CEO 99-10 -- September 8, 1999
CODE OF ETHICS; CONFLICT OF INTEREST
PRESIDENT OF PRIVATE NONPROFIT CHARTER SCHOOL
CORPORATION LEASING AND/OR SELLING HER PRIVATELY OWNED
PROPERTY TO THE CHARTER SCHOOL CORPORATION
To: Melanie Fernandez, Ph.D., Administrator, Academie Da Vinci (Dunedin)
An officer and director of a not-for-profit governing organization of a charter school, whose power and authority is derived solely from the contractual agreement between a sponsoring school board and the not-for-profit charter school corporation created to operate the charter school, is not a Apublic officer@ for purposes of the application of the Code of Ethics. Furthermore, because Section 228.056(7) provides that Aindividuals or groups of individuals who contract their services to the charter school are not public employees@ and because the salaried administrator of the charter school contracted her services to the charter school through an employee leasing company, she also is not a Apublic employee.@ Therefore, neither Section 112.313(3) nor 112.313(7)(a), Florida Statutes, applies to prohibit the contractual relationship or leasing arrangement between the officer and director of the not-for-profit charter school corporation and the charter school corporation or between the charter school corporation and the employee leasing company.
Are you, the President and member of the Board of Directors of a private not-for-profit corporation created to operate a charter school under Section 228.056, Florida Statutes, which has entered into a charter school contractual agreement with the County School Board, a Apublic officer@ for purposes of the application of the Code of Ethics to your conduct?
Your question is answered in the negative.
In your letter of inquiry and the follow-up letter from an attorney for the Academie Da Vinci Charter School Inc., you advise that you are the administrator of the Charter School, an officer and member of the Board of Directors of the Charter School corporation, Academie Da Vinci Charter School, Inc., and President of a for-profit corporation, Academie DaVinci, Inc. The Charter School was formed as a not-for-profit corporation, we are advised, for the specific purpose of operating a charter developmental research school under Florida=s Charter School legislation (Section 228.056, Florida Statutes). The for-profit corporation, Academie DaVinci, Inc., was organized to engage in any activity or business permitted under the laws of the United States and the State of Florida in accordance with and as permitted by Chapter 607, Florida Statutes. We are advised that the Board of Directors of the Academie Da Vinci Charter School, Inc. entered into a Charter contract with the Pinellas County School Board in June 1997.
We are advised further that, as a practical matter, your intention was for Academie DaVinci, Inc. to provide after school care and instruction to both the Charter School students and to students from other schools in dance, art, music, and drama. In addition to its one part-time drama instructor, we are advised, the corporation also owns a van. The attorney for the Charter School also advises that you receive no salary from the corporation; the corporation has no lease under which it operates at the Charter School location; and, historically, the corporation has operated at a loss. In all likelihood, we are advised, the corporation will be dissolved.
You further advise that the Charter School currently is operating on property owned by you. You write that although you bought the property approximately five (5) years ago for $146,000, you proposed having the school purchase the property for $140,000. You also advise that the property=s zoning has been Aupgraded@ since you purchased it, so you doubt that its value has decreased. You claim that you were not attempting to profit from the sale of the property to the Charter School corporation. In fact, you assert that under your original proposal you would have been losing money. You claim that your primary interest has been in putting the Charter School in a Abetter position to operate in the future.@ You advise that it was expedient to locate the Charter School on your property in order to get the Charter School up and running. We are advised further that while it was envisioned that the Charter School would own the property, on this point you now are flexible. If it is deemed more appropriate, the Charter School=s attorney advises, title to the property can be transferred directly to the Pinellas County School Board. However, apparently because of unresolved issues regarding the application of the Code of Ethics for Public Officers and Employees [Part III, Chapter 112, Florida Statutes] to this situation and the receipt and proper expenditure of S.I.T. funds by the School Board, we are advised that the School Board has not shown an interest in owning the property directly. Nevertheless, the Charter School attorney advises, although the purchase issue is moot at this time, ownership of the property and issues relating to it could change with clarification of these issues by this Commission and the Attorney General, and the composition of the School Board.
We are advised that the Charter School currently leases your property from you for $1.00 per year. It operates, you write, in leased portables and an old 1500 square foot frame building. Eventually, the Charter School and the County School Board will want to determine the reasonable rental value of the property so that it can begin paying it, the Charter School attorney advises.
We also are advised that the Charter School has elected to be a private employer for purposes of the Florida Retirement System. In fact, it has no employees. You advise that the School=s employees are employed by an employee leasing firm which leases them back to the Charter School Corporation.
