February 8, 1989

FACTS:



Recently, the City Facility Committee (Committee) and ABC, a
non-profit corporation, entered into a consultantship agreement,
whereby ABC agreed to design, staff and execute a study of the
facilities of the City, and the Committee agreed to pay ABC a
specific fee. Pursuant to the consultantslup agreement, ABC
presented the Committee with a comprehensive plan.

ABC and the Committee are currently negotiating a second
agreement which will implement the plan. Although the final terms
of this agreement have not yet been determined, a draft contract
(Contract) outlines the undertakings of the parties and represents
the basic structure by which both parties seek to revitalize
facilities of the Committee.

The terms of the contract can be summarized as follows: The
Committee will delegate to ABC all of its authority and
responsibility for the management, supervision and oversight of the
city facilities. ABC will develop curriculum and instruction,
including the training, supervision, and evaluation of all
personnel. In addition, ABC will conduct hearings; set compensation
for employees, subject to all applicable laws and agreements; have
authority to recruit, hire, appoint, evaluate, promote, assign,
fire, suspend and dismiss employees and consultants; and conduct
collective bargaining. The Committee will also delegate to ABC its
powers, functions and duties

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relating to city finances, including the authority to determine
expenditures within the total appropriation. Aiso, ABC will have
authority to accept and expend gifts and grants, to prepare
budgets, incur liabilities, and make expenditures for the
facilities. Furthermore, ABC will prepare the annual budget, apply
for and seek funds in the name of the Committee, and make contracts
and agreements on behalf of the Committee. Except as provided for
in the contract, no vote of the Committee shall be required in
order for ABC to excrcise any powers delegated to it in the
contract.

ABC will provide appropriate resources to undertake the training
of employees and will be solely responsible for determining which
ABC personnel and resources will be utilized in the implementation
of the contract. ABC will provide monthly reports to the Committee
and semi-annual reports to the governing body of the city. The
Committee will be informed of funding goals, income projections,
and budgetary changes.

The Committee retains the following powers in the contract,
although it is understood that the final agreement may give the
Committee somewhat expanded powers to override certain ABC
decisions. The Committee will receive timely reports from ABC in
the implementation of the system. By majority vote, the Committee
can require ABC to reconsider (1) the adoption of policies
affecting the facilities as a whole, (2) the adoption and
submission of the annual budget, (3) the adoption of employee
collective bargaining agreements, and (4) new appointments of the
administrative officers. ABC shall then reconsider its decision and
report its decision after reconsideration, which will be
final, except if it involves a matter subject to override.

By two-thirds vote, the Committee will have the power to
override acts of ABC regarding the adoption of policies affecting
the facilities as a whole; the adoption and submission of the
annual budget; and the adoption of collective bargaining
agreements. Thus, the Committee will be able to require
reconsideration of new appointments but shall not be empowered to
override ABC decisions on such matters.

Currently, the contract states that the Committee will indemnify
and hold harmless ABC, its officers, trustees, employees and agents
from and against all losses, damages, liabilities, costs and
expenses. It is our understanding, however, that this clause is
subject to change. The Contract as it now stands also provides
that ABC employees will not be subject to, among other statutes,
the conflict of interest law, G.L. c. 268A.

The parties acknowledge that improvement of the facilities is
one of the highest priorities of the city and commit themselves to
a good faith effort to increase the available financial resources.
If either party believes that insufficient funds will be available
in order to carry out the project, they will have the right to
terminate the contract upon timely notice and the performance of
certain conditions.

The contract will take effect upon its execution and upon
adoption of local ordinances and revisions of the city charter.
In addition, the General Court must enact enabling legislation.

No individual employed by ABC is specifically named in either
the contract or the draft legislation. ABC is empowered to perform
the wide variety of functions contemplated in the contract. It is
expected that the entire program will be administered by an ad hoc
committee. No ABC personnel will assume roles within the
facilities. Each ABC employee who works on the project will receive
compensation from ABC. Facility employees will receive their
compensation fiom the city.


QUESTION:


On the basis of the foregoing facts, are ABC employees
"municipal employees" or "special municipal employees" under G.L.
c. 268A?


ANSWER:


No.



DISCUSSION:


We note at the outset that the arrangement envisioned by the
contract and accompanying legislation is unique in that it
delegates virtually all management powers of a municipal agency to
a private entity. Because of that uniqueness, the consequent
uncertainty as to how the contract will ultimately be performed,
and the fact that contract provisions are still subject to change,
we stress that this opinion is based solely upon the facts given
to us m your recent letters and the contract.

"Municipal employee" is defined as "a person performing services
for a municipal agency, whether by election, appointment, contract
of hire or engagement, whether serving with or without compensation
on a...consultant basis..." G.L. c. 268A, s.1(g). Thus, it will not
necessary to be a paid, full-time, city worker in order to fall
within the statutory definition ofmunicipal employee." Even
uncompensated


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consultants to city government are "municipal employees" under the
conflict law. For example, an architect or engineer who renders
professional services directly to a city or town agency would be
a "municipal employee." Buss, The Massachusetts Conflict of
Interest Law An Analysis,
45 B.U. Law Rev. 299,3II (1965).

