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HomeMy WebLinkAbout79-061 LevinTO: RE: FACTS: OPINION STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 October 1979 79 -061 Suzanne M. Elder Booher & Elder, Accountants 115 West Market Street Lewistown, PA 17044 School board member spouse of member of accounting firm whose services are contracted by school board, Section 3(c) Norman L. Levin, Solicitor Brugler & Levine 10 South Wayne Street Lewistown, PA 17044 On August 2, 1979, Norman L. Levine, Solicitor for the Mifflin County School District, wrote this Commission requesting a response as to the proper interpretation of Section 3(c) of Act 170. He advised that a contract was drawn for a term "commencing July 1, 1978, and ending June 30, 1979, and continuing annually thereafter unless terminated by School District or Tax Collector by a ninety (90) day written notice." He further advised that one of the elected school directors serving on the board is also a spouse of one of the two partners in a public account- ing firm acting as tax collector. He inquired as to whether the contractual arrange- ment arrangement must be opened up and publicly rebid annually as long as the relationship between the contracting principal and the school board exists, pursuant to Section 3(c) of Act 170. On August 13, Suzanne M. Elder wrote the Commission advising that the existing contract was advertised for public bid in the local paper. She asked, "Does this contract that we have need to be bid each and every year since 1 am the wife of a school director ?" On October 17, Mrs. Elder advised the Commission orally that there were seven closed bids for services and six of the bidders were present at the bid opening 0 Norman L. Levin & Suzanne M. Elder October 17, 1979 page 2 of 3 She further advised that her husband was one of nine school directors. DISCUSSION: The issue before the Commission is whether a contract with an automatic renewal clause must be renewed through an open and public process, including pior public notice and subsequent public disclosure of all proposals considered and contracts awarded. Section 3(c) requires that contracts be awarded through an open and public process where the "public employee" or "public official" in the governmental body is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business. Although the original awarding of the contract was in compliance with Section 3(c), does Section 3(c) require annual rebidding, or may the annual renewal clause be given effect? We note that the renewal clause of the contract allows the school directors to demand that -the contract be rebid each and every year. We do not find that one person out of nine on a school board constitutes control of the board. Act 170 in no way bars the school board from adopting nor requiring the contract be rebid each and every year where the spouse of the school director has interests in the bid. However, Act 170 does not require an annual rebidding of the contract where the contractor's wife is on the school board. Pursuant to Section 7(9)(i), this opinion is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the advice given. This letter is a public record and will be made available as such. Noriman L. Levin & 5utbnne M. Elder October 17, 1979 page 3 of 3 CONCLUSION: where one of the principals in a firm contracting with a school district is a spouse of an elected school board member and either party to the contract may terminate within 90 days of the annual renewal date, Act 170 does not require annual rebidding of the contract. Chairman