CEO 86-29 -- April 3, 1986

CONFLICT OF INTEREST; VOTING CONFLICT OF INTEREST

CITY MAYOR SERVING AS TRUSTEE OF VOLUNTEER FIRE DEPARTMENT CONTRACTING WITH CITY

To: Mr. James S. Theriac, III, City Attorney, City of Cape Canaveral

SUMMARY:

No prohibited conflict of interest exists where a city mayor serves as a trustee of a volunteer fire department which is contracting to provide services to the city. Although Section 112.313(3), Florida Statutes, prohibits a public officer from serving as a director of a business entity which is selling services to his agency, in this case the exemption of Section 112.313(12)(e) is applicable because the volunteer fire department is the sole source of supply for firefighting services within the city under the limitations of a city referendum. Further, the mayor was not prohibited by Section 112.3143(3), Florida Statutes, from voting on the approval of the contract between the city and the volunteer fire department as he was not "retained" by the organization.

QUESTION 1:

Does a prohibited conflict of interest exist where a city mayor serves as a trustee of a volunteer fire department which is contracting to provide services to the city?

Under the circumstances presented, your question is answered in the negative.

In your letter of inquiry you advise that Mr. Patrick Lee was elected to serve as Mayor of the City of Cape Canaveral in November, 1985. You also advise that he serves as a Trustee on the Board of Trustees for the local Volunteer Fire Department. In a telephone conversation with our staff, you advised that the Volunteer Fire Department is organized as a nonprofit corporation and that the Mayor receives no compensation for his services as trustee.

You also advise that a referendum which passed in November, 1985, prohibited the City from entering into a contract for fire protection services with any entity other than the Volunteer Fire Department without the approval of the general electorate. After the Mayor took office, the City Council unanimously approved and entered into a contract with the Volunteer Fire Department for the provision of fire protection services. The Mayor participated in this vote. He did not file any written disclosure of his interest or position with the Volunteer Fire Department, although his involvement with the Department basically is a matter of public knowledge, as his campaign focused on that issue, and is a matter of particular knowledge to the members of the City Council. After the initial vote, the Council ratified its previous action, with the Mayor abstaining from voting.

The Code of Ethics for Public Officers and Employees provides in 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 (1985).]

This provision would prohibit the Mayor from having any employment or contractual relationship with a business entity which is doing business with his agency. However, as we have advised in previous opinions, noncompensated service as a member of the board of directors of a nonprofit corporation does not constitute an employment or contractual relationship with that entity. See, for example, CEO 82-37 and CEO 80-45.

The Code of Ethics also 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 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 (1985).]

This provision prohibits a public officer from serving as an officer or director of a business entity which is selling services to his agency. For example, in CEO 82-51 we found that a prohibited conflict of interest would be created were a county commissioner to serve as an officer or director of a nonprofit corporation receiving tourist development funds to promote tourism in the county.

However, Section 112.313(12)(e), Florida Statutes (1985), provides an exemption to the prohibition of Section 112.313(3) where

[t]he business entity involved is the only source of supply within the political subdivision of the officer or employee and there is full disclosure by the officer or employee of his interest in the business entity to the governing body of the political subdivision prior to the purchase, rental, sale, leasing, or other business being transacted.

Under the circumstances presented, it appears that because of the City referendum, which in essence required the City to contract with the Volunteer Fire Department, the Volunteer Fire Department is the only source of supply for fire protection services within the City. Although the statute requires full disclosure to the governing body of the City (we have promulgated CE Form 4A, Disclosure of Business Transaction, Relationship or Interest, for this purpose), you have advised that the members of the City Council were aware of the Mayor's involvement with the Fire Department before the Council approved the contract. Under these circumstances, we are of the opinion that substantial compliance with the disclosure requirements of the statute has been effected.

Accordingly, we find that no prohibited conflict of interest exists by virtue of the Mayor's serving as a Trustee of the Volunteer Fire Department.

QUESTION 2:

Was a voting conflict of interest created under Section 112.3143, Florida Statutes, where the Mayor voted on the approval of the contract between the City and the Volunteer Fire Department?

This question also is answered in the negative.

Section 112.3143(3), Florida Statutes (1985), 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 provision prohibits a municipal officer from knowingly voting upon any measure which inures to the special gain of any principal by whom he is retained. However, we previously have advised that a public officer does not have a voting conflict of interest under this provision when voting on matters affecting a nonprofit organization which he serves as an officer or director without compensation, as the official is not "retained" by the organization. See CEO 83-93 and CEO 83-70.

Accordingly, we find that the Mayor was not prohibited by Section 112.3143, Florida Statutes, from voting on the approval of the contract between the City and the Volunteer Fire Department because of his service as a Trustee of the Fire Department.