Opinion 88-68


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

ZONING AND PLANNING -- Planning Boards (authority of individual member to vote on matter of personal interest)

CONFLICTS OF INTEREST -- Contracts (whether application for subdivision approval constitutes a contract) -- Disclosure of Interest (application for subdivision approval)

GENERAL MUNICIPAL LAW, §§800(2), 809: It is not clear whether an application for subdivision approval constitutes a "contract" with the meaning of General Municipal Law, §800(2), and, even if it does, it is not clear whether Article 18 would apply to a planning board member whose interest as a neighbor is adverse to the applicant. Similarly, the disclosure requirements of General Municipal Law, §809 also may not be applicable to a planning board member in such circumstances.

You ask if a member of a town planning board is disqualified from considering and voting on matters concerning a proposed subdivision development. You advise that the property being developed is immediately adjacent to an existing subdivision in which the planning board member and his spouse are resident homeowners. All property owners in that subdivision are required by their deeds to be members of the property owners association. The spouse of the planning board member is a member of the board of directors of that association.

Article 18 of the General Municipal Law (§§800, et seq.) contains the provisions of law which relate to conflicts of interest of municipal officers and employees. Pursuant to General Municipal Law, §800(3), a municipal officer or employee has an interest in any contract with his municipality if he receives a direct or indirect pecuniary or material benefit as a result of that contract. That interest is prohibited if the officer or employee, individually or as a member of a board, has the power or duty to: (a) negotiate, prepare, authorize or approve the contract or approve payments thereunder; (b) audit bills or claims under the contract; or (c) appoint an officer or employee who has any such powers or duties (General Municipal Law, §801), and none of the exceptions contained in Article 18 are applicable (see General Municipal Law, §802).

Any contract willfully entered into in which there is a prohibited interest is null, void and unenforceable (General Municipal Law, §804) and any officer or employee who willfully or knowingly violates the provisions of Article 18 may be guilty of a misdemeanor (General Municipal Law, §805). We also note that, if an officer or employee has an interest in a contract that is not prohibited under the provisions of Article 18, General Municipal Law, §803 nonetheless generally requires that the interest be disclosed in writing and included in the official record of the governing board's proceedings. Disclosure is not required under section 803 in the case of an interest in a contract which is not prohibited under subdivision two of section 802 (General Municipal Law, §803[2]).

A "contract", for purposes of Article 18, is defined in General Municipal Law, §800(2) as any "claim, account or demand against or agreement with a municipality, express or implied." It is not clear whether applications for subdivision approval constitute contracts as defined in that statute. It has been the position of this Office that such applications do not result in a section 800(2) contract with a municipality (see e.g. 1983 Opns St Comp No. 83-108, p 133). However at least one lower court, the City Court of the City of Mount Vernon, has held that an application for a building permit and subsequent issuance thereof constitutes a "contract" for conflict of interest purposes (People v Pinto, 88 Misc 2d 303, 387 NYS2d 385). If the granting of subdivision approval were found to be a contract (see People v Pinto, supra), a municipal officer or employee would have an interest if he or she stands to gain a direct or indirect material or pecuniary benefit from the contract even though the officer or employee is not a party to the contract (1985 Opns St Comp No. 85-60, p 84; 24 Opns St Comp, 1968, p 561; 1981 Opns St Comp No. 81-295, p 318). However, it is not clear whether, even under the Pinto rationale, Article 18 would apply to a situation where the interest of the officer or employee is adverse to those of the applicant.

We also call your attention to the disclosure requirements of General Municipal Law, §809. Section 809 provides, in pertinent part, that every application, petition or request submitted for a variance, amendment, change of zoning, approval of a plat, exemption from a plat or official map, license or permit must state the name, residence and the nature and extent of the interest of any officer or employee of the municipality, in the person, partnership or association making such application, petition or request, to the extent known to the applicant. For the purpose of this section, an officer or employee is deemed to have an interest in the applicant when he, his spouse, or their brothers, sisters, parents, children, grandchildren, or the spouse of any of them (a) is the applicant, (b) is an officer, director, partner or employee of the applicant, (c) legally or beneficially owns or controls stock of a corporate applicant or is a member of a partnership or association applicant, or (d) is a party to an agreement with such an applicant, express or implied, whereby he may receive any payment or other benefit, whether or not for services rendered, dependent or contingent upon the favorable approval of such application, petition or request. Since this statute contemplates that the person or entity making the application will make the required disclosures, it also may not apply to a situation where the interest of the local government officer or employee is adverse to that of the applicant.

It should be noted that even when a transaction does not result in a prohibited conflict of interest and the provisions of section 809 do not apply, the town's code of ethics should be reviewed to determine whether it contains any pertinent provisions. Under General Municipal Law, §806, a town code may regulate or prescribe conduct which is not expressly prohibited by article 18.

Finally, but perhaps of the greatest significance in this instance, we note that the courts of this State have held public officials to a high standard of conduct and, on occasion, have negated certain actions which, although not violating the literal provisions of article 18 of the General Municipal Law, violate the spirit and intent of the statute, are inconsistent with public policy, or suggest self-interest, partiality or economic impropriety (see, e.g., Zagoreos v Conklin, 109 AD2d 281, 491 NYS2d 358; Matter of Tuxedo Conservation v Town Board of the Town of Tuxedo, 69 AD2d 320, 418 NYS2d 638; Conrad v Hinman, 122 Misc 2d 531, 471 NYS2d 521). Thus, for example, in Tuxedo, supra, the court held that a board member should have disqualified himself from voting to grant a construction permit to a subsidiary of a client of the advertising agency of which he was an officer, and in Zagoreos, supra, the court upheld the setting aside of a zoning variance granted to an electric utility where decisive votes were cast by board members who were employees of the utility. Accordingly, any planning board member should consider abstaining from discussions and voting on any matter which, while not violating article 18 or the town's code of ethics, suggests even an appearance of self-interest, partiality or economic impropriety. We also call your attention to General Municipal Law, §805-a(1)(b) which precludes a municipal officer or employee from disclosing confidential information acquired by him or using such information to further his personal interests.

September 7, 1988
Cornelius F. Healy
Deputy State Comptroller