CONFLICT OF INTEREST; VOTING CONFLICT

COUNTY COMMISSIONER SERVING ON BOARD OF ECONOMIC
DEVELOPMENT COUNCIL RECEIVING
FUNDING FROM THE COUNTY

To:        Name withheld at person's request (Citrus County)

SUMMARY:

Under the facts presented, no prohibited conflict of interest exists under Section 112.313(3), Florida Statutes, where a county commissioner serves on the board of directors of an economic development council that receives funding from the county. Section 112.316, Florida Statutes, applies to negate any conflict because of the council's unity of interests with the County. Nor would the county commissioner have a voting conflict under Section 112.3143(3)(a), Florida Statutes, were he to vote on measures recommended by the council, because he is serving the council in an uncompensated position and will not experience any "special private gain or loss" due to such measures. Referenced are CEO 11-04, CEO 10-04, CEO 06-12, CEO 97-09, CEO 96-30, CEO 92-45, CEO 90-24, CEO 84-63, and CEO 81-40.

QUESTION 1:

Does a prohibited conflict of interest exist under Section 112.313(3), Florida Statutes, where a county commissioner serves on the board of an economic development council receiving funding from the county?

Under the circumstances presented, Question 1 is answered in the negative.

Through your letter of inquiry and correspondence with our staff, we are advised that you serve as the County Attorney for Citrus County, and have been authorized to seek this opinion on behalf of a County Commissioner. You relate that the Commissioner has inquired whether any prohibited conflict of interest exists due to his uncompensated service as president of the board of directors of the Citrus County Economic Development Council ("EDC").

You indicate the EDC receives funding of $110,000 per year from the County. You state the EDC is not a County agency but rather a private nonprofit corporation whose goal is to encourage desirable economic development within the County. The EDC's funding agreement with the County-included in your correspondence-describes the EDC as a private entity which partners with the County to promote economic development. The funding agreement additionally states that in exchange for funding from the County, the EDC must annually present a strategic development plan to the County, as well as regular reports concerning the status of ongoing projects. The agreement also lists certain tasks which the EDC is obligated to perform, such as assisting new businesses with finding qualified employees, helping businesses acquire grants and stimulus funding, and working with local government "to remove obstacles and barriers to entry for business." The Chairman of the County Commission, you relate, appoints a member of the County Commission to the EDC Board. You indicate that-currently-the Chairman has appointed the Commissioner to serve in this capacity. The EDC's website confirms your assertion and indicates that the Commissioner is now serving as the president of its board of directors.

In addition to these obligations, you indicate the EDC interfaces with the County by making specific recommendations concerning projects it believes will bring growth and jobs to the County. As an example, you offer the scenario of a new developer wishing to enter into a development agreement with the County. You indicate that if the EDC feels the agreement will benefit the County, it will send a representative to encourage the County Commission to approve the agreement.

The provision most pertinent to your inquiry is Section 112.313(3), Florida Statutes, which states, in part:

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.

Section 112.313(3) prohibits the Commissioner from acting in his public capacity¹ to purchase or rent any goods or services for the County from a business entity in which he serves as an officer, director, or proprietor, or has a material interest.² Thus, to the extent the EDC's contract with the County entails selling services to the County, a conflict under this section would exist, absent the applicability of some exemption.

In prior opinions, we have dealt with scenarios similar to the one you present here. In CEO 81-40, we found no prohibited conflict under Section 112.313(3) would exist were a school board member to serve as a trustee of the Florida School Boards Association Insurance Trust, a nonprofit self-insurance program designed to enable school districts to self-insure as a group. In that opinion, we noted that the board member would not stand to benefit privately were the school board to obtain self-insurance through the Trust, since it was a nonprofit program and he would receive no compensation for his service. We also noted that he would be appointed as trustee because of his public position with the school board, and that the Trust was created by the nonprofit Association of School Boards, which in turn had been created to assist the school boards of this state. Given these circumstances, we found a unity of interest in the goals of the public and private organizations.

In CEO 84-63, we found no prohibited conflict of interest would be created were an individual to be appointed to serve on a port authority, where he was employed as executive director of a nonprofit corporation of which the port authority was a member and to which it provided funding. There, we said:

In one sense, the nonprofit corporation could be viewed as selling services to the Port Authority and as doing business with the Port Authority. However, the Authority is a member of the nonprofit corporation, with a seat on its board of directors. This indicates that there is a unity of interests between the Port Authority and the nonprofit corporation, rather than a conflict of interests.

