CEO 80-28 -- April 17, 1980

FLORIDA MUNICIPAL POWER AGENCY

APPLICABILITY OF THE CODE OF ETHICS TO BOARD OF DIRECTORS

To: Frederick M. Bryant, Attorney, Tallahassee

Prepared by: Phil Claypool

SUMMARY:

The Florida Municipal Power Agency, a legal entity created pursuant to part II, ch. 361, and part I, ch. 163, F. S., was formed by an interlocal agreement among municipalities which operate municipal electric systems in order to obtain mutual advantage from the coordinated planning, construction, and operation of such systems. Despite its being an entity of more than one municipal government in this state, the agency is deemed to constitute an "agency" under s. 112.312(2) of the Code of Ethics. The question of whether the agency's directors are "local officers" subject to financial disclosure turns upon whether they are appointed members of a board of any political subdivision of this state. Section 112.3145(1)(a)2., F. S.

Each member city is represented on the agency's board of directors; there are no qualification requirements for directors, who have no specifically assigned duties and who serve at the member city's pleasure. A director may resign at any time, and each city may choose alternate directors to represent the city in the event a designated director is absent. In following the holding of the Second District Court of Appeal in the case of Florida Gulf Health Systems Agency, Inc. v. Commission on Ethics, 354 So.2d 932 (2 D.C.A. Fla., 1978), persons who are neither elected by the public nor appointed by an official authority, but who instead accede to positions in which they perform a public function by agreement among themselves, are not "public officers." However, members of the Board of Directors of the Florida Municipal Power Agency are designated to serve in that capacity by each city which is an agency member. This method of selecting directors is sufficient to constitute an appointment by an official authority within the terms of the financial disclosure law; directors, therefore, are "local officers" subject to disclosure. Similarly, they constitute "public officers" under s. 112.313(1), F. S., for purposes of the conflict of interest laws.

QUESTIONS:

1. Are members of the Board of Directors of the Florida Municipal Power Agency "local officers" subject to the requirement of filing financial disclosure annually?

2. Are members of the Board of Directors of the Florida Municipal Power Agency "public officers" subject to the standards of conduct provisions of the Code of Ethics for Public Officers and Employees?

Question 1 is answered in the affirmative.

The Code of Ethics for Public Officers and Employees provides that each "local officer" shall file a statement of financial interests annually. Section 112.3145(2)(b), F. S. The term "local officer" is defined to include:

Any appointed member of a board, commission, authority, community college district board of trustees, or council of any political subdivision of the state, excluding any member of an advisory body. A governmental body with land-planning, zoning, or natural resources responsibilities shall not be considered an advisory body. [Section 112.3145(1)(a)2., F. S.]

In your letter of inquiry you advise that the Florida Municipal Power Agency is a legal entity created pursuant to part II, ch. 361, F. S., commonly known as the "Joint Power Act," and part I, ch. 163, F. S., commonly known as the "Florida Interlocal Cooperation Act of 1969." The agency consists of 26 municipalities whose membership is purely voluntary. A member city may withdraw, or a nonmember city may join, at any time. Each city is represented on the agency's board of directors. You advise that there are no qualification requirements for directors, who have no specifically assigned duties and who serve at the member city's pleasure. A director may resign at any time, and each city may choose alternate directors to represent the city in the event a designated director is absent.

The agency was formed by an interlocal agreement among municipalities which operate municipal electric systems in order to obtain mutual advantage from the coordinated planning, construction, and operation of municipal electric systems. The agency is actively operated by the executive committee, each member of which is chosen by the board of directors. The agency is funded by annual assessments from each member city, and the number of votes accorded to each director is in direct proportion to the amount of the annual assessment of each municipality.

Section 10(d), Art. VII of the State Constitution provides that the Legislature may enact laws authorizing a municipality or an agency of a municipality to be a joint owner of, or to lend or use its taxing power or credit for the joint ownership, construction, and operation of, electrical energy generating or transmission facilities with any corporation, association, partnership, or person. Part II, ch. 361, F. S., was enacted in order to implement this constitutional provision, and it provides in part that a municipality, by participating in an agreement, may join with other municipalities for the purpose of jointly financing, constructing, operating, and owning electric power supply projects; in doing so, the municipalities may create an organization, association, or legal entity. Section 361.12.

