Advisory Opinion No. 2003-30

Re: Jay Manning

QUESTION PRESENTED

The petitioner, Principal Sanitary Engineer with the Department of Environmental Management (DEM), a state employee position, requests an advisory opinion as to whether, as the DEM’s coordinator for the Clean Water State Revolving Fund (CWSRF) program, he may participate in the approval and administration of financing for projects that would have a financial impact on property that he owns.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioner, Principal Sanitary Engineer with the Department of Environmental Management (DEM), a state employee position, may not participate in the approval or administration of financing for projects that would have a financial impact on property that he owns.

The petitioner represents that he is the DEM’s coordinator for the Clean Water State Revolving Fund (CWSRF) program. He states that the purpose of the program is to provide below market rate financing for water pollution abatement projects. In that capacity, his primary responsibility is to approve projects for CWSRF loans based on their environmental and technical merit. Additionally, the petitioner is responsible for developing an annual project priority list, reviewing requests for project payment, inspecting project construction and performing various other administrative matters. He informs that since 1996 he has not had any staff assigned to assist him in the management of this program.

The petitioner advises that the Town of Middletown is currently contemplating CWSRF funding for two projects that would impact property that he owns. The first project is the Town’s purchase of the Kempenaar Valley for open space preservation. He states that the Kempenaar Valley parcel abuts property that he presently owns and leases to a tenant. He further indicates that his property is one of approximately twenty house lots that abut the Kempenaar Valley land. The second project that Middletown is seeking CWSRF funding for is a proposed installation of sewers in the Slate Hill Farm subdivision. The petitioner resides in the subdivision at issue, which he estimates contains sixty residences.

Under the Code of Ethics, the petitioner is prohibited from using his public position or confidential information received through his position to obtain financial gain, other than that provided by law, for himself, a business associate or a family member. See R.I. Gen. Laws § 36-14-5(d). He 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 and employment in the public interest. See R.I. Gen. Laws § 36-14-5(a). The petitioner will have an interest in substantial conflict with his official duties if he has reason to believe or expect that a "direct monetary gain" or a "direct monetary loss" will accrue, by virtue of his official activity, to himself, a family member, a business associate, an employer, or any business which he represents. See R.I. Gen. Laws § 36-14-7(a).

In past advisory opinions, the Commission consistently has required public officials to recuse from participation in matters that would financially impact their property interests. See A.O. 2002-16 (finding that a member of the Richmond Town Council is prohibited from participating in matters regarding a proposed multi-use development since it would financially impact the his property given his status as an abutting property owner); A.O. 2001-19 (concluding that a Lincoln Planning Board member may not participate and/or vote on matters involving the Whipple-Cullen Farm, given that he owns property abutting the proposed development); A.O. 99-107 (advising that a Jamestown Town Councilor may not participate in a matter where he is an abutter since he has a financial interest in the particular project at issue).

Here, the petitioner represents that his property is one of 60 homes in his development that will be affected by the installation of sewers, a project over which he has decision-making power as a public official. Accordingly, the prohibitions contained in Code sections 5(a) and 5(d) are implicated. The petitioner inquires as to whether, despite this conflict, he may participate in the projects under the 7(b) "class exception," since his home would be affected by the installation of the sewers to no greater or lesser extent then any of the other 59 homes.

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 his official duties if any benefit or detriment accrues to him “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.” R.I. Gen. Laws 36-14-7(b).

The Commission will determine whether a proposed class is sufficiently "significant and definable," so as to justify an exception to what is otherwise a clear prohibition, by considering the totality of the circumstances. Among the important factors considered are: (1) the description of the class or subclass; (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.

Here, the proposed class consists of approximately 60 residences in the Slate Hill Farm subdivision of the Town of Middletown. The official action contemplated by a member of this class is, among other things, to rank the priority of the class's need for sewers among all other statewide applicants for Clean Water Revolving Funds, to opine on the environmental and technical merit of the application to install the sewers, to inspect the sewer installation and other work being done on the project and to review requests for payment from those working on the project. It is apparent to the Commission that these official actions, determining the feasibility, likelihood and quality of sewerage around the class's subdivision, will have a substantial and foreseeable impact on the class and each of its individual members. Considering these circumstances, the Commission does not find that application of the 7(b) class exception is warranted or appropriate.

Notwithstanding the inapplicability of the class exception, the petitioner represents that if he is required to recuse on matters involving both projects it will result in an unfair burden to his division of the DEM, since he is the sole employee in charge of the CWSRF program. The petitioner inquires as to whether his situation would qualify for a hardship exception under the Code or if he would be allowed to participate under the Commission’s “Rule of Necessity.”

The Code of Ethics does not provide for a hardship exception to those sections of the Code applicable here, namely Sections 5(a), 5(d) and 7(a). While the hardship exception is expressly included in the provisions of 5(e), “appearance before one’s own Board,” there is no hardship exception that would allow a public official to participate in matters that will result in a financial benefit to himself. Furthermore, the Commission has only applied the “Rule of Necessity” in situations where a public body is unable to act or achieve a quorum due to the number of recusals. There, the official or officials determined to have the least conflict are permitted to participate so that an important governmental function can be accomplished. The rationale for a Rule of Necessity in such situations is that the public body is either appointed or elected, and recusing members cannot be replaced since no alternate chain of command is available.

Here, the petitioner is an employee of the Department of Environmental Management. While the petitioner represents that he is the sole employee for his specific job description, the petitioner does have supervisors within the DEM. It is unfortunate that the requirements of the Code of Ethics may place burdens on small divisions of large governmental agencies, but the provisions of the Code apply to them nonetheless. Safeguards must be in place within the DEM to ensure that employees who have conflicts of interest can properly recuse.

Accordingly, absent evidence that the proposed Kempenaar Valley and Slate Hill Farm projects would not financially impact the petitioner’s own property interests, the petitioner may not participate in the approval or administration of financing for such projects, given his status as an abutting property owner. Further, the petitioner may not delegate his responsibilities to a subordinate within his agency. Rather, the responsibility for approving and administering funding for the projects at issue must be shifted to a superior or co-equal employee within the DEM. Notice of recusal should be filed with the Ethics Commission in accordance with R.I. Gen. Laws § 36-14-6.

Code Citations:

36-14-5(a)

36-14-5(d)

36-14-6

36-14-7(a)

36-14-7(b)

36-14-6001

Related Advisory Opinions:

2002-65

2002-23

2002-16

2001-19

99-107

98-56

97-63

Keywords:

Property interest

Recusal