CEO 91-47 -- September 13, 1991
CONFLICT OF INTEREST
FIRE CHIEF OF VOLUNTEER FIRE DEPARTMENT [NONPROFIT CORPORATION]
WORKING AS A SALES REPRESENTATIVE FOR FIRE APPARATUS COMPANY
BIDDING ON EQUIPMENT TO BE PURCHASED BY THE COUNTY
FOR THE FIRE CHIEF'S DEPARTMENT
To: (Name withheld at the person's request.)
A volunteer Fire Chief for a nonprofit corporation organized as a fire department, who receives a set monthly expense reimbursement from the County, is neither a "public officer" nor an employee of an "agency" and, therefore, the "Conflict of Interest" provisions [Sections 112.313(3) and (7), Florida Statutes] of the Code of Ethics for Public Officers and Employees do not apply to prohibit him from working as a salesman for a firefighting apparatus company selling equipment to the County for use by his fire department [nonprofit corporation], nor to his doing business with the County as an electrical contractor providing services to the County's Public Safety Division which oversees the operations of the County's Fire Departments. "Public officer" is defined at Section 112.313(1), Florida Statutes, to include "any person elected or appointed to hold office in any agency," and "agency" is defined at Section 112.312(2), Florida Statutes. Because the Fire Chief is neither elected by the public nor appointed to his position by any governmental entity, he is not a "public officer" for purposes of the Code of Ethics, and because the Volunteer Fire Department has no governmental authority, responsibilities, powers, or duties delegated to it by law, ordinance, or resolution, the Department is neither a governmental entity nor a political subdivision of the State and therefore is not an agency for purposes of the Code of Ethics.
Are you, a volunteer Fire Chief for a nonprofit corporation organized as a department of a special taxing district for the purpose of providing fire protection and rescue facilities and services in the community and vicinity of Marathon in Monroe County, and who receives a set monthly expense reimbursement from the County, a public officer or employee of an agency subject to the Code of Ethics for Public Officers and Employees?
Your question is answered in the negative.
Through your letter of inquiry, telephone conversation with staff, and information you have provided through your letter responding to staff's questions, we are advised that you are the Fire Chief of the Marathon Volunteer Fire and Rescue, Inc., a nonprofit corporation formed as a fire department of the Lower and Middle Keys Fire and Ambulance Special Taxing District. The nonprofit corporation's purpose is to provide firefighting, prevention, and rescue services in the community and vicinity of Marathon in Monroe County. While the Board of County Commissioners is the governing body over the special taxing district [District], the nonprofit corporation [Department] operates under contract with the District.
You have provided us with a copy of the Constitution and By-Laws of the nonprofit corporation which lists, among other things, the types of membership and qualifications for membership; the requirements for retaining membership such as attendance at both business and training meetings; qualifications for membership in the rescue squad; and qualifications, duties, and election of both line officers and corporate officers. Any additional policies and procedures are set by the members of the Department at its regular meetings.
We are advised that the line officers, which include a fire chief, deputy fire chief, two captains, two lieutenants, and one training officer, are elected by the membership and can be removed from office by order of the Fire Chief or by written charges brought against the officer by any member having just cause. The member's charges must be referred to the examination committee of the Department, and a report of the examination committee must be presented at the next regular business meeting of the Department. Upon recommendation of the committee and a two-thirds vote [for removal] of the members present, the officer must be removed.
We also are advised that the Board of County Commissioners of Monroe County is the governing body over the Lower and Middle Keys Fire and Ambulance Special Taxing District. It has ultimate approval authority over your Department's budget, which you and the President of your nonprofit corporation prepare utilizing the Department's past history, needs, recommendations from Department officers, and a master plan adopted by the Monroe County Fire Chiefs' Association. Your budget is, thereafter, reviewed by the Fire Marshal's Office, which office within the County's Division of Public Safety also supervises the fire departments, the Monroe County Fire Chiefs' Association, the Monroe County Fire Review Board, and ultimately the Monroe County Commission. Department funding is derived from property taxes assessed by the Taxing District.
We also are advised that pursuant to the contract between your Department and the Special Taxing District, and depending on the availability of funds, volunteers serving both firefighting and rescue services are reimbursed at the rate of $100.00 per month. You are reimbursed at the rate of $250.00 per month. This "reimbursement of expenses," as opposed to "compensation" for services, is authorized by County ordinance and is paid directly to the Department which, in turn, reimburses both you and the volunteers. Workers' Compensation Insurance is another benefit provided by the County or the Special Taxing District to the Department's volunteers.
You advise that you also work as a sales representative for a fire equipment company from which the County purchases firefighting apparatus. A project that concerns you requires the construction and mounting of a pumper body with booster tank and fire pump onto an existing cab and chassis for use by your Department. This project was awarded to your company under a system of sealed bids. You, however, as is customary for the Fire Chief of your department, along with the Department's committee appointed for this purpose by the President of your nonprofit corporation, participated in the development of the bid specifications. You advise that the language in the specifications had been developed by the County as "standard" for use for all County purchases of firefighting apparatus and were not written to favor one manufacturer over another.
We are advised that the bid review procedure for firefighting apparatus includes review by the respective fire departments, followed by review by the Fire Marshal's office which issues written staff recommendations. These recommendations are then forwarded along with the bids for review by the Monroe County Fire Review Board and the Monroe County Fire Chiefs' Association for final recommendation to the County Commission. The Board of County Commissioners makes the final purchasing decision.
