January 18, 1995

FACTS:



You are the Executive Director of the Waltham Community Access
Corporation, a non-profit corporation ("Corporation"), organized in
accordance with s.501(c)(3) of the Internal Revenue Code. The
Corporation was not established by vote of the City Council or by
ordinance, but rather was incorporated in response to the cable
license agreement executed between the City and the local cable
company. According to the Waltham Cable License Agreement, the
Corporation has responsibility to manage the local access
channels and ensure that all Waltham residents, businesses
and organizations have a reasonable opportunity to utilize the access
facilities of the cable television system. The Corporation is responsible
for all community programming, including program production and
allocating capacity and time on the channels.

Under the License Agreement, the cable company agreed to
designate 10% of its channel capacity on the subscriber system for
public, educational and municipal access. Each channel is to be
activated at the discretion of the Corporation, according to rules
and regulations established jointly by the Corporation and the
cable company. At least one of the channels is dedicated to
municipal uses, and the City determines such uses. The cable
company maintains the local access channels free of charge to local
residents, city departments and organizations. Operating rules for
these channels are established by the Corporation in conjunction
with the cable company and the City. The Corporation is responsible
for staffing and supervision at the studio, community education,
training of local citizens in the use of the system, local
ordinance programming, and program generation.

Under the License Agreement, the cable company agreed to
provide monies to the Corporation and the schools to defray
operating expenses and to assist in capital expenditures. The
present agreement requires the cable company to give 4% of its
gross revenues to the Corporation in each year of operation.
Additionally, the cable company agreed to pay a maximum of $572,000
for capital equipment purchases over the term of the license. The
cable company also purchased a mobile van, which is capable of
remote programming, and established a complete studio centrally
located in downtown Waltham. The City provides no funding or
municipal resources to the Corporation. The Corporation raises
additional revenue through fundraising events, such as auctions,
and fees which it charges. The Corporation rents

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space, pays for its utilities, compensates its employees, and
retains legal counsel. You state that, should the Corporation
dissolve, the City does not have a reversionary interest in any of
the assets of the Corporation.

The Corporation is governed by a Board of Directors ("Board")
which is appointed by the Mayor. The Board also includes one ex
officio member selected by the cable company. Other than the power
to appoint Board members, the Mayor has no other decision-making
role in the Corporation.[1] Under the Corporation bylaws, the
Board may, by majority vote, with or without cause, remove a member
from the Board. The Board has full power to manage and control the
property and affairs of the Corporation, including full authority
with respect to the distribution and payment of money received by
the Corporation. The Board is not required to report its actions
to the Mayor, nor does the Mayor play a role in reviewing the
Board's actions, except that the cable company files with the City
an annual report which describes the state of the local
programming.

You indicate that, in 1988, at the recommendation of the City
Solicitor's Office, the City Council designated the Board to be
special municipal employees under the conflict of interest
statute.[2] The Board questions whether you, as a Corporation
employee, are a municipal employee under the conflict of interest
law. You were hired by the Board. You have never received any
compensation or benefits from the City. Corporation employees are
not eligible for a municipal pension, municipal union membership,
or authorized to use municipal vehicles.


QUESTION:



Are you, as Executive Director of the Waltham Cable Access
Corporation, a "municipal employee" as defined by Chapter 268A,
s.1(g)?



ANSWER:



No, because the Waltham Cable Access Corporation is not a
"municipal agency" as defined by chapter 268A, s.1(f).



DISCUSSION:



G.L. c. 268A, s.1(g) defines a municipal employee as "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).

In order to determine whether you are a municipal employee
within the statutory definition, we must consider whether the
Corporation is a "municipal agency" under the conflict of interest
law.

Municipal agency is defined in G.L. c. 268A, s.1(f) as "any
department or office of a city or town government and any council,
division, board, bureau, commission, institution, tribunal or other
instrumentality thereof or thereunder."

Prior opinions of the Commission have identified several
criteria useful to an analysis of whether a particular entity is a
public instrumentality for the purposes of G.L. c. 268A. These
factors are:

(a) the impetus for the creation of the entity (e.g.,
legislative or administrative action);

(b) the entity's performance of some essentially
governmental function;

(c) whether the entity receives or expends public funds;
and

(d) the extent of control and supervision exercised by
governmental officials or agencies over the entity.

See EC-COI-94-7; 89-24; 89-1. The Commission also considers
whether, in light of the preceding factors, "there are any private
interests involved, or whether the states or political subdivisions
have the powers and interests of an owner." See MBTA Retirement
Board v. State Ethics Commission
, 414 Mass. 582 (1993) (quoting
Rev. Rul. 57-128, 1957-1 C.B. 311, 312). For the following
reasons, we conclude that the Corporation is not a municipal agency
whose members and employees are subject to the conflict of interest
statute.

In 1988, the Ethics Commission addressed the question of
whether a similar local access cable corporation was a municipal
agency under the conflict law, and concluded that the particular
cable access corporation was not a municipal agency. EC-COI-88-19.

