CEO 81-74 -- October 29, 1981

CONFLICT OF INTEREST

MEMBER OF TOWN COUNCIL LEASING PROPERTY TO COMPANY SELLING GASOLINE TO TOWN

To: Mr. Albert C. Malone, Jr., Attorney, Palatka

SUMMARY:

Reference is made to CEO 76-195, in which the Commission found that no prohibited conflict of interest would be created were a city to purchase goods from a store which leased a building from a city councilman. Here, a town council member has entered into a long-term lease at a flat rate with a company which submitted the only bid for supplying gasoline to the town. Under these circumstances, Section 112.316, F. S., would operate to override the literal prohibition of Section 112.313(7), F. S., against having a contractual relationship with a business entity doing business with one's public agency.

QUESTION:

Does a prohibited conflict of interest exist where a member of a town council has leased property to a company which is selling gasoline to the town?

Your question is answered in the negative, given the circumstances you have presented.

In your letter of inquiry you advise that in April, 1981, Mrs. Grace Evans was elected to membership on the Town Council of the Town of Welaka. In your letter and in a telephone conversation with our staff, you advised that in 1973 the subject Council member and her husband purchased three lots with buildings constructed on them which are located outside the County and which were leased to a company which operates a number of convenience stores in the area. As part of the purchase, these leases were renegotiated for a 15-year period, with payments being made on a flat rate. This company also operates a convenience store in the Town of Welaka, you advised, but neither the subject Council member nor her husband has any interest in that property. Nor do they own any interest in the company which operates the convenience stores.

Subsequent to her election, you advise, the Town Council decided, because of thefts, to terminate the operation of its municipal operated gas pump and decided to seek bidders to supply gasoline to the Town's vehicles. After advertisement and solicitation of bids, only one bid was received, that being from the subject company through its convenience store in the Town. That bid was accepted unanimously by the Town Council, with the subject Council member voting. Although there are other filling stations in the Town, they did not bid on the contract.

The Code of Ethics for Public Offices 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), F. S. (1979).]

Under this provision, a public officer is prohibited from having a contractual relationship with a business entity which does business with the officer's public agency. As rental of property constitutes a contractual relationship, the situation about which you inquire would appear to breach this prohibition. However, in a previous opinion, CEO 76-195, we found that Section 112.316, F. S., when read in conjunction with the literal prohibition of Section 112.313(7)(a), required a finding that no prohibited conflict of interest existed were a city to purchase goods from a store which leased its buildings from a city councilman. That section provides as follows:

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 duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, F. S. (1979).]

In CEO 76-195 we advised that one of the essential purposes of Section 112.313(7) is to prohibit those situations in which a public officer could obtain preferential treatment from, or award public business to, a business entity with which he is associated. Since the city council member's association with the merchandise store in that opinion was solely that of landlord, with the actual business conducted by the store having no effect on the particular contractual relationship between him and the store, we found that Section 112.316 would apply.

Similarly, under the circumstances you have described, it appears that the actual business conducted between the Town and the company supplying gasoline to the Town would have no effect on the leases between the subject Council member and the company, which have been in effect for approximately eight years and which will continue for approximately another seven years at a flat rate. In addition, the fact that there was only one bid submitted would minimize any appearance of impropriety on the subject Council member's part.

Accordingly, we find that no prohibited conflict of interest exists under the circumstances you have described where the subject Town Council member has leased property to a company which recently has contracted to provide gasoline to the Town.