Advisory Opinion No. 2019-56 Rhode Island Ethics Commission Advisory Opinion No. 2019-56 Approved: October 8, 2019 Re: Seth Yurdin QUESTION PRESENTED: The Petitioner, a member of the Providence City Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from: (i) responding to the request of the City Plan Commission for support in his capacity as City Councilman of an application by the Providence Preservation Society to expand the Providence Historic District Zoning Overlay in the district he represents; and (ii) participating in the City Council’s discussions and decision-making relative to the reaffirmation of the existing Zoning Overlay, and its proposed expansion, given that the Petitioner would be one of the affected residents within the proposed extension. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the Petitioner from: (i) responding to the request of the City Plan Commission for support in his capacity as City Councilman of an application by the Providence Preservation Society to expand the Providence Historic District Zoning Overlay in the district he represents; and (ii) participating in the City Council’s discussions and decision-making relative to the reaffirmation of the existing Zoning Overlay and its proposed expansion, notwithstanding that the Petitioner would be one of the affected residents within the proposed extension, given that the circumstances herein justify the application of the class exception as set forth in Rhode Island General Laws § 36-14-7(b). The Petitioner is an elected member of the Providence City Council (“City Council”). He states that a petition to expand the Providence Historic District Zoning Overlay (“Zoning Overlay”) has been proposed by the Providence Preservation Society (“PPS”), a private, nonprofit organization, specifically, by adding 90 properties to the College Hill Historic Overlay District. He further states that the Zoning Overlay subjects those properties within its boundaries to regulations and approvals by the Providence Historic District Commission (“Historic District Commission”), which “reviews all proposed work affecting the exterior appearance of any structure, site or its appurtenances, including construction, alteration, repair, moving, demolition and signage, within the historic districts.”[1] The Petitioner explains that he is a property owner/resident of, and the Councilman for, the area within the proposed expansion. The Petitioner represents that the proposal to expand the Zoning Overlay was forwarded by the PPS to the City Plan Commission (“CPC”) for evaluation based on conformance with the CPC’s adopted criteria and procedures for designation of historic district overlay zones. He explains that the PPS is required to show compliance with nine standards from the CPC’s policy for designation of local historic districts. He further explains that the CPC can make a positive recommendation to the City Council to approve the expansion based on compliance with those standards, which include “seeking support from the City Council representative in whose ward the proposed district is located” and “contacting each property owner within the proposed district individually with information about the benefits and restrictions associated with historic zoning” with the requirement that “at least 50 percent of all property owners within the district be in support of the designation.”[2] The Petitioner states that he has not indicated support for the expansion in light of his pending request for an advisory opinion from the Ethics Commission. He adds that, although the CPC’s requirement that there be support from at least 50 percent of all property owners within the proposed expansion area has not been met (to date only 45 percent have expressed support), the CPC noted in its letter to the City Council that the PPS was “largely in compliance” with the CPC’s policy for inclusion within a historic district and had submitted “sufficient information” for the City Council to take action.[3] The Petitioner states that when the City Council considers the petition for expansion of the Zoning Overlay, it will actually be reaffirming the application of the existing Zoning Overlay and adding the 90 new properties. He explains that the present Zoning Overlay encompasses 1,296 properties.[4] He adds that the Standards and Guidelines subject all properties within the Zoning Overlay, as they would for all properties within the proposed expansion, to the same obligations and/or requirements, regardless of the property type. It is in the context of these facts and representations that the Petitioner seeks the advice of the Ethics Commission regarding whether he may: (i) respond to the request of the CPC for support in his capacity as City Councilman for the area affected by the proposed expansion of the Zoning Overlay; and (ii) participate in the City Council’s discussions and decision-making relative to the reaffirmation of the existing Zoning Overlay and approval of the proposed 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, his business associate or his 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 of Ethics 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 member, his business associate, or any person by which he is employed or whom he represents. Section 36-14-5(d). In order to determine whether the above provisions of the Code of Ethics are implicated, the Commission must ascertain whether the Petitioner would be financially impacted by the official action that is under consideration. Here, the Petitioner owns and resides in a property that would be subject to the proposed expansion of the Zoning Overlay. It is, therefore, reasonably foreseeable that the Petitioner would be financially impacted by the expansion. Because the above representations suggest that any financial impact would likely be substantially similar among all of the property owners within the area of the proposed expansion, we will consider whether the “class exception” applies to this unique set of circumstances. Section 36-14-7(b) of the Code of Ethics, referred to as the “class exception,” states that a public official will not have an interest which is in substantial conflict with the proper discharge of his official duties if any benefit or detriment accrues to him, or any person within his family or 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.” When determining whether any particular circumstance supports and justifies the application of the class exception, the Ethics Commission considers 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. 