September 14, 1993

FACTS:


You are an appointed sewer commissioner in a town (Town).
Sewer commissioners have been designated special municipal
employees.

-538-

You are also the president and principal owner of ABC
Plumbing & Heating (ABC). In your individual capacity, you have
previously developed several multi-unit residential projects.
Presently, you own several undeveloped acres of land in the Town
on which you expect to erect residential units in the future.

The sewer commission (Commission) is currently reviewing
proposed sewer and water regulation revisions that were drafted
by their former executive director. These regulations will govern
the construction of all new sewer and water pipes, and the repair
of all existing pipes within the Town.

You anticipate that the Commission will soon consider
whether polyvinyl chloride (PVC) pipe or copper pipe must be used
for water connections. You state that PVC pipe is considerably
less expensive for a developer to use than copper pipe.
Additionally, you indicate that if the Commission allows the use
of PVC pipe, it could require that it be laid in a bed of sand
rather than in the existing soil, thereby creating added expense
for the developer.


QUESTION:


Does G.L. c. 268A permit you to participate as a
Commissioner in a decision to adopt these water and sewer
regulations?


ANSWER:


No, unless your appointing authority gives you an exemption
under G.L. c. 268A, s. 19(b)(1).


DISCUSSION:


In your position as a sewer commissioner, you are a
municipal employee for the purposes of the conflict of interest
law [1]. As a result, you are subject to the restrictions set
forth in s. 19, which provides that a municipal employee (including
a special municipal employee) may not participate [2]
as such in any particular matter [3] in which to his knowledge he
or his immediate family has a financial interest.

In Graham v. McGrail, 370 Mass. 133, 139 (1976), the term
"financial interest" was interpreted to mean an economic interest
that is not shared with a substantial segment of the public.
While the Court in Graham held that the financial interest
implicated by s. 19(a) is to be distinguished from the interest
every member of the Town would have in a particular act or
expenditure of the Town [4], the Court also made it clear that an
individual's interest in his own compensation "is
unquestionably a 'financial interest'" under s. 19(a). That financial interest
may be of any size, and may either be positive or negative. See,
e.g., EC-COI-89-33; 89-19; 84-96. If the municipal employee's
direct or reasonably foreseeable financial interest will be
affected, the municipal employee must abstain from the matter in
question. See, e.g., EC-COI-89-19; see also Graham v. McGrail,
370 Mass. at 137-138. The question then is whether you have a
direct or reasonably foreseeable financial interest in the
proposed revisions to the Town's water and sewer regulations.

As a real estate developer whose project would be subject to
the regulations, you have an obvious financial interest in the
Commission's decision whether or not to require the more costly
copper pipe or the more costly method of PVC pipe installation.
See, e.g., EC-COI-84-76 (city council member has obvious
financial interest in decisions of council with regard to land he
proposes to develop); EC-COI-87-31 (where Board issued permits
and licenses concerning the operation of restaurants, Board
member has financial interest in Board determinations regarding
his restaurant). Thus, s. 19 would prohibit your participation in
the decision whether or not to promulgate these regulations,
unless that decision either is not a "particular matter" or is
exempt under s. 19(b)(3) because the decision involves "a
determination of general policy," and your financial interest is
"shared with a substantial segment of the [Town's] population
[5]." See EC-COI-92-34.

The Commission has long recognized that while "regulations
in and of themselves are not particular matters . . . the process
by which they are adopted and the determination that was
initially made as to their validity will be considered particular
matters." EC-COI-81-34; see also 85-11; 87-34. Therefore, s. 19
would require your abstention unless we were to conclude that
your financial interest in the decision is shared with a
substantial segment of the Town's population [6].

In determining whether your financial interest in the
promulgation of the proposed regulations is shared by a
substantial segment of the Town's population, we look to our most
recent application of this statutory language in EC-COI-92-34.
There we considered whether a Selectman and commercial property
owner could participate in a decision to adopt a residential
factor that would have the effect of applying a higher tax rate
to commercial property than to residential property. In analyzing
that question, we first looked to whether the general policy at
issue suggested a

-539-

classification for the segment of the Town's population we were
to examine. We concluded, in that case, that the classification
was established by the regulation itself -- whether the Town
resident was a commercial, as opposed to a residential, property owner.

We then sought to determine what percentage of the Town's
population fit within the classification and found that 10% of
the Town's population were commercial property owners. Noting
that the "relevant classification must be one of kind rather than
degree," however, we did not seek to determine whether there was
a difference among commercial property owners in the degree to
which they were financially impacted by the polic [7].

Applying a like analysis in this case, we believe that
although the regulations do not establish the relevant
classification, the facts you present suggest what that
classification consists of, namely, construction businesses --
real estate developers, contractors, plumbers, and the like --
which will be affected on a regular basis by the regulations. By
contrast, homeowners, and businesses unrelated to construction,
would be affected only in the rare instance where they install or
repair new or existing pipes. Moreover, some homeowners and
businesses will never be affected by the regulations.

