REQUESTED BY: Keith Drury, District Manager, Lower Niobrara Natural Resources District.
QUESTION: Must a Director of a Natural Resources District file an Employment of Immediate Family Members Disclosure Statement if the spouse of the Director intermittently performs services for the District for which the spouse is paid a nominal fee?
CONCLUSION
No.
FACTS
We are advised that recently the Directors of the Lower Niobrara Resources District decided to pay the spouses of the Directors a nominal fee when the spouses assisted with district activities. Specifically, the Directors are contemplating paying their spouses the sum of $15 per diem when the spouses help act as judges in district essay contests and tabulate results in range and land judging contests. The $15 fee was chosen because it is the per diem amount paid to the directors themselves when performing the duties of office. We are further informed that the spouses of the directors would be used.
The directors wish to know if they need to file Employment of Immediate Family Members Disclosure Statements (NADC Form C-4) and otherwise comply with the provisions of Section 49-1499.01 under these circumstances.
ANALYSIS
Section 49-1499.01 requires a public official who is employing or recommending the employment of an immediate family member to make a disclosure on the record of the governing body or to make a written disclosure to the record keeper of the governing body. This is normally done by executing and filing an Employment of Immediate Family Members Disclosure Statement (NADC Form C-4). However, given the intermittent occasions upon which the services of the spouses would be used and the nominal amount of the compensation, we do not believe that the actions contemplated by the directors constitute employment. This determination is made based upon our understanding that the spouses will not be working set hours, they will not be paid a wage or a salary, and they are not subject to the direction of the Natural Resources District. Instead, they will be paid a set fee to accomplish a task no matter how many or how few hours it takes to do so.
They will evaluate material submitted by the contestants and reach a result without consultation with the directors. The relationship described is not that of employer/employee but one in which the spouses act as independent contractors. Therefore, there is no requirement for the directors to file form C-4. Since this is not an employment situation, the provisions of Section 49-1499.01 requiring the district to first make "a reasonable solicitation and consideration of applications for such employment" are not applicable.
Since the situation described is a contract, the directors are subject to the provisions of Section 49-14,103.01 through Section 49-14,103.03. That is, a contract between the NRD and spouse of a Director of the NRD is prohibited unless: (1) the Director makes a declaration on the record regarding the nature and extent of his or her interest in the contract; (2) does not vote on the matter of granting the contract; (3) does not act for the governing body which is a party to the contract. The declaration on the record is normally accomplished by executing and filing a Contractual Interest Statement (NADC Form C-3).
Given the small amounts which are to paid to the spouses, the Lower Niobrara Natural Resources District may wish to consider invoking the provisions of Section 49-14,103.06. That section provides that "any governing body may exempt from sections 49-14,103.01 to 49-14,103.03 contracts involving one hundred dollars or less in which an officer of such body may have an interest". By exempting such contracts through some official act of the NRD, the directors would not be required to file Contractual Interest Statements under the circumstances described in the above fact situation.