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. See, e.g., A.O. 2012-13 (opining that the class exception was inapplicable and, thus, a member of the Westerly Town Council was prohibited from participating in the consideration of a resolution to fund a sewer expansion to the Misquamicut Beach area, given that three members of the Board of Directors of the Misquamicut Beach Association (“MBA”), the petitioner’s employer, as well as 90% of the MBA’s business members and 12 of the MBA’s homeowner members would incur dissimilar financial impacts resulting from the Town Council’s approval or disapproval of the sewer expansion); A.O. 2016-3 (opining that the class exception was inapplicable and, thus, a member of the Scituate Town Council was prohibited from participating in the consideration of a tax stabilization agreement for the Hope Mill, given that he owned two properties within close proximity of the Hope Mill, the transformation of which could result in competition in the local rental market for the petitioner). However, the Ethics Commission has previously applied the class exception in a variety of circumstances involving city/town council members and their real estate holdings. See, e.g., A.O. 2015-4 (applying the class exception and permitting a Charlestown Town Council member to participate in the Town Council’s discussions and decision-making relative to remediating ground water pollution, given that it was reasonably foreseeable that the financial impact upon the entire class would be substantially similar in the form of equal of proportional assessments to connect to community water and/or wastewater systems, or a Town-wide tax increase to subsidize improvements to the water and sewer infrastructure to prevent pollution and salt water intrusion); A.O. 2005-22 (applying the class exception and permitting an Exeter Town Council member to 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); and A.O. 2005-13 (applying the class exception and permitting the Chair of the Jamestown Planning Commission to participate in discussions and decision-making relative to changes to the Jamestown Zoning Ordinance that would place new requirements upon Jamestown property owners within an overlay district who were seeking to build on critical lands, notwithstanding that his property was located within the overlay district containing these lands). Here, when the City Council meets to engage in discussions and decision-making regarding the Zoning Overlay, it will address not only the potential expansion to include a class of 90 properties, but the reaffirmation of the existing Zoning Overlay, which presently consists of 1,296 properties. The official action being contemplated by the Petitioner, both in his capacity as the City Council representative in whose ward the expansion is located interacting with the PPS, and in his capacity as a member of the City Council before whom the petition of PPS will ultimately be brought, will result in subjecting all of the properties within the Zoning Overly, including those in the proposed expansion, to the same obligations and/or requirements of the Historic District Commission’s Standards and Guidelines, regardless of property type. For this reason, and in consideration of the facts as represented, the application of the Code of Ethics, and prior advisory opinions, it is the opinion of the Ethics Commission that the Petitioner is not prohibited from responding in his capacity as City Councilman to the request of the CPC for support of the PCP’s application to expand the Zoning Overlay, or from participating in the City Council’s discussions and decision-making relative to the reaffirmation of the existing zoning overlay and its proposed expansion. However, in the event that the City Council’s discussions veer into a revision of the proposed expansion in ways that would impact the Petitioner individually, or as a member of a much smaller class or subclass of residents, the Petitioner is advised that he must either recuse from participation or seek additional guidance from the Ethics Commission. Upon recusal, a statement of conflict of interest must be filed with the City Council and the Ethics Commission pursuant to section 36-14-6. This Advisory Opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics. Under the Code of Ethics, advisory opinions are based on the representations made by, or on behalf of, a public official or employee and are not adversarial or investigative proceedings. Finally, this Commission offers no opinion on the effect that any other statute, regulation, ordinance, constitutional provision, charter provision, or canon of professional ethics may have on this situation. 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. 2016-3 A.O. 2015-4 A.O. 2012-13 A.O. 2005-22 A.O. 2005-13 Keywords: Class Exception Property Interest [1] Providence Historic District Commission Standards and Guidelines for the Armory, Broadway, College Hill, Northern Elmwood, Southern Elmwood and Stimson Avenue Historic Districts, p. 4 (“Standards and Guidelines”). [2] Letter of Choyon Manjrekar, Administrative Officer, City Plan Commission to Councilwoman Jo-Ann Ryan, Chair, Committee on Ordinances, dated September 18, 2019. [3] In addition to requiring the PPS to continue to seek the support of the Petitioner in his capacity as the City Council representative in whose ward the proposed expansion is located, the CPC is also requiring the PPS to continue to seek support from property owners in order to exceed the 50 percent threshold of property owners supporting inclusion. [4] The Deputy Director of the Department of Planning and Development for the City of Providence represents that there are approximately 2,600 properties within all Historic Overlay Districts within the City of Providence.