Iowa Code 362.5 – Interest in public contract prohibited — exceptions
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1. When used in this section, “contract” means any claim, account, or demand against or agreement with a city, express or implied.
Terms Used In Iowa Code 362.5
- city: includes only the area within the city limits. See Iowa Code 362.2
- City utility: means all or part of a waterworks, gasworks, sanitary sewage system, storm water drainage system, electric light and power plant and system, heating plant, cable communication or television system, telephone or telecommunications systems or services offered separately or combined with any system or service specified in this subsection or authorized by other law, any of which are owned by a city, including all land, easements, rights-of-way, fixtures, equipment, accessories, improvements, appurtenances, and other property necessary or useful for the operation of the utility. See Iowa Code 362.2
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Officer: means a natural person elected or appointed to a fixed term and exercising some portion of the power of a city. See Iowa Code 362.2
2. A city officer or employee shall not have an interest, direct or indirect, in any contract or job of work or material or the profits thereof or services to be furnished or performed for the officer’s or employee’s city. A contract entered into in violation of this section is void.
3. The provisions of this section do not apply to:
a. The payment of lawful compensation of a city officer or employee holding more than one city office or position, the holding of which is not incompatible with another public office or is not prohibited by law.
b. The designation of a bank or trust company as a depository, paying agent, or for investment of funds.
c. An employee of a bank or trust company, who serves as treasurer of a city.
d. Contracts made by a city, upon competitive bid in writing, publicly invited and opened.
e. Contracts in which a city officer or employee has an interest solely by reason of employment, or a stock interest of the kind described in paragraph “i”, or both, if the contracts are made by competitive bid in writing, publicly invited and opened, or if the remuneration of employment will not be directly affected as a result of the contract and the duties of employment do not directly involve the procurement or preparation of any part of the contract. The competitive bid qualification of this paragraph does not apply to a contract for professional services not customarily awarded by competitive bid.
f. The designation of an official newspaper.
g. A contract in which a city officer or employee has an interest if the contract was made before the time the officer or employee was elected or appointed, but the contract may not be renewed.
h. Contracts with volunteer fire fighters or civil defense volunteers.
i. A contract with a corporation in which a city officer or employee has an interest by reason of stockholdings when less than five percent of the outstanding stock of the corporation is owned or controlled directly or indirectly by the officer or employee or the spouse or immediate family of such officer or employee.
j. Contracts not otherwise permitted by this section, for the purchase of goods or services by a city which benefit a city officer or employee, if the purchases benefiting that officer or employee do not exceed a cumulative total purchase price of six thousand dollars in a fiscal year.
k. Franchise agreements between a city and a utility and contracts entered into by a city for the provision of essential city utility services.
l. A contract that is a bond, note, or other obligation of the city and the contract is not acquired directly from the city, but is acquired in a transaction with a third party who may or may not be the original underwriter, purchaser, or obligee of the contract.