CAO 99-04
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CITY OF MIAMI BEACH
DAlE: APRIL28,1999
TO:
SERGIO RODRIGUEZ, CITY MANAGER
VIA:
CHRISTINA CUERVO, ASSISTANT CITY MANAGER
VIA:
RANDOLPH MARKS, COMMUNITYIECONOMIC DEVELOPMENT -
ASSISTANT DIRECTOR
VIA:
JOANNA RAVELO, CDBG PROJECTS COORDrr~"O:
MURRAYH.DUBBIN,CITY ATTORNE~ ~
CAO #99-4: CONFLICT OF INTEREST - CDAC CHAIR SERVING AS
HONORARY TRUSTEE FOR A CDBG FUNDED SUBRECIPIENT.
FROM:
RE:
Pursuant to your request, I have researched the issue of whether a conflict of interest would
exist were the City of Miami Beach Community Development Advisory Committee ("CDAC")
Chairperson to serve as an honorary trustee of a Community Development Block Grant ("CDBG")
funded subrecipient organization. For the reasons stated more fully below, no per se conflict exists.
The Federal conflict of interest regulation applicable to CDAC membership, embodied in 24
CFR section 570.61 1 (b), reads as follows:
The general rule is that no persons described in paragraph (c) of this
Section! who exercise or have exercised any functions or
responsibilities with respect to CDBG activities assisted under this
part, or who are in a position to participate in the decision making
process or to gain inside information with regard to such activities,
may obtain a financial interest or benefit from a CDBG assisted
activity. or have a financial interest in any contract, subcontra'?t or
agreement with respect to a CDBG assisted activity, or with respect
to the proceeds of the CDBG assisted activity, either for themselves
or those with whom they have business or immediate family ties.
during their tenure or for one year thereafter. . . .
I "The conflict of interest provisions of paragraph (b) of this section apply to any person
who is an employee, agent, consultant, officer, or elected official or appointed official of the
recipient, or of any designated public agencies, or of subrecipients that are receiving funds under
this part." 24 CFR section 570.611(c).
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To:
From:
Re:
Date:
Page:
Sergio Rodriguez, City Manager, et al.
Murray H. Dubbin, City Attorney
CAO #99-4
April 28, 1999
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(Emphasis added.)
The facts presented in this request for legal opinion do not mention any financial gain to be
received by the subject CDBG Chairperson as a result of the proposed affiliation with the funded
subrecipient. Therefore, the relevant issue is whether serving as a member of a funded subrecipient
constitutes a "business tie" under the federal conflict rule. Although the Department of Housing and
Urban Development previously suggested that the City of Miami Beach avoid appearances of any
conflict of interest with regard to CDBG programs by disallowing members of funded subrecipients
from being appointed to CDAC (see attached Composite Exhibit "A" hereto), HUD has also verbally
opined that a CDAC member's passive affiliation with a funded subrecipient (said membership not
benefitting directly as a result of the CDBG funds received) does not constitute a "business tie" for
purposes of a conflict under the applicable federal regulations.2 Accordingly, and asswning that the
honorary trustee position at issue herein would in no way be benefitted as a result of the CDBG
monies received by the subject funded subrecipient, no conflict of interest exists were the CDAC
Chairperson to accept an honorary trustee position of a CDBG funded subrecipient.
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2 The City is awaiting receipt of a written opinion from HUD on this issue.