CEO 77-5 -- February 1, 1977

CONFLICT OF INTEREST

APPOINTMENT TO CITY NEIGHBORHOOD DEVELOPMENT BOARD OF DISTRICT MANAGER OF CORPORATION DOING BUSINESS WITH THE CITY AND OWNING PROPERTY WITHIN DEVELOPMENT AREA

To: Gretchen R. H. Vose, Assistant City Attorney, Orlando

Prepared by: Bonnie Johnson

SUMMARY:

No prohibited conflict of interest is created where a mayor appoints to a neighborhood development board the district manager of a corporation which holds a franchise with the city and owns property within the development area. Although s. 112.313(7)(a), F. S. 1975, prohibits a public officer from holding employment with a business entity subject to the regulation of or doing business with his public agency, paragraph (b) of that statute exempts from such prohibition those persons whose profession or occupation is required or permitted by law or ordinance. As the special act creating the development board requires that board members have their principal residence, employment, or place of business, or be an owner of realty, in the development area and that a majority of the board members be owners of realty in the area, or a lessee thereof, or a director, officer, or managing agent of an owner or lessee thereof, the subject membership is deemed to fall within the contemplation of the above-cited exception. Furthermore, the board member's employer company does not hold a franchise with the board, his agency, but with the city and therefore does not do business with the officer's agency.

QUESTION:

Would a prohibited conflict of interest be created were a mayor to appoint to a central city neighborhood development board the district manager of a corporation which holds a franchise with the city and owns property within the development area?

Your question is answered in the negative.

You advise in your letter of inquiry that the Orlando Central City Neighborhood Development Board (OCCNDB) was created by a special act of the Legislature (Ch. 71-810, Laws of Florida) in order to revitalize and preserve property values in the central city area. The OCCNDB is charged with the responsibilities of analyzing economic conditions in and their effect on the development area, formulating plans for improving the attractiveness and accessibility of the area, recommending to the city council actions for implementation of such plans, and participating actively in the implementation and execution of approved development area plans. Members of the OCCNDB are appointed by the mayor with the concurrence of the city council. Section 5(3) of the special act creating the board further sets forth requirements for board membership as follows:

To qualify for appointment to the board and to remain qualified for service on it, a prospective member or a member already appointed shall have his principal residence, employment, place of business or be an owner of realty in the development area therein, and shall not be serving as a city officer or employee. A majority shall be owners of realty within the development area, or a lessee thereof, or a director, officer, or managing agent of an owner or of a lessee thereof so required to pay taxes thereon, but no two (2) shall be affiliates of the same corporation, partnership, or other business entity.

Based on the above circumstances, the mayor wishes to know whether a prohibited conflict would be created were he to appoint to the OCCNDB the district manager of Southern Bell, which company owns property within the development area and has a 29-year franchise with the city pursuant to a Certificate of Convenience and Necessity issued by the State of Florida. The franchise, for use of city rights-of-way and easements for telephone lines, was negotiated approximately 3 years ago. The OCCNDB has no part either in the negotiation of the franchise or in its enforcement. Also, both the city and the OCCNDB are customers of Southern Bell.

The Code of Ethics for Public Officers and Employees provides in pertinent part as follows:

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 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), F. S. 1975.]

A public officer accordingly is prohibited from holding employment with a business entity subject to the regulation of or doing business with his public agency. Pursuant to s. 112.312(2), F. S. (1976 Supp.), the potential appointee's agency will be the OCCNDB which, as previously mentioned, is a customer of Southern Bell in apparent violation of the above statute. However, we have previously found that the purchase of services of this type which are not obtainable from another source presents no interference with the full and faithful discharge of public duties pursuant to the mandate of s. 112.316. See CEO 76-47, a copy of which is enclosed. Further, Southern Bell's long-term franchise is with the city rather than with the OCCNDB, thus precluding this instance of "doing business" from being in violation of paragraph (7)(a). Inasmuch as Southern Bell owns development property within the central city area, however, it may be argued that the company is subject to the regulation of the OCCNDB and that the appointee's employment with the company will create a continuing or frequently recurring conflict in violation of the second clause of the above-quoted s. 112.313(7)(a). However, paragraph (b) of that statute constitutes an exemption from the prohibition set forth in (a):

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.

The above language constitutes a recognition that some public positions by their very nature require of their holders expertise which, under a strict reading of s. 112.313(7)(a), would present a conflict. As s. 5(3) of the special act establishing the OCCNDB specifically provides that members of the board have their "principal residence, employment, place of business or be an owner of realty in the development area," and that a majority of the board members be "owners of realty within the development area, or a lessee thereof," it is our view that the subject appointment falls within the contemplation of the exemption contained in s. 112.313(7)(b).

Accordingly, no prohibited conflict of interest would be created were the mayor to appoint to the OCCNDB the subject district manager of Southern Bell. We would caution, however, that this opinion does not preclude the possibility that voting conflicts of interest may arise from time to time, in which case the subject board member should look to s. 112.3143 for the standard of duty.