CEO 06-28 -- December 6, 2006



To: Name withheld at person's request (Okaloosa County)


Under the circumstances presented, property owned by a corporation in which an assistant principal has a one-third interest is a "sole source" of real property for construction of new schools for purposes of exempting the assistant principal from the proscriptions of Section 112.313(3) and (7), Florida Statutes.


Would a conflict of interest exist were a corporation in which an assistant principal of the Okaloosa School District owns a one-third interest to sell real property to the School District?

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

In your letter of inquiry, you advise that ... is an assistant principal employed by the Okaloosa School District and that he owns a one-third interest in a limited liability corporation which owns a parcel of property the District would like to purchase for the purpose of constructing one or more schools.

The proposal to purchase this property is, you advise, "a result of almost three years of extensive efforts on the part of the School District to identify, evaluate, and negotiate for land acquisition for a school site in the north end of Okaloosa County upon which two replacement schools would be built in Crestview, Florida." You state that the District's needs "included certain acreage requirements for two complete separate school facilities to be built on one parcel, a timeframe requirement for when access to the parcel would have to be available for the commencement of construction, certain topographic and physical characteristics of the site which [comply with] the rules of the state Board of Education for the construction and placement of public school facilities, and the price of the parcel[,] which had to be within a reasonable range of fair market value appraisals that would allow the School Board to expend public funds to acquire the site."

You have provided a memorandum from the District's Chief Officer of Educational Support Services detailing the process through which the District's needs were ascertained and potential sites identified. For various reasons, none of the sites other than the corporation's property proved to be viable alternatives. For example, in one parcel referred to in the memorandum the landowner was willing to donate property but placed so many restrictions on the donation that "the net construct-able acreage" would be insufficient to meet the District's needs. With another, the county objected due to a lack of traffic concurrency, and with a third site the landowners wanted the District to purchase a larger portion of the property than necessary. In all, you advise, the District conducted site review and analysis of 14 different parcels, with the end result being a recommendation from the Chief Officer of Educational Support Services that the corporation's property is "the only available site within the target zone which is available for purchase which meets all of the District's objectives . . . ." You emphasize that the assistant principal played no part in the needs assessment or site selection, that the duties and responsibilities of his position would not call for him to have any input into this process, and that it was the District which initially contacted the assistant principal regarding the possibility of purchasing the land.

You advise that at its October 23, 2006 meeting, the School Board determined through a unanimous vote "as a matter of public record that the property proposed for purchase from [the corporation] was a 'sole source' acquisition based upon its location, its buildable acreage, [its] access to existing public right-of-ways, [its] availability for construction by January 2007, its topographical characteristics, and its purchase price being within an acceptable range of the fair market value appraisals." The assistant principal, you relate, filed a CE Form 4A prior to the meeting.

Section 112.313(7), Florida Statutes, provides:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.-—(a) 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, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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) prohibits a public officer or employee from having a contractual relationship with any business entity doing business with his agency.

This section prohibits the assistant principal from having any employment or contractual relationship with a business entity doing business with his agency. In CEO 92-6 the Commission on Ethics said an assistant school principal's "agency" was the school, rather than the district. Accordingly, the first part of this section is not applicable here, as the corporation is not doing business with the school.

Nor does there appear to be any violation of the second part of the statute. The second part of Section 112.313(7) prohibits a public employee from having any contractual relationship which would 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. This provision establishes an objective standard which requires an examination of the nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate, and distinct, or whether they coincide to create a situation which "tempts dishonor." Zerweck v. Commission on Ethics, 409 So. 2d 57 (Fla. 4th DCA 1982). In this case, the assistant principal did not have any duties which would call for his input into the site selection process, and he did not in fact have any participation in that process. Accordingly, it does not appear that the proposed purchase would violate Section 112.313(7), Florida Statutes.

Section 112.313(3), Florida Statutes, provides:

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 or when such offices are on property wholly or partially owned by the legislator. 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

The first part of this section prohibits a public employee from acting in his public capacity to buy or rent goods, services, or realty from a business entity in which he is an officer or director. This is obviously not the case here. The second part prohibits a public employee from acting in his private capacity to sell, rent, or lease any goods, services, or realty to his public agency or the political subdivision which he serves. As a public employee is deemed to act in a private capacity when a business in which he has a material interest acts (CEO 87-41), this provision would serve to prohibit the assistant principal from selling land to his School District, unless an exception applies.

