Legal Topics for Administrative Professionals

1. Michigan Association of School Boards Go to Pros Webinar for Administrative Professionals December 9, 2014 Legal Topics for Administrative Professionals Presented by: Brad Banasik, Legal Counsel Michigan Association of School Boards

2. Overview • Handling Conflicts of Interests. • Managing School Board Positions: Elections, Terms of Office, and Vacancies. • Requests for Information under PERA • Open Meetings Act FAQs • Other Topics You Want To Discuss. • Conclusion.

3. Handling Conflicts of Interest • Incompatible Public Offices Law. • Contracts of Public Servants with Public Entities Law. • Public Act 419 of 2004 (ISD Reform Legislation). • MCL 380.1203 (PA 606 of 2012). • Other Conflict of Interest Issues.

4. Conflict of Interest: Incompatible Offices • Abstaining does not resolve the conflict. • A board member must resign from one of the two incompatible offices. • The law is enforced by a county prosecutor or the Michigan Attorney General. • There is no private cause of action. • Any judicial relief or judicial remedy applies prospectively.

5. Conflict of Interest: Incompatible Offices A public officer cannot hold incompatible offices at the same time (PA 566 of 1978; MCL 15.181). • Subordination of one public office to another; • Supervision of one public office by another- * Approves compensation * Power of appointment or removal • Breach of duty * Competing Interests * Contractual Relationship

6. Incompatible Offices- Issues • School board member – employee of the school district? • School board member – township board of trustees? • ISD superintendent – superintendent of constituent school district? • School board member – substitute teacher via third-party contract?

7. PA 22 of 2008: Volunteering • The board member receives no compensation as a volunteer coach or supervisor. • The board member abstains from voting on issues concerning the specific extracurricular program during the period he/she is volunteering. • There is no qualified applicant available to fill the vacant position if the board member is excluded. • A criminal history check and a criminal records check are conducted on the board member.

8. Conflict of Interest: Contracts of Public Servants with Public Entities • PA 317 of 1968 regulates contracts between school districts and board members or between school districts and employees of the district. • Prohibits a public servant from being a party, directly or indirectly, to a contract between him/ herself and the governmental entity of which he or she is an officer or employee. • Exception: Public servants paid for working an average of 25 hours or less (disclose/abstain).

9. If Exempted: Duty to Disclose • Threshold: $250 or 5% of contract cost. • More than $5,000: ● Disclose conflict at meeting. ● Vote on contract at next meeting at least seven days after disclosure. • Less than $5,000, same as above or: ● Written disclosure to President at least seven days before meeting ● Post disclosure on meeting notice

10. Record of Disclosure Minutes or Notice must show: • The name of each party involved in the contract. • Duration. • Financial consideration between the parties. • Facilities or services of the school district included in the contract. • The “degree of assignment” of public employees regarding fulfillment of the contract.

11. If Exempted: Duty to Abstain • The board member who has a conflict of interest must abstain from voting on the contract. • The minutes must record his/her abstention. • The motion to approve the contract must pass by a 2/3 vote of the full board (without the abstaining member’s vote). • In the case of a 7-member board, this means there must be at least 5 affirmative votes.

12. MCL 380.634- Restrictions for ISDs • Prohibits board members and administrators from accepting more than $56.00 (13/14 amt.) from vendors in any one month period. • Prohibits “substantial conflicts of interest” in proposed contracts. • “Substantial conflicts of interest”- Of such substance as to induce action to promote the contract for personal benefit.

13. “No substantial conflict of interest” • Stockholder: 1% or less of total stock if not listed on SE or less than $25,000 market value if listed on SE. • Trust Beneficiary: (same as above) • Employee of professional LLC. • Corporations and firms that don’t include a board member or an administrator as a director, officer, member, or employee. • Contracts between the ISD and constituent school districts

14. Disclosing other conflicts of interest 1) An ISD Board member or administrator is employed or under contract with a business enterprise or a “family member” who has an ownership interest in or is employed by a business enterprise with which the ISD is considering entering into a contract. 2) Must disclose the conflict at a board meeting. 3) Two votes: (1) Is it a conflict? (2) Entering into the contract.

15. “Family Member” • A person’s spouse or spouse’s sibling or child • A person’s sibling or sibling’s spouse or child • A person’s child or child’s spouse • A person’s parent or parent’s spouse • Includes the above relationships as created by adoption or marriage

16. MCL 380.1203- Public Act 606 • Applies to contracts and financial transactions that “require the approval of the board.” • A board member who believes or has reason to believe that he or she has a conflict of interest with regard to a contract or other financial transaction shall abstain from voting on the matter and shall disclose the specific conflict of interest.

