Can my city contract with a school district when one of our city councilmembers also works for that school district?

Plain-English summary

Article X, § 11 of the Oklahoma Constitution makes it a felony for a state, county, or city officer (or a state legislator) to receive, directly or indirectly, any "interest, profit, or perquisite" arising from the use or loan of public funds in their hands or moneys raised through their agency.

Senator Brenda Stanley asked: a city councilmember in our town also works for the local school district. Can the city contract with the school district without putting the councilmember in legal jeopardy under Article X, § 11?

AG Drummond said yes, with a careful caveat. City councilmembers are elected officials and clearly fall within § 11. But § 11 is a criminal provision, so it must be strictly construed and not expanded beyond its express terms. The "interest" or "profit" or "perquisite" that triggers the statute is the kind of personal, financial benefit unique to the officer that goes beyond what the public receives.

Where a city contracts with a school district for an ordinary public-purpose contract that benefits all district students and operations equally, and the councilmember-employee receives nothing different than any other district employee or community member, there is no constitutional violation. The councilmember gets the same general benefit (a better-funded district) as everyone else.

If specific facts show that the councilmember receives an additional interest, profit, or perquisite beyond the public benefit, § 11 is violated. The opinion does not decide whether a particular contract has that effect; it says the answer depends on the circumstances.

What this means for you

If you are a city councilmember who works for a public entity

Holding the dual role is legally permitted, but the city's contracts with your other employer require attention:

1. Contracts with a district-wide public benefit: the opinion says no § 11 violation arises when the councilmember receives no additional benefit different from what the public receives.
2. Contracts that may give the councilmember an additional benefit: the answer depends on specific facts. The opinion does not decide whether any particular school district contract produces such a benefit.

Indirect receipt of benefit by your spouse counts as receipt by you (per 2011 OK AG 14). Receipt by a parent or in-law can count too if the circumstances show indirect benefit to you (per 1985 OK AG 138).

If you are a city attorney or municipal clerk

Build dual-role disclosures and recusal protocols into council practice. When the city contracts with another public body where a councilmember is employed, document:

• The public purpose of the contract.
• That the councilmember-employee receives no benefit different from the public's general benefit.
• The councilmember's recusal (preferably) from the vote and from drafting the agreement.

The AG opinion is binding on state officials, but city councilmembers are local: still, it is the leading interpretation of art. X, § 11 and the right framework for any audit or prosecutor inquiry.

If you are a school district administrator

The councilmember's employment by the school district alone does not prohibit a municipal contract. The question is whether the contract gives that officer an additional interest, profit, or perquisite different from what the public receives. The opinion does not decide any specific contract.

If you are a journalist or government-ethics advocate

The line drawn by the AG is the additional benefit test. A city councilmember is not barred from working for a school district that contracts with the city. They are barred from receiving interest, profit, or perquisite from those public funds beyond what the public itself receives.

If you are an Oklahoma criminal-defense or public-corruption attorney

Article X, § 11 must be strictly construed (per State v. Humphrey). The constitutional prohibition only reaches individuals "explicitly outlined within the provision" (per 2003 OK AG 17). The receipt must be by the officer (or, by extension, the officer's spouse, and possibly other close relatives in fact-specific circumstances), not by the officer's general employer.

Common questions

Q: I'm a city councilmember and a public school teacher. Can my city give a grant to the school district? A: Probably yes, if the grant benefits the entire district (or all schools, all students, etc.) and you do not get any benefit different from what other teachers, students, or community members receive. Recuse yourself from the vote to be safe.

Q: What if the city's grant is earmarked for my school specifically? A: That requires more analysis. If the grant funds something at your school (new computers in your classroom, a special program you teach), there is real risk it could be characterized as personal benefit. Consult counsel and at minimum recuse from the vote.

Q: Does it matter if the contract is small?
A: Not directly, but small generally-beneficial contracts are far less likely to attract scrutiny. The legal test is qualitative (additional benefit), not quantitative.

Q: What if the city gives the school money that the school uses to pay my salary? A: The opinion quotes 2001 OK AG 32 on a city official's potential interest in funds given to a private entity that could not survive without city support or whose funds relate to the official's pay. It does not determine that a school district's use of city funds for an employee's salary violates § 11. The answer depends on whether the councilmember receives an additional interest, profit, or perquisite on the facts.

Q: Does my spouse count?
A: Yes. Indirect receipt by a spouse counts as receipt by the officer (2011 OK AG 14). Receipt by a parent-in-law could count if circumstances show indirect benefit to the officer.

Q: What if my city has a written ethics code that's stricter than § 11? A: Follow the stricter code. § 11 is a criminal floor; cities can adopt stricter standards by ordinance.

Background and statutory framework

Article X, § 11 of the Oklahoma Constitution states:

The receiving, directly or indirectly, by any officer of the State, or of any county, city, or town, or member or officer of the Legislature, of any interest, profit, or perquisites, arising from the use or loan of public funds in his hands, or moneys to be raised through his agency for State, city, town, district, or county purposes shall be deemed a felony.

The provision must be strictly construed because it carries felony punishment and disqualification from office (State v. Humphrey).

