CONFLICT OF INTEREST; VOTING CONFLICT
CITY COMMISSIONER'S WRECKER COMPANY
IN CITY'S WRECKER ROTATION SYSTEM
To: Name withheld at person's request (Longwood)
Under the circumstances presented, the "rotation system" exemption of Section 112.313(12)(a), Florida Statutes, is applicable to negate an otherwise prohibited conflict under Sections 112.313(3) and 112.313(7)(a), Florida Statutes, regarding a city commissioner's wrecker company providing services to the city. However, the commissioner will be presented with a voting conflict under Section 112.3143(3)(a), Florida Statutes, regarding votes/measures concerning the rotation system. CEO 76-148A, CEO 81-70, CEO 83-48, CEO 86-24, CEO 89-64, CEO 92-27, CEO 01-15, CEO 07-11, and CEO 08-14 are referenced.1
Would a prohibited conflict of interest be created under Section 112.313(3) or Section 112.313(7)(a), Florida Statutes, were a wrecker company owned by you, a Commissioner of the City of Longwood, to participate in a City wrecker rotation system which provides wrecker services for private vehicle owners and for the City?
Under the circumstances presented, Question 1 is answered in the negative, due in part to application of the "rotation system" exemption of Section 112.313(12)(a), Florida Statutes.2
By your letter of inquiry and additional information provided to our staff, we are advised that you serve as a Commissioner and Deputy Mayor of the City of Longwood and that you own a wrecker company that has been operating locally for over twenty years. In addition, you advise that for over ten years, the City used a single source contract for wrecker services for the City and the City's police department, but that, recently, the wrecker company (the single source and not your company) terminated its contract with the City. Further, you advise that as a stop-gap measure, the City's police chief contacted the Seminole County Sheriff's Office and requested and received permission to use the County's wrecker rotation system to secure competent wrecker services for the City and the City's police department. You advise that your company is included as a qualified participant in the County's wrecker rotation system. However, you advise that rather than continuing to use the County's rotation system or returning to a single source wrecker contract, the City's police chief has decided to implement a new rotation system developed by and for the City. Additionally, you state that as a City Commissioner, you have had no involvement in developing the City's wrecker rotation list, system, or the method of selection under the list/system, and that you have not been involved with the police department's decision to implement the new wrecker rotation list.3
More particularly, as to the rotation system proposed by the police department, you advise that qualified wrecker companies would execute an agreement with the City, would then be placed on an approved wrecker rotation list, and would take turns providing towing and wrecker services to the City and its police department on an as-needed basis. Further, you advised that the companies would then, in turn, charge the cost of towing to the owners of the towed vehicles or the owners' assigned agents. But, you advise, in consideration for being placed on the City's rotation list, the companies would be required to tow City-owned vehicles at "no charge," when towed from locations anywhere inside the City limits or from locations up to ten miles outside the City limits, and the companies would "not charge" the City for wrecker services for impounded vehicles. And, you advise, in order to participate in the rotation system, companies must meet specified qualifications and execute an agreement between the company and the City to abide by the terms of the rotation system.4 Also, you advise that the police chief has indicated that he intends to base the City's rotation list on the current list used by the County and will include on the City's list those companies (of which your company is one) currently qualified by the County in the County zone in which the City is located.5
The Code of Ethics provides:
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.]
CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.- 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 . . .; 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.]
(12) EXEMPTION.- . . . no person shall be held in violation of subsection (3) or subsection (7) if:
(a) Within a city or county the business is transacted under a rotation system whereby the business transactions are rotated among all qualified suppliers of the goods or services within the city or county. [Section 112.313(12)(a), Florida Statutes.]
