CONFLICT OF INTEREST

CITY COMMITTEE MEMBER EMPLOYED BY PRIVATE,
NONPROFIT CORPORATION RECEIVING FUNDING FROM THE CITY

To: Kirby G. Oberdorfer, Deputy Director, City of Jacksonville Ethics, Compliance & Oversight Office (Jacksonville)

SUMMARY:

No prohibited conflict of interest would be created were a member of the City of Jacksonville's Opioid Abuse Prevention Committee to be employed by a private, nonprofit corporation that has a subcontract with a separate private, nonprofit corporation that has a contract with the City to provide opioid related services or that, as a direct result of recommendations from the member's agency regarding funding awards, may have a contract with the City to provide opioid services in the future. Section 112.313(7)(b), Florida Statutes, acts as a "waiver" of conflict under Section 112.313(7)(a), Florida Statutes, and the elements necessary for a conflict under Section 112.313(3), Florida Statutes, are not present. CEOs 04-1, 07-11, and 18-6 are referenced.¹

QUESTION:

Would a prohibited conflict of interest be created were a member of the City of Jacksonville's Opioid Abuse Prevention Committee to be employed by a private, nonprofit corporation that has a subcontract with a separate private nonprofit corporation that has a contract with the City to provide opioid related services?

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

In your letter of inquiry, additional materials supplied to our staff, and telephone conversations between you and our staff, you relate that you make inquiry in behalf of Cynthia Smith—Funkhouser, a current member of the newly—created City of Jacksonville's Opioid Abuse Prevention (OAP) Committee. You relate that, in her private capacity, Ms. Smith—Funkhouser (the member) is employed as President and CEO of the I.M. Sulzbacher Center for the Homeless, Inc. (Sulzbacher Center), a private, nonprofit corporation that serves as the largest provider of comprehensive services for homeless men, women, and children in Northeast Florida. Prior to the creation of the OAP Committee,² you explain that in June 2017, the City Council for the City of Jacksonville funded "Project Saves Lives," a pilot program developed to address the opioid epidemic in Duval County in conjunction with local service providers specializing in addressing opioid addiction issues, including the member's private capacity employer, the Sulzbacher Center (the nonprofit). The pilot program was comprised of two components: (1) evaluation and treatment of patients for six months and (2) data collection, analysis, and reporting on the effectiveness of the opioid abuse treatment programs for the six months during treatment and six additional months after the treatment ends. You relate that the treatment component consisted of initial evaluation and referral of patients to a targeted opioid treatment program with either in—patient/residential or outpatient services. Thereafter, you explain that City Council extended the treatment series component of the program and designated Gateway as the provider of treatment services. As part of the additional extension for FY 2018-2019, you relate that $1,149,945.00 was appropriated to Gateway Community Services, Inc. (Gateway)—a separate private, non—profit corporation. In conjunction with the appropriation, you explain that Gateway and the City executed "Amendment No. 2"—the Revised Scope of Services—which required Gateway to partner with the Sulzbacher Center to lease transitional beds for patients undergoing residential treatment services by Gateway. The Revised Scope of Services also required a counselor employed by Gateway to work at the Sulzbacher Women's Village to assist patients in the opioid treatment program with medication dosage and to provide treatment groups to all substance abuse individuals. To effectuate these requirements, you further relate that Gateway and the Sulzbacher Center entered into a subcontract on February 1, 2019, providing for the leasing of transitional beds and the provision of a Gateway—employed counselor at the Sulzbacher Women's Village and the Sulzbacher Center downtown campus, which are funded through the Project Saves Lives program money that Gateway was awarded by the City.³ Therefore, although the Sulzbacher Center is not currently receiving direct funding from the City for the Project Saves Lives opioid program for FY 2019�, it is anticipated that the nonprofit will receive approximately $36,000 from Gateway vis-à-vis the subcontract that it has with Gateway.⁴

