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HomeMy WebLinkAboutAgenda - Mail Packet - 4/3/2018 - City Council Ethics Review Board Agenda - April 5, 2018f �t1 City Attorney's Office 300 Laporte Avenue PO Box 580 Fort Collins, CO 80522 970.221.6520 970.221.6327 fcgov.com AGENDA Ethics Review Board Meeting City Attorney's Large Conference Room Garden Level, City Hall (300 Laporte Avenue) April 5, 2018 (4:00 p.m.) 1. Review and Approval of the November 7, 2017 Minutes of the Ethics Review Board. 2. Consider a request under "Other Business" at the Council meeting on February 20, 2018 regarding whether Councilmembers have conflicts of interest in matters involving: 1) outside bodies they have been appointed to represent the City on; or 2) organizations to which they have donated funds. 3. Other Business. 4. Adjournment. WitfCollins PUBLIC NOTICE City Attorneys Office 300 Laporte Avenue PO Box 580 Fort Collins, CO 80522 970.221.6520 970.221.6327 fcgov.com Notice is hereby given that the City Council Ethics Review Board will meet on Thursday, April 5, 2018, at 4:00 p.m., in the City Attorney's Large Conference Room at City Hall, located at 300 Laporte Avenue, City Hall West, Fort Collins, Colorado. The purpose of the meeting will be to discuss and address the following agenda items: 1. Review and Approval of the November 7, 2017 Minutes of the Ethics Review Board. 2. Consider a request under "Other Business" at the Council meeting on February 20, 2018 regarding whether Councilmembers have conflicts of interest in matters involving: 1) outside bodies they have been appointed to represent the City on; or 2) organizations to whichithey have donated funds. 3. Other Business. 4. Adjournment. As the majority of Council may attend this meeting, the meeting is also being regarded as a meeting of the City Council for the purposes of this notice. The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities and will make special communication arrangements for persons with disabilities. Please contact the City Attorney's Office to arrange for such services at 970-221-6520 or caoadmin@fcgov.com. Auxiliary aids and services are available for persons with disabilities. V/TDD: Dial 711 for Relay Colorado. Fort Collins City Attorney Posted: March 29, 2018 (970) 221-6520 Ethics Review Board Meeting Minutes November 7, 2017 4:00 p.m. Members in Attendance: Board members Ray Martinez, Kristin Stephens and Ross Cunniff (as alternate). Staff in Attendance: Carrie Daggett, City Attorney; Jeanne Sanford, Paralegal, Tyler Marr, Ginny Sawyer, City Manager's Office, Also Present: Kevin Jones, Fort Collins Chamber of Commerce. A meeting of the City Council Ethics Review Board ("Board") was held on Tuesday, November 7, 2017, in the City Attorney's Office Large Conference Room, for review of recommended amendments to City Code Section 2-568(c)(2) in preparation for Council consideration. The meeting began at 4:04 p.m. The Board reviewed the Agenda which contained the following items: 1. Review and approval of the March 2 017 nutes of the Ethics Review Board. 2. Review of recommended amendmeCode Section 2-568(c)(2) in preparation for Council consideration. 3. Other Business. 4. Adjournment. Chair Martinez stated that this was an Ethics Review Board meeting on November 7, 2017 at 4:04 p.m., and after roll call, declared that a quorum of the Board was present with Ray Martinez and Ross Cunniff present to act as alternate for Ken Summers. Chair Martinez called for the approval of the March 21, 2017 Minutes. Councilmember Cunniff moved approval and Chair Martinez seconded. The Board unanimously approved the March 21, 2017, Minutes. Chair Martinez then called for and read the second agenda item which was review and recommendation of amendments to City Code Section 2-568(c)(2 in preparation for Council consideration. Chair Martinez called for the record to reflect that Ken Summers has asked Ross Cunniff to be alternate in this Ethics Review Board meeting. Chair Martinez and Councilmember Cunniff asked City Attorney Daggett to meet one-on-one with Councilmember Summers to bring him up to speed on the issues and to circle back to the Board if he had any questions. 