IN THE CIRCUIT COURT THIRD JUDICIAL CIRCUIT FEB 2017 MADISON COUNTY, ILLINOIS max 0, am,? THIRD JUDICIAL 76 MICHAEL PARKINSON, MADISON COI MY I Plaintiff, No. 17- me. An?) MADISON COUNTY BOARD, and GOVERNMENT RELATIONS COMMITTEE OF THE MADISON COUNTY BOARD, Defendant. comm 229m Violation of The Illinois Open Meetings Act (Madison Count},r Board) 1. Plaintiff brings this action pursuant to The Illinois Open Meetings Act, 5 ILCS 120 et seq, (?The Act") and speci?cally pursuant to 5 ILCS 120/3 of The Act. 2. Plaintiff is a resident and citizen of Madison County, Illinois and has standing to bring this action. 3. The Madison County Board is a public body pursuant to The Act. 4. The Third Judicial Circuit is the judicial circuit which encompasses Madison County, Illinois and therefore, venue is proper. 5. On February 6, 2017, the Government Relations Committee of the Madison County Board convened a regular meeting. 6. At some time prioritb: thei?T-?ebruary 6, 2017 meeting of the Government Relations Committee, there was published on the Madison County Government website an Agenda. (Agenda attached as Exhibit A) 7. This Agenda was in violation of the Notice Requirements of The Act generally and of Section 2.0202) of The Act speci?cally. 8. New Business Agenda Item is simply listed as ?County Board Resolution.? 9. Section 2.02(c) of The ACT states: Any agenda required under this Section shall set forth the general subject matter of any resolution or ordinance that will be the subject of ?nal action at the meeting. The public body conducting a public meeting shall ensure that at least one copy of any requested notice and agenda for the meeting is continuously available for public review during the entire 48-hour period preceding the meeting. Posting of the notice and agenda on a website that is maintained by the public body satis?es the requirement for continuous posting under this subsection If a notice or agenda is not continuously available for the full 48?hour period due to actions outside of the control of the public body, then that lack of availability does not invalidate any meeting or action taken at a meeting. (emphasis added) 10. The new business item referenced in paragraph 9, above does not in any meaningful way ?set forth the general subject matter of [the] resolution." 11. The new business item referenced in paragraph 9 above was the subject of ?nal action of the meeting; speci?cally the resolution was voted on and approved to be submitted to The Madison County Board for final approval. (The Resolution attached as Exhibit B) 12. The resolution in question is a matter of grave public concern insofar as it seeks to determine if, in fact, the current Madison County Board is a lawfully constituted public body. 13. The resolution in question seeks to approve and ratify more pro tune, actions taken by Kurt Premier on December 5, 2016. 14. This matter has been and continues to be a matter of public concern and is a matter in controversy. 15. Because of defendants' violation of the Open Meeting Act, plaintiff, as a concerned citizen of Madison County, was deprived of an opportunity to observe consideration of the resolution. 16. Because of defendants? violation of the Open Meetings Act, plaintiff, as a concerned citizen of Madison County, was deprived of an Opportunity to make a public comment, as is his right to speak on the matter pursuant to 2.06(g) of The Act. 17. Defendants' actions constitute a wilful and intentional violation of the Illinois Open Meetings Act. 18. Defendants, through their actions, demonstrate an intent to defeat the policy of the Illinois Open Meetings Act as described in 5 ILCS 120/1 generally, and speci?cally to defeat the ?the intent of the Act to protect the citizen?s right to know.? WHEREFORE, Plaintiff moves that this Court ?nd that defendants have violated the Illinois Open Meetings Act and grant the following relief as allowed per 5 ILCS A. Declare null and void any ?nal action taken by the Madison County Board and/or the Government Relations Committee of the Madison County Board on February 6, 2017 with respect to Agenda Item ?New Business a. County Board Resolution.? B. Enjoin any action on the above-referenced resolution pending action by the Madison County Board and/ or the Government Relations Committee of the Madison County Board at a properly noticed meeting with a legally suf?cient agenda. C. Award plaintiff reasonable attorney?s fees and other costs of litigation reasonably occurred in bringing this action, pursuant to 5 ILCS Count II Violation of The. Illinois Open Meetings Act (Government Relations Committee of the Madison County Board) 1. Plaintiff brings this action pursuant to The Illinois Open Meetings Act, 5 ILCs 120 et seq, (?The Act?) and speci?cally pursuant to 5 ILCS 120/3 of The Act. 2. Plaintiff is a resident and citizen of Madison County, Illinois and has. standing to bring this action. 3. The Government Relations Committee of the Madison County Board is a public body pursuant to The Act. 4. The Third Judicial Circuit is the judicial circuit which encompasses Madison County, Illinois and therefore, venue is proper. 5. On February 6, 2017, the Government Relations Committee of the Madison County Board convened a regular meeting. 6. At some time prior to the February 6, 2017 meeting of the Government Relations Committee, there was published on the Madison County Government website an Agenda. (Agenda attached as Exhibit A) 7. This Agenda was in violation of the Notice Requirements of The Act generally and of Section 2.02(c) of The Act speci?cally. 8. New Business Agenda Item is simply listed as ?County Board Resolution.? 9. Section 2.02(c) of The states: Any agenda required under this Section shall set forth the general subiect matter of any resolution or ordinance that will be the subject of ?nal action at the meeting. The public body conducting a public meeting shall ensure that at least one copy of any requested notice and agenda for the meeting is continuously available for public review during the entire 48-hour period preceding the meeting. Posting of the notice and agenda on a website that is maintained by the public body satis?es the requirement for continuous posting under this subsection If a notice or agenda is not continuously available for the full 48-hour period due to actions outside of the control of the public body, then that lack of availability does not invalidate any meeting or action taken at a meeting. (emphasis added) 10. The new business item referenced in paragraph 9, above does not in any meaningful way ?set forth the general subject matter of [the] resolution.? 11. The new business item referenced in paragraph 9 above was the subject of ?nal action of the meeting; speci?cally the resolution was voted on and approved to be submitted to The Madison County Board for ?nal approval. (The Resolution attached as Exhibit B) 12. The resolution in question is a matter of grave public concern insofar as it seeks to determine if, in fact, the current Madison County Board is a lawfully constituted public body. 13. The resolution in question seeks to approve and ratify nunc pro tune, actions taken by Kurt Premier on December 5, 2016. 14. This matter has been and continues to be a matter of public concern and is a matter in controversy. 15. Because of defendants? violation of the Open Meeting Act, plaintiff, as a concerned citizen of Madison County, was deprived of an opportunity to observe consideration of the resolution. 