CEO 89-47 -- September 14, 1989
CONFLICT OF INTEREST
COUNTY COMMISSIONER'S LAW FIRM REPRESENTING LOCAL DEVELOPER
To: (Name withheld at the person's request.)
A prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, were the law firm of a county commissioner to represent a developer in the formation of a community development district in the county, or to represent the district after its formation. Representing the developer would impede the commissioner's duty to determine if formation of the district is in the best interests of the county, although a unity of interests would be present if the county expressed support for forming the district. Once formed, the district is also subject to the regulation of the county, constituting a prohibited conflict of interest which would preclude the commissioner's firm from representing the district.
Would a prohibited conflict of interest be created were your law firm to represent a local developer in the formation of a Community Development District, where you also serve as a County Commissioner?
Your question is answered in the affirmative, subject to the conditions indicated.
In your letter of inquiry, you advise that you are a Collier County Commissioner, having been elected in November 1988. You advise that you are also a practicing attorney and partner in the local office of a law firm. A local developer has contacted your office about representation in the formation of a community development district under Chapter 190, Florida Statutes. Because this district is contemplated to be over 1,000 acres in size, it would require a petition to be filed with the State Land and Water Adjudicatory Commission. The petition also would be submitted to any municipalities or counties which include land comprising the district. Affected counties and municipalities could conduct a public hearing regarding the petition and may adopt a resolution expressing support of or objection to the granting of the petition based on factors outlined in statute. In addition, a local public hearing must be held by a hearing officer under Chapter 120, Florida Statutes, at which the public and local governments have an opportunity to comment on the petition. The Land and Water Adjudicatory Commission considers a number of factors, including the resolutions of local governments and records of the hearings, in making a determination to grant or deny the petition. You inquire as to whether your firm may represent the developer in formation of such a district within your county.
The Code of Ethics for Public Officers and Employees provides in relevant part:
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].
This provision would prohibit you from holding a contractual relationship with the developer if he is subject to the regulation of your County, or if it would create a continuing or frequently recurring conflict between your private interests and performance of your duties as a County Commissioner or would impede the full and faithful discharge of those duties.
In order to determine whether this relationship creates a prohibited conflict of interest, we first must determine whether the developer is subject to the regulation of the County. We have advised in CEO 88-20 that ordinances of general application which do not regulate one landowner more than another do not constitute "regulation" within the meaning of this provision. We also have held that where active enforcement has been delegated to various city boards and departments, a business was not "regulated" by a city commission. In that decision, we noted that if general controls and restrictions constitute regulation, no commissioner could work or reside in the city. In re John Zerweck, Complaint No. 79-74, 2 F.A.L.R. 1097-A (1980), affirmed, Zerweck v. State Commission on Ethics, 409 So. 2d 57 (Fla. 4th DCA 1982). Further, in CEO 87-22, we advised that where a county development authority did not prescribe methods of doing business, but rather implemented constraints on businesses in an industrial park to maintain the desirability of the park, the authority did not "regulate" those businesses.
In this case, the County has the general power to enact ordinances which would apply to the developer, as well as to other landowners or developers, and be enforced through various County boards and departments. In our view, these duties alone would not constitute "regulation" of the developer under Section 112.313(7)(a), Florida Statutes. Under Chapter 190, Florida Statutes, the County also has various permissive powers with regard to creation of the district. These include calling a public hearing, issuing a resolution opposing or supporting creation of the district, or appearing at a local hearing to be conducted by a hearing officer. While the views of the County would be considered by the Land and Water Adjudicatory Commission in its determination on the petition, the County has no mandatory duties with regard to creation of the district or any role in prescribing how the district would be formed. Rather, the duties specified in statute constitute an advisory role to the decision maker. Under these circumstances the County Commission cannot be said to "regulate" the developer in formation of the district.
The second provision of the statute to be considered is whether your contractual relationship with this developer would create a continuing or frequently recurring conflict between private interests and the performance of your duties as a County Commissioner or would impede the full and faithful discharge of those duties. The District Court of Appeal in Zerweck stated that this prohibition.
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.' [409 So. 2d at 61.]
Also, the Code of Ethics defines "conflict" as
a situation in which regard for a private interest tends to lead to disregard of a public duty or interest.
Interpreting this provision as defined in Zerweck along with the definition of "conflict" cited above, we must examine the nature of your public duties as a Commissioner along with the obligations of your private relationship with the developer to determine if the two are compatible.
In CEO 84-1, we advised that a developer was not regulated by the county commission where active enforcement of general ordinances had been delegated to various county boards and departments. However, we also advised that this delegation does not necessarily mean that a continuing or frequently recurring conflict could not exist or that relationships with a developer could not impede the full and faithful discharge of public duties under the second provision of Section 112.313(7)(a). We also advised in CEO 88-40 that a city council member who is a partner in a law firm should not represent clients before the city council; nor should members of his firm represent such clients. In CEO 77-126, we advised that representation of clients before one's board constituted a conflict of interest as defined in Section 112.312(6), Florida Statutes, and created a continuing or frequently recurring conflict. In CEO 78-86, we held that even where such representation occurred once, it would impede the full and faithful discharge of public duties. In other decisions, we have advised that a conflict of interest would exist where a member of a city commission represented clients against the city in other forums. See CEO's 80-12, and 82-7.
In this case your duties as a County Commissioner would involve determining whether the establishment of the community development district is in the best interests of the County, so that the County's position could be advocated in the review process at the local hearing and before the Land and Water Adjudicatory Commission. We are advised by State officials involved in the community development district review process that usually a county's concerns are important elements in a hearing officer's determination of whether to recommend that the district be established. However, your private employment dictates that you promote creation of the district, which could include lobbying the County by your firm to influence them to support the district. Also, your firm could be called upon to represent the developer at a public hearing called by the County or at the local public hearing before a hearing officer. If the County adopted a resolution opposing the creation of the district, your firm also could be faced with appearing in opposition to the County before the Governor and Cabinet.
