CEO 98-17 -- October 22, 1998
CONFLICT OF INTEREST; VOTING CONFLICT
NEW SIGN CODE VOTED ON BY VILLAGE COUNCIL MEMBER
EMPLOYED AS MARKETING AND SALES REPRESENTATIVE
FOR SIGN MANUFACTURING COMPANY DOING BUSINESS
WITH VILLAGE AND DEVELOPERS WHO APPEAR
BEFORE VILLAGE COUNCIL
To: Christine P. Tatum, Village Attorney (Wellington)
SUMMARY:
A member of a Village Council, who is employed as a marketing and sales representative for a sign manufacturing company which is doing business with the Village, has a prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, for purchases in an amount less than $15,000 unless the sole source exemption of Section 112.313(12)(e), Florida Statutes, applies to negate the prohibition. For purchases by the Village from the company in an amount greater than $15,000, no prohibited conflict of interest exists as long as the Council member complies with the requirements of Section 112.313(12)(b), Florida Statutes, pertaining to contracts awarded under a sealed competitive bid process.
In addition, no prohibited conflict of interest under the first part of Section 112.313(7)(a) is created by the Council member=s employer having to obtain permits from the Village=s Planning, Building, and Zoning Department, because that Department is not the Council member=s Aagency,@ as that term is defined at Section 112.312(2), Florida Statutes. Thus, the Council member would not have an employment relationship with a business entity, his employer, which is regulated by his agency.
Inasmuch as the Council member has no involvement with the review or approval of sign permits or site-plans, no continuing or frequently recurring conflict between his private interests and his public duties or an impediment to the proper performance of his public duties is created by his employment with the sign manufacturing company.
As long as the Village=s proposed Land Development Regulations do not provide for the eventual abatement of signs within the Village, no voting conflict would be created by the Council member=s voting on the Regulations. The class of persons who would be indirectly affected by the Regulations, of which the Council member is one, is sufficiently large that any gain or loss resulting from the Council=s adoption of the Regulations would not be Aspecial@ to him.
Because a vote by the Council member on a matter that directly affects his employer, such as on awarding a bid or approving payment on a contract, would inure to the special gain or loss of a principal by whom he is retained, he is prohibited by Section 112.3143(3)(a) from voting on such matters. However, no voting conflict would exist were the Council member to vote on various land development approvals, including annexations, requested by developers who the Council member no longer is doing business with, but may have done business with in the past or anticipates doing business with in the future, because he would not be voting on a matter that inures to the special gain or loss of himself or of a principal by which he is retained. If the Council member currently is doing business or negotiating with the developer, he may be prohibited from voting on the developer=s land development approval request. CEO 87-86 and CEO 92-1 are referenced.
QUESTION 1:
Is a prohibited conflict of interest created by a Village=s purchase of signage from a sign manufacturing company employing a Village Council member?
Under the circumstances presented, your question is answered in the negative relative to purchases in an amount greater than $15,000, and in the affirmative relative to purchases in an amount less than $15,000 unless the Village institutes all such purchases pursuant to a sealed competitive bid process or the Council member=s employer is the sole source of supply of signage in the Village.
In your letter of inquiry, you advise that you are seeking an opinion on behalf of Albert P. Paglia, an elected Village Council member of the Village of Wellington (AVillage@). The Council member is concerned about the existence of possible violations of the Code of Ethics for Public Officers and Employees relative to his employment as a sales and marketing representative for a sign manufacturing company.
You advise that the Village operates under a Manager/Village Council form of government, where the Village Manager is responsible for the day-to-day operations of the Village. You write that the Mayor and four Council members comprise the Village Council. You relate further that the subject Council member was elected in March 1998 to a four year term. As part of his official duties, you advise, he will be asked to vote on various Aland development approvals,@ including several annexations, and new land development regulations, which will include a new Village sign ordinance.
