CEO 08-12 -- June 11, 2008

VOTING CONFLICT; UNAUTHORIZED COMPENSATION;
CONFLICT OF INTEREST

SCHOOL BOARD MEMBER'S RENTED RESIDENCE
OWNED BY ARCHITECT WHOSE FIRM DOES
BUSINESS WITH SCHOOL DISTRICT

To: Franklin R. Harrison, Attorney for Bay County School Board

SUMMARY:

Under the circumstances presented, a school board member would not be presented with a voting conflict regarding measures affecting an architectural firm, an owner of which co-owns with his wife a residence leased, with an option to purchase, as the residence of the member and her husband. Under the circumstances presented, the votes/measures would not affect the member or her husband (relative) and "landlord" is not a relationship enumerated in Section 112.3143, Florida Statutes. The situation presented is indicative of a fair market value, arms-length transaction made by the owners of the property for the purpose of leasing/selling the property; it does not indicate that the transaction was intended to influence the member in her official capacity toward the firm. No prohibited conflict under either the first or second parts of Section 112.313(7)(a), Florida Statutes, is indicated, under the facts presented. CEO 77-34, CEO 83-42, CEO 98-9, CEO 02-16, and CEO 08-4 are referenced.


QUESTION 1:

Would a school board member be presented with a voting conflict under Section 112.3143(3)(a), Florida Statutes, regarding a board measure to award an architectural contract to a firm, an owner of which owns the member's rented residence?


This question is answered in the negative under the circumstances presented.


By your letter of inquiry and accompanying documents, we are advised that Donna Allen (member) serves as a member and Chair of the Bay County District School Board, having been first elected to the Board in 2002. In addition, we are advised that the member and her husband reside in a rented house owned by an owner of an architectural firm which has been doing business with the Board for over twelve years.1 Further, you advise that the original lease of the house began in 2006 and was renewed in 2008, under the same terms and conditions, for an additional two years. Also, you advise that the rent is $1,500 per month; that the lease contains an option to purchase for the amount of $695,000; that the lessor reports that the previous tenant paid $1,200 per month rent, with the house remaining vacant for ten months between the previous tenant's occupancy and the member's occupancy; that the just (market) value of the property according to the County Property Appraiser is $634,129, with a substantial majority of the value being attributed to the land and not the structure; and that there is no evidence that the situation is anything more than an arms-length transaction.


Section 112.3143(3)(a), Florida Statutes, the portion of the voting conflicts law applicable to local, elected public officers such as school board members, provides:


VOTING CONFLICTS.óNo county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure 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 he or she 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(2); 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 officerís 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.


The statute requires declaration of interests, abstention from voting, and timely filing of a memorandum of voting conflict (CE Form 8B) regarding measures of one's public board which would inure to the special private gain or loss of the board member, the board member's relative, the board member's principal (e.g., client, employer), the board member's business associate, or other enumerated persons or entities.


We find that the member will not be presented with a voting conflict under the statute, and thus will not be subject to its requirements, regarding School Board measures which would inure to the special private gain or loss of the architectural firm, its owner who is an owner of the member's residence, or the firm owner's spouse who co-owns the property. Under the facts presented, neither the firm, its principals/owners, nor the wife of one of the firm's owners falls within any relationship to the member as enumerated in the statute. The landlord-tenant relationship has not been found to be encompassed within the law (CEO 77-34, CEO 83-42, CEO 02-16), the facts presented do not indicate the carrying on of a business enterprise by the member, her husband, the firm owner, or the owner's wife such that they would be "business associates" (CEO 08-4, Question 5; CEO 98-9, Question 1), and the facts presented do not indicate that Board measures affecting the architectural firm also would inure to the special private gain or loss of the member or her husband ("relative").2


This question is answered accordingly.


QUESTION 2:

Does the lease-purchase described herein constitute "unauthorized compensation" to the member prohibited by Section 112.313(4), Florida Statutes?


This question is answered in the negative under the facts presented.


Section 112.313(4) provides:


UNAUTHORIZED COMPENSATION.óNo public officer, employee of an agency, or local government attorney or his or her spouse or minor child shall, at any time, accept any compensation, payment, or thing of value when such public officer, employee, or local government attorney knows, or, with the exercise of reasonable care, should know, that it was given to influence a vote or other action in which the officer, employee, or local government attorney was expected to participate in his or her official capacity.


The statute requires that a public officer have either actual or constructive knowledge that a provider of an item to the officer, the officer's spouse, or the officer's minor child intended to influence the officer's vote or other official action by provision of the item. Commission on Ethics v. Barker, 677 So. 2d 254 (Fla. 1996).


Under the facts presented, which are indicative of an arms-length lease-purchase agreement at fair market value, we do not find the lease-purchase to be prohibited by the statute. The situation is indicative of intent by the owners to lease and sell their property for a fair price; it is not indicative of intent on the part of the owners to give away or provide the property at less than arms length in order to influence the member's Board actions regarding the firm.


This question is answered accordingly.


QUESTION 3:

Does the situation described above create a prohibited conflict for the member under Section 112.313(7)(a), Florida Statutes?


This question is answered in the negative under the facts presented.


Section 112.313(7)(a) provides:


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.


Under the facts presented, under the first part of the statute, the member (assuming arguendo that she has a contractual relationship under the lease-purchase agreement identifying only her husband as tenant) would not hold a contractual relationship with the architectural firm (the business entity doing business with the Board/District) or with its owner in his professional firm capacity. Rather, she would hold a contractual relationship with the firm owner's wife (a party to the lease) and, apparently, the firm owner (as a natural person co-owning the property with his wife). Regarding the second part of the statute, we do not find that the arms-length lease-purchase situation presented would create a continuing or frequently recurring conflict between the member's performance of her public duties and her private interests or would impede the full and faithful discharge of her public duties.


This question is answered accordingly.


ORDERED by the State of Florida Commission on Ethics meeting in public session on June 6, 2008 and RENDERED this 11th day of June, 2008.

____________________________________

Albert P. Massey, III, Chairman


[1]Your inquiry materials show that the house is owned by the firm owner and his wife, that his wife alone is identified as landlord in the lease documents, and that the member's husband alone is identified as the tenant in the documents.
[2]Nevertheless, the member may, but is not required to, declare, abstain, and file under Section 286.012, Florida Statutes. CEO 83-42.