CEO 91-26 -- June 7, 1991

CONFLICT OF INTEREST; VOTING CONFLICT OF INTEREST

COUNTY TOURIST DEVELOPMENT COUNCIL ADVISORY COMMITTEE MEMBER ALSO EXECUTIVE DIRECTOR OF CHAMBER OF COMMERCE CONTRACTING WITH TOURIST DEVELOPMENT COUNCIL

To: (Name withheld at the person's request.)

SUMMARY:

A conflict of interest exists under Section 112.313(7)(a), Florida Statutes, where a member of an advisory committee to a County tourist development council serves as the executive director of a local chamber of commerce, and where the chamber of commerce has entered into a contract with the board of county commissioners and the tourist development council to provide tourist information services. However, the county commission may elect to waive the conflict by following the procedures contained in either Section 112.313(12) or Section 112.313(12)(e), Florida Statutes. If the county commission elects to waive the conflict, the committee member may continue to serve on the advisory committee and be employed by the chamber of commerce as its executive director. In that case, the committee member should comply with the requirements of Section 112.3143(3), Florida Statutes, when voting upon measures involving the chamber of commerce. CEO's 89-41, 89-29, 87-69, 84-67, 83-22, and 82-51 are referenced.

QUESTION:

Does a prohibited conflict of interest exist where a member of the District IV Advisory Committee, an advisory board to the Monroe County Tourist Development Council, is the executive director of the Islamorada Chamber of Commerce, which has a contract with the Tourist Development Council for tourist information services and which sponsors events and functions funded partly by tourist development funds?

Your question is answered in the affirmative, subject to the exemptions noted below.

In your letter of inquiry, you advise that you are an Assistant County Attorney and that you seek this opinion on behalf of the Monroe County Tourist Development Council. In the information submitted by both the Office of the County Attorney and the Islamorada Chamber of Commerce, as well as in telephone conversations with our staff, we are advised that Ms. Ellen McFadden is a member of the District IV Advisory Committee, one of five advisory boards to the Monroe County Tourist Development Council. The creation of county tourist development councils is authorized by Section 125.0104, Florida Statutes. The Monroe County Board of County Commissioners has enacted an ordinance which permits the creation of advisory committees by the various chambers of commerce which, in turn, make recommendations to the Tourist Development Council concerning the expenditure of tourist development tax funds collected in their respective voting districts. District IV Advisory Committee members are appointed by the Islamorada Chamber of Commerce.

You advise that the Committee member who is the subject of this opinion is the Executive Director of the Islamorada Chamber of Commerce, which is a paid position. You further advise that the Committee member was appointed to the District IV Advisory Committee by the President of the Chamber of Commerce. You also advise that the Islamorada Chamber of Commerce has entered into a contract with the Monroe County Tourist Development Council and the Monroe County Board of County Commissioners to provide tourist information services. The contract indicates that the County has designated the Chamber of Commerce to be a "sole source" provider under the terms of the contract, and it also provides that tourist development tax revenues are expended to pay a portion of the Chamber of Commerce executive director's salary. As the executive director of the Islamorada Chamber of Commerce, the individual involved prepares the budget, including increases in her salary, and presents the budget to the District IV Advisory Committee of which she is a member. The District IV Advisory Committee then makes recommendations to the Tourist Development Council concerning this and other expenditures, with the executive director abstaining from voting on matters involving the chamber of commerce.

You question whether this situation poses a conflict of interest under the Code of Ethics for Public Officers and Employees, and, if there is a conflict, whether the District Advisory Committee member must resign from the Committee to continue her employment with the chamber of commerce. You also inquire as to what procedures the Committee member should follow if she can continue to serve on the Committee, when voting on matters involving the chamber of commerce.

The first issue that must be resolved is whether District Advisory Committees are public agencies and their members are public officers, for purposes of the Code of Ethics. Section 2-299(F) of the Monroe County Code, provides as follows:

Advisory committees may be created by the various chambers of commerce throughout Monroe County to make recommendations to the tourist development council concerning the expenditures of the tax funds herein collected in their respective voting district.

