VOTING CONFLICT OF INTEREST; MISUSE OF PUBLIC POSITION; ABUSE OF PUBLIC POSITION

COUNTY COMMISSION MEMBER VOTING ON
PUBLIC OFFICER RETIREMENT COMPENSATION

To: Name withheld (Escambia County)

SUMMARY:

Under the circumstances presented, a County Commission member is not prohibited from voting upon a retirement compensation resolution he would be eligible to receive that provides lump-sum payments to all eligible elected public officers and Senior Management Services Class County employees who qualify, as Section 112.313(5), Florida Statutes, modifies the voting conflicts provision of Section 112.3143(3)(a), Florida Statutes. Section 112.313(5), Florida Statutes, permits a public officer to vote on a matter affecting his or her own salary, expenses, or other compensation as a public officer. Further, the Commissioner's participation in the matter would not constitute a misuse of public position under Section 112.313(6), Florida Statutes, or a disproportionate benefit through abuse of public position under Article II, Section 8(g)(2), Florida Constitution. CEO 85-19, CEO 88-46, CEO 91-62, CEO 08-25, CEO 14-17, and CEO 19-23 are referenced.¹

QUESTION 1:

Does Section 112.313(5), Florida Statutes, apply to negate a voting conflict of interest under Section 112.3143(3)(a), Florida Statutes, were a County Commission member to vote upon a retirement compensation resolution that he would be eligible to receive as a member of the affected class?

Under the circumstances presented, this question is answered in the affirmative.

In your letter of inquiry and supplemental information provided to our staff, you state that you are requesting this opinion on behalf of a member of a County Commission (Requestor or member). You advise that pursuant to Section 121.021(42), Florida Statutes, the Board of County Commissioners is a local agency employer participating in the Florida Retirement System (FRS). You relate that pursuant to Section 121.052(3)(d) and Section 121.055(1)(f)2., Florida Statutes, an elected officer of a local agency employer in the Elected Officers' Class may, within six months after assuming office, elect membership in a different FRS class or withdraw from FRS and pursue other retirement options.²

You state that for many years the County has provided a 401(a) local government annuity program as an alternative retirement program for eligible officers and employees who have elected to withdraw from FRS.³ The Florida Legislature establishes the employer and employee contribution rates for the FRS programs, and each year, the County has adopted the same contribution rates for its 401(a) local government annuity program. You relate that the employer contribution rates established by the Legislature have significantly increased over the last eight fiscal years and, thus, made the local annuity program option a more advantageous plan to County participants who have elected to withdraw from FRS because the percentage of the employer contribution actually deposited on behalf of a participant in the FRS investment and pension programs is significantly less than the total percentage adopted by the Legislature and utilized for the local annuity program.⁴

You state that in past years the County's Human Resources (HR) department did not inform incoming County Commissioners, SMS level staff, or newly-promoted SMS level staff about the opportunity to participate in the 401(a) local government annuity program or the potential benefits of such a program compared to FRS programs. Thus, you relate that in past years only one County Commissioner and very few employees have elected to participate in the County's 401(a) local annuity program. Further, you state that upon learning of the local annuity option the Requestor attempted to withdraw from the FRS Investment Plan in order to avail himself of the local annuity program, but his application was denied as his election to withdraw from FRS was not within six months after his assumption of public office. Following the Requestor's re-election, and within six months after assuming office for a third term,⁵ the Requestor elected to withdraw from FRS and enroll in the County's 401(a) local annuity program. Pursuant to the provisions of Chapter 121, Florida Statutes, such an election to withdraw from FRS and enroll in the local annuity program may only apply prospectively, and, thus, does not address past service accruing before an otherwise eligible elected officer or County SMS employee had the opportunity to make an informed decision about the available options.

In order to address this issue, you state that the member would like to propose offering a retirement compensation resolution to the class of eligible elected officers and SMS County employees who recently elected or will elect to participate in the 401(a) local annuity program. You relate that the retirement compensation amount would be uniformly calculated based upon the difference between the employer's previous contributions to the FRS program and what the employer's contribution would have been had the person elected the 401(a) local annuity program at the earliest qualifying point. While the compensation amount would be unique to each person (as it would be dependent on the individual's corresponding salary, years of qualifying service, and the employer contribution rates for the respective years), you state that each person who accepts a retirement compensation disbursement would uniformly avail themselves of an identical retirement compensation resolution formula. As there is no method available to include participants in the 401(a) local annuity plan retroactively, and the lump-sum retirement compensation disbursements cannot be incorporated in the individual's 401(a) account, you state that if approved the prospective compensation would be paid directly to the eligible retirement resolution participant.

