VOTING CONFLICT

CITY COMMISSIONER VOTING ON AMENDMENTS TO AFFORDABLE HOUSING ORDINANCE

To:      Mark Herron, Esquire (regarding City of Key West)

SUMMARY:

A city commissioner whose private legal client is a potential developer of affordable housing within the city is not required to abstain from voting and otherwise comply with the voting conflicts law regarding city commission measures/votes to amend the city's affordable housing ordinance to raise the value/price of "affordable housing." Given the events, in addition to mere passage of the amendments, that would have to occur in order for the client-developer to engage a project, any gain or loss to the client-developer (a principal by whom the commissioner is retained) would be "remote and speculative." However, the commissioner must comply with the voting conflicts law regarding measures/votes more insular to his client, such as measures/votes on his client's particular projects/permits. CEOs 05-2 and 91-61 are referenced.^[1]

QUESTION:

Is a city commissioner required to abstain from voting and otherwise comply with Section 112.3143(3)(a), Florida Statutes, regarding measures/votes to amend the city's affordable (work force) housing ordinance to raise the value/price of "affordable housing," where one of his private legal clients is a potential developer of affordable housing within the city?

This question is answered in the negative.

By your letter of inquiry, an earlier letter to our staff from the public officer in whose behalf you inquire, and additional written materials provided by you to our staff, we are advised that you inquire in behalf of Mr. Ed Scales ("Commissioner"), a member of the Key West City Commission who also is an attorney in private practice. In addition, we are advised that a major client of the Commissioner is a developer of housing in the Keys, including within the City, but that the Commissioner does not represent the client on any projects within the City. Further, we are advised that the City Commission is poised to consider a proposed ordinance^[2] which would amend the City's existing affordable (work force) housing ordinance to, inter alia, allow developers to charge higher prices for the sale or rental of affordable housing.^[3] And we are advised that an increase in the value or price of what is considered "affordable" likely will spur developers to seek building permits for more owner-occupied affordable housing,^[4] in contrast to the existing or historical situation in which the permits have gone unused, due to their use being unprofitable under existing income/rent/sales limits.^[5] However, you represent that if changes to the ordinance are approved by the City Commission, in order to become effective the changes also would have to be approved by DCA (inasmuch as the City has been statutorily designated as an area of critical state concern) and that all land development regulations, as well as building permits, must be approved by DCA. Further, you represent, if the ordinance changes are approved by DCA, any specific permit application would have to be reviewed and approved by the City's development review committee and the City's planning board and, depending on the size of the project, would have to be reviewed and approved by the City Commission. In addition, we are advised that whether any special private gain would inure to the Commissioner's client as a result of votes on measures proposing amendments to the ordinance would be dependent on a number of factors not determinable at the time of the votes: whether land or property can be acquired that is suitable for development as affordable housing; whether financing can be arranged for such projects; whether any proposed project meets the requirements of the land development regulations; and whether a proposed project will receive approval of local and state regulatory bodies.

Under your scenario set forth above, you inquire whether the Commissioner can vote on the proposed changes to the affordable housing ordinance without running afoul of the voting conflicts law, emphasizing the issue of whether changes to the ordinance would inure to the special private gain of his developer-client or whether the effect would be "remote and speculative."

The voting conflicts law prohibition in the Code of Ethics for Public Officers and Employees applicable to local, elected, public officers such as the Commissioner^[6] is Section 112.3143(3)(a), Florida Statutes,^[7] which provides:

VOTING CONFLICTS.-- No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(2); or which he or she knows would inure to the special private gain or loss 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 the officer's interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her 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.

In many opinions we have found that the law is not applicable in situations in which any gain or loss to the voting officer, his client (principal), his relative, or other persons or entities connected to him as enumerated in the statute was "remote and speculative." That is, we have found that if there is uncertainty at the time of a vote as to whether the measure will directly affect the officer, his client, or other person or entity connected to him, the measure/vote does not require the officer's declaration, abstention, and filing. See, for example, CEO 05-2 (village workforce/affordable housing committee member voting on mobile home park measures not a voting conflict).

Similarly, we find that the instant situation contains uncertainty as to whether the proposed changes to the ordinance would result in gain or loss to the Commissioner's developer-client. Assuming passage of changes to the ordinance, given the many approvals and events that would have to occur for the client (or other would-be developers of "affordable housing") to engage in a particular new project,^[8] such as DCA approval or planning board approval, it is remote and speculative that any gain or loss would flow to the client from mere passage of the ordinance changes. See also CEO 91-61, in which we found that a city commissioner was not prohibited from voting on construction of a city sidewalk to encircle a lake near which she resided because any gain to her from the measure would be remote and speculative since a zoning change (with many attendant steps and contingencies) subsequently would have to be effected in order for her to realize gain from the sidewalk measure.