The Commission has long recognized that a consultant contract
between a municipality and a corporation will not render the
corporation a "municipal employee." In most instances, employees
of such corporations will not come within the statutory definition
of "municipal employee." See EC-COI-87-8 (most corporate employees
are "too remote" from the municipality to be considered municipal
employees); EC-COI-83-129 (employees of corporate consultants not
generally considered "municipal employees"). in the municipality
specifically targets a certain individual within the corporate
structure to perform the services, however, that individual will
be. considered a government employee under G.L. c. 268A. See, EC-
COI-86-21
(state agency specifically requested corporate employee),
83-129 (state specifically contemplated corporate employee's
services and had contractual right to approve replacement). In
practical terms, specifically designated employees of a corporation
are treated as if they are consultants to a governmental agency and
therefore covered by G.L c. 268A.

The contract in this instance mentions no ABC personnel;
however, that fact will not always operate to exempt from
"municipal employee" status individuals who are nevertheless
targeted by the municipality. See EC-COI-87-8 (individual not
specified in agreement found to be "municipal employee" as city
impliedly contracted for his specific services). Therefore, we
must examine the following factors before determining whether a
corporate employee not specifically designated in a municipal
consulting contract can be considered a "municipal employee":

1. Whether the individual's services are expressly or impliedly
contracted for;

2. The type and size of the corporation. For example, an
individual who is president, treasurer and sole stockholder of a
closely held corporation may be deemed a public employee if the
corporation has made a contract with a public agency;

3. The degree of specialized knowledge or expertise required of
the service. For example, an individual who performs highly
specialized services for a corporation which contracts with a
public agency to provide those services may be deemed to be
performing services directly to the agency;

4. The extent to which the individual personally performs
services under the contract, or controls and directs the terms of
the contract or services provided thereunder and,

5. The extent to which the person has performed similar services
for the public entity in the past.


EC-COI-87-19; 87-8.


Applying these criteria to the facts as outlined above, we conclude
that ABC personnel working on the plan are not "municipal
employees"[1]

ABC employs many individuals and operates on a substantial
budget. Given the size of ABC and the variety of services which
will be provided, there is litlle likelihood that ABC employees are
attempting to hide behind corporate employee status in order to be
exempt from the conflict law. Compare EC-COI-87. 8 (sole owner
and officer of corporation employing three individuals held to be
state employee as his services were impliedly contracted for by the
state agency). As this is the first time that the city has
contracted for the services contemplated in the agreement, there
is no history of actual services rendered upon which the Committee
can rely in order to target specific ABC personnel. Although
Committee members have developed relationships with certain high-
ranking ABC officials through the consultantship agreement, we do
not find that the Committee has impliedly targeted the services of
those particular individuals through the contract. The choice of
ABC personnel is within the sole province of ABC; the Committee has
no right to override those choices or to demand the services of any
specific ABC personnel. Thus, the Committee has not impliedly
contracted for the services of any ABC employee.

Although the facts here are unique, the Commission has
previously decided one similar question which involved a public
entity's delegation of management authority to an outside
corporation. We examined the five factors listed above in finding
that the facility manager was a governmental employee. EC-COI-87-
19
. However, that finding was grounded on the fact that the
manager had a history of previous service in the same position with
the public enrnty, that he provided a high degree of specialized
service, and that the government had specifically contracted for
his services. Thus, we require the presence of a number of factors
before asserting jurisdiction. The sole factor present in this
instance is the high degree of

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specialized services which will be performed by as yet undetermined
personnel. We do not find that this fact alone will render those
individuals "municipal employees."

With this opinion, we do not comment on the wisdom of the plan
or its constitutional permissibility. We answer only your immediate
question, and use our standard of the need for either an express
or implied governmental request for services. Applying that
standard to the facts in this case, we find that the Committee has
not and cannot designate specific ABC employees for work on the
plan. Rather, the Committee has delegated authority to ABC as a
corporate entity. Therefore, we conclude that ABC personnel will
not be considered municipal or special municipal employees under
the confiict law. As stated, this opinion is based on the facts
contained in the contract and your earlier letters. Should the
performance of the contract lead to results materially different
from those contemplated therein, we advise that you renew your
request for an opinion based on those facts.[3]

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

[1] By extension, they cannot be considered "special municipal
employees," as that term necessarily encompasses only "municipal
employees." G.L. c. 268A, s.1(n).

[2] For example, if it has been the expectation of the parties that
the plan will be administered by specific individuals, we would
need to reconsider our result with respect to those individuals.
In such or similar event, we will consider the present opinion as
preliminary.

End Of Decision