In her current private capacity roles, you further relate that the member manages daily operations of the Sulzbacher Center and supervises approximately 200 employees. Additionally, she is responsible for the strategic planning, budgeting and finance, and staffing of the Sulzbacher Center, including managing the subcontract with Gateway for the services related to the Project Saves Lives program. As it relates to the subcontract with Gateway, as part of the Project Salves Lives opioid program, you relate that the member coordinates the provision of transitional beds and residential services for some of the patients undergoing residential treatment through Gateway and also coordinates the access to treatment programs provided by the Gateway—employed counselor located at the Sulzbacher Women's Village and the Sulzbacher center downtown campus. Based upon the member's professional qualifications and employment with the largest homeless resource provider in Northeast Florida, you explain that she was nominated⁵ by the Mayor of the City of Jacksonville to serve as the designated Homeless Advocacy Organization member of the OAP Committee, in accordance with Jacksonville Ordinance Code Section 84.202, which provides, in part:

Membership; appointment and removal; terms of office.—(a) Composition. The Committee shall consists of nine members to be appointed by the Mayor within the following categories:

(1) Medical Professional, Program Treatment;

(2) Medical Professional, Emergency Department;

(3) Mental Health professional;

(4) Addiction Treatment Provider;

(5) Certified Recovery Peer Specialist or Certified Recovery Support Specialist;

(6) Member from a Veteran Services Organization;

(7) Member from the Health Department;

(8) Member from a Homeless Advocacy organization; and

(9) Member from Jacksonville Sheriff's Office or Jacksonville Fire and Rescue Department.

The appointees shall be confirmed by City Council.

Pursuant to Jacksonville Ordinance Code Section 84.203, the OAP Committee is responsible, in part, for (1) reviewing and assessing the City's needs with respect to opioid addiction and recovery for funding opioid programs and (2) recommending programs, grant awards, and annual lump sum appropriations for the opioid abuse program funding. However, you relate that the Project Saves Lives program is excluded from the opioid abuse—related programs that the OAP Committee recommends funding for. Specifically, you explain that the Project Saves Lives funding is recommended to City Council by the Mayor as part of the City's annual budget and that the City Council will either approve or deny the recommended funding. In addition to the Project Saves Lives funding, you indicate that the City Council recently awarded the Sulzbacher Center a one-time appropriation of $900,000.00 for a mobile medical unit to treat homeless individuals,⁶ and that the City provides annual, recurring funding and public service grants to the Sulzbacher Center for various programs, including (1) behavioral/mental health programs, (2) services related to housing and homeless persons, and (3) emergency services grants. However, in addition to not having any involvement in, or oversight over, the additional funding and/or contracts for the Project Saves Lives opioid program, the OAP Committee does not, and will not, have any responsibility for determining funding for these various programs and services and will not administer any of the contracts related to their funding.⁷

Two prohibitions of the Code of Ethics for Public Officers and Employees are relevant to your inquiry. The first is Section 112.313(7)(a), Florida Statutes, which states:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.—(a) 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.

However, Section 112.313(7)(b), Florida Statutes, provides:

This subsection shall not prohibit a public officer or employee from practicing in a particular profession or occupation when such practice by persons holding such public office or employment is required or permitted by law or ordinance.

Absent an exemption, Section 112.313(7)(a) would prohibit the member from holding employment with the nonprofit, a business entity (defined in Section 112.312(5), Florida Statutes, to include corporations) doing business with her agency, and would prohibit the subject employee from having a contractual relationship which would create a continuing or frequently recurring conflict between her private interests and the performance of her public duties or which would impede the full and faithful discharge of her public duties. Here, the Sulzbacher Center will be receiving funding for the provision of the Project Saves Lives related resources through its subcontract with Gateway, not through any direct contract arising from an award by the City Council. You further relate that, in addition to a one-time $900,000.00 recent appropriation from City Council to the member's private employer, historically, City Council has recurring contracts with the member's employer. However, as explained above, the member has not had (and will not have) any public duties or responsibilities with respect to these recurring contracts. As such, the member's public duties are apparently unrelated to these contracts between the nonprofit and other City agencies. Therefore, where there appears to be no intersect between the member's private duties and responsibilities with the nonprofit and her public duties as a member of the OAP Committee, we find no prohibited conflict of interest under Section 112.313(7)(a). ⁸

