latter basis
       appears particularly germane herein with respect to agency contracts. It is
       to be recalled that in 1979, when the Legislature amended section 7 of the
       Agency Act to require service of two local representatives on the agency
       board, it was fully aware that representatives might be chosen from districts
       where land ownership was required for election or appointment to office.
       Thus, the Legislature was fully aware that the agency, in carrying out its
       essential functions, would encounter situations where conflicts of interest
       might arise as to the two local representatives. The Legislature could not

board to exercise an option not to rehire her. Such an option might obviate the need to apply the
"rule of necessity" to a prospective annual collective bargaining agreement.

                                               12
                                                                                        85-1105

       have intended that the agency should be powerless to act because of such
       conflicts.

              "Accordingly, the doctrine would permit the agency board to enter
       into contracts to carry out its essential functions despite the conflict of
       interest of one or more board members. The affected director(s) should,
       however, abstain either under common law concepts or under the
       appropriate PRA analysis as determined by the FPPC."                    (67
       Ops.Cal.Atty.Gen. at p. 378, emphasis added, fns. omitted.)8

              Thus, we not only recognized the potential applicability of the "rule of
necessity" to multimember boards under section 1090 of the Government Code, but we
also recognized that, since the rule is not set forth in the code, nothing in the code itself
would require abstention. We stated, however, that abstention should be the course to be
followed. This approach is logical and we reaffirm it herein. To conclude otherwise, and
permit participation of the financially interested board member, would stretch the "rule of
necessity" well beyond the bounds of necessity.9

              With respect to the second factual distinction between our present case and
that considered in our 1982 opinion, that is, that the marriage in the instant opinion
preceded the board member's election to office, we believe that the reasoning of our 1982
opinion, set forth at length above as to why neither the superintendent of schools nor his
permanent civil service wife should be required to resign, is equally applicable to the
board member herein and his tenured-teacher wife.

             Accordingly, based upon the foregoing analysis we reach the following
conclusions as to the school board and the school board member involved herein:

   8
       We are not asked about nor do we discuss herein the Political Reform Act (PRA) aspects of
this matter. (See, 67 Ops.Cal.Atty.Gen. 369, 374 (1984): such matters should be addressed to
the Fair Political Practices Commission.)
     9
       In so concluding, we note possible language or implications in some older decisions
involving public improvement assessment proceedings indicating that the interested official may
still act. (See, e.g., Federal Construction Co. v. Curd (1918) 179 Cal. 489; Jeffery v. City of
Salinas (1965) 232 Cal.App.3d 29, 40, fn.5; Raisch v. Sanitary Dist. No. 1 (1952) 108
Cal.App.2d 878, 884.)
     We would not counsel such an approach based upon these cases, and believe they should be
narrowly construed and restricted to their facts. (Compare 61 Ops.Cal.Atty.Gen. 243, 253-255
(1978).)

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              1. Section 1090 of the Government Code would literally prohibit an annual
collective bargaining agreement between the school board and the teachers' association
during the board member's current term. However, such an agreement could still be
entered into under the "rule of necessity."

              Further, if the board member is re-elected, section 1090 of the Government
Code would not prohibit the employees' annual agreement by virtue of the "non-interest"
provisions of section 1091, subdivision(a)(6) of the Government Code.

               2. The collective bargaining agreement could be rendered void if entered
into during the board member's current term with his participation. Contracts entered
into in violation of section 1090 are void. (See Thomson v. Call, supra, 38 Cal.3d 633,
646, fn. 15.) Failure to properly adhere to the "rule of necessity" by abstention could
constitute a violation of section 1090.

             As to a future term, section 1091.5 subdivision (a)(6) would completely
remove any section 1090 proscription. Accordingly, the collective bargaining agreement
would be valid with or without the interested board member's participation.

               3. Since a violation of section 1090 of the Government Code subjects an
official to possible criminal sanctions and disqualification from office under section 1097
of the code, those sanctions could be applied if the board were to enter into a collective
bargaining agreement with the interested members' participation. That participation
would go beyond the bounds of the "rule of necessity."

             As to a future term of office, no proscription would be applicable under
section 1090 of the Government Code. Accordingly, no sanctions would be applicable.

               4. Section 1090 of the Government Code would not prohibit the school
board member from participating in negotiations with the teachers' association during a
future term of office. He should, however, abstain from any and all participation during
his current term of office under general common law principles.

                                          *****

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