CEO 85-46 -- July 11, 1985

VOTING CONFLICT OF INTEREST

CITY COMMISSIONER EMPLOYED BY DEVELOPER HOLDING MORTGAGE ON PROPERTY SUBJECT TO ANNEXATION PETITION

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

SUMMARY:

A city commissioner is not prohibited by Section 112.3143, Florida Statutes, from voting on a petition for annexation of property, where the developer which employs the commissioner has sold the property but retains a mortgage on the property and in addition owns adjoining property. Under the circumstances presented, any gain or loss derived by the commissioner's employer from the annexation would be too remote and speculative to "inure to the special gain" of the employer. CEO 85-17 is referenced.

QUESTION:

Is a city commissioner prohibited by Section 112.3143, Florida Statutes, from voting on a petition for annexation of property, where the developer which employs the commissioner has sold the property but retains a mortgage on the property?

Your question is answered in the negative.

This opinion is the sequel to a previous opinion issued to you, CEO 85-17. In that opinion we advised that a city mayor and a city commissioner who were employed by a developer were prohibited by Section 112.3143(3), Florida Statutes (Supp. 1984), from voting on a petition for annexation of property owned by the developer. The annexation petition had been filed by a group which had an option to purchase the property from the developer, and the developer joined in the petition because it was the owner of the property.

Since the issuance of CEO 85-17, you advise, the developer which employs the subject Commissioner has sold the property by warranty deed containing no buy-back provisions to the group which had petitioned for annexation. However, the developer retained a purchase money mortgage interest in the property in an amount which represents approximately 75% of the value of the property. The developer also owns property immediately adjacent to the land to be annexed into the City.

In a telephone conversation with our staff, you advised that the subject Commissioner has voted on the annexation petition twice. At the first reading of the annexation ordinance the Commissioner was aware that his employer had sold the property, but did not know of the mortgage. At the time of the second vote, the Commissioner had learned that the developer retained a mortgage interest in the property. In addition, the Commission had been told by the group which owns the property that even if the property were not annexed, they would proceed to develop it.

There are no facts which would indicate that the Commissioner stood to personally gain from the annexation measure. Therefore, the issue presented here is the same as in CEO 85-17, as a municipal officer is prohibited from knowingly voting "upon any measure which inures to the special gain of any principal . . . by whom he is retained." Section 112.3143(3), Florida Statutes (Supp. 1984).

By prohibiting an official from "knowingly" voting on matters which inure to the special gain of his employer, the law recognizes that a public official, like any other employee, may not be aware of all of his employer's interests and should not be held accountable for matters he is not in a position to know. However, in this case we do not base our decision strictly on the information known by the Commissioner at the time of his votes.

In CEO 85-17, we concluded that annexation would inure to the special gain of the developer, as we felt that the developer would not join in an annexation petition unless it believed the action would be to its benefit, and as it appeared that the option to purchase might not be exercised if the property were not annexed. Here, the developer has not petitioned for annexation and does not own the property which was annexed. In our view, the developer does not stand to gain or lose as a direct result of the annexation, either in terms of the value of its adjacent property or in terms of its security interest in the subject property. Under the circumstances presented, whether the developer stands to gain or lose either from owning adjacent property or from its mortgage interest ultimately will be the result of many factors, with annexation of the property not even being the predominant factor. In essence, we conclude that any gain or loss derived by the developer from the annexation would be too remote and speculative for us to conclude that annexation "inures to the special gain" of the Commissioner's employer.

Accordingly, we find that the subject Commissioner was not prohibited by Section 112.3143, Florida Statutes, from voting on the petition for annexation.