CONFLICT OF INTEREST; FINANCIAL DISCLOSURE

APPLICABILITY OF CODE OF ETHICS TO APPOINTED
MEMBERS OF ADVISORY BOARD FOR CITYOPERATED CHARTER SCHOOL

To: Samuel S. Goren,City Attorney; (City of North Lauderdale)

SUMMARY:

With the exception of the Section 112.3145, Florida, Statutes, requirement for local officers to file financial disclosure, because members of the North Lauderdale Charter School Advisory Board are not local officers within the meaning of Section 112.3145(1)(a), Florida Statutes, members of the Charter School Advisory Board are subject to the standards of conduct for public officers and employees as set forth in Section 112.313, Florida Statutes, and to the voting conflicts prohibitions of Sections 112.3143(3) and (4), Florida Statutes. Because the Charter School Advisory Board operates solely as an Aadvisory body, as that term is defined at Section 112.312(1), Florida Statutes, its members are not local officers subject to the financial disclosure requirements of the Code of Ethics.

However, the members of the Advisory board are public officers, as that term is defined at Section 112.313(1) and 112.3143(1)(a), Florida Statutes. Consequently, with possible exemptions to the prohibitions of Sections 112.313(3) and 112.313(7)(a), Florida Statutes, granted to members of the Advisory Board where, pursuant to Section 112.313(12), Florida Statutes, the City Council votes to waive potential prohibited conflicts of interest of members of the Advisory Board upon their full disclosure of the potentially prohibited transactions or relationships prior to the waivers, and an affirmative two-thirds vote of the City Council waiving the conflicts, the members of the Advisory Board are subject to the standards of conduct for public officers and employees set forth in Section 112.313, Florida Statutes. Similarly, because Advisory Board members are public officers, as that term is defined at Section 112.3143(1)(a), Florida Statutes, the voting conflicts prohibition of the Code of Ethics also applies to them.  

QUESTION:

Do the standards of conduct of the Code of Ethics for Public Officers and Employees, including the requirement for filing financial disclosure, apply to members of the City's Charter School Advisory Board?

With the exception of the requirement for filing financial disclosure, your question is answered in the affirmative.

In your letter of inquiry, you advise that you are requesting this opinion on behalf of the City Manager. You write that the City has been granted a charter by the School Board of Broward County "School Board", to operate a charter school pursuant to Section 228.056, Florida Statutes. As a result, you advise, the City is operating North Lauderdale Academy High, the first municipally sponsored charter high school in the United States.

You advise that one of the requirements for operating a charter school is that the charter school applicant or the governing body of a proposed charter school, the City in this instance, enter into a written contractual agreement with the sponsoring agency, in this case the School Board of Broward County, which sets forth the rights and obligations concerning the operation of the charter school. The performance agreement between the City and the School Board, you write, includes the governing structure of the school. In this instance, the City agreed to form an advisory board to consider items and issues relating to the Charter School and to provide guidance to the City Council on those items. However, you advise that the City Council makes the final decision on all matters relating to the Charter School. 

You further advise that the City Council created the North Lauderdale Charter School Advisory Board by the adoption of Ordinance 98-6-958 on June 19, 1998.¹ The Advisory Board acts in an advisory capacity to the City Council on matters related to the City's Charter School. Its duties include: 

1. Recommending policies regarding such issues as attendance and discipline;

2. Providing periodic reports to the City Council including an end-of-year annual report;

3. Recommending curriculum initiatives to the City in cooperation with the Charter School's Principal;

4. Assisting in the development of long range strategic plans in order to establish a comprehensive vision

of the City's educational initiatives;

5. Assisting and advising in development efforts, including grant administration and other fund raising efforts;

6. Reviewing the school's progress in meeting the goals, objectives, and requirements of the Charter School

Agreement between the City and the Broward County School Board; and

7. Coordinating with the City's designated management team or its successors, if any.

You emphasize that no actions, decisions or recommendations of the Advisory Board are final or binding upon the City Council. 

We also are advised that the Advisory Board is comprised of both voting and non-voting members. The non-voting members, you advise, include a resident of the City, a student representative, and representatives of the City's business community appointed by the City Council, and the voting members include members of the City Council, parents of children attending the school, residents of the City, and members of the business community appointed by the City Council. 

