Advisory Opinion No. 2013-5

Re: Christine A. Rossi

QUESTION PRESENTED:

The Petitioner, a member of the East Providence City Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits her from serving as the City Council’s representative member on the East Providence Police and Fire Pension Fund Board, given that her husband is a retired East Providence Police Officer.

RESPONSE:

It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the East Providence City Council, a municipal elected position, may serve as the City Council’s representative member on the East Providence Police and Fire Pension Fund Board, provided that her official actions do not affect her husband to any greater or lesser extent than any other similarly situated beneficiary of the East Providence Police and Fire Pension Fund.

The Petitioner is a member of the East Providence City Council (“City Council”), having been recently elected in November 2012. She informs that she would like to represent the City Council as a member of the East Providence Police and Fire Pension Fund Board (“Board”). She states that the Board was created by a City ordinance in 1961 as a trust to be managed by a Board of Trustees. She represents that the Board is comprised of seven (7) trustees: the City manager and the director of finance, who serve ex officio; one (1) police officer and one (1) firefighter, each having five (5) years of credited service; one (1) member elected from the City police and fire retirees association; one (1) member of the City Council; and one (1) member to be elected by the remaining six (6) members of the Board. East Providence Code § 11-245.

The Petitioner states that the Board holds quarterly meetings, which are open to the public. She represents that the Board is charged with overseeing the investment and disbursement of the pension fund to 250 police and fire retirees each month. She informs that matters for consideration at each meeting can include: receiving reports from the professional investment consultant and making investment decisions; assessing applications for disability pensions; providing benefits to surviving spouses; and reviewing the eligibility of active members seeking to retire.

Additionally, at every meeting during open session there is an agenda item called “Items to be received for the record” that includes, among other things, a list of retirees who automatically received cost of living adjustments (“COLAs”) since the last meeting. This list is organized by month because COLAS for police and fire retirees occur annually on the anniversary of each person’s retirement. The list includes the names of each retiree and that retiree’s new monthly pension payment. The Board takes one vote to receive all of the items for the record, including the automatic COLA increases.

The Petitioner further represents that her husband retired from the East Providence Police Department on April 1, 2010 and is currently collecting a pension that is administered by the Board. She states that her husband previously served as Chair of the Board during his employment as a police officer. Cognizant of the Code of Ethics, the Petitioner seeks advice as to whether she can serve as a member of the Board that administers her husband’s pension.

Under the Code of Ethics, a public official may not participate in any matter in which she has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of her 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 she, any person within her family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of her official activity. Section 36-14-7(a). Additionally, a public official may not use her office for pecuniary gain, other than as provided by law, for herself, a family member, employer, business associate, or a business that she represents. Section 36-14-5(d).

However, section 36-14-7(b) of the Code, sometimes referred to as the “class exception,” states that a public official will not have an interest which is in substantial conflict with her official duties if any benefit or detriment accrues to her or any person within her family “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.”

When determining whether any particular circumstance supports and justifies the application of the class exception, the Commission will consider the totality of the circumstances. Among the important factors considered are: 1) the description of the class; 2) the size of the class; 3) the function or official action being contemplated by the public official; and 4) the nature and degree of foreseeable impact upon the class and its individual members as a result of the official action.

In prior advisory opinions the Commission has applied the class exception to fact patterns involving pension plans. For example, in Advisory Opinion 2003-57, a state senator was permitted to participate in the Rhode Island Senate’s consideration of legislation concerning the state pension plan, of which he was a member, given that the legislation would affect all state employees and all teachers in the state. See also A.O. 2008-16 (opining that the Director of Administration for Providence, who had a vested interest in the municipal employees’ pension plan administered by the state, could serve on a special House Commission to study the state retirement system, given that the petitioner would be financially impacted to no greater or lesser extent than any other similarly situated participants in the state and municipal employees’ pension plan).

Here, the Petitioner’s husband is a member of a class of 250 retired police officers and firefighters in the City of East Providence. See A.O. 2005-22 (applying the class exception and opining that an Exeter Town Council member could participate in a proposed tax freeze ordinance for all property owners aged 65 and over, notwithstanding that his spouse was over 65 and could benefit from the tax freeze, because 250 to 300 other property owners would be similarly impacted by the ordinance). Each member of this class is a current beneficiary of the pension fund, which is managed by the Board. The Petitioner’s contemplated official actions, such as investment decisions, will primarily affect all retirees equally or will be directed at other individuals, such as new retirees, surviving spouses or disability pension applicants. Many of the Board’s actions are limited to overseeing the pension fund according to the collective bargaining agreements under which the police officers and firefighters retired. However, in the event that any of the matters before the Board individually identify or individually impact her husband, such as his annual COLA, the Petitioner would be required to recuse.

The Petitioner should also be mindful that, if she is appointed to serve as the City Council’s member of the Board, Commission Regulation 36-14-5002 (“Regulation 5002”) would require her to recuse herself from participation when her husband appears or presents evidence or argument before the Board. Regulation 5002(a)(1). However, this prohibition would not apply if her husband appeared before the Board during a period when public comment is allowed, to offer comment on a matter of general public interest, provided that all other members of the public have an equal opportunity to comment, and further provided that her husband is not otherwise a party or participant and has no personal financial interest in the matter under discussion. Regulation 5002(b)(2).

For all of these reasons, it is the opinion of the Ethics Commission that the Petitioner may serve as a member of the East Providence Police and Fire Pension Fund Board, provided that her official actions do not affect her husband to any greater or lesser extent than any other similarly situated beneficiary of the East Providence Police and Fire Pension Fund. However, the Petitioner is required to recuse from any Board matters that individually identify or individually impact her husband. Notice of recusal must be filed with the Ethics Commission in accordance with § 36-14-6.

Finally, this advisory opinion only considers the Code of Ethics and provides no opinion as to whether the East Providence City Charter, the East Providence Code of Ordinances or any other statutes, regulations, rulings or policies prohibit her service on the pension board.

Code Citations:

§ 36-14-5(a)

§ 36-14-5(d)

§ 36-14-6

§ 36-14-7(a)

§ 36-14-7(b)

Commission Regulation 36-14-5002

Related Advisory Opinions:

A.O. 2008-16

A.O. 2005-22

A.O. 2003-57

Keywords:

Class Exception