You presently serve as one of five trustees on the George Robert White Fund (GRW Fund). The Fund was established as a permanent charitable trust fund pursuant to Article Fourteen of the will of George Robert White dated May 21,1920. The purpose of the GRW Fund is to use the net income to finance projects involving "works of public utility and beauty, for the use and enjoyment of the inhabitants of the City of Boston.. . " No part of the income is to be used "for any purpose which it is the duty of the City in the ordinary course of events to provide."
Mr. White further stipulated that the GRW Fund is to be administered by five trustees: The Mayor, the President of the City Council, the City Auditor, the President of the Chamber of Commerce and the President of the Bar Association of the City of Boston. Pursuant to the direction of Mr. White, the GRW Fund has an office in City Hall where one administrative assistant keeps the books and records. The City of Boston pays the salary and provides other city benefits for the administrative position, but is reimbursed by the Fund for both the salary and benefits.
Are the trustees of the GRW Fund considered municipal employees for the purposes of G.L. c. 268A?
Chapter 268A defines 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.. ." G.L. c. 268A, § 1(g). The issue of whether GRW Fund trustees are considered municipal employees therefore depends upon whether the GRW Fund is a municipal agency, which is defined by the conflict of interest law 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." G.L.c.268A, § 1(f).
In its previous determinations concerning the public status of an entity for the purposes of Chapter 268A, the Commission has focused on the following four factors:
(1) the means by which it was created (e.g. legislative or administrative action);
(2) the entity's performance of some essentially governmental function;
(3) whether the entity receives and/or expends public funds; and
(4) the extent of control and supervision exercised by government officials or agencies over the entity.
None of these factors standing alone is dispositive; rather, the Commission has considered the conjunctive effect produced by the extent of each factor's applicability to a given entity. For example, the Commission concluded that local private industry councils are municipal agencies within the meaning of c. 268A § 1(f) because of the role they play in the implementation of the Federal Job Training and Partnership Act; namely in the decision-making role they share with local elected officials in the development of job training plans, the selection of grant recipients and the expenditure of public funds. EC-COI-83-4. See also EC-COI-82-25 [regional school district is a municipal agency for c. 268A purposes because it is supported solely by public funds and it provides a service which each municipality in the Commonwealth is required by law to provide].
The establishment, funding and functions of the GRW Fund can be distinguished from those entities deemed to he public agencies by the Commission, based on the foregoing factors.
1. Creation
The GRW Fund was not created by direct legislative or administrative action,[1] but rather was established as a permanent charitable trust fund pursuant to an individual's will. The City of Boston clearly must have taken some type of administrative action in order to accept the bequest. However, "[a] completed gift duly accepted by the town constitutes a contract between the town and the estate of the [testator]." City Bank Farmers Trust Co v. Carpenter, 319 Mass. 78, 80(1946). Thus, the City's acceptance of Mr. White's gift for "important civic improvements" can be compared to a contract between the City and a vendor to provide goods and services to the City of Boston. The use of a City office and the transaction of the Fund's business through City departments are terms of that contract, conditions to be met in order to accept Mr. White's bequest. The establishment of a municipal agency or department cannot be unilaterally accomplished via an individual's will.
2. Governmental Functions
Although the GRW fund's purpose is to finance projects for the use and enjoyment of Boston residents, essentially a public function,[2] the will specifically states that the monies shall not be used for any kind of function that the city would ordinarily finance. With this language, Mr. White expressly excluded the use of Fund monies to finance "essentially governmental functions" from the options available to the trustees. Instead, Mr. White instructed that the monies be used for such projects as a "forum of substantial proportions for public gatherings" and other city improvements such as a zoological garden, uses which the courts have traditionally accepted as public charitable uses.[3] Since 1976, the GRW Fund has financed such projects as the Orient Heights Youth Recreation Center in East Boston's Noyes Park, the Community Resource Center at the Franklin Park Zoo and the South Boston Health Center, and the Children's Zoo project in Franklin Park. These functions could be either publicly or privately financed and managed, and therefore do not appear to constitute "essentially governmental functions."
3. Public Funds
Likewise, the GRW Fund does not receive or expend public funds: the net income from the investment of the original endorsement in Mr. White's will to the Fund constitutes the expendable assets. While the day-to-day administration of the Fund is performed by a city employee, the Fund reimburses the City for the employee's salary and benefits. Furthermore, the Fund's assets are to be kept separate from other city assets. See Municipal Register p.149 (1978-79). Compare EC-COI-81-77 [where the monies from private trust funds are commingled and are by statute under the control and management of University Trustees, to be treated in effect as university funds]. The City's acceptance of Mr. White's bequest therefore did not convert the funds to City funds, but rather established a contract, the terms of which were provided for in Mr. White's will.
4. Municipal Government Control Over the Fund
The GRW Fund is first and last a public charitable trust fund, to be governed by the law of trusts. Because the "inhabitants of the City of Boston" are the beneficiaries of the GRW Fund, the will provides that it be administered through the regular departments of the City and that the Board of Trustees have a City office. These provisions for a public administration of the Fund appear to derive out of Mr. White's desire for accountability on the part of the Fund's managers, as evidenced by the additional provision that "all books and records of every nature relating to the management of the Fund [be] readily accessible during business hours for the reasonable inspection of citizens, so that all who so desire may have full knowledge of the conduct of the business of the Fund." Likewise, the fact that the majority of the Trustees are city officials is not dispositive. See EC-COI-83-74 [where an entity is deemed a municipal agency even though the majority of its membership is selected from representatives of the private sector, because of other factors such as the expenditure of public funds]. As with all trustees of public charitable trusts, the three city officials acting in their trustee capacities owe a duty of loyalty to the Fund: they must administer the trust solely with a view to the accomplishment of the purposes of the trust. Scott on Trusts, § 379 (3rd ed. 1967). They owe their selection to the will of Mr. White and not to any action on the part of an appointing government official. As trustees, the three city officials have only such powers as are conferred upon them in specific words by the terms of the trust or are necessary or appropriate to carry out the purposes of the trust and are not forbidden by the terms of the trust. Scott on Trusts, § 380 (3rd ed. 1967). While Mr. White may have chosen municipal officials to fill three of the five trustee positions for the perspective they would bring to the funding determinations, the three officials are acting as individuals in their roles as trustees. Redress for any alleged breach of trust therefore lies in the law of trusts as applied to an individual's services as a trustee,[4] rather than in the application of the conflict of interest law due to his separate role as a municipal official.
Based on the foregoing, the Commission concludes that the GRW fund is not a municipal agency for the purposes of Chapter 268A. As a charitable trust fund established to finance "important civil improvements aimed at benefitting the residents of Boston, the Fund may share certain attributes of a public entity. However, the Commission holds that the GRW Fund remains a private entity whose administration is subject to the law of trusts, as opposed to an agency or instrumentality of the City of Boston performing governmental functions whose employees are subject to the conflict of interest law.[5]
End Of Decision
