Advisory Opinion No. 2020-5 Rhode Island Ethics Commission Advisory Opinion No. 2020-5 Approved: January 28, 2020 Re: The Town of New Shoreham Town Council QUESTION PRESENTED: The Town of New Shoreham Town Council, by and through its Solicitor, Katherine A. Merolla, requests an advisory opinion regarding whether the Town Council may hear and decide a matter pursuant to the Rule of Necessity relating to the potential amendment of a New Shoreham ordinance that would provide for the issuance of municipal permits for the operation of mobile food establishments in conformance with State law, given that conflicts of interest prevent the Town Council from achieving a necessary quorum of three (3) members. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Town of New Shoreham Town Council may utilize the Rule of Necessity, subject to the procedures outlined below, to achieve a quorum of three (3) members to hear and decide a matter relating to the potential amendment of a New Shoreham ordinance that would provide for the issuance of municipal permits for the operation of mobile food establishments in conformance with State law, given that four (4) of the five (5) Town Council members have conflicts of interest requiring their recusals. The Solicitor for the Town of New Shoreham (“Town”), writing on behalf of the New Shoreham Town Council (“Town Council”), states that the Town Council consists of five (5) members. She further states that before the Town Council is a matter relating to Title 5, Chapter 5-11.1 of the Rhode Island General Laws known as the “State Mobile Food Establishment Registration Act” (the “Act”). The Solicitor represents that the Act, which went into effect in 2019, provides that, to operate in any city or town, a mobile food establishment operator must first provide proof to that city or town of having obtained a state mobile food establishment registration (“state registration”). The Act further provides that cities and towns retain the authority to restrict the operation of mobile food establishments in their city or town by ordinance, including the setting of restrictions on the number of permits, location of operation, and hours of operation. The Solicitor explains that the Town Council plans to hold a public hearing to consider the proposed amendment of New Shoreham General Ordinances Chapter 8, Licenses and Business Regulations (“Ordinance”) to add new Article XI, “Mobile Food Establishments,” to provide for the issuance of municipal permits (“municipal permits”) for the operation of mobile food establishments within the Town in conformance with the Act. The Solicitor advises that four (4) of the five (5) members of the Town Council, Kenneth C. Lacoste, André Boudreau, Christopher Willi, and Sven Risom, have conflicts of interest in this matter which may require their recusals. She states that there remains only one (1) member permitted to participate, and that Article IV, Section 405 of New Shoreham’s Home Rule Charter states that “[a] quorum for Council meetings shall be three members.” The Solicitor represents that, under the circumstances, the Town Council is unable to conduct its statutorily assigned duties and seeks permission to invoke the Rule of Necessity to allow the participation of two or more conflicted members to achieve a quorum. Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest occurs if a public official has reason to believe or expect that he, any person within his family, his business associate, or any business by which he is employed, will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). A public official has reason to believe or expect a conflict of interest exists when it is “reasonably foreseeable,” which means the probability is greater than conceivably but not necessarily certain to occur. Commission Regulation 520-RICR-00-00-1.1.5 Reasonable Foreseeability (36-14-7001). Specifically, a public official is prohibited from using his public position to obtain financial gain, other than that provided by law, for himself, a person within his family, his employer, his business associate, or any business that he represents. Section 36-14-5(d). