A school board member's company sells and services HVAC equipment to the school system. When the school administration (not the board) decides who to use for routine servicing of already-installed units, and the work is service-only with no parts or materials, does that violate North Carolina's public-officer conflict statutes?

Plain-English summary

A school board member owned a company that had long sold and serviced air conditioning equipment for the school system. The requester asked a narrow question about routine service of installed units. The stated assumptions were that administrators alone chose when and whom to use, with no board involvement, and that the work supplied no goods, wares or merchandise whatsoever.

Under those assumptions, the AG said performing the service did not violate N.C.G.S. §14-234 or §14-236. The office had read §14-234 to require the public body to participate in making or approving the contract or decision. Here, the opinion assumed all service decisions stayed with administrators. N.C.G.S. §14-236 concerned a school-board member supplying goods to institutions the board administered. The AG said repair labor on already installed equipment was a service, not a good within that section.

The opinion does not decide a service call involving supplied parts, a major installation or replacement bid, or sales to intermediaries. It does not prescribe abstention or discuss statutory exceptions for those different circumstances.

Currency note

This opinion addresses a February 1996 hypothetical under the statutes then in force. Check current conflict statutes and the precise decision-making and purchase facts before relying on it.

Background and statutory framework

The opinion says purchasing and service decisions generally occurred administratively, except that major installation or replacement bids could reach the board. Its answer concerns only servicing under the question's express assumptions. The distinction under §14-234 was the board's lack of involvement in the decision; under §14-236 it was the absence of supplied goods.

Common questions

Can the member's company perform service on already installed school HVAC units?

The AG said yes under the stated assumptions: administrators alone make the service decision, the board gives no input or approval, and the work supplies no goods.

Does the opinion decide what happens if a repair requires a filter or replacement part?

No. It assumes that the work supplies no goods, wares or merchandise. A service call with a supplied item falls outside the answer given.

Does it approve the company bidding on replacement units?

No. The opinion mentions major installation or replacement bidding as a situation that can involve the board, but gives no ruling on such a bid.

Does this opinion rely on a companion opinion or an exception to §14-234?

No. It cites no companion opinion and analyzes no statutory exception.

Source

• Landing page: https://ncdoj.gov/opinions/service-and-repair-services-to-school-system-property/

Citations

• N.C.G.S. §14-234 (board involvement in a contract decision)
• N.C.G.S. §14-236 (supplying goods to schools)

Original opinion text

February 6, 1996

Ms. Jill R. Wilson
Mr. James T. Williams, Jr.
Attorneys at Law
P. O. Box 26000
Greensboro, North Carolina 27420

RE: Advisory Opinion; Service and Repair Services to School System Property by a Business Owned by a Board Member; Conflict of Interest; N.C.G.S. §§14-234, 14-236, and 14-237

Dear Jill and Jim:

I reply to your February 5 letter requesting our opinion whether a member of a Board of Education has a conflict of interest should a business he owns continue to do work for the school system.

The Board member's business sells and services air conditioning equipment and is the exclusive local representative for a specific brand of air conditioning units. That business has had an ongoing relationship with the school system or its predecessors for a number of years. A large number of the facilities in the school system have installed that product over the years and continue to need routine service of the air conditioning units. Purchasing and service decisions are made at an administrative level and do not involve the decision making or approval of the Board of Education, except where they are a part of the bidding process for a major installation or replacement of the air conditioning units.

Since the Board member has joined the Board of Education, the school system has restricted the new Board member's company from doing any business with the school system pending a thorough review of the legal restrictions on public officers doing business with boards on which they sit. You request our opinion on the following question:

Question: Assuming that decisions with regard to when and who to use for servicing HVAC are only made at the administrative level and do not in any way involve the Board of Education and assuming that any service performed does not directly or indirectly, proximately or remotely involve the supplying of any goods, wares or merchandise whatsoever, would the mere performance of service of systems of the Schools violate either N.C.G.S. §14-234 or §14-236?

Answer: So long as the Board of Education is not involved in any manner with the decisions concerning when and who to use for servicing the air conditioning equipment, and assuming that any services performed do not directly or indirectly involve the supplying of any goods, wares or merchandise whatsoever, the mere performance of service on the air conditioning systems does not violate either N.C.G.S. §14-234 or §14-236.

Our office has consistently opined that in order for N.C.G.S. §14-234 to apply, public bodies must be directly involved in the making or approving of a contract, agreement or decisions to deal with a business or company owned by a member of the public body. Since all of the servicing decisions are made by the administration, and without any input or approval by the Board of Education, we do not believe that N.C.G.S. §14-234 is applicable.

N.C.G.S. §14-236, although extremely broad in its scope, makes it a crime for a member of a public body to supply "any goods, wares or merchandise of any nature or kind" to educational institutions administered by that public body. Because the General Assembly did not define what is meant by the words "goods, wares or merchandise," we must look elsewhere for their meaning. Black's Law Dictionary, Deluxe Fourth Edition, defines the words "goods, wares, and merchandise" as follows: "A general and comprehensive designation of such chattels as are ordinarily the subject of traffic and sale." That same dictionary defines the word "chattel" as follows: "An article of personal property; any species of property not amounting to a freehold or fee in land. A thing personal and moveable."

It is clear that "services" rendered by fixing or repairing already installed air conditioning systems would not be considered "goods, wares or merchandise." Therefore, we do not believe that N.C.G.S. §14-236 is applicable.

Andrew A. Vanore, Jr.
Chief Deputy Attorney General