Can the mayor of a Minnesota city serve in office while also being an employee, incorporator, and director of a nonprofit that holds a contract from the city to operate public-access cable television under the city's cable franchise?

Plain-English summary

The City of Northfield granted a non-exclusive cable television franchise to NorCom Video, Inc. in 1983, requiring NorCom to provide a public-access channel and pay a 5% franchise fee. In 1985, the city and NorCom amended the agreement: NorCom would no longer provide local-origination and public-access services directly but would instead pay the city an annual grant for those activities. Northfield then delegated the public-access functions, via a separate agreement, to NTV 26, a Minnesota nonprofit. NTV 26 received 75% of the cable franchise fee plus the local-origination grant from the city.

Northfield's mayor was an incorporator of NTV 26, served as one of its directors, and worked as its primary employee at a $25,000 annual salary. He had also served on the council from 1990 to 1994 before being elected mayor in 1994. The city's amended franchise with NorCom and the delegation agreement with NTV 26 were both still in effect and unmodified.

City Attorney Maren Swanson asked AG Humphrey whether the mayor was prohibited from serving in office because of his interests in NTV 26.

Assistant AG Kenneth Raschke, signing for AG Humphrey, said no, with the qualification that the mayor must abstain from council action involving the cable franchise.

The reasoning worked through three statutes.

Section 471.87 is the general municipal officer conflict-of-interest statute. It prohibits a public officer from voluntarily having a personal financial interest in a sale, lease, or contract that the officer is authorized to take part in making, and violation is a gross misdemeanor. On its face, the mayor had a direct financial interest in the NTV 26 delegation agreement (NTV 26 employed him at $25,000) and an indirect interest in the NorCom franchise agreement (because NTV 26's funding flowed from the NorCom fee). The council renegotiated and amended both periodically. Under § 471.87 alone, the mayor would be in violation unless an exception in § 471.88 applied.

Section 238.15 is the cable-specific provision. It addresses elected officials and employees of franchising bodies who would be involved in granting or administering a cable franchise and who have any financial interest in a cable communications company. The remedy is abstention, not divestiture. The statute "addresses the conflict by prohibiting the interested member from any participation in the granting or administration of the franchise."

Section 645.26, subd. 1 is the special-versus-general rule. When statutes conflict, the special prevails as an exception to the general. The AG read § 238.15 as the special provision controlling over § 471.87's broader prohibition. The 1994 AG opinion (Op. Atty. Gen. 90, June 9, 1994) had reached the same result for HRA commissioners under § 469.009: the specific HRA statute controlled over the general § 471.87.

Coverage of the delegation agreement. The AG concluded that the delegation agreement with NTV 26 was covered by § 238.15. Section 238.02, subd. 5 defines "franchise" broadly as "any authorization granted by a municipality...to construct, operate, maintain, or manage a cable communications system." Section 238.081, subd. 9 permits franchising a nonprofit-owned system, and subd. 4(3)(iv) requires the franchise to address "the number of channels and services to be made available for access cable broadcasting." Read together, the public-access delegation was a franchise-related arrangement governed by § 238.15.

Effect on the 1973 opinion. Op. Atty. Gen. 90a-1 (July 12, 1973) had concluded that a person with a financial interest in a cable franchisee could not serve on a village council without divesting the interest. That opinion construed Minn. Stat. § 412.311 (1971) and predated § 238.15 (which took effect August 1, 1973, after the opinion was issued). The 1997 opinion superseded 90a-1 to the extent inconsistent.

The mayor's required conduct. The mayor was not disqualified from holding office. He had to abstain from any council action involving the cable franchise or its administration, including renegotiation of the NorCom amendment (every three years) or amendment of the NTV 26 delegation agreement (annually).

Currency note

This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The cable-franchise statute (Minn. Stat. ch. 238) has been amended significantly since 1997, and the federal Cable Act (47 U.S.C. § 521 et seq.) preemption framework has evolved. The general municipal-officer conflict statute (§§ 471.87, 471.88) and the special-versus-general construction principle (§ 645.26) remain established.

Historical context: what the AG concluded

The opinion is a careful resolution of two overlapping conflict statutes.

