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HomeMy WebLinkAboutAgenda - Mail Packet - 11/16/2021 - City Council Ethics Review Board Agenda - November 15, 2021'ity of Fort Collins PUBLIC NOTICE City Attorney's Office 300 Laporte Avenue PO Box 580 Fort Collins, CO 80522 970.221.6520 970.22 1 6327 fcgov com ETHICS REVIEW BOARD MEETING An Ethics Review Board meeting will be held Monday, November 15, 2021, from 4:00 p.m. - 5:30 p.m. Due to COVID-19, this meeting will be held remotely via Zoom. Members of the public who wish to join the meeting via Zoom may do so by calling in to the information below: Join Zoom Meeting https://fc2ov.zoo111.us/j/99324949947 Or One tap mobile : US:+17209289299„99324949947# or+13462487799„99324949947# Or Telephone: Dial(for higher quality, dial a number based on your current Location): US: +1 720 928 9299 or +1 346 248 7799 or +1 253 215 8782 or +1 646 558 8656 or + 1 312 626 6799 Webinar ID: 993 2494 9947 International numbers available: https://fcgov.zoom.uslu/acmMltBAc( Wiof t_ Collins AGENDA Ethics Review Board Meeting November 15, 2021 (4:00 -- 5:30 p.m.) Via Zoom City Attorney's Office 300 Laporte Avenue PO Box 580 Fort Collins, CO 80522 970.221.6520 970 221.6327 fcgov com Members of the public who wish to join the meeting via Zoom may do so by calling in to the information below: httl"s://fc2ov.zoom.us/j/99324949947 Or One tap mobile : US:+17209289299„99324949947# or+13462487799„99324949947# Or Telephone: Dial(for higher quality, dial a number based on your current location): US: +1 720 928 9299 or + 1346 248 7799 or +1 253 215 8782 or + 1 646 558 8656 or +I 312 626 6799 Webinar ID: 993 2494 9947 International numbers available: httosWicgov.zoom.us/u/acmMItBAcQ Find your local number: hops://zoom.us/u/adycV8V46 1. Call to Order 2. Roll Call 3. Selection of a Presiding Officer 4. Review and Approval of the February 12, 2021, Minutes of the Ethics Review Board 5. Consideration of conflicts of interest related to employment relationships 6. Consideration of any additional policy ideas or concerns the Board would like to address in upcoming meetings 7. Consideration of meeting frequency and schedule 8. Other Business 9. Adjournment Ethics Review Board Meeting Minutes February 12, 2021 4:15 p.m. Meeting Via Zoom Ethics Review Board members in attendance: Mayor Wade Troxell, Councilmembers Julie Pignataro, Ken Summers. Staff in attendance: Carrie Daggett, City Attorney; Doug Marek, Greeley City Attorney (as special legal counsel to the Board), Jeanne Sanford, Paralegal; Other Attendees: Councilmember Melanie Potyondy, Michael Pruznick, citizen, A meeting of the City Council Ethics Review Board t`Board") was held on Friday, February 12, 2021, at 4:15 p.m. via Zoom Meeting. The meeting started at 4:15 pm. The Board reviewed the Agenda which contained the following items: 1. Review and Approval of the January 29, 2021 Minutes of the Ethics Review Board. 2. Review and Approval of the draft Ethics Advisory Opinion 2021-01, with continued consideration of an inquiry by Councilmember Potyondy pursuant to City Code Section 2-569(d)(2) requesting that the Board consider and provide an advisory opinion regarding the questions of: (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 ("PSD" or the "District"). 3. Other Business. 4. Adjournment. Chair Troxell called meeting to order at 4:17 pm and stated this meeting was available via Zoom with the link available on the City's website. The Mayor conferred with City Manager Darin Atteberry and City Attorney Carrie Daggett and determined the board should conduct this meeting remotely due to the public health emergency re: COVID and per the County's emergency orders. Paralegal Jeanne Sanford took roll call: Julie Pignataro - here; Wade Troxell - here; Ken Summers - here. The first item was review and approval of Minutes of the January 29 meeting. 1 Councilmember Pignataro made a motion to approve the January 29, 2021 Minutes. Councilmember Summers seconded the motion. The Minutes were approved by unanimous vote. Mayor Troxell confirmed that members of the Ethics Review Board were agreeable to his continuing as Chair of the Board. The second agenda item, review and approval of the draft Ethics Opinion 2021-01 regarding the inquiry of Councilmember Potyondy regarding possible conflicts of interest concerning her husband, Assistant City Attorney Eric Potyondy and her employment with Poudre School District ("PSD") was read. City Attorney Carrie Daggett gave an overview of the Opinion and noted for the record that Greeley City Attorney Douglas Marek was present at the meeting. Ms. Daggett noted Mr. Marek worked on the portion of the draft Opinion related to the City Attorney's Office. Ms. Daggett noted that a summary of conclusions is included near the beginning of the draft Opinion. Chair Troxell asked City Attorney Daggett if there were any specific suggestions going forward on this issue. City Attorney Daggett noted that members of the Board may have suggestions not included in the Opinion that they would like to add and explained the Opinion was prepared based on the Board's January 29 discussion. In the discussion of conflicts and the summary in the Opinion, it was noted it might be helpful for Councilmember Potyondy to obtain from the Poudre School District -an affirmation that the District recognizes that she is carrying out her role as a councilmember independent of her work at the District and commits to assuring that her actions as a councilmember will have no bearing or impact on the District's treatment of her as an employee. City Attorney Daggett noted this was just