082117 KSEO, ETH 2017-07

• Case Date: August 21, 2017
• Court: Kansas

ETH 2017-07 Opinion No. 2017-07 Kansas Ethics Opinion August 21, 2017          Greg A. Bengtson          Salina City Attorney          Clark, Mize & Linville, Chartered          129 S. Eighth          P.O. Box 380          Salina, Kansas 67402-0380          Synopsis: The local conflict of laws, K.S.A. 75-4301 a et seq., do not impute substantial interests of local government officials or employees in businesses or persons that are connected to businesses or persons in which they do have substantial interests. Under the facts provided, contracts for the sale of real estate, when let for bid by publication, must be published in the official municipal newspaper to meet the requirements K.S.A. 75-4304(d)(1). Cited herein: K.S.A. 75-4301a, K.S.A. 75-4304, and Opinion 2015-06.          Dear Mr. Bengtson,          In response to your August 3, 2017, letter request, this opinion is provided by the Kansas Governmental Ethics Commission (commission), concerning application of the local conflict of interest law, K.S.A. 75-4301 a et seq. The commission's jurisdiction is limited to applicability of this law. This opinion, provided pursuant to K.S.A. 75-4303a(a), does not address whether some other statutory system, common law theory, or agency rule or regulation applies to your inquiry.          FACTUAL STATEMENT          We understand that you request this opinion as city attorney for the City of Salina, Kansas. The following facts are provided with your inquiry:

• [Question 1] A member of the Salina's governing body is a medical doctor employed by Salina Regional Health Center, Inc. ("SRHC"), and received compensation from SRHC in the form of taxable income of more than $2,000. Another member of the Salina's governing body is married to a medical doctor employed by SRHC. During calendar year 2016 this doctor received compensation from Salina Regional Health Center in the form of taxable income of more than $2,000. We understand each them have a substantial interest in SRHC under K.S.A. 75-4301a(a)(2). The Salina Regional Health Foundation (the "Foundation") is a separate Kansas not-for-profit corporation and a corporate member of SRHC.

• [Question 2] A different governing body member was determined in Governmental Ethics Commission Opinion 2015-06 to have a substantial interest in Kelly Dunn Construction, Inc., whether by virtue of commissions exceeding $2,000 paid to his spouse by that business for services rendered as a real estate agent, or as the customer or client paying commissions which aggregated to an amount in excess of $2,000 in the preceding year under K.S.A. 75-4301 (a)(5). This member currently has a substantial interest in Kelly Dunn Construction, Inc. Magnolia Hills, Inc., is a Kansas for-profit corporation. Its annual report indicates Kelly R. Dunn is president and a director of the corporation, and identifies real estate development as the nature and kind of business in which the corporation is engaged. KC Development LLC is a Kansas limited liability company. The most recent annual report, filed February 9, 20*7, indicates Kelly R. Dunn is a member who owns five percent or more of capital in the limited liability company.

• [Question 3] This governing body member's spouse continues to be a Kansas licensed real estate agent associated as an independent contractor of Todd E. Welsh, a Kansas licensed real estate broker (the "Broker," as defined in K.S.A. 58-3035(f)), doing business as the brokerage firm SalinaHomes.com, Inc., a Kansas for-profit corporation (the "Brokerage Firm," as defined in K.S.A. 58-30-102(e)). The Brokerage Firm's annual report indicates that Mr. Welsh holds the positions of officer and director of the corporation and identifies "RE AGENT BROKER" as the nature and kind of business in which the corporation is engaged.

         The governing body member's current Statement of Substantial Interests form identifies "Salina Homes, Inc." in the "Receipt of Compensation" section. We request the Commission's advisory opinion as to whether the governing body member actually...