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HomeMy WebLinkAboutRESOLUTION - 1/16/1996- CHRIS KNEELAND,TAX REBATE PROGRAM,MANUFACTURINGRESOLUTION 96-9 OF THE COUNCIL OF THE CITY OF FORT COLLINS ACCEPTING THE ADVISORY OPINION AND RECOMMFNL NO. 96-2 OF THE ETHICS REVIEW BOARD WHEREAS, the City Council has established an Ethics Revue Board ("the Board") consisting of three members of the City Council; and WTIFREAS, the Roan] is emliowercd under Section 2-56 of the oily C'odc to render advisory opinions and uccuwnucudaliuns uegarding actual Irypothrlical situations of Councilmem•bers or board and commission members of the Citynd WHEREAS, the Board met on January 16, 1996, to co sider whether Councilmember Chris Kneeland has a conflict of interest in participating in the C' y Council's discussions and decisions regarding a proposed use tax rebate program for to manu cturing companies in the City; and WHEREAS, the Board has issued Opinion Nq06-2 with regard to the foregoing issue; and WHEREAS, Section 2-569(e) of the Cit Code provides that all advisory opinions and recommendations of the Board be placed on the • enda for the next special or regular City Council meeting, at which time the City Council sl 1 determine whether to adopt such opinions and recommendations; and WHEREAS, the City Council h 1 reviewed the opinion and recommendation of the Board and wishes to adopt the! X NOW, THEREFORE, BE RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Opinion Noed 9 2 of the Ethics Review Board, a copy of which is attached hereto and incorporated herein by teference as Exhibit "A," has been submitted to and reviewed by the City Council, and the Cou erebyadopts the opinion and recommendation contained therein. Passed and ad ted at an adjourned meeting of the Council of the City of Fort Collins held this 23rd day of Ja ary, A.D. 1996. Mayor Clerk No Ac+iovk EXHIBIT A 96-2 OPINION OF THE ETHICS REVIEW BOARD OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS January 16, 1996 The Ethics Review Board ("the Board") met on the above -referenced date to address a question presented by Councilmember Chris Kneeland. In attendance were Ethics Review Board members N iayor Ann Azari, Mayor Pro Tent Gina Janett and Councilmember Will Smith; Councilmember Kneeland; and Councilmember McCluskey, who had presented a separate inquiry to the Board. 'I he question presented is whether Councihnember Kneeland would have a conflict of interest in participating in discussions of the City Council pertaining to a proposed use tax relief program, because of the fact that Councilmember Kneeland has done consulting work for some of the companies that would be affected by the program. Ilte Proposed Use fax Relief Program The City Manager has proposed an interim policy, pending further study of the matter, through which manufacturers that have been irroperatiorrin Fort Collins for three years or more may be relieved of some measure of the use tax burden upon their purchases of manufacturing equipment f 10111 outside of the city. The recommended approach would provide an effective use tax reduction for affected manufacturers from 3 % to 1 % on the first $5 million of the manufacturing equipment purchased, and from 3% to 2% on the next $10 million of the manufacturing equipment. Equipment purchases of beyond $15 million would be subject to the current rate of 3'7o up to a maximum total of $50 million worth of manufacturing equipment purchases that would bC subject to the use tax. Thus, the emphasis of the program would be the reduction of the tax burden on smaller purchases of manufacturing equipment, with a cap on total use tax that would benefit manufacturers making extremely large purchases of manufacturing equipment. Leka[ Staudardc The Charter recognizes two kinds of interests which can give rise to a conflict of interest for a Councilmember: a financial interest and a personal interest. A financial interest is defined as "any interest equated with money or its equivalent." A financial interest is specifically not to include: The interest of an employee of a business, or 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 employee or interest holder ...(City Charter, Article IV, Section 9., emphasis added.) The Charter defines a personal interest as: Ethics Opinion 96-2 January 16, 1996 Page 2 Any interest (other than a financial interest) arising from blood or marriage relationships or from close business, political or personal associations or concerns which would, in the judgment of a reasonably prudent person, lend to impair independence of judgment or action in the performance of official discretionary duties. (City Charter, Article IV, Section 9.) Analysis !2f the Kneeland Inquit, COnnCilmember Kneeland has a consulting business and, in that capacity, she has occasionally rendered services to three or four of the companies that would be affected by the proposed use tax relief' program. She also does consulting work for numerous other companies across the country. Those companies range in size from relatively few employees to several thousand employees. As a consultant, Cott ncilmember Kneeland provides, either directly or through her employees, various kinds of training for company employees, including training related to stress management, career management, conflict resolution, basic skills programs and assessments, performance appraisals, etc. Her services are provided on an "as needed" basis, sometimes pursuant to a written contract but more often through an informal, verbal agreement. It has been several months, or even years, since Councilmember Kneeland has done consulting work for some of the companies. However, with at least one of the companies, she is presently rendering services under an ongoing contractual relationship. Depending upon the nature of the services and the phase of the particular training program, _C-nuncihnember-Kneeland may -have contacts with company employees two or three times per week or two or three times per month. The manner in which Councilmember Kneeland is compensated is not tied to the profitability of the companies but is determined instead on either a project or an hourly basis. First, there appears to be no question of a financial conflict of interest in this situation because a proposed use tax relief program would not result in any "foreseeable, measurable financial benefit" to Councilmember Kneeland. The question to be examined more closely is whether she has a personal interest in the decision. This, in turn, presents the question of whether Councilmember Kneeland's working relationship with any of the manufacturing companies is sufficiently "close" to warrant concern that her independence of judgment in participating in Council's decision would be impaired by that working relationship. The Board believes that if the business dealings of a Council member do not create a financial conflict of interest within the meaning of the Charter, those same factual circumstances should not be found to create a personal conflict of interest unless there is a clear indication that the relationship in question would likely interfere with the Councibnember's independence of judgment. No such clear indication exists in this case. The nature of the work that Councilmember Kneeland performs for various companies (including manufacturing companies) is entirely unrelated to the financial operations and purchasing decisions of those companies. Ethics Opinion 96-2 January 16, 1996 Page 3 Admittedly, a use tax rebate program could affect the purchasing practices of the manufacturers, or even contribute to their decisions to remain or expand in Fort Collins. However, there is no indication that these kinds of corporate decisions would affect a company's need for the kind of consulting work that COunClltnember Kneeland provides or its ability or willingness to maintain an ongoing working relationship with her. Nor is there any indication that Councilmember Kneeland's overall consulting business would be significantly affected by any such decisions of local companies, since her consulting services can be (and presently are) made available to companies located outside the Fort Collins area. Absent any such indication, a finding of a personal conflict of interest would be based upon mere speculation. Under these circumstances, therefore, the Board does not believe that Councilmember Kneeland has a conflict of interest Which would interfere with her independence of judgment in participating in Council's deliberations regarding a proposed use tax relief program. This advisory opinion was reviewed and approved by Mayor Azari and Mayor Pro Tern Jarrett, regular members of the Ethics Review Board, with Council member Smith dissenting from the majority opinion of the Board. Pursuant to Section 2-569(e) of the City Code, this opinion and recommendation is to be immediately filed with the City Clerk and made available for public inspection. Additionally, this opinion shall be considered by the City Council at its meeting on January 23, 1996. Dated this ."day of January, 1996. Roy, SJR: meg