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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 04/07/2020 - FIRST READING OF ORDINANCE NO. 057, 2020, AMENDINGAgenda Item 11 Item # 11 Page 1 AGENDA ITEM SUMMARY April 7, 2020 City Council STAFF Mark Sears, Natural Areas Manager Ingrid Decker, Legal SUBJECT First Reading of Ordinance No. 057, 2020, Amending Section 2-568 of the Code of the City of Fort Collins to Clarify Ethical Rules of Conduct to Address Employee Housing and Purchases from the City. EXECUTIVE SUMMARY The purpose of this item is to propose a Code change to clarify that the City Charter’s prohibition on City employees purchasing property from the City was not intended to prevent employees from compensating the City for the value of housing that they are required to live in as a condition of employment. This would confirm Council’s expectations related to this issue and to clarify how these kinds of housing arrangements relate to the Charter requirement. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION A. Employee Housing City departments have on occasion found that arranging for an on-site employee at a City property serves important purposes and helps to preserve the property, provide more readily available service to the public or improves the employee’s access to a work site. As a primary example, for over ten years Natural Areas has required three employees to live in City-provided houses as a condition of their employment: a ranger at Gateway Natural Area; a ranger at Bobcat Ridge Natural Area; and, a caretaker at Primrose Studio on Reservoir Ridge Natural Area. Recently Natural Areas worked with the City Attorney’s Office (CAO) on a fourth Employee Housing Agreement to house an employee in an existing home on the recently acquired Bishop Ranch property at the north end of Redstone Canyon, which along with two other parcels was named the Crossline Canyons Natural Area. This employee will serve during their off-duty hours as a sentinel for this remote property and house and monitor the 1,300-acre property and care for the house and outbuildings. The first ranger residence agreement, at Gateway Park in 2001, did not require the employee to pay rent; rather the housing was provided in consideration of the duties to be performed by the employee on site. Over the next ten years, Natural Areas shifted to charging employees rent for occupying the City houses. All four positions are now required to compensate the City for approximately 50% of the fair market rental rate for the houses they are required to live in. Agenda Item 11 Item # 11 Page 2 B. Relevant Charter Provision During the preparation of the fourth Employee Housing Agreement a review of how this policy had evolved from not charging the employees led to the realization there could be a question as to whether requiring employees to pay the City for housing would potentially be in conflict with the City Charter. Article IV, Section 9(b)(2) of the Charter says: (2) Purchases from the City. No officer, employee or relative shall, directly or indirectly, purchase any real or personal property from the city, except such property as is offered for sale at an established price, and not by bid or auction, on the same terms and conditions as to all members of the general public. The onsite residences occupied by City employees on City sites are not residences that the City would likely ever offer for rental by the general public because of their location, for example, on Natural Areas properties. There is also a question as to whether such an arrangement with an employee would be treated as a purchase of real property from the City. C. Proposed Solution Staff considered several lease arrangement options to avoid raising this Charter question. One possibility was to not charge the employees but, instead, consider the value of the housing to be part of the total compensation for their employment and reduce their salaries accordingly. However, this would have a negative impact on their employee benefits contributions including retirement accounts and Social Security. Another option was to keep their salaries the same and not charge them anything for their City-provided housing, but Natural Areas felt this would create an unfair windfall for a few employees. In light of this, staff is requesting a change to Section 2-568 of the City Code regarding ethical rules of conduct to clarify and establish Council’s concurrence that the Charter prohibition on City employees’ purchases from the City was not intended to include City employees compensating the City for the value of housing that they are required to live in as a condition of employment. Over the last ten plus years, it has proven to be essential to the management of Gateway, Bobcat Ridge and Primrose Studio to have employees live in houses on site to provide an almost 24/7 presence. It is also essential to the management of Crossline Canyons to have an employee live on site to monitor and care for the property and the house. CITY FINANCIAL IMPACTS The City benefits financially by having employees live in City owned housing on remote sites to provide a presence on the site, monitor and care for the property and house in exchange for reduced rent. BOARD / COMMISSION RECOMMENDATION The Land Conservation and Stewardship Board recommends that City Council approve the proposed Code Change. PUBLIC OUTREACH The only public outreach has been to the Land Conservation and Stewardship Board on March 11, 2020. ATTACHMENTS 1. Land Conservation and Stewardship Board minutes, March 18, 2020 (draft) (PDF) Land Conservation & Stewardship Board March 18, 2020 Minutes Excerpt Proposed Code Change – employee housing Vicky McLane made a motion that City Council approve the proposed Code change regarding employee housing and purchases from the City. Andrea Elson seconded the motion. The motion was unanimously approved 7-0. Board members confirmed they had read the “Confidential Memo” regarding the code changes and had no issues or qualms about the changes. All agreed the changes should be approved. ATTACHMENT 1 -1- ORDINANCE NO. 057, 2020 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING SECTION 2-568 OF THE CODE OF THE CITY OF FORT COLLINS TO CLARIFY ETHICAL RULES OF CONDUCT TO ADDRESS EMPLOYEE HOUSING AND PURCHASES FROM THE CITY WHEREAS, City departments have on occasion found that arranging for an on-site employee at a City property serves important purposes and helps to preserve the property, provide more readily available service to the public or improves the employee’s access to a work site; and WHEREAS, for many years the City’s Natural Areas Department has required three employees to live in City-provided houses on Natural Areas’ properties as a condition of their employment, to help safeguard and maintain these properties; and WHEREAS, although such arrangements did not require the employee to pay rent to the City for this housing, over time these arrangements have evolved to include a charge to the employees of approximately 50% of the fair market rental rate for the houses they live in; and WHEREAS, in evaluating whether requiring employees to pay rent for housing they live in as a requirement of their jobs could be seen as a conflict with Article IV, Section 9(b)(2) of the City Charter, which prohibits employees from purchasing real or personal property from the City except property that is offered for sale on the same terms and conditions to all members of the general public, staff has concluded that such arrangements don’t fall within the intended scope of the Charter prohibition; and WHEREAS, because the City does not intend to offer these houses for rent by the public, and paying for housing would not necessarily be considered a purchase of real property from the City, to confirm Council’s expectations related to this issue and to clarify how these kinds of housing arrangements relate to the Charter requirement, staff is proposing this Ordinance to amend Section 2-568 of the City Code regarding ethical rules of conduct to clarify that the Charter prohibition on employees’ purchases from the City should not be interpreted and was not intended to apply to employees paying for employee housing provided by the City; and WHEREAS, the Council has determined that the proposed Code amendment it is in the best interest of the City and its citizens. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. -2- Section 2. That Section 2-568 of the Code of the City of Fort Collins is hereby amended by the addition of a new subsection (a)(14) to read as follows, and the remaining subsections renumbered accordingly: Sec. 2-568. - Ethical rules of conduct. (a) Definitions. The following words, terms and phrases, when used in this Section, Section 2-569 and in Section 9 of the Charter Article IV, shall have the following meanings: … 14) Purchases from the city, as described in Section 9(b)(2) of Charter Article IV, shall not include payments by an employee to the city pursuant to an agreement for housing in which such employee is required to live as a condition of employment with the city. Introduced, considered favorably on first reading, and ordered published this 7th day of April, A.D. 2020 and to be presented for final passage on the 21st day of April, A.D. 2020. __________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on this 21st day of April, A.D. 2020. __________________________________ Mayor ATTEST: _____________________________ City Clerk