CEO 21-6—April 16, 2021
CONFLICT OF INTEREST
CITY COUNCIL MEMBER CONTRACTING WITH CITY
FOR USE OF RECREATION CENTER FOR KARATE CLASSES
To: Name withheld at person's request (Temple Terrace)
Under the particular facts presented, Section 112.316, Florida Statutes, will negate a conflict of interest under Section 112.313(7)(a), Florida Statutes, were a member of a City Council to enter into a contract with the City for usage of the City recreation center to host karate classes. No conflict is found under Section 112.313(3), Florida Statutes. Referenced are CEO 92-25, CEO 10-15, CEO 15-2, and CEO 16-12.
Is a prohibited conflict of interest created where a member of the City Council enters into a contract with the City for usage of the City recreation center to host karate classes?
Under the particular circumstances presented, this question is answered in the negative.
You are a member of the City Council of a City, a position to which you were elected on November 3, 2020. You also are a karate instructor, performing private instruction at the residences of your students and at a local mosque, and, in both instances, the students pay tuition to you for your instruction. Also, until you were elected, you performed private karate instruction for children at the City's recreation center, for which you received compensation from the students.
The City has a program that is administered by the City's Leisure Services Department whereby clubs and activity groups can use space in City-owned resources, such as the recreation center or parks, to host their gatherings. The City forms a contract with the activity instructor and allows him or her to use the City-owned space for the gathering in exchange for a percentage of the recreation center membership fees paid by class attendees, or an $8 surcharge for attendees who are not recreation center members. In practice, before you were elected, you would collect the fees from the students and remit the percentage owed to the City under the contract on a monthly basis. Among other terms, the contract includes an indemnification clause wherein the instructor agrees to hold the City harmless and to indemnify the City for damages and an agreement that the City has the right to advertise the class in a brochure, but other advertising is the responsibility of the instructor.
Since your election, parents have expressed a demand for you to continue teaching karate at the recreation center. You ask if you may volunteer your time, receiving no income from tuition,1 as a karate instructor at the recreation center. You explained to Commission on Ethics staff on the telephone that that students would pay the tuition to the recreation center and that the tuition would result in no payment to you, but it would still be necessary for you to charge students for your cost, with no profit margin, for uniforms, belt testing,2 and gear, as needed, because those things are essential to administering the program. With this background, you ask whether the proposed arrangement would pose a conflict of interest under the Code of Ethics for Public Officers and Employees.
We find that Section 112.313(3), Florida Statutes, is not applicable to your situation. Section 112.313(3) states:
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 . . . 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.
Based on the facts you present, it does not appear you are acting in an official capacity to purchase karate instruction for the City and you are not acting in a private capacity to sell karate instruction to the City. Therefore, Section 112.313(3) does not apply to pose any prohibited conflict of interest.
Also relevant to your inquiry, Section 112.313(7)(a), Florida Statutes, states:
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 clause of this statute prohibits a public officer or employee from having employment or a contractual relationship with a business entity or an agency that is regulated by or is doing business with his or her agency. The second clause of this statute prohibits a public officer or employee from having employment or a contractual relationship that would create a continuing or frequently recurring conflict of interest or that would create an impediment to the full and faithful discharge of his or her public duties.
Considering, in isolation, the first clause of the prohibition, the contract with the City would appear to be conflicting, given that you, a self-employed business entity, would have a contractual relationship with the City. See CEO 16-12 (citing CEO 10-15 for the proposition that even a self-employed person can be a business entity). However, we believe that Section 112.316, Florida Statutes, operates to negate this conflict under the particular circumstances presented.
Section 112.316 states:
Construction.—It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his or her duties to the state or the county, city, or other political subdivision of the state involved.
We note that there are two exemptions to the conflict of interest statute that are not directly applicable to your situation, but the spirit of these exemptions demonstrates that any conflict of interest arising from the scenario you present should be negated by Section 112.316.
The first exemption is found at Section 112.313(12)(f), Florida Statutes. It provides an exemption to conflicts found under Section 112.313(3) and (7)(a) when "[t]he total amount of the transactions in the aggregate between the business entity and the agency does not exceed $500 per calendar year." This exemption concerns situations where the public agency is purchasing less than $500 per calendar year from a public officer's or public employee's business. See CEO 92-25 and CEO 15-2.
The second exemption is found at Section 112.313(12)(i), Florida Statutes. It provides an exception to conflicts found under Section 112.313(3) and (7)(a) when:
[t]he public officer or employee purchases in a private capacity goods or services, at a price and upon terms available to similarly situated members of the general public, from a business entity which is doing business with his or her agency.
Considered without reference to Section 112.316, these two exemptions would not apply to you because the City is not purchasing from you (instead, students would be paying the City directly for your usage of the City's facility) and because you are not purchasing from a business entity doing business with the City (instead, you are, in a sense, purchasing from the City itself). However, in a situation where you are remitting less than $500 to the City each calendar year for the use of the facility and that usage affords you less than $500 in income per calendar year, and where the usage of the facility is available to similarly-situated members of the public at the same terms, we find that the spirit of these exemptions gives rise to an operation of Section 112.316 that negates the conflict of interest.3
Your question is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on April 16, 2021, and RENDERED 21st day of April, 2021.
JoAnne Leznoff, Chair
You state that you are unsure if this means the recreation center would charge the students no tuition or if it would keep the tuition, but in either event, you would earn no income from any tuition that might be charged.
 "Belt testing" is a test of the karate curriculum a student has learned. The costs for belt testing include a new belt, a certificate, and an ice cream party. Belt testing occurs every three months.
In applying Section 112.316 to negate the otherwise apparent conflict of interest, the Commission on Ethics notes that this application is entirely dependent on the very particular facts presented and the context of those facts. Anyone who seeks to avail themselves of a similar application of Section 112.316 should contact the Commission on Ethics for guidance, inasmuch as Section 112.316 may or may not be applicable to them depending on their particular facts.