16. Because of defendants? violation of the Open Meetings Act, plaintiff, as a concerned citizen of Madison County, was deprived of an opportunity to make a public comment, as is his right to speak on the matter pursuant to 2.o6(g) of The Act. 17. Defendants? actions constitute a wilful and intentional violation of the Illinois Open Meetings Act. 18. Defendants, through their actions, demonstrate an intent to defeat the policy of the Illinois Open Meetings Act as described in 5 ILCS 120/1 generally, and speci?cally to defeat the ?the intent of the Act to protect the citizen?s right to know.? WHEREFORE, Plaintiff moves that this Court find that defendants have violated the Illinois Open Meetings Act and grant the following relief as allowed'per 5 ILCS 120 A. Declare null and void any ?nal action taken by the Madison County Board and/ or the Government Relations Committee of the Madison County Board on February 6, 2017 with respect to Agenda Item ?New Business a. County Board Desolution.? B. Enjoin any action on the above-referenced resolution pending action by the Madison County Board and/or the Government Relations Committee of the Madison County Board at a properly noticed meeting with a legally suf?cient agenda. C. Award plaintiff reasonable attorney?s fees and other costs of litigation reasonably occurred in bringing this action, pursuant to 5 ILCS By: augherty "6229106) Law 0 Ce ofJack Daugherty P.C, 112 Front Stree' Alton, IL 62002 Phone: 618-462-9|6o Fax: 618-462--9167 'ack ckda law.com ATTORNEY FOR PLAINTIFF SETTLEMENT AND RELEASE This Settlement Agreement and Release (the ?Agreement?) is made and entered into by and between Michael Parkinson the Madison County, Illinois Board, and the Government Relations Committee of the Madison County Board, collectively referred to as (?Madison?), and further collectively referred to as the Parties and individually referred to as a Party. RECITALS WHEREAS, Parkinson has asserted certain claims against Madison in a lawsuit captioned Michael Parkinson County Board. and Government Rotations Committee of the Madison Board, Madison County Cause No. which is currently pending in the Circuit Court of Madison County, .lilinois {the ?Litigation"i in the Litigation, Parkinson alleges Madison violated the Illinois Open Meetings Act on February 6. 2m 7. WHEREAS, Madison has denied, and continues to deny it violated the Open Meetings Act as alleged by Parkinson, or that Parkinson or anyone on whose behalf he purports to act, including the general public, have been damaged by any act or inaction of Madison. WHEREAS, to avoid further expense and uncertainty of the Litigation, the Parties have agreed to enter into this Agreement to compromise, settle and release any and all claims, known or unknown arising out of and relating to the Litigation. NOW, THEREFORE, in considerat'imt of the premises, promises, covenants and agreements herein contained, and other good and valuable consideration, the receipt and suf?ciency of which are hereby acknowledged, the Parties hereto agree as follows: TERMS OF AGREEMENT l. Recitals. The foregoing Recitals are incorporated by reference as though fully set forth herein and constitute express terms of this Agreement. 1 8819967J . 2. Monetary Payment. Madison shall pay a total to Parkinson for his attorney?s fees incurred by remitting a check for that lump sum amount payable to ?Law Of?ce of Keith Short" in settlement and release of all claims against Madison in the Litigation (the ?Settlement Payment"). The Settlement Payment shall be delivered to Parkinson?s counsel. Law Of?ce of Keith Short at [355 North Bluff Road. Collinsvillc, Illinois, 62234 following receipt by Madison of the Agreement having been fully executed by Parkinson. 3. Release. Upon his counsel's receipt of the Settlement Payment set forth in Paragraph 2 herein, Parkinson and his heirs, spouse, estate, beneficiaries, devisees, executors, administrators, brokers, employees, personal and legal representatives, agents, successors. and assigns (collectively the "Releasors?) shall release, acquit and forever and irrevocably discharge Madison, including its respective former and current officials, of?cers, directors, committees, subcommittees, divisions, employees, agents, counsel. attorneys, personal and legal representatives, heirs, estates, beneficiaries, executors, successors and assigns (collectively the jointly and severally. from any and all past. present or future claims. demands, obligations, actions, causes of action, rights, damages, costs. expenses and compensation ofany nature whatsoever, whether based on a tort, in equity, or other theory of recovery. and whether for statutory, compensatory or punitive damages. that the Relcusors now have and will fully, ?nally, absolutely, and forever release and discharge the Releasecs from any and all actions, causes of action, claims. debts. damages, demands, liabilities, obligations, defenses and suits of Releasors, of whatever kind or nature. in law or equity, whether now known or unknown to Releasors, and whether contingent or matured. under. arising out of or related to the Litigation and the allegations and claims alleged therein, or any act or omission of Madison. is.) 88199611 Releasors further expressly agree and warrant that they will not ?le any claims, complaints, appeals, af?davits, arbitrations and proceedings or any of the same collectively or individually. with any court, arbitration, l?orum, regulatory or administrt-itive agency with respect to any ofthe matters released in the Agreement against any of the Releasec-s, including but not limited to. notifying, alerting, claiming. or informing the Public Access Counselor of" the Illinois Attorney General?s Of?ce that Madison is alleged by Parkinson to have violated the Open Meetings Act, other than as required by a court of law or in response to any inquiry by a regulatory or administrative agency. 4. Dismissal With Prejudice. Within ?fteen (15) calendar days after the Settlement Payment is delivered, Parkinson shall dismiss the Litigation with pt?ejudicelat his cost by ?ling a Motion to that efl'eizt with the Court in the Litigation. Each Party shall bear their own costs and fees incurred to date. it?any. 5. No Admission of Liability. The Parties agree that nothing herein is an admission by Madison of any liability. wrongdoing or violation of any applicable law or otherwise, and Madison hereby denies any and all liability, wrongdoing or violation asserted against it in the Litigation or otherwise by" Parkinson and any third party. 6. Consultation ?with Attorney. Parkinson acknowledges that he has been advised by and consulted with his attorneys, that he has had a reasonable period of?time in which to consider the terms ot'the Agreement and has specifically consulted his attorney regarding the Agreement and all of its terms. 7. Choice of Law. The Agreement shall be construed and governed by the laws of the State of Illinois. 8. Tax Considerations. The Agreement is a result of a ?contested liability? that was disputed in good faith. Madison does not make any agreement or warranty regarding 1099 3 88 l9967.l reporting. It is understood that Parkinson is solely responsible for the tax treatment of the Parties? settlement; however, the Agreement is not intended to impose negative tax consequences on Parkinson. 