On the other hand, part I of ch. 163, F. S., was enacted in a less specific context in order to permit local governmental units to make the most efficient use of their powers by enabling them to cooperate with others to provide services and facilities pursuant to the most appropriate forms of governmental organization. Section 163.01(2). Thus, these two statutory provisions have authorized municipalities to create the Florida Municipal Power Agency, a new legal entity established to act as agent for the municipalities in matters relating to electric power supply projects. See article II of the interlocal agreement.

In our opinion, this agency is a "public agency" in the sense that it is an entity authorized to exercise a proper governmental function as an agent for its member municipalities. The powers of the agency, as set forth in the interlocal agreement, include municipal functions and powers. See, for example, article II of the agreement at p. 5, wherein the agency is authorized to "exercise any power, privilege or authority which is necessary and proper to further the purposes of the Agency and which the parties to this agreement might exercise in their capacity as public agencies."

Within the Code of Ethics, the term "agency" is defined to mean "any . . . municipal governmental entity of this state . . . ." In our view, the fact that the agency is an entity of more than one municipal government in this state does not indicate that the agency is not a "municipal government entity." Therefore, we are of the opinion that the Florida Municipal Power Agency is an "agency" for purposes of the provisions of the Code of Ethics. In this respect, we note that the Attorney General has opined that the Central Florida Commission on the Status of Women, a regional organization formed by an interlocal agreement among four central Florida counties, is subject to the Sunshine Law (s. 286.011, F. S.) as being an "agency of any county."

As noted above, the question of whether directors of the agency are "local officers" turns upon whether they are appointed members of a board of any political subdivision of this state. Black's Law Dictionary (5th Rev. ed., 1979) defines "appoint" as

[t]o designate, ordain, prescribe, constitute, or nominate. To allot or set apart. To assign authority to a particular use, task, position, or office.

Black's defines "appointment" as "[t]he designation of a person, by the person or persons having authority therefor, to discharge the duties of some office or trust. . . ." In considering these definitions together with the manner of designation of directors of the agency, we are of the opinion that the directors are appointed by public entities, the cities, to represent their cities on the board of directors and to act as agents for the cities in undertaking the functions of directors.

In your letter of inquiry you questioned whether the case of Florida Gulf Health Systems Agency, Inc. v. Commission on Ethics, 354 So.2d 932 (2 D.C.A. Fla., 1978), would indicate that directors of the agency are not "local officers." In that case, the Second District Court of Appeal reversed an advisory opinion of this commission and held that

[n]either stockholders, directors, nor officers of a private corporation can be termed 'local officers' under this statute since they are neither 'appointed' nor 'elected' as contemplated by the financial disclosure law. Members of a private corporation accede to their positions as do members of any private business, that is by agreement among themselves without regard to the public generally. [Id., at p. 934.]

In following the holding of the Third District Court of Appeal, we have advised subsequently that persons who are neither elected by the public nor appointed by an official authority, but who instead accede to positions in which they perform a public function by agreement among themselves, are not "public officers." See CEO 78-35, in which we advised that public school advisory committee members who are not appointed or designated by the school board or by any person, but who rather announce their willingness to serve on a particular committee and thereby have the right to serve on the committee, are not "elected or appointed to hold office in any agency." Here, however, members of the board of directors of the agency are designated to serve in that capacity by each city which is a member of the agency. In our opinion, this method of selecting directors is sufficient to constitute an appointment by an official authority within the terms of the Financial Disclosure Law.

Accordingly, we find that members of the Board of Directors of the Florida Municipal Power Agency are "local officers" subject to the requirement of filing financial disclosure annually.

Question 2 also is answered in the affirmative.

The term "public officer" is defined in s. 112.313(1), F. S., to include "any person elected or appointed to hold office in any agency, including any person serving on an advisory body."

In our response to your first question, we advised that the Florida Municipal Power Agency is an "agency" within the contemplation of the Code of Ethics and that members of its board of directors are "appointed" to their positions. Accordingly, we find that members of the Board of Directors of the Florida Municipal Power Agency are "public officers" subject to the standards of conduct provisions of the Code of Ethics for Public Officers and Employees.