You also advise that the Council member currently is employed by a sign manufacturing company for which he performs both marketing and sales work, and is compensated through a combination of salary and commissions. His sales area includes the Village, as well as adjoining areas which are or may be seeking annexation approval and land development approvals from the Village, you write.
You advise further that pursuant to an interlocal agreement, sign permitting currently is handled by Palm Beach County. However, within the next several months, the Village will be assuming the building permitting function from the County. Consequently, when the building permitting responsibility transfer occurs, the Council member=s employer, the sign manufacturing company, will be required to obtain permits from the Village=s Planning, Building, and Zoning Department for each sign that is installed in the Village. Nevertheless, because the Council member has no jurisdiction or authority over the Planning, Building and Zoning Department, he will have no involvement in the Village=s review or approval of sign permits, you write.
You advise that at the present time, site-plan approval, which may involve approval of the location, type, and dimensions of proposed signs, is processed by Village staff, and does not come before the Village Council for its review. However, it is possible that such review will be transferred, at least for certain projects, to the Village Council after it adopts its new Land Development regulations, you write.
Finally, you advise that the Village Acurrently@ has a contract with the Council member=s employer, the sign manufacturing company, for the construction and installation of signage at a new Village Park facility. The contract, which was completed in 1997, was approved in 1995, prior to the Council member=s election to the Council, you write. You also advise that if the purchase amount of a sign contract is greater than $15,000, it is awarded pursuant to a sealed competitive bid process, and for projects costing between $5,000 and $15,000, the Department purchasing the signs must obtain price quotes from three vendors, For projects costing under $5,000, the Department making the purchase is authorized to choose the vendor, you advise.
You relate that the Village does not maintain a list of approved sign manufacturing company vendors and that the Council member=s employer is interested in continuing to do work for the Village. However, you advise that the Council member would not be involved in the solicitation of such work.
Relevant to your inquiry are the following provisions of the Code of Ethics for Public Officers and Employees:
DOING BUSINESS WITH ONE'S AGENCY.--No employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer=s or employee=s spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer=s or employee=s 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 the officer=s or employee=s own agency, if he or she is a state officer or employee, or to any political subdivision or any agency thereof, if he or she 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.
(c) Appointment to public office.
(d) Beginning public employment.
[Section 112.313(3), Florida Statutes.]
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 or she is an officer or employee, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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 or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes.]
VOTING CONFLICTS.--No county, municipal, or other local public officer shall vote in an official capacity upon any measure which inures to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom the officer is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(3); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer=s interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her 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. [Section 112.3143(3)(a), Florida Statutes.]
Unless one of the exemptions of Section 112.313(12), Florida Statutes, applies, Section 112.313(3), Florida Statutes, prohibits the Village Council member from acting in his official capacity to purchase any goods or services for his agency, the Village Council, from a business entity of which he or his spouse or child is an officer, partner, director, or proprietor, or in which he or his spouse or child owns more than a five percent interest, and from selling any services or goods to the Village Council or the Village in his private capacity. Because it appears that the Council member is an employee of the company, rather than an officer, partner, director, proprietor, or owner of more than a five percent interest in the company, and because we have no information indicating that the Council member=s spouse or child is an officer, partner, director, or proprietor, or owner of more than a five percent interest in the company, we are of the opinion that the first part of this provision does not apply. See CEO 86-14. Similarly, although the Council member=s employer sells signs to the Village, because he will not be involved personally in the solicitation of those sales, we also are of the opinion that the second part of this provision is not applicable.
Unless one of the exemptions of Section 112.313(12), Florida Statutes, applies, Section 112.313(7)(a), Florida Statutes, prohibits the Council member from being employed with the sign manufacturing company if it is doing business with or is subject to the regulation of his agency, the Village Council, or if it creates a continuing or frequently recurring conflict between his private interests and the performance of his public duties or an impediment to the full and faithful discharge of his public duties. For purposes of Section 112.313(7)(a), the phrase "conflict of interest" is defined in the Code of Ethics to mean "a situation in which regard for a private interest tends to lead to disregard of a public duty of interest." Section 112.312(8), Florida Statutes.