You write that the variety of representation on the Advisory Board creates different and individual interests in decisions that are being made regarding the City's Charter School. Moreover, many of the issues associated with the school, you advise, involve the potential of financial gain or personal benefit to some of the Advisory Board members. For example, you relate that consideration of an expanded site or new location for the school may result in lease agreements, land purchases, or contracts for services which may directly or indirectly benefit members of the Advisory Board. 

You write that several members of the Advisory Board, both non-voting and voting, are clearly subject to the Code of Ethics as provided in Article II, Section 8 of the Florida Constitution and Chapter 112, Florida Statutes, including the financial disclosure requirements of Section 112.3145, Florida Statutes, due to their other responsibilities as elected officials. However, you advise that the creation of Charter School Advisory Boards organized by municipal corporations which are operating Charter Schools is a new concept. In view of the above, you are requesting that we advise you about the applicability of Chapter 112, Florida Statutes, including the financial disclosure requirements of Section 112.3145, Florida Statutes, to the members of the Advisory Board. 

In our view, the Charter School Advisory Board operates as solely an advisory body, as that term is defined at Section 112.312(1), Florida Statutes. ² We found in CEO 77-178 that this definition essentially contains a two-part test; the first relating to the budget of the body and the second relating to its powers or authority. Here, we are advised that the Advisory Board has no allocated budget. Therefore, because it has a total budget of less than one (1) per cent of the budget of the agency it serves, that is, the City Council, or less than $100,000, it meets the first requirement to qualify as an advisory body. We also previously have opined that an agency is solely advisory where it renders advice to an officer or agency, which officer or agency then has complete discretion to accept or reject the advice or recommendations of the body. See CEO 74-4 and CEO 76-25. Inasmuch as the information that we have been provided about the duties and functions of the Advisory Board indicate that its functions and responsibilities essentially are to provide guidance to the City Council on items and issues related to the Charter School, that its functions do not include the final determination or adjudication of any personal or property rights, duties, or obligations, and that the City Council makes the final decision on all matters related to the Charter School, we find that its functions and responsibilities are solely advisory in nature. Thus, we find that the Advisory Board also meets the second requirement to qualify as an advisory body. Having met both requirements, we find that the Advisory Board is an advisory body; within the meaning of Section 112.312(1), Florida Statutes. 

The Code of Ethics provides that each local officer shall file a statement of financial interests annually. Section 112.3145(2)(b). The term local officer is defined at Section 112.3145(1)(a), Florida Statutes, among other things to mean: 

Any appointed member of a board; commission; authority, including any expressway authority or transportation authority established by general law; community college district board of trustees; or council of any political subdivision of the state, excluding any member of any advisory body. A governmental body with land planning, zoning, or natural resources responsibilities shall not be considered an advisory body. [E.S.] 

Because the Advisory Board is an advisory body and does not appear to have any land-planning, zoning, or natural resources responsibilities, we are of the opinion that its members are not local officers subject to the financial disclosure requirements of the Code of Ethics. 

Nevertheless, we also are of the opinion that the standards of conduct provisions of Section 112.313, Florida Statutes, and the prohibitions of Sections 112.3143(3)(a) and (4), Florida Statutes, are applicable to the members of the Advisory Board. We previously have stated that the standards of conduct for public officers and employees, as contained in Sections 112.313, apply to public officers, public employees, and in some cases, to candidates for public office. See CEO 76-25 and CEO 78-35. Similarly, the prohibition of Section 112.3143(3) regarding voting conflicts also applies to public officers. Because members of the Charter School Advisory Board are appointed by the City Council to serve on the Charter School Advisory Board, they are public officers, as that term is defined at Sections 112.313(1)³ and 112.3143(1)(a), Florida Statutes. Consequently, they are subject to the prohibitions of Sections 112.313 and 112.3143(3). 

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.

(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, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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.] 

