KAMALA D. HARRIS Attorney General BRUCE M. SLAVIN MARC J. NOLAN Deputy Attorneys General AGO 13-903 No. 13-903
California Attorney General Opinions Office of the Attorney General State of California December 23, 2015 THE HONORABLE CAROL LIU, MEMBER OF THE STATE SENATE, has requested an opinion on the following question: Under Government Code section 1090, does a city council member who is associated, as an independent contractor, with a public-relations firm that provides services to two nonprofit organizations that have contracts with the city, have a prohibited financial interest in those contracts where the council member performs no services for the two contracting nonprofits and receives no compensation based on the firm's provision of services to those entities? CONCLUSION Under Government Code section 1090, a city council member who is associated, as an independent contractor, with a public-relations firm that provides services to two nonprofit organizations that have contracts with the city, does not have a prohibited financial interest in those contracts where the council member performs no services for the two contracting nonprofits and receives no compensation based on the firm's provision of services to those entities. ANALYSIS In this opinion, we are asked to determine whether a Glendale City Council member has or does not have a prohibited financial interest in contracts between a private public-relations firm and two nonprofit corporations that perform work for the City of Glendale (Glendale). In Glendale, as in many other cities, the city council acted as the city's redevelopment agency, and all of the city council members were also redevelopment agency members.1 In 2012, all redevelopment agencies throughout the state were dissolved by operation of law, and interim successor agencies were created in their place for the purpose of wrapping up the business of the redevelopment agencies.2Glendale's successor agency, like its redevelopment agency, is composed of the members of the Glendale City Council. In 2008, several years before it was dissolved, the Glendale Redevelopment Agency entered into lease and management agreements with a nonprofit corporation called Glendale Arts, to rehabilitate and operate the historic Alex Theatre in Glendale. The terms of Glendale's lease-management agreements with Glendale Arts require Glendale to complete certain work, including expanding the Alex Theatre into an adjacent parking lot. In order to carry out this expansion, the successor agency entered into three additional contracts, including a contract with Glendale for a bridge loan, a contract with a building firm for design and construction work, and a contract with Glendale Arts for mothballing and resetting stage equipment. In a separate project, in 2012, the Glendale City Council adopted a resolution approving the creation of the Downtown Glendale Community Benefit District. The district provides extra security, sidewalk maintenance, beautification, promotional activities, and other similar benefits to property owners within the district. These benefits are funded through special assessments on real property within the district. To carry out this project, Glendale entered a contract with a nonprofit corporation called the Downtown Glendale Association, to plan and implement the operations of the community benefit district. We are informed that an individual serving as a member of the Glendale City Council (and, therefore, as a member of the successor agency) recently established an independent contractor relationship with a public-relations firm.3 The firm provides media relations services, such as composing and issuing press releases, to Glendale Arts and the Downtown Glendale Association. As a contractor, the council member does not personally provide any services to either Glendale Arts or the Downtown Glendale Association. The council member is not an owner, shareholder, partner, or employee of the public-relations firm. Rather, the council member provides services directly to certain of the firm's clients and is compensated on a per-client, per-project basis. The council member currently provides services to only one client of the firm, a nonprofit social services organization that operates outside Glendale. Given these circumstances, we have been asked to give our opinion as to whether the council member has a prohibited financial interest in Glendale's contracts with these two nonprofits. We are also asked whether the council member would have a prohibited interest if Glendale were to amend, renew, or extend those contracts. Our analysis follows. Government Code section 1090 Government Code section 1090 provides in relevant part that "[M]embers of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members." Under section 1090, public officials...
