CEO 93-33 -- December 2, 1993
CONFLICT OF INTEREST
EMPLOYEE OF CITY UTILITIES DEPARTMENT, WHICH OPERATES A
WASTEWATER FACILITY FOR FIVE LOCAL GOVERNMENTS,
SERVING ON CITY COMMISSION OF ONE
OF THE MEMBER CITIES
To: Saul Smolar, Assistant City Attorney (City of West Palm Beach)
No prohibited conflict of interest would be created under Sections 112.313(7) and (10), Florida Statutes, were an employee of a city utilities department which operates a wastewater treatment facility for five local government entities to serve on the city commission of one of the member cities. Intergovernmental agreements and dealings between governmental entities do not constitute "doing business" for purposes of the first part of Section 112.313(7)(a), and none of the member signatory municipalities to the interlocal agreement regulate the utilities department of the city which operates the wastewater treatment facility pursuant to the agreement. Because the employee is no longer providing financial information concerning the wastewater treatment plant as part of her employment responsibilities to the member municipalities, her employment would not present a continuing or frequently recurring conflict of interest or impede the full and faithful discharge of her duties as a city commissioner. Because the employee is employed by a city and its utilities department independent of the city that she would be a city commissioner of, and because the interlocal agreement does not make her an employee of that city, Section 112.313(10)(a), Florida Statutes, would not be violated.
The employee would not be prohibited from voting as a city commissioner on matters relating to her employing municipality or its utilities department under Section 112.3143(3), Florida Statutes, because the principal by whom she is retained is a governmental agency. However, she would be permitted to abstain from voting on these matters pursuant to Section 286.012, Florida Statutes.
Would a prohibited conflict of interest be created were an employee of a city utilities department which operates and manages a wastewater treatment facility on behalf of five local government entities pursuant to an interlocal agreement between them to be elected to the city commission of one of the member municipalities?
Your question is answered in the negative.
In your letter of inquiry, you advise that . . . ., a City of West Palm Beach employee, is considering running for a seat on the City Commission of the City of Lake Worth. You advise that she holds the position of Assistant to the Director of Utilities. You are concerned that if she runs for the City Commission, a conflict of interest may be created due to the fact that the Utilities Department operates and manages the East Central Regional Wastewater Facilities ("Facilities") on behalf of five local governmental entities ("Entities"), including the City of Lake Worth, in accordance with an interlocal agreement entered into by the entities pursuant to Part I of Chapter 163, Florida Statutes.
The copy of the Interlocal Agreement ("Agreement") which you attached to your letter of inquiry indicates that the purpose of the agreement is to: (1) establish uniform rules and procedures for the operation and management of the Facilities by the City of West Palm Beach for the benefit of the entities; (2) provide wastewater treatment and disposal and sludge treatment and disposal services in an economical and efficient manner; and (3) provide wastewater treatment and disposal and sludge treatment and disposal services to all who can be legally serviced. The agreement also establishes an Operation Board, as permitted by Section 163.01(7), Florida Statutes, to administer the agreement.
The Operation Board, which is made up of five members, each appointed by an entity and designated as the staff official from the entity and each serving at the pleasure of the entity that appoints him or her, has among its powers the authority to decide all matters related to the Facilities, including the approval of all construction contracts, Facilities budget and expansion, flow charges, dispute resolution among the entities, and the adequacy of funds for renewal and replacement of the Facilities through annual payments from the entities into the Renewal and Replacement Agency Fund, which is administered by the City of West Palm Beach. From time to time, the Board also is authorized by the agreement to require the entities to make special non-annual payments into the Fund in anticipation of projects which will require additional funding. In addition, the Board directs the City of West Palm Beach as to the operation and management of the Facilities.
Under the agreement, the City of West Palm Beach is charged with administering and carrying out the decisions of the Board through utilization of its personnel, purchasing, industrial pretreatment, and minority business enterprise policies and procedures and with operation and maintenance of the facilities provided an adequate budget is adopted by the Board. The City is required to provide sufficient personnel for this purpose. Included within its responsibilities also is metering for flow charges as directed by the Board, preparing monthly operating and financial reports and quarterly financial statements for the Board members and annual financial statements for filing with the entities, and invoicing of each entity monthly for its wastewater flow charges.
The employee's written description of her job responsibilities indicates that she oversees the administration of the Utilities Department for the City of West Palm Beach. The employee writes that administration consists of: (1) customer service, which includes meter reading, meter maintenance, and collections of the water and sewer accounts; (2) financial accounting; and (3) personnel administration. We are advised that with respect to customer service, the employee is a direct line supervisor over 30 employees and becomes involved in customer complaints and billing problems that cannot be resolved at a lower level. With respect to financial accounting, we are advised that before the Board requested that a Certified Public Accountant (CPA) be hired, the employee presented financial information relative to the Facilities to the entities. This responsibility now has been taken over by the CPA, leaving the employee with the responsibility, as supervisor, of ensuring that the City's policies and procedures relative to such things as procurement and contract administrative review are enforced. We also are advised that as Assistant to the Director of Utilities, the employee is responsible for seeing that the City's policies and procedures relative to such things as employee evaluations and disciplinary actions are enforced. Finally, with respect to the East Central Regional Wastewater Treatment Plant, the employee acts as liaison and interacts with entities receiving wastewater treatment from the plant and coordinates City and the Department of Utilities activities with other cities, regulatory agencies, utilities, boards, and agencies.
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.]
EMPLOYEES HOLDING OFFICE.--No employee of a state agency or of a county, municipality, special taxing district, or other political subdivision of the state shall hold office as a member of the governing board, council, commission, or authority, by whatever name known, which is his employer while at the same time, continuing as an employee of such employer. [Section 112.313(10)(a), Florida Statutes.]