Prior AG opinions developed the framework:

• 1979 OK AG 267 and 1985 OK AG 138, the "interest" must be a private or personal financial interest.
• 2001 OK AG 32, elected city officials are subject to art. X, § 11; an officer could have an interest in funds given to a private entity that could not survive without city funds or whose funds relate to the officer's compensation.
• 2004 OK AG 40, extends the analysis to public-utility contracts where the officer is also a utility employee.
• 2011 OK AG 14, indirect receipt by a spouse counts.

The AG used the canon of noscitur a sociis (associated-words canon) to read "interest, profit, or perquisites" together. Black's Law Dictionary defines "perquisite" as "a privilege or benefit given in addition to one's salary or regular wages." Read alongside "interest" and "profit," the phrase reaches non-pecuniary as well as pecuniary benefits, but the benefit must be additional, not the same general benefit the public receives.

The AG also reaffirmed the rule from prior opinions: the prohibition is on the officer, not on the officer's general employer or affiliated entity. Public-purpose municipal contracts with public bodies do not become unlawful merely because a city officer happens to work for the contracting body.

Citations and references

Constitution:

• Okla. Const. art. X, § 11: Officer receipt of interest, profit, or perquisite

Statutes:

• 11 O.S.2021, §§ 8-109(A), 9-103, 10-103, 11-103, City government and councilmember elections
• 70 O.S.2021, §§ 1-106, 1-108, Free public school education funded by taxation
• 74 O.S.Supp.2022, § 18b(A)(5): AG opinions limited to questions of law

Cases:

• State v. West, 1918 OK CR 41, 171 P. 1127, defining "interest" and "profit"
• State v. Humphrey, 1980 OK CR 86, 620 P.2d 408, strict construction of felony provisions

Prior AG opinions:

• 1985 OK AG 138; 2001 OK AG 32; 2003 OK AG 17; 2004 OK AG 40; 2010 OK AG 12; 2011 OK AG 14

Source

• Landing page: https://oklahoma.gov/oag/opinions/ag-opinions/2024/ag-opinion-2024-8.html
• Original PDF: https://oklahoma.gov/content/dam/ok/en/oag/opinions/ag-opinions/2024/AG Opinion 2024-8.pdf

Original opinion text

GENTNER DRUMMOND
ATTORNEY GENERAL
ATTORNEY GENERAL OPINION
2024-8
The Honorable Brenda Stanley
Oklahoma State Senate, District 42
State Capitol, Room 414
2300 N. Lincoln Blvd.
Oklahoma City, OK 73105

June 4, 2024

Dear Senator Stanley:
This office has received your request for an official Attorney General Opinion in which you ask, in effect, the following: May a municipality lawfully contract with a school district while a city councilmember for the municipality is an employee of said school district without violating article X, section 11 of the Oklahoma Constitution? I. SUMMARY Except as provided in this opinion, a municipality may lawfully contract with a school district while a city councilmember for the municipality is an employee of said school district without violating the Oklahoma Constitution’s prohibition against officers receiving interest. This office has already opined that elected city officials are subject to article X, section 11 of the Oklahoma Constitution. 2001 OK AG 32, ¶ 7. Consequently, city councilmembers are officers of the city and are subject to article X, section 11. Although municipalities may enter into such contracts, if circumstances show that the officer received an interest, profit, or perquisite unique to that officer as a result of the contract, a constitutional violation exists. But if the use or loan of public funds simply results in the public receiving the same type of benefit as the officer, there is no constitutional violation. This office does not analyze any specific factual circumstance because questions of fact are beyond the scope of an official Attorney General opinion. 2010 OK AG 12,
¶ 11; see 74 O.S.Supp.2022, § 18b(A)(5).
II.

BACKGROUND
The question presented to this office stems from a municipality trying to reconcile two of this office’s past Attorney General Opinions: 1985 OK AG 138 and 2001 OK AG 32. Both interpret

313 N.E. 21ST STREET • OKLAHOMA CITY, OK 73105 • (405) 521-3921 • FAX: (405) 521-6246

The Honorable Brenda Stanley
Oklahoma State Senate, District 42

A.G. Opinion
Page 2

the state constitution’s criminal prohibition on officers receiving interest, profits, or perquisites. Article X, section 11 of the Oklahoma Constitution provides: The receiving, directly or indirectly, by any officer of the State, or of any county, city, or town, or member or officer of the Legislature, of any interest, profit, or perquisites, arising from the use or loan of public funds in his hands, or moneys to be raised through his agency for State, city, town, district, or county purposes shall be deemed a felony. OKLA. CONST., art. X, § 11. III.