In CEO 86-59, we considered a situation where a city was seeking to adopt a sign ordinance containing provisions regarding the abatement of signs in violation of the ordinance and procedures for the removal of illegal, unauthorized, or unpermitted signs by the city, creating zoning limitations on signs that restricted the size, type, and location of on‑site and off‑site signs in various zoning districts, and prohibiting certain types of signs in varying districts. Assuming that the Village=s proposed sign code will contain similar provisions, we conclude that the sign manufacturing company would not be subject to the regulation of the Village; rather those persons and entities owning, leasing, or otherwise using signs covered by the proposed sign code would be regulated by the Village.
On the other hand, unless one of the exemptions to the prohibitions of Section 112.313(7)(a) are applicable, the sale by the company of signs to the Village would create a prohibited conflict of interest in violation of the first part of Section 112.313(7)(a). The Council member would have an employment relationship with a business entity doing business with his agency, the Village Council.
With respect to purchases from the company in an amount greater than $15,000 where the purchase is made through a sealed competitive bid process, Section 112.313(12)(b), Florida Statutes, would apply to exempt the apparent conflict created by the Council member=s employment with a company which is doing business with his agency. Section 112.313(12)(b) exempts business awarded under a system of sealed competitive bidding, but only where: (1) neither the Council member nor his or her spouse or child has participated in either the determination of the bid specifications or the lowest and best bidder; (2) neither the Council member nor his spouse or child has used or attempted to use their influence to persuade the Village Council or any of its employees to enter into such a contract, other than by the mere submission of a bid; and (3) the Council member, prior to or at the time of submission of the bid, has filed a statement with the Supervisor of Elections disclosing his interest, or the interest of his spouse or child, and the nature of the intended business. This disclosure should be made on CE Form 3A. See CEO 94-9. Thus, in order to comply with the requirements of this exemption, we find that the Council member would not be able to participate in discussions or vote on agenda items that come before the Village Council concerning the selection of company to be awarded the bid.
With respect to projects costing less than $15,000, unless the Village institutes a sealed competitive bid process for those as well, or unless one of the other exemptions contained in Section 112.313(12), such as Section 112.313(12)(e), Florida Statutes, is applicable, the Village would not be able to purchase from the company without creating a prohibited conflict of interest for the Council member. Section 112.313(12)(e) exempts purchases made seemingly in violation of Section 112.313(7)(a) where the business entity, in this case, the sign manufacturing company, is the sole source of supply within the Village, and there is full disclosure by the Council member of his interest in the company to the Village Council prior to the purchase or other business transacted. Thus, if the sign manufacturing company is located in the Village and is the only such business entity located in the Village manufacturing and selling the signs needed by the Village, and as long as the Council member completes Part B [Disclosure of Interest in Sole Source of Supply] on Form 4A [Disclosure of Business Transaction, Relationship or Interest], we find that this exemption would apply to exempt any conflict under Section 112.313(7)(a) that would be created by his employment with the company.
QUESTION 2
Is a prohibited conflict of interest created by the Village Council member=s employer=s obtaining permits from the Village=s Planning, Building, and Zoning Department for each sign installed in the Village?
Under the circumstances presented, your question is answered in the negative.
We also find that no prohibited conflict of interest under the first part of Section 112.313(7)(a) would be created by the Council member=s company=s having to obtain permits from the Village=s Planning, Building, and Zoning Department for each sign that is installed in the Village because, even if the permitting process were considered to be regulation, it is not the Council member=s Aagency@ which is doing the regulating, as that term is defined at Section 112.312(2), Florida Statutes, but the Planning, Building, and Zoning Department, a separate Aagency@.
