CEO 86-32 -- May 15, 1986

CONFLICT OF INTEREST

COUNTY ASSISTANT ADMINISTRATOR OWNING COUNTY HEALTH FACILITIES AUTHORITY BONDS

To: Mr. Thomas A. Bustin, County Attorney, Alachua County, Gainesville

SUMMARY:

No prohibited conflict of interest exists under Section 112.313(7), Florida Statutes, where an assistant county administrator owns county health facilities authority revenue bonds issued for a hospital with which the county has a contract for indigent health care. Here, the health facilities authority is neither regulated by nor doing business with the county. Nor is the fact that the assistant administrator is responsible for negotiating part of the county's indigent health care contract substantial enough to conclude that his interest in the bonds would impede the full and faithful discharge of his public duties.

QUESTION:

Does a prohibited conflict of interest exist where an assistant county administrator owns county health facilities authority bonds issued for a hospital with which the county has a contract for indigent health care?

Your question is answered in the negative.

In your letter of inquiry and in a telephone conversation with our staff you have advised that Mr. Peter Schneider, Assistant Alachua County Administrator, purchased as a private investment a series of County Health Facilities Authority bonds, which are tax exempt bonds issued for the Shands Teaching Hospital. The Authority is a separate body, corporate and politic, whose members are appointed by the Board of County Commissioners. Section 154.207, Florida Statutes. However, you advised that the Authority is not doing business with the County and that the County Commission is not required to approve the issuance of bonds or to regulate the activities of the Authority in any manner.

You also have advised that the Hospital has entered into a master public health contract with the County under which it agrees to provide medical care for indigents. In return, the County pays the Hospital approximately $90,000 per year. The Assistant Administrator was responsible for negotiating the portions of the contract relating to indigent maternity care. However, he has no responsibility for payments made under the contract, as the Hospital's invoices go to the finance and accounting personnel under the Clerk of the Circuit Court. Finally, you advised that the bonds issued by the Authority are revenue bonds payable from the general revenues of the Hospital. Therefore, funds received from the County for indigent care could go to pay the bonds.

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 (1985).]

This provision prohibits a public employee from having any contractual relationship with an agency which is subject to the regulation of or is doing business with his agency. We have advised that the ownership of bonds issued by a public agency constitutes a contractual relationship with that agency. See CEO 85-58. However, it is apparent that the Health Facilities Authority is neither regulated by nor doing business with the County.

Section 112.313(7) also prohibits a public employee from having any contractual relationship which would present a continuing or frequently recurring conflict of interest or which would impede the full and faithful discharge of his public duties. In interpreting this provision of the Code of Ethics, we are guided by the intent of the Legislature as expressed in Section 112.311, Florida Statutes. Particularly, we note that Section 112.311(5) provides as the policy of the State that no public employee shall have any interest "which is in substantial conflict with the proper discharge of his duties in the public interest." In addition, Section 112.311(2) provides in part:

Public officials should not be denied the opportunity, available to all other citizens, to acquire and retain private economic interests except when conflicts with the responsibility of such officials to the public cannot be avoided.

It appears that the Assistant Administrator's role in negotiating a portion of the contract between the County and the Hospital would not give rise to a conflict of interest which could be considered "continuing or frequently recurring." In addition, while it might be preferable for the Assistant Administrator not to be involved in negotiating any part of the County's contract with the Hospital, we find that his interest in the bonds is not substantial enough to conclude that it impedes the full and faithful discharge of his public role in negotiating a portion of the contract. In particular, we base our conclusion on the relatively small amount of funds paid under the contract and the fact that the Assistant Administrator's responsibilities have involved only negotiating a part of that contract.

Accordingly, we find that no prohibited conflict of interest exists where the Assistant County Administrator owns County Health Facilities Authority bonds issued for a hospital with which the County has a contract for indigent health care.