You state that your office has identified sixteen individuals, including four of the five County Commissioners currently serving on the Board (including the Requestor) and twelve SMS County employees, as eligible for the proposed retirement compensation resolution. You relate that your office also is reviewing whether twenty-two additional persons (elected constitutional officers and their respective SMS employees) may be eligible for the proposed retirement benefit resolution. Further, you relate that if approved by the County Commission, the County Attorney's Office would coordinate with the County's HR department to ensure that each qualifying member of the class is individually given notice regarding the 401(a) local annuity program and the proposed retirement benefit resolution.

In light of the foregoing, you inquire as to whether the Requestor, as a potentially-eligible member of the retirement compensation resolution class, would be presented with a voting conflict under Section 112.3143(3)(a), Florida Statutes, were he to vote upon the resolution, and whether Section 112.313(5), Florida Statutes, would act to negate the voting conflict. Section 112.3143(3)(a), Florida Statutes, the portion of the voting conflicts law applicable to local, elected, public officers, and Section 112.313(5), Florida Statutes, which affects the application of Section 112.3143(3)(a), Florida Statutes, provide:

VOTING CONFLICTS. —No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(2); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer’s interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her 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(3)(a), Florida Statutes]

SALARY AND EXPENSES.—No public officer shall be prohibited from voting on a matter affecting his or her salary, expenses, or other compensation as a public officer, as provided by law. No local government attorney shall be prevented from considering any matter affecting his or her salary, expenses, or other compensation as the local government attorney, as provided by law. [Section 112.313(5), Florida Statutes]

Section 112.3143(3)(a), standing alone, would prohibit the member from voting on, and would require disclosure and filing of CE Form 8B, regarding any measure which would inure to the special private gain or loss of himself, his relative, his business associate, or a principal by whom he is retained. Thus, absent the application of Section 112.313(5), Florida Statutes, the member would be presented with a voting conflict regarding votes/measures concerning a retirement compensation resolution for which he is eligible, as such a vote/measure apparently would inure to his own special private gain/loss.

However, the Commission on Ethics has previously advised that Section 112.313(5), Florida Statutes, which affects the application of Section 112.3143(3)(a), Florida Statutes, permits a public officer to vote on a matter affecting his or her own public salary, expenses, or other compensation, when such an increase or benefit is derived from their position as a public officer (e.g., county commissioner). See CEO 85-19, CEO 88-46, CEO 91-62, CEO 08-25, and CEO 14-17. For example, in CEO 88-46, the Commission found that pursuant to the application of Section 112.313(5), Florida Statutes, a water and sewer commissioner was not prohibited by Section 112.3143, Florida Statutes, from voting on a matter concerning the public payment of his legal fees incurred in defense of a Commission on Ethics action brought against him as a public officer. Similarly, in CEO 91-62, the Commission determined that pursuant to the application of Section 112.313(5), Florida Statutes, the members of a board of a hospital district were not prohibited from voting on a measure to include themselves in a discount on the cost of medical services provided by the district.

In the instant matter, the retirement benefit options provided by local agency employers participating in FRS (such as the County Commission) pursuant to Chapter 121, Florida Statutes, and the 401(a) local annuity program maintained by the County pursuant to ordinance, are afforded by law exclusively to eligible public officers and public employees as a result of their public service. The proposal at issue for consideration and vote by the Board involves a retirement compensation resolution to a defined class of eligible elected officers and SMS County employees who recently elected or will elect to participate in the 401(a) local annuity program and who were not informed of the 401(a) local annuity program by the County's HR department at the time they qualified to participate. Further, the eligible class of resolution beneficiaries include four out of the five members of the County Commission—the sole collegial body possessing the authority to address the inequity. While the votes/measures involving the proposed retirement compensation resolution would be a part of a process causing gain or loss to the County Commission members who are a part of a class of eligible elected officers and SMS class County employees, we find that such a retirement compensation resolution would constitute "other compensation" under Section 112.313(5), Florida Statutes, derived by virtue of their public positions.

Accordingly, we find that due to the applicability of Section 112.313(5), Florida Statutes, the Requestor is not prohibited by Section 112.3143(3)(a), Florida Statutes, from voting upon a retirement compensation resolution which he would be eligible to receive as part of a class of elected public officers and SMS County employees who recently elected or will elect to participate in the 401(a) local annuity program.

This question is answered accordingly.

QUESTION 2:

Would the member's proposal of, and vote regarding, a retirement compensation resolution constitute a misuse of public office under Section 112.313(6), Florida Statutes, or be considered an abuse of position to obtain a disproportionate benefit, as prohibited by Article II, Section 8(g)(2),⁶ Florida Constitution?

