CEO 87-63 -- July 30, 1987

CONFLICT OF INTEREST

CITY COUNCILWOMAN CONTRACTING WITH NONPROFIT CORPORATION

RECEIVING GRANT MONEY ADMINISTERED BY CITY

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

To: (Name withheld at the person's request.)

SUMMARY:

No prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, were a city councilwoman to lease to a nonprofit corporation a commercial building which she owns. Although the nonprofit corporation will utilize federal grant money which is administered by the city's department of housing and urban development in order to renovate part of the building, the corporation is not doing business with the public officer's agency. However, the council member would be prohibited by Section 112.3143(3), Florida Statutes, from voting to approve the expenditure of federal grant money by the department to the corporation, as the measure would inure to her special private gain.

QUESTION 1:

Would a prohibited conflict of interest be created were a city councilwoman to lease to a nonprofit corporation a commercial building which she owns, when the nonprofit corporation will use federal grant money which is administered by the city's department of housing and urban development in order to renovate part of the building?

This question is answered in the negative.

In your letter of inquiry you advise that ...., a member of the Jacksonville City Council, is the owner of a vacant commercial building. She has contracted with a nonprofit corporation to renovate a portion of that building. In exchange for the improvements to her property, she intends to give the corporation rent-free space for five years. The corporation will use federal grant money that is administered by the City's Department of Housing and Urban Development.

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

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 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 private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1985).]

The first part of this provision prevents a public officer from having a contractual relationship with a business entity which is doing business with her agency.

In a telephone conversation with our staff, you advised that the federal grant funds are placed in the general revenue fund of the City. Any expenditure of City money is subject to Council approval. Here, the only Council action would be the appropriation of the grant funds. The City Department of Housing and Urban Development would contract with the nonprofit corporation, establishing guidelines as to how the funds are spent, and would make the actual disbursement of the money.

Therefore, we are of the opinion that the City Council is not "doing business" with the nonprofit corporation by virtue of its approval of grant fund expenditures. Rather, the corporation is doing business with the City Department of Housing and Urban Development, which is a separate "agency" as that term is defined in Section 112.312(2), Florida Statutes.

The second part of Section 112.313(7)(a), Florida Statutes, prohibits a public officer from having a contractual relationship which would create a continuing or frequently recurring conflict or impede the discharge of her public duties. As you have advised that this matter will only come before the City Council on one occasion, it does not appear that the Councilwoman would be presented with a conflict of interest which would be prohibited by this provision.

Accordingly, we find that no prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, were the subject City Councilwoman to lease to the nonprofit corporation space in the commercial building, despite the fact that the nonprofit corporation will utilize federal grant money which is administered by the City's Department of Housing and Urban Development.

QUESTION 2:

Is the city councilwoman prohibited by Section 112.3143, Florida Statutes, from voting to approve the expenditure of federal grant money by the city department of housing and urban development to the nonprofit corporation?

This question is answered in the affirmative.

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

No county, municipal, or other local public officer shall vote in his official capacity upon any measure which inures to his special private gain or shall knowingly vote in his official capacity upon any measure which inures to the special gain of any principal, other than an agency as defined in s. 112.312(2), by whom he is retained. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of his interest in the matter from which he is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his 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. However, a commissioner of a community redevelopment agency created or designated pursuant to s. 163.356 or s. 163.357 or an officer of an independent special tax district elected on a one- acre, one-vote basis is not prohibited from voting. [Section 112.3143(3), Florida Statutes (1985).]

This provision prohibits a city councilwoman from voting on a matter which inures to her special private gain. She also is required to announce the conflict of interest at the meeting and to file a memorandum of voting conflict within 15 days with the person who keeps the minutes of the meeting. We have prescribed a form to facilitate this disclosure designated as CE Form 8B, "Memorandum of Voting Conflict for County, Municipal, and Other Local Public Officers."

The question of whether a particular measure will result in "special" gain generally turns on the size of the class of persons benefited and the nature and extent of any gain received. Here, the City Council must approve the funding before the corporation receives the renovation money from the City Department of Housing and Urban Development. Clearly, if the measure would affect so directly the property owned by the council member, that measure would inure to her special private gain.

Accordingly, we find that the subject City Councilwoman is prohibited from voting on a measure approving the expenditure of federal grant money by the City Department of Housing and Urban Development to the nonprofit corporation for use in the renovation of her commercial building.