Section 112.312(1), Florida Statutes, defines "advisory body" as:

[A]ny board, commission, committee, council, or authority, however selected, whose total budget, appropriations, or authorized expenditures constitute less than 1 percent of the budget of each agency it serves or $100,000, whichever is less, and whose powers, jurisdiction, and authority are solely advisory and do not include the final determination or adjudication of any personal or property rights, duties, or obligations, other than those relating to its internal operations.

Notwithstanding the fact that the Monroe County Code permits the creation of advisory committees by chambers of commerce which are not public agencies, we find that the District Advisory Committees are public agencies and their members are public officers for purposes of the Code of Ethics for Public Officers and Employees. We view Section 2-299(F) of the Monroe County Code as a delegation of authority to the various chambers of commerce in Monroe County and will assume for purposes of this opinion that the County Commission maintains the ultimate authority and control over both the Tourist Development Council and all five District Advisory Committees. We also note that, based on minutes of Committee meetings, it appears that applicants for tourist development funds are required first to have their requests considered by their respective District Advisory Committees.

Moreover, we previously have opined that in determining an individual's "agency" for purposes of the Code of Ethics, an advisory board to a governing body is a part of that body. See CEO's 89-41 and 87-69. We previously have determined that county tourist development councils are advisory bodies. See CEO's 84-67, 83-22, and 82-51. As the functions of the five District Advisory Committees are advisory as well, we also consider them to be advisory bodies. Therefore, the Monroe County Board of County Commissioners is the "agency" of both District Advisory Committee members and Tourist Development Council members.

The relevant provisions of the Code of Ethics for Public Officers and Employees are as follows:

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.

[Section 112.313(3), Florida Statutes (1989).]

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 (1989).]

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. [Section 112.3143(3), Florida Statutes (1989).]

The first of these provisions prohibits a District Advisory Committee member from acting in an official capacity to purchase any services, either directly or indirectly, from any business in which she is an officer, partner, director, or proprietor, or in which she has a material interest. In CEO 89-29, we considered whether the executive director of a chamber of commerce was an officer for purposes of Section 112.313(3), Florida Statutes, and although we determined that the executive director might be considered an officer of the chamber of commerce under the terms of his employment contract, we ultimately found that in that situation the chamber was not selling or leasing any realty, goods, or services to the city commission or any agency of the city commission.

In the situation presented herein, we are advised that the executive director of the chamber does not have an employment contract but, instead, is appointed by the chamber's president, subject to approval by the chamber's board of directors. For purposes of this opinion, therefore, it would appear that the executive director is not an officer, partner, director, or proprietor; nor would she own a material interest in the chamber of commerce. Although Section 112.313(3), Florida Statutes, also prohibits a public officer, acting in her private capacity, to sell any services to her agency, it does not appear that the executive director is providing these services in her private capacity. Instead, she is an employee of the chamber, and the chamber is under contract to the Tourist Development Council to provide tourist information services. Thus, we conclude that this situation does not result in a prohibited conflict of interest under Section 112.313(3), Florida Statutes.

Under Section 112.313(7)(a), Florida Statutes, however, we are of the opinion that a conflict of interest exists. The first part of this statute prevents a public officer from having any employment with a business entity which is doing business with the agency of which she is an officer. Clearly, the Committee member is employed by the chamber, and the chamber is doing business with her agency.

