CEO 89-4 -- January 18, 1989
CONFLICT OF INTEREST
TOWN BUILDING OFFICIAL CONTRACTING
TO DESIGN HOME WITHIN CITY
To: (Name withheld at the person's request.)
Section 112.313(7)(a), Florida Statutes, prohibits a public employee from having a contractual relationship that would impede the full and faithful discharge of his public duties. Thus, a prohibited conflict of interest exists where a town building official, who prior to that employment accepted a commission and a retainer fee to design a house within the town for an individual, is responsible for examining construction plans and inspecting the actual construction of the house. However, this conflict would be eliminated if building plan and construction review services independent of the town were secured for the project.
Would a prohibited conflict of interest exist were you, a Town Building Official, to design a house within the Town for an individual where you accepted a commission and retainer fee for the project prior to your employment with the Town?
Your question is answered in the negative, subject to the conditions noted below.
In your letter of inquiry you advise that you are employed as the Building Official for the Town of Palm Beach Shores. In this position, you primarily are responsible for examining construction plans and inspecting the actual construction of local buildings in order to determine compliance with Town ordinances and the Standard Building Code. You further advise that prior to accepting this employment, you received a commission and a retainer fee to design a house within the Town for a friend and former client.
You state that the house plans and exterior design of the house are very similar to a house which you created for another client. The preliminary plans for the house are in progress, and you have devoted a sizeable amount of time to the project. Therefore, no other architect could complete the plans or satisfy your client while keeping the house within budget. You question whether a prohibited conflict of interest will be created if you review the plans and inspect this structure in your capacity as Town Building Official.
The Code of Ethics for Public Officers and Employees provides in relevant 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 (1987).]
The first portion of this provision prohibits a public employee from having an employment or contractual relationship with a business entity which is subject to the regulation of his agency. Thus, we previously have advised that this subsection prohibits a building official from private employment in the building industry within the area of his jurisdiction, as he or his department would be cast in the role of approving his work. See CEO 81-9 and the opinions cited therein. However, here your contractual relationship is with the individual for whom you are designing the house, rather than with a "business entity," as that term is defined in Section 112.312(3), Florida Statutes.
The second part of Section 112.313(7)(a), Florida Statutes, prohibits you from having any employment or contractual relationship that will create a continuing or frequently recurring conflict between your private interests and the performance of your public duties or that would impede the full and faithful discharge of your public duties. In CEO 81-10 we noted that this provision, unlike the first part of the subsection, is not limited in its scope to contractual relationships only with business entities; rather, its scope covers contractual relationships with both business entities and individual persons. In that opinion, we determined that where a municipal code inspector who was a licensed real estate broker had a contract with an individual who owned property within the city, the contractual relationship between such a person and the subject code inspector as a real estate broker would impede the full and faithful discharge of his public duty to inspect in an independent and impartial manner the property owned by the individual. Additionally, we advised that a continuing or frequently recurring conflict of interest would be created were this situation to occur regularly as an ongoing part of the code inspector's business as a real estate broker.
In our view, the situation which you have described impedes the full and faithful discharge of your duty to examine construction plans and inspect the construction of local buildings, as you would be required to review your own work. In previous advisory opinions we have read Section 112.313(7)(a), Florida Statutes, together with Section 112.316, Florida Statutes, to imply a "grandfather clause" which would exempt a business transaction with a business entity doing business with a public employee's agency entered into prior to the time the individual began public employment. See CEO 86-71, for example. 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 duties to the state or the county, city, or other political subdivision of the state involved.
While your prior contractual obligation would indeed interfere with the full and faithful discharge of your public duties in a very limited sense, that is, with regard to subject project, the Legislature also has provided that:
It is the intent of this act to implement these objectives of protecting the integrity of government and of facilitating the recruitment and retention of qualified personnel by prescribing restrictions against conflicts of interest without creating unnecessary barriers to public service. [Section 112.311(4), Florida Statutes.]
With this policy in mind, we believe that the conflict inherent in having you inspect your own work may be eliminated if building plan and inspection review services independent of the Town are secured in this instance. Similarly, in CEO 81-20, we advised that a prohibited conflict of interest would be created were the chief building inspector of a city to contract for the construction of a warehouse complex on property owned by him within the city, unless two conditions were met. First, the building inspection services regarding the warehouse complex were to be made by an agency independent of the city, which would eliminate the conflict inherent in the building inspector or his subordinates inspecting work to be done for himself. Secondly, the contractor and the subcontractors on the warehouse complex could not be doing other work within the city which would subject them to the regulation of the building inspector at the time he contracted with them. We also have advised that a municipal building official could contract for the purchase of a condominium unit as a personal residence within the municipality prior to the construction and completion of all building inspections so long as he removed himself from personal involvement and decision-making in connection with the building department's regulation of the construction of his residence and the entire condominium development. See CEO 81-51.
No public disclosure of this relationship will have to be made, other than through the annual filing of the statement of financial interests required of the chief building inspector for each municipality pursuant to Section 112.3145(1)(a)3, Florida Statutes. As that law requires disclosure of each source of income in excess of five percent of the official's gross income, your commission and fee would have to be disclosed if in excess of that five percent threshold.
Accordingly, we find that no prohibited conflict of interest would be created were you, a Town Building Official, to design the house where you accepted a commission and retainer fee for the project prior to your employment with the Town, if building plan and inspection review services independent of the Town are secured for the project.