CEO 00-21 -- October 11, 2000

CONFLICT OF INTEREST

COUNTY MANAGER SELLING LAND TO HEALTH CARE FACILITY WHICH PLANS TO DONATE LAND TO COUNTY FOR WASTEWATER TREATMENT PLANT

To: Name withheld at person's request (Wauchula)

SUMMARY:

The Code of Ethics would not be violated where a county manager sells a parcel of land to a private health care facility which would, in turn, donate the land to the county in order for a wastewater treatment facility to be built on the site to service its present and future needs. The county manager would not be selling realty to the county. Thus Section 112.313(3), Florida Statutes, is not violated, and the relationship between the health care facility and the county would not constitute "doing business" for purposes of Section 112.313(7)(a), Florida Statutes.

QUESTION:

Are you, a county manager, prohibited from selling a parcel of land to a private health care facility that intends to donate the property to the county for a site on which to build a wastewater treatment facility?

Under the specific factual circumstances presented, and limited exclusively to this opinion, your question is answered in the negative.

Through your letter of inquiry and information provided to our staff, we are advised that you serve as the County Manager for Hardee County. Materials you have submitted indicate that the County was notified of funding availability under the Small Cities Community Development Block Grant Program administered by the Florida Department of Community Affairs. The County Commission advertised the availability of funds for economic development and, at a public hearing, received and considered only one request for assistance -- a request made by a private health care facility that treats adults and children with significant neurological impairments. In its presentation to the County Commission, the health care facility explained that its existing facility used septic systems for wastewater disposal and that it was experiencing difficulty with its system. It further explained that it was planning a $7 million expansion that would provide 127 new full-time jobs (in addition to its existing 300 employees) and that over half of those new jobs would be available to low-to-moderate income residents of the County. As a result of the request of the facility, which is the largest employer in the County after the School District, the County Commission approved the submittal of a CDBG application with the health care facility as the direct beneficiary and also approved the submittal of an application to the U.S. Department of Commerce for funding assistance for the balance of the wastewater treatment facility and attendant construction that would provide capacity to the industrial/commercial corridor where the health care facility is located and where other industries anticipate locating and a municipal airport plans to expand.

We are informed that in order to assist with the development of the project and to reinforce its level of commitment, the health care facility indicated that it would either fund the purchase of a site for the wastewater treatment facility or purchase it outright and donate it to the County. Subsequently, a consultant for the County conducted a survey of the properties bordering the corridor and identified several sites suitable for the wastewater treatment plant, including a 15-acre parcel that you own. However, the other property owners were not interested in selling, leaving only your parcel under consideration. It is further represented that a selling price was negotiated, taking into account the loss of income from a crop of oranges that would be lost when the groves are leveled prior to picking season, and the County intends to verify the purchase price with an independent appraisal. Thus, you question whether a prohibited conflict of interest would be created if you sold your property to the health care facility and the health care facility donated it to the County for the proposed wastewater treatment plant.

Section 112.313(3), Florida Statutes, provides:

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 or 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.

(d) Beginning public employment.

The second sentence of Section 112.313(3) prohibits a county employee from acting in a private capacity to sell realty to his own agency.

In CEO 87-31, we opined that this provision would be violated where a school principal sold real property to the school district that employed him. Although that opinion noted that there were exemptions in Section 112.313(12), Florida Statutes, for "sole source" purchases or emergency purchases necessary to protect the public health and welfare, neither exemption was found to be applicable to the facts presented in CEO 87-31. In CEO 88-51, we concluded that absent the applicability of a Section 112.313(12) exemption, Section 112.313(3) would be violated where a county commissioner sold property to the county for use as a landfill. CEO 88-51 discussed the competitive bid exemption as well as the sole source exemption--although neither was determined to be applicable--and also suggested that the county could acquire the property through eminent domain proceedings without violating Section 112.313(3).

In the situation before us, you do not propose to sell the property to the County but, instead, propose to sell it to the health care facility that would, in turn, donate it to the County. Under the circumstances presented here, the facility is not simply acting as a "straw man" to enable a purchase that would otherwise be prohibited. Therefore, it would not appear that the proposed sale and transfer would violate Section 112.313(3), Florida Statutes.

Another provision that is implicated by your inquiry is Section 112.313(7)(a), Florida Statutes, which states:

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 (1997).]

Section 112.313(7)(a) prohibits a public employee from having a contractual relationship with a business entity that is doing business with or regulated by his agency. It also prohibits a public employee from having a contractual relationship which creates a continuing or frequently recurring conflict between his private interests and the performance of his public duties, or which impedes the full and faithful discharge of his public duties.

In the situation before us, you have indicated that the health care facility is not "doing business" with the County, although it apparently has committed to purchasing your land and donating it to the County in exchange for a wastewater treatment facility to be built on the site. Notwithstanding, we view that understanding as an agreement to make a gift, not an enforceable contract. See Ross v. Walker, 44 Fla. 704 (1902). Therefore, we do not view those factual circumstances as constituting a contractual relationship between the health care facility and the County.

You have said that after the wastewater treatment plant is built, the health care facility will be treated like any other utility customer and will be charged the same rate as other commercial users. Because of the exemption for utility services in Section 112.313(12)(c), Florida Statutes, we do not view that arrangement as prohibited by Section 112.313(7)(a).

As for the second part of Section 112.313(7)(a), you have stated that matters involving the health care facility do not frequently come before the County, and there is nothing to suggest that your duties as County Manager are or would be impeded as a result of the sale of your property to the health care facility. Thus, we do not view the sale as a conflict under the second part of Section 112.313(7)(a), Florida Statutes.

Accordingly, under the specific factual circumstances presented, and limited exclusively to this opinion, we conclude that the proposed arrangement between you, the health care facility, and the County does not create a prohibited conflict of interest. This conclusion should not be read as applying to any other set of facts other than those considered herein.

ORDERED by the State of Florida Commission on Ethics meeting in public session on October 5, 2000 and RENDERED this 10th day of October, 2000.

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Howard Marks

Chair