HomeMy WebLinkAboutAGENDA ITEM SUMMARY - 1/29/2021- Advisory Opinion
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AGENDA ITEM SUMMARY January 29, 2021
Ethics Review Board
STAFF
Carrie Daggett, City Attorney (with Greeley City Attorney Doug Marek as Special Counsel)
SUBJECT
Consideration of the January 19, 2021, request by Councilmember Melanie Potyondy for an advisory
review and opinion by the Ethics Review Board pursuant to City Code Section 2-569(d)(2) regarding
possible conflicts of interest that may arise from her husband, Eric Potyondy, being employed with the
City Attorney’s Office as well as her employment with Poudre School District.
EXECUTIVE SUMMARY
The purpose of this item is consideration of the January 19, 2021, request by Councilmember
Melanie Potyondy for an advisory review and opinion by the Ethics Review Board (“ERB” or “Board”)
pursuant to City Code Section 2-569(d)(2) regarding the following questions:
(a) Possible conflicts of interest that may arise from her husband, Eric Potyondy, being
employed as an assistant city attorney in the City Attorney’s Office; and
(b) Possible conflicts of interest that may arise from her employment with Poudre School
District.
STAFF RECOMMENDATION
The Ethics Review Board should consider Councilmember Potyondy’s questions in light of the City
Charter and Code, relevant ethics opinions, and applicable State ethics laws, and information
obtained from Councilmember Potyondy regarding her circumstances, and formulate an advisory
opinion. The Board may wish to work with Councilmember Potyondy to develop a “conflict
management plan” as a tool to assist her in managing and fostering transparency related to potential
conflicts.
BACKGROUND / DISCUSSION
Under City Code Section 2-569 (attached), City Councilmembers may present to the Council
Ethics Review Board inquiries regarding the application of state or local ethical rules to actual or
hypothetical situations involving potential conflicts of interest. On January 19, 2021, Councilmember
Potyondy requested that the ERB consider the following questions to the ERB:
(a) Possible conflicts of interest that may arise from my husband, Eric Potyondy,
being employed in the City Attorney’s Office; and
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(b) Possible conflicts of interest that may arise from my employment with Poudre
School District.
General Background:
Composition of the Board:
The members of the Ethics Review Board include Councilmember Ken Summers and
Councilmember Julie Pignataro, with alternate ERB member Mayor Wade Troxell. Former Mayor
Pro Tem Kristin Stephens, who left the Council at the end of 2020, was the third regular member of
the ERB. Pursuant to the Resolution by which Council appointed ERB members in May 2019, the
person replacing former Mayor Pro Tem Stephens automatically assumes her appointments except
as the Council otherwise appoints. Council has not yet taken any action to appoint a new ERB
member and therefore Councilmember Potyondy would assume the vacant seat on the ERB.
However, because this matter relates to potential conflicts of Councilmember Potyondy, Mayor
Troxell will appropriately participate in the ERB’s action on this matter as the alternate board
member.
Special Counsel for City Attorney-Related Matters:
Because some of the matters to be discussed by the Board involve the relationship of
Councilmembers to the City Attorney, the relationship of the City Attorney to Councilmember
Potyondy’s husband, and related interests, Greeley City Attorney Doug Marek will serve as the legal
advisor to the Board and the Council related to the evaluation of the potential conflicts of interest
stemming from Councilmember Potyondy’s inquiry about conflicts related to her husband’s
employment as an assistant city attorney.
In connection with the evaluation of the potential conflicts related to Councilmember Potyondy’s
employment by Poudre School District or general discussion related to the use of Conflicts
Management Plans, the Fort Collins City Attorney will continue her involvement, unless that
arrangement proves unworkable.
Advisory Review and Conflicts Management Plans:
The purpose of the Board, as described in City Code Section 2-569(a), is “to assist Councilmembers
and board and commission members in interpreting and applying the definitions, rules and
procedures pertaining to ethics established by the Charter (City Charter Article IV, Section 9,
attached) and Code (City Code Section 2-568, attached) and by the applicable provisions of state
statute…” The duties and responsibilities of the Board (set out in Code Section 2-569(c)) are:
(1) To review and investigate complaints of unethical conduct filed against
Councilmembers or board and commission members by any person;
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(2) To review and investigate actual or hypothetical situations involving potential
conflicts of interest presented by individual Councilmembers or board and
commission members;
(3) After review and investigation, to render advisory opinions or interpretations
pertaining to such complaints or inquiries under the relevant provisions of the
Charter or Code and the applicable provisions of state law, if any, and to make
written recommendations to the City Council and any affected board or
commission concerning the same; and
(3) To propose any revisions or the provisions of the Charter or Code or other
regulations, rules or policies of the City pertaining to ethical conduct as the
Review Board may deem necessary and appropriate in the best interests of the
City.