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

Section 112.313(6), Florida Statutes, provides:

MISUSE OF PUBLIC POSITION.—No public officer, employee of an agency, or local government attorney shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, or others. This section shall not be construed to conflict with s. 104.31.

Pursuant to Section 112.312(9), Florida Statutes, "corruptly" is defined as:

. . . done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his or her public duties.

Section 112.313(6) prohibits public officers from corruptly using or attempting to use their official positions or property or resources placed within their trust due to their status as public officials, and it prohibits them from corruptly performing their official duties, in order to secure a special privilege, benefit, or exemption for themselves or another.

The facts of your inquiry also necessitate analysis under a recent amendment to Article II, Section 8 of the Florida Constitution, specifically Article II, Section 8(g)(2), which states:

A public officer or public employee shall not abuse his or her public position in order to obtain a disproportionate benefit for himself or herself; his or her spouse, children, or employer; or for any business with which he or she contracts; in which he or she is an officer, a partner, a director, or a proprietor; or in which he or she owns an interest. The Florida Commission on Ethics shall, by rule in accordance with statutory procedures governing administrative rulemaking, define the term “disproportionate benefit” and prescribe the requisite intent for finding a violation of this prohibition for purposes of enforcing this paragraph. Appropriate penalties shall be prescribed by law.

For the purposes of this provision, Rule 34-18.001(2), Florida Administrative Code, defines the term "disproportionate benefit" to mean "a benefit, privilege, exemption or result arising from an act or omission by a public officer or public employee inconsistent with the proper performance of his or her public duties." Rule 34-18.001(3), Florida Administrative Code, lists several factors the Commission should consider in determining whether a benefit, privilege, exemption, or result constitutes a "disproportionate benefit." It then provides—in Rule 34-18.001(4)—the requisite intent needed to find a violation of the Constitutional prohibition, stating the public officer or public employee must have "acted, or refrained from acting, with a wrongful intent for the purpose of obtaining any benefit, privilege, exemption, or result from the act or omission which is inconsistent with the proper performance of his or her public duties." See CEO 19-23.

While a determination as to the requisite intent required in the above-referenced provisions is difficult in the context of an advisory opinion, as it turns on subtle nuances of fact, we advise that under the facts you present, the prospective vote on the retirement compensation resolution proposal is not implicative of either prohibition. The facts you present indicate that the resolution at issue is proposed in the pursuit of fairness and equity to a defined class of similarly-situated elected officials and SMS County employees who were not informed of the 401(a) local annuity option at the time they qualified to participate therein. Further, the proposed resolution at issue would not result in a disproportionate benefit to the Requestor when compared to other eligible class members, as he is but one of 16 individuals eligible to receive the retirement benefit compensation calculated based upon a formula which would be uniformly applied. However, our decision herein, under the particular and material facts presented, should not be read to preclude our application of Section 112.313(6), Florida Statutes, or Article II, Section 8(g), Florida Constitution, to situations indicative of a misuse of public position or an abuse of public position to obtain a disproportionate benefit.

This question is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on March 5, 2021, and RENDERED this 10th day of March, 2021.

____________________________________

LoAnne Leznoff, Chair

^[1]Prior opinions of the Commission on Ethics can be viewed at www.ethics.state.fl.us.

^[2]See also Section 121.055(1)(b)2., Florida Statutes, as to public employees who hold a position in the Senior Management Services (SMS) Class.

^[3]Section 2-151 of the Escambia County Code of Ordinances provides that the Board of County Commissioners authorizes the implementation and administration of an optional annuity plan in accordance with Section 121.055, Florida Statutes, and Section 401(a) of the Internal Revenue Code. See also Sections 2-152 through 2-154, Escambia County Code of Ordinances.

^[4]For example, you relate that during the fiscal year 2020/2021 the employer contribution rates adopted by the Legislature and utilized for the local annuity program for elected officers was 49.18 percent, all of which was deposited on behalf of the participant, whereas the percentage actually deposited on behalf of an elected officer participating in the FRS Investment Plan was only 8.34 percent. Similarly, the employer contribution rates adopted by the Legislature and utilized in the local annuity program for SMS employees was 27.29 percent percent, all of which was deposited on behalf of the participant, whereas the percentage actually deposited on behalf of SMS employees in the FRS Investment Plan was only 4.67 percent.

^[5]The facts of your inquiry indicate that the Requestor has served three (four-year) terms as a member of the County Commission.

^[6]On December 31, 2022, when a new subsection (f) becomes effective and is included in the State Constitution, the citation of this provision will be redesignated to Article II, Section 8(h)(2), Florida Constitution.