Charter schools in Florida are authorized by Section 228.056, Florida Statutes. Section 228.056(1) provides , in part:
Charter schools shall be part of the state's program of public education. All charter schools in Florida are fully recognized as public schools. A charter school may be formed by creating a new school or converting an existing public school to charter status.
The charter school approval process begins with a proposal, which is described as follows:
PROPOSAL.--A proposal for a new charter school may be made by an individual, teachers, parents, a group of individuals, a municipality, or a legal entity organized under the laws of this state. The district school board or the principal, teachers, and/or the school advisory council at an existing public school, including a public school within a school that is designated as a school by the district school board, shall submit any proposal for converting the school to a charter school. . . . A private school, parochial school, or home education program shall not be eligible for charter school status. [Sec. 228.056(3), F.S.]
The statute also provides:
LEGAL ENTITY. A charter school shall organize as, or be operated by, a nonprofit organization. A charter school may be operated by a municipality or other public entity as provided for by law. As such, the charter school may be either a private or a public employer. As a public employer, a charter school may participate in the Florida Retirement System upon application and approval as a >covered group= under s. 121.021(34). If a charter school participates in the Florida Retirement System, the charter school employees shall be compulsory members of the Florida Retirement System. As either a private or a public employer, a charter school may contract for services with an individual or group of individuals who are organized as a partnership or a cooperative. Individuals or groups of individuals who contract their services to the charter school are not public employees. [Sec. 228.056(7), F.S.]
* * *
EXEMPTION FROM STATUTES. A charter school shall operate in accordance with its charter and shall be exempt from all statutes of the Florida School Code, except those pertaining to civil rights and student health, safety, and welfare, or as otherwise required by this section. A charter school shall not be exempt from the following statutes: chapter 119, relating to public records, and s. 286.011, relating to public meetings and records, public inspection, and penalties. The sponsor, upon request of a charter school, may apply to the Commissioner of Education for a waiver of provisions of chapters 230 through 239 which are applicable to charter schools under this section, except that the provisions of chapters 236 or 237 shall not be eligible for waiver if the waiver would affect funding allocations or create inequity in public school funding. The commissioner may grant the waiver if necessary to implement the school program. [Sec. 228.056(11), F.S.]
EMPLOYEES OF CHARTER SCHOOLS.
(a) A charter school shall select its own employees. A charter school may contract with its sponsor for the services of personnel employed by the sponsor.
(b) Charter school employees shall have the option to bargain collectively. Employees may collectively bargain as a separate unit or as part of the existing district collective bargaining unit as determined by the structure of the charter school.
(c) The employees of a conversion charter school shall remain public employees for all purposes, unless such employees choose not to do so.
(d) The teachers at a charter school may choose to be part of a professional group that subcontracts with the charter school to operate the instructional program under the auspices of a partnership or cooperative that they collectively own. Under this arrangement, the teachers would not be public employees.
(e) Employees of a school district may take leave to accept employment in a charter school upon the approval of the district school board. While employed by the charter school and on leave that is approved by the school board, the employee may retain seniority accrued in that school district and may continue to be covered by the benefit programs of that school district, if the charter school and the district school board agree to this arrangement and its financing. School districts shall not require resignations of teachers desiring to teach in a charter school. This paragraph shall not prohibit a school board from approving alternative leave arrangements consistent with chapter 231. . . . [Sec. 228.056(12), F.S.]
Along with your letter, we received a copy of a memorandum prepared by the attorney for the Pinellas County Schools and addressed to the Superintendent of the Pinellas County Schools, in which, from the standpoint of the application of the Code of Ethics, he addresses the propriety of the Academie Da Vinci Charter School, Inc.=s proposed purchase of your property from you. In his memorandum, the attorney first determines from his reading of Section 228.056 that you are a Apublic officer@ because you have been appointed to hold office in an Aagency,@ as that term is defined at Section 112.312(2), which includes Aany public school.@ Moreover, he observes that Section 228.056 specifically provides that Acharter schools in Florida are fully recognized as public schools.@ Consequently, he concludes that you are a Apublic officer@ and that Section 112.313(3) applies to prohibit the transaction between you and the Charter School, that is, it prohibits you, a public officer, from selling realty in your private capacity to your own agency, the Charter School. He recommends that, absent formal opinions from the Attorney General=s office and from us, the School Board should not agree to share S.I.T. funds with your charter school.
While we lack the jurisdiction to opine on the legality of your charter school=s receipt of the S.I.T. funds that you originally applied for, we can determine whether the Code of Ethics applies to your situation, that is, whether you are a public officer or employee to whom the Code of Ethics applies, and, if you are, (1) whether your leasing the property that you own, and on which the Charter School is located, to the Charter School corporation violates the Code of Ethics; and (2) whether the Academie Da Vinci Charter School, Inc.=s entering into a contractual/leasing relationship/arrangement with the employee leasing company by which you apparently are employed creates a prohibited conflict for you under the Code.