In recent ethics policy discussions, Council has discussed the concept of using “conflict
management plans” to identify in advance and plan for management of conflicts of interest questions
for individuals. An example of this approach is the use of Conflicts of Interest/Conflicts of
Commitment Management Plans by Colorado State University (CSU). The form of Conflicts
Management Plan publicly available from CSU is attached for the Board’s reference.
The Board may wish to discuss the potential for the use of Conflicts Management Plans to assist
Councilmember Potyondy in managing her potential conflicts and may also wish to consider making
recommendations regarding the use of this tool more generally.
Suggested Process for Review:
Because this is the Board’s initial meeting to discuss Councilmember Potyondy’s inquiry, the
materials provided are intended to provide general background and the basis for initial
discussion, scoping of the potential conflict of interest issues, and a plan for general
approach in moving forward.
• In this initial discussion, the Board may wish to discuss with Councilmember
Potyondy and gather or request information related to her potential conflicts.
Councilmember Potyondy has provided the job description for her position at Poudre
School District (attached).
• In particular, the Board will need to develop a list of topics or types of matters that
may arise that would raise conflicts questions for Councilmember Potyondy under
each of the two areas of inquiry she has identified.
• Questions it would be helpful for the Board to consider include:
o What examples and types of situations raise a potential conflict to be evaluated
and addressed for each of the two categories in the inquiry (employment of
spouse as assistant city attorney and employment of Councilmember at Poudre
School District);
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o What initial thoughts do Board members have regarding the identified
examples?
o How do Board members envision the use of a Conflicts Management Plan for
Councilmember Potyondy’s inquiry?
After some initial discussion of those types of matters, the Board will likely need to meet
again to more fully discuss, evaluate and develop recommendations for an advisory opinion,
which may also incorporate suggestions for a Conflicts Management Plan.
After the Board has considered and adopted an advisory opinion in response to the request,
that opinion will be presented to the City Council for adoption by resolution.
Conflicts of Interest Authorities for Consideration:
1. City Charter Conflicts of Interest:
Article IV, Section 9(b)(3) of the City Charter requires any officer or employee who has, or
whose relative has, a financial or personal interest in any decision of any public body of
which he or she is a member or to which he or she makes recommendations, to upon
discovery disclose that interest in the manner described and refrain from voting on,
attempting to influence, or otherwise participating in the decision as an officer or employee.
The Charter defines “financial interest” and “personal interest” as follows (emphasis added):
Financial interest means any interest equated with money or its equivalent. Financial interest shall
not include:
(1) the interest that an officer, employee or relative has as an employee of a business, or as a
holder of an ownership interest in such business, in a decision of any public body, when the
decision financially benefits or otherwise affects such business but entails no foreseeable,
measurable financial benefit to the officer, employee or relative;
(2) the interest that an officer, employee or relative has as a non-salaried officer or member
of a nonprofit corporation or association or of an educational, religious, charitable, fraternal or
civic organization in the holdings of such corporation, association or organization;
(3) the interest that an officer, employee or relative has as a recipient of public services when
such services are generally provided by the city on the same terms and conditions to all
similarly situated citizens, regardless of whether such recipient is an officer, employee or
relative;
(4) the interest that an officer, employee or relative has as a recipient of a commercially
reasonable loan made in the ordinary course of business by a lending institution, in such
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lending institution;
(5) the interest that an officer, employee or relative has as a shareholder in a mutual or
common investment fund in the holdings of such fund unless the shareholder actively
participates in the management of such fund;
(6) the interest that an officer, employee or relative has as a policyholder in an insurance
company, a depositor in a duly established savings association or bank, or a similar interest-
holder, unless the discretionary act of such person, as an officer or employee, could
immediately, definitely and measurably affect the value of such policy, deposit or similar
interest;
(7) the interest that an officer, employee or relative has as an owner of government-issued
securities unless the discretionary act of such owner, as an officer or employee, could
immediately, definitely and measurably affect the value of such securities; or
(8) the interest that an officer or employee has in the compensation received from the city for
personal services provided to the city as an officer or employee.
