CEO 81-62 -- September 17, 1981

CONFLICT OF INTEREST; VOTING CONFLICT OF INTEREST

SCHOOL BOARD MEMBER EMPLOYED BY UTILITY COMPANY PROVIDING UTILITY SERVICE TO SCHOOL

To: (Name withheld at the person's request.)

SUMMARY:

No prohibited conflict of interest would be created were a school board member to be employed as Vice- President and General Manager of a utility company which provides utility service to a public school within the school district. Section 112.313(3), Florida Statutes, prohibits a school board member from serving as an officer of a company which is selling any services to the school district, and Section 112.313(7), prohibits a school board member from having any employment with a business entity which is doing business with the school district. However, an exemption to these prohibitions is provided in Section 112.313(12)(c), Florida Statutes, where the purchase or sale is for any utility service.

A voting conflict of interest under Section 112.3143, Florida Statutes, would be created were a school board member to vote on contracts, agreements, bills and other business the school district may have with the utility company which employs him as Vice-President and General Manager. Therefore, pursuant to Section 112.3143, Florida Statutes, a Memorandum of Voting Conflict (CE Form 4) should be filed by the school board member within 15 days after the vote occurs with the person responsible for recording the minutes of the meeting, who is to incorporate the Memorandum in the minutes. As an alternative in such situations, Section 286.012, Florida Statutes, would permit the school board member to abstain from voting.

QUESTION 1:

Would a prohibited conflict of interest be created were you, a School Board member, to be employed as Vice President and General Manager of a utility company which provides utility service to a public school within the School District?

This question is answered in the negative.

In your letter of inquiry you advise that you are a member of a District School Board and that you are employed as Vice President and General Manager of a utility company. This company, you advise, is regulated by the Florida Public Service Commission and provides water and sewer service within a local community. You further advise that the School District is constructing a new middle school within that community. Since the school will be within the service area of the utility company, it will receive water and sewer service from the company. The company will require the District to pay a one-time water and sewer impact fee and after the school is occupied will require the District to pay a monthly water and sewer service charge in accordance with rates approved by the Public Service Commission.

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

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or his 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 his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he 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. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1979).]

This provision would prohibit a School Board member from serving as an officer of a company which is selling any services to the School District.

In addition, the Code of Ethics provides:

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 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 private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1979).]

This provision prohibits a School Board member from having any employment with a business entity which is doing business with the School District.

However, the Code of Ethics also provides an exemption to the requirements of subsections 112.313(3) and (7) where:

The purchase or sale is for legal advertising in a newspaper, for any utilities service, or for passage on a common carrier. [E.S.] [Section 112.313(12)(c), Florida Statutes.]

As the School District would be purchasing utility services from the company of which you are an officer and employee, we find that this exemption would apply to the situation you have described.

Accordingly, we find that no prohibited conflict of interest would be created were you to continue to serve on the School Board while being employed as Vice President and General Manager of a utility company providing water and sewer service to a school within the School District.

QUESTION 2:

Would a voting conflict of interest be created were you to vote on contracts, agreements, bills and other business the School District may have with the utility company which employs you as Vice President and General Manager?

This question is answered in the affirmative.

The Code of Ethics does not prohibit a public officer from voting in his official capacity on any matter. Rather, if a public officer votes upon a matter in which he has a conflict of interest, he is required to disclose the conflict as follows:

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, Florida Statutes (1979).]

As an alternative, Section 286.012, Florida Statutes, permits a public officer to abstain from voting on matters in which there is or appears to be a possible conflict of interest under the Code of Ethics.

Since you are employed as Vice President and General Manager of the utility company we are of the opinion that you would have a personal or private interest in matters coming before the School Board which relate to the company. In addition, we are of the opinion that contracts, agreements, bills, and other business the School District might have with the utility company would inure to the special gain of a principal by whom you are retained, the utility company.

Accordingly, if you vote on such matters involving the utilities company, you would be required to file a Memorandum of Voting Conflict (Commission on Ethics Form 4) within 15 days after the vote with the person responsible for recording the minutes of the meeting. Alternatively, you may abstain from voting in such matters.