9. Entire Aureement. The foregoing Agreement constitutes the entire agreement among the Parties and there are no other understandings or agreements, written or oral, among them on the subject. The Agreement shall be binding upon execution by Parkinson. and the ?Effective Date" of the Agreement shall be the date ot'l?arkinson?s execution of The Agreement. 10. Jointlv Dragged. The Agreement has been jointly drafted by the Parties and their attorneys. and in the event of any dispute arising out of the Agreement, no party will have any right to argue ,any rule of construction or interpretation against any other party claiming the bene?t or detriment ofbeing :i I. Attorneys? egg. In the event any party is required to bring an action at law or in equity against any other party to enforce any ot? the terms hereof, the losing party hereby agrees to pay the prevailing party its reasonable attorneys? fees. costs and expenses as they may be ?xed by the Court. Severability. Should any provision of the Agreement be declared or be detennined by any court of competent jurisdiction to be illegal, invalid, or unenforceable. the legality, validity, and enforceability of the remaining parts. terms, or provisions shall not be affected thereby, and the illegal, unenforceable, or invalid part. term, or provision shall be deemed not to be a part of the Agreement. 13. Assigns and The Agreement shall be binding upon and inure to the bene?t of the heirs, successors, and assigns of the Parties. 88199611 I IN TNESS HEREOFI has cxcculcd KIM: as "Us I MICHAEL PARKINSON STATE OF ILLINOIS COUNTY OFMADISON On tInsI day of EQPI 2017. bcforc 1m: pcrsunaIL nppcumd MuchaeI Parkinson. to me pcr'smmuy known rho be} by me duly sworn am my mm h; noqulchI and (In; foregoing as his Free 351 and (lord and (hat he cxcculcd IIvc mm: {or the purposes stalcd '7 7 - OFFICIAL SEAL I I MY colnm'ssmn IZI WI "0 NOTARVFUELID of mucus COMMISSION man Madisan County IL 62025 Vendar: 532435 LAW OFFICE OF KEITH SHORT PC on: Invoice Number Reflux: vm N0 P0 Numbzr 1099 Amount 10/04/2017 1043002 SETTLEMENT FEES PARKIN 507005 000000 1.500 00 Omsk 0m: 10/05/2017 Check No, 704703 Check 1.500100 Bank at Emma Madison County Government min om Dav/Eng Mendozac, Conn? Clerk i ris up er slusser, oun reasurer sw 157 Main 31. Suile 332 - DATE 10/00/2017 1 Edwardsville IL 52025 615-296-401 1 . ""1.500.00 AY. Qn'e Thousand Five Hundred Dollars And No Cents mm "Saws; 1 JPY 1 LAW OFFICE OF KEITH SHORT PC newnm mam" 1mm 1 1355 BLUFF ROAD 3 UNITC 1" 62234 COUNW TREASURER 4/6/2018 Illinois General Assembly - Illinois Compiled Statutes Home Legislation&Laws Senate House My Legislation Siteh?tap Bills Resolutions Compiled Statutes Public Acts Legislative Reports IL Constitution Legislative Guide Legislative Glossary Search By Number (example: HBOOM) lei seam? BY LE9.I Search Tips Advanced Search Illinois Compiled Statutes CW Information maintained by the Legislative Reference Bureau Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the cm. Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law. (50 ILCS 105/3) (from Ch. 102, par. 3) Sec. 3. Prohibited interest in contracts. No person holding any office, either by election or appointment under the laws or Constitution of this State, may be in any manner financially interested directly in his own name or indirectly in the name of any other person, association, trust, or corporation, in any contract or the performance of any work in the making or letting of which such officer may be called upon to act or vote. No such officer may represent, either as agent or otherwise, any person, association, trust, or corporation, with respect to any application or bid for any contract or work in regard to which such officer may be called upon to vote. Nor may any such officer take or receive, or offer to take or receive, either directly or indirectly, any money or other thing of value as a gift or bribe or means of influencing his vote or action in his official character. Any contract made and procured in violation hereof is void. This Section shall not apply to any person serving on an advisory panel or commission, to any director serving on a hospital district board as provided under subsection of Section 13 of the Hospital District Law, or to any person serving as both a contractual employee and as a member of a public hospital board as provided under Article 11 of the Illinois Municipal Code in a municipality with a population between 13,000 and 16,000 that is located in a county with a population between 50,000 and 70,000. However, any elected or appointed member of the governing* body may provide materials, merchandise, property, services, or labor, subject in: the following provisions under either paragraph (1) or (2): (1) If: A. the contract is with a person, firm, partnership, association, corporation, or cooperative association in which such interested member of the governing body of the nmnicipality has less than a 7 1/2% share in the ownership; and B. such interested member publicly discloses the nature and extent of his interest prior to or during deliberations concerning the proposed award of the contract; and C. such interested member abstains from voting on 1M 4/6/201 8 Illinois General Assembly - Illinois Compiled Statutes the award of the contract, though he shall be considered present for the purposes of establishing a quorum; and D. such contract is approved by a majority vote of those members presently holding office; and E. the contract is awarded after sealed bids to the lowest responsible bidder if the amount of the contract exceeds $1500, or awarded without bidding if the amount of the contract is less than $1500; and F. the award of the contract would not cause the aggregate amount of all such contracts so awarded to the same person, firm, association, partnership, corporation, or cooperative association in the same fiscal year to exceed $25,000. (2) If: A. the award of the contract is approved by a majority vote of the governing body of the municipality provided that any such interested member shall abstain from voting; and B. the amount of the contract does not exceed $2,000; and C. the award of the contract would not cause the aggregate amount of all such contracts so awarded to the same person, firm, association, partnership, corporation, or cooperative association in the same fiscal year to exceed $4,000; and D. such interested member publicly discloses the nature and extent of his interest prior to or during deliberations concerning the proposed award of the contract; and E. such interested member abstains from voting on the award of the contract, though he shall be considered present for the purposes of establishing a quorum. In addition to the above exemptions, any elected or appointed member of the governing body may provide materials, merchandise, property, services, or labor if: A. the contract is with a person, firm, partnership, association, corporation, or cooperative association in which the interested member of the governing body of the municipality, advisory panel, or commission has less than a 1% share in the ownership; and B. the award of the contract is approved by a majority ?vote of the governing body of the municipality provided that any such interested member shall abstain from voting; and C. such interested member publicly discloses the nature and extent of his interest before or during deliberations concerning the proposed award