Request By:
Mr. Kenneth Carroll
Vice Chairman
Campbellsville Board of Education
725 Lebanon Avenue
Campbellsville, Kentucky 42718
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Robert L. Chenoweth, Assistant Attorney General
As vice chairperson of the Campbellsville Board of Education you have asked three subject matter related questions regarding possible disqualifying acts for membership on a local board of education. Your questions are as follows:
1. Campbellsville Independent School District had $20,000 invested in a savings account at the 1st Federal Savings & Loan in Campbellsville, 1st Federal Savings & Loan in Cambpellsville. Mr. Ron Wise, a vice president of 1st Federal, won a seat on the school board on November 7, 1978. Mr. Wise takes an oath of office on January 1, 1979. We presently have $13,000 left in savings and district is considering investing $100,000 at the same institution.
2. Campbellsville Independent School District has a contract with a Dr. Philip Captain of Campbellsville College to administer psychological tests to certain students as directed by the district. A copy of the contract is attached (see A). Dr. Captain came to the district superintendent and supervisor and informed them that if he won the election that he would have to resign. He did win at the polls and was elected whereupon on November 8 he submitted the attached statement (see B). He will take oath of office January 1, 1979.
3. A few teachers of the Campbellsville Independent School District are employed by Campbellsville College to be supervising teachers for some of its practice teachers. Said stipends are paid directly to these teachers. Two members of the Campbellsville College faculty were elected to the school board - Dr. Captain (psychologist) and Mr. Don Bishop (physical education department) on November 7, 1978. They will take oath of office on January 1, 1979.
As for your first question, we believe OAG 77-231, copy attached, is dispositive. In this opinion the office concluded that it was only those banking transactions with a board of education which causes the school board to expend school funds (for example, the borrowing of money from a bank for which an interest is charged) that creates the disqualifying act prohibited under KRS 160.180 for the individual who serves on a local board of education and who also is an officer, director or stockholder of a banking institution with which the school board does business. This opinion, in principle, was substantially upheld in
McCloud v. City of Cadiz, Ky.App., 548 S.W.2d 158 (1977), copy attached.
Your second and third questions are factually closely aligned. In reviewing these facts as far as the disqualification statute of KRS 160.180 goes, it is of supreme importance to look for whether school funds were or are to be expended for property, services, etc., which payment a board member would be interested in, either directly or indirectly. The facts of your second question are that a Campbellsville college faculty member had a contract with the Campbellsville Board of Education to perform psychological testing services on children attending school in that system. This college faculty member became a candidate for the school board and upon being elected on November 8, terminated his contract with the board on that date.
The applicable part of KRS 160.180 is subsection (1)(f) which reads as follows:
"(1) No person shall be eligible to membership on a board of education:
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(f) Who, at the time of his election, is directly or indirectly interested in the sale to the board of books, stationery or any other property, materials, supplies, equipment or services for which school funds are expended; "
Of key importance is the language "at the time of his election. " The question here becomes whether a continuation of the contract between the time of becoming a candidate for board membership and the time of being elected is prohibited by the statute noted above. In order to answer this question, we have reviewed the Kentucky appellate cases as well as prior opinions of this office. In
Whitaker v. Commonwealth, 272 Ky. 794, 115 S.W.2d 355, 358 (1938), the Court stated:
"Therefore, we cannot escape the conclusion that it was intended that if the conditions named existed at the time of the election, the person affected thereby was disqualified to hold the office of school board member."
The Court further noted that as now set forth in subsection (2) of KRS 160.180, if such conditions continue to exist after election up to induction into office, the individual would be disqualified to hold office of a school board member. The question of interest at the time of election and after election was also carefully reviewed in
Commonwealth v. Hardin, 286 Ky. 404, 150 S.W.2d 477 (1941) and
Commonwealth v. Coatney, Ky., 396 S.W.2d 72 (1965). As for advisory opinions of this office, see OAG 60-947, 60-1029 as modified by OAG 61-71, and OAG 62-956.
However, none of the cases or the opinions of this office reviewed have considered the period of time between becoming a candidate for board membership and the time of election to the board. As noted above, your second question presents this situation. It is our conclusion that KRS 160.180(1)(f) does not prohibit a candidate for board membership from having an interest in a contract or claim with the board for which school funds are expended so long as the contractual or claim relationship is terminated in all respects at the time of the election. We believe the present situation with the facts given us is a close question as to whether the contract was terminated "at the time of his election, " but hesitatingly do so conclude. The individual in question did not prepare his unilateral termination of contract notice until 2:15 p.m. on November 8, 1978, Election Day, and we presume not until after knowing he had been elected. This unilateral notice does refer to an oral notification "before becoming a candidate for the school board. " In view of the close question created under the circumstances we believe the best practice most assuredly would always be for an individual to end any contractual or claim relationship with a board of education prior to becoming a candidate for membership on the board.
As to your third question, again we must reiterate that a school board member may not enter into any relationship that would create either directly or indirectly a personal interest in the expenditure of school funds.