The default rule under § 471.87. Minnesota's general conflict statute prohibits an officer from voluntarily having a financial interest in a contract that the officer is authorized to take part in making. Violation is a gross misdemeanor. The statute is broadly prohibitory; its remedy is essentially divestiture (or refusal to vote, which still leaves the gross-misdemeanor risk if the officer is "authorized to take part" in making the contract).

The cable-specific carve-out under § 238.15. When the legislature enacted the cable communications chapter, it included a conflict provision specific to cable franchising. Members of elected bodies granting cable franchises and employees of franchising bodies directly involved in granting or administering cable franchises who have financial interests in cable companies must "abstain from participation in the franchising of a cable communications company or the administration of such franchise."

The legislature chose abstention rather than divestiture as the cable-specific remedy. That choice implies an awareness that elected officials might own interests in cable franchisees and a legislative judgment that abstention is sufficient to address the conflict in that specific context.

Reconciling the two. Section 645.26, subd. 1 instructs courts to give effect to both general and special provisions if possible, and if not possible, the special prevails. The AG read § 238.15 as the special provision controlling over § 471.87 for cable-franchise contracts. The June 1994 HRA opinion (Op. Atty. Gen. 90) had reached the same result for the § 469.009 HRA-commissioner conflict provision over § 471.87.

The AG also offered a textual alternative: by the terms of § 238.15, the elected official with a cable interest is "not authorized to take part" in franchise decisions in an official capacity (because the abstention requirement removes the authorization). On that reading, the § 471.87 trigger (officer "authorized to take part") is never satisfied, and the violation question never arises.

Why the delegation agreement is "franchise" material. The statute defines "franchise" broadly enough to reach delegation of public-access functions to a nonprofit. Section 238.02, subd. 5 reaches "any authorization granted by a municipality...to construct, operate, maintain, or manage a cable communications system." Section 238.081, subd. 9 contemplates franchising nonprofit-owned systems. The delegation arrangement, although structured as a contract rather than a franchise per se, was an authorization to operate public-access components of the city's cable system. The AG treated it as within § 238.15's scope.

Why the 1973 opinion is superseded. Op. Atty. Gen. 90a-1 dealt with a similar fact pattern (financial interest in a cable franchisee) but predated § 238.15 by weeks. The 1973 AG applied only § 412.311 (statutory city general conflict) and noted that the § 471.88 exceptions did not apply. With § 238.15 now in place, the analysis necessarily shifts to recognize the cable-specific remedy. The 1973 opinion remains historically accurate as to pre-August-1973 law; for post-1973 facts, the 1997 opinion controls.

Common questions

Q: I'm a city councilmember and my spouse works for the cable franchisee. Do I need to resign?
A: Under the 1997 opinion, no. Section 238.15 lets you retain the position and the related family financial interest, but you must abstain from participation in council action involving the cable franchise or its administration. Confirm current statute language before relying on this rule.

Q: What counts as "franchise administration" that I need to abstain from?
A: The franchise includes the initial grant, renewals, amendments, and any council action implementing or enforcing franchise terms (fee renegotiation, performance review, complaints, breach claims, transfer requests). The opinion specifically called out the three-year NorCom amendment renegotiation and the annual NTV 26 delegation amendment.

Q: Does abstention mean I can sit in the meeting and not vote, or do I have to leave the room?
A: Section 238.15 just says "abstain from participation in" the franchise action. The safer practice is recusal: disclose the interest on the record, do not participate in the discussion or vote, and either leave the room or remain silent. Robert's Rules and Open Meeting Law considerations both favor recusal as the cleaner approach.

Q: I'm on a HRA commission with a contract with my own company. Same rule?
A: That is the situation in the June 1994 AG opinion (Op. Atty. Gen. 90). Section 469.009's notice and non-participation requirements control over § 471.87 for HRA commissioners. The principle is the same: specific statutes with abstention-style remedies displace § 471.87's broader prohibition.

Q: What if I cannot avoid participating, for example because abstention would leave the council without a quorum?
A: Section 238.15 does not include an "absent quorum" exception, unlike some other conflict statutes. The AG opinion does not address quorum impasses directly. In practice, the cleanest path is to defer the action until a quorum can be assembled without the conflicted member, or to seek a substitute through statutory mechanisms (e.g., a deputy mayor for ministerial functions, depending on city structure).

