CEO 86-71 -- September 17, 1986

CONFLICT OF INTEREST

CITY COMMISSION MEMBER EMPLOYED BY CORPORATION RECEIVING CONCESSION CONTRACT FROM CITY

To: (Name withheld at the person's request.)

SUMMARY:

No prohibited conflict of interest would be created were an individual who is employed by a corporation which has contracted with a city to operate a beach concession to be elected to serve on the city commission. As the contract was entered into prior to qualification for elective office, that relationship would be "grandfathered in" under Section 112.313(3)(b), Florida Statutes, and the rationale of CEO's 82-10, 80-88, and 77-36.

QUESTION:

Would a prohibited conflict of interest be created were you to be elected to serve on a city commission where you are employed by a corporation which has contracted with the city to operate a beach concession?

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

In your letter of inquiry you advise that you are considering running for election to the City Commission of the City of Cocoa Beach. You also advise that you are employed by a corporation which has contracted with the City to operate a beach concession. The president and sole shareholder of the corporation is your father.

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 or 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 (1985).]

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 (1985).]

Section 112.313(3) prohibits a city commissioner from acting in an official capacity to purchase, rent, or lease any realty, goods, or services for the city from a business entity of which the commissioner is an officer, partner, director, or owner of more than a five percent interest. It appears that this provision would not apply to your situation, as you simply are an employee of the corporation which has contracted with the City to operate the beach concession. However, even if you were an officer of the corporation and the City were leasing any realty to the corporation, Section 112.313(3)(b) exempts any contract entered into prior to your qualification for office.

Under the agreement which was entered into in January of 1985 for a term of ten years, the City grants the exclusive right to operate a beach equipment rental concession at a park. The concessionaire is required to pay an annual fee and to provide a sufficient number of stands and sufficient quantity of beach equipment to serve the needs of the public. As you have not yet qualified as a candidate, it is apparent that the beach concession contract would be grandfathered in under Section 112.313(3)(b).

Section 112.313(7)(a) prohibits a city commissioner from having any employment with a business entity which is doing business with the city. Although this provision does not expressly contain a grandfather clause, we have found that another provision of the Code of Ethics, Section 112.316, Florida Statutes, would have the effect of grandfathering in business relationships between a public agency and the employer of a public official which were entered into before the official took office. Examples of this interpretation are contained in previous opinions CEO 82-10, CEO 80-88, and CEO 77-36.

Accordingly, unless and until a new agreement is reached between the City and the corporation which operates the beach concession, the Code of Ethics for Public Officers and Employees would not prohibit you from serving on the City Commission while being employed by the corporation.