Advisory Opinion No. 2012-13

Re: Caswell Cooke, Jr.

QUESTION PRESENTED

The Petitioner, a member of the Westerly Town Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in the Town Council’s consideration of a resolution to fund a sewer expansion to the Misquamicut Beach area, given that he is employed as the part-time Executive Director of the Misquamicut Business Association.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Westerly Town Council, a municipal elected position, is prohibited by the Code of Ethics from participating in the Town Council’s consideration of the Misquamicut Beach area sewer expansion, given that 3 members of the Misquamicut Business Association’s Board of Directors, the Petitioner’s employer, as well as 90% of the business members and 12 of the homeowner members of the Misquamicut Business Association will be financially impacted by the Town Council’s approval or disapproval of this sewer expansion.

The Petitioner is a member of the Westerly Town Council (“Town Council”). He represents that the Westerly Town Manager has proposed a resolution to fund a sewer expansion to the Misquamicut Beach area, which includes costs, grant availability, municipal contributions, twenty-year revenue bond financing and a method of property owner assessment. He informs that 770 homes and 33 businesses will be affected by this proposed sewer expansion. He advises that individual sewer assessments for property owners will be based upon projected utilization of the system, with larger users paying larger assessments. In addition, he states that property owners who have already installed expensive denitrification septic systems will be allowed a ten year forbearance before beginning to pay their sewer assessment. He represents that, if approved, the sewer expansion would be completed in two phases: Phase I for Atlantic Ave and Winnapaug Road, areas located closest to coastal features, and Phase II for the remainder of southwestern Misquamicut.

In his private capacity, the Petitioner is the part-time, paid Executive Director of the Misquamicut Business Association (“MBA”). He states that the MBA works to revitalize the beach area and promote local business and commerce. He informs that the MBA has about 180 members, including approximately 90% of the 33 businesses affected by the sewer expansion and 12 of the 770 homeowners affected by the sewer expansion. He also represents that 3 of the 33 businesses affected by the sewer expansion are owned by members of the Board of Directors of the MBA, which is his employer. Given the above representations, the Petitioner seeks guidance as to whether he is required to recuse from the Town Council’s consideration of the Misquamicut Beach area sewer expansion.

Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of his duties or employment in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if an official has reason to believe or expect that he, any person within his family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). Additionally, the Code prohibits a public official from using his public office or confidential information received through his public office to obtain financial gain for himself, his family, his business associate, or any person by which he is employed or whom he represents. Section 36-14-5(d).

However, section 36-14-7(b) of the Code, referred to as the “class exception,” states that a public official will not have an interest which is in substantial conflict with his official duties if any benefit or detriment accrues to him, any person within his family, any business associate, or any business by which he is employed or which he represents “as a member of a business, profession, occupation or group, or of any significant and definable class of persons within the business, profession, occupation or group, to no greater or lesser extent than any other similarly situated member of the business, profession, occupation or group, or the significant and definable class of persons within the business, profession, occupation or group.”

The Commission has previously noted the general difficultly of applying the class exception to matters involving actions that impact real property, given the unique nature of each discrete piece of real estate and the fact that actions affecting real property and its value will likely create a dissimilar impact on each property owner. A.O. 2008-63 (opining that the class exception was inapplicable and, thus, the petitioner was required to recuse from participation in the Narragansett Town Council’s approval of a zoning amendment, given that he owned 2 of the 70 properties within the district subject to the amendment). See also A.O. 2002-66 (opining that the class exception was inapplicable because while all the teachers constituted a significant and definable class, the bargaining agreement at issue did not impact all of the members of the class equally).

In the present matter, 3 members of the Board of Directors of the MBA, the Petitioner’s employer, as well as 90% of the MBA’s business members and 12 of the MBA’s homeowner members will be financially impacted by the Town Council’s approval or disapproval of this sewer expansion. While the MBA’s members are part of a larger, significant and definable class of 770 homes and 33 businesses, the sewer expansion plan does not impact all of the members of this class equally. In the event that the Town Council approves this sewer expansion, each property owner will be required to pay a sewer assessment based upon the projected usage of each property, with larger users subject to larger assessments. Moreover, certain property owners will not have to start paying the sewer assessment for ten years if they have already installed an expensive denitrification septic system. On the other hand, if the Town Council disapproves the sewer expansion plan, certain property owners would have to install new and very expensive denitrification septic systems while others, who have already installed those systems, will not be subject to any increased cost. Also, the costs of installing the required septic systems will vary dramatically from the smallest single family homeowner to the largest hotel. Therefore, the class exception is inapplicable because irrespective of how the Town Council votes there will be a dissimilar financial impact upon all of the property owners affected by the sewer expansion.

Accordingly, it is the opinion of the Ethics Commission that the Petitioner is prohibited by the Code of Ethics from participating in the Town Council’s consideration of a resolution to fund a sewer expansion to the Misquamicut Beach area, given that 3 members of the Board of Directors of the MBA, the Petitioner’s employer, as well as 90% of the MBA’s business members and 12 of the MBA’s homeowner members will incur dissimilar financial impacts resulting from the Town Council’s approval or disapproval of this sewer expansion. As such, the Petitioner is required to recuse from participating in the Town Council’s consideration and vote on the Misquamicut Beach area sewer expansion. Notice of recusal must be filed in accordance with § 36-14-6.

Code Citations:

§ 36-14-5(a)

§ 36-14-5(d)

§ 36-14-6

§ 36-14-7(a)

§36-14-7(b)

Related Advisory Opinions:

A.O. 2008-63

A.O. 2002-66

Keywords:

Class Exception

Private Employment