Opinion  EC-COI-87-31

Date:	08/17/1987
Organization:	State Ethics Commission

A municipal board of health member who owns a local restaurant may not participate officially on matters which concern either the restaurant, the restaurant's competitors, or the member's financial interest. Section 17 also prohibits the board member from installing septic systems locally as this work is presumptively in relation to the septic permit, a matter in which the town has a direct and substantial interest. (legislation passed in 1988 to allow this in certain cases).

Facts

You are the chairman of the ABC Board of Health (Board). The Board develops and implements health policies for the Town. The Board has the statutory authority to promulgate regulations Concerning environmental health, including house drainage and sewer connections. G.L. c. 111, s.127. However, it is the Water and Sewer Department which approves and licenses water and sewer connections.

The Board also enforces provisions of the State Environmental Code regarding on-site subsurface disposal systems. G.L. c. 21A, s.13. The Board issues permits for the construction of septic systems and conducts site examinations for deep hole and percolation tests. 310 CMR s.15.02(1) and 315.03 (1). In practice, it is the Health Agent who actually performs the inspections and issues the permits.

You install septic systems and make water and sewer service connections. The permits for this work may be applied for by you, the general contractor or engineer on the job or the owner of the property. You, as the installer, are listed on the permit applications.

You also own a small, local restaurant. The Town Health Agent, who performs inspections of and issues permits for all food establishments, similarly licenses your restaurant[1]

Questions

1. While you serve as a member of the Board, may you also be the owner of a local restaurant?

2. While you serve as a member of the Board, may you also install local septic systems?

3. While you serve as a member of the Board, may you also connect local water and sewer service lines?

Answers

1. Yes, subject to the limitations discussed below.

2. No.

3. Yes, provided that you are designated as a "special municipal employee."

Discussion

In your capacity as a Board member, you are a municipal employee for purposes of the conflict of interest law. G.L. c. 268A, s.1(g).  Consequently, you are subject to the provisions of the law.[2]

1. Restaurant Ownership

(a) Section 19

In your capacity as a Board member, you are prohibited from participating[3] in any decision, determination or other particular matter[4] in which you have a financial interest G.L. c. 268A, s.19(a).  The financial

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interest must be direct or reasonably foreseeable, EC-COI-84-123. In light of the fact that you own a restaurant, it is reasonably foreseeable that a Board determination concerning your restaurant would affect your financial interest, Accordingly, you may not participate, as a Board member, on matters affecting your restaurant, For example, you obviously cannot participate as a Board member in a hearing to determine whether to suspend your own food service permit, See, EC-COI-86-13 (where the police chief may not act on matters affecting his wife's liquor establishment).

You also may not act on matters affecting your restaurant's business competitors.

Because the consequence of an investigation of an infraction by a competitor may be the suspension or termination of the competitor's license, the removal of a competitor would have a foreseeable financial impact on [your own establishment]. EC-COI-86-13 citing EC-COI-81-118; 82-95; 82-98.[5]

The Board of Selectmen, your appointing authority, may grant you an exemption from s.19 by giving you written permission to participate in those matters in which you have a financial interest. G.L. c. 268A, s.19(b)(1). The Board of Selectmen's determination to grant such permission must be based on the conclusion that the financial interest at stake is not so substantial as to be deemed likely to affect the integrity of your services as a Board of Health member.

(b) Section 23

The conflict law also prohibits you from using your position on the Board to gain unwarranted privileges of substantial value which are not properly available to similarly situated individuals. G.L. c. 268A, s.23(b)(2). For example, as Chairman of the Board, you may not put implicit or explicit pressure on the Health Agent or other Board members to treat your restaurant differently from other food service establishments with respect to licenses, permits, inspections and the like. See, EC-COI-86-13.

(c) Section 17

In addition to the restrictions set forth above, you also you may not represent your restaurant (i.e., act as its agent ) in it dealings with the town. For example, you may not discuss matters such as licensure, inspections, potential health code infractions or their remedies with the Health Agent. See, EC-COI-83-17 (a public employee may not apply to his own Board on behalf of another for a permit for the removal of underwater archaeological resources); 80-53 (a public employee may not be the agent for a private party in applying for or renewing licenses to family day care homes). See also, EC-COI-87-17; 83-5, This issue becomes particularly sensitive if a representative of your restaurant must actually appear before a town agency. Pursuant to G.L. c. 268A, s.17(c), you may not make the appearance.

2. Installation of Septic Systems

As applied to your case, s.17 will prohibit your outside work installing septic systems. Section 17 generally prohibits a municipal employee from acting as the agent for or being paid by anyone (other than the town or a town agency) in relation to any decision, determination or other particular matter in which the town is a party or has a direct and substantial interest.[6]

Where you operate your own business installing septic systems, and are the only installer on the job, the work you do is presumptively "in relation to" the septic permit Absent facts to overcome this presumption, you are prohibited from engaging in this privately paid work.[7]

In a prior opinion, the Commission concluded that the application for a Board permit, the decision to grant the permit, decisions regarding the oversight of the operation... [pursuant to the permit] are all particular matters which are within [a Board member's] official responsibility. EC-COI-83-17.