1 Chair Martinez then asked if City Attorney Daggett had any presentations. Ms. Daggett explained that part of the reason this meeting was scheduled was due to the fact that it had been since last spring since the Ethics Review Board acted on the recommendation for Code changes to go forward to Council. Ms. Daggett explained not too long after that, she received feedback calling for more public outreach on items the City Attorney's Office was in the lead on. After a series of conversations about that particular question with the City's Public involvement office, the group realized that part of the public process is really the Ethics Review Board and due to the fact there is a new member on the Board, staff wanted to make sure we gave the public an additional chance to chime in about this matter before it went to Council. Councilmember Cunniff asked if the draft ordinance language was the same language that was reviewed last meeting? City Attorney Daggett stated yes and reminded the Board that there was an ethics opinion about a year earlier, in which the Board noticed there really was no guidance to Council when a conflict of interest was declared and there would be a benefit to clarifying what exactly Councilmembers can and cannot do when they have declared a conflict of interest. Ms. Daggett explained there were a number of meetings on that issue, so there ny different versions of language drafted, reviewed and discussed on this topic. The Code wereent language that is stated in the March 21, 2017 Minutes is the language the Board settl Ms. Daggett stated the current Code languag`inimal and the new language adds more detail in its place. Ginny Sawyer asked City Attorne and (5) to bring her up to speed. Ms. ' a ett read the pertinent Code sections and discussed the matter. Ms. Sawyer asked if this was a ready a scheduled agenda item. Ms. Daggett explained that due to timing, the matter would be brought before either the December 5th or December 19th Council session. r an explanation of City Code Section 2-568(c)(4) Ms. Daggett then noted for the record that staff members Ginny Sawyer and/or Tyler Marr would now be participating in Ethics Review Board meetings due to the public outreach discussion which identified the need to have staff counterparts actively work with the Ethics Review Board. Chair Martinez made a motion to adjourn and Councilmember Cunniff seconded the motion. The Board voted unanimously to adopt Chair Martinez's Motion to adjourn the meeting. Meeting adjourned at 4:24 p.m. Carrie M. Daggett, City Attorney 2 Agenda Item 2 AGENDA ITEM SUMMARY Ethics Review Board April 5, 2018 STAFF Carrie Daggett, City Attorney SUBJECT Review of and possible recommendation regarding a Council inquiry regarding whether Councilmembers have conflicts of interest in matters involving: 1) outside bodies they have been appointed to represent the City on; or 2) organizations to which they have donated funds. EXECUTIVE SUMMARY The purpose of this item is for review of and possible recommendation in follow up to a request under "Other Business" at the Council meeting on February 20, 2018 regarding whether Councilmembers have conflicts of interest in matters involving: 1) outside bodies they have been appointed to represent the City on; or 2) organizations to which they have donated funds. STAFF RECOMMENDATION Further discussion and direction regarding options are needed. BACKGROUND 1 DISCUSSION Under City Code Section 2-569, 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. In response to a situation that arose at the February 20, 2018, Council meeting, several Councilmembers under the "Other Business" portion of the meeting asked that the Ethics Review Board consider whether Councilmembers have conflicts of interest in matters involving: 1) outside bodies they have been appointed to represent the City on; or 2) organizations to which they have donated funds. Councilmembers Serving on Outside Boards On the first question, the City Code provides specific guidance: Sec. 2-570. - City Councilmember appointments. (a) Definitions. The following words, for the purpose of this Section, shall have the following definitions: (1) Governmental agency shall mean a federal, state or county government or any incorporated City or town, and every kind of district, agency, instrumentality or political subdivision thereof which has been organized pursuant to law. (2) Private agency shall mean any committee, association, corporation, partnership or other organization or group of persons other than a governmental entity or agency. (b) Appointments to governmental or private agencies. The City Council may, in its discretion, appoint any number of its own members, or may authorize members of its boards or commissions, to serve as City representatives to, or members of the boards of directors of, other governmental or private agencies. Agenda Item 2 Absent extraordinary circumstances, which may be reviewed on a case -by -case basis, such appointments shall not be considered to create conflicts of interest for the members of the City Council or the members of City boards and commissions who are so appointed. Accordingly, such City Councilmembers or board