CEO 77-176 -- December 14, 1977

CONFLICT OF INTEREST

FIRE AND RESCUE DISTRICT BOARD MEMBER LEASING LAND TO BOARD FOR USE AS SUBSTATION FOR NOMINAL SUM

To: Charles A. Ball, Chairman, Tice Fire and Rescue District Board, Fort Myers

Prepared by: Phil Claypool

SUMMARY:

Section 112.313(3), F. S., prohibits a public officer from acting in a private capacity to lease any realty to his public agency. Therefore, the chairman of a fire and rescue district board is prohibited from leasing to the board from year to year, at $1 per year, property for use as a fire substation where the contract stipulates that, upon abandonment, improvements on the property revert to him. Although s. 1 of Ch. 77-349, Laws of Florida, exempts transactions of $500 or less between a public officer and his agency, it is possible that abandonment of the property would occur before improvements have depreciated in value to less than the $500 limit.

QUESTION:

Would a prohibited conflict of interest exist were I, the chairman of a fire and rescue district board, to lease to the board from year to year for a nominal sum property for use as a substation with the provision that upon abandonment of that use, any improvements would revert to me?

Your question is answered in the affirmative.

In your letter of inquiry you advise that you are the Chairman of the Tice Fire and Rescue District Board and that you are contemplating proposing to the board a lease from year to year of property owned by you to the board for $1 per year. This property would be used by the board for a district fire substation. It is part of the land upon which your home is situated, but is located some distance away from your home. You also advise that you intend to stipulate that the facility would be used only as a fire station or for associated activities, and that in the event of abandonment any fixtures would become yours, in order to encourage subsequent boards to provide service to the area, which is 15 to 20 minutes away from present stations. You anticipate that the facility would house one truck, with a small office/sleeping quarters for one employee. The cost of such a structure would be less than $3,000, you advise.

The Code of Ethics for Public Officers and Employees provides in relevant 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. . . . [Section 112.313(3), F. S. 1975.]

This provision prohibits a public officer acting in a private capacity from leasing any realty to his own agency and therefore would prohibit you from entering into any lease of your land to the District Board which you serve as Chairman.

However, Ch. 77-349, Laws of Florida, which was enacted during the most recent legislative session, provides several exemptions to the provision quoted above. One of those exemptions occurs where "the total amount of the subject transaction does not exceed $500." Section 1, Ch. 77-349. Thus, the present rule is that no public officer may be engaged in a transaction of more than $500 with his agency, in the absence of another applicable exemption. It is obvious that this $500 exemption could be used to frustrate the purposes of the Code of Ethics, for example, where a sale between a public officer and his agency was broken down into several transactions of $500 or less in order to make use of this exemption. Therefore, we are of the opinion that this exemption should be interpreted strictly, so that the exception does not consume the rule.

Reading this exemption narrowly, we are not persuaded that the transaction you have described falls within the $500 limit, for two reasons. First, should the lease be entered into from year to year, absent a contrary provision in the lease, the improvements constructed by the district would revert back to you should the lease be terminated for any reason by either party. Second, should the district abandon its use of the property as a substation, you would gain full legal right to the improvements constructed by the district. Although it is possible that such abandonment or termination of the lease might occur in the distant future, when the improvements will have depreciated in value to less than the $500 limit, it is still possible that the abandonment or termination could take place while the improvements are worth more than $500. This being the case, we are unable to say conclusively that under the terms of the lease as you have described them "the total amount of the subject transaction does not exceed $500."

Accordingly, we find that a prohibited conflict of interest would exist were you, the Chairman of the Tice Fire and Rescue District Board, to lease to the board from year to year for a nominal sum property for use as a substation, with the provision that, upon abandonment of that use, any improvements would revert to you.