of the contract; and D. such interested member abstains from voting on the award of the contract, though he shall be considered present for the purposes of establishing a quorum. A contract for the procurement of public utility services by a public entity with a public utility company is not barred by this Section by one or more members of the governing body of the public entity being an officer or employee of the public utility company or holding an ownership interest of no more than 7 1/2% in the public utility company, or holding an ownership interest of any size if the public entity is a municipality with a population of less than 7,500 and the public utility's rates are approved by the Illinois Commerce Commission. An elected or appointed member of the governing body of the public entity having such an interest shall be deemed not to have a prohibited interest under this Section. Notwithstanding any other provision of this Section or anKQ 2M 4/6/2018 General Assembly - Compiled Statutes any other law to the contrary, until January 1, 1994, a member of the city council of a municipality with a population under 20,000 may purchase real estate from the nmnicipality, at a price of not less than 100% of the value of the real estate as determined by a written MAI certified appraisal or by a written certified appraisal of a State certified or licensed real estate appraiser, if the purchase is approved by a unanimous vote of the city council members then holding office (except for the member desiring to purchase the real estate, who shall not vote on the question). For the purposes of this Section only, a nmnicipal officer shall not. be deemed interested, if ?the officer is an employee of a company or owns or holds an interest of 1% or less in the municipal officer's individual name in a company, or both, that company is involved in the transaction of business with the municipality, and that company's stock is traded on a nationally recognized securities market, provided the interested member: publicly discloses the fact that he or she is an employee or holds an interest of 1% or less in a company before deliberation of the proposed aWard of the contract; (ii) refrains from evaluating, recommending, approving, deliberating, or otherwise participating in negotiation, approval, or both, of the contract, work, or business; abstains from voting on the award of the contract though he or she shall be considered present for* purposes of establishing' a quorum; and (iv) the contract is approved by a majority vote of those members currently holding office. A municipal officer shall not be deemed interested if the officer owns or holds an interest of 1% or less, not in the officer's individual name but through a mutual fund or exchange- traded fund, in a company, that company is involved in the transaction of business with the municipality, and that company's stock is traded on a nationally recognized securities market. Under either of the following circumstances, a municipal or county officer may hold a position on the board of a not?for? profit corporation that is interested in a contract, work, or business of the municipality or county: (1) If the municipal or county officer is appointed by the governing body of the municipality or county to represent the interests of the municipality or county on a not-for?profit corporation's board, then the municipal or county officer may actively vote on matters involving either that board or the municipality or county, at any time, so long as the membership on the not?for?profit board is not a paid position, except that the municipal or county officer may be reimbursed by the not?for-profit board for expenses incurred as the result of membership on the not- for-profit board. (2) If the municipal or county officer is not appointed to the governing body of a not?for?profit corporation by the governing body of the municipality or county, then the municipal or county officer may continue to serve; however, the nmnicipal or county officer shall abstain from voting on any proposition before the municipal or county governing? body directly' involving the not-for- profit corporation and, for those matters, shall not, be counted. as present for the purposes of a quorum of the municipal or county governing body. (Source: P.A. 100-201, eff. 8-18-17.) Home Legislation Laws House Senate My Legislation Disclaimers Email hH-n'llumnu ilnn 3?4 4/6/2018 Illinois General Assembly - Illinois Compiled Statutes This site is maintained for the Illinois General Assembly by the Legislative Information System, 705 Stratton Building, Spring?eld, Illinois 62706 mafia-1m 217-782-3944 217-782-2050 (TTY) a in- nation 4/4 ICS A Illinois Council of School Attorneys Answers to FAQs Regarding Conflict of Interest and Incompatible Offices June 2014 Published by a Committee of the Illinois Council of School Attorneys1 ICSA publishes this guidance as part of its continuing effort to provide assistance to school leaders. The responses to the FAQs represent the combined thinking of committee members. Potential conflict questions may arise that are not addressed in this guidance. This guidance is published for informational purposes only, and is not a substitute for legal advice. For legal advice or a legal opinion on a specific question, you should consult a lawyer. com-immanent Board member Interest In school contracts, p. 1 . Employment while a board member, p. 3 . Nepotlsm, p. 4 . Incompatibility of offices, p. 5 . Fiduciary duty and oath of office, p. 5 . Gift ban and prohibited political practices, p. 7 . Illinois Governmental Ethics Act, p. 7 . Removal of a board member, p. 8 . Appearance of impropriety, p. 8 1. Board member interest in school contracts Section of the School Code (105 ILCS 5/10-9) states that a board member shall not be interested, either directly or indirectly, in his or her own name, or in the name of another person, in any contract, work, or business of the school district, or in any sales or purchases of the school district. Similar provisions are found in the Public Officer Prohibited Activities Act. 50 ILCS 105/3. A. Are there any exceptions to this rule? Yes. Certain contracts may be given to a board member or his or her business if the contract is $1000 or less, or in certain limited situations provided disclosure procedures are followed and the board member owns less than 7.5% of the business. Also, if the materials, labor, or merchandise are not available from any other source, the contract may be let to a board member provided the total amount in any one fiscal year does not exceed $5000. El 2921 Baker Drive 0 Springfield lilinois 62703-5929 217/528-9688 0 Fax 217/528?2831 One Imperial Place 0 1 East 22nd Street, Suite 20 - Lombard, Illinois 60148-6120 630/629-3776 - Fax 630/629-3940 B. What does it mean to be ?interested, either directly or indirectly?" In Panozzo v. City of Rockford, 306 443, 28 748 (2d Dist. 1940), the court held that the interest must be ?certain, de?nable, pecuniary or proprietary." The court held that the interest must be financial, and must be of a personal or private nature as opposed to a general benefit to all persons or property. In considering the financial interest, or prohibited interest, the courts have basically held that it is irrelevant whether there would be any actual harm or injury, or even whether the contract may be beneficial to the governmental entity. Motive