Section 112.313(12)(e), states, in pertinent part:
. . . no person shall be held in violation of subsection (3) or subsection (7) if:
The business entity involved is the only source of supply within the political subdivision of the officer or employee and there is full disclosure by the officer or employee of his or her interest in the business entity to the governing body of the political subdivision prior to the purchase, rental, sale, leasing, or other business being transacted.

The disclosure required by this exemption should be made on CE Form 4A, Disclosure of Business Transaction, Relationship or Interest.

In CEO 87-31, we advised a school principal that he would be prohibited from selling property to his district for the expansion of his school. However, as we pointed out, the individual requesting the opinion had not indicated any basis from which we could conclude that the property was the only property available to the district for the expansion. Similarly, in CEO 90-24 we advised a city commissioner who was also a deacon and the finance committee chairman of a church that should the city buy property from the church he would be acting in his public capacity to purchase property from a business entity of which he was a director, and, we noted, "while you indicate that suitable improved land is in short supply, you have not provided any information which indicates that the church holds the only suitable property in the City."

In contrast to those opinions, here you have provided substantial information indicating that the property in question is the only suitable property available. In addition, and perhaps more significantly, you have indicated that the District itself has made that determination.

In CEO 83-23, we dealt with the question of the potential sale of property to a county from a corporation in which a county commissioner had a material interest. We were unable to say that the sole source exception would apply, because the letter indicated there may be alternative space available. But we noted that the exemption

would apply if the building owned by your corporation were the only suitable location for an emergency operations center within the County and if then you make the appropriate disclosure (on Commission on Ethics Form 4A) to the County Commission prior to the lease of the property. At the present time, we cannot conclude that this exemption would apply, because of the apparent possibility that facilities may be available in the courthouse. However, if it is determined that the courthouse does not provide sufficient space, and that the building owned by your corporation is the only facility suitable for such a center, this exemption would apply.

Similarly, in CEO 91-26, we reviewed a question from a member of the Monroe County Tourist Development Council who was the executive director of the Islamorada Chamber of Commerce, which had a contract with the Tourist Development Council for tourist information services and which sponsored events and functions funded partly by tourist development funds. We said, "As the Board of County Commissioners has designated the chamber of commerce as a 'sole source' provider under the terms of the tourist information services contract, this exemption may be applicable as well, if the disclosure requirements contained in Section 112.313(12)(e), Florida Statutes, are complied with."

Finally, in CEO 00-10 we considered a question from a community redevelopment agency which wished to purchase advertising from a local television station in which one of its employees owned a material interest. While there were other stations which would reach the CRA's target audience, those stations were geared to much larger audiences and were concomitantly more expensive. There, we said:

While you have represented that stations other than the employee's broadcast into the County and are carried on cable in the County, it also is represented that the other stations charge considerably higher rates than the employee's station, and that advertising on the cable channels in the County carrying the other stations is based on rates applicable to the whole of a large urban television market (e.g., the Tampa market) rather than on rates (much less expensive) applicable to the County market. Such a situation supports a determination that County-targeted advertising on a County-targeted station at lower broadcast and cable rates is a qualitatively different item to be purchased by the CRA than is advertising on a large, urban-market-targeted station at higher broadcast and cable rates.

We found the station to be a "sole source," adding in a footnote, "We do not believe it is our role to seek to micromanage or second-guess the CRA's decision to choose television over radio or some other medium or its decision to target via its advertising the County's populace rather than another demographic group." Similarly, we will not second-guess your School Board's decision that the assistant principal's property is the only suitable property available for its needs.

Accordingly, we find that the "sole source" exemption contained in Section 112.313(12)(e), Florida Statutes, would under the circumstances you describe negate any violation of Section 112.313(3), Florida Statutes.

ORDERED by the State of Florida Commission on Ethics meeting in public session on December 1, 2006 and RENDERED this 6th day of December, 2006.

Norman M. Ostrau, Chair