Background and statutory framework

Minnesota's conflict-of-interest framework for local officials is a patchwork of one general statute (§ 471.87) and several special-purpose statutes (§§ 238.15 for cable, 469.009 for HRA commissioners, 469.098 for EDA commissioners, 412.311 for statutory cities before 1973). The legislature's pattern is to include specific abstention-style remedies in domain-specific statutes; the courts and the AG apply the special-versus-general rule (§ 645.26) to determine which controls.

Section 471.87 imposes a gross misdemeanor penalty and a broad prohibition. Its companion § 471.88 carves out enumerated exceptions (small contracts, board contracts of cooperatives, etc.) but does not carve out cable franchises. So pre-1973, an official with a cable interest had no statutory path other than divestiture.

The 1973 legislation that enacted what became § 238.15 was part of a broader statutory framework regulating cable communications. The conflict rule was specifically structured to permit elected officials to retain cable interests while ensuring they did not actively participate in franchise decisions. The legislative judgment reflects the reality that in smaller communities, the pool of qualified candidates is shallow and rigid divestiture rules would deter service.

The 1994 HRA opinion (Op. Atty. Gen. 90) and the 1997 cable opinion together establish the AG's reading of the special-versus-general framework: when a domain-specific statute provides an abstention remedy, that remedy controls over the general § 471.87 prohibition, and the officer is "not authorized to take part" in conflicted decisions in any event.

Hubert H. Humphrey III was Minnesota AG from 1983 through January 1999. Kenneth E. Raschke, Jr. signed as Assistant AG. The opinion bore the file note AG:30404 v1.

Citations and references

Statutes:
- Minn. Stat. § 238.02, subd. 5 (1996) ("franchise" definition)
- Minn. Stat. § 238.081, subd. 4(3)(iv) (1996) (access cable broadcasting in franchise)
- Minn. Stat. § 238.081, subd. 9 (1996) (nonprofit-owned system franchising)
- Minn. Stat. § 238.15 (1996) (cable franchise conflict; abstention requirement)
- Minn. Stat. § 412.311 (1971) (statutory city general conflict; pre-1973)
- Minn. Stat. § 469.009 (1996) (HRA commissioner conflict; non-participation)
- Minn. Stat. § 471.87 (general municipal officer conflict)
- Minn. Stat. § 471.88 (exceptions to § 471.87)
- Minn. Stat. § 645.26, subd. 1 (1996) (special versus general statutory construction)

Related AG opinions:
- Op. Atty. Gen. 90, June 9, 1994 (HRA commissioner contracts; § 469.009 controls over § 471.87)

Superseded:
- Op. Atty. Gen. 90a-1, July 12, 1973 (cable franchisee; pre-§ 238.15)

Source

• Landing page: https://www.ag.state.mn.us/Office/Opinions/
• Original PDF: https://www.ag.state.mn.us/Office/Opinions/90e-19970825.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

CONTRACTS: OFFICERS INTEREST: CITY: Officer and employee of nonprofit corporation that provides public access cable television services in connection with city franchise and contract is not disqualified from serving as mayor or council member, but must abstain from participating in city actions involving franchise. Op. Atty. Gen. 90a-1, July 12, 1973 superseded. Minn. Stat. §§ 238.15 and 471.87 (1996).

90e
(Cr. Ref. 90a-1)
August 25, 1997

Maren Swanson
City Attorney
City of Northfield
105 East Fifth Street
PO Box 240
Northfield, MN 55057

Dear Ms. Swanson:

From the information provided to us in your letters to the office of the Attorney General, we have ascertained the following:

FACTS

The City of Northfield ("Northfield") granted a nonexclusive cable television franchise to NorCom Video, Inc. ("NorCom"). Ordinance 444, Ordinance Summary, dated November 21, 1983 (now codified at Northfield Ordinance § 1520:00, et seq.) ("Franchise"). The ordinance required NorCom to provide public access channel(s) for use by the public and pay 5 percent of its gross revenues to Northfield as a franchise fee.