17. MCL 380.1203 (Cont.) • Also applies to legal counsel, advisors or consultants. • A board member is presumed to have a conflict of interest if the member or his or her “family member” has a financial interest, or a competing financial interest, in the contract or other financial transaction or is an employee of the school district.

18. “Family Member” • A person’s spouse or spouse’s sibling or child • A person’s sibling or sibling’s spouse or child • A person’s child or child’s spouse • A person’s parent or parent’s spouse • Includes the above relationships as created by adoption or marriage

19. “No financial interest” • Stockholder: 1% or less of total stock if not listed on SE or less than $25, 000 market value if listed on SE. • Trust Beneficiary: (same as above) • Employee of professional LLC. • Corporations and firms that don’t include a board member or an administrator as a director, officer, member, or employee. • Contracts between the ISD and constituent school districts

20. MCL 380.1203 (Cont.) • If a majority of board members are required to abstain, the members who are able to vote may approve the contract/transaction by a majority vote of the members voting. • New requirements are “in addition to other provisions of law concerning conflicts of interest that apply to school districts.” • Violations of the requirements are subject to the Revised School Code’s penalty provisions.

21. Other Conflict of Interest Issues • School Aid Act – 169b (“A board member…shall abstain from voting on any contract in which the board member has a conflict of interest”.) • Article IV, § 10 of Michigan Const. (...“no state officer shall be interested directly or indirectly in any contract with the state which shall cause a substantial conflict of interest.”) • Nepotism and Ethical Conflicts of Interest.

22. Election Law Issues • Even year November elections for electing school board members. • Terms expiring in June or in odd years are extended by operation of law. • Terms of office for new board members start on January 1. • Choosing four year or six year terms by amending the board’s bylaws. • No deadline for changing bylaws.

23. www.masb.org/Portals/0/Publications/BoardVacancies/boardvacancies.pdfwww.masb.org/Portals/0/Publications/BoardVacancies/boardvacancies.pdf

24. MCL 168.310 Vacancies Position becomes vacant immediately regardless of notice by board member or acceptance by board if: • Death • Declared insane or incapacitated by court • Resigns • Removed from office • Conviction of felony • Election declared void by court • Failure to file acceptance of office, take oath, or renew bond required by law • Ceases to possess legal qualifications to hold office • Moves from school district

25. Eligibility Requirements • To be eligible to serve on a board of education, a person must be a qualified school elector (M.C.L. 168.302). This means that a board member must be a registered voter in the school district where he or she serves on the board of education. Accordingly, a board of education member must then be at least 18 years of age; a citizen of the United States; a resident of the State of Michigan for at least 30 days; and a resident of the school district on or before the 30th day prior to being elected into office (M.C.L. 168.10).

26. Maintaining Residency • Habitually sleeps • Keeps personal effects • Regular place of lodging • More than one residence? Resides greater part of the time • Proof?

27. MCL 168.311 Vacancies • School board fills vacancies (less than a majority) by appointment. • Within 3 days after the appointment, the secretary of the board shall notify the school district election coordinator, in writing, of the name, address, and office of the person who vacated the office as well as the person filling the office. • Acceptance of office & oath of office.

28. MCL 168.311 (continued) • If the vacancy is not filled within 30 days or if a majority of the board becomes vacant, the ISD school board fills the vacancy(ies). • An appointee serves until “a successor is elected and qualified.” • If a vacancy occurs more than 7 days before the nominating petition filing deadline, the appointee shall hold office until a successor is elected at the next November election.

29. MCL 168.311 (continued) • The successor who is elected at the next election holds the office for the remainder of the unexpired term. • If the vacated office is set to expire at the next election, the appointee serves the remainder of the vacated term until December 31.

30. Not Enough Candidates  • What happens when a school board has three positions up for election, but only two candidates have filed petitions? • The position could still be filled by a write-in candidate as long as the person files a declaration of intent to be a write-in candidate no later than 4:00pm on the second Friday before the election. • If the open position is not filled by a write-in candidate, the school board will have a vacancy on January 1.

31. Providing Information under PERA • In order to satisfy its bargaining obligation under the PERA, an employer must supply in a timely manner information requested by the union which will permit it to engage in collective bargaining and police the administration of its CBA. • The employer has a duty to disclose the requested information as long as there exists a reasonable probability that the information will be relevant to the union in carrying out its statutory duties. • Employer may claim a legitimate confidentiality interest would be damaged by disclosure of the information.