QUESTION 3:
Would a prohibited conflict of interest be created under the second part of Section 112.313(7)(a), Florida Statutes, by the Council member=s employment with the sign manufacturing company in view of the Village=s review and/or approval of sign permit applications and site-plans?
Under the circumstances presented, your question is answered in the negative.
Finally, we find that the second part of Section 112.313(7)(a) would not be implicated by the Council member=s employment with the sign manufacturing company because you have indicated that he has no involvement with review or approval of any sign permits. Furthermore, because site-plan approval, which may involve approval of the location, type, and dimensions of proposed signs, for those developers that he is doing business with through his employer, are processed by staff of the Village and do not come before the Village Council, no continuing or frequently recurring conflict between the Council member=s private interests, as an employee of the sign company, and his public duties, as a member of the Village Council, or impediment to the proper performance of his public duties, exists. However, when the Village adopts its new Land Development Regulations, which, as you have advised, may involve site-plan approval for certain projects, you may wish to contact us again with more specifics regarding the type of review that the Council would be doing, what entities would be affected by the Council=s review, the frequency with which the Council will conduct such reviews, and the frequency of the appearances of certain entities before the Council, i.e., developers, for a determination of whether a conflict of interest is created for the Council member under these changed circumstances.[1]
QUESTION 4:
Would a voting conflict of interest be created were the Village Council member to vote on the Village=s new Land Development Regulations?
As long as the Village=s proposed Land Development Regulations do not provide for the eventual abatement of signs within the Village, your question is answered in the negative.
Section 112.3143(3)(a), quoted above, also prohibits the Council member from voting on a matter which would inure to his special private gain or loss, to the special private gain or loss of a principal by whom he is retained, or to the special gain or loss of his relative or business associate. It also contains an affirmative duty of disclosure so that interested parties and the public will understand why he is abstaining from voting.
In CEO 86-59, we opined that a city council member was not prohibited by Section 112.3143 from voting on a proposed sign ordinance where the council member was the owner of a commercial art shop which produced signs, among other products. We found that the ordinance would have only an indirect effect on the council member=s business and, under the facts presented, there was no indication that the council member would be affected by the ordinance to a significantly greater or lesser degree than the other affected businesses. Consequently, we opined that the proposed ordinance would not inure to the Aspecial gain@ of the city council member. In contrast, in CEO 90-25, where the proposed ordinance would have prohibited new billboards and eliminated existing billboards after seven years, and the city commission member owned several billboards, we found that because the city commission member was a member of the smaller class of persons directly affected by the proposed ordinance, he was prohibited by Section 112.3143 from voting on the proposed ordinance. Thus, assuming that the proposed Land Development Regulations only pertain the abatement of signs in violation of the ordinance, procedures for the removal of illegal, unauthorized, or unpermitted signs by the Village, and zoning limitations on the size, type, and location of on‑site and off‑site signs in various zoning districts, and the prohibition of certain types of signs in varying districts, we are of the opinion, as we found in CEO 86-59, that the Council member, as a marketing and sales representative for the sign manufacturing company, is a member of the class of persons indirectly affected by the regulations. We find further that that class is sufficiently large that any gain or loss resulting from the Village Council=s adoption of the Regulations, although possibly also being remote and speculative, would not be Aspecial@ to the Council member, that is, he would not be affected by the ordinance to any greater (or lesser) degree than other businesses which would be affected by the ordinance. The class of persons who would be Adirectly@ affected by the Regulations, would be the sign owners, lessors, and other users, of which the Council member is not a member. However, if the Land Development Regulations provide for the eventual abatement of signs within the Village, then the Council member would be directly affected by the regulations and his vote on the measure would inure to his or his principal=s special gain or loss. Consequently, he would be prohibited by Section 112.3143(3)(a) from voting on the measure. See CEO 90-25.
QUESTION 5:
Would a voting conflict of interest be created were the Village Council member to vote on matters affecting his employer?
Under the circumstances presented, your question is answered in the affirmative.
