CONFLICT OF INTEREST

COUNTY COMMISSIONERS BECOMING BOARD MEMBERS OF
NONPROFIT ORGANIZATION OPERATING COUNTY PARK

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

SUMMARY:

A prohibited conflict of interest will not be created were a county commissioner to join the board of a nonprofit where an agreement to purchase services already exists between the two. Where the county has a reserved seat on the board of the nonprofit to which it may appoint a person and where the board members of the nonprofit are not compensated, there is a unity of interest between the county and the nonprofit such that Section 112.316, Florida Statutes, operates to negate any conflict of interest arising from Sections 112.313(3) and 112.313(7)(a), Florida Statutes, when the county and the nonprofit amend the purchasing agreement or negotiate a new agreement after the county commissioner joins the board of the nonprofit. Referenced are CEO 14-12, CEO 07-1, CEO 96-30, and CEO 84-63.

QUESTION:

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

In your role as County Attorney, you inquire on behalf of members of the County Commission who seek to appoint a County Commissioner as an uncompensated director on the board of Suncoast Aquatic Nature Center Associates, Inc. (SANCA), a non-profit organization. According to its articles of incorporation, SANCA's singular nonprofit purpose is to provide financial and managerial support for nature and aquatic activities at Nathan Benderson Park, a County park that contains a multi-use sports venue. The County and SANCA executed an agreement in 2014 that granted SANCA the right and responsibility to manage and operate the park and its facilities with financial assistance from the County. The terms of the agreement provide for an automatic renewal of the agreement in 2019 with further extensions for three successive terms of ten years each at the election of SANCA, provided there are no material breaches of the agreement in the interim; according to you, the agreement is current and was automatically renewed for a ten-year term in 2019. In your inquiry, you explain that the County does not presently have a dedicated seat on SANCA's board, but the County and SANCA have mutually agreed to terms of a new agreement that will supersede the current agreement, but the new agreement has not yet been formally approved by the County or SANCA. In the new agreement, you advise, the County will have the right to designate a member of the Board of County Commissioners or other person to be elected by the SANCA Board of Directors to be a member of the SANCA Board of Directors. The agreement further provides that it would be a breach of the agreement for SANCA not to approve the County's designated person as a member of its board.

Relevant to this inquiry, Section 112.313(3), Florida Statutes, 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 subsection operates to prevent a public officer from acting in his or her public capacity to "purchase, rent, or lease any realty, goods, or services" for his or her agency from any business entity in which he or she is an officer or director. The second part of this subsection prevents a public officer from acting in his or her private capacity to "rent, lease, or sell any realty, goods, or services" to his or her agency.

In CEO 07-1, we found no conflict of interest would arise from Section 112.313(3) for a member of a housing authority where the housing authority had entered into a long-term agreement with a law firm to purchase legal services and that law firm later merged with the member's private employer—a separate law firm where the member was a partner. Even though the member was a public officer of the housing authority at the time the purchasing agreement for legal services was made, we reasoned that the member had not acted at the time of the purchase in a public capacity to purchase from a business entity with which he held a leadership or ownership status and did not act in a private capacity to sell services to the housing authority because he was not a part of the private organization (firm) at the time of the purchase and sale. We cautioned, however, that a conflict would arise if a new purchasing agreement was enacted with the member's firm, barring the application of certain exemptions.

With regard to the County Commissioners who would seek an appointment to the board of SANCA, as in CEO 07-1, we find that no conflict of interest would arise from such appointment under Section 112.313(3), under the preexisting agreement. Although the County and SANCA have an ongoing agreement whereby the County obtains property and facility management services from SANCA in exchange for funding, the Commissioners did not hold leadership positions in SANCA at the time that purchase was made. Further, even in the event that the newest proposed agreement between the County and SANCA is approved by both entities, the Commissioners only will be on one side of that agreement when it is formed.

If the current agreement is operative when one of the Commissioners joins the SANCA board, then, absent the application of Section 112.316, Florida Statutes, as discussed below, a conflict of interest would seem to arise under Section 112.313(3) once SANCA and the County attempt to amend the agreement or enact a superseding agreement. See CEO 07-1. However, if the County and SANCA formally approve the new proposed agreement, which effectively provides for the County to have a dedicated seat on SANCA's board to which it may designate a person of its choosing, then we find that there will be a unity of interest between the County and SANCA. As we found in CEO 84-63, CEO 96-30, and CEO 14-12, a seat on the board of directors of a nonprofit entity that is reserved for a political subdivision to appoint a person, potentially one of its own members, indicates a unity of interest between the political subdivision and the nonprofit. This organizational alignment, however, must be paired with an actual alignment of interests. As we opined in CEO 14-12,

we can envision circumstances where private companies may work in concert with public entities, yet have different underlying core interests . . . [but] 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 another.

In this case, where both entities are invested in the proper stewardship and care of a County park, we perceive an actual alignment of the parties' interests that is not contraindicative of the organizational alignment indicated by the reservation of a board seat on the nonprofit for designation by the County. Therefore, under the situation presented, we find that Section 112.316, Florida Statutes,¹ applies to negate any conflict under Section 112.313(3), if the County and SANCA approve the new agreement as you describe.

We also note that we do not find the prohibition against conflicting employment or contractual relationships in Section 112.313(7)(a), Florida Statutes, to be applicable. See Section 112.316, Florida Statutes.

Your inquiry is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on December 6, 2019, and RENDERED this 11th day of December, 2019.

____________________________________

Kimberly B. Rezanka, Chair

^[1]Section 112.316, Florida Statutes, 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.