a suggestion and not a requirement. Greeley City Attorney Douglas Marek then spoke of the relationship of Councilmember Potyondy to Eric Potyondy and the indirect ways Council actions might impact her personally or financially, such as City Attorney's Office budget approvals, and more specifically budget cuts for reduction of force. Mr. Marek stated Councilmember Potyondy would be wise to evaluate, in those instances, if she or her husband has a financial or personal stake in the outcome and if so, to recuse herself from those matters. Mr. Marek stated, regarding the issue of performance evaluations and Councilmember Potyondy's participation in performance review of the City Attorney, there was no inherent financial or personal conflict in that regard. Mr. Marek stated he reviewed the organizational chart of the City Attorney's Office and found it to be very rare for any Council decision making to have a direct impact on Eric Potyondy in his role as Assistant City Attorney. Mr. Marek noted City Attorney Daggett will need to erect an ethical wall on certain confidential matters, as is commonly done in legal offices, so Eric Potyondy cannot access information about matters he or Councilmember Potyondy have a conflict of interest in, but stated those issues would be rare since he is a specialist attorney. 2 The Board discussed if the matters of budget cuts and raises would raise conflicts of interest. It was noted that in the organization, employees are granted salary increases, but department heads may give some employees different percentages so there is some latitude on discretionary decisions of those salary increases which could present a presumption. City Attorney Daggett confirmed that is way the City Attorney's Office handles salary adjustments. The department gets a "pot of money" to be distributed according to methods in use at that time. Ms. Daggett explained she sets the approach to he used for the raises for the attorneys. She also noted that the attorney pay plan is not included in the classified pay plan that the City Council approves. Chair Troxell asked Councilmember Potyondy for her input and responses to the Opinion, and asked it is helpful or if she would like more, noting that it was designed to help her out with her questions. Chair Troxell did note that he was hoping it would be more like a conflicts management plan, however, he hoped Councilmember Potyondy has discussed this issue with her employer as it falls on Councilmembers to make the determination of when there is a conflict. Councilmember Pignataro stated she was fine after reading the conclusions of the Opinion but wanted to check in with Councilmember Potyondy on how she felt. Councilmember Potyondy stated she felt the Opinion was very helpful on specific issues and noted she was free to consult with Carrie Daggett and Darin Atteberry to identify and understand up -corning agenda items that may raise a question for her. Councilmember Potyondy stated her take -away from the Opinion was that she will work to always know what's coming, be up -front regarding concerns on financial or personal gain and plan to consult with folks on areas of concern. Councilmember Potyondy did state, regarding issues raised in an email earlier on the 12'h by a member of the public, Michael Pruznick, she did disclose this issue as part of her application for the District 4 appointment and in discussion with the Mayor and others, so that has been transparent and out in the open. Councilmember Potyondy stated she is open to any structure or type of guidance, and will proceed with caution, always vetting these issues. Chair Troxell indicated that individual Councilmembers have an obligation to evaluate these issues and Councilmember Potyondy has stated that correctly. The Board discussed the issue of water as not being a common issue and whether Poudre School District is ever given money from the City. City Attorney Daggett answered that there were some instances when the City and PSD work together, such as on infrastructure where a grant has come from CDOT or where the City and PSD develop a park together. City Attorney Daggett noted the City does provide services to PSD, such as after school programs for example. Councilmember Summers felt these types of situations were pretty broad and don't relate directly to Councilmember Potyondy's role as school psychologist. 3 Councilmember Potyondy agreed and discussed the notion of values vs. financial/personal interest. Ms. Potyondy stated she does not get a raise based on anything so the School District issues will be pretty clear. Chair Troxell asked Councilmember Potyondy if there was anything with the advisory opinion she wanted added to help her out? Councilmember Potyondy stated the way the Opinion was written is as clear as it can be considering the fluid nature of Council and how unpredictable it is what items will come forward and noted she has folks to touch base with if sticky issues do come up. Councilmember Pignataro noted as Councilmembers, we have access to the attorneys to discuss complicated issues, such as water. One can always arrange a 1xl meeting with an attorney to ask question. City Attorney Daggett noted that she can arrange for specific discussions with Councilmembers about legal issues, also noting, though, that since her role is to advise Council as a body rather than individual Councilmembers, the City Attorney's Office works hard to make sure any legal advice or information is provide to the entire Council rather than with individual Councilmembers and that she manages and coordinates those communications with Council. City