does not play a part in whether a conflict of interest exists and whether the contract is then void. The purpose of the prohibition was explained by the Illinois Supreme Court in People v. Adduci, 412 621, 108 1 (1952), as follows: The interest against which the prohibition is leveled is such an interest as prevents or tends to prevent the public official from giving to the public that impartial and faithful service which he is in duty bound to render and which the public has every right to demand and or not the interest in any given case comes within the prohibition of the statute may well become a question of construction for the court in view of all the facts and circumstances shown in the particular case. The court's interpretation of what constitutes a ?contract? under 105 ILCS 5/10-9 and 50 ILCS 5/3 is sweeping. In People ex rel. Madigan v. Bertrand, Jr., 2012 IL App (1st) 111419, the Appellate Court held that a board member could not settle a lawsuit he filed against the public board because the settlement agreement included the payment of his attorney fees, thus making it a contract in which he was financially interested. C. May a board member be employed by a company that does business with the district he or she serves? Yes, as long as a board member has no financial interest in the business other than as an employee. The School Code states that school board member [is not] deemed interested if the board member is an employee of a business that is involved in the transaction of business with the school district, provided that the board member has no financial interests other than as an employee."105 ILCS 5/10-9. In a 2014 ?unofficial" opinion, the Attorney General determined that a board member?s employment must be at a for-profit business that operates as a traditional commercial enterprise. In that case, a school board member was determined to be in violation of 105 ILCS 5/10?9 because she was employed at a special education cooperative to which her board's school district was a member. D. May a board member who is appropriately licensed work as a substitute teacher for the district where he or she is a board member? Yes, but only in limited situations. Working as a substitute is a contract for services. As such, it is analyzed under the statutory exception requiring: (1) a contract to be approved by majority vote of the board; (2) the amount of the contract to not exceed $1000 and, in the aggregate, to not exceed $2000 per fiscal year, except when the service is not available from any other source, the aggregate amount in the same fiscal year to not exceed $5000; (3) the board member to publicly disclose the nature and extent of his or her interest before or during deliberations; and (4) the interested member to abstain from voting on the contract. The potential of a common law conflict may exist, however, if the board member is called upon to vote on the rate of compensation to be paid to substitute teachers. See also the discussion at 2. B. below. E. Can the spouse of a board member who owns his or her own business be awarded a contract with the school district? This probably would not be a conflict so long as the board member had no ownership or financial interest in the business. See Sections 3 and 9 below. F. May the school district purchase property from the spouse of a board member? The answer to this question could be very fact-specific. Such a purchase could probably be made so long as the board member does not have any ownership or proprietary interest in the property being purchased, but a violation could occur depending on how title to the property in question was held. G. Can a board member who owns a local business provide free services to the district? Example: A board member owns a printing business and offers to print athletic programs at no cost to the district. A gift would not be deemed a contract. Thus, so long as there is nothing of value coming to the board member, and the service is in fact free, then it does not appear that there is a conflict. H. If a conflict exists, can a board member merely abstain from voting? Does it make any difference if the contract is awarded pursuant to a public bid? Merely abstaining from voting does not alone cure a statutory conflict of interest. if a conflict exists, it does not make any difference if the contract is fair or even favorable to the district, or if it was awarded pursuant to a public bid. I. What are the penalties or consequences if any of these provisions are violated? A board member convicted of violating provisions of the applicable statutes would be guilty of a Class 4 felony and would be removed from office. The contract is also voidable by the court. 50 105/3. 2. Employment while a board member A. May an individual run for election as a school board member for the district where he or she is employed? Yes. If elected, the individual may need to resign from district employment to comply with the laws defining prohibited interests as described below. B. May an individual be employed by a school district for which he or she serves as a school board member? A school board member may not be employed by the district he or she serves unless the pay is less than the statutory contract limit and other requirements are met. Two laws address this question: the School Code and the Public Officer Prohibited Activities Act. The School Code prohibits a school board member from having an interest in a contract with the district he or she serves. Employment is a contractual relationship even if the individual does not have an individual employment agreement. An exception to this rule exists when the contract amount does not exceed $1000 or the award of the contract does not cause the aggregate amount of such contacts to the same individual to exceed $2000 in the same fiscai year, or $5,000 in the same fiscal year if the labor or materials to be provided are not otherwise available in the district. 105 The Public Officer Prohibited Activities Act prohibits a governing body member from being ?in any manner financially interested directly in his own name or indirectly in the name of any other person, association, trust, or corporation, in any contract or the performance of any work in the making or letting of which such officer may be called upon to act or vote." 50 105/3. Exceptions to this prohibition are similar to the exceptions in the School Code. Read together, the School Code and the Public Officer Prohibited Activities Act allow a board member to be employed by the district he or she serves if all of the following conditions are met: 1) The award of the contract is approved by a majority vote and the board member abstains from voting; (2) The contract (employment is a contractual relationship) amount does not exceed $1,000; (3) The award of the contract would not cause the aggregate amount of all such contracts so awarded to the same board member to exceed $2,000 in the same fiscal year, or $5,000 in the same fiscal year if the labor or materials to be provided are not othenrvise available in the district; 2 (4) The board member publicly discloses the nature and extent of his or her interest before or during the deliberations concerning the contract; and (5) The board member abstains from voting on the award of the contract (note that he or she is considered present to establish a quorum). The question occasionally arises whether an employee of a special education cooperative may serve on the school board for a district that is a member of the cooperative. If the individual is deemed to be a district employee, he or she violates the conflict of interest laws. See the answer to question 10 above for more information. An attorney will analyze the entire factual context before providing an answer. A violation of the prohibited interests section of the School Code or the Public Officer Prohibited Activities Act is a Class 4 felony. 