Thus, the board member (and the only consultant on the job) was not permitted to receive compensation from the permit holder for work done pursuant to the permit. Id.

An application for a septic permit, the decision to issue the permit, the permit itself as well as the Health Agent's determination that a septic system installation has been done correctly, are all "particular matters" for purposes of the conflict of interest law. The Town is both party to these matters and has a direct and substantial interest in them in light of the town's extensive regulation in local health matters.

Your proposal to be privately paid for work done pursuant to a septic permit is presumptively "in relation to" the permit and may well be "in relation to" many of the other determinations made concerning the installation of a septic system. See, EC-COI-83-17 (where a state employee may not be privately paid to do work which is subject to the state's oversight and final approval); See also, EC-COI-83-155 (where being paid by a private party to fulfill licensure requirements is "in connection with" a particular matter); EC-COI-81-140 (where an action taken to satisfy the initial and ongoing conditions for nursing home licensure is "in connection with" the determination to approve the license).

Furthermore, the Commission has consistently held that a public employee may not appear on behalf of a private party in dealing with a public agency. See, EC-COI-84-22 (where one who does plumbing work for a private party and meets with the plumbing examiner

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concerning the work is considered acting as an agent in connection with a particular matter); 87-3 (where a state employee may not act as a private party's agent in dealing with other state employees (concerning the oversight of a private development project); 87-4 (where a public employee may not meet with other public officials on behalf of another "to resolve problems which have arisen in the [course off implement[ing]... [the private project]...").

Thus, as a septic system installer, you would be prohibited from meeting with the Health Agent on behalf of the private party for whom the installation was done.

The conclusion that you may not be paid by or act as the agent for a private party concerning septic installations is consistent with the policy considerations of s.17. Section 17 is intended to prevent the divided loyalties an individual may feel if he both is in a public position which regulates a particular industry and is also paid by a private party to engage in that regulated work. See, EC-COI-87-13 (where a public employee may not be privately paid in connection with any matter within his official responsibility).[8]

3. Connection of Water and Sewer Hookup

(a) Section 17

Although septic installations are approved by the Board or its Agent, water and sewer service connections are approved by the Town's Water and Sewer Department. Because approvals for water and sewer service connections are granted by a town agency other than the one where you hold a public position, you may be privately compensated to do this work provided that you are designated as a "special municipal employee." You would qualify for this designation upon an affirmative vote of the Board of Selectmen. See, supra, footnote 6 at page 4.

[1] In rendering this opinion, the Commission has relied on the facts as stated by ABC town officials and has not made an independent investigation of those facts.

[2] The advice provided in this opinion is intended to guide your prospective conduct and does not purport to review the propriety of your prior activities.

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

[4] "Particular matter," is defined as 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).

[5] There are inherently local factor's which would influence the determination of the scope of competitive area for your restaurant, your appointing official is in a better position than the Commission to identify whether other restaurants should be considered your competitors. See, EC-COI-87-1.

[6] As a Board member, you have not been designated a "special municipal employee." see, G.L.c. 268A, s.1(n). Because the Board position is unpaid, you are entitled to be so designated by the Board of Selectmen. If you are designated a "special," you are only prohibited from being paid by or acting as agent for non-town parties if the matter (for which you are being paid or acting as agent) is (1) one in which you already participated as a municipal employee, or (2) is or, within one year, was the subject of your official responsibility, or (3) is pending in the Health Department or the Board of Health (if you have served more than sixty days of the past 365 days). Thus, if you are a "special", there are fewer restrictions on your ability to do outside work on matter's which, in essence, do not concern the Board of Health. The result in the matter of septic system installation would be unchanged by this status. On a different set of facts, however, this issue could be determinative of a different result see, infra, Part 3 at 6.

[7] Certain facts may overcome the presumption that all work done pursuant to the permit is "in relation to" the permit. For example, a municipal employee, who is one of many privately paid employees or independent contractor's on a major construction project, and who has no responsibility for dealing with the town on any matter, might not be considered to be privately compensated "in relation to", the permit which allows the construction. Furthermore, certain permits which authorize a major construction project (e.g., a zoning municipal reuse permit to convert a school building into condominiums) will not necessarily render all work done on the project, e.g., interior painting, "in relation to", the permit).  Although in any particular case there may exist facts relevant to overcome the presumption, we know of none applicable to your case. 

[8] You are also prohibited from being paid by or acting on behalf of a nonpublic entity in applying for a Septic permit. See, EC-COI- 87-17;83-17;83-5;80-53. See also, Buss, The Massachusetts Conflict of Interest Statute: An Analysis, 45 B.U. L. REV. 299,928(1965). While we understand that you presently do not take any part in the septic permit application process, we note the prohibition in case it becomes relevant in the future.

End Of Decision