CEO 82-22 -- April 8, 1982

CONFLICT OF INTEREST

ASSISTANT CITY MANAGER SERVING AS OFFICER OR DIRECTOR OF NONPROFIT CORPORATION RECEIVING FUNDS FROM CITY

To: Ms. Jennifer Hurst, City Attorney, City of North Miami

SUMMARY:

No prohibited conflict of interest would be created were an assistant city manager to serve as an officer or director of a nonprofit corporation receiving funds from the city and providing programs for the elderly such as meals on wheels and transportation. Since service as an officer or director would be without compensation, the employee would not have any employment or contractual relationship with the nonprofit corporation. CEO 80-46 and CEO 77-167 are referenced in this regard. Since the city is under no obligation to provide any of the programs provided by the nonprofit corporation and its contribution to the corporation is purely discretionary, the nonprofit corporation is not selling any services to the city. Compare CEO 82-9.

QUESTION:

Would a prohibited conflict of interest be created were an assistant city manager to serve as an officer or director of a nonprofit corporation receiving funds from the city?

Your question is answered in the negative.

In your letter of inquiry and in a telephone conversation with our staff, you have advised that Mr. James DiPietro is the Assistant City Manager of the City of North Miami. You also have advised that he has been invited to serve as an officer or director of a nonprofit corporation which provides programs for citizens both within and outside the City, such as meals on wheels for the elderly and transportation for the elderly. The corporation receives funds from the federal government and matching funds from the City, as well as from other sources. Officers and directors of the corporation serve without compensation of any kind.

The Code of Ethics for Public Officers and Employees provides in part:

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 (1981).]

The first part of this provision would prohibit the subject Assistant City Manager from having any employment or contractual relationship with a business entity which is doing business with the City. In previous opinions, we have advised that noncompensated service as an officer or as a member of the Board of Directors of a nonprofit corporation does not constitute an employment or contractual relationship with that entity. See, for example, CEO 80-46 and CEO 77-167.

The Code of Ethics also provides:

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.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1981).]

This provision prohibits the subject Assistant City Manager from acting in a private capacity to sell any services to the City. In previous opinions, we have advised that one acts "in a private capacity" to sell any realty, goods, or services when he is an officer or director of, or owns more than five percent of, the business entity which is selling such realty, goods, or services. See, for example, CEO 81-49.

Therefore, the remaining question is whether the nonprofit corporation is selling any services to the City. In CEO 82-9 we found that nonprofit organization contracting with the Department of Health and Rehabilitative Services to provide services for a designated clientele was selling services to the Department, where the Department had the responsibility of providing those services to that clientele. Here, you have advised our staff that the City is under no obligation to provide any of the programs now provided by the nonprofit corporation, and that the City's contribution to the corporation is purely discretionary. Under these circumstances, we find that the nonprofit corporation is not selling any services to the City but rather is providing services to the elderly with the assistance of a voluntary contribution from the City.

Accordingly, we find that no prohibited conflict of interest would be created were the subject Assistant City Manager to serve as an officer or director of a nonprofit corporation which is receiving funding from the City.