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3). A person is defined as “an individual or a business entity.” Section 36-14-2(7). A business is defined as “a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, trust or any other entity recognized in law through which business for profit or not for profit is conducted.” Section 36-14-2(2). The Ethics Commission has recognized and permitted a Rule of Necessity exception in matters where recusals inhibit governmental process, such as where the majority of public body members must recuse themselves and a resulting failure of a quorum renders the entity unable to act. Public bodies may not, on their own, invoke the Rule of Necessity. Rather, public bodies are required to seek an advisory opinion from the Ethics Commission permitting the use of the Rule of Necessity each time conflicts of interest would inhibit their necessary governmental processes. Indeed, the Ethics Commission has previously considered and applied the Rule of Necessity to proceedings before the New Shoreham Zoning Board of Review (“Zoning Board”) in Advisory Opinion 2018-45, opining that the Zoning Board could utilize the Rule of Necessity to achieve a quorum of five (5) members to hear and decide an application for a special use permit for a utility facility, given that three (3) of the seven (7) Zoning Board members had conflicts of interest requiring their recusals. See also A.O. 2008-9 (opining that the Town of Smithfield Zoning Board of Review could utilize the Rule of Necessity to achieve a quorum of five (5) members to hear and decide an appeal from a decision of the Planning Board, given that three (3) of the seven (7) Zoning Board members had conflicts of interest requiring their recusals); A.O. 2000-74 (opining that the Westerly Housing Authority could utilize the Rule of Necessity in order to achieve a quorum, given that the majority of its commissioners had conflicts and were required to recuse). Here, the Solicitor represents that the Town Council’s Second Warden, André Boudreau (“Mr. Boudreau”), owns and operates a food truck which he parks on land that is owned by the Southeast Lighthouse Foundation (“Foundation”), and for which Mr. Boudreau intends to seek a state registration and municipal permit in 2020. The Solicitor further represents that, for the past several summers, Mr. Boudreau has employed an individual who had been on a waitlist[1] for a municipal permit to operate a food truck of his own, and who intends to seek a state registration and municipal permit from the Town in 2020. In describing Mr. Boudreau’s potential conflicts of interest, the Solicitor adds that decisions regarding Mr. Boudreau’s present lease with the Foundation are made by the Board of Directors of the Foundation (“Board”), and that the son of one of the Board members wishes to obtain a municipal permit and will, thus, be affected by the cap on municipal permits set by the Town Council. The Solicitor also offers that Mr. Boudreau’s spouse is the Executive Director of the Foundation and, as such, reports directly to the Board. As the owner of a food truck business, Mr. Boudreau will be personally financially impacted by any discussions and decision-making regarding the Ordinance; therefore, his participation is prohibited by the Code of Ethics. See A.O. 99-9 (opining that a member of the Narragansett Town Council who owned a restaurant holding a liquor license could not participate in matters directly affecting his business).[2] Next, the Solicitor states that Town Councilor Christopher Willi (“Mr. Willi”) is currently employed by Carol Payne (“Ms. Payne”), for whom he operates a marina. She further states that Mr. Willi also rents property from Ms. Payne on which he operates his own business, Block Island Fishworks. The Solicitor represents that Ms. Payne plans to obtain a state registration and seek a municipal permit from the Town in 2020 for her mobile food establishment. Given that Mr. Willi is an employee of Ms. Payne, and also her business associate by virtue of their landlord/tenant relationship, he is prohibited by the Code of Ethics from participating in discussions and decision-making regarding the Ordinance because of the financial impact upon Ms. Payne. See A.O. 2004-38 (opining that a member of the New Shoreham Town Council could neither participate in the Town Council’s review of the petitioner’s employer’s liquor license, nor those of his employer’s direct competitors);[3] A.O. 2002-70 (opining that a member of the North Kingstown Town Council was a business associate of a person from whom she rented retail space, and was prohibited by the Code of Ethics from participating in Town Council matters that would financially impact her landlord). The third person for whom the Solicitor describes a potential conflict of interest is Kenneth C. Lacoste (“Mr. Lacoste”), First Warden on the Town Council. Mr. Lacoste owns a marina next to Ms. Payne’s marina, and hauls and launches boats for Ms. Payne’s clientele in exchange for being allowed by Ms. Payne to store the trailers he uses to do so on her property. Unlike Mr. Willi, Mr. Lacoste is not Ms. Payne’s employee; however, Mr. Lacoste and Ms. Payne do have a business association by virtue of the arrangement between them that prohibits Mr. Lacoste from participating in discussions and decision-making regarding the Ordinance because of the financial impact upon Ms. Payne. See A.O.2012-34 (opining that a member of the Foster School Committee, who was also a member of the Foster-Glocester Regional School Committee, was