Advisory Opinion No. 2020-53 Rhode Island Ethics Commission Advisory Opinion No. 2020-53 Approved: December 8, 2020 Re: David P. Tikoian QUESTION PRESENTED: The Petitioner, a member of the Smithfield Town Council and, by extension, a member of the Board of Water Commissioners for the Smithfield Water Supply Board, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in Town Council and/or Board discussions and voting on matters involving his employer, Providence Water, a quasi-municipal agency. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Smithfield Town Council and, by extension, a member of the Board of Water Commissioners for the Smithfield Water Supply Board, is not prohibited by the Code of Ethics from participating in Town Council and/or Board discussions and voting on matters involving his employer, Providence Water, a quasi-municipal agency, provided that said matters would not financially impact the Petitioner. The Petitioner was elected to serve as a member of the Smithfield Town Council (“Town Council”) on November 3, 2020. He states that the five-member Town Council also serves as the Board of Water Commissioners for the Smithfield Water Supply Board (“Water Supply Board”). He further states that the Town of Smithfield, through the Water Supply Board, owns and operates a public water distribution system serving portions of the Towns of Smithfield and North Providence. The Petitioner states that he is also employed as the Director of the Transmission and Distribution Department (“Department”) for Providence Water, a quasi-municipal agency. He represents that the Department is responsible for the daily maintenance and repair of more than 1,000 miles of infrastructure which delivers drinking water from distribution points to customer service connections. The Petitioner states that his compensation as a management employee of Providence Water is set by an ordinance of the Providence City Council and is not impacted by any other factors. He further states that Providence Water, although a department of the City of Providence, is regulated by state and federal agencies in addition to city policies and procedures. He adds that the quality of Providence Water’s drinking water is regulated by the United States Environmental Protection Agency and the Rhode Island Department of Health and that Providence Water’s revenue and rate structure is regulated by the Rhode Island Public Utilities Commission. The Petitioner explains that there exists a seven-member Providence Water Board of Directors, comprised of private citizens and public officials, which determines corporate policy. He further explains that, in addition to its retail customers, Providence Water provides water to eight wholesalers, including the Town of Smithfield. The Petitioner states that, because the Town of Smithfield is a wholesale customer of Providence Water, it is possible that the Smithfield Town Council and/or the Board of Water Commissioners (collectively, “the Town”) may at some point be tasked with considering a matter involving Providence Water. Examples offered by the Petitioner include the Town’s potential need to adjust water rates as a result of rate increases set by the Public Utilities Commission for Providence Water, or an application to the Town by Providence Water seeking a road opening permit. The Petitioner states that he is unaware of the duration of the present contract between the Town of Smithfield and Providence Water, or to what extent, if any, the Town participates in the extension of said contract, but offers that Providence Water is presently the sole source of raw drinking water available to the Town of Smithfield. Based on these representations, the Petitioner seeks guidance from the Ethics Commission regarding whether he may participate in discussions and voting on matters which come before the Town involving Providence Water. 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 public official will have an interest in substantial conflict with his official duties if it is reasonably foreseeable that a “direct monetary gain” or a “direct monetary loss” will accrue, by virtue of the public official’s activity, to the public official, his family member, his business associate, or any business by which he is employed or which he represents. Section 36-14-7(a). Further, section 36-14-5(d) prohibits a public official from using his position or confidential information received through his position to obtain financial gain, other than that provided by law, for himself, any person within his family, his business associate, or any business by which he is employed or represents. Finally, Commission Regulation 520-RICR-00-00-1.2.1(A)(2) (“Regulation 1.2.1”) states that a public official must also recuse himself from participation in his official capacity when his business associate or employer appears or presents evidence or arguments before his municipal agency. 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). 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). In prior advisory opinions, the Ethics Commission has consistently concluded that the Code of Ethics does not consider the relationship between a public official and a public body, such as a state or municipal agency,[1] to be that of “business associates.” For example, in Advisory Opinion 2011-29, the Ethics Commission opined that a member of the Portsmouth Planning Board, who was also employed as a civil engineer for the Rhode Island Department of Transportation (“DOT”), could participate in the Planning Board’s consideration of a development proposal, notwithstanding that in her capacity as a DOT-employed engineer the petitioner had been reviewing the same property to ensure that the state’s property interests were protected. The Ethics Commission reasoned that, because neither the DOT nor the Planning Board were considered “businesses” under the Code of Ethics, the “business associates” prohibitions that would have otherwise constrained the petitioner while carrying out her public duties did not applySee alsoA.O. 2015-27 (opining that the Director of Planning, Code Enforcement and Grants Administration for the Town of Westerly, who was also temporarily serving as Interim Town Manager, was not prohibited by the Code of Ethics from participating in the Town’s review of a non-profit entity’s development proposal that might involve the Community College of Rhode Island (“CCRI”), notwithstanding that the petitioner was an online adjunct faculty member of CCRI, because neither the Town of Westerly nor CCRI were considered “businesses” and, therefore, the petitioner could not be considered a “business associate” of either the Town of Westerly or CCRI). In the present matter, the central question is whether the Code of Ethics prohibits the Petitioner, an elected official in the Town of Smithfield, from participating in Town discussions and voting on matters involving his employer, Providence Water, which is pursuant to section 36-14-2(8)(ii) of the Code of Ethics, another municipal agency. Under the Code of Ethics, neither the Town nor Providence Water is considered a “business.” Therefore, Providence Water is neither a “business by which [the Petitioner] is employed” nor is it the Petitioner’s “business associate.” Accordingly, it is the opinion of the Ethics Commission that the Petitioner is not prohibited from participating in said Town discussions and voting. However, if a matter involving Providence Water were to come before the Petitioner in his public capacity that would financially impact him, then the Petitioner would be required to recuse consistent with sections 36-14-5 and 36-14-6. Given the Petitioner’s representation that his compensation as a management employee of Providence Water is set by an ordinance of the Providence City Council and is not impacted by any other factors, it appears unlikely that the Petitioner would be financially impacted by any decision made by the Town regarding Providence Water. Nevertheless, the Petitioner is encouraged to seek additional advice from the Ethics Commission in the future as more specific questions regarding potential conflicts of interest arise. 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) § 36-14-2(8) § 36-14-5(a) § 36-14-5(d) § 36-14-6 § 36-14-7(a) 520-RICR-00-00-1.2.1 Additional Circumstances Warranting Recusal (36-14-5002) Related Advisory Opinions: A.O. 2015-27 A.O. 2011-29 Keywords: Dual Public Roles [1] Pursuant to § 36-14-2(8)(ii) of the Code of Ethics, the term “municipal agency” includes a quasi-public authority such as, in this instance, Providence Water.