3. Nepotism A. May an individual be a board member at a school district that employs his or her spouse? Yes. An individual?s interest in a contract is not attributed to his or her spouse, provided the contract is not a mere subterfuge Following this rule, an Illinois Appellate Court found no violation of the Corrupt Practices Act (predeces- sor of the Public Officer Prohibited Activities Act) when a school district employs a board member?s spouse. Hollister v. North258 (4th Dist. 1977). This rule also applies in the context of the School Code?s section on prohibited interests. It allows a board member to participate in a group health insurance program provided to a district employee if the board member is that employ- ee's spouse or child. 105 ILCS This provision clearly indicates an intent to permit spousal employment. A violation may occur if the board member actively promotes the financial interests of his or her spouse. This is a fact-sensitive inquiry; a board member should seek legal counsel before voting on anything directly related to his or her spouse, such as, a motion to hire, promote, or transfer as well as anything of a disciplinary nature. May a board member participate in his or her spouse?s insurance? Yes. As discussed above, the School Code expressly permits a school board member to be the beneficiary of dependent health insurance coverage. It states: Nothing contained in this Code may preclude an elected school board member from participating in a group health insurance program provided to an employee of the school district that the board member serves it the board member is a dependent of that employee. 105 There are no appellate decisions concerning whether the Public Officer Prohibited Activities Act permits this interest. However, the School Code provision should control because it was the latest legislative action on the topic and the most specific. . May a board adopt an anti-nepotism policy? More specifically, may a school board prohibit the hiring of a spouse and family members of sitting board members? Yes, a board may adopt an anti-nepotism policy that prohibits hiring a spouse and family members of sitting board members. This policy may be broadened to prohibit the hiring of the spouse and family members of the superintendent and other identified employees. State and federal law permits no-spousal hire or anti-nepotism policies. The Illinois Human Flights Act prohibits dis- crimination on the basis of marital status. As defined, marital status concerns an individual's legal status as married, single, separated, divorced, or widowed. Thus, the statutory definition of marital status discrimination does not encompass the identity of one?s spouse. Boaden Dept. of Law Enforcement, 171 l .2d 230, 664 61 (1996). Before adopting an anti-nepotism or no-spouse policy, a board should carefully analyze benefit versus harm. Among the potential harms are that such a policy could reduce the applicant pool, be dif?cult to apply, prevent hiring of the most capable applicant prohibited relationship, and burden future boards with a policy that is difficult to delete or dilute. Potential bene?ts include protecting the district against favoritism, preventing fellow board members from feeling pressured, and adding credibility to the hiring process. Selecting job candidates based on merit is itself a powerful deterrent to nepotism. Adhering to the principle that the most qualified candidate will be selected also avoids the pitfalls of an anti-nepotism policy. 4. Incompatibility of offices A. Can a board member hold two elected offices at the same time? Yes, provided the offices are not incompatible. In Flogers v. Village of Tfnley Park, 116 I .App.3d 437, 441 (1 st Dist. 1983), the court described incompatibility as follows: Incompatibility is present when the written law of a state specifically prohibits the occupant of either one of the offices in question from holding the other and, also, where the duties of either office are such that the holder of the office cannot in every instance, properly and fully, faithfully perform all the duties of the other office. This incompatibility may arise from multiplicity of business in one office or the other, considera- tions of public policies, or othenNise. (Emphasis added) People v. Haas, 145 Ill.App. 283, 286-87 (1st Dist. 1908). [incompatibility] is found to be in the character of the offices and their relation to each other, in the subordina- tion of the one to the other, and in the nature of the duties and functions which attach to them. incompatibility of offices exists Were there Is a conflict In the duties of the offices, so that the performance of the duties of the one interferes with the performance of the other. They are generally considered incompatible where such duties and functions are inherently inconsistent and repugnant, so that because of the contrariety and antagonism which would result from the attempt of one person to discharge faithfully, impartially, and effi- ciently the duties of both offices, considerations of public policy render it improper to retain both. [Emphasis added] (Internal quotations omit- ted). In another appellate decision, the court held that the offices of alderman, school board member, and park district commissioner were incompatible. Said the court: ?Instead of examining whether there has been an actual conflict in the of?ces in which a person is sewing, Illinois courts look to whether there will eventually be a conflict.? People ex. rel. Alvarez v. Price, 948 174 (Ill. App. 1 Diet. 2011). The Illinois Attorney General?s office has compiled a comprehensive list of incompatible offices. Some offices found by Attorney General opinions to be incompatible with the office of school board member are: Board of Review member, City Council member, City Manager, Community College District Trustee, County Board Member, County Engineer, County Zoning Administrator, County Zoning Board of Appeals Member, Educational Labor Relations Board Member, Fire Protection District Trustee, Park District Board Member, Township Assessor, and Township School Trustee. The Attorney General's index of opinions can be found at: A board member may also be a city councilman, a city alderman or a village trustee if the village, city or unincorporated town has 2500 or fewer inhabitants. 50 105/13. B. Can a board member be employed by another public body (tag, a park district) that may have dealings with the school district? If the employment position is one of authority or policy making, the analysis contained in the above answer would seem to indicate that a conflict exists. 