The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

JENNIFER M. GRANHOLM, ATTORNEY GENERAL


CITIES:

CONFLICT OF INTEREST:

CONSTITUTIONAL LAW:

INCOMPATIBILITY:

MUNICIPAL CORPORATIONS:

PUBLIC OFFICERS AND OFFICES:

City councilperson serving as member of board of regional transportation authority

Application of Const 1963, art 7,  28, to Incompatible Public Offices Act

Contract between city and regional transportation authority of which city is a member

The Incompatible Public Offices Act does not prohibit a person from simultaneously serving as a member of a city council and as a member of the board of a public transportation authority of which the city is a member. Const 1963, art 7,  28, permits such dual office holding.

The Public Servants' Conflict of Interest Act does not prohibit a city from entering into a contract with a public transportation authority to act as employer of persons hired by the authority where a city council member simultaneously serves as a member of the transportation authority of which the city is a member.


Opinion No. 7054

May 17, 2000


Honorable Larry Julian
State Representative
The Capitol
Lansing, Michigan


You have asked two questions concerning a public transportation authority created by an interlocal agreement under the Public Transportation Authority Act. Interlocal agreements are permitted by the Urban Cooperation Act of 1967. 1967 (Ex Sess) PA 7; MCL 124.501 et seq; MSA 5.4088(1) et seq.

The Public Transportation Authority Act, 1986 PA 196, MCL 124.451 et seq; MSA 5.3475(451) et seq, authorizes the formation of public transportation authorities. A transportation authority created under the Public Transportation Authority Act may plan, promote, finance, own, construct, operate, and maintain a public transportation system. Section 12. It is administered by a board of directors in accordance with an interlocal agreement. Sections 3 and 13. A public transportation authority is a body corporate and "shall be considered to be an agency and instrumentality of the state." Section 13. A city which has joined a public transportation authority through execution of an interlocal agreement is a member of the public authority. Section 3.

Your first question asks whether the Incompatible Public Offices Act prohibits a person from simultaneously serving as a member of a city council and as a member of the board of a public transportation authority of which the city is a member.

The Incompatible Public Offices Act, 1978 PA 566, MCL 15.181 et seq; MSA 15.1120(121) et seq (Act), prohibits the same person from simultaneously holding two or more incompatible public offices. Section 1(b) of the Act defines incompatible public offices as follows:

"Incompatible offices" means public offices held by a public official which, when the official is performing the duties of any of the public offices held by the official, results in any of the following with respect to those offices held:

(i) The subordination of 1 public office to another.

(ii) The supervision of 1 public office by another.

(iii) A breach of duty of public office.

The office of city council member is a public office for purposes of the Act. Section 1(e)(ii). Because a public transportation authority is a public body, members of its governing board are public officials subject to the Act. Thus, a person simultaneously serving as member of the city council and member of the governing board of a public transportation authority holds two public offices at the same time. Under the Act, the question becomes whether these two public offices are incompatible, i.e., does one office supervise the other or is one subordinate to the other.

A subordinate and supervisory relationship exists where one office has the power to appoint members to the other office. OAG, 1995-1996, No 6834, pp 9, 10 (February 3, 1995); OAG, 1979-1980, No 5626, pp 537, 542 (January 16, 1980). The interlocal agreement creating the transportation authority which is the subject of your question provides that each governmental unit joining in its formation may appoint two members to the transportation authority's board of directors and set the length of the terms of their office. See Shiawassee Area Transportation Authority interlocal agreement, paragraph 4. My staff is advised that the city council participates in the process of appointing members to the transportation authority's board. Thus, a city council member's duty to appoint, or to confirm the appointment of transportation authority board members, creates a subordinate and supervisory relationship under subsections 1(b)(i) and (ii) of the Act. Accordingly, city council members and transportation authority board members are involved in a subordinate and supervisory relationship, a situation prohibited by the Incompatible Public Offices Act, unless the relationship falls within a specific constitutional or statutory exception.