32. Examples of Relevant Information • Current home addresses of employees in bargaining unit(s). • Information needed to process a grievance. • Salary data, including extra duty and overtime pay. • Monthly budget reports and current individual teacher contracts. • Information regarding class sizes. • Teaching personnel roster: step, degree(s), certification, and wages. • Evaluations and performance appraisals.

33. Providing Information (Cont.) • Failure to provide requested information in a timely fashion is itself an unfair labor practice. • Two or three month delay = ULP • Three-week delay = No ULP • Five-week delay = No ULP • PERA requires that the employer bargain in good faith over the cost of duplication or compilation of the information requested.

34. Open Meetings Act (OMA)Frequently Asked Questions

35. Can a board member participate and vote in a meeting via Skype?

36. Meeting via Skype (cont.) • Currently, Michigan's OMA does not expressly cover the issue of attendance and participation at meetings by Skype, telephone conference calls or other electronic means. • Attorney General Opinions Nos. 5183 (1977) and 6835 (1995). • Goode v. Department of Social Services, 143 Mich App 756 (1985).

37. House Bill No. 4363 • “A meeting is not open to the public if a member of the public body is permitted to cast his or her vote on a decision of the public body without being physically present at the meeting.” • Passed the House in mid May, 2013. • Currently before the Senate.

38. Meetings by Telephone or Skype:Best Practice Guidelines • Limit to circumstances when board members are unable to attend meetings due to circumstances beyond their control. • At least a quorum of the board should be physically present at the meeting location. • Two-way communication devices must allow other board members and the audience to hear all comments and votes by the caller. • Use roll call votes.

39. Do minutes have to be approved at an immediately subsequent meeting? • No, but corrections in the minutes must be made at the next meeting following the meeting recorded in the minutes. • Thus, the above limitation prevents a school board from changing “approved” minutes.

40. Meeting Minutes: Discussion • Minutes do not state what is said verbatim. • Minutes do not repeat the same point made by different individuals. • If appropriate, the minutes may include a background and an explanation of the circumstances surrounding an issue discussed. • Requests from individual board members to include an opinion or an explanation of a vote are handled according to board policy.

41. Can a quorum of the board ever “gather” outside of a public meeting? • Yes, under the following examples and as long as the members present do not collectively discuss school district matters: ● Social or chance gatherings ● Presentations by groups ● Political matters ● Conferences and workshops

42. Is a school district required to provide special meeting notices to individual board members under the OMA? • No, but it is required by the School Code. • According to the Code, school boards must adopt bylaws for board procedures related to the “effective and efficient” functioning of the board, including notice of meetings. • Affidavit of Service of Call for School Board Meeting (attests that school district complied with bylaw’s notice provisions).

43. Does the OMA require a school board to post its meeting agenda? • The OMA does not require the posting or even the creation of an agenda. • If, however, the notice is for a public hearing, an agenda must be included. • Where a public hearing is held at part of a public meeting, public notice of the contents of the hearing must be given.

44. Can a school board use a secret ballot to rank candidates for vacancies? • No, because a school board is making a “decision” by ranking the candidates. • Votes resulting in decisions must be taken in such a way that a person attending the meeting or reading the minutes can see how each board member voted. • A secret ballot effectively closes part of a meeting to the public, since the ballot withdraws from public view an essential part of the meeting.

45. Top 5 Closed Meeting Violations • Making a decision in closed session. • Discussing individual administrative contracts in closed session. • Citing “personnel matters” as the reason for calling a closed meeting. • Discussing oral legal opinions from legal counsel without a pending lawsuit. • Not taking closed meeting minutes.

46. When can a school board meet in closed session? • Considering complaints, discipline & evaluations relating to employees or board members • Considering student discipline • Discussing collective bargaining strategy • Considering the purchase or lease of property • Consulting with an attorney on pending litigation • Reviewing applications for employment or appointment to public office • Reviewing material exempted by statute

47. Should closed meeting minutes be included in the board packet? • No. The OMA provides that closed meeting minutes “shall be retained by the clerk of the public body.” • Numbered copies should be distributed at the meeting where the minutes will be reviewed. • After approval, the copies should be collected and destroyed.

48. Who decides who can attend a closed session? • The Board. A board may selectively include certain individuals in a closed meeting while at the same time excluding all others. • Decision by consent. President: “Any objection to Principal Smith attending the closed meeting? Hearing none, Principal Smith shall attend the closed session.”

49. Conclusion • Questions? • Brad Banasik, (517) 327-5929 bbanasik@masb.org • Joel Gerring, (517) 327-5922 jgerring@masb.org • Kacie Kefgen, (517) 327-5914 kkefgen@masb.org