The relevant provisions of the Code of Ethics for Public Officers and Employees provide as follows:
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. 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.
[Sec. 112.313(3), F.S.]
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. [Sec. 112.313(7)(a), F.S.]
Clearly, these prohibitions apply only to public officers and public employees. For purposes of these provisions, the term Apublic officer@ is defined at Section 112.313(1), Florida Statutes, to include
any person elected or appointed to hold office in any agency, including any person serving on an advisory body.
Furthermore, the term Aagency@ is defined at Section 112.312(2), Florida Statutes, to mean
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 previous opinions we have found that the provisions of the Code of Ethics do not apply to board members of private, nonprofit corporations, because they are not public officers or employees. See CEO 75-149, CEO 76-22, CEO 83-6, CEO 84-2, and CEO 84-17. We adhere to the reasoning of those prior opinions and find that, in your capacity as an officer and director of the not-for-profit Charter School corporation, you are not a public officer or employee for purposes of the application of the Code of Ethics. As we have already indicated, the School Board attorney argues that because Section 228.056(1), Florida Statutes, provides that charter schools are Apart of the State=s program of public education@ and all charter schools in Florida are fully recognized as Apublic schools,@ and because the term Aagency@ is defined at Section 112.312(2) to include Apublic schools,@ you must be a Apublic officer@ within the meaning of Section 112.313(1), because you have been elected or appointed to be an officer and director of the Charter School corporation, a Apublic school,@ and therefore, an Aagency@ within the meaning of Section 112.313(1). However, this argument assumes that the not-for-profit organization that Section 228.056(7) requires that the charter school be organized as or be operated by is the same entity as the Charter School. Our reading of this provision is that it does not have to be.
Under the circumstances presented here, the Articles of Incorporation of Academie Da Vinci Charter School, Inc. indicates that the corporation=s primary purpose is to operate a chartered developmental research school as part of the State=s program of public education. Thus, even if we assume that the Charter School itself is an Aagency@ within the meaning of Section 112.312(2), it does not necessarily follow that the not-for-profit corporation also is part of that same Aagency.@ Nor do we believe that the not-for-profit corporation was converted into a public agency, from its private status, when it undertook to operate a charter school.
The School Board attorney also notes that the statutory exemption paragraph of Section 228.056(11) does not specifically grant an exemption from the application of Part III of Chapter 112, Florida Statutes [the Code of Ethics], for the officers and directors of charter schools. Therefore, he argues, just as Section 228.056(11) specifically provides that charter schools are not exempt from the application of Chapter 119, Florida Statutes, relating to public records, and Section 286.011, Florida Statutes, relating to public meetings and records, public inspection, and penalties, so also must the Code of Ethics be applicable, because the Code of Ethics is not part of the Florida School Code from which charter schools are, for the most part, exempt under that paragraph.
However, this argument is contrary to the well established rule of statutory construction that where a statute enumerates the things on which it is to operate, it is to be construed as excluding from its operation all things not expressly mentioned -- expressio unius est exclusio alterius. See Thayer v. State, 335 So. 2d 815, 817 (Fla. 1976); Dobbs v. Sea Isle Hotel, 56 So. 2d 341, 342 (Fla. 1952); Ideal Farms Drainage District v. Certain Lands, 19 So.2d 234 (Fla. 1944). The Legislature specifically did not include Part III of Chapter 112 within its enumeration of those statutes from which the charter schools are not exempt, although it easily could have done so if it had intended all charter school officers and directors to be subject to the Code of Ethics.
We also disagree with the School Board attorney=s analysis because it seems to disregard Section 228.056(7), which describes the legal status of a charter school and the requirement that it be organized as or be operated by a nonprofit organization. This provision also allows a charter school to be either a private or a public employer. Here, the Charter School has elected to be a private employer and not participate in the Florida Retirement System. Furthermore, this provision specifically provides that individuals or groups of individuals who contract their services to the charter school are not public employees.
Recently, in AGO 98-48, the Attorney General opined that because Section 228.056 does not invest members of the governing body of a charter school with powers or authority that would make them public officers under Article II, Section 5(a), Florida Constitution, a county commissioner would not violate the dual officeholding prohibition by serving as a member of the governing body of a charter school. The Attorney General noted that the Constitution does not define the terms Aofficer@ or Aoffice@ for purposes of the dual officeholding prohibition. However, in State ex rel. Holloway v. Sheats, 83 So. 508, 509 (Fla. 1919), the Florida Supreme Court wrote:
The term Aoffice@ implies a delegation of a portion of the sovereign power to, and the possession of it by, the person filling the office, while an Aemployment@ does not comprehend a delegation of any part of the sovereign authority. The term Aoffice@ embraces the idea of tenure, duration, and duties in exercising some portion of the sovereign power conferred or defined by law and not by contract . . . . [E.S.]
