Advisory Opinion No. 2007-2 Advisory Opinion No. 2007-2 Re: James P. Durkin QUESTION PRESENTED: The petitioner, a member of the Narragansett Town Council, a municipal elected position, requests an advisory opinion regarding whether he may participate in the Council's appointments to a Homestead Advisory Committee to study and make recommendations to the Council concerning the creation of a homestead tax exemption for Narragansett residents who own and reside in their home. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the Narragansett Town Council, a municipal elected position, may participate in the Council's appointments to a Homestead Advisory Committee to study and make recommendations to the Council concerning the creation of a homestead tax exemption for Narragansett residents who own and reside in their home. However, the petitioner should seek further advice from the Ethics Commission, or recuse himself from participation, if and when the Council determines whether to implement a homestead tax exemption. The petitioner is a member of the Narragansett Town Council. In his private employment he is the owner of Durkin Cottage Realty, a business that manages approximately 150 rental properties in Narragansett for some 100 different clients. Aside from his management of rental properties, the petitioner states that he personally owns between 50 and 70 pieces of property in Narragansett made up of residential and commercial properties and undeveloped lots. The petitioner represents that the Town Council wishes to consider implementing a homestead tax exemption that would reduce or stabilize property taxes for residences occupied by full-time Narragansett residents. Toward that end, the Town Council will appoint a nine-member Homestead Advisory Committee ("the Committee") to study all aspects of the tax exemption, and report back to the Council with findings and recommendations. At that point, according to the petitioner, the Council will discuss and vote on whether to seek the passage of legislation needed to authorize an exemption. Ultimately, the petitioner notes, the matter will be put on a ballot for the voters in Narragansett to approve or disapprove. The Code of Ethics provides that a public official shall not have any interest, financial or otherwise, direct or indirect, or engage in any employment or transaction that 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 the public official has reason to believe or expect that he or any business by which he is employed or represents, among others, 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). A public official may not use his public office or confidential information received from his public office to obtain financial gain, other than that provided by law, for himself, a family member, business associate or private employer. R.I. Gen. Laws § 36-14-5(d). In an analogous advisory opinion, a state legislator in the business of buying and selling used automobiles sought advice from the Ethics Commission as to whether he was permitted to introduce legislation to create a Special House Commission to study rules, regulations and laws that pertain to automobile dealers. A.O. 96-91. Relying on the legislator's representation that the study commission would merely report advisory findings to the House of Representatives, the Ethics Commission opined that there would be no impermissible conflict of interest for the legislator to participate in the introduction, discussion and voting on the bill. Id. Similarly, in this matter the Committee's duties are purely advisory, merely presenting findings and making recommendations to the Town Council. Accordingly, these appointments will not impart any financial benefit or detriment to the petitioner or his business associates. For that reason it is our opinion that the petitioner may participate in the Town Council's appointment of members to the Committee. We expressly caution the petitioner that this opinion is limited the Council's appointment to the Committee. Because the petitioner and his private clients own a substantial number of non-owner-occupied properties in the Town of Narragansett, it seems reasonable to believe that a tax exemption for owner-occupied residences may have corresponding negative implications for other properties. Nevertheless, at this stage with no findings or recommendations from the Committee as to the scope or application of the exemption, it would be pure speculation to consider any likely impact. At such time as the Committee prepares to return findings or recommendations to the Town Council, the petitioner should seek further advice from the Ethics Commission or recuse from further participation out of an abundance of caution. Code Citations : 36-14-5(a) 36-14-5(d) 36-14-7(a) Related Advisory Opinions : 96-91 Keywords : Business interest