CEO 83-83 -- October 27, 1983

CONFLICT OF INTEREST; VOTING CONFLICT OF INTEREST

CITY COMMISSIONER ACTING AS REAL ESTATE BROKER FOR CITY HOUSING AUTHORITY

To: Mr. Carl V. M. Coffin, City Attorney, City of West Palm Beach

SUMMARY:

No prohibited conflict of interest was created where a city commissioner agreed to act as a real estate broker for the city housing authority in the purchase of property located within the city, and where he would have received a commission on property purchased by the authority. As the housing authority is a separate political subdivision from the city, Section 112.313(3), Florida Statutes, would not be violated. Nor would Section 112.313(7), Florida Statutes, regarding conflicting employment or contractual relationships, be violated, for the reasons expressed in CEO 81-77.

No voting conflict of interest was created under Section 112.3143, Florida Statutes, where the city commissioner voted to appropriate funds to the city housing authority for the acquisition of property, and later agreed to act as real estate broker for the authority in negotiating the sale of property to the authority. At the time of the vote, the commissioner had not agreed to act as broker for the housing authority, and therefore he had no financial interest in the reappropriation of the funds to the authority either individually or as an agent for the authority.

QUESTION 1:

Was a prohibited conflict of interest created where a city commissioner agreed to act as a real estate broker for the city housing authority in the purchase of property located within the city and where he would have received a commission on property purchased by the authority?

This question is answered in the negative.

In your letter of inquiry you advise that Mr. L. Frank Sineath, III, is a member of the City Commission of the City of West Palm Beach. You also advise that he is a local real estate broker who was contacted by the Executive Director of the City's Housing Authority to assist the Authority in the purchase of real property within the City. The Authority had determined that it should use "scattered sites" to provide public housing. In essence, the Commissioner was to contact owners of real property in which the Housing Authority was interested and try to arrange a sale of the property to the Authority. This was a non-exclusive arrangement. No compensation was to be paid by the Authority to the Commissioner for his work. In the event of a sale, he would have been entitled to a commission paid by the seller for his negotiations with the property owners. However, no contacts were made and no sales took place because the arrangement subsequently was terminated for reasons of the Commissioner's health.

The Code of Ethics for Public Officers and Employees provides in part:

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 or 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 (1981).]

This provision prohibits a City Commissioner from acting in a private capacity to sell any services to any agency of the City.

However, we are of the opinion that for the purposes of this prohibition the Housing Authority is not an agency of the City, but should be considered as a political subdivision separate from the City. In CEO 81-25 we referenced the statutory independence of a city housing authority from control by the city under Chapter 421, Florida Statutes. It was this degree of independence as granted in the statutory predecessor to Chapter 421, Florida Statutes (Chapter 17981, Acts of 1937), which led the Supreme Court to find that the Jacksonville Housing Authority was not a "mere agency" of the City, but was "a separate and distinct corporate entity from that of the municipality . . . ." State ex rel. Burbridge v. St. John, 197 So. 131, 134 (Fla. 1940). Similarly, the Attorney General has advised that housing authorities are "special districts" under the Uniform Local Government Financial and Reporting Act, Part III, Chapter 218, Florida Statutes, and that such authorities are "political subdivisions" subject to the Consultants' Competitive Negotiation Act, Section 287.055, Florida Statutes. AGO 074-234, AGO 074-367, and AGO 078-19.

Therefore, while the Housing Authority is an "agency" as defined in Section 112.312(2), Florida Statutes, for purposes of the Code of Ethics, it is not an agency of the City. For this reason, we do not find that the subject Commissioner acted in violation of Section 112.313(3), when he agreed to act as a real estate broker for the Housing Authority.

In addition, the Code of Ethics 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. [Section 112.313(7)(a), Florida Statutes (1981).]

This provision prohibits a City Commissioner from having any employment or contractual relationship with an agency which either is doing business with, or is subject to the regulation of, the City Commission. In CEO 81-77, Question 2, we found that Section 112.313(7)(a) would not prohibit a county commissioner's construction company from bidding for the construction of a low-cost housing project proposed by the county housing authority. For the reasons expressed in that opinion, we find Section 112.313(7)(a) to be inapplicable to the situation you have described.

Accordingly, we find that no prohibited conflict of interest was created where the subject City Commissioner agreed to act as a real estate broker for the Housing Authority in the purchase of property located within the City, but where no sales were made. To the extent that the rationale of this opinion differs from that expressed in CEO 83-12 and CEO 83-38, those opinions are hereby superseded.

QUESTION 2:

Was a voting conflict of interest created under Section 112.3143, Florida Statutes, where a city commissioner voted to appropriate funds to the city housing authority for the acquisition of property, and later agreed to act as real estate broker for the authority in negotiating the sale of property to the authority?

This question is answered in the negative.

Section 112.3143, Florida Statutes, provides as follows:

Voting conflicts. -- No public officer shall be prohibited from voting in his official capacity on any matter. However, any public officer voting in his official capacity upon any measure in which he has a personal, private, or professional interest and which inures to his special private gain or the special gain of any principal by whom he is retained shall, 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.

In your letter of inquiry you advise that on January 24, 1983, the subject Commissioner voted to reappropriate from alley and street improvements to real property acquisition a sum of community development funds which had been made available to the City by HUD as community development block grant funds. It was intended that this money be available to acquire property for the Housing Authority, if needed for such purpose. The details of how the sales transactions would occur and how the money would flow or be reimbursed were not determined at that time. In addition, you advise that from all indications, the Commissioner's agreement to act as broker for the Authority was oral and was made after the January 24 vote.

We are of the opinion that the reappropriation of money for real property acquisitions did not inure to the special private gain of the subject Commissioner and did not inure to the private gain of a principal by whom he was retained. At the time of the vote, the Commissioner had not agreed to act as broker for the Housing Authority, and therefore he had no financial interest in the reappropriation of the funds. Nor could the Housing Authority be considered to have been a principal by whom he was retained at the time of the vote.

Accordingly, we find that no voting conflict of interest requiring the filing of a memorandum of voting conflict under Section 112.3143, Florida Statutes, was created when the subject Commissioner voted to reappropriate funds for the acquisition of real property.