Advisory Opinion No. 2013-37 RHODE ISLAND ETHICS COMMISSION Advisory Opinion No. 2013-37 Approved: November 19, 2013 Re: Sean J. McGarry QUESTION PRESENTED: The Petitioner, a member of the New Shoreham Town Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits his business, Block Island Recycling Management, from either extending its existing contracts with the Town or, upon their expiration, bidding on new contracts to perform the same or similar work for the Town. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner’s business, Block Island Recycling Management, is not prohibited by the Code of Ethics from extending an existing contract with the Town, provided that any such existing contract was awarded prior to his election to the Town Council. However, the Petitioner’s business is prohibited by the Code of Ethics from seeking or accepting any new contracts with the Town for the duration of his service on the Town Council and for a period of one (1) year after the official date of his severance from the Town Council. The Petitioner is a member of the New Shoreham Town Council (“Town Council”), having been elected in November 2012.[1] In his private capacity, the Petitioner is a fifty percent (50%) owner of Block Island Recycling Management (“BIRM”), a waste collection and hauling company with its principal place of business in the Town of New Shoreham (“Town”). The Petitioner represents that BIRM currently holds contracts with the Town for the collection of trash, the operation and maintenance of the transfer station, and the supplying of road materials. He informs that BIRM’s contracts with the Town are his primary source of income. He states that the trash collection and transfer station contracts were most recently awarded to BIRM in November 2011 with a three (3) year term, expiring in November 2014. He informs that these contracts, however, contain provisions for two (2), three-year extensions, upon the mutual agreement of the Town and BIRM. He states that upon the expiration of the contracts in November 2014 the Town Council could seek a three-year extension or, alternatively, decide not to renew the contracts and advertise requests for new bids. Given the above representations, the Petitioner seeks advice as to whether his membership on the Town Council impairs his ability to either extend BIRM’s existing contracts with the Town or to bid on any new contracts for the same or similar services with the Town when any of his contracts expire. He states that if BIRM can no longer bid on new Town contracts, he will resign from the Town Council in November of 2013 to wait out the one (1) year cooling-off period so that BIRM can bid on the trash collection and transfer station contracts next year, if necessary. Commission Regulation 36-14-5014 (“Regulation 5014”), entitled “Municipal Official Revolving Door” provides: (a) No municipal elected official or municipal school committee member, whether elected or appointed, while holding office and for a period of one (1) year after leaving municipal office, shall seek or accept employment with any municipal agency in the municipality in which the official serves, other than employment which was held at the time of the official’s election or appointment to office or at the time of enactment of this regulation, except as provided herein. (1) For purposes of this regulation, “employment” shall include service as defined in R.I. Gen Laws § 36-14-2(4) and shall also include service as an independent contractor or consultant to any municipality or municipal agency, whether as an individual or a principal of an entity performing such service. The issue in this matter is whether Regulation 5014 prohibits the Petitioner’s business from bidding on any new contracts with the Town when his business’ current contracts expire. The Commission has previously issued advisory opinions invoking the pre-existing employment exclusion in Regulation 5014 and permitting municipal officials to maintain employment with their municipality if such employment was held at the time of their election, but at the same time limiting that official from seeking or accepting any new employment with their municipality. For example, in Advisory Opinion 2010-58, the Commission opined that a Providence City Council member-elect was not prohibited from continuing to provide legal representation to the Providence Water Supply Board (“PSWB”) in a pending litigation matter because it constituted “employment” held at the time of his election. However, that petitioner was prohibited from seeking or accepting any new representation of the PSWB or any other Providence agency while he served on the City Council and for one (1) year thereafter. See also A.O. 2007-3 (opining that a Charlestown Town Council member could retain his part-time employment as a custodian at the Charlestown Senior Center because it was municipal employment held prior to his election to the Town Council, however, he was prohibited from seeking or accepting another position at the Senior Center, or with any other municipal agency in the Town, while serving on the Town Council and for a period of one (1) year thereafter). Here, BIRM’s contracts with the Town constitute “employment” as that term is defined in Regulation 5014 because the Petitioner is a principal of BIRM, an entity that is providing independent contractor services to the Town. Any contract that BIRM entered into with the Town prior to the Petitioner’s election to the Town Council in November 2012 may be extended if the contract’s terms expressly permit such extension. This mutually agreed upon extension of an already bargained for and awarded contract, which is expressly permitted under the terms of the contract, is not the equivalent of “seeking or accepting” new employment with the Town. See A.O. 2008-72 (permitting an East Providence City Council member’s business to remain on the City’s tow list given that the employment predated his election and opining that the annual submission of an application for the renewal of licensure as a tow truck operator and the payment of a $25 fee, is not “seeking or accepting” employment but rather is analogous to numerous other service licensure or professional certification procedures found across a broad array of industries and professions that require an annual payment for renewal). However, consistent with the advisory opinions discussed above, the pre-existing employment exclusion in Regulation 5014 is limited to the position or contract held at the time of a municipal official’s election and restricts that official’s ability to seek or accept any new employment or contract with his municipality while serving in his elected position and for one (1) year after leaving municipal office. Accordingly, the act of bidding on a new contract, even for services that were previously provided to the Town under an expired contract, constitutes “seeking or accepting” new employment within the municipality in which the Petitioner serves and is, thus, prohibited by Regulation 5014. In conclusion, it is the opinion of the Ethics Commission that while the Petitioner’s business, BIRM, may extend any contracts with the Town that were entered into prior to the Petitioner’s election to the Town Council, the Petitioner’s business may not bid on any new contracts for the duration of his service on the Town Council and for a period of one (1) year after his date of severance from the Town Council. Code Citations: Commission Regulation 36-14-5014 Related Advisory Opinions: A.O. 2013-27 A.O. 2010-58 A.O. 2008-72 A.O. 2007-3 Keywords: Contracts Private Employment 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. [1] The Ethics Commission issued Advisory Opinion 2013-27 to this Petitioner on August 20, 2013, wherein it opined that he was not prohibited by the Code of Ethics from participating in the Town Council’s discussion and vote relative to the Town Manager’s employment contract, notwithstanding that the Town Manager oversees the performance of contracts between the Town and the Petitioner’s business.