Borough releases memo on education funding vote

GEOFF SMITH

The Kodiak Island Borough Assembly voted unanimously last week to release a legal memo regarding questions surrounding whether Assembly Member Geoff Smith should be allowed to vote on school funding since he is an employee of the Kodiak Island Borough School District.

The topic was added to the agenda Thursday night at the request of Assembly Member Julie Kavanaugh so she might better explain it to residents.

“It will simplify my ability to speak with concerned community members about the topic,” Kavanaugh said. 

Assembly members cannot disclose confidential information, including classified legal opinions, data about personnel or any other topic derived from executive session discussions.

“I think having this out in the public will answer a lot of questions,” Kavanaugh said. 

The assembly approved its appropriations for the school district by resolution in a 5-2 vote on May 20 for just over $10.4 million. The budget was formally approved along with the rest of the borough’s budget at the June 3 public hearing. 

According to a legal memo from Scott A. Brandt-Erichsen, Kodiak Island Borough’s attorney, Smith disclosed his status as a school district employee prior to the discussion and eventual vote. Smith also noted that while he didn’t have a financial interest in the role, he perceived a potential conflict of interest due to his employment.

Borough Mayor Bill Roberts ruled that conflict of interest derived from financial gain and allowed Smith to participate and vote on the resolution. Smith was one of five assembly members who approved the budget.

The legal memo states that should someone challenge the vote, or Roberts’ decision, legally, it would be unlikely to be reversed in court.

“While the Mayor could have ruled either way, there is a reasonable basis to support the Mayor's ruling, and it was not timely challenged by the Assembly,” the memo states. “Because Member Smith disclosed his interest and was not the deciding vote, it is unlikely that a court would void the Assembly approval of Resolution FY2022-01 due to Member Smith's participation.”

The memo goes into detail about a Kodiak borough mayor’s authority to rule whether someone has a financial conflict of interest that would disqualify the assembly member from voting. A disqualified member would also be unable to debate or discuss that particular topic.

The affected assembly member could also appeal via motion and have the initial decision overturned by a vote of the assembly.

The memo states that Smith’s conflict was based solely on his employment with the school district. 

“While Assembly Member Smith might not have a personal financial stake because his continued employment or compensation would not be substantially impacted by the decision one way or the other, the question of the financial interest of the KIBSD as an entity is a separate issue,” the memo states.

The borough assembly has addressed the topic in the past, and has amended the borough code regarding conflict of interest to be in line with other municipalities and the state of Alaska. 

The legal memo also noted that school districts present a special challenge for conflict of interest analysis because of the special relationships shared with boroughs. State laws stipulate that all organized boroughs maintain a school district, that all school funding be deposited into a central treasury, and that it can be argued that the district as an entity does not have a separate financial interest from the borough.

For example, the borough owns the buildings and facilities the district operates from, and is responsible for major maintenance and capital improvements.

“Taking these factors into account, it may reasonably be argued that, as an entity, the KIBSD does not have a substantial financial interest separate from that of the Borough,” the legal memo states.

“It does not have separate ownership or constituency, but operates in conjunction with the Borough such that the financial interests of the Borough as an entity and the financial interests of the KIBSD are intertwined.”

Smith on Thursday had no objections to releasing the legal memo.

He said he had been informed that someone had requested the memo and had been surprised, but had no problems with it.

“I asked the clerk and said that I would like to be transparent and for it to come out before the public,” Smith said. He added he had not received phone calls personally about his voting on the school district budget. 

“I feel from the word ‘go’ that I have done everything on the up and up,” Smith said. “From pamphlets to the forum to every time we’ve talked about education, I’ve put it out there that I’ve been employed by the Kodiak Island Borough School District.” 

He added, “if the public ever has a problem with this, I will listen loud and clear to the community.”

Should the perception overwhelmingly show conflict of interest and come before the assembly, he said, “I would be more than willing to resign my seat on this assembly.”

Roberts stood by his initial May 20 ruling, declaring Smith to have no conflict of interest when it came to voting on matters related to education or the school district.

“I think it’s important for the public to know that we have a good basis for our reasoning and just because some people don’t like it, it doesn't mean it has to go their way,” Roberts said.

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