CEO 98-25 -- December 3, 1998

CONFLICT OF INTEREST

POLICE OFFICERS LEASING THEIR OWN HORSES

TO THE CITY FOR ONE DOLLAR PER YEAR

To: Name Withheld At Person=s Request (Cape Coral)

SUMMARY:

No prohibited conflict of interest would be created under Section 112.313(3), Florida Statutes, were City police officers to lease their horses to the City for use in the Police Department=s Mounted Patrol Unit for one (1) dollar per year, where the police officers remain responsible for all expenses associated with the upkeep and maintenance of their horses. Because of the uncertainty about whether the City would ever be required to pay the veterinary bills or replacement costs resulting from the Ain the line of duty@ injury to or death of one of the horses, and if Section 112.313(3) were applicable under the circumstances presented, the Section 112.313(12)(f), Florida Statutes, exemption to the prohibitions of Section 112.313(3), Florida Statutes, for transactions in the aggregate amount of less than $500 per year, should apply to negate the prohibition against police officers leasing their horses to the City.

Under the circumstances presented, the police officers= leasing of their horses to the City does not constitute the Alease of goods@ within the contemplation of Section 112.313(3), Florida Statutes. Rather the police officers are donating the use of their horses to the City for use in the Police Department=s Mounted Patrol Unit. Consequently, the prohibitions of Section 112.313(3), Florida Statutes, do not apply.

QUESTION:

Would a prohibited conflict of interest be created if City police officers were to lease their own horses to the City for use in a mounted patrol unit for the sum of one (1) dollar per year?

Under the circumstances presented, your question is answered in the negative.

In your letter of inquiry, you ask whether a prohibited conflict of interest would be created if City police officers were to lease their own horses to the Police Department/City for the sum of one (1) dollar per year for use in the City=s Mounted Patrol Unit. You write that although you are aware that Section 112.313(3), Florida Statutes, prohibits an employee of an agency from leasing goods to his or her own agency, you believe that the exemption of Section 112.313(12)(f), Florida Statutes, regarding transactions between a business entity and an agency of less than $500 in the aggregate per year, applies to negate the prohibition.

Upon further inquiry by our staff, we have been advised that, subject to the conclusions that we reach in this opinion, the City intends to lease four (4) horses (one from each of four police officers) for one (1) dollar per year per horse. The proposed lease agreement provides that the lessor/police officers would

maintain custody of the . . . horse and train it, feed it, groom it, and maintain it, in every way that is necessary to keep it in top physical condition and to maintain its necessary abilities for performance as a Mounted Patrol Unit of the staff of the [City].

Although the agreement also provides that the lessee/City Aagrees to pay for all veterinary expenses deemed reasonably necessary by [lessee/City] for the . . . horse arising out of the on-duty use of the . . . horse,@ we have been informed that any inoculations or routine annual check-ups would be the responsibility of the owner, that is, the police officer. In other words, apart from the City=s supplying all of the equipment that it deems reasonably necessary for the horses to perform as a Mounted Patrol Unit and the provision of veterinary care resulting from any injuries to the horses while Ain the line of duty,@ we understand that the police officers would be responsible for all of the expenses related to the boarding, training, feeding, and grooming of their own horses, as well as the provision of ordinary and necessary veterinary care.

We are advised further that should a horse be killed while Ain the line of duty,@ the City would replace the horse with one of like type and value. We also are advised that the value of the horses which the City would be leasing ranges anywhere from $5,000 to $10,000 per horse, depending on, among other things, the amount of training that the horse has received and its age. The City's current liability insurance, for which there is no additional premium, we are advised, will cover replacement of any horse up to $5,000 per horse and no more than $15,000 total claims per year. However, you advise that under the City=s property damage coverage, there may be a $500

deductible. You also advise that the City will not be purchasing any type of health/veterinary insurance for the horses.

Relevant to your inquiry is the following provision of the Code of Ethics for Public Officers and Employees:

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. 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.]

Unless one of the exemptions of Section 112.313(12), Florida Statutes, applies, Section 112.313(3), Florida Statutes, prohibits the police officers from acting in their official capacities to purchase, rent, or lease, any goods or services for their agency, the Police Department, from a business entity of which they or 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 services or goods to the Police Department or the City in their private capacities. Because it does not appear that the police officers would be leasing the horses on behalf of the City or their Police Department, we are of the opinion that the first part of Section 112.313(3) does not apply.

