CEO 00-4 -- March 10, 2000

 

CONFLICT OF INTEREST; VOTING CONFLICT

 

FLORIDA INLAND NAVIGATION DISTRICT COMMISSIONER OFFICER/SHAREHOLDER OF COMPANY EXCHANGING REALTY INTERESTS WITH DISTRICT

 

To:       Thomas A. Sheehan, III, General Counsel, Florida Inland Navigation District (West Palm Beach)

 

SUMMARY:

 

No prohibited conflict of interest would be created under Sections 112.313(3) or 112.313(7)(a), Florida Statutes, were a company of which a member of the Board of Commissioners of the Florida Inland Navigation District is an officer/shareholder to exchange real property interests with the District.  Under the circumstances, the "construction" language of Section 112.316, Florida Statutes, applies to negate any conflict.  However, the member must refrain from voting and participating regarding the exchange.

 

QUESTION:

 

Is a prohibited conflict of interest created by the exchange of real property interests between a navigation district and a company, an officer/shareholder of which is a district commissioner?

 

Under the circumstances of this opinion, your question is answered in the negative.

 

By your letter of inquiry and documents accompanying the letter, a letter from you responding to our staff, and a letter and accompanying materials from the Executive Director of the public agency mentioned herein, we are advised that Thomas Jones (hereinafter "member") serves as a member of the Board of Commissioners of the Florida Inland Navigation District (hereinafter "FIND" or "District"), an independent special taxing district, and that he is vice-president and a shareholder of a company which owns land burdened by a dredged materials disposal easement in favor of the District.  In addition, we are advised that it is proposed that the District release the easement on the property in exchange for fee simple title to a neighboring property (contiguous to other District property) of approximately the same size, also owned by the company.

Regarding the history of the proposed exchange, we are advised that the District Board voted to approve in concept the exchange several months prior to the Commissioner being appointed to the Board; that the substance of the proposed exchange agreement follows the format the District has utilized in the past for exchange of properties, except for some minor revisions suggested by attorneys for the company; that the actual exchange agreement will be voted upon by the District's Land Acquisition Management Committee, on which the member does not sit; that there are "due diligence" requirements in the agreement that would typically be handled by District staff, but that any problems regarding the requirements would be resolved by the Committee on which the member does not sit; and that at no time would the member be voting on measures involving the exchange.

Further, we are advised that the District will utilize the property from the exchange for the placement of dredged materials from maintenance of the Atlantic Intracoastal Waterway as outlined in a District long range plan; and that the District's motivation for the exchange is its receipt of fee simple title to the new property, the company's payment for replication of the District's engineering and environmental studies and plans for the new property, the anticipation of lower operating costs for the new property (as opposed to operating costs for the old disposal easement) because the new property is contiguous to other District property, and the District's inability to acquire properties from other owners at no out-of-pocket expense.

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

 

DOING BUSINESS WITH ONE'S AGENCY.--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 of any agency thereof, if he or she 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 or when such offices are on property wholly or partially owned by the legislator.  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.  [Section 112.313(3), Florida Statutes.]

 

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 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. [Section 112.313(7)(a), Florida Statutes.]

 

Assuming arguendo that the situation you describe constitutes a "purchase" or "sale" under Section 112.313(3) or that it constitutes the "doing of business" between the District and the company under Section 112.313(7)(a), these statutes do not exist in isolation but must be read in conjunction with Section 112.316, Florida Statutes, which provides:

 

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.

 

Therefore, under the particular facts of this situation, a scenario in which the District is in effect adjusting its spoil disposal from one site on company property to another site on company property more convenient for the District, under a long-range plan and largely under decisions made without the member's input and prior to his being appointed, we find that Section 112.316 is applicable to negate any conflict.  In essence, notwithstanding that the agreement between the company and the District will be formally entered into after the member's seating on the Board and notwithstanding that the formal entry will be imputed to the member as an individual public officer, the reality of the situation indicates that the member was and will be sufficiently distanced from District decisionmaking on the matter to negate a conflict.[1]

Accordingly, under the circumstances described herein and subject to the conditions noted herein, we find that a prohibited conflict of interest would not be created were a company of which a Commissioner of the Florida Inland Navigation District is an officer/shareholder to exchange real property interests with the District.

 

ORDERED by the State of Florida Commission on Ethics meeting in public session on March 9, 2000 and RENDERED this 10th day of March, 2000.

 

 

__________________________

Peter M. Dunbar

Chair


[1]We caution the member that our decision herein is conditioned on the member's abstention from voting and other compliance with Sections 112.3143(3)(a) and (4), Florida Statutes, regarding exchange measures, and his refraining from interacting with District staff or fellow Commissioners regarding the exchange.