September 26, 1990
David R. Tooley
City Manager
City of Eureka
531 K Street
Eureka, CA 95501-1165
Re: Your Request for Advice
Our File No. A-90-545
Dear Mr. Tooley:
This is in response to your letter requesting advice on behalf of Lance Madsen, Eureka City Councilmember, concerning his duties under the conflict-of-interest provisions of the Political Reform Act (the "Act").
QUESTION PRESENTED
Does Mr. Madsen, a former city employee, have a conflict-of-interest when he is legally entitled to compensation for sick leave time accumulated while he was a city employee and there is no related governmental decision pending before the city council?
CONCLUSION
Mr. Madsen does not have a conflict-of-interest under the Act when he is legally entitled to compensation for sick leave time accumulated while he was a city employee or when there is no related governmental decision pending before the city council.
FACTS
Lance Madsen has been recently been elected to the Eureka City Council and is due to take office on November 20, 1990. Mr. Madsen is also a former city employee who retired due to an industrial disability. According to your analysis, under Government Code Section 21025.2 an employer is required to compensate an employee for accumulated sick leave time if the employee retires due to industrial disability. Thus under your analysis Mr. Madsen is legally entitled to compensation for his accumulated sick leave time, although the city has not yet paid such compensation to him. Payment of such compensation would be handled administratively and would not require any action by the city council.
ANALYSIS
Section 87100 sets forth the conflict-of-interest prohibition of the Act:
No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.
As set forth in Section 87100, a public official shall not make, participate in making or in any way attempt to use his official position to influence a governmental decision. From the facts presented to us Mr. Madsen does not appear to be making, participating in making or in any way using his position to influence a governmental decision. No decision related to the payment of Mr. Madsen's benefits is before the city council. Indeed the payment of the benefits to Mr. Madsen will be handled at an administrative level.
Moreover, for there to be a conflict of interest there must be a financial interest involved. "Financial interest" is defined by Section 87103:
An official has a financial interest in a decision within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official or a member of his or he immediate family or on:
(a) Any business entity in which the public official has a direct or indirect investment worth one thousand dollars ($1,000) or more.
(b) Any real property in which the public official has a direct or indirect interest worth one thousand dollars ($1,000) or more.
(c) Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating two hundred fifty dollars ($250) or more in value provided to, received by or promised to the public official within 12 months prior to the time when the decision is made.
(d) Any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management.
(e) Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating two hundred fifty dollars ($250) or more in value provided to, received by, or promised to the public official within 12 months prior to the time when the decision is made.
(Section 87103(a)-(e).)
Under the facts presented to us, Mr. Madsen does not have a "financial interest" as defined by the Act. Salaries from local governmental agencies are specifically excluded from the definition of income under the Act. (Section 82030(b)(2); Regulation 18702.1(c)(1).) Fringe benefits that are part of a compensation package paid by a government agency are included with the term "salary" in Section 82030(b)(2). (In re Moore, (1977) 3 FPPC Ops. 33, 36; James Advice Letter, A-88-469; copies enclosed.) While Mr. Madsen may have an interest in compensation for his accumulated sick leave time from the city, this interest is excluded from the definition of "income," and therefore Mr. Madsen does not have a "financial interest" under Section 87103. None of the other specified financial interests in Section 87103 appear involved here.
Mr. Madsen is not making, participating in making or in any way using his official position to influence a governmental decision. Nor does he have a financial interest involved here. Mr. Madsen has no conflict-of-interest.
If you should have any question regarding this matter, please feel free to contact me at (916) 322-5901.
Sincerely,
Scott Hallabrin
Acting General Counsel
By:Mark Morodomi
Legal Division
SH:MM:dg
Enclosures