CEO 07-7 -- March 7, 2007
VOTING CONFLICT
CITY COUNCILMAN VOTING ON MEASURES AFFECTING
LOCAL MANUFACTURER OF FIRE TRUCKS
SUMMARY:
A city councilman, whose company is a supplier of a local manufacturer of fire trucks, is not presented with a voting conflict regarding measures to provide financial incentives to the manufacturer in an effort to keep the manufacturer from relocating. Under the circumstances, any gain or loss to the councilman's company from the measures would be remote or speculative. CEO 06-21, CEO 05-15, CEO 05-2, and CEO 88-27 are referenced; CEO 89-45 is distinguished.1
QUESTION:
Would a city councilman, whose company is a supplier of a local manufacturer of fire trucks, be presented with a voting conflict regarding a measure to provide financial incentives to the manufacturer in an effort to keep the manufacturer from relocating?
Under the particular circumstances presented, your question is answered in the negative.
By your letter of inquiry and additional information provided to our staff, we are advised that Daniel Owen (member) serves as a member of the City Council of the City of Ocala. In addition, we are advised that the member is an employee, officer, and approximately one percent shareholder of a local, closely-held company (supplier) that is a supplier of fire industry water and foam tanks to a local manufacturer of fire trucks (manufacturer). Further, we are advised that the manufacturer has informed the City, Marion County, and State government that it is considering relocating outside of Florida to communities that have offered it considerable financial incentives to do so. In response, you advise, the City, County, and State are currently exploring a mix of financial grants and other incentives to keep the manufacturer local, with the City's portion of the money coming from its Economic Incentive Fund (EIF), sourced from the City's electric utility. Use of EIF funds is determined by the City Council.2
You advise that the amount of business the supplier does with the manufacturer fluctuates, at times being none of the supplier's business, and that it is estimated that the supplier's current gross revenue from the manufacturer is ten percent of the supplier's overall gross revenues. Further, you advise that the supplier would continue to solicit the manufacturer's business, as it does with other fire truck manufacturers, regardless of where a given manufacturer is located. You advise that, if the manufacturer does not relocate, its likely business interface with the supplier will be one of continued fluctuation of the supplier's overall revenues,3 that there are local competitors to the supplier, and that there are numerous other competitors to the supplier located throughout the United States.4 In addition, and perhaps most importantly for purposes of our analysis, you advise that it is unknown whether the manufacturer will stay, even if the City provides EIF funding to it; that the manufacturer has stated that it is being courted by many different communities, both inside and outside Florida; that the manufacturer will decide what is in its best interest vis-à-vis the competing economic packages; and that location of the manufacturer is a decision of its management.
The voting conflicts law applicable to a local, elected public officer (e.g., a city council member) 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. [Section 112.3143(3)(a), Florida Statutes.]
In past decisions, we have found that the statute does not apply in situations where, at the time of the vote, there is uncertainty whether there will be any gain or loss to the officer, his principal (employer), or to other persons or entities standing in an enumerated relationship to the officer, and if so, what the nature and magnitude of the gain or loss might be. Thus, we frequently have found no special private gain or loss to exist when the circumstances were such that any gain or loss to the officer, or to an enumerated person or entity, was too remote or speculative. See, for example, CEO 06-21 (town commission member voting on land use matters where member's employer has extensive contractual relationships with land use applicant), CEO 05-15 (city commissioner whose client is potential developer of affordable housing within city voting on amendments to affordable housing ordinance), CEO 05-2 (village workforce/affordable housing committee member voting on mobile home park measures), and CEO 88-27, Question 3, (city commissioner voting on rezoning of property sold contingent on rezoning where commissioner probably will be building contractor on the property).
Likewise, in the member's situation we find that any gain or loss to the supplier (inter alia, his principal/employer) would be remote or speculative.5 In the scenario presented, it is uncertain whether the EIF funding measure would result in the manufacturer's not relocating. Further, even if the EIF funding would keep the manufacturer local, we find that any gain or loss to the supplier from the measure still would be remote or speculative, given fluctuations in the amount of business between the manufacturer and the supplier, given that most of the supplier's business does not come from the manufacturer, and given that the supplier has both local and nonlocal competitors.
Accordingly, we find that the Councilmember is not required to abstain from voting and otherwise comply with Section 112.3143(3)(a), Florida Statutes, regarding measures of the City Council to provide financial incentives to the local manufacturer of fire trucks.
ORDERED by the State of Florida Commission on Ethics meeting in public session on March 2, 2007 and RENDERED this 7th day of March, 2007.
______________________________
Norman M. Ostrau, Chairman
[1]For prior opinions of the Commission on Ethics, go to www.ethics.state.fl.us
[2] You advise that the measures/votes of the City Council will be: "One vote for EIF funding, fee waivers, and tax incentives and credits spread over a 10 year period as currently proposed."
[3] More specifically, you advise that the supplier opened in 1996, that the supplier is a maker of water and foam tanks for the fire industry, that the manufacturer is not the supplier's largest customer, that for the first five or six years of the supplier's existence the manufacturer accounted for in excess of thirty percent of the supplier's revenue, but that for the last four or five years the supplier's revenue from the manufacturer has fluctuated from less than ten percent to as high as twenty percent.
[4] You state that advantages to the manufacturer occasioned by its purchasing from the supplier rather than from the supplier's competition (especially its nonlocal competition) include competitive pricing locally and lack of shipping costs, and that if the manufacturer relocates, shipping costs will be added to the cost of the supplier's products sold to the manufacturer.
[5] CEO 89-45 (city commissioner owning steel company which bids on projects brought before city commission) is distinguishable from the member's situation. The voting conflict issue (Question 2) in CEO 89-45 involved city approval of a specific development for which the commissioner's company would be negotiating with a contractor or developer to supply steel. In contrast, the instant situation does not involve a specific order or production of fire trucks by the manufacturer regarding which the supplier is seeking to provide specific components; rather, it involves one aspect of a general attempt by many parties, the outcome of which is in doubt, to keep the manufacturer local.