Attorney Daggett then explained if the Opinion as presented was acceptable and the Board approves it by motion, then it can come forward to Council on Tuesday, February 23 at an adjourned meeting, if Council is willing to adjourn the February 16 meeting to February 23"1 for that purpose. The Code requires that the Opinion be presented promptly to Council once the Ethics Review Board approves it. Councilmember Ken Summers made a motion to approve Ethics Opinion 2021-01 and Chair Troxell seconded the motion. Paralegal Jeanne Sanford took a roll call vote: Mayor Wade Troxell: yes; Julie Pignataro: yes; Ken Summers: yes. The motion was approved by unanimous vote. Councilmember Potyondy thanked the Board as this was helpful to have this conversation and think the issues through. As there was no other business, the meeting adjourned 5:02 pm. 4 AGENDA ITEM SUMMARY City Council -Ethics Review Board November 15, 2021 STAFF Carrie M. Daggett, City Attorney SUBJECT Initial discussion of conflicts of interest definitions related to employment relationships of Councilmembers. EXECUTIVE SUMMARY This is the initial meeting of the Ethics Review Board ("Board") appointed in May 2021. This meeting was requested for the Board to discuss potential changes to conflicts of interest provisions and particularly when employment relationships of Councilmembers should constitute a conflict of interest. The Board may also identify other ethics matters it would like to address at future Board meetings. BACKGROUND / DISCUSSION The City Code (Section 2-569) establishes an Ethics Review Board to assist Councilmembers and board and commission members in interpreting and applying the City's ethics provisions. In addition to considering complaints and rendering advisory opinions, the Code also empowers the Board to "propose any revisions to 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." This meeting was scheduled in response to a request at a Council meeting this summer under "Other Business" initiated by Councilmember Gutowsky. The request was in follow up to discussions by Council and the Ethics Review Board in 2020 in response to several ethics reviews focused on the question of when a Councilmember's employment relationship creates a conflict of interest in decisions of interest to the employer. General Background regarding 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 they are a member or to which they make 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. Item 1 Page 1 The Charter defines "financial interest" and "personal interest" as follows (emphasis added): Financial interest means any interest equated with money or its equ;valent. 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 nonsalaried 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 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. Personal interest means any interest (other than a financial interest) by reason of which an officer or employee, or a relative of such officer or employee, would, in the judgment of a reasonably prudent person, realize or experience some direct and substantial benefit or detriment different in kind from that experienced by the general public. Personal interest shall not include: Item 1 Page 2 (1) the interest that an officer, employee or relative has as a member of a board, commission, committee, or authority of another governmental entity or of a nonprofit corporation or association or of an educational, religious, charitable, fraternal, or civic organization; (2) the interest that an officer, employee or relative has in the receipt of public services when such services are generally provided by the city on the same terms and conditions to all similarly situated citizens; or (3) the interest that an officer or employee has in the compensation, benefits, or terms and conditions of his or her employment with the city. Applying these definitions to determine whether an officer or employee (or that person's relative) has a financial interest is generally a more objective inquiry, since it turns on whether there is a "foreseeable, measurable financial benefit" to the officer or employee. In contrast, evaluating whether an officer or employee (or that person's relative) has a "personal interest" is generally more difficult, because there is more room for interpretation. The definition requires an evaluation of whether that person would, in the judgment of a reasonably prudent person: 1. realize or experience some direct and substantial benefit or detriment 2. different in kind from that experienced by the general public. Opinions regarding whether these elements are met in any particular circumstance can vary widely and as a result this provision does not often provide clear guidance related to the commonly encountered issue of whether an employment relationship and an employer's interests constitute a personal interest. Employment Relationships and Conflicts of Interest To define more specifically how the interest of an employer of a City officer gives rise to a conflict of interest, the simplest approach would be to add clarifying language to the personal interest definition. Because these definitions are in the Charter, proposing a Charter amendment for voter approval would be the mechanism for making such a change. This provision could be revised to make clear that a City official has a personal interest when that official is a direct employee of an entity or person that has a financial interest in a decision, or when the employer will experience from that decision a direct and substantial benefit or detriment different in kind from that