In 1985, Northfield and NorCom amended the franchise agreement to relieve NorCom of its obligation to provide local origination and public access staff, equipment, and associated commitments and to impose instead an obligation to pay to Northfield an annual grant for support of local origination and public access television activities. Cable Communications Offering, Amendment Agreement No. 1, City of Northfield, dated May 1, 1985 ("Amendment Agreement"). Northfield delegated the duties to administer/operate the use and maintenance of certain local origination/public access equipment and to operate the public access channels to NTV 26, a nonprofit corporation of the State of Minnesota. Agreement for the Delegation of Public Access/Local Origination Cable Communications Functions, dated April 9, 1985 ("Delegation Agreement"). The Delegation Agreement also provided that NTV 26 would receive from Northfield 75 percent of the cable franchise fee collected by Northfield, plus the amount of the grant Northfield received under the amended cable franchise agreement with NorCom. More or less funds would be allocated annually upon request of NTV 26. NTV 26 has never requested an adjustment and Northfield has always paid according to the terms of the Delegation Agreement.

The amended Franchise and Delegation Agreement are still in effect and have not been renegotiated or reconsidered. The Franchise and the Delegation Agreement were not publicly bid, but were awarded upon request for proposals.

Northfield's present mayor was an incorporator of NTV 26. He is currently one of its directors and as its primary employee, he is responsible for NTV 26's operation. He receives an annual salary of $25,000 from the corporation.

The service area of NTV 26 comprises the City of Northfield, the City of Dundas, and some neighboring townships.

During the period 1990 to 1994, the present mayor of Northfield served as a city council member. Then in 1994, he was elected to his present office of mayor.

You ask substantially the following questions:

QUESTION ONE

Is the mayor of Northfield prohibited from serving as mayor because he is an employee, incorporator and director of Northfield's public access cable television provider?

OPINION

We answer your question in the negative.

As a general proposition, circumstances involving a public official's personal interest in official contracts are addressed by Minn. Stat. § 471.87 which provides:

Except as authorized in section 471.88, a public officer who is authorized to take part in any manner in making any sale, lease or contract in official capacity shall not voluntarily have a personal financial interest in that sale, lease, or contract or personally benefit financially therefrom. Every public officer who violates this provision is guilty of a gross misdemeanor.

According to the facts ascertained, the mayor who is also a member of the council has a direct financial interest in NTV 26 by virtue of his position as a director and primary employee who receives an annual salary. [Footnote 1: It is assumed that the mayor receives no financial benefit from his position as incorporator, since NTV 26 is a Minnesota nonprofit 501(c)(3) corporation.] NTV 26 has a contract with Northfield which has been in place since 1985. Delegation Agreement. The contract funds NTV 26 with cable franchise fees and additional grant funds received by Northfield from its franchisee, NorCom. Amendment Agreement, paragraph 2; Delegation Agreement, paragraph 2. The Amendment Agreement with NorCom may be renegotiated every three years with respect to fees paid. Amendment Agreement, paragraph 2. The Delegation Agreement with NTV 26 may be amended annually to change the amount of the funds allocated to NTV 26. Delegation Agreement, paragraph 2. In both cases, Northfield, as the franchiser and contractor, respectively, would be the entity renegotiating the fee structures through its council. Thus it appears that the mayor has a direct financial interest in one contract (the Delegation Agreement) and an indirect interest in a second contract (the Franchise Agreement) both of which are made and amended by the council of which he is a member. Thus, if we consider only section 471.87, the mayor would be in violation of that section and subject to the penalties provided unless one of the exceptions contained in section 471.88 applied.

However, we must also consider other relevant legislation which pertains more specifically to potential conflict of interest situations related to cable television franchises. Minn. Stat. § 238.15 (1996) provides:

Members of any elected body granting [cable communications] franchises and employees of any franchising body who would be directly involved in the granting or administration of franchises for cable communications and who are employed by or knowingly have any financial interest in any cable communications company, bidding on such franchise, or the cable communications company granted the franchise, or their subsidiaries, major equipment or program supplier shall abstain from participation in the franchising of a cable communications company or the administration of such franchise.

This plain language appears to contemplate that some members of elected bodies granting or administering franchises will have a financial interest in cable communications companies granted a "franchise" or in its subsidiaries. In contrast to the broad prohibitory terms of section 471.87 discussed above, however, section 238.15 addresses the conflict by prohibiting the interested member from any participation in the granting or administration of the franchise.

