CONFLICT OF INTEREST

BOARD MEMBERS OF CITY EMPLOYEES' RETIREMENT PLAN
ALSO CITY EMPLOYEES AND PLAN MEMBERS

To: Richard Salamon (City of Sunrise)

SUMMARY:

No prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, would be created if members of the Board of Trustees for a City employees' retirement Plan also were employees of the City and members of the Plan. Under Section 112.313(7)(b), Florida Statutes, the Board members could be employed by the City and members of the Plan without conflict, because a City ordinance requires members of the Board to be members of the Plan. Depending on the circumstances, the Board members may be prohibited by Section 112.3143(3), Florida Statutes, from voting on matters that come before the Board. CEO 91-13, CEO 86-10, CEO 84-63, and CEO 80-59 are referenced.¹

QUESTION:

Would members of the Board of Trustees of a City employees' retirement Plan have prohibited conflicts of interest if they were employees of the City and members of the Plan?

Under the circumstances presented, your question is answered in the negative.

In your letter of inquiry and a subsequent email, you state that you write on behalf of the City Manager of the City of Sunrise. You specifically ask whether there would be a conflict of interest under the Code of Ethics for Public Officers and Employees if three appointed members of the Board of Trustees of the City's General Employees' Retirement Plan also were to be employed by the City as Director of Finance and Administrative Services, Assistant City Manager, and Director of Human Resources. Under a City ordinance, the Plan is administered by a Board serving without compensation and consisting of seven members and one alternate member, none of whom are elected officials and all of whom must be members of the Plan. You state that the three appointed Board members hold City positions with responsibilities that might overlap with their Board duties. The four remaining Board members and the alternate member are chosen as set forth in the ordinance. We address the question as to whether any of the Board members or the alternate member would have conflicting employment or contractual relationships while also being employed by the City and being members of the Plan.

This scenario implicates Section 112.313(7)(a), Florida Statutes, which states:

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.

The first part of Section 112.313(7)(a) prohibits a public officer from having an employment or contractual relationship with a business entity or agency that is regulated by or is doing business with the officer's agency. The second part of Section 112.313(7)(a) prohibits a public officer from having an employment or contractual relationship which will create a continuing or recurring conflict between the officer's private interests and the performance of the officer's public duties or which would impede the full and faithful discharge of his or her public duties. Section 112.313(7)(a) is applicable to the Board members since they are public officers of a public agency.

However, Section 112.313(7)(b), Florida Statutes, provides:

This subsection shall not prohibit a public officer or employee from practicing in a particular profession or occupation when such practice by persons holding such public office or employment is required or permitted by law or ordinance.

Any conflict of interest for the three appointed Board members—or the four chosen Board members or alternate Board member-under the first part or second part of Section 112.313(7)(a) would be negated by Section 112.313(7)(b), a statutory provision stating that no conflict exists under Section 112.313(7)(a) where a particular employment is required or permitted by law or ordinance. The City ordinance which establishes the City Employees' General Retirement Plan, provides in pertinent part:

The board for the general employees' retirement plan shall consist of seven (7) members, none of whom shall be elected officials, all of whom shall be members of the general employees' retirement plan . . . . [Sunrise, Fla., Code art. II, Section 11-11(b)].

Under the facts presented, a City ordinance requires the seven Board members and the alternate member to also be Plan members, and Plan members are, by definition, City employees. Therefore, service on the Board by City employees who are members of the Plan is allowed under Section 112.313(7)(b), Florida Statutes. CEO 91-13, CEO 86-10, CEO 84-63, and CEO 80-59.

As to a potential voting conflict, if a measure were to come before the Board that would inure to the special private gain or loss of one of the Board members, as an appointed public officer that Board member would be presented with a voting conflict under Section 112.3143(3)(a), Florida Statutes, and, therefore, would be required to abstain from voting on the measure after adhering to the procedure set forth in Section 112.3143(4), which requires disclosure of the nature of the conflict on a conflict memorandum (CE Form 8B) prior to participating in a meeting where such vote is to occur.

Accordingly, we find that, under Section 112.313(7)(b), Florida Statutes, the seven Board members and the alternate Board member may also be employees of the City and members of the Plan because they are required by City ordinance to be members of the Plan in order to serve on the Board. If a measure were to come before the Board that would inure to the special private gain or loss of one of the Board members, that member would be required to comply with the voting conflicts procedures set forth in Section 112.3143, Florida Statutes.

ORDERED by the State of Florida Commission on Ethics meeting in public session on January 27, 2017, and RENDERED this 1st day of February, 2017.

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Matthew F. Carlucci, Chair

^[1]Opinions, statutes, and forms of the Commission on Ethics may be obtained from its website (www.ethics.state.fl.us).