Advisory Opinion No. 2006-19

Advisory Opinion No. 2006-19

Re: Michael A. Ursillo, Esq.

QUESTION PRESENTED

The petitioner, the Town Solicitor for the Town of South Kingstown, a municipal appointed position, requests an advisory opinion regarding whether he may participate in a low interest loan program created through an agreement between the Town of South Kingstown and the Rhode Island Clean Water Finance Agency, given the fact that the petitioner reviewed documentation and contracts establishing the Town's participation in the low interest loan program as the Town Solicitor.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioner, the Town Solicitor for the Town of South Kingstown, a municipal appointed position, may participate in a low interest loan program created through an agreement between the Town of South Kingstown and the Rhode Island Clean Water Finance Agency, notwithstanding the fact that the petitioner reviewed documentation and contracts establishing Town's participation in the low interest loan program as the Town Solicitor.

The petitioner is the Town Solicitor for the Town of South Kingstown.  He states that as part of his duties in 2001 he reviewed and helped to revise an on-site wastewater management ordinance for the Town.  The ordinance provided that property owners having either a cesspool or a failing septic system are required to upgrade their system to a DEM-approved Individual Septic Disposal System ("ISDS") within a certain amount of time (one to five years).

The petitioner states that on January 2, 2006 the Town entered into an agreement with the Rhode Island Clean Water Finance Agency ("RICWFA") to participate in the Community Septic System Loan Program ("the Loan Program").  Under the Loan Program, eligible municipalities may obtain a low-interest loan from the RICWFA.  The proceeds of this loan are administered by the Rhode Island Housing and Mortgage Finance Corporation ("RI Housing") and made available as secondary low-interest loans to residents of participating towns who are upgrading a cesspool or failing septic system. All resident applications for participation in the Loan Program are made, not to the Town, but to RI Housing.  Furthermore, once approved, these loans continue to be serviced by RI Housing.  The petitioner states that any homeowner that has received either a notice of a failing septic system, or notice of a cesspool (considered the equivalent of a failing septic) is automatically eligible to participate in the Loan Program.

The petitioner represents that, as Solicitor, in late 2005 he assisted the Town in its review of documents and contracts leading to the Town's participation in the Loan Program.  According to the petitioner, his role as Solicitor was limited to a legal review and analysis of Loan Program-related documents that he received from the Town's Finance Director, and he had no role in the Town Council's policy decision to participate in the Loan Program.

The petitioner represents that for several years he and his spouse have had an ownership interest in a residential property located within the Town. In December 2005, they became the sole record owners and prepared to utilize the property as their permanent residence.  The petitioner states that the property is currently being renovated, and plans have been prepared to upgrade its cesspool to an approved ISDS.  The petitioner wishes to finance this upgrade through participation in the Loan Program, and is preparing an application to RI Housing.  He seeks advice as to whether his previous Town work relative to the sewage ordinance and the Loan Program hinders his participation in the Loan Program.

Under the Code of Ethics, the petitioner may not have any interest, financial or otherwise, direct or indirect, 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 he has reason to believe or expect that he or any family member or business associate, or any business by which he is employed or represents, will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity.  R.I. Gen. Laws § 36-14-7(a).  He also 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 family member, business associate, or any business by which he is employed or represents.  R.I. Gen. Laws § 36-14-5(d).  Further, no person subject to the Code or any person within his or her family may enter into a contract with any state or municipal agency unless “the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded.” See R.I. Gen. Laws § 36-14-5(h).

The Commission has previously applied these provisions of the Code to similar fact patterns in the past.  For example, in Advisory Opinion 2001-48, the Commission opined that the legal counsel for the Providence Neighborhood Housing Corporation (PNHC) could participate in the City of Providence's zero-interest loan program for municipal employees administered by PNHC, notwithstanding the fact that the petitioner participated in the development of the program.  The petitioner was required, however, to recuse from any PNHC review or servicing of his loan.  See also A.O. 2001-5 (West Warwick Town Councilor's sibling may apply for and receive Community Development Block Grant notwithstanding fact that Councilor voted to approve the Town’s year 2000 CDBG grant, provided that Councilor recuses from consideration of sibling's application).  The facts represented by the petitioner in the instant request indicate that the petitioner is even further removed from the loan process than the petitioners in these past opinions.

The petitioner states that as Solicitor, his role in the Town's decision to participate in the Loan Program was limited to offering legal advice.  He had no vote in the Town's decision to participate. Furthermore, there is no risk of favoritism from the Town in the review of the petitioner's application to the Loan Program because the Town is not the entity that reviews the applications or administers the loan.  Rather, the applications are reviewed by RI Housing, who will also service the loan if awarded.  For these reasons, the petitioner is not prohibited from applying for and receiving a low interest loan through the Loan Program.  Subsequent thereto, in the event that

any matters relating to or impacting his loan comes before him as Solicitor, the petitioner must recuse in accordance with R.I. Gen. Laws § 36-14-6.

Code Citations:

36-14-5(a)

36-14-5(d)

36-14-5(h)

36-14-6

36-14-7(a)

Related Advisory Opinions:

2001-48

2001-5

2000-28

99-83

99-46

99-35

98-124

98-123

98-95

98-86

98-65

98-50

98-46

98-22

97-66

97-51

97-50

97-48

95-105

95-90

95-29

95-24

Keywords:

Financial interest

Government loans

Recusal