As in EC-COI-92-34, we do not endeavor to determine among
construction businesses the difference, if any, in the degree to
which the regulations will affect their financial interest.
Instead our focus is next directed to determining whether people
who own these businesses constitute a substantial segment of the
Town's population. Here, we think it safe to assume these
business owners represent but a small percentage of the Town's
total population [8]. Because of this, and because such business
owners' ability to earn their livelihood is directly affected by
construction costs, we must conclude that, as a real estate
developer, your financial interest in the adoption of regulations
affecting those costs is not shared by a substantial segment of
the Town's population. See, e.g., EC-COI-83-47 (selectman and
commercial shellfisherman may not participate in particular
matters concerning the shellfishing industry where his
shellfishing license was one of only 200 issued by the Town, and
because of the "significance to [his] livelihood"); see also 84-
96 (owner of land abutting proposed development would, by virtue
of the location of his property, have a financial interest that
was distinct from other citizens).

Since we conclude that your financial interest is not shared
by a substantial segment of the Town's population, the only
exemption from s. 19 that is available to you is that contained
in s. 19(b)(1). To qualify for this exemption, prior to
participating, you must (1) inform your appointing official of
the nature and circumstances of the particular matter; (2) make a
full written disclosure to your appointing authority of the
financial interest; and (3) receive a written determination in
advance from your appointing authority that the financial
interest is not so substantial as to be deemed likely to affect
the integrity of your services to the Town. Unless and until you
receive this exemption, you must abstain from any participation
in the promulgation of water and sewer regulations for the Town
[9].



-----------------------------------


[1] "Municipal employee," a person performing services for
or holding an office, position, employment or membership in a
municipal agency, whether by election, appointment, contract of
hire or engagement, whether serving with or without compensation,
on a full, regular, part-time, intermittent, or consultant basis,
but excluding (1) elected members of a town meeting and (2)
members of a charter commission established under Article LXXXIX
of the Amendments to the Constitution. G.L. c. 268A, s. 1(g).

[2] "Participate," participate in agency action or in a
particular matter personally and substantially as a state, county
or municipal employee, through approval, disapproval, decision,
recommendation, the rendering of advice, investigation or
otherwise. G.L. c. 268A, s. 1(j).

[3] "Particular matter," any judicial or other proceeding,
application, submission, request for a ruling or other
determination, contract, claim, controversy, charge, accusation,
arrest, decision, determination, finding, but excluding enactment
of general legislation by the general court and petitions of
cities, towns, counties and districts for special laws related to
their governmental organizations, powers, duties, finances and
property. G.L. c. 268A, s. 1(k).

[4] Examples cited by the Court are every taxpayer's
interest in the school budget for his town, every town employee's
interest in every town expenditure, and the interest of school
children and their parents in school services.

[5] Section 19(b)(3) provides an exemption, "if the
particular matter involves a determination of general policy and
the interest of the municipal employee or members of his
immediate family is shared with a substantial segment of the
population of the municipality."

[6] In EC-COI-92-34, we noted that certain matters of
general policy may not be particular matters for purposes of G.L.
c. 268A. That precedent is wholly consistent with

-540-

our ruling in EC-COI-81-34 that regulations themselves are not
particular matters. Nothing in EC-COI-92-34, however, persuades
us that we must now depart from our longstanding precedent that
the process leading to the adoption of general policy contained
in a regulation is a particular matter.

[7] In EC-COI-92-34, our concern was that while the
residential factor affected all commercial property owners, the
opinion requester owned a significantly higher percentage of the
Town's commercial property. Therefore, the degree to which the
residential factor affected the requester's interest was greater
than the remainder of the class of commercial property owners.

[8] In 92-34, we held that 10% of a town's population would
constitute a "substantial segment." The Town's population,
according to the 1990 census, is 33,836. G.L. c. 4, s. 7(41)
("population" as used in the General Laws, means the number of
residents counted in the most recent census). Were we to apply a
10% standard here, we would have to be presented with evidence
that the Town has 3,383 or more owners of construction-related
businesses in order for us to conclude that the regulations
affecting such business owners as a class affect a substantial
segment of the Town's population.

[9] Should you obtain an exemption under s. 19(b)(1), you
are advised that you must continue to guide your conduct in
accordance with the principles of s. 23. Specifically, Section
23(b)(2) prohibits a public official from using his position to
secure an unwarranted privilege of substantial value which is not
properly available to similarly situated individuals. Thus, s.
23(b)(2) requires that you apply objective standards in any
decision concerning the proposed regulations, without regard to
your personal interest in the matter. See EC-COI-89-23; 89-3.

End Of Decision