In EC-COI-88-19, the Commission concluded that the local access
corporation was not governmentally created, as the impetus for the
creation was the License Agreement between the city and the cable
company, as opposed to a rule, regulation, statute, or ordinance.
Further, the Commission found that the

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local access corporation's management of the local access channels,
while a public service, was not an essentially governmental
function. According to the Commission, "public television
scheduling and production are neither traditional nor exclusive
roles of government." EC-COI-88-19.

We reaffirm our conclusions that the management of local
access channels by a non-profit organization is not an essentially
governmental function, and that, absent a rule, regulation,
statute, or ordinance, an organization established as a result of
a contract between a City and a private company is not
governmentally created. See, e.g., MBTA Retirement Board v. State
Ethics Commission
, 414 Mass at 589-590 (no governmental creation
where there is no statute, regulation or executive order addressing
establishment of fund and board which arose from trust instrument);
EC-COI-94-7; 93-2 (non-profit created in response to lease; no
governmental creation); 84-65 (no governmental creation where
entity created by terms of will).

Turning to the third factor, concerning the amount of public
funding, we do not find, under our jurisdictional test, that
the Corporation receives significant public funding. The City provides
no City funding or municipal resources to the Corporation. See EC-
COI-93-2
(corporation privately financed and will not expend or
receive county funds). Further, considering the private interests
involved, we find that these private interests outweigh any
interest of the City. See MBTA Retirement Board, 414 Mass. at 591
("analysis of [public funding] factor ... should focus on the use
of the public funds received by the entity in question, taking into
consideration the private interests involved"). The Corporation
has full authority to manage and expend its funds, within the
parameters of its contractual obligations, bylaws and articles of
organization, without oversight by the City. The City has no
proprietary interest in the assets of the Corporation and has no
right to receive any of the assets upon dissolution of the
Corporation. See Id at 591. Compare, EC-COI-94-7 (public funding
found where state provided non-profit with substantial funding,
audited non-profit organization's financial records, and maintained
an interest in how funds were expended).

The final consideration in our analysis is the degree of
control and supervision exercised by governmental officials over
the Corporation. In EC-COI-88-19, the Commission found no
government control of the local access corporation because,
although the Mayor appointed the initial Board of Directors, all
subsequent Directors were selected by the Board of Directors, not
by the Mayor. In your situation, the Mayor is the appointing
authority under the License Agreement and the Corporation Bylaws.
We must consider whether the Mayor's appointment power provides a
sufficient indication of control to constitute governmental
control.

In previous Commission opinions, one of the significant
measures of control has been the presence of a majority voting
block appointed by a government official on the board of directors
of a non-profit corporation. See, e.g., EC-COI-91-12; 89-24; 89-1.
However, the Supreme Judicial Court, in its interpretation of our
jurisdictional test, has indicated that, in addition to voting
power, "the issue of control must be considered in the context of
each board member's role as a fiduciary..." MBTA Retirement
Board
, 414 Mass. at 592.

Other than his appointment power, the Mayor has not been given
any decision-making role in the Corporation, and the Board is not
required to report its actions to the Mayor. See EC-COI-93-2 (no
control or supervision over Board decisions); compare EC-COI-88-24
(members of Board take action upon instruction from government
personnel). We note that, under its bylaws, although the Board may
not appoint subsequent members, it may, by majority vote, remove a
member (a mayoral appointee), with or without cause. This
provision provides some evidence of the Board's independence from
the Mayor's Office. Under the Corporation bylaws, the Corporation
has full authority to manage its affairs. Given the Board's
autonomy in managing its affairs and the limited participation by
the Mayor, we conclude that the Board's primary loyalty lies with
the Corporation and with the cable subscribers, and that the Board
members owe a fiduciary duty to the Corporation. See MBTA
Retirement Board
, 414 Mass. at 592 (board members, as trustees, owe
primary loyalty to beneficiaries of retirement fund, not to MBTA).

In conclusion, we do not find that the level of control
exercised by the Mayor in appointing the Board is sufficient to
outweigh our conclusions under the other jurisdictional factors.
Because the Corporation was not created by statute or regulation,
does not perform an essentially governmental function, does not
receive or expend governmental funds, and has authority to manage
its own affairs without direction from a City agency, we conclude
that the Corporation is not a "municipal agency" for purposes of
the conflict of interest statute, and that Corporation employees
are not municipal employees subject to the conflict law.


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[*] Pursuant to G.L. c. 268B, s.3(g), the requesting person
has consented to the publication of this opinion with identifying
information.

[1] The city has established a separate cable oversight board,
which is a municipal agency. This board serves as the city's
liaison with the cable company and addresses issues of concern to
cable consumers.

[2] The City Solicitor's Office now informs us that it
believes that the Corporation is a private corporation, not subject
to the conflict law.

Page 610

End Of Decision