However, because the police officers would be acting in their private capacities to lease their horses to the City, a political subdivision that they are serving as officers or employees of, we find that a violation of the second part of Section 112.313(3) seemingly would exist. This finding is consistent with our finding in CEO 85-48, where we opined that absent the making of sales or leases through a system of sealed, competitive bidding, where the requirements of Section 112.313(12)(b), Florida Statutes, are met, a prohibited conflict of interest would be created under Section 112.313(3) were a part-time deputy sheriff to sell or lease vehicles to the sheriff's office.

As you noted, one of the exemptions to the prohibitions of Sections 112.313(3) and 112.313(7)(a), Florida Statutes, appears at Section 112.313(12)(f), Florida Statutes. It provides as follows:

EXEMPTION.-- . . . In addition, no person shall be held in violation of subsection (3) or subsection (7) if:

(f) The total amount of the transactions in the aggregate between the business entity and the agency does not exceed $500 per calendar year.

Under this exemption, we have advised that an employee may do business with his or her agency in an amount not exceeding five hundred dollars in the aggregate within any calendar or fiscal year. See CEO 84-12 and 89-52. Because the police officers are leasing their horses to the City for one (1) dollar per year and remain responsible for all of the ordinary expenses associated with the upkeep or maintenance of their horses, and because we can only speculate as to whether the City will be required to pay any veterinary bills or replace a horse during the year due to either Ain the line of duty@ injury to or death of a horse, we believe that technically this exemption would apply to exempt the prohibition of an agency employee doing business with his or her own agency.

This situation can be differentiated from the one presented in CEO 77-176, where the chairman of a fire and rescue district board proposed leasing a portion of his property to the board for one (1) dollar per year for use as a district fire substation. The lease between the chairman and the board would have required that the leased land be used only as a fire station or for associated activities, and in the event of abandonment, any improvements constructed by the district would revert back to the chairman. There we found that the $500 exemption did not apply because, although it was possible that an abandonment or termination of the lease might occur in the distant future, when the improvements would have depreciated in value to less than the $500 limit, it was still possible that the abandonment or termination could take place while the improvements were worth more than $500. In contrast, here, should the lease of the horses be terminated, the police officers do not stand to realize any benefit from the City.

Nevertheless, we find that there may be another more salient reason for concluding that the police officers= leasing of their horses to the City is not prohibited by the Code of Ethics. Although we have previously advised that a business entity is Adoing business@ with an agency where the parties have entered into a lease, contract, or other type of legal arrangement under which one would have a cause of action against the other in the event of a default or breach (see CEO 83-84 and CEO 88-78), due to the nominal amount that the City would be paying ($1.00 per year for use of each horse with the police officers being responsible for all expenses related to the maintenance of their horses), we find that the police officers are, in effect, donating the use of their horses to the City.

Because the intent of the Section 112.313(3) prohibition against an employee doing business with his or her own agency is to preclude personal or private gain acquired by virtue of the employee=s public position other than remuneration provided by law (see CEO 76-77), we previously have found that the donation of property to one=s agency does not constitute the sale of property within the contemplation of this provision. Similarly, we find here that under the circumstances presented the leasing of the horses by the police officers to the City does not constitute the lease of goods within the contemplation of Section 112.313(3), Florida Statutes. Rather, we are of the opinion that the police officers would be donating the use of their horses to the City for use in the Police Department=s Mounted Patrol Unit. Therefore, we find that the second part of Section 112.313(3), Florida Statutes, also does not apply to prohibit the City=s Aleasing@ of the horses from the police officers.

Accordingly, we are of the opinion that under the circumstances presented no prohibited conflict of interest would be created under Section 112.313(3), Florida Statutes, were City police officers to lease their horses to the City for use in the Police Department=s Mounted Patrol Unit for one (1) dollar per year.

ORDERED by the State of Florida Commission on Ethics meeting in public session on December 3, 1998 and RENDERED this 8th day of December, 1998.

__________________________

Charles A. Stampelos

Chairman