The Council member also would be prohibited from voting on matters directly affecting his employer, such as on awarding a bid to his employer, on paying the sign manufacturing company for services performed or items sold to the Village, and on awarding a contract to his employer. Such a vote would inure to the special gain or loss of a principal by whom the Council member is retained. In previous opinions we have advised that a public official=s employer is a Aprincipal by whom he is retained.@ See CEO 85-17 and the opinions cited therein.
QUESTION 6:
Would a voting conflict of interest be created by the Council member=s voting on various land development approvals, including annexation, requested by developers?
Your question is answered in the negative with respect to developers who the Council member is no longer doing business with or selling to, and answered in the affirmative with respect to those developers with whom the Council member currently is doing business or is negotiating to do business.
With respect to the Council member=s voting on various land development approvals in the Village, including several annexations requested by developers who the Council member no longer is doing business with, but may have done business with in the past, or anticipates doing business with in the future, we are of the opinion that no voting conflict would exist. The Council member would not be voting on a matter that inures to the special private gain of himself, a Aprincipal by whom he is retained,@ or anyone else within the scope of the statute. However, if the Council member currently is doing business with a developer through his employer or is negotiating to do business with a developer, we believe that a voting conflict may exist were the Council member to vote to approve on a land development proposal, including an annexation, requested by the developer.
In CEO 87-86, we found that a city council member was prohibited by Section 112.3143 from voting on a proposed development agreement regarding the construction of a shopping center development, where he was negotiating for the lease or sublease in the shopping center. We opined that, as the extent to which the Council member might gain would turn on the willingness of the developer to lease a favorable location upon favorable terms and conditions and as different arrangements might be possible for different tenants, we could not conclude that the development agreement would not inure to the special gain of the council member. Similarly, here, where the Council member is doing business with or negotiating to do business with developers appearing before the Council for land development approvals, including annexations, we cannot conclude that the land development approvals would not inure to the special gain of the Council member, that is, that the extent of the gain to the Council member in increased commissions from his sales to the developer would not turn on the developer=s willingness to do business with the Council member upon obtaining land development approval.
On the other hand, in CEO 92-1, we opined that the applicability of Section 112.3143(3)(a) turns on the nature of a measure=s relationship to the public official=s interests, rather than on the identity of the party before the public official=s agency. Therefore, we found that a city council member was not prohibited from voting on an amendment to the city=s comprehensive plan which was opposed by a company that dealt with the council member's company at Aarms length@ and sold his company both services and wholesale products, when neither the council member nor his company was affected either directly or indirectly by the passage or defeat of the plan amendment. Thus, even if the entity appearing before the Village Council may be a developer who the Council member is either currently doing business with or is negotiating to do business with, if the matter under consideration will not directly or indirectly affect the Council member or his employer, no prohibited voting conflict would exist were he to vote on the matter. Nevertheless, the appearance of a conflict of interest may be such as to permit the Council member to abstain at his discretion from voting pursuant to Section 286.012, Florida Statutes. See CEO 83-42 and CEO 90-44.
Finally, we must caution that the Council member be made aware of Section 112.313(6), Florida Statutes, which states:
MISUSE OF PUBLIC POSITION.--No public officer or employee of an agency, or local government attorney shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, or others. This section shall not be construed to conflict with s. 104.31.
Any attempt by the Council member to use his position to harass those developers who do not use his company, to reward those who do, or to influence the actions of Village employees regarding a developer=s site-plan, could be determined to be in violation of this Section.
Your questions are answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on October 22, 1998 and RENDERED this 27th day of October, 1998.
__________________________
Charles A. Stampelos
Chairman
[1] In CEO 89-45, we opined that if a city commissioner has contractual relationships with entities which frequently are required to come before the City Commission in one capacity or another, his relationships may create a continuing or frequently recurring conflict between his private interests and public duties and could impede the full and faithful discharge of his public duties.