Const 1963, art 7, 24, authorizes the Legislature to empower municipalities to operate transportation and other public service facilities. Const 1963, art 7, 28, empowers the Legislature to authorize municipalities to enter interlocal agreements to deliver services, and allows dual office holding under specified circumstances.

The legislature by general law shall authorize two or more counties, townships, cities . . . or any combination thereof among other things to: enter into contractual undertakings or agreements with one another . . . for the joint administration of any of the functions or powers which each would have the power to perform separately . . . .

***


Any other provision of this constitution notwithstanding, an officer or employee of the state or any such unit of government or subdivision . . . may serve on or with any governmental body established for the purposes set forth in this section and shall not be required to relinquish his office or employment by reason of such service.

(Emphasis added.)

The Address to the People discussed the purpose of this section:
This is a new section designed to encourage the solution of metropolitan problems through existing units of government rather than by creating a fourth layer of local government. Local governments are allowed to join in a variety of ways to work out together the solutions to their joint problems.

***

Because this work is to be carried on by local governments, officials (except members of the legislature) are allowed to serve on the boards. The last sentence provides that such service is not in conflict with other provisions of this constitution.

2 Official Record, Constitutional Convention 1961, p 3394.

Consistent with these constitutional provisions, the Legislature enacted the Public Transportation Authority Act, supra, to provide the statutory mechanism governing the formation and operation of a public transportation authority. The public transportation authority described in your question falls within the class of intergovernmental units encompassed by Const 1963, art 7, 28.1 The effect of this constitutional provision is to authorize city council members to serve on the board of a regional public transportation authority. See OAG, 1983-1984, No 6260, pp 423, 424-425 (December 5, 1984). Since Michigan's Constitution expressly permits local elected officials to serve on an intergovernmental body, such dual office holding does not give rise to a prohibited incompatibility. Id. at pp 424-425. OAG, 1997-1998, No 7003 (December 23, 1998), which concluded that the Incompatible Public Offices Act prohibits a city council member from serving as a member of the city's board of public transportation authority, is distinguishable because it did not involve serving on an intergovernmental body established by interlocal agreement.

It is my opinion, therefore, in answer to your first question, that the Incompatible Public Offices Act does not prohibit a person from simultaneously serving as a member of a city council and member of the board of a public transportation authority of which the city is a member. Const 1963, art 7,  28, permits such dual office holding.

Your second question asks whether the Public Servants' Conflict of Interest Act prohibits a city from entering into a contract with a regional transportation authority to act as employer of persons hired by the authority where a city council member simultaneously serves as a member of the board of transportation authority of which the city is a member.

The Public Servants' Conflict of Interest Act, 1968 PA 317, MCL 15.321 et seq; MSA 4.1700(51) et seq, generally prohibits a public servant from being a party to a contract between himself or herself and the public entity2 of which he or she is an officer or employee. Section 2(1). This act, however, expressly provides that the prohibitions in section 2 shall not apply to certain types of contracts, including "[c]ontracts between public entities." Section 4(a). The contract which is the subject of your question is a contract between a city and a public transportation authority, both of which are public entities. Since the act's section 4(a) exception is controlling, the contract between the city and the transportation authority is exempted from the general prohibition in section 2 of the act.3

It is my opinion, therefore, in answer to your second question, that the Public Servants' Conflict of Interest Act does not prohibit a city from entering into a contract with a public transportation authority to act as employer of persons hired by the authority where a city council member simultaneously serves as a member of the transportation authority of which the city is a member.



JENNIFER M. GRANHOLM
Attorney General

1 Section 3(4)(a) of the Incompatible Public Offices Act also provides an exception which allows dual office holding by public officers and employees of municipalities having a population of less than 25,000. Given the application of Const 1963, art 7, 28, to your question, however, it is not necessary to apply the under-25,000 exception.

2 The act defines "public entity" to include "any public body corporate within the state." Section 1(b).

3 Section 3 of the Public Servants' Conflict of Interest Act also provides an exception which allows certain contracts between public servants and municipalities having a population of less than 25,000. Given the application of section 4(1) of this Act to your question, however, it is not necessary to apply the under-25,000 exception.