Related key terms (from Section 2-568(a) of the City Code) include:
(2) Benefit = an advantage or gain.
(6) Different in kind from that experienced by the general public = of a different type or nature
not shared by the public generally and that is not merely different in degree from that
experienced by the public generally.
(7) Direct = resulting immediately and proximately from the circumstances and not from an
intervening cause.
(8) Detriment = disadvantage, injury, damage or loss.
(13) Public services = city services provided to or made available for the public's benefit.
(15) Relative = the spouse or minor child of the officer or employee, any person claimed by the
officer or employee as a dependent for income tax purposes, or any person residing in and
sharing with the officer or employee the expenses of the household.
(18) Substantial = more than nominal in value, degree, amount or extent.
2. Conflicts of Interest Under State Law
Colorado law provides ethics provisions for local government officials, including Colorado Revised
Statutes: Sections 24-18-102 through -105 and Section 24-18-109 (attached for reference).
1. As defined for the purpose of the statutory ethics provisions:
i. Councilmembers are “local government officials” (as defined in Section 24-18-102(6)).
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ii. "Financial interest" means a substantial interest held by an individual which is:
(a) An ownership interest in a business;
(b) A creditor interest in an insolvent business;
(c) An employment or a prospective employment for which negotiations have begun;
(d) An ownership interest in real or personal property;
(e) A loan or any other debtor interest; or
(f) A directorship or officership in a business. (Section 24-18-102(4)).
2. Section 24-18-103, C.R.S., when read in conjunction with the rest of the statutory standards of
conduct, is interpreted to establish an ethical standard of conduct concerning activities that could
allow covered individuals to improperly benefit financially from their public office. However, it is
general in nature and does not specify a standard or rule to determine what is permissible.
3. Section 24-18-104, C.R.S., prohibits disclosure or use of confidential information acquired in the
course of official duties and acceptance of certain gifts.
4. Section 24-18-105, C.R.S., sets out ethical principles that are “intended as guides to conduct and
do not constitute violations as such of the public trust of office or employment in state or local
government.”
i. Section 24-18-105(2) provides that:
(2) A … local government official … should not acquire or hold an interest in any business or
undertaking which he has reason to believe may be directly and substantially affected to its
economic benefit by official action to be taken by an agency over which he has substantial
authority.
ii. Section 24-18-105(4) provides that:
(4) A …local government official …should not perform an official act directly and substantially
affecting a business or other undertaking to its economic detriment when he has a substantial
financial interest in a competing firm or undertaking. (Emphasis added.)
5. Section 24-18-109(2), C.R.S., provides that a local government official or employee shall not (in
relevant part):
i. Engage in a substantial financial transaction for his private business purposes with a person
whom he inspects or supervises in the course of his official duties (§ 24-18-109(2)(a)); or
ii. Perform an official act directly and substantially affecting to its economic benefit a business or
other undertaking in which he either has a substantial financial interest or is engaged as
counsel, consultant, representative or agent (§ 24-18-109(2)(b));
6. A member of a governing body of a local government who has a personal or private interest in
any matter proposed or pending before the governing body shall disclose such interest and refrain
from participating in the decision unless necessary to obtain a quorum (§ 24-18-109(3)).
i. Although the key term from this statute “personal or private interest” is not defined, guidance
from other uses of this term in related Colorado law may be helpful. As noted in a 2004 Colorado
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Lawyer article describing this statute (an excerpt of which is attached), this “standard of conduct”
was likely adapted from a provision of the Colorado constitution that is applicable to members
of the General Assembly (Colo. Constitution Art. V, § 43). As described in the article, the limits
focus primarily on financial relationships in determining whether an impermissible personal or
private interest exists.
ii. In light of the relationship between this provision and the constitutional limit on members of the
General Assembly, the way the constitutional limit has been applied to the General Assembly
may provide some useful guidance in considering the meaning of “personal or private interest.”
Attached to this Agenda Item Summary are materials further elaborating on this limit on
members of the General Assembly: Joint Rule 42, which states a legislative interpretation of the
limit, and two excerpts from materials prepared and published by the Office of Legislative Legal
Services to help with applying it.