You have advised that you, along with your Department's bid specification writing committee, participate on behalf of your Department in reviewing incoming bids and voting on your Department's recommendation to the County's Fire Marshal's office. You have a second recommendation vote through your participation in the review conducted by the Fire Chiefs' Association. This is an informal association of the County's Fire Chiefs. The Monroe County Fire Review Board, however, is a citizens group appointed by the Board of County Commissioners to review and recommend, among other things, budgets, purchases, and policies for the volunteer fire departments.
You are concerned about whether a prohibited conflict of interest exists here. The Code of Ethics for Public Officers and Employees provides in relevant 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 of 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.
(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 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.]
The only relevant part of Section 112.313(3), Florida Statutes, which might apply is the second sentence which prohibits a public employee from acting in his private capacity to sell any services or goods to his own agency. Whether this section would apply depends both on whether you are a public officer or employee and on whether you are selling to your own agency. Regarding Section 112.313(7)(a), Florida Statutes, the first part prohibits a public employee from having an employment or contractual relationship with any business entity which is subject to the regulation of or doing business with his agency, while the remaining provision prohibits an employee from having any employment or contractual relationship which creates a continuing or frequently recurring conflict between his private interests and his public duties. An exemption to both Sections 112.313(3) and (7) appears at Section 112.313(12)(b). This provision exempts business awarded to the lowest bidder under a system of sealed, competitive bidding, but only where the official has in no way participated in either the determination of the bid specifications or the determination of the lowest or best bidder. Assuming the Code of Ethics applies, this exemption would not apply to you because of your participation in both the determination of bid specifications and the determination of the lowest or best bidder. Again, whether these conflict provisions apply to your situation depends on whether you are a public officer or employee of an agency for purposes of the Code of Ethics.
"Public officer" is defined at Section 112.313(1) to include
any person elected or appointed to hold office in any agency, including any person serving on an advisory body.
Because you neither have been elected by the public nor appointed to the position of Fire Chief by any governmental authority, we find that you are not a "public officer" for purposes of this section. We can discern no reason why our finding here should be any different than it was in CEO 81-55, where we found that a Fire Chief of a city volunteer fire department was not a "local officer" required to file a statement of financial interests annually. Our finding here, as well as the one in CEO 81-55, is consistent with the Second District Court of Appeal's holding in Florida Gulf Health Systems Agency, Inc. v. Commission on Ethics, 354 So.2d 932 (Fla. 2d DCA 1978), that directors and officers of a private corporation who accede to their positions by agreement among themselves without regard to the public generally are not "local officers." Because the Fire Chief of the Marathon Volunteer Fire and Rescue, Inc. is elected bi-annually by secret ballot of the membership eligible to vote, he is not a "public officer."
The next question for determination is whether for purposes of Section 112.313(3) or (7) you are an "employee of an agency." "Agency," as defined at Section 112.312(2), Florida Statutes, means
any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college or state university.
In our opinion the Marathon Volunteer Fire and Rescue, Inc. is not a "public agency." It has no governmental authority, responsibilities, powers, or duties delegated to it by law, ordinance, or resolution. Therefore, this nonprofit corporation is not a government entity of the state or a political subdivision of this state. As it is not an agency, you are not an officer or employee of an agency. See CEO 77-157 and CEO 91-41.
Accordingly, we find that you are not subject to the provisions of the Code of Ethics by virtue of your serving as Fire Chief of the Marathon Volunteer Fire and Rescue, Inc., and the Code of Ethics does not prohibit you from working as a sales representative for a company from which the County purchases firefighting apparatus for use by your fire department. We find, however, that although the Code of Ethics does not apply to prohibit your serving as a sales representative in this case, there is an appearance of a conflict of interest. We strongly suggest that in order to avoid the appearance that you are using your position as Fire Chief to benefit either yourself or your employer, you should avoid participation in the bid specification writing and review process for the entire period that you are both a sales representative for the firefighting apparatus company bidding or desiring to bid on firefighting equipment to be purchased by the County for your Fire Department and an officer in your Fire Department having responsibility for the recommendation for purchase or the bid specification process pertaining to firefighting equipment needed by your Department.
Does the Code of Ethics for Public Officers and Employees prohibit you, a volunteer Fire Chief for a nonprofit corporation who receives a set monthly expense reimbursement from the County through the nonprofit corporation [Fire Department], and who owns an electrical service company, from providing electrical services to County Departments such as the Public Works Division and the Public Safety Division where either competitive bids are obtained by the Purchasing Department within the County's Division of Management Services, or where a written quotation system is used?
Your question is answered in the negative.
You advise that in addition to being a volunteer Fire Chief and a salesman for a firefighting apparatus company, you are an electrical and sign contractor conducting business with the county on a daily basis. You provide electrical services including, among other things, street lights to County facilities. You advise that your company is not a sole supplier to the County. You also advise that the majority of your work is for the County's Public Works Division. However, on occasion you do some work for the County's Public Safety Division which oversees the operations of all fire departments, including yours, through its authority to administer and enforce County policies and administer the budgeted County funds which have been earmarked for the fire departments. The Division of Public Safety, however, has no hiring or firing authority over your Fire Department because all members are volunteers.
You have provided us with copies of some of the County's purchasing policies. You advise that most work orders received by you are in the "Level A" division [less than $1,000]. These orders are given a purchase order number by the County's Purchasing Department and, in most non-emergency situations, the Purchasing Department receives two quotes before it authorizes work to be done where the work is estimated to exceed $250.00. Sealed bids are required only for County purchases exceeding $25,000.
You are concerned about whether the Code of Ethics for Public Officers and Employees prohibits you from contracting with the County, including its Public Safety Division. For the same reasons we stated in our response to Question 1, we find that you are neither a "public officer" nor an "employee of an agency" and, therefore, the Code of Ethics does not prohibit you from contracting with the County.