CONFLICT OF INTEREST

CONSOLIDATED GOVERNMENT CITY COUNCIL MEMBER
SELLING SERVICES TO SCHOOL BOARD

To: Name withheld at person's request (Jacksonville)

SUMMARY:

Under the circumstances presented, no prohibited conflict of interest exists under Section 112.313(7)(a) or Section 112.313(3), Florida Statutes, where a council member of a consolidated city government owns a construction company selling construction services to the local public school board. CEO 74-8, CEO 76-21, CEO 76-38, CEO 79-82, CEO 80-29, CEO 84-43, CEO 96-32, CEO 05-7, and CEO 07-12 are referenced.¹

QUESTION:

Does a prohibited conflict of interest exist where a member of the City Council for the consolidated government of the City of Jacksonville owns a construction company providing construction services to the local School Board?

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

In your letter of inquiry and supplemental information provided to our staff, you state you serve as a Deputy General Counsel for the City of Jacksonville and have been authorized to seek this opinion on behalf of a member of the City Council. You relate that the Council member was elected in 2015, and operates, manages, and owns a construction company. The company is not regulated by the City Council, you advise, and it has several contracts (entered into after the Council member was elected) with the Duval County School Board, an "independent agency" within the consolidated government of the City. You further state that the contracts were not procured through sealed competitive bids, but instead through an informal process through which the School Board obtains price quotes from pre-approved contractors and then awards the contract to the contractor with the lowest quote. You further relate that the Council member, as the sole employee and agent of the company, negotiated, prepared, and submitted the written price quotes to the School Board for the contracts. On several occasions, the City and the School Board have entered into agreements to provide after-school youth programs through the Children's Commission, an agency of the City, as well as to provide access to school facilities, such as swimming pools, recreational areas, and stormwater drainage ponds. However, you advise that the City Council does not oversee the school system, appropriate funds to the school system, or review the school system's budget.

You inquire whether a prohibited conflict exist for the Council member under any provision of the Code of Ethics for Public Officers and Employees (Part III, Chapter 112, Florida Statutes) due to his company's providing construction services to the School Board. The prohibitions of the Code of Ethics relevant to your question are within Sections 112.313(7)(a) and 112.313(3), Florida Statutes. Section 112.313(7)(a) provides:

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. . .; 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.

The first part of this statute prohibits the Council member from having employment or a contractual relationship with any business entity regulated by or doing business with his agency. For purposes of Section 112.313(7)(a), the "agency" of a city council member is the city council. See, for example, CEO 96-32. As stated above, the Council member has both "employment" and a "contractual relationship" with his company within the meaning of the first part of Section 112.313(7)(a). See CEO 05-7, CEO 80-29, and CEO 76-21. As such, it must be determined whether the company is regulated by, or is doing business with, the City Council.

The City Code requires all businesses, professions, or occupations in the City to obtain an occupational license, and you advise that the company has been issued such a license. For "regulation" to exist, we have found that a business's operations or modes of doing business must be subject to the control or authority of a public agency (CEO 74-8), and we previously have opined that occupational licensing for revenue purposes does not constitute "regulation" within the meaning of the first part of Section 112.313(7)(a). See CEO 79-82. Accordingly, we find that the company is not regulated by the City Council, and as you represent that the company has no business relationships with the City Council, the first part of Section 112.313(7)(a) does not apply.

The second part of Section 112.313(7)(a) prohibits a public officer from having any employment or contractual relationship, if it would create a continuing or frequently recurring conflict between the officer's private interests and the performance of his or her public duties or would impede the full and faithful discharge of the officer's public duties. A "conflict" or a "conflict of interest" is defined by Section 112.312(8) as "a situation in which regard for a private interest tends to lead to disregard of a public duty or interest." The provision contained in the second part of Section 112.313(7)(a) is grounded on the principle that one cannot serve two masters, and calls for a comparison of an official's public responsibilities against his or her private interests to "determine whether the two are compatible, separate, and distinct, or whether they coincide to create a situation which tempts dishonor." Zerweck v. State, Commission on Ethics, 409 So. 2d 57, 61 (Fla. 4th DCA 1982). Thus, the issue is whether the Council member's interest in selling services to the School Board may tempt him to dishonor any responsibilities he has as a member of the City Council.

Nothing in the information you have provided suggests such a conflicting dynamic. You advise that the Council member's duties as a member of the City Council do not include oversight of the School Board, and that the City Council has no authority to influence, recommend, or approve the School Board's procurement awards, contract decisions, or other contract matters. Given the autonomy with which the School Board operates, we find that there is no overlap between the Council member's private interests and public responsibilities.

Section 112.313(3) provides:

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.

The first part of this statute prohibits a public officer from acting in his official capacity to purchase goods or services for his own agency from a business entity in which he holds particular positions or interests. As stated above, the Council member's "agency" is the City Council. Here, the Council member, in his official capacity as a member of the City Council, is not purchasing any services for the City Council from the company. Rather, it is the School Board which is purchasing the construction services for the School Board from the company. Accordingly, the prohibition contained in the first part of Section 112.313(3) is not applicable here.

The second part of Section 112.313(3) prohibits a public officer from acting in his private capacity to sell goods or services to his political subdivision or any agency of the political subdivision. However, Section 112.316, provides:

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.

We have interpreted this provision to permit a public officer or employee to sell services to government, where the officer or employee is not responsible in any manner for the approval of, or the giving of advice, or recommendation regarding contracts for those services. See, for example, CEO 07-12, CEO 84-43, and CEO 76-38, and the opinions cited therein. We believe that it is appropriate to apply Section 112.316 here—where the Council member has no public responsibilities regarding the business between his company and the School Board. Thus, we find that no prohibited conflict of interest exists under Section 112.313(3) where the Council member in his private capacity sells construction services to the School Board.

Accordingly, we find that the Council member's ownership of and position with a construction company that provides construction services to the Duval County School Board does not create a prohibited conflict of interest under Section 112.313(7)(a) or Section 112.313(3), Florida Statutes.

ORDERED by the State of Florida Commission on Ethics meeting in public session on April 20, 2018, and RENDERED this 25th day of April, 2018.

____________________________________

Michelle Anchors, Chair

^[1] Prior opinions of the Commission on Ethics may be obtained from its website: www.ethics.state.fl.us.