Advisory Opinion 99-120

Re: Charles Poirier

QUESTION PRESENTED

The petitioner, the Chairperson of the Glocester Housing Authority, a municipal appointed position, requests an advisory opinion as to whether members of the Housing Authority may receive compensation for duties that they are handling in the absence of a manager given that the manager resigned and they have not yet hired a new manager or management company.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission, that the members of the Glocester Housing Authority, municipal appointed positions, may not receive compensation for their efforts if the members of the Housing Authority themselves take action to provide for or set their own compensation. This opinion does not prevent another body, i.e. Town Council, from setting compensation for the Board members independent of any action by the Housing Authority members.

The Rhode Island Code of Ethics holds all public officials to the "highest standards of ethical conduct" and requires that public officials avoid even the "appearance of impropriety," R.I. Gen. Laws § 36-14-1. Under the Code, the members of the Housing Authority may not participate in any matters in which they have an interest, financial or otherwise, which is in substantial conflict with the proper discharge of their duties.R.I. Gen. Laws § 36-14-5(a). Further, they may not use their public office to obtain personal financial gain for themselves. R.I. Gen. Laws §§ 36-14-5(d) and 36-14-7(a).

In this case, the Commission must address whether the Housing Authority board members may participate in matters that result in financial gain in the form of compensation from management fees even though the practice is in conformance with federal guidelines. The petitioner represents that the Housing Authority faces a temporary, emergency situation. The manager of the Housing Authority, one of its two employees, abruptly resigned recently leaving the members of the board to manage the single facility maintained by the Authority, which houses approximately 62 elderly, disabled and handicapped persons. The Housing Authority operates under guidelines established by the U.S. Department of Agriculture, Rural Development "the USDA"). The USDA has concluded that the board members may utilize either management service fees or on-site management payroll to compensate members for managing the facility under its guidelines. According to the USDA, existing guidelines provide that $20 per unit per month may be set aside for management fees; another amount is provided for on-site management payroll. These are line items in the Housing Authority budget that must be approved by the USDA. A letter from the USDA also advises the Authority that it must develop a plan to hire an on-site manager within 90 days.

General Commission Advisory Opinion No. 6 relates to salary increases and other financial benefits for public officials. In that Opinion, the Commission noted that public officials must exercise care "in every situation where the individual's action might eventually lead to financial gain for him or her, a spouse, dependent child, or business associate." The Commission concluded that a public official would violate the Code of Ethics by participating in or taking action that would affect the public officials salary or benefits when the public official had reason to believe that he or she might receive direct financial gain as the result of the action. For example, the Commission determined that ethics violations would occur when a public official directly votes him or herself a raise (i.e., when a City Council votes to increase the compensation of all of the present members); or when a City Council passes a resolution seeking legislative change to the Town Charter to provide each Council member with a fixed monthly, payment for reimbursement of expenses, (In that case, the Rhode Island Supreme Court affirmed the Commission's decision that the Council members violated the Code of Ethics even though the Council did not actually vote the increased benefits. Celona v. R.I. Ethics Commission, 544 A.2d 582 (R.I. 1988). The Court noted that the Council had initiated and participated in the increase in benefits) or when Council members participate in discussions regarding, or vote on, a budget at an annual town meeting when the budget includes funding for an increase in the Council members' salaries or benefits.

Upon consideration of the petitioner's request, we conclude that the Code of Ethics does not permit the Glocester Housing Authority board members to benefit financially by accepting compensation that it either sets or votes to appropriate from its budget. Although the USDA guidelines allow the Authority members to use certain funds for this type of compensation, it is not mandated and therefore would require an affirmative action on the part of the Housing Authority board members to distribute the funds to themselves rather than to a manager or management company.

This conclusion is supported by General Commission Advisory Opinion No. 6 and by previous advisory opinions issued that are consistent with the general advisory; e.g., A.O. 95-52 (Code prohibits Town Council members' participation in discussion or votes regarding a stipend to be paid to the council members to compensate for their administrative duties). While the Commission would ordinarily recommend that the board members consider enacting a resolution or bylaw relating receiving compensation in such circumstances to take effect at the start of the new board members' terms, that does not address the immediate situation. Whether or not the Town Council or the USDA should take action to provide compensation for the board members is not a matter for the Ethics Commission to consider. Nor would it violate any provisions of the Code of Ethics for a body other than the Housing Authority to take independent action to address the temporary emergency situation that afflicts the Housing Authority. As for the Housing Authority itself taking action to provide compensation, we conclude that such action is prohibited by the Code of Ethics.

Nothing in the Code of Ethics provides for an exception to a substantial conflict of interest under emergency circumstances. The General Assembly provided for hardship exceptions under certain sections of the Code of Ethics, the basic provision is not one of them.

Code Citations:

36-14-5(a)
36-14-5(d)
36-14-7(a)

Related Case Law:

Carmody v. Conflict of Interest Commission, 509 A.2d 453 (R.I. 1986)
Celona v. R.I. Ethics Commission, 544 A.2d 582 (R.I. 1988)

Related Advisory Opinions:

GCA 6
95-52
96-21
97-64
97-128
97-130
98-9

Keyword:

Compensation