experienced by the general public. Consistent with state ethics laws, such a provision may also need to include any person or organization with which the official is negotiating or has an arrangement concerning prospective employment. Some jurisdictions impute any financial or personal interest of an employer to the city official as though it were their own interest. These approaches would result in a relatively broad application of the personal interest standard. Item 1 Page 3 Alternatively, the official could be defined to have a personal interest only when the employer (or prospective employer) has a financial interest in the City decision. Either approach would impute the interests of the external employer to the City official, but to different degrees. Other distinctions that Council may want to consider in defining what constitutes a personal interest include: The size of the employer; The type of the employer (for -profit, not -for -profit, governmental); The number of organizational layers between the City official and the governing body, chief executive officer, president or owner of the entity that employs the official; Whether the official's position is compensated or uncompensated; Whether it's practical for the City official to maintain confidentiality of City confidential information from their employer in the decision -making process; and Whether the City official's participation in the City decision will present conflicting loyalties for the City official. Next Steps The Board may wish to discuss these and other ideas and request further research and information for further discussion at an upcoming Board meeting. If the Board would like to recommend changes related to this issue and Council agrees to move these changes forward, Council would need to adopt an ordinance submitting a Charter amendment to the voters as a called special election (such as a coordinated November election) or a regular municipal election in an odd -year April. The next regular City election will be April 2023. Examples of how other jurisdictions address employment -related conflicts of interest are outlined in the attachment. ATTACHMENTS Summary of Selected Sample Provisions from Other Jurisdictions Item 1 Page 4 Summary of Selected Sample Provisions from Other Jurisdictions Arizona Statute: Prohibits participation where officer or employee (or their relative) has a "substantial interest," other than a "remote interest." "Remote interest" means (among other things): (i) That of a public officer or employee, or that of a relative of a public officer or employee, unless the contract or decision involved would confer a direct economic benefit or detriment on the officer, the employee or his relative, of any of the following: (i) Another political subdivision. (ii) A public agency of another political subdivision. (iii) A public agency except if it is the same governmental entity. (j) That of a member of a trade, business, occupation, profession or class of persons consisting of at least ten members which is no greater than the interest of the other members of that trade, business, occupation, profession or class of persons. (k) That of a relative who is an employee of any business entity or governmental entity that employs at least twenty-five employees within this state and who, in the capacity as an employee, does not assert control or decision -making authority over the entity's management or budget decisions. Bellingham, Washington: Prohibits participation where board member of employee (or immediate family) has a financial interest unless it is a "remote financial interest." "Remote financial interest" means: 2. That of an employee or agent of a contracting party where the compensation of the employee or agent consists entirely of fixed wages or salary and the contract is awarded by bid or by other competitive process; Bridgeport, Connecticut: Prohibits various forms of participation and dealings when a "financial interest" is present. "Financial interest" means any interest, other than an interest of a de minimis nature, that is not distinct from that of the general public, which shall yield a monetary or other material benefit to the official or employee or to any person employing or retaining the services of the official or employee. Chicago, Illinois: (2) To avoid even an appearance of impropriety, any member of the City Council who has any business relationship with a person or entity with a matter pending before the City Council 1 or any City Council Committee: (i) that creates a financial interest on the part of such member, or the domestic partner or spouse of such member, or (ii) from whom or which the member has derived any income or compensation during the preceding twelve months or from whom or which the member reasonably expects to derive any income or compensation in the following twelve months, shall publicly disclose in detail the nature of such business relationship or income or compensation, including when such relationship commenced, on the records of proceedings of the City Council and the City Council Committee, and shall also notify, with the same detail, the Board of Ethics of such relationship within 96 hours of delivery by the Clerk to the member, of the introduction of any ordinance, resolution, order or other matter in the City Council, or as soon thereafter as the member is or should be aware of such potential conflict of interest.... The Board of Ethics shall post such disclosures, including any additional detail submitted by the member, on the Board of Ethics website, in a searchable format, immediately upon receipt. The member