For purposes of these two provisions, we must determine the agency of the Advisory Board members. In CEO 91-26 and CEO 94-36, we reiterated our view that in determining an individual's agency for purposes of the Code of Ethics, an advisory board to a governing body is part of that body. Therefore, we conclude that the City Council is the agency of those persons serving on the Advisory Board.⁴  

Section 112.313(3) prohibits the Advisory Board Members from acting in their official capacities to purchase, rent, or lease, any realty, goods or services for their agency, the City Council, from a business entity of which their spouses or children are officers, partners, directors, or proprietors, or in which they or their spouses or children own more than a five percent interest, and from selling or leasing any realty, goods, or services to the City Council in their private capacities. Section 112.313(7)(a), Florida Statutes, further prohibits the Advisory Board members from being employed by or having contractual relationships with business entities if they are doing business with or are subject to the regulation of their agency, the City Council, or if their employment or contractual relationships create continuing or frequently recurring conflicts between their private interests and the performance of their public duties or impediments to the full and faithful discharge of their public duties.  

However, Section 112.313(12), Florida Statutes, contains an exemption to these prohibitions where, in this case, the City Council, votes to waive a particular conflict of interest of an Advisory Board member upon full disclosure by the Advisory Board member of the transaction or relationship on CE Form 4A prior to the waiver and an affirmative two-thirds vote of the City Council, the appointing body, waiving the conflict. Thus, should some of the issues associated with the school that the Advisory Board will be dealing with involve the potential of financial gain or personal benefit to some of the Advisory Board members or otherwise come within the prohibitions of Sections 112.313(3) and/or 112.313(7)(a) so as to create prohibited conflicts of interest, these potential conflicts may be waived by the City Council pursuant to the procedures set forth in Section 112.313(12). However, we caution that this exemption applies solely to conflicts under Sections 112.313(3) and 112.313(7)(a), but does not apply to any of theother prohibitions within Section 112.313.  

Finally, Sections 112.3143(3) and (4), Florida Statutes, provide as follows: 

VOTING CONFLICTS.--No county, municipal, or other local public officer shall vote in an official capacity upon any measure which inures 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 the officer 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(3); 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. [Section 112.3143(3)(a), Florida Statutes.] 

VOTING CONFLICTS.--No appointed public officer shall participate in any matter which would inure to the officer's special private gain or loss; which the officer 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; or which he or she knows would inure to the special private gain of a relative or business associate of the public officer, without first disclosing the nature of his or her interest in the matter. [Section 112.3143(4), Florida Statutes.] 

Two such provisions of Section 112.313 which are applicable to the Advisory Board members are Sections 112.313(3) and 112.313(7)(a), which provide as follows: 

Section 112.3143(3) prohibits county, municipal and other local public officers from voting on measures which inure to their special private gain or loss, to the special private gain or loss of any principals by whom they are retained, or to the special private gain or loss of relatives or business associates. It also contains an affirmative duty of disclosure so that interested parties and the public will understand why they abstained from voting. The Commission on Ethics has promulgated CE Form 8B for this purpose. In addition, Section 112.3143(4) prohibits appointed public officers from "participating" in any matter which would inure to their special private gain or loss or to the special private gain or loss of their principals without first disclosing their conflict prior to their participation in the matters. For purposes of this provision, the term "participation" has been defined at Section 112.3143(4)(c) to mean "any attempt to influence the decision by oral or written communication whether made by the officer or at his direction." Because the Advisory Board members are "public officers", as that term is defined at Section 112.3143(1)(a), Florida Statutes, ⁵these prohibitions also apply to them. 

Accordingly, we find that, with the exception of the Section 112.3145, Florida Statutes, requirement for filing financial disclosure, members of the North Lauderdale Charter School Advisory Board are subject to the standards of conduct for public officers and employees set forth in Section 112.313, Florida Statutes, and to the voting conflict prohibitions of Sections 112.3143(3) and (4), Florida Statutes. 

ORDERED by the State of Florida Commission on Ethics meeting in public session on January 28, 1999 and RENDERED this 2nd day of February, 1999. 

^[1]Ordinance 98-6-958 was subsequently amended, you advise, by Ordinance 98-11-965 to alter the number of members on the Advisory Board and the number of members required for a quorum of the Advisory Board.