Further, any conflict of interest that might exist for the member under Section 112.313(7)(a) due to her employment with the nonprofit, including participating in the Project Saves Lives opioid program, would be negated by Section 112.313(7)(b), a statutory provision which negates conflicts under Section 112.313(7)(a) where a particular employment is required or permitted by law or ordinance in order for the public officer to hold his position, such as is the case here under the City's OAP Committee ordinance (Member from a Homeless Advocacy organization). We have found that such a provision essentially works as a "waiver" of conflict "by recognizing that certain credentials are so vital to the expertise and operation of a public [committee] that the otherwise conflicting business/client connections of certain members must yield to the public purpose of a portion of the [committee's] membership possessing such professional training and practice." See, CEO 04-1 and other decisions of the Commission cited therein.

The second prohibition of the Code of Ethics that is relevant to your inquiry is Section 112.313(3), Florida Statutes, which states:

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.

This section prohibits a public employee from acting in an official capacity as a purchasing agent to purchase, rent, or lease any realty, goods, or services for his own public agency from a business entity of which the public officer or his spouse or child holds certain ownership or leadership positions. Here, the City Council is not purchasing, renting, or leasing any realty, goods, or services from the Sulzbacher Center. As such, we find that the first part of Section 112.313(3) is inapplicable and there is no prohibited conflict.

The second part of the statute prohibits a public officer from acting in a private capacity to sell services to her own agency or to any agency of his political subdivision. However, the Commission has previously found that, previously found that, when a governmental agency merely provides grants or funding to an entity (e.g., a nonprofit) that in turn provides services to a specific clientele (e.g., citizens with needs) that the governmental agency itself has no legal obligation to serve, this does not constitute the selling of services within the meaning of Section 112.313(3). CEO 18-6 and CEO 07-11. Here, the City is under no legal obligation to provide the services the nonprofit delivers. The member also is not selling any services in her private capacity with Sulzbacher Center to the City, City Council, or the OAP Committee. CEO 18-6 and CEO 07-11. As such, no prohibited conflict would be created under Section 112.313(3).

Thus, under the specific circumstances of your inquiry, we find that no prohibited conflict of interest would be created for the subject member of the City of Jacksonville's Opioid Abuse Prevention Committee as a result of the subcontract agreement between Gateway and the Sulzbacher Center (her employer) to provide resources to patients participating in the Project Saves Lives opioid program, even when such resources are paid from funding provided through awards recommended by the OAP Committee. ⁹

Your question is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on October 25, 2019, and RENDERED this 30th day of October, 2019.

____________________________________

Kimberly B. Rezanka, Chair

^[1] Prior opinions of the Commission on Ethics can be viewed at www.ethics.state.fl.us.

^[2]You relate that the City Council created the OAP Committee on March 26, 2019.

^[3]You relate that on September 24, 2019, the City Council approved $1,191,423.00 in additional funding to Gateway for the 2019-2020 fiscal year (FY 2019-2020), which began October 1, 2019.

^[4]You explain that, on September 24, 2019, the City Council approved the FY 2019-2010 budget that included an appropriation of $1,191,423.00 to Gateway for the Project Saves Lives program.

^[5]You relate that the nomination took place on May 28, 2019.

^[6]You relate that this contract is being administered by the City's Grant Administrator.

^[7]You explain that the funding for these other programs and services is determined and administered by various agencies within the City, including the Housing Division of the Neighborhoods Department, the Public Service Grant Council, and City Council.

^[8]The analysis provided in this paragraph addresses "ISSUE #2" as identified by the requestor in her initial submission.

^[9]However, as a member of the OAP Committee, to the extent that the member is presented with measures/matters that would affect his private-capacity employer, he is subject to the voting/participation conflicts law of Sections 112.3143(3)(a) and 112.3143(4), Florida Statutes, which provide:

And, see CE Form 8B at www.ethics.state.fl.us (found within the "Forms" tab that is located near the bottom left-hand side of the webpage).