In that respect, section 238.15 presents a situation similar to that described in Op. Atty. Gen. 90, June 9, 1994, wherein we concluded that a Housing and Redevelopment Authority ("HRA") commissioner could enter contracts with the Housing and Redevelopment Authority, if the notice and non-participation requirements of Minn. Stat. § 469.009 (1996) governing potential conflicts of interest involving HRA commissioners were observed. Although section 238.15 does not contain a notice provision, it does implicitly permit an elected official to retain his or her financial interest in a cable communications company granted a franchise or in its subsidiaries if he or she abstains from participation in the franchising of the company or the administration of such franchise.

Our analysis in Atty. Gen. Op. 90, June 9, 1994, we believe applies to this situation as well. In that opinion we concluded that the "special" statutory provisions relating to HRA commissioners' contractual interests prevailed over the more general prohibition contained in section 471.87. [Footnote 2: Minn. Stat. § 645.26, subd. 1 (1996) provides: When a general provision in a law is in conflict with a special provision in the same or another law, the two shall be construed, if possible, so that effect may be given to both. If the conflict between the two provisions be irreconcilable, the special provision shall prevail and shall be construed as an exception to the general provision, unless the general provision shall be enacted at a later session and it shall be the manifest intention of the legislature that such general provision shall prevail.] For similar reasons we believe that the non-participation provisions of Minn. Stat. § 238.15 apply to members of an elected body having a personal financial interest in any cable communication company or its subsidiary which bid on a contract or which is a party to a contract that is being administered by the elected body. In the June 9, 1994 opinion we also noted that

Another arguable approach to the same result may be to observe that, by virtue of the language contained in Section 469.009, a commissioner who knows, or has reason to know of a personal conflict of interest in an HRA project is simply not "authorized to take part" officially in making contracts associated with that project, and is thus not technically within the prohibition of Section 471.87.

Likewise in this case, the mandate in section 238.15 that elected members of a franchising body abstain from participation in franchise granting or operation actions would indicate that the official is not authorized to take part in franchising decisions in his or her official capacity.

While there may be arguments to the contrary, we believe that the Delegation Agreement at issue is covered by section 238.15. Minn. Stat. § 238.02, subd. 5 (1996) defines "franchise" to mean "any authorization granted by a municipality in the form of a franchise, privilege, permit, license or other municipal authorization to construct, operate, maintain, or manage a cable communications system in any municipality." Additionally, Minn. Stat. § 238.081, subd. 9 (1996) permits a franchising authority to franchise a nonprofit owned system, while Minn. Stat. § 238.081, subd. 4(3)(iv) (1996) includes in its listing of areas to be covered in the franchise "the number of channels and services to be made available for access cable broadcasting." Thus, in light of the broad definition of "franchise," the fact that public access is part of cable service covered by chapter 238 and that a franchising authority may grant a franchise to a nonprofit corporation, the Delegation Agreement does appear to be covered by the cable communication laws including section 238.15.

Therefore, we conclude that the mayor in these circumstances would not be affected by the conflict of interest provision of section 471.87, but would be governed by the requirements of section 238.15, requiring him to abstain from participation in the franchising of the cable communications company or the administration of that franchise.

In reaching this conclusion we have considered Op. Atty. Gen. 90a-1, July 12, 1973, where we stated that a person may not serve on a village council while a franchise agreement is in effect when the person had a financial interest in the franchisee company, without first divesting himself of his interest. That opinion addressed Minn. Stat. § 412.311 (1971) which provided in part:

Except as provided in sections 471.87 to 471.89, no member of the village council shall be directly interested in any contract made by the council. [Footnote 3: Section 412.311 is applicable only to statutory cities.]

It did not directly address section 471.87 or section 471.88 except to note in a footnote that none of the exceptions were applicable. Neither did that opinion address section 238.15. Section 238.15 was enacted during the 1973 legislative session and did not become effective until August 1, 1973, after the opinion was issued. Therefore, since no exceptions to the conflict of interest rule existed at that time for franchises, that opinion must be read in its historic context and is superseded to the extent inconsistent with this opinion.

In light of our conclusion here it is not necessary to address your remaining questions concerning measures which might be taken by the mayor or council to avoid further violations of Minn. Stat. § 471.87.

Sincerely,

HUBERT H. HUMPHREY III
Attorney General

KENNETH E. RASCHKE, JR.
Assistant Attorney General

AG:30404 v1