5. Fiduciary duty and oath of office A. Does a board of education member owe a fiduciary obligation to the school district? If so, what is that obligation? As elected public officials, school board members hold a fiduciary position and owe duties of loyalty and good faith to their school districts. The fiduciary duty requires the board member to put the best interests of the district ahead of his or her other personal or financial interests. As the Illinois Supreme Court has noted, ?The faithful performance of official duties is best secured if a governmental officer, like any other person holding a fiduciary position, is not called upon to make decisions that may advance or injure his individual interest." City of Chicago v. Keane, 64 lil.2d 559 (1976). Moreover, in the mandated oath of office, each board member swears or affirms to faithfully discharge the duties of the office in accordance with the state and federal constitutions and laws, and to ?respect taxpayer interests by serving as a faithful protector of the school district?s assets.? 105 ILCS Training on fiduciary responsibilities is included in the list of topics on which each board member must complete training within the first year of his or her term. 105 ILCS 5/24-16a. B. What is the board of education member?s obligation when his or her personal or financial interests conflict with the best interests of the school district? The board member is expected to act in the best interest of the school district and not in his or her own personal or financial interest. When a conflict arises between the district?s interests and the school board member?s personal and ?nancial interest, the board member should carefully review and consider his or her role in the decision. Sometimes conflict can be resolved by the board member?s abstaining from discussion and action on the matter. However, there may be occasions when the board member?s conflict of interest cannot be removed through non-participation in the decision-making process. This is addressed in Section 1. Similarly, the board member should not use his or her position as a board member to in?uence the outcome of day-to-day decisions left in the administration?s hands. Use of such influence could be considered a breach of the board member?s fiduciary obligations to the school district. C. What are the considerations for a board member who simultaneously serves as a board member in both a high school and elementary school district? Lawyers disagree whether this constitutes incompatible office holding; an individual considering being on both boards should obtain a legal opinion. See Section 4. In addition to this consideration, the board member should be mindful that he or she has a fiduciary duty to both the high school district and the elementary district. If a conflict arises between the two districts, the board member should obtain guidance from legal counsel on how to best address the potential conflict. D. What are the consequences if a board member breaches the fiduciary duty? In some instances, the board member may forfeit his or her seat on the school board as a consequence of the breach. Depending upon the nature of the breach, the board member could also face legal action by the school district, a taxpayer, or a member of the public for an accounting and possible restitution. The board member could further face criminal penalties imposed by statutes, including penalties under the Gift Ban Act or the Public Officer Prohibited Activities Act. Can a board member be prohibited from participating in a closed meeting if he or she has a personal interest adverse to the district as regards the matter being discussed? Illinois statutes do not specifically address whether a board of education member can be excluded from a closed meeting because of a perceived conflict of interest. The Attorney General?s office has opined that a board member cannot be sanctioned in the absence of a statute authorizing such action by the board. See Op. Atty Gen. No. 91-001 (1991). Furthermore, the Appellate Court has held that school board members hold a property right in their election to the board, thus requiring due process before removal. East St. Louis Federation of Teachers, AFL-CIO v. East. St. Louis School District No. 189 Financial Oversight Panel, 178 lil.2d 399, 417-18 (1997). i? If because of his or her own personal or financial interests the board member cannot act in the best interest of the school district, the board member should voluntarily refrain from participation and discussion of the topic. F. What is the significance of the school board member oath of office? Board members are required to take the oath of office, administered as determined by the board, in substantially the form set out in 105 5/1 0-16.53 In addition to fiduciary and other duties imposed by statute, the oath of office could be a basis for legal action against the school board member. Courts have found government officials liable for breach of contract for violating the oath of office. The violation of the oath of office may also be grounds for removal from office. A violation of the oath in most cases, however, is not subject to a private right of action for damages. Collins v. Bd. of Educ. of N. Chicago Cmfy. Unit Sch. Dist. 187, 792 F. Supp. 2d 992, 999 (ND. Ill. 2011). Board members should carefully read the required oath of office to better understand the obligations it imposes on school board members. G. When does a seat on the board of education become vacant? According to the School Code, a school board seat is vacant if one of the following occurs during the board members term of office: (1) death of the incumbent; (2) resignation provided to the Secretary or Clerk of the board; (3) lacking legal capacity to serve in the position; (4) no longer residing in the district; (5) conviction of certain crimes involving a violation of official oath, or conviction of a violent crime against a child; (6) removal from office; (7) a finding by a court or other competent tribunal that the election of the board member is void; and (8) no longer residing in the particular area that the school board member was elected to represent. Other actions may lead to a vacancy under other state or federal law. For example, a vacancy occurs if a board member is convicted of having a prohibited interest in a district contract, of?cial misconduct, or engaging in bid rigging activities. A board member may also forfeit his or her office by failing to file a statement of economic interest, accepting an incompatible office, or violating the working cash fund provisions. See Vacancies on the Board of Education, published on the IASB website at 6. Gift ban and prohibited political practices What does the Act prohibit? The State Of?cials and Employees Ethics Act, 5 et seq. (Ethics Act), prohibits the acceptance of certain gifts by public officials and identifies prohibited political activities. The Ethics Act is a and complex law most of which does not apply to school board members. A school board should consult with its attorney for legal advice or a legal opinion concerning specific fact situations. The Ethics Act is designed for state employees and officials but requires local governments to adopt an ordinance or resolution no less restrictive than the Act's provisions. Thus, school officials are left to figure out how to make a piece of legislation that was not designed for them, fit their situation. The enforcement provisions are particularly problematic because school boards do not have the power to adopt penal ordinances and penalties. Regardless of enforcement uncertainties, school officials should pay attention to the Act?s prohibitions because violation charges