CEO 04-6 Ė April 27, 2004

CONFLICT OF INTEREST; VOTING CONFLICT

CITY COUNCIL MEMBER EMPLOYED BY PRIVATE ECONOMIC DEVELOPMENT COUNCIL


To:      Name withheld at the person's request.

SUMMARY:

No prohibited conflict of interest would be created under Section 112.313(7), Florida Statutes, were a City Council member to accept employment as Executive Director of a private economic development council which receives city funds.† The Council member would not be prohibited from voting on the City budget, which contains a line item appropriation for the economic development council.

QUESTION:

Would a conflict of interest exist were a city council member to accept employment as Executive Director of a private economic development council which receives city funds?

Your question is answered in the negative.


In your letter of inquiry and subsequent conversations with our staff, you advise that as City Attorney for the City of Monticello, you have been authorized by ..., a member of the Monticello City Council, to request our opinion on whether a prohibited conflict of interest would be created were she to accept employment as Executive Director of a private economic development council receiving City funds.


The Council member was elected in 2003 to a four year term which began in January 2004 and was subsequently elected by her peers on the council to serve as Mayor.† She has been offered the position of Executive Director of the Jefferson County Economic Development Council ("EDC").† The EDC is a nonprofit corporation with tax exempt status under Section 501(c) of the Internal Revenue Code, whose mission is to promote and assist the growth and development of the Countyís economy.† It is managed by an 11 member board of directors who represent a broad cross-section of public and private sector interests, including the City and County, the Regional Workforce Development Board, the Chamber of Commerce, and local banks and utilities.


The EDC receives its funding from a variety of private and public sources.† State funding comes through grants for specific projects, while the City and County typically budget funds each year, based on requests made by the EDC.† In the last two fiscal years the City appropriated about $25,000 to the EDC; this yearís appropriation was $20,000.† The only interaction between the EDC and the City Council regarding funding comes with the budget request, which is usually made by the EDCís Chairman.† Once the funds are allotted, the EDC is free to use them as desired by its board of directors.† The only other time the EDC appears before the governmental boards is when, as a courtesy, it appears to update them on its activities.


The Code of Ethics for Public Officers and Employees provides in relevant part as follows:


DOING BUSINESS WITH ONE'S AGENCY. No 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.]


As it does not appear that the EDC rents, leases, or sells any realty, goods, or services to the City, the above-quoted provision is not applicable to your situation.


The Code of Ethics further provides:


CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. (a)  No 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, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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), Florida Statutes.]


Section 112.313(7) prohibits the City Council member from having a contractual relationship with any business entity which is regulated by, or does business with, the City.† It does not appear that the EDC is regulated by the City, leaving the question of whether the funding mechanism by which the City provides funds to the EDC constitutes "doing business."† In previous opinions we have advised that a business entity and an agency are not "doing business" within the contemplation of this provision where one would not have a cause of action against the other in the event of default on the agreement or where the transaction is merely a donation of property.† See, CEO 85-7, CEO 82-13, and CEO 80-87.† In CEO 88-20, we determined that a city which provided in-kind services for a parade sponsored by a nonprofit corporation was not "doing business" with the corporation, and that there would be no violation were a city commissioner to be employed by that corporation.† In CEO 88-65, we found no conflict would be created were a city-county planning commission member to be employed by a state university center receiving matching funds from the planning commission.† There we said that because "there would be no contract and no obligation flowing from the Center to the Planning Commission" the commission would not be "doing business" with the center.† Similarly, the appropriation of funds from the City to the EDC here is a "no strings attached" commitment.


Therefore, the first part of this section would not appear to apply here.


The second part of Section 112.313(7) prohibits a public officer from having any contractual relationship which would 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.† This provision establishes an objective standard which requires an examination of the nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate and distinct or whether they coincide to create a situation which "tempts dishonor."† Zerweck v. Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982).


You state that the Council memberís responsibilities with the EDC call for the day-to day operation of the organization. She would maintain and preserve records, conduct correspondence, organize and attend the EDCís meetings, and develop and follow leads and respond to inquiries regarding possibilities for enhancing business and industry in the county.


You advise that the EDC does not lobby the City Council as to any issues other than its annual request for funds, and that that request is traditionally made by the EDC Chairman, rather than the Executive Director.† In addition, you advise that although the various reports regarding projects and initiatives made to the Council by the EDC have, in the past, been presented by the Executive Director, in the event the Council member accepts this position those responsibilities will be taken over by EDC board members.


In CEO 89-29, we considered the similar question of whether Section 112.313(7) would be violated where a member of a city commission was also employed as executive director of the cityís Chamber of Commerce.† In that scenario, the Chamber occasionally took positions on topics which concerned the city as a whole, but the executive director was not the spokesman or advocate for the organization, and his role as its manager did not, we found, conflict with his public responsibilities.† Given that the EDC has a more narrow focus of interests than the Chamber did in CEO 89-29 (the Chamberís interests ran the gamut from bond issues to the location of a heliport on the city owned convention center) we consider there will be fewer instances in which it might take a position on an issue of interest to the City, but even in the event that did occur, the Council member would not be the spokesman or advocate for the EDC on the issue.† As it appears that the lobbying efforts of the EDC are minimal and that the Council memberís employment will be completely separated from them, it does not appear that there would be an impermissible overlap between those positions or a violation of Section 112.313(7).† We emphasize that the Council member should not advocate on behalf of the EDC before the Council, including in its budget workshops.


Finally, Section 112.3143 provides as follows:


VOTING CONFLICTS. No county, municipal, or other local public officer shall vote in an official capacity upon any measure which inures to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom the officer is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(3); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer's interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes. [Section 112.3143(3)(a), Florida Statutes.]


Section 112.3143(3)(a) prohibits the Council member from voting on matters which inure to her own special private gain or loss, or to that of the EDC.† You state that the only issue of interest to the EDC likely to come before the City Council is its budget request.† You advise that once the EDC makes its request, the matter is taken up in the Cityís budget workshops and placed in the budget as a line item.† Ultimately, the entire budget of approximately $3.5 million dollars is voted on at once.


We have advised that whether a particular measure inures to the "special" gain of an officer or his principal will turn in part on the size of the class of persons who stand to benefit from the measure; where the class of persons is large a special gain will result only if there are circumstances unique to the officer or his principal under which they stand to gain more than other members of the class.† Thus, in CEO 88-20, referenced earlier, we advised that the city commissioner could vote on his cityís $26 million budget, notwithstanding the fact that it contained line items for $9,000 in-kind services provided by the city to his employer.† See also CEOís 92-43 and 89-19.† Similarly, we find here that the Council member would not be prohibited from voting on the entire City budget.


Accordingly, under the circumstances presented we find that no prohibited conflict of interest would exist were a member of the Monticello City Council to accept employment as Executive Director of the Jefferson County Economic Development Council, and that she would not be prohibited from voting on the City budget.


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