CEO 88-75 -- October 19, 1988

CONFLICT OF INTEREST

CITY COMMISSION MEMBER RECEIVING CITY RETIREMENT BENEFITS

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

SUMMARY:

No prohibited conflict of interest would be created under Section 112.313(7), Florida Statutes, were a former city employee to be elected to serve on the city commission, when he is receiving retirement benefits from the city pension fund which is administered by the city commission. As the city commission meets as the pension board only once or twice a year, as pension-related matters constitute only a small portion of the city commission's duties, and as the ability of the commission to effect a change in vested pension rights is limited by Supreme Court decision, the former employee's interests as a retiree would not create a continuing or frequently recurring conflict with, and would not impede the full and faithful discharge of, his public duties. Depending on the circumstances, the commissioner may be prohibited by Section 112.3143(3), Florida Statutes, from voting on pension matters. CEO's 86-10 and 87-77 are referenced.

QUESTION:

Would a prohibited conflict of interest be created were a retired police chief who is receiving benefits from a city employee retirement fund to be elected to the city commission, where the city commission serves as the board of trustees for the retirement fund?

Your question is answered in the negative.

In your letter of inquiry you advise that .... retired from the Police Department of the City of Fort Meade after serving 24 years as Chief of Police. He currently is receiving benefits from the City of Fort Meade Employee Retirement Fund. He has filed a petition to run for a seat on the City Commission and has been certified to do so.

You advise that the City of Fort Meade has five elected officials, with four serving as Commissioners and one as mayor. These five also serve as the Board of Trustees who govern the pension fund. The Board of Trustees usually meets only once or twice a year, with funding recommendations being made by the City actuary, you advise. According to the City Code, the City Commission has the power to provide for relief or pension of City employees and to adopt necessary ordinances. The Commission may make contributions to the plan, make rules and regulations for the management, investment, and administration of such plan, and may levy taxes on all the real and personal property of the City.

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 (1987).]

In CEO 86-10, we found that this provision prohibited a retired chief of police, who was receiving monthly pension benefits from the city, from serving on the board of trustees of the municipal police officers' retirement trust fund. In our view the retired police chief had a contractual relationship with the city by virtue of his vested right in the retirement trust fund and his ongoing private interests in the fund would present a continuing or frequently recurring conflict of interest with his duties on the board of trustees, as the board's duties included determining qualified pensioners, pension amounts, and cost of living increases.

Conversely, in CEO 87-77 we found no prohibited conflict to exist where a retired city employee receiving pension benefits served on the board of trustees of the city general employees' and sanitation employees' retirement trust. We concluded that there was not a continuing or frequently recurring conflict between the retired employee's private interest in the trust and his public duties as a member of the board of trustees because the board members had little or no discretion in the determination of qualified pensions, pension amounts, and cost-of-living increases, and exercised whatever discretion they did have on infrequent occasions.

We believe that no prohibited conflict exists in the present situation because of the limited capability of the City Commission to affect pension rights. The Florida Supreme Court has ruled that once a participating member of a retirement plan reaches retirement status, the benefits under the terms of the act in effect at the time of the employee's retirement vest, and the contractual relationship may not thereafter be affected or adversely altered by subsequent statutory enactments. See Florida Sheriffs Association v. Department of Administration, 408 So.2d 1033 (Fla. 1981), and Stringer v. Lee, 2 So.2d 127 (Fla. 1941). Therefore, it would be unlawful for the members of the City Commission to adversely affect the benefits due present recipients.

As far as beneficially altering current pension benefits is concerned, we cannot definitely say that the subject retired employee would be faced with a voting conflict situation within the purview of Section 112.3143, Florida Statutes, which provides in relevant part:

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 (1987).]

It is questionable whether a vote on a pension fund matter which would result in an increase in benefits to employees would be classified as "inuring to the special private gain" of the subject City retiree/City Commissioner. However, we believe in the interest of avoiding even the appearance of a conflict, it would be advisable for him to follow the mandate of Section 112.3143(3).

In finding no prohibited conflict of interest to exist under 112.313(7)(a), we also take into account the comparatively small amount of time the City Commission would spend on pension fund matters, as well as the fact that pension matters presumably would comprise only a small fraction of the responsibilities of the City Commission. As the Board of Trustees meets only one or two times annually, we believe that a conflict of interest situation would not be so "continuing or frequently recurring" as to prohibit the City retiree from being elected as a City Commissioner.

Accordingly, we find that no prohibited conflict of interest would be created were the subject retired Police Chief to be elected to the City Commission which administers the retirement fund from which he is receiving pension benefits.