CEO 78-96 -- December 21, 1978
VOTING CONFLICT OF INTEREST
CITY COUNCILMAN VOTING ON MATTERS AFFECTING CLIENTS OR POTENTIAL CLIENTS OF HIS REAL ESTATE FIRM
To: (Name withheld at the person's request.)
Prepared by: Phil Claypool
When a city councilman, in his private capacity as a real estate broker, stands to receive a portion of his commission for the sale of land at the time such property is rezoned, he will be faced with a voting conflict of interest requiring disclosure when the rezoning comes before the city council because he stands to gain as a result of the vote. See s. 112.3143, F. S. 1977. Reading this provision in conjunction with s. 286.012, the councilman either may exercise his right to vote in spite of the conflict, filing a Memorandum of Voting Conflict (CE Form 4), or may abstain from voting on the matter based on his having a conflict under s. 112.3143. No voting conflict of interest would be created, however, were the councilman to vote on a special assessment taxing district ordinance which would benefit the purchaser of the property referenced above because the councilman would benefit in no way from the vote and the purchaser, a principal by whom the councilman is retained, would not enjoy any special gain based on the property's constituting only 38 out of 5,000 acres of property which would be affected. Nor would a voting conflict be created were the councilman to vote on a measure which would benefit a potential client of his real estate firm because the councilman would not personally benefit and a potential client does not at that point in time constitute a principal by whom the councilman is retained.
1. Would a voting conflict of interest exist were I, a city councilman, to vote on the rezoning of a parcel of land which is in the process of being sold by my real estate firm?
2. Would a voting conflict of interest exist were I, a city councilman, to vote on an ordinance creating a special assessment taxing district for undeveloped portions of the city, including property which is being sold by my real estate firm?
3. Would a voting conflict of interest exist were I, a member of a city council, to vote on a measure which would benefit a potential client of my real estate firm?
Question 1 is answered in the affirmative.
In your letter of inquiry and in a telephone conversation with our staff, you advise that you are a member of the city council of the City of ____ and that privately you are a real estate broker. You also advise that your real estate firm recently has cooperated with another firm in the sale of a parcel of land within the city. In addition, you state that the purchaser of the property intends to develop it into an industrial park, which will require the rezoning of the property. Finally, you advise that part of your commission will be paid at the closing on the property but that the balance of your commission is not to be received until the property is rezoned or, if it is not rezoned, the property is sold later for at least its purchase price. You question what your role should be when the rezoning matter comes before the city council.
The Code of Ethics for Public Officers and Employees provides in relevant part:
Voting Conflicts. -- No public officer shall be prohibited from voting in his official capacity on any matter. However, any public officer voting in his official capacity upon any measure in which he has a personal, private, or professional interest and which inures to his special private gain or the special gain of any principal by whom he is retained shall, within 15 days after the vote occurs, disclose the nature of his 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, F. S. 1977.]
In our opinion, if you vote on the rezoning of the subject parcel, this provision of the Code of Ethics will require you to file a Memorandum of Voting Conflict, as you stand to receive a portion of your commission if the property is rezoned.
In addition, s. 286.012, F. S. 1977, states:
Voting requirement at meetings of governmental bodies. -- No member of any state, county, or municipal governmental board, commission, or agency who is present at any meeting of any such body at which an official decision, ruling, or other official act is to be taken or adopted may abstain from voting in regard to any such decision, ruling, or act, and a vote shall be recorded or counted for each such member present, except when, with respect to any such member, there is, or appears to be, a possible conflict of interest under the provisions of s. 112.311, s. 112.313, or s. 112.3143. In such cases said member shall comply with the disclosure requirements of s. 112.3143.
As you would have a voting conflict of interest under s. 112.3143, this provision would allow you to abstain from voting on the rezoning of the subject parcel.
Accordingly, when the matter you have described comes before the city council, you will have the choice of two alternatives: you may exercise your right to vote in spite of the conflict and therefore be required to file a Memorandum of Voting Conflict (CE Form 4), or you may abstain from voting in the matter.
Question 2 is answered in the negative.