Accordingly, we find that the Commissioner is not subject to the voting conflicts law regarding measures/votes to amend the City's affordable (work force) housing ordinance as set forth in your inquiry.^[9]

ORDERED by the State of Florida Commission on Ethics meeting in public session on September 1, 2005 and RENDERED this 7th day of June, 2005.

__________________________

Thomas P. Scarritt, Jr.

Chair

¹ Opinions of the Commission on Ethics (CEOs) are viewable on its website: www.ethics.state.fl.us

² Information included in your request states that although the City has approved many projects under the existing (current) ordinance, very little affordable housing has been built. One 20-unit project recommended by the planning board was withdrawn because of the cost of construction and, you write, the dramatic increases in housing prices have made it increasingly difficult for moderate and middle income people to find housing. Further, information included in your inquiry indicates that changes in the ordinance would, inter alia, raise the fee in lieu of providing work force housing from $40,000 to $80,000; allow developers to provide moderate and middle income units if they also provide low income and median income units; remove the limitation that accessory infill units must be located upstairs; and increase the rent and sales prices of accessory infill units.

³ We are advised that since approximately 1993, the Department of Community Affairs (DCA), as part of a comprehensive growth management scheme for the Florida Keys, allocates residential building permits to the City (as well as to the rest of the Keys); that new permits allocated to the City are restricted to "affordable housing" because of the Keys' affordable housing crisis; and that the City, through ordinances, determines what is "affordable."

⁴ We are advised that the Commissioner's client has indicated that if the ordinance is amended he intends to seek building permits from the City for more owner-occupied affordable housing. In addition, we are advised that the client already has obtained all approvals and permits for a nine-unit affordability-restricted complex to be located in the Old Town section of the City; that no construction has been commenced on the complex; that the client plans to sell the units in the complex as ownership units, but may choose to rent them; and that, presumably, amendments to the ordinance would affect the purchase/sale price of the units as well as the eligibility of the units. Further, we are advised that the City's development review committee (a staff committee) has met with the client to discuss the client's plans to construct 38 affordability-restricted units in the New Town section of the City and that further process regarding the units will be as follows: revision of plans based on development review committee's comments; the City's planning board (made up of 5 mayoral appointees) will meet to approve/disapprove the plan, which will require Minor Development Plan approval; the City Commission must then meet to approve/disapprove the minor development plan (which likely will occur later in the fall of 2005, when the Commissioner will no longer be serving on the City Commission); any permits issued will be issued by the City's building department; the Department of Community Affairs (DCA) will have 45 days to review the City's issuance of the permits to determine congruency with the City's comprehensive plan, during which time any affected person may file an administrative challenge via Chapter 120, Florida Statutes (with any such challenge halting the project until a final adjudication of the challenge). Additionally, we are advised that information from the City's planning department shows there are a total of six private affordable housing projects at various stages in the pipeline; that the six projects (two of which are the client's) represent 55 total units; and that anecdotal evidence indicates several other would-be developers have expressed interest in building affordability-restricted units but have not proceeded due to the economics of such construction.

⁵ We are advised that the proposed changes passed first reading at the City Commission's August 2, 2005 meeting (without a vote or participation by the Commissioner due to his illness-based nonattendance); that the Commissioner anticipates that a second reading is scheduled for September 20, 2005; and that, assuming the proposed changes pass second reading, DCA will have 45 days to review the changes to determine congruency with the City's comprehensive plan (during which time a Chapter 120 challenge may be filed).

⁶ As an elective (rather than an appointive) officer, the Commissioner is not subject to the "participation" restrictions of Section 112.3143(4), Florida Statutes.

⁷ If applicable to a vote/measure, Section 112.3143(3)(a) requires an official to declare his interest in the matter, abstain from voting on the matter, and file a memorandum of voting conflict (CE Form 8B) regarding the matter.

⁸ Also, we do not find that the client's nine-unit complex (regarding which it is represented that all approvals and permits have been issued) dictates a different decision from us. That complex was approved under the existing ordinance (independent of the proposed changes now up for votes of the City Commission) and it does not appear by any means certain whether the proposed changes to the ordinance would directly affect it.

⁹ However, we find that the Commissioner is subject to the voting conflicts law regarding measures/votes of the City Commission to, for example, approve a particular project of the client's. If, in the future, the Commissioner is uncertain as to the applicability of the law to a particular matter, he (or you in his behalf) should contact us (or our staff) for further advice.