Section 228.056(4)(f) provides that the terms and conditions for the operation of a charter school, including such items as the Agovernance structure of the school,@ must be set forth by the sponsor [county school board] and the applicant [charter school corporation] in a written contractual agreement, with no efforts by the sponsor to limit the charter school=s flexibility to meet educational goals. Although, in keeping with the goal of allowing maximum flexibility for charter schools, the Legislature has imposed few limitations on the role of their governing bodies, there is no delegated legislative grant of authority to the governing body that would indicate that its members are exercising a portion of the sovereign power of the State. They may not levy taxes or issue bonds secured by tax revenues, and in the event that the charter is not renewed or is terminated by a county school board, the governing body of the charter school, unlike the governing bodies of other legislatively created public entities, is responsible for all debts of the charter school. All authority and power of the governing body of a charter school is developed and exercised pursuant to the contractual agreement between the sponsoring school board and the charter school, rather than by law.
Accordingly, we are of the opinion that, as an officer and director of a not-for-profit governing organization of the Charter School, whose power and authority is derived solely from the contractual agreement between the School Board and the not-for-profit charter school corporation, you are not a Apublic officer@ for purposes of the application of the Code of Ethics to your conduct. We also are of the opinion that because Section 256.056(7) provides that Aindividuals or groups of individuals who contract their services to a charter school are not public employees,@ and because you contract your services to the Charter School through an employee leasing company, you, in your capacity as a salaried administrator of the Charter School, are not a Apublic employee.@
Accordingly, we find that neither Section 112.313(3) nor 112.313(7)(a) applies to prohibit the contractual relationship or leasing arrangements between you and the Charter School corporation or between the Charter School corporation and the employee leasing company. Given the variety of charter schools and entities that are authorized to create them, we do not intend for this opinion to be applied to situations that are not factually identical.
ORDERED by the State of Florida Commission on Ethics meeting in public session on September 2, 1999 and RENDERED on this 8th day of September, 1999.
Peter M. Dunbar
Section 228.056(4)(f), Florida Statutes, provides that the terms and conditions for the operation of a charter school shall be set forth by the sponsor [Pinellas County School Board] and the applicant [Academie Da Vinci Charter School, Inc.] in a written contractual agreement.
The copy of the warranty deed provided to our staff indicates that title to the property was transferred to you on October 18, 1995.
In an application for School Infrastructure Thrift Program Act (AS.I.T.@) funds, you originally proposed that the charter school corporation purchase the property from you so that the school could build permanent buildings with public money--the S.I.T. funds, we were advised.
All citations are to Sec. 228.056, Fla. Stat. (Supp. 1998), as amended by Ch. 99-374, Laws of Florida.
 We note that when the Legislature abolished the Florida Housing Finance Agency and recreated it as a public corporation, the Florida Housing Finance Corporation, [See Sec. 420.504, F.S. (1997)], it provided:
For purposes of s. 112.313, the corporation is deemed to be a continuation of the agency, and the provisions thereof are deemed to apply as if the same entity remained in place. Any employees of the agency and agency board members covered by s. 112.313(9)(a)6, shall continue to be entitled to the exemption in that subparagraph, notwithstanding being hired by the corporation or appointed as board members of the corporation. [Sec. 420.5061, F.S.]
At the same time, the Legislature also enacted Sec. 420.504, F.S., which provides:
Public corporation; creation, membership, terms, expenses.--
(1) There is created within the Department of Community Affairs a public corporation and a public body corporate and politic, to be known as the "Florida Housing Finance Corporation." It is declared to be the intent of and constitutional construction by the Legislature that the Florida Housing Finance Corporation constitutes an entrepreneurial public corporation organized to provide and promote the public welfare by administering the governmental function of financing or refinancing housing and related facilities in Florida and that the corporation is not a department of the executive branch of state government within the scope and meaning of s. 6, Article IV of the State Constitution, but is functionally related to the Department of Community Affairs in which it is placed. . . .
(2) The corporation is constituted as a public instrumentality, and the exercise by the corporation of the power conferred by this act is considered to be the performance of an essential public function. The corporation is subject to chapter 119, subject to exceptions applicable to the corporation, and to the provisions of chapter 286. . . .
While the term Apublic officer@ is defined at Section 112.313(1), it is defined by using the term Aoffice,@ which is not defined elsewhere in the Code of Ethics.