shall abstain from participating in any discussion concerning and voting on the matter but shall be counted present for purposes of a quorum... . Knoxville, Tennessee: Prohibits participation in matters where an officer has a personal interest, unless in the judgment of the law director such personal interest is de minimis. (b) Definition of personal interest. (1) For purposes of this section, "personal interest" means: a. Any financial, ownership, or employment interest in the subject of a vote by the council not otherwise regulated by state statutes on conflicts of interests; or b. Any financial, ownership, or employment interest in a matter to be regulated or supervised; or c. Any such financial, ownership, or employment interest of the city official's or employee's spouse, parent(s), stepparent(s), grandparent(s), sibling(s), child(ren), or stepchild(ren). (2) The words "employment interest" include a situation in which a city official or employee or a designated family member is negotiating possible employment with a person or organization that is the subject of the vote or that is to be regulated or supervised. Montpelier, Vermont: Requires recusal in the case of a direct or indirect financial benefit or conflict of interest. "A public officer shall not take any action on any matter in which she/he/they has an appearance of a conflict of interest unless in his or her own estimation, she/he/they is able to do so fairly, objectively and in the public interest in spite of the appearance of conflict of interest." C. It is recognized that Montpelier may have a large number of Vermont State Employees as members of local public agencies. These individuals may generally participate in matters involving state government but should consider recusal or disclosure when matters involve their specific work responsibilities or employment unit. 2 Oregon Statute: Oregon state ethics law (ORS 244.020(3)4) defines "business with which the person is associated" as: • When, during the preceding calendar year, an appointee or relative has held a position as director, officer, owner, employee or agent of a private business or a closely held corporation in which the appointee or relative held or currently holds stock, stock options, equity interest or debt instrument over $1,000. • When, during the preceding calendar year, appointee or relative has owned or currently owns stock, equity interest, stock options or debt instruments of $100,000 or more in a publicly held corporation. • When the appointee or relative is a director or officer of a publicly held corporation. • When an appointee is required by ORS 244.050(5) to file an Annual Verified Statement of Economic Interest form and the business is listed as a source of household income. San Antonio, Texas: To avoid the appearance and risk of impropriety, a City official or employee shall not take any official action that he or she knows is likely to affect the economic interests of. (1) The official or employee; (2) His or her parent, child, spouse, or other family member within the second degree of consanguinity or affinity; (3) His or her outside client; (4) A member of his or her household; (5) The outside employer of the official or employee or of his or her parent, child (unless the child is a minor), spouse, or member of the household (unless member of household is a minor); (9) A person or entity with whom, within the past twelve (12) months: a. The official or employee, or his or her spouse, directly or indirectly has: 1. Solicited an offer of employment for which the application is still pending; 2. Received an offer of employment which has not been rejected; or 3. Accepted an offer of employment; or 3 b. The official or employee, or his or her spouse, directly or indirectly engaged in negotiations pertaining to business opportunities, where such negotiations are pending or not terminated. Seattle, Washington: A covered individual may not engage in any of the following acts: A. Disqualification from acting on City business 1. Participate in a matter in which any of the following has a financial interest, except as permitted by Section 4.16.071: a. The covered individual; b. An immediate family member of the covered individual; c. An individual residing with the covered individual; d. A person the covered individual serves as an officer, director, trustee, partner, or employee; e. A person with whom the covered individual is seeking or has an arrangement concerning future employment. 2. Participate in a matter in which a person who employed the covered individual in the preceding 12 months, or retained the covered individual or the covered individual's firm or partnership in the preceding 12 months, has a financial interest provided, however, that the Executive Director shall waive this subsection 4.16.070.A.2 when: a. The covered individual's appointing authority or the authority's designee makes a written determination that there is a compelling City need for the covered individual to participate in a matter involving a prior employer or client, and submits that determination with a written plan showing how the authority will safeguard the City's interests, and b. The Executive Director determines that the authority's plan is satisfactory. 3. Perform any official duties when it could appear to a reasonable person, having knowledge of the relevant circumstances, that the covered individual's judgment is impaired because of either (a) a personal or business relationship not covered under subsection 4.16.070.A.1 or 4.16.070.A.2, or (b) a transaction or activity engaged in by the covered individual... . 4