DISCUSSION
As a preliminary matter, Oklahoma law mandates that strict construction must be afforded to provisions resulting in felony punishment and disqualification to hold office. State v. Humphrey, 1980 OK CR 86, ¶ 3, 620 P.2d 408, 409. As a result, article X, section 11 of the Oklahoma Constitution must be strictly construed and not expanded. Thus, the prohibition on receipt of interest, profit, or perquisite only applies to individuals who are explicitly outlined within the provision. 2003 OK AG 17, ¶ 8. A. As officers of a city, councilmembers are subject to the prohibition in article X, section 11 of the Oklahoma Constitution. This office previously determined that “elected city officials” are subject to the Oklahoma constitutional prohibitions against interest. 2001 OK AG 32, ¶ 7. In all three statutory forms of city government that include the city councilmember role, the councilmembers are elected unless a vacancy occurs. 11 O.S.2021, §§ 9-103, 10-103, 11-103; 11 O.S.2021, § 8-109(A). Therefore, city councilmembers are elected city officials and subject to the Oklahoma constitutional prohibitions against interest. B. A municipality may lawfully contract with a school district while a city councilmember is an employee of said school district if circumstances show the officer received no additional interest, profit, or perquisite in the contract than the public received. Noscitur a sociis, 1 the rule of construction which provides that the meaning of a word should be determined by considering the words with which it is associated, guides this office in interpreting the meaning of “interest, profit, or perquisites.” The Oklahoma Court of Criminal Appeals interpreted both the terms “interest” and “profit” as used in the constitutional provision to mean monetary interest earned as a result of an officer depositing public funds in a bank and retaining the interest earned on said funds for the officer’s personal use. State v. West, 1918 OK CR 41, 171 P. 1127. Black’s Law Dictionary defines perquisite as “a privilege or benefit given in addition to one’s salary or regular wages. Often shortened to perk.” Perquisite, BLACK’S LAW DICTIONARY 1

Also known as the Associated-Words Canon.

The Honorable Brenda Stanley
Oklahoma State Senate, District 42

A.G. Opinion
Page 3

(11th ed. 2019). Read together, the constitutional prohibition cannot be solely applied to pecuniary gain. This office’s prior opinions analyzing article X, section 11, are consistent with this reading. Initially, this office found that “[t]he type of interest subject to the prohibition is a private or personal interest of a financial or pecuniary nature.” 1985 OK AG 138, ¶ 2 (citing 1979 OK AG 267). Then, this office determined that an officer receives interest, profit, or perquisite:
[W]hen a city official has any interest that arises from the use of city funds by a private entity even if the city official does not have a proprietary interest in the private entity, and even if the city official’s compensation is not paid out of any funds received by the private entity from the city . . . . [T]he city official could have an interest in the city funds if the private entity could not survive without the city funds or if the city funds have a relationship to the funds that are used for the city official’s compensation (i.e., matching funds for grants, etc.). 2001 OK AG 32, ¶¶ 3, 5. The office continued to expand its interpretation when issuing 2004 OK AG 40. There, this office concluded that even a contract between a public utility and a state agency board, where the officer of the State was also an employee of the public utility, could be defined as receipt of interest, profit, or perquisite by the officer-employee if “specific facts and circumstances” warranted it. 2004 OK AG 40, ¶ 22. This office reaffirms its previous opinions. Funds of the state, county, city, town, or legislature of the officer given, contractually or otherwise, to another employer of the same officer does not in itself violate the State constitution. That officer’s receipt of interest, profit, or perquisite can be shown only by the circumstances of the situation. This office cannot resolve questions of fact because they are beyond the scope of Attorney General Opinions. 2010 OK AG 12, ¶ 11; see 74 O.S.Supp.2022, § 18b(A)(5). Nonetheless, this office has made clear that “[i]t is the officer himself who must receive the direct or indirect profit or interest.” 1985 OK AG 138, ¶ 2. Indirect receipt of such prohibited gain by the officer, however, includes receipt of the same by the officer’s spouse. 2011 OK AG 14, ¶¶ 18–23. Even gain by the officer’s father-in-law, if circumstances reveal an indirect receipt of benefit by the officer as a result, could fall within the constitutional prohibition, though “the existence of such a family relationship does not, in and of itself, establish such interest.” 1985 OK AG 138, ¶ 3. However, if the public receives the same benefit the officer receives, there is no direct or indirect interest to the officer. There, a public benefit has been bestowed and the government has simply done its job to serve its people. The primary purpose of school districts is to provide free school education, supported by public taxation. 70 O.S.2021, §§ 1-108, 1-106. A municipality’s contract with a school district from which the entire district benefits from equally, where no specific facts or circumstances point to additional benefit received by the dual-role public servant, is a public benefit to that school district and is not a constitutionally prohibited interest, profit, or perquisite received by the officer. Accordingly, if a use or loan of public funds results in the public receiving the same type of benefit as the officer,

The Honorable Brenda Stanley
Oklahoma State Senate, District 42

A.G. Opinion
Page 4

with no additional interest, profit, or perquisite, there is no violation of article X, section 11 of the Oklahoma Constitution. It is, therefore, the official Opinion of the Attorney General that: A municipality may lawfully contract with a school district while a city councilmember for the municipality is an employee of said school district without violating the Oklahoma Constitution, provided that the city councilmember does not receive any additional interest, profit, or perquisite from the contract different than what the public received.

GENTNER DRUMMOND
ATTORNEY GENERAL OF OKLAHOMA

STEPHANIE ACQUARIO
ASSISTANT ATTORNEY GENERAL