CEO 84-107 -- November 29, 1984

CONFLICT OF INTEREST

CITY COMMISSIONER SERVING ON BOARD OF DIRECTORS OF PRIVATE HOSPITAL

To: (Name withheld at the person's request.)

SUMMARY:

No prohibited conflict of interest exists where a city commissioner serves on the board of directors of a private hospital in the city. Here, the city provides no funding to the hospital and exercises no authority over the operations of the hospital, and there is no public hospital located in the city.

QUESTION:

Does a prohibited conflict of interest exist where you, a City Commissioner, serve on the Board of Directors of a private hospital in the City?

Your question is answered in the negative.

In your letter of inquiry you advise that you are a member of the City Commission of the City of South Pasadena. You also advise that you are a member of the Board of Directors of a privately owned hospital in the City. As a director, you are paid by the hospital on a monthly basis.

In addition, you have advised that the City provides no funding to the hospital and exercises no authority over the operations of the hospital, although the City and three other cities pay for the maintenance of emergency medical services communications equipment. Finally, you advise that the City's sanitation department periodically checks sewage and other waste products coming from the hospital.

The Code of Ethics for Public Officers and Employees provides in relevant part:

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 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 private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1983).]

Under the circumstances presented, we find that the hospital is not doing business with, and is not subject to the regulation of, the City Commission. Nor do we perceive any basis on which we could conclude that your serving as a director of the hospital would present a frequently recurring conflict of interest or would impede the full and faithful discharge of your public duties. For example, you have advised our staff that there is no public hospital within the City.

However, there may be instances in which you would be required to abstain from voting as a City Commissioner because of your serving as a director of the hospital. Section 112.3143, Florida Statutes, as amended by Chapter 84-357, Laws of Florida, requires you to abstain from voting and disclose a conflict of interest on matters before the Commission which would inure to the special gain of a principal by whom you are retained. Directors in a broad sense are considered agents of a corporation. 8 Fla. Jur. 2d Business Relationships, Section 277. In addition, as you receive compensation for your services as a director of the hospital we consider you to be "retained" by the hospital. Therefore, we are of the opinion that you should abstain from voting on measures which inure to the special gain of the hospital and make the disclosures required by the new voting conflict law in those instances.

Accordingly, we find that no prohibited conflict of interest exists where you serve as a City Commissioner while serving on the Board of Directors of a private hospital within the City.