prohibited by the Code of Ethics from participating in and voting on matters before either School Committee that involved Sodexo, Inc., given that the petitioner’s family farm had entered into an agreement with Sodexo to grow vegetables for the school lunch program); A.O. 2010-16 (opining that an East Greenwich Planning Board member, who in his private capacity was the publisher of a local news and information website, was required to recuse when a business associate appeared before the Planning Board, specifically, if the business associate was then currently advertised on the petitioner’s website, had outstanding accounts, or when there was an anticipated future relationship between the parties). Finally, the Solicitor represents that Town Councilor Sven Risom (“Mr. Risom”) owns and operates a yarn shop on property that he rents. She further represents that Mr. Risom believes and expects that, in 2020, an individual with whom he is familiar intends to obtain a state registration and seek a municipal permit to locate a food truck on the same property on which Mr. Risom operates his yarn shop. Mr. Risom and his landlords are business associates by virtue of their landlord/tenant relationship. Given the reasonable foreseeability of this individual’s application for a municipal permit, and the financial impact upon Mr. Risom’s business associates as a result, Mr. Risom is prohibited from participating in discussions and decision-making regarding the Ordinance. See supra A.O. 2002-70. In the instant matter, four (4) of the five (5) Town Council members have conflicts of interest requiring their recusals. Thus, given the legal requirement that there be participation by three (3) Town Council members to hear and vote on the Ordinance, and based on the review of prior advisory opinions, it is appropriate for the Ethics Commission to apply the Rule of Necessity. Under the Rule of Necessity, the official or officials determined to have the least conflict may be permitted to participate so that an important governmental function can be accomplished. See supra A.O. 2008-9. Here, the one Town Council member who has not asserted a conflict is required to participate. Mr. Boudreau, who has a personal financial interest in the Ordinance, shall remain disqualified and recuse. Mr. Willi shall also recuse, given that Ms. Payne, his employer and business associate, will be financially impacted by the Ordinance. It is the opinion of the Ethics Commission that Mr. Lacoste and Mr. Risom are the least conflicted. Neither Mr. Lacoste nor Mr. Risom stands to be personally financially impacted by the Ordinance. Mr. Lacoste’s conflict stems from his business association with Ms. Payne, who will be financially impacted by the Ordinance. Mr. Risom’s conflict stems from the reasonably foreseeable financial impact upon his landlords who are his business associates. Accordingly, in order that the Town Council may conduct its statutorily assigned duties, both Mr. Lacoste and Mr. Risom shall each, prior to participation in the matter, file a conflict of interest statement in accordance with section 36-14-6. Each shall disclose his interest in the matter, and each shall affirm that, despite his interest, he is willing and able to participate fairly, objectively, and in the public interest. Mr. Boudreau and Mr. Willi shall recuse from participation and voting on the matter in accordance with 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: § 36-14-2(2) § 36-14-2(3) § 36-14-2(7) § 36-14-5(a) § 36-14-5(d) § 36-14-6 § 36-14-7(a) 520-RICR-00-00-1.1.5 Reasonable Foreseeability (36-14-7001) Other Related Authority: R.I.G.L. § 5-11.1-7 The Home Rule Charter of New Shoreham, Article IV, Section 405 New Shoreham General Ordinances Chapter 8, Licenses and Business Regulations Related Advisory Opinions: A.O. 2018-45 A.O. 2012-34 A.O. 2010-16 A.O. 2008-9 A.O. 2004-38 A.O. 2002-70 A.O. 2000-74 A.O. 99-9 Keywords: Recusal Rule of Necessity [1] The Solicitor explains that, because the issuance of a state registration is now a prerequisite to obtaining a municipal permit to operate a mobile food establishment, there is no longer a Town waitlist for municipal permits and no priority will be given to people formerly on the Town waitlist for municipal permits. [2] Because of the direct financial impact upon Mr. Boudreau personally as a result of any discussions and decision-making regarding the Ordinance, there is no need for the Ethics Commission to address the potential conflicts raised regarding the son of the Foundation Board member or the relationship between Mr. Boudreau’s spouse and the Foundation Board. [3] The identification by the Ethics Commission of direct competitors of Ms. Payne is not possible at this time given the record before us. Further guidance from the Ethics Commission can be sought upon request, as necessary.