Initially, we find that your company's providing wrecker/towing services for vehicles where your company charges the costs of the services to the owners of the vehicles or their agents, as opposed to services provided to the City for its vehicles or for impounded vehicles, is not, under the circumstances presented, prohibited by either Section 112.313(3) or Section 112.313(7)(a). In such a situation, under Section 112.313(3), your company would be selling services to persons or parties other than the City; and, under Section 112.313(7)(a), your company's providing services to a mere vehicle owner or the owner's agent does not indicate a prohibited conflict. CEO 81-70 and CEO 76-148A.6
However, were it not for the "rotation system" exemption of Section 112.313(12)(a), which we find to be applicable under the circumstances you present, we would find that your company's entering into an Agreement with the City would be violative of both Section 112.313(3) and Section 112.313(7)(a).
Under Section 112.313(3), notwithstanding that your company mainly would be providing services to vehicle owners, their insurance companies, or related others, and not to the City, your inquiry also presents the issue of whether the substance of the rotation arrangement would amount to the purchase of services by the City from your company or would amount to the sale of services from your company to the City. We find that the arrangement would amount to such a purchase/sale. Unquestionably, under the facts presented, the City would receive City vehicle and impounded vehicle wrecker/towing services from your company (or, at least, would receive the "on-call status" rotation service of your company, enforceable under the Agreement, regarding City vehicles and impounded vehicles) in exchange for the valuable consideration to your company of being on the rotation system list and receiving business thereby. That is, we see no distinction, for purposes of the statute, between a situation where your company expressly contracts with the City for cash to provide wrecker/towing services for City vehicles and impounded vehicles and the valuable-consideration-for-services situation described in your inquiry. In this regard, we note that we have but once considered the meaning of "sell" or "selling," a term not defined in the Code of Ethics. See CEO 08-14 (university employee responding to university request for proposal prior to retiring), in which we did not limit our understanding of the term to that of a cash sale for an express service; instead, we took guidance from a dictionary definition of the verb "sell" ("To exchange or deliver for money or its equivalent").7 Also, definitions given in the Webster's Seventh New Collegiate Dictionary (1972) for "sell" include "to give up (property) to another for money or other valuable consideration," "to give up in return for something else . . . .," and "to exact a price for."
Under Section 112.313(7)(a), we find that you would hold employment or a contractual relationship with your wrecker company (see, for example, CEO 83-48), that your wrecker company would be a "business entity,"8 and that your company would be "doing business with" your agency (the City) by virtue of its entry into an Agreement with the City concerning the rotation system. See, for example, CEO 86-24 and CEO 07-11, decisions in which we have determined that a business entity is "doing business with"9 a public agency when the two have entered into a lease, contract, or other type of arrangement where a cause of action would exist in the event of a default or breach. The Agreement between your company and the City would appear to be such a contract or arrangement.
Further, we find that the rotation system contemplated, a system which would provide wrecker/towing services to the City for its vehicles and for impounded vehicles, would constitute a rotation system among "all qualified suppliers" of wrecker/towing services, including your company. While, like other terms or phrases, "all qualified suppliers" is not defined in the Code of Ethics, we have found that rotation systems which impose reasonable and objective criteria on providers in order for providers to be included in the rotation and which do not have the effect of unduly limiting the pool or unfairly benefitting the business of a public official can legitimately be enacted by local governments without thwarting applicability of the rotation exemption. See, for example, CEO 89-64 (county commissioner owning auto parts business selling to county road department) and CEO 92-27 (city commissioner owner of publication selling advertising space to city). The materials supplied by you indicate that the City's rotation system will include reasonable, objective criteria, without unduly limiting the pool of providers or unfairly benefitting your business.10
Question 1 is answered accordingly.
Will you be presented with a voting conflict under Section 112.3143(3)(a), Florida Statutes, regarding votes/measures of the City Commission pertaining to, authorizing, or implementing the wrecker rotation system/list?
Question 2 is answered in the affirmative.
It is plain that such votes/measures would inure to your special private gain or loss. However, note that the statute does not specify that you must "recuse" yourself. The law requires oral declaration, abstention from voting, and timely filing of a memorandum of voting conflict. See CE Form 8B.
Question 2 is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on July 29, 2011 and RENDERED this 3rd day of August, 2011.