In the circumstances you have presented, we find that your firm should not represent the developer in any hearing called by the County or before the County Commission. Your firm also should not represent the developer in any situation where the interests of the County may be opposed to those of the developer. This would include the hearings specified in Chapter 190 as well as any other proceeding where the County has not taken a position favoring approval of the petition creating the district. This also would include any negotiations with the County preceding formal consideration of the matter by the Commission, since there may be efforts to influence the County to support the petition prior to its filing with the State. In each of these situations your private interests could potentially lead to disregard of your public duties.
However, a conflict of interest between your private interests and your public duties would be eliminated were the County to take a position in support of the creating the district. Rather, from that point on in the formation process there would be a unity of interests between the developer and the County. Our past decisions have recognized that such a commonality of interests can negate an apparent conflict. See CEO's 86-43, 84-63, and 83-35. Therefore, while a conflict would exist before the County had determined whether to support creation of the district, it would be removed by a clear expression of County support for the petition. We do not prescribe what form this expression of support must take, but a resolution or other action by a majority of the County Commission would be the most unambiguous indicator. Further, if the County Commission formally elects not to take a position on the petition the conflict of interest also would be removed because your public and private interests would no longer be incompatible. Your representation of the client would begin only after the County's decision process was completed. See CEO 85-33.
If such a measure were to come before the Commission, the question arises as to whether you may vote. The Code of Ethics provides:
No county, municipal, or other local public officer shall vote in his official capacity upon any measure which inures to his special private gain or shall knowingly vote in his official capacity upon any measure which inures to the special gain of any principal, other than an agency as defined in s. 112.312(2), by whom he is retained. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of his interest in the matter from which he is abstaining from voting and, 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. However, a commissioner of a community redevelopment agency created or designated pursuant to s. 163.356 or s. 163.357 or an officer of an independent special tax district elected on a one-acre, one-vote basis is not prohibited from voting. [Section 112.3143(3), Florida Statutes.]
Since your firm would not be retained at the time of this vote, and it would not benefit you personally other than raising the possibility your firm may acquire a new client, you would be permitted to vote on such a measure. This potential benefit is too speculative to constitute a "special gain" to you or your firm, assuming that the developer would be under no obligation to retain your firm if a favorable vote of the Commission resulted.
In some cases, we have advised that where a conflict was not substantial, the employment or contractual relationship was permissible provided that the individual abstained from voting and disclosed that relationship under Section 112.3143(3), Florida Statutes. However, in this case the conflict that would exist prior to County support of the petition could not be addressed through voting restrictions since the vote would constitute only a small part of the conflicting activity and would occur only after lobbying and other efforts by your firm to influence the County. In addition, this conflict could not be removed by limiting representation of the developer to other members of your firm. We previously have advised that each member of a law firm has a contractual relationship with each client of that firm. Therefore, this conflict would be present whether you or a member of your firm represented the District in its formation. CEO's 80-79 and 86-37. Further, we do not have jurisdiction to advise you as to the implications of this situation under the Code of Professional Responsibility governing ethical conduct of attorneys. You may wish to contact the Florida Bar for an opinion in this regard.
Accordingly, we find that while you serve as a County Commissioner a prohibited conflict of interest would be created were you or another member of your law firm to represent a developer in creation of a Community Development District until such time as the County expressly either supports creation of this district or elects not to take a position on the creation of the district.
Would a prohibited conflict of interest be created were your law firm to represent a community development district after its creation, where you also serve as a county commissioner?
Your question is answered in the affirmative.
Chapter 190, Florida Statutes, provides that a county exercises local permitting and regulation over certain powers of a community development district, while other powers can only be exercised with the consent of an affected county. Also, a district can transfer services to the county, or the county can adopt an ordinance requiring a transfer and, if the district is opposed, the issue must be resolved in circuit court.
The result in this question is dictated in part by the rationale of our answer to Question 1, along with the more complex and ongoing regulatory relationship between a county and an existing community development district. As noted in our response to Question 1, we have advised that a county commissioner's authority over county employees who possess delegated enforcement authority can cause a continuing or frequently recurring conflict or impede the full and faithful discharge of public duties, even where the commission may not regulate the firm in question. See CEO 84-1. By representing the district after its creation, you would have a conflict which would impede the full and faithful discharge of your public duties. Also, there is the potential for these conflicts to occur on a continuing or frequently recurring basis due to the statutory provisions requiring interactions between the County and district. Unlike Question 1, the fact that the County may support the district on a particular issue would not be significant because of the potential for a new conflict with each interaction between the County and district. Chapter 190, Florida Statutes, requires County consent or permitting for roads, water, fire prevention, schools, waste disposal, and other services within the district, which could result in recurring instances where the interests of the County are opposed to those of the district. Although many of these responsibilities have been delegated to other County boards and departments, authority over these entities rests with the County Commission. See CEO 84-1.
In addition to this conflict under the second provision of Section 112.313(7)(a), Florida Statutes, we find that the County has ongoing regulatory duties with regard to the district. The powers granted to the County under Chapter 190 can govern the daily operations of the district as well as what functions the district is permitted to perform. In addition, ordinances enacted by the Commission, such as a transfer ordinance, would apply specifically to the district rather than being ordinances of general application, as in the Zerweck decision. Thus, you would hold a contractual relationship with the district, which would be subject to the regulation of your agency.
Accordingly, we find that a prohibited conflict of interest would be created were a member of your firm to provide representation for a community development district, where you serve as a member of the County Commission.