Finally, in CEO 96-30, we found no prohibited conflict of interest was created under Section 112.313(3) where a county commissioner served on the board of directors of a nonprofit corporation providing mental health and substance abuse services to the county, inasmuch as the county commission had a seat on the corporation's board of directors, appointed the commissioner to fill that seat as its designee, and the commissioner was not compensated for his service on the corporation's board of directors.

In each of these opinions, we applied Section 112.316, Florida Statutes, to negate any conflict under Section 112.313(3). Section 112.316 states:

CONSTRUCTION.--It is not the intent of this part, nor shall it be construed to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his or her duties to the state or the county, city, or other political subdivision of the state involved.

As in the opinions cited, we find a unity of interests in the circumstances here. The information you have provided describes the goals of the County and EDC as the same: to attract businesses and investments to the County, and develop jobs and the workforce within the County. The contract describes the relationship as a "public/private partnership," and although we do not find this label dispositive-because we can envision circumstances where private companies may work in concert with public entities, yet have different underlying core interests-under the particular facts described here, we perceive an actual alignment of the parties' interests, and their relationship to be more a joint effort than a conflicting sale of services by one to the other.

Accordingly, we find that under the circumstances presented here, no prohibited conflict of interest is created under Section 112.313(3) by the Commissioner's service on the board of the EDC. ³

QUESTION 2:

Would a voting conflict be presented under Section 112.3143(3)(a), Florida Statutes, regarding a measure supported by the EDC?

Under the circumstances presented, Question 2 is answered in the negative.

You next ask whether the Commissioner may vote on measures supported by the EDC while still serving on its board of directors. As an example of such measure, you indicate the County Commission might vote on a development agreement supported by the EDC, as detailed in Question 1.

The portion of the voting conflicts law applicable to local, elective officers is Section 112.3143(3)(a), Florida Statutes, which states:

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. The statute prohibits a public office from voting on any measure which will result in his "special private gain or loss." The phrase "special private gain or loss," as defined in Section 112.3143(1)(d), Florida Statutes, includes only economic benefit or harm.

You represent, and the EDC by-laws report, that neither the Commissioner nor any of the EDC directors is compensated (although they may be reimbursed for costs and expenses accrued in performance of their duties). Moreover, nothing in the materials you have provided suggests that he otherwise stands to experience economic gain or loss as a result of voting on a matter of interest to the EDC.

Accordingly, we find that the Commissioner will not be presented with a voting conflict due to his service as an EDC director, as long as he continues to serve without compensation, and the measure does not otherwise inure to his special private gain or loss or to that of other persons or entities standing in relationship to him as listed in Section 112.3143(3)(a). See CEO 11-04.

ORDERED by the State of Florida Commission on Ethics meeting in public session on April 25, 2014, and RENDERED this 30th day of April, 2014.

____________________________________

Morgan R. Bentley, Chairman

^[1] We have found that a member of a governing board acts to purchase when his board so acts, regardless of whether he abstains from voting on the matter. See, among many, CEO 10-04 and CEO 90-24.

^[2] We have found such a purchase or lease would be prohibited even if the public officer was not compensated for his or her service to the outside business entity. See, generally, CEO 97-09, Note 8.

^[3] Sections 112.313(7)(a) and 112.313(10), Florida Statutes, also are not applicable under the situation you present. Section 112.313(7)(a) applies only if a public officer has an "employment or contractual relationship" creating a conflict of interest. In the past, the Commission has found that uncompensated service as an officer or director of a nonprofit will not constitute an "employment or contractual relationship" for the purpose of the prohibition. See CEO 92-45. Here, because you indicate the Commissioner is only an EDC director-not also an EDC rank-and-file member (CEO 06-12)-and is not compensated for his service, Section 112.313(7)(a) does not apply. Similarly, Section 112.313(10), which prohibits certain public officers from being employed by their public boards, is inapplicable as the Commissioner's EDC position is not County government employment.

Of course, our decision herein does not mean that a government-EDC relationship could not underlie a violation of other provisions of the Code of Ethics under particular circumstances (e.g., Section 112.313(6), Florida Statutes, misuse of public position).