VOTING CONFLICT.--No county, municipal, or other local public officer shall vote in his official capacity upon any measure which inures to his special private gain; which he knows would inure to the special private gain of any principal by whom he is retained or to the parent organization or subsidiary of a corporate principal by which he is retained, other than an agency as defined in s. 112.312(2); or which he knows would inure to the special private gain of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of his interest in the matter from which he is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes. [Section 112.3143(3)(a), Florida Statutes.]
Section 112.313(7)(a), Florida Statutes, prohibits a public officer from having or holding any employment or any contractual relationship with any business entity or with any agency which is doing business with or which is subject to the regulation of the employee's agency. Therefore, were the employee to be elected to the Lake Worth City Commission, she would be a "public officer" pursuant to the definition of that term contained in Section 112.312(2), Florida Statutes (see CEO 92-39 and CEO 92-51), and would be prohibited from holding employment with the City of West Palm Beach Utilities Department were it subject to the regulation of or doing business with the Lake Worth City Commission.
The Code of Ethics is intended to prevent private gain at public expense rather than to prevent dealings between governmental entities. See CEO 92-39. In keeping with this reasoning we generally have found that intergovernmental agreements and dealings between governmental entities do not constitute "doing business" for purposes of the first part of Section 112.313(7)(a). See CEO 76-2, CEO 76-139, CEO 80-5, CEO 81-5, CEO 83-5, CEO 86-28, and CEO 92-39. Therefore, we find that the Interlocal Agreement entered into here by the five entities, including the City of Lake Worth and the City of West Palm Beach, does not constitute "doing business."
We also do not find that the City of Lake Worth regulates the Utilities Department of the City of West Palm Beach. While the City of West Palm Beach operates and maintains the Facilities, the Interlocal Agreement establishes a Board to which each of the five member signatories to the agreement appoints a representative. Pursuant to the agreement, the City of West Palm Beach Utilities Department administers and carries out decisions of the Board. The agreement does not provide for any direct supervisory authority by the Board, a separate entity from the cities that are represented on the Board, over either the City of West Palm Beach or its Utilities Department. Neither does the agreement provide any authority to any of the other cities, including the City of Lake Worth, over the City of West Palm Beach or its Utilities Department. Accordingly, we find that neither the City of West Palm Beach nor its Utilities Department is regulated by the Lake Worth City Commission, and the employee would not be employed by an agency (City of West Palm Beach) which is subject to the regulation of her agency (City of Lake Worth), in violation of the first part of Section 112.313(7)(a), were she to be elected to the Lake Worth City Commission.
Section 112.313(7)(a) also prohibits a public officer from having an employment or contractual relationship that will create a continuing or frequently recurring conflict between her private interests and the performance of her public duties or that would impede the full and faithful discharge of her public duties. After reviewing the terms of the Interlocal Agreement, and inasmuch as a Certified Public Accountant (CPA) who was recently hired by the City of West Palm Beach at the direction of the Board has taken over the responsibility of providing financial information to the entities upon which any annual or additional charges to the entities will be based, we do not perceive that the employee's employment with the City of West Palm Beach would create a continuing or frequently recurring conflict of interest with the duties of a Lake Worth City Commissioner or would impede the full and faithful discharge of those duties.
Section 112.313(10)(a), Florida Statutes, prohibits an employee from holding office as a member of the governing board which is her employer while concurrently continuing as an employee of such employer. Thus, in CEO 76-83 we stated that an employee of a school district is prohibited from sitting on the board of that school district. However, we concluded that because a district school board constitutes the governing body of a political subdivision separate and distinct from a board of county commissioners, Section 112.313(10)(a) would not be violated were an employee of a school district to be elected to the board of county commissioners. See also CEO 81-81, where we stated that Section 112.313(10)(a) prohibits a municipal employee from also holding office as a member of the governing council of the municipality. Here, because the employee is employed by the City of West Palm Beach and its Utilities Department, which is independent from the City of Lake Worth, and because the Interlocal Agreement does not make employees of the West Palm Beach Utilities Department employees of the signatory entities or of the Board, Section 112.313(10)(a) does not prohibit the employee's continued employment with the Utilities Department while at the same time serving as a Lake Worth City Commissioner.
Finally, Section 112.3143(3), Florida Statutes, would prohibit the employee, as a Lake Worth City Commissioner, from voting on measures which inure to her private gain or to the special gain of a principal by which she is retained, unless her principal is an "agency" as defined in Section 112.312(2), Florida Statutes. Section 112.312(2) defines "agency" to mean
any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university.
Because the employee's principal is the City of West Palm Beach Utilities Department, and because the City and the Utilities Department are "agencies," the employee would not be prohibited from voting on matters relating to the City of West Palm Beach and the Facilities. However, the employee would be permitted pursuant to Section 286.012, Florida Statutes, to abstain from voting on such matters. This provision permits a city official to abstain from voting where there is or appears to be a possible conflict of interest under one of the provisions of the Code of Ethics. We suggest that under this provision the employee consider removing herself as Lake Worth City Commissioner from participation in any issue which involves the City of West Palm Beach Utilities Department. In addition, as the Assistant to the Director of Utilities, the employee may wish to refrain from any involvement with such issues as contracts, facility reserve capacity, and invoices between the City of Lake Worth and the West Palm Beach Utilities Department, as well as any liaison work on behalf of the Department with the City of Lake Worth.
Accordingly, we find that no prohibited conflict of interest or voting conflict of interest would be created were the employee to serve as a Lake Worth City Commissioner and to vote on matters relating to the City of West Palm Beach, such as financial reports relative to the operation of the Facilities and wastewater flow charges.