In your letter of inquiry you advise that before you met the purchaser of the parcel of land referenced in question 1, you proposed a special assessment taxing district ordinance for the installation of water, sewers, and streets throughout the remainder of the undeveloped portions of the city. You also advise that the subject 38-acre parcel would be affected by this ordinance since it lies within an undeveloped portion of the city. In addition, you advise that the ordinance would benefit this purchaser should he develop the parcel because if a special taxing district is created, he will have 10 years to pay off the improvements to the subject parcel; otherwise, he will be required to pay for the improvements as they are made. In a telephone conversation with our staff, the city planner advised that the undeveloped area of the city constitutes approximately 5,000 acres, while 4,200 acres of the city are developed.
Section 112.3143, quoted above in response to your first question, would require you to file a Memorandum of Voting Conflict only if the measure upon which you vote inures to your special private gain or the special gain of any principal by whom you are retained. It is apparent that the proposed ordinance would result in no gain to you, unlike the situation of your first question, because your commission on the sale of the subject parcel is not dependent upon the passage or defeat of the ordinance. Nor do we feel that the ordinance would inure to the special gain of the purchaser of the property. We have previously advised that the question of whether a particular gain is "special" depends upon the size of the class of persons who stand to benefit. See CEO 77-129. Here, the subject property constitutes only 38 out of the 5,000 acres of undeveloped property within the city -- less than 1 percent of this area. In the absence of any circumstances which would indicate that this property owner would receive a greater benefit than the other owners of undeveloped property within the city, his gain is certainly not "special."
With respect to the applicability of s. 286.012, above, we have advised that a public officer may abstain when there is or appears to be a conflict of interest under s. 112.311 of the Code of Ethics. See CEO 78-34. That section states in part that it is the public policy of this state that "public officials be independent and impartial." Section 112.311(1), F. S. 1977. In our view, the totality of the circumstances give an appearance that one in your position may not be totally independent and impartial concerning matters in which your real estate firm's client is involved.
Accordingly, when the ordinance you have described comes before the city council, you may exercise your right to vote or you may abstain from voting; in neither case, however, will you be required to file a Memorandum of Voting Conflict.
As to question 3, in your letter of inquiry and in a telephone conversation with our staff you advise that approximately 1 1/2 years ago, an out-of-state company unsuccessfully attempted to obtain the city's approval for the issuance of industrial revenue bonds to enable them to open a theater in the city. Subsequently, as a real estate broker, you contacted that business to present information about a piece of property within the city for their consideration. The company at present has not decided whether to purchase the subject property or any other property. Since the time you contacted the company, the city council unanimously passed a motion instructing the city attorney to draft whatever ordinance is necessary to enable the company to open a theater in the city. You further advise that there is an open listing on the parcel of land with reference to which you contacted the business, and that you have no contract with the business. You question whether a voting conflict of interest was created when you voted to instruct the city attorney to prepare an ordinance, and you question what your voting posture should be when the ordinance comes before the city council for approval.
Section 112.3143, quoted above in response to your first question, would require you to file a Memorandum of Voting Conflict only if the measure upon which you vote inures to your special private gain or to the special gain of any principal by whom you are retained. Clearly, neither the motion to direct the city attorney to draft the ordinance nor the ordinance itself will result in any special gain to you, although it would benefit the business which is seeking to open a theater. We do not consider that business a principal by whom you are retained, as you merely approached them with the possibility of purchasing property which is openly listed and because you have no contract with them. Therefore, you need not file a Memorandum of Voting Conflict because of your vote on the motion instructing the city attorney to draft the ordinance, and you need not file such a memorandum if you vote on the ordinance in the future.
We also are of the opinion that s. 286.012 would authorize you to abstain from voting on the subject ordinance. The situation here, where you have contacted a business regarding a purchase of property prior to the passage of an ordinance which would benefit that business substantially, is similar to the circumstances of your second question.
Accordingly, when the matter you have described comes before the city council, you may exercise your right to vote or you may abstain; in neither case will you be required to file a Memorandum of Voting Conflict.