CEO 04-5 -- April 27, 2004

CONFLICT OF INTEREST

CITY COMMISSIONER EXECUTIVE DIRECTOR OF NON PROFIT CORPORATION INTERACTING CITY


To:      Name withheld at the person's request.

SUMMARY:

No prohibited conflict of interest would be created for a city commissioner under either Section 112.313(3) or Section 112.313(7)(a), Florida Statutes, regarding various interactions between the city and a nonprofit corporation employing the commissioner as its executive director.† The interactions either do not constitute the provision of something to the city, are "grandfathered," are donative and thus do not constitute "doing business," or do not constitute a continuing or frequently recurring conflict or impediment to the full and faithful discharge of public duty.† However, should entry of the city and the corporation into a business (as opposed to a donative/gratuitous) relationship in relation to a former school site be concretely proposed, one or both of the statutes will be at issue and the councilman should contact the Commission for further advice.† CEO's 82-13, 85-7, 86-13, 88-20, 89-29, 90-8, 90-47, and 02-14 are referenced.[1]



QUESTION 1:

Would a prohibited conflict of interest be created were the city of which you are a commissioner to provide infrastructure (e.g., sidewalks, underground utilities) to a portion of the city of interest to a nonprofit corporation of which you are the executive director?

Your question is answered in the negative.


By your letter of inquiry and accompanying materials, we are advised that you serve as a member of the City Commission of the City of Leesburg, having taken office in January 2004.† In addition, we are advised that you are employed as the executive director of a nonprofit corporation, the Community Development Corporation of Leesburg and Vicinity ("CDC"), formed to foster greater economic development and opportunity within the City.† Further, you advise that Federal court litigation involving the City, the CDC, and others, settled under a consent decree[2] entered several years before you took office, has created a situation in which the City is obligated to support initiatives of the CDC in areas of the City (including the area to which infrastructure would be extended)[3]


We find that neither Section 112.313(3) nor Section 112.313(7)(a), Florida Statutes, would be violated were the City to provide the infrastructure.[4]† Regarding Section 112.313(3), the City would be providing something (infrastructure) to some of its residents or a subdivision within its boundaries; it would not be purchasing, renting, or leasing goods, realty, or services from the CDC, residents, or the subdivision.† Regarding Section 112.313(7)(a), assuming arguendo that provision of infrastructure ("public works") by the City to one of its neighborhoods constitutes "doing business" between the City and the neighborhood or between the City and the various property owners within the neighborhood, rather than constituting a governmental obligation (especially in light of the court consent decree), we find that the provision is "grandfathered," given that the decree predates your assumption of office.† See CEO 02-14.


QUESTION 2:

Would a "joint venture" between the City and the CDC to study the best method of redeveloping a lumber yard, or the City's and the CDC's actually entering into a project together for redevelopment of the yard, create a prohibited conflict of interest for you?


Your question is answered as set forth below.


Regarding this question, we are advised that the City and the CDC were working together (prior to your election) on a study to determine the highest and best use for an abandoned lumber yard and adjacent property and to determine feasibility of redeveloping the site.


We find that any contract or business relationship between the City and the CDC to study redevelopment (or any project for redevelopment) entered into before you took office would be "grandfathered" and would not violate either statute.† See Section 112.313(3)(b), Florida Statutes, and CEO 02-14.† Regarding any study or project not grandfathered, whether the same would be conflicting depends on the substance of the "joint venture" or "project."† Irrespective of any label or title ascribed to a situation between the City and the CDC, it would appear that a contract or arrangement between the City and the CDC entered into after your taking of City office, under which the CDC provides goods, realty, or services to the City, would be violative of Section 112.313(3).† It would appear that such a contract or arrangement also would constitute "doing business" between the City and the CDC (your private employer), in violation of Section 112.313(7)(a).† However, if the "ungrandfathered"† "joint venture" or "project" involving the City and the CDC is, for example, merely a gratuitous transfer of funds from the City to the CDC or otherwise does not create legally enforceable rights and responsibilities between the City and the CDC, we find that such a contract or arrangement would not violate either statute.[5]


This question is answered accordingly.


QUESTION 3:

Would a prohibited conflict of interest be created for you were a school district to donate real property to the City, which would then pass title to the CDC?


This question is answered in the negative.


Further, we are advised that the Lake County School Board, in conjunction with the construction of a new elementary school, will be closing an existing elementary school and could donate the old school site to the City or the City's community redevelopment agency ("CRA"), which then could pass title to the site without consideration (donate the site) to the CDC.


We find that such a transfer of the school site would not be prohibited by Section 112.313(3) because, as in Question 1 above, neither the City nor its CRA[6] would be acquiring the property from the CDC.† Also, we find that a donative transfer of the site to the CDC via the City or its CRA would not create a prohibited conflict under Section 112.313(7)(a), adhering to our previously stated view that a donation of property does not constitute "doing business" for purposes of the statute, and that such a situation does not otherwise violate Section 112.313(7)(a).† See CEO 82-13 (Question 1), in which we stated:


In our view, the phrase 'doing business' contemplates an exchange of consideration, such as money, property, or services, rather than a donation of property

Also, see CEO 85-7, CEO 88-20, and CEO 90-47.

