Advisory Opinion No. 2002-29

Re: Greenville Water District

QUESTION PRESENTED

Legal Counsel for the Greenville Water District requests an advisory opinion on behalf of the petitioners, Greenville Water District Board members, regional elected officials, as to whether and under what conditions the Board members may accept an increase in compensation.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioners, Greenville Water District Board Members, regional elected officials, may accept an increase in compensation as approved at the annual meeting by District electors. The Code of Ethics does not require the increase to take effect subsequent to the next election, given that the District electors, and not the Board members, voted upon the increase in compensation.

The petitioner advises that the Greenville Water District voted in March 2002 to include a proposed compensation increase for all Board members as an item on the agenda for the District’s annual meeting. The proposal increased the compensation of Board members from $50.00 to $75.00 per meeting and from $50.00 to $100.00 per meeting for the Chairman. Pursuant to the District By-laws, Article IV, Section 4.11, the salaries of the Board members shall be fixed from time to time by the qualified electors of the District, upon prior recommendation by the Board. However, the Board’s recommendation is not binding upon the electors. In April 2002, the Greenville Water District held its annual meeting. All qualified electors were given notice and invited to attend the meeting, at which the electors voted to approve the increase in compensation.

Under the Code of Ethics, a public official may not have any interest, financial or otherwise, direct or indirect, or engage in any employment or transaction which is in substantial conflict with the proper discharge of his or her duties in the public interest. See R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest occurs if the official has reason to believe or expect that he or she or any family member, business associate, or any business by which he or she is employed or represents will derive a direct monetary gain or suffer a direct monetary loss by reason of his or her official activity. See R.I. Gen. Laws § 36-14-7(a). Further, the official may not use his or her position or confidential information received through said position to obtain financial gain, other than that provided by law, for him or herself, a business associate, or any business which the official represents or by which he or she is employed. See R.I. Gen. Laws § 36-14-5(d).

In General Commission Advisory (GCA) No. 6, the Commission opined that the Code of Ethics prohibited public officials from taking any action affecting their own salary or benefits. An important basis for that general advisory is the provision in the Code that a public official has a substantial conflict of interest with his or her duties in the public interest if the official has reason to believe or expect a financial gain by reason of his or her official activity. See R.I. Gen. Laws §§ 36-14-5(a), 7(a).

In General Commission Advisory Opinion No. 6, the Commission clarified the responsibilities of all public officials who are in a position to grant themselves salary increases, or who may have any role in the granting of such increases. The Commission stated that, in general, it would be a violation of the Code of Ethics for a public official to vote on, participate in the discussion of, promote or otherwise have any role in the granting of a raise or increase of benefits to him or herself. Where a public official takes any action with regard to salary or other benefits of employment that will benefit him or her directly, a probable violation of the Code of Ethics will occur. The Commission referred specifically to Celona v. R.I. Ethics Commission, 544 A.2d 582, wherein the Court stated:

There is no language in the … statute that limits violations to circumstances where a public official renders a decision that results in financial gain. Rather … a conflict exists if the public official has reason to believe or expect that he [or she] *** will derive a direct monetary gain *** by reason of his [or her] official activity.

However, the Commission further opined that a Board member could propose a compensation increase as an article on the agenda of the annual town financial meeting, but could not participate in discussion in any way during the meeting and may not vote on the compensation increase. Here, the petitioners did not vote in their capacities as public officials for an increase in their own compensation. The Board members merely included this item on the agenda for the annual District meeting for a vote by the qualified electorate.

In two distinguishable advisory opinions, the Commission opined that public officials could not participate in discussion or votes regarding the receipt of a stipend by members of their public bodies, despite the fact that such compensation would be voted on and approved by the electorate at annual financial town meetings. E.g., A.O. 95-52 and A.O. 97-130. There, however, the stipends were proposed to compensate incumbent members for taking on additional administrative responsibilities on behalf of the municipality or regional district at issue, rather than for the performance of their regular public duties. In the instant matter, the compensation voted upon and approved by the District electorate reflects compensation for the regular duties of the District Board members. Consistent with General Commission Advisory No. 6, the Commission concludes that the petitioners may accept the receipt of such compensation, effective immediately upon passage, provided that such action was voted upon by the qualified District electorate at a duly noticed public meeting.

Code Citations:

36-14-5(a)

36-14-7(a)

36-14-5(d)

Related Advisory Opinions:

97-130

97-64

96-21

95-52

93-82

93-74

93-73

90-42

89-32

89-27

83-69

GCA 6

Related Case Law:

Celona v. R.I. Ethics Commission, 544 A.2d 582 (R.I. 1988)

Keywords:

Compensation

Financial interest