To summarize, Joint Rule 42 provides that:
a) If the passage or failure of a measure will result in the legislator deriving a direct
financial or pecuniary benefit that is greater than any such benefit derived by or
shared by other persons in the legislator’s profession, occupation, industry or
region, the legislator is considered to have a personal, private or financial interest
in the measure.
b) If the interest a legislator has in a measure affects the entire membership of a class
to which the legislator belongs, the interest is not deemed to be a personal, private
or financial interest.
Merriam-Webster’s online definition of the term “pecuniary” is: 1. consisting of or measured in
money; such as pecuniary aid pecuniary gifts; 2: of or relating to money.
iii. Examples interpreting the constitutional limit on the General Assembly and Joint Rule 42 are
provided in the attached.
7. Article XXIX of the Colorado constitution – also referred to as “Amendment 41,” sets out
limits for state and local officers and employees, by establishing limits on the acceptance of gifts
and forming an Independent Ethics Commission to hear complaints about conduct of covered
officials. While the amendment applies to municipalities in general, Section 7 provides, “Any county
or municipality may adopt ordinances or charter provisions with respect to ethics matters that are
more stringent than any of the provisions contained in this article. The requirements of this article
shall not apply to home rule counties or home rule municipalities that have adopted charters,
ordinances, or resolutions that address the matters covered by this article.” (Emphasis added.)
Since the enactment of Amendment 41, it has been generally understood that Section 7 exempts
home-rule cities that have enacted their own local charter and code ethics provisions, like Fort
Collins, from its provisions.
In September 2010, the City Council adopted Resolution 2010-063, finding and determining that
the City’s Charter and Code adequately and appropriately address those matters covered by
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Amendment 41, that no further action by the City Council is warranted or necessary in order to
further the purposes of Amendment 41 or address the matters contained therein, and that the
requirements of Amendment 41 shall not be applicable to the City of Fort Collins.
Other Considerations:
Although there is no specific City Charter or Code provision precluding a Councilmember from
participating in a decision due to the “appearance of a conflict” if the specific ethics standards that
apply are met, this issue is frequently raised as a component of the evaluation of conflicts of interest.
Councilmembers do on occasion recuse themselves from an item by leaving the Council meeting for
the item when that Councilmember is uncomfortable participating due to the potential for or
appearance of a conflict.
In addition, where acting as a quasi-judicial decisionmaker, a Councilmember has an obligation to
consider carefully whether his or her relationships, particularly business or professional relationships
result in a bias or inability to be impartial in a quasi-judicial decision. As described on page 3 of the
attached Colorado Lawyer article:
Often, opponents or proponents in a public hearing will accuse a board member of
having a private interest or conflict simply because he or she is acquainted with the
applicant. However, the Standards focus primarily on financial relationships in
determining whether an impermissible personal or private interest exists.
Following are examples of relationships that ordinarily would not disqualify a board
member from acting in his or her quasi-judicial capacity. They reflect the practical
reality of life in a small community and, standing alone, should not prevent a board
member from voting on an application. Bearing in mind that the Standards are
primarily concerned with financial interest, it is important to note that these kinds of
fact patterns lack the potential of personal financial gain or loss:
1. The member lives next door to the applicant;
2. The member and the applicant know and like (or dislike) each other,
are friends, go to the same church, have memberships at the same
club, or play golf together.
3. The member is related by blood or marriage to the applicant, but has
no financial connection or potential of experiencing financial gain or
loss. However, to the extent the blood or marriage relationship is
immediate (for instance, husband and wife or father and son), the
member should step down. Even though there may be not financial
connection, the relationship is so close that a conflict of interest would
be presumed.
The City does have an interest in assuring that those making quasi-judicial decisions have carefully
considered whether they have a bias or will not be able to be impartial. In those instances, the
individual should seriously consider not participating in the decision.
In light of this, Councilmember Potyondy may find it helpful for the Board to consider and provide
guidance related to identifying and evaluating potential bias in quasi-judicial matters.
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ATTACHMENTS
1. City Code Section 2-569
2. City Code Section 2-568(a)
3. City Charter Section 9(a)
4. CSU Conflicts Management Plan
5. CRS Section 24-18-102(4) and (6)
6. CRS Section 24-18-103
7. CRS Section 24-18-104
8. CRS Section 24-18-105
9. CRS Section 24-18-109
10. Excerpt from 2004 Colorado Lawyer Article
11. Colorado General Assembly Joint Rule 42 and related guidance
12. Job Description – Poudre School District - Psychologist