CAO 98-29
..
..
CITY OF MIAMI BEACH
OFFICE OF THE CITY ATTORNEY
MEMORANDUM
FROM:
Sergio Rodriguez
City Manager
Murray H. Dubbi~\ ~
City Attorney /w.
Raul J. AgUila'~
First Assistant City Attorney
C.A.O. NO. 98-29
TO:
C.M.O. NO. 3-10/98
DATE:
November 17,1998
RE:
GARY KNIGHT I CDAC MEMBER
We are in receipt of your request for legal opinion, dated October 15, 1998, regarding the
appropriateness of Gary Knight, a current member of the Community Development Advisory
Committee (CDAC), continuing to serve as a CDAC member given that this individual has recently
accepted a paid position with the ArtCenter of South Florida (ArtCenter). ArtCenter is a sub-
recipient of Community Development Block Grant (CDBG) program funds. For the reasons stated
more fully below, a conflict of interest would exist under federal conflict of interest laws.
ArtCenter, acting as sub-recipient ofCDBG funds, is subject to the provisions of24 C.FR
Section 570.611(b), reading as follows:
(b) Conflicts Prohibited.
Except for the use of CDBG funds to pay salaries and other related
administrative or personnel costs, the general rule is that no persons
described in paragraph (c)\ of this section who have exercised any
functions or responsibilities with respect to Community Development
Block Grant activities assisted under this part or who are in a position
to participate in a decision-making process or gain inside information
with regard to such activities, may obtain a personal or financial
interest or benefit from a CDBG assisted activity, or have an interest
in any contract, subcontract or agreement with respect thereto, or the
proceeds thereunder, either for themselves or those with whom they
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 sub-recipients which are receiving funds under
this part." 24 C.F.R. Section 570.611(c).
~
have family or business ties, during their tenure or for one (1) year
thereafter.
On September 30, 1993, the United States Department of Housing and Urban Development
(HUD) interpreted the above-referenced federal conflict of interest provision as embodying an
absolute conflict of interest precluding members of funded sub-recipients from serving on CDAC:
[A]lthough the CDAC members do not derive a financial interest
from the funding decisions, they are in a position to participate in the
decision making process and gain inside information. This could
result in the appearance offavoritism in funding decisions....The city
should thus evaluate its criteria for membership on the CDAC, to
avoid the appearance of conflicts of interest.
Subsequent to a review ofHUD's September 30, 1993 letter, on November 1, 1993, this
office rendered an opinion holding that in light of the federal conflict of interest guidelines and
RUD's interpretation thereof:
The broad federal conflict of interest regulations shall be hereafter
interpreted so as to prohibit any CDAC board member from voting
upon any application involving CDBO funds when that board
member iSoooin a position to participate in a decision-making process
or gain inside information with regard to such activities, may obtain
a personal of financial interest of benefit from a CDBO assisted
activity, or have an interest in any contract, subcontract, or agreement
with respect thereto, or have proceeds thereunder, either for
themselves or those with whom they have family or business ties,
during their tenure or one year thereafter.
Accordingly, the City's Citizen Participant Plan, as amended and restated on October 7, 1998,
requires that all CDAC members comply with all federal conflict of interest regulations, specifically
those listed under 24 C.F.R. 570.611 for the CDBO Program. Additionally, addressing general
requirements for membership on CDAC, the City's Plan further states:
No City of Miami Beach employee nor an appointed or elected
official directly involved with the utilization or approval of
Community Development funds and/or expenditures is eligible for
membership on the CDAC.2
2 This is consistent with RUD's directive to the City on November 17, 1993, wherein
HUD informed the City through correspondence that "the city should consider revising its
guidelines for CDAC membership to exclude members of funded sub-recipients."
2
'"
In light of the above, the federal conflict of interest provisions applicable to CDAC
absolutely prohibit CDAC board members from having any personal or financial interests from a
CDBG assisted activity or having any interest in any contract, subcontract, or agreement with respect
thereto, or the proceeds thereunder, either for themselves or those with whom they have family or
business ties, during their tenure or one (1) year thereafter. Accordingly, the appointment of Gary
Knight as executive director of the ArtCenter of South Florida would be prohibitive of the federal
conflict regulations were the ArtCenter to receive CDBG funds.
Should you have any questions or comments regarding the above, please do not hesitate to
contact me.
RJAIkw
F:IATTOIAGURICAOI9B.29.CAO
cc: Christina M. Cuervo, Assistant City Manager
Randolph Marks, Asst. Director, Community/Economic Development
Joanna Revelo, CDBG Projects Coordinator
3