are tried in the court of public opinion. Detenninlng what political activities are prohibited by the Ethics Act depends on three factors: the actor (board member or employee), the context (location and time), and the activity. No employee may intentionally perform any political activity during compensated time. No board member or employee may intentionally use any district property or resources in connection with any political activity (similar to the prohibition in the Election Interference Prohibition Act, 10 519-251, that bars spending public money to advance a candidate or proposition), intentionally require any other board member or employee to perform any political activity, or award board members or employees compensation or benefits for participating in any political activity. The Ethics Act?s gift ban prohibits school officials (board members and employees) from accepting a gift from a prohibited source unless the gift falls within one or more of 12 exceptions to the ban. A person or entity becomes a prohibited source by seeking official action from, or doing or seeking to do business with, school officials, among other types of conduct described in the statute. The 12 exceptions include receipt of educational materials, a gift from a relative or personal friend, goods or refreshments not exceeding $75 per person in value on a single calendar day, and any item(s) from one prohibited source during any calendar year having a cumulative total value of less than $100. The ban applies to spouses and immediate family members living with the school of?cial. 7. Illinois Governmental Ethics Act A. What is required by the Governmental Ethics Act? The Governmental Ethics Act requires each school board member and certain employees to annually file a verified Statement of Economic Interests. 5 ILCS A school board candidate must also ?le a Statement of Economic Interests. 105 519-10; 5 ILCS Campaign contributions are not included in the Statement of Economic interests, but must be disclosed pursuant to the Election Code. 10 ILCS 5/9-1 et seq. The Governmental Ethics Act provides instructions and deadlines for filing a Statement of Economic Interests. The required form is also posted on the Illinois Secretary of State?s website An individual must file the Statement upon initial appoint- mentor employment and by May 1 of each year unless he or she has already filed that calendar year. A candidate for the school board must file a Statementwith the county clerk and give the receipt to the county clerk or the county board of election commissioners at the time he or she files nominating papers. 105 ILCS 5/9-10. Failing to comply with the deadline or filing an intentionally false or incomplete Statement may subject an individual to a fine, criminal charge, and/or forfeiture of office or employment. B. Are items that are required to be listed in a board member?s Statement of Economic Interests also prohibited conflicts of interest? Not necessarily. The interests that must be disclosed in the Statement of Economic interests are independent from the prohibited interests contained in other laws. These laws do not correlate to each other. Thus, an interest disclosed in the Statement of Economic interests does not necessarily give rise to a prohibited conflict of interest. 8. Removal of a board member May a school board member be removed from office? It so, what are the procedures? The regional superintendent of schools is authorized to remove a school board member during his or her term of office. The regional superintendent may do so if the school board member has willfully failed to perform his or her duties as a member. If a board member fails to perform a mandatory duty, a proceeding known as qua warranto may be brought against the board member. If a court determines that the board member did not perform a mandatory duty, the court can impose a $25,000 fine or oust the board member from office. 735 5/18?108. If, after three years foltowing a district?s placement on academic watch status, the district remains on academic watch status, the State Board of Education may authorize the State Superintendent to direct the regional superintendent to remove school board members. 105 ILCS and 3-14.28. 9. Appearance of impropriety What does appearance of impropriety mean? Is this a legal standard? Appearance of impropriety is not a legal standard; it refers to conduct that appears questionable although it may be legal. Community members might assume, based on their knowiedge of the facts, that a board member has violated some rule or law because his or her conduct appears suspicious. self-serving, or improper. To avoid accusations of misconduct and the resultant loss of credibility, board members generalty seek to avoid the appearance of impropriety. For example, to avoid the appearance of impropriety, a board member may want to refrain from voting on any matter that will ?nancially attect him or her and his or her spouse or family member. 1 The foltowing attorneys are members of the 2014 committee: Heather Brickman, Hodges, Loizzi, Eisenhammer, Ftodiok 8: Kohn John lzzo, Sraga Hauser, Chris Miller, Miller, Tracy, Braun, Funk Miller, Ltd.; Merry Flhoades, Tueth, Keeney, Cooper, Mohan Jackstadt, James Petrungaro, Scariano, Himes Petrarca, Chtd.; Melinda Selbee, Illinois Association of School Boards; and Peter Wilson, Jr, Mickey, Wilson, Weller, Fienzi Andersson, PC. The 2014 ICSA Executive Committee provided peer review. 2 The prohibited interests sections of the School Code and Pubfic Officer Prohibited Activities Act have different limits. Here we used the limits in the School Code because they are specifically applicable to school board members. The Public Officer Prohibited Activities Act permits a contract to be awarded to a governing body member if it ?Would not cause the aggregate amount of all such contracts so award- ed to the same person, firm, association, partnership, corporation, or cooperative association in the same fiscal year to exceed $4,000." The similar provision in the School Code is up to $2,000, but it permits contracts up to the aggregate amount of $5000 in the same fiscal year if the labor is not otherwise available in the district. 3 The following is the text of the oath of office to be administered to board members: I, (name of member or successful candidate), do solemniy swear (or affirm) that I will faithfully discharge the duties of the office of member of the Board of Education (or Board of School Directors, as the case may be) of (name of school district), in accordance with the Constitution of the United States, the Constitution of the State of Illinois, and the laws of the State of Illinois, to the best of my ability. 1 further swear (or af?rm) that: I shall respect taxpayer interests by sewing as a faithful protector of the school district's assets; I shall encourage and respect the free expression of opinion by my fellow board members and others who seek a hearing before the board, while respecting the privacy of students and employees; I shalt recognize that a board member has no legal authority as an individual and that decisions can be made only by a majority vote at a public board meeting; and i shall abide by majority decisions of the board, while retaining the right to seek changes in such decisions through ethical and constructive channets. 105 ILCS 5/1 0-1 6.5. 2014 Illinois Council of School Attorneys