QUESTION 4:

Would a prohibited conflict of interest be created for you were the City to own the former school site (or, though not owner, to financially participate in renovation and maintenance of the site), with the CDC and other community groups then utilizing portions of the site to further their various initiatives?


We find that this question cannot be answered definitively, as it appears that it concerns potential "partnering" between the City, the CDC, and others, the details of which are not currently discernable.† However, if such partnering were to involve the City's or its CRA's purchase, rental, or leasing from the CDC, or if the partnering otherwise involved a "business" relationship, Section 112.313(3) and/or Section 112.313(7)(a) would be at issue.[7]† Conversely, if the partnering only involved donations of renovation or maintenance from the City or the CRA to a CDC-owned site, or only involved the City's/CRA's gratuitous provision of use of the site (owned by the City/CRA) to the CDC and/or other groups, we find that a prohibited conflict of interest would not be created under either Section 112.313(3) or Section 112.313(7)(a).† See Question 3 above.


This question is answered accordingly.

QUESTION 5:

Does your employment as executive director of the CDC, in and of itself, create a continuing or frequently recurring conflict between your private interests and the performance of your public duties or impede the full and faithful discharge of your public duties under the second part of Section 112.313(7)(a), given the interactions and potential interactions between the City and the CDC as discussed above in this opinion?


This question is answered in the negative, subject to the proviso or condition noted below.


Additionally, we are advised that you have withdrawn from representing the CDC in its interactions with City staff on any project, that you have turned over the representation to the chair of the board of the CDC, and that the chair now serves as the spokesperson for the CDC in all interactions with City staff and the City Commission.


Provided that your activities for the CDC do not encompass activities related to lobbying the City Commission,[8] we find that your CDC employment does not create a prohibited conflict under the second part of Section 112.313(7)(a).† See CEO 89-29 (city commissioner employed as executive director of city chamber of commerce) and CEO 90-8, Question 2 (legislator employed as president of nonprofit corporation representing interests of private colleges and universities).

QUESTION 6:

Would voting abstentions by you regarding measures affecting the CDC create a prohibited conflict under the second part of Section 112.313(7)(a)?


We see no indication in the scenario you present that the number or frequency of voting abstentions by you which may be necessitated by your relationship to the CDC (your principal/employer) would be of such a nature that they would, in and of themselves, violate Section 112.313(7)(a), especially given the many other items that you would be voting on as a City Commissioner [a member of a board of a general (rather than a special) unit of government].[9]


This question is answered accordingly.


ORDERED by the State of Florida Commission on Ethics meeting in public session on April 23, 2004 and RENDERED this 27th day of April 2004.




__________________________

Richard L. Spears

Chairman



[1]Prior opinions of the Commission on Ethics are viewable on its website:† www.ethics.state.fl.us

[2]You advise that the provisions of the consent decree can be altered only with approval of the Federal District Court.

[3]You describe the area to which the infrastructure would be provided as a single-family residential subdivision within a predominantly African-American area of the City.

[4]Statutes provide:

DOING BUSINESS WITH ONEíS AGENCY.óNo employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer's or employee's spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer's or employee's spouse or child, or any combination of them, has a material interest.† Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to the officer's or employee's own agency, if he or she is a state officer or employee, or to any political subdivision or any agency thereof, if he or she is serving as an officer or employee of that political subdivision.† The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business or when such offices are on property wholly or partially owned by the legislator.† This subsection shall not affect or be construed to prohibit contracts entered into prior to:
(a) October 1, 1975.
(b) Qualification for elective office.
(c) Appointment to public office.
(d) Beginning public employment.
[Section 112.313(3), Florida Statutes.]

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.óNo public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee . . .; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties.† [Section 112.313(7)(a), Florida Statutes.]

[5]In addition, we do not find that such a situation would create a continuing or frequently recurring conflict or impediment to the full and faithful discharge of your public duties under the second part of Section 112.313(7)(a), Florida Statutes.

[6]You represent that you also sit as a member of the CRA.

[7]If a potential "business" relationship concretely presents itself in the future, you are encouraged to contact our staff for further advice.

[8]Please note that "activities related to lobbying" are broader than personally being the contact person between the CDC and the City, and take care that in your CDC capacity you also do not direct the activities of the chair or others who will contact the City, that you also do not participate in setting the City-lobbying strategies of the CDC, and that you also do not assist in preparing CDC City-lobbying documents.† See CEO 90-8, Question 2.

[9]Further, in your CRA capacity (as opposed to your City Commission capacity), you are not prohibited from voting on matters affecting the CDC; you merely are required to declare your relationship and file CE Form 8B.† See Section 112.3143(3)(b), Florida Statutes, and CEO 86-13.