CEO 90-24 -- March 8, 1990

CONFLICT OF INTEREST

CITY COMMISSIONERS MEMBERS OF CHURCH

SEEKING TO SELL PROPERTY TO THE CITY

To: Lewis W. Stone, City Attorney (Eustis)

SUMMARY:

A prohibited conflict of interest would be created were a city commissioner also to be a deacon and finance committee chairman of a church selling property to the city. Under Section 112.313(3), Florida Statutes, he would both be acting as a public officer to purchase realty for his agency from a business entity of which he is a director and acting in his private capacity to sell realty to his agency. No prohibited conflict of interest would be created were a city commissioner to be a member of the church which sells property to the city. In addition, no voting conflict of interest would be created under Section 112.3143(3), Florida Statutes, were that commissioner to vote as a member of the commission regarding purchase of the church property by the city.

QUESTION:

Would a prohibited conflict of interest be created were city commissioners to be a member or a deacon and finance committee chairman of a church seeking to seeking to sell property to the city?

Your question is answered in the negative as to the Commissioner who is a church member, and in the affirmative as to the Commissioner who is a deacon and finance committee chairman.

In you letter of inquiry, you have advised that Homer E. Royals is a Commissioner and Dougal M. Buie, III, is a Commissioner and Vice-Mayor for the City of Eustis. You advise that the City is seeking property for the purpose of expanding City offices and facilities. You indicate that the City would prefer to purchase improved real estate rather than buying unimproved land and building the needed improvements, but available improved property in the City is extremely limited. You advise that a church in the City is marketing its entire real estate holdings, including an auditorium, a family life center, recreational facilities, offices, and parking facilities. This property may be considered by the Commissioners of the City for purchase. However, the Vice-Mayor noted above is a member of the church and the Commissioner noted above is a member and chairman of the church's finance committee and a member of the church's board of deacons. The board of deacons is an advisory body with no decision-making powers. However, in any sale the board would present the issue to the membership for a vote with its recommendation. The finance committee would have no involvement in the sale. Neither Commissioner involved receives any compensation from the church. You inquire whether this transaction would present a prohibited conflict of interest.

Section 112.313(7)(a), Florida Statutes, provides:

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.

This section prohibits employment or a contractual relationship with a business entity which is doing business with the public officer's agency. In CEO 81-33, we advised that noncompensated membership on the board of directors of a nonprofit organization does not constitute employment or a contractual relationship. Under the rationale of this and similar opinions, we find that the subject Commissioners do not have employment or a contractual relationship with the church. Therefore, this section is not applicable.

Secondly, Section 112.313(3), Florida Statutes, provides:

DOING BUSINESS WITH ONE'S AGENCY.--No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee of his spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he is serving as an officer or employee of that political subdivision. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(d) Beginning public employment.

The first part of this section prohibits a public officer acting in his official capacity from purchasing realty for his agency from any business entity of which he is a director. In CEO 75-201, we advised that a public officer purchases for his agency where the commission of which he is a member transacts such business. In CEO 75-210 we held that abstention from voting would not eliminate such a conflict, finding that membership on the commission is deemed to constitute acting in one's official capacity. Under the rationale of these decisions, the subject Commissioners would be acting in their official capacity to purchase for their agency.

The next issue is whether the City would be purchasing from a business entity of which the Commissioners are "directors" under that section. In CEO 81-40, we advised that service as an uncompensated trustee of a nonprofit insurance trust was the equivalent of a "director" under the statute. We see no distinction between this situation and that of a deacon in the church. The role of the board of deacons is to present the issue and a recommendation to the congregation for a vote. In this respect, their role is similar to that of a corporate director. In addition, the definition of "business entity" provided at Section 112.312(3), Florida Statutes, would include the church. While in CEO 81-40 we ultimately found no prohibited conflict of interest based on a unity of interests between the insurance trust and the officer's agency, we do not perceive the same unity of interests here between independent parties in a real estate transaction. Therefore, with regard to the Commissioner who also serves as a deacon, he would be purchasing services from a business entity of which he is a director in violation of Section 112.313(3). However, the Commissioner who is merely a member of the church could not be considered to be a director and would not be in violation of this provision.

The second part of Section 112.313(3) would prohibit the Commissioners from acting in their private capacities to sell realty to the City. Under this provision, we find that the Commissioner who also serves as church deacon and finance committee chairman would be acting in his private capacity to sell realty to his agency. Our decisions have advised that this provision would apply where the corporation of which the public official is an officer or director sold to his agency. See CEO 76-23, CEO 78-7, and CEO 81-27. However, with regard to the Commissioner who is merely a member of the church, we find that he would not be acting in his private capacity to sell to the City. We do not conclude that merely voting as a member of the congregation on a recommendation regarding sale of the property would constitute "selling" for purposes of this provision.

As we have determined that a prohibited conflict of interest would be created were the Commissioner also to serve as a deacon and finance committee chairman, we must examine whether any of the statutory exemptions from this prohibition might apply. In reviewing the exemptions, it appears that only the exemption for sole source of supply of Section 112.313(12)(e), Florida Statutes, could potentially be applicable. This provision requires that the business entity involved is the only source of supply within the political subdivision of the officer and there is full disclosure by the officer to the governing body prior to the purchase. However, while you indicate that suitable improved land is in short supply, you have not provided any information which indicates that the church holds the only suitable property in the City. Therefore, we cannot conclude that this exemption would be applicable.

With regard to the Commissioner who is merely a member of the church and would not have a prohibited conflict of interest under the above provision, we must consider the restrictions of the voting conflicts statute with regard to any vote of the City Commission to purchase the church property. Section 112.3143(3), Florida Statutes, provides:

No county, municipal, or other local public officer shall vote in his official capacity upon any measure which inures to his special private gain or shall knowingly vote in his official capacity upon any measure which inures to the special gain of any principal, other than an agency as defined in s. 112.312(2), by whom he is retained. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of his interest in the matter from which he is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes. However, a commissioner of a community redevelopment agency created or designated pursuant to s. 163.356 or s. 163.357 or an officer of an independent special tax district elected on a one-acre, one-vote basis is not prohibited from voting.

This section would preclude voting by the commissioner where the measure would inure to his special private gain or to the special gain of a principal by whom he is retained. CEO 83-93 and CEO 84-50 generally indicate that where the benefit accrues to a charitable or nonprofit organization which does not retain the official in question, there is no special private gain to the official or a principal by whom he is retained, as required under that section. On this basis, the Commissioner may vote regarding purchase of the church property while a member of the church.

In addition, we would caution the Commissioners regarding potential appearance of misuse of position with regard to acquisition of the church property. Section 112.313(6), Florida Statutes, provides:

MISUSE OF PUBLIC POSITION.--No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit, or exemption for himself or others. This section shall not be construed to conflict with s. 104.31.

While we are not indicating that the subject Commissioners would attempt to improperly benefit the church through their public positions, we would caution against any action which could be perceived as favoring the church at the expense of the City's interests.

Accordingly, we find that a prohibited conflict of interest would be created were a City Commissioner also to be a deacon and finance committee chairman of a church which sells property to the City. However, no prohibited conflict of interest would be created were a City Commissioner to be a member of the church. That Commissioner would not be prohibited from voting on the purchase of the property by the City from the church.