Further, the second part of Section 112.313(7)(a), Florida Statutes, prohibits an officer from having any employment or contractual relationship which creates a continuing or frequently recurring conflict between her private interests and the performance of her public duties, or that would impede the full and faithful discharge of her public duties. In your letter of inquiry, you indicate that the chamber of commerce executive director is responsible for preparing a budget, which includes increases in the executive director's salary, and that she then presents this budget to the District IV Advisory Committee on which she serves. Although she evidently abstains from voting on chamber-sponsored projects, events, functions, and budgets when the District IV Advisory Committee considers them, it nonetheless appears that her employment by the chamber and her service on the Advisory Committee clearly constitutes a continuing or frequently recurring conflict of interest. A review of the minutes from seven District IV Advisory Committee meetings held over the past two years indicates that of approximately 22 different agenda items acted upon by the Committee, the Member abstained from voting 10 different times because the agenda item was either a chamber-sponsored event or chamber function.

Section 112.313(12), Florida Statutes, contains several exemptions from the requirements of Section 112.313(7), Florida Statutes, two of which may be applicable to the situation presented herein to absolve a conflict of interest. Section 112.313(12), Florida Statutes, provides in relevant part:

The requirements of subsections (3) and (7) as they pertain to persons serving on advisory boards may be waived in a particular instance by the body which appointed the person to the advisory board, upon a full disclosure of the transaction or relationship to the appointing body prior to waiver and an affirmative vote in favor of waiver by two-thirds vote of that body. In instances in which appointment to the advisory body is made by an individual, waiver may be effected, after public hearing, by a determination by the appointing person and full disclosure of the transaction or relationship by the appointee to the appointing person.

As discussed previously, the Commission has considered tourist development councils to be advisory boards. See CEO's 84-67, 83-22, and 82-51. It follows that the District IV Advisory Committee, which advises the Tourist Development Council, is likewise an advisory board. In accordance with Section 112.313(12), Florida Statutes, the body which appointed the person to the advisory board may then, by two-thirds vote, waive the requirements after full disclosure of the transaction or relationship. In this situation, where the County Commission essentially has delegated the authority to the chambers of commerce to create the district advisory committees, we believe that it would be appropriate for the County Commission to consider whether to waive a conflict under Section 112.313(7), Florida Statutes, rather than the chambers of commerce which created the District Advisory Committees.

Section 112.313(12)(e), Florida Statutes, also contains an exemption where the business entity is the only source of supply within the political subdivision of the officer, and where there is full disclosure by the officer of his interest in the business entity to the governing body prior to the business transaction. As the Board of County Commissioners has designated the chamber of commerce as a "sole source" provider under the terms of the tourist information services contract, this exemption may be applicable as well, if the disclosure requirements contained in Section 112.313(12)(e), Florida Statutes, are complied with. This exemption would be applicable to issues involving the chamber's contract with the tourist development council but would not be applicable to the other recurring conflicts involving chamber-sponsored events.

We note also that an exemption contained in Section 112.313(14), Florida Statutes, for employees of tax-exempt organizations would not be applicable, as it only pertains to elected public officers and the Committee member is an appointed public officer.

If the Monroe County Commission acts to waive the Committee member's conflict under Section 112.313(7)(a), Florida Statutes, she may continue to serve on the District IV Advisory Committee and be employed by the Islamorada Chamber of Commerce as its Executive Director. Were this to occur, she must comply with the requirements of Section 112.3143(3), Florida Statutes, as provided above, when voting as a Committee member upon measures which inure to the special private gain of the Islamorada Chamber of Commerce. This provision requires the officer to abstain from voting, as well as publicly state to the assembly the nature of her interest in the matter in which she is abstaining from voting, and file a memorandum disclosing her conflict within 15 days of the vote with the person responsible for recording the minutes of the meetings. We have promulgated CE Form 8B, which may be used for this purpose.

Accordingly, although a conflict of interest exists under Section 112.313(7)(a), Florida Statutes, the Monroe County Commission may elect to waive the conflict by following the procedures contained in Section 112.313(12), Florida Statutes. If the County Commission waives the conflict, the individual may continue to serve on the District Advisory Committee and be employed by the chamber of commerce as its executive director. In that case, the Committee member should comply with the requirements of Section 112.3143(3), Florida Statutes, when voting upon measures involving the Chamber of Commerce.