Robert J. Sniffen, Chairman
Prior opinions of the Commission on Ethics may be obtained from its website (www.ethics.state.fl.us) or may be obtained directly from the Commission.
Your inquiry contains question numbering of 1-5. Herein, we have consolidated your questions 1-4 into Question 1; and we treat your question 5 in Question 2.
You advise that the police chief is appointed by, supervised by, and reports directly to the City's administrator; that the appointment of a police chief is made by the administrator, subject to confirmation by the City Commission; and that the City's charter prohibits City Commissioners from giving orders to any officer or employee of the City who is subject to the direction and supervision of the administrator.
Documents submitted under your inquiry include a CITY OF LONGWOOD WRECKER CALL ALLOCATION SYSTEM TECHNICAL SPECIFICATIONS document (hereinafter "Technical Specifications") and a Wrecker Call Allocation System Agreement (hereinafter "Agreement"), both of which incorporate many specifics (e.g., as to experience, size of response equipment, insurance, response time), too voluminous to restate herein.
You advise that your wrecker company's headquarters is located inside the City limits, that there are four qualified companies (including your company) on the County's southwest quadrant rotation list, that the other three companies have a Longwood address but their shops are located in the unincorporated County just outside the City limits, and that the other three regularly provide services within the City limits. Further, you advise that all of the companies located inside the City limits or just outside the City limits are capable of meeting the Technical Specifications proposed for the City's rotation system, that companies not capable of meeting the Specifications are companies which are located in another county or which have their bases of operation too far from the City's boundaries, and that all of the capable companies are willing to sign an Agreement with the City in the form proposed.
CEO 76-148A also determined that a particular rotation system did not negate a conflict under Section 112.313(3) occasioned by a councilwoman's wrecker business providing services to her city. However, the opinion involved an analysis under Section 112.316, Florida Statutes, rather than under the rotation exemption codified in Section 112.313(12)(a), inasmuch as the exemption did not enter the Code of Ethics until 1977; see Chapter 77-349, Laws of Florida.
Further, in CEO 08-14, the issue was whether a mere response to a request for proposals, without the response being accepted and without a contract being entered into between the proposer and the requestor, amounted to a "sale." From the opinion, it is clear that entry into a contract (an agreement) would amount to "selling."
Defined in Section 112.312(5), Florida Statutes, to mean
any corporation, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in this state. "Doing business with" is not defined within the Code of Ethics. In making our finding that the City's proposed rotation system would fit the exemption, we have not overlooked CEO 01-15, which involved a county commissioner. In that opinion, we found that the exemption was not applicable because qualified engineering firms (one of which was connected to the commissioner) were selected "from both within and without the [c]ounty, rather than from just within the [c]ounty." However, we do not, in issuing the instant opinion to you, find that inclusion of wrecker companies which are physically located near, but not within, the City limits, which operate within the City, and which meet the other criteria for inclusion on the rotation list means that the exemption does not apply. In the situation presented by you, we find that all qualified suppliers operating in the City would be included; we do not read the exemption as requiring that a wrecker company have a physical shop or station within the City limits, especially since such is not part of the Technical Specifications/criteria for list inclusion.
any corporation, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in this state.
"Doing business with" is not defined within the Code of Ethics.
In making our finding that the City's proposed rotation system would fit the exemption, we have not overlooked CEO 01-15, which involved a county commissioner. In that opinion, we found that the exemption was not applicable because qualified engineering firms (one of which was connected to the commissioner) were selected "from both within and without the [c]ounty, rather than from just within the [c]ounty." However, we do not, in issuing the instant opinion to you, find that inclusion of wrecker companies which are physically located near, but not within, the City limits, which operate within the City, and which meet the other criteria for inclusion on the rotation list means that the exemption does not apply. In the situation presented by you, we find that all qualified suppliers operating in the City would be included; we do not read the exemption as requiring that a wrecker company have a physical shop or station within the City limits, especially since such is not part of the Technical Specifications/criteria for list inclusion.