and commission members shall not generally be required to refrain from participating in any administrative, legislative, fiscal, investigative or quasi-judicial functions of the City, which may affect the interests of such governmental or private agencies. In the event that individual City Councilmembers or board and commission members may, from time to time, determine, on a case -by - case basis, that a particular circumstance does create a conflict of interest under the then current provisions of law, such City Councilmembers or board or commission members may, in their discretion, choose to abstain from any such decision. The service of City Councilmembers or board or commission members with other governmental or private agencies shall not be considered service in an official capacity on behalf of the City unless such service has been determined by the City Council by ordinance or resolution to De in ine Dest interests oT ine .ity. (Ord. No. 16, 1990, 2-20-90; Ord. No. 65, 1993, 7-20-93; Ord. No. 65, 1995, 6-20-95) Organizations to Which Councilmembers Donate With regard to the second question, in general the key consideration will be whether the Councilmember has either a financial interest or a personal interest in a decision, as those terms are defined in the City Charter and City Code. A financial interest is defined as follows: 9) Financial interest shall have the meaning given to this term in Section 9(a) of Charter Article IV, which states: Financial interest means any interest equated with money or its equivalent. Financial interest shall not include: a. 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; b. 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; c. 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; d. 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; e. 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; f. 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; g. 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 Agenda Item 2 h. 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. A personal interest is defined as follows: (11) Personal interest shall have the meaning given to this term in Section 9(a) of the Charter Article IV, which states: 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: a. 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; b. 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 c. the interest that an officer or employee has in the compensation, benefits, or terms and conditions of his or her employment with the city. Four ethics opinions from prior Ethics Review Board reviews of the "personal interest" test applying the currently applicable provision are attached for reference and consideration by the Board in evaluating the question posed regarding organizations to which a Councilmember has made a donation. ATTACHMENTS 1. Resolution 2000-80, Accepting the Advisory Opinion and Recommendation No. 2000-1 of the Ethics Review Board 2. Resolution 2003-083, Accepting the Advisory Opinion and Recommendation No. 2003-1 of the Ethics Review Board 3. Resolution 2004-129, Accepting the Advisory Opinion and Recommendation No. 2004-2 of the Ethics Review Board 4. Resolution 2012-020, Accepting the Advisory Opinion and Recommendation No. 2012-1 of the Ethics Review Board RESOLUTION 2000-80 OF THE COUNCIL OF THE CITY OF FORT COLLINS ACCEPTING THE ADVISORY OPINION AND RECOMMENDATION NO. 2000-1 OF THE ETHICS REVIEW BOARD WHEREAS, the City Council has established an Ethics Review Board (the "Board") consisting of three members of the City Council; and WHEREAS, the Board is empowered under Section 2-569 of the City Code to render advisory opinions and recommendations regarding actual or hypothetical situations of Councilmembers of board and commission members of the City; and WHEREAS, the Ethics Review Board met on May 23, 2000, to consider whether Mayor Pro Tem Chuck Wanner has a conflict of interest in participating in City Council's consideration of proposed floodplain regulations for the Poudre River by reason of his employment as Executive Director of The Friends of the Poudre or as a member of the Board of Directors of the Friends of the Poudre; and WHEREAS, the Board has issued an advisory opinion that Mayor Pro Tem Wanner does not have a conflict of interest with regard to the proposed floodplain regulations; and WHEREAS, Section 2-569(e) of the City Code provides that all advisory opinions and recommendations of the Board be placed on the agenda for the next special or regular City Council meeting, at which time the City Council shall determine whether to adopt such opinions and recommendations; and WHEREAS, the City has reviewed the opinion and recommendations of the Board and wishes to adopt the same. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Opinion No. 2000-1 of the Ethics Review Board, a copy of which is attached hereto and incorporated herein by this reference as Exhibit "A," has been submitted to and reviewed by the City Council, and the Council hereby adopts the opinion and recommendation contained therein. Passed and adopted at a regular meeting of the City Council held}his 6th day of June, A.D. 2000. Mayor ATTEST: %ktiliN)r\ :\ttiX4 City Clerk 2000 -1 OPINION OF THE ETHICS REVIEW BOARD OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS May 23, 2000 The City Council Ethics Review Board ("the Board") met on May 23, 2000, to render an advisory opinion on a question submitted to the Board by Mayor Pro Tem Chuck Wanner. The question presented is whether Mayor Pro Tem Wanner ("Wanner") would have a conflict of interest in continuing to participate in Council discussions and, ultimately, Council's vote, regarding the proposed new floodplain regulations for the Poudre River. The question arises because Wanner is employed by The Friends of the Poudre, a non-profit organization that has been actively involved in commenting on the new proposed floodplain regulations and that has lobbied for "Option C," the most restrictive alternative that has been presented by staff. The Friends of the Poudre is a citizen's group formed to protect the River. According to its Mission, Vision and Goals Statement (copy attached), one the goals of The Friends of the Poudre is to "preserve, restore and enhance critical areas of the Cache La Poudre watershed." Toward that end, it actively seeks ways in which to minimize development in the floodplain and to influence the kind of development that does occur. At present, the Friends of the Poudre has 160 dues -paying members and an operating budget of approximately $45,000. Wanner is employed as the Executive Director of The Friends of the Poudre and he is a member of its seven -member board of directors (the "Board of Directors"). He assumed both positions in the fall of last year. Warner's term of employment with The Friends of the Poudre is of indefinite duration, and he is employed at the will of the Board of Directors. Funding for his position has been secured in the form of a grant from River Network, a national non-profit organization. The grant funding has been allocated over a ten-month period in the form of a salary to Wanner in the amount of $1,666 per month, which will be payable through September of 2000. Wanner has indicated that, at the time of accepting his employment, he and the Board of Directors discussed the fact that Wanner would need to exercise independent judgment as a Councilmember with regard to any changes to the floodplain regulations for the Poudre River. That arrangement was reportedly acceptable to the Board of Directors, and Wanner has indicated that there have been no attempts by members of the Board of Directors to influence his position with regard to those regulations other than those lobbying efforts that have been directed to Councilmembers generally. There is no indication from Wanner or others that Warner's employment, the amount of his compensation, or his membership on the Board of Directors is dependent upon the position that he takes with regard to the proposed floodplain regulations. Neither Wanner nor the Friends of the Poudre have a financial interest in any real property that will be affected by the proposed floodplain regulations. It is unclear whether any future funding for the Friends of the Poudre in the form of other grants might be affected by the floodplain regulations that are approved by the Friends of the Poudre, since each grant has different terms and conditions. Ethics Opinion 2000-1 May 23, 2000 Page 2 The question presented for the Board, is whether, under these facts, Wanner's employment with The Friends of the Poudre and/or his membership on the Board of Directors creates a conflict of interest under the City Charter or the state statutes that would prevent Wanner from participating in Council's discussion and vote on the proposed Poudre River floodplain regulations. ANALYSIS. 1. City Charter Provisions. The City Charter requires that any Councilmember who has a financial or personal interest in a decision of the Council disclose such interest and refrain from voting on, attempting to influence, or otherwise participating in such decision in any manner as a Councilmember. The City Charter defines two kinds of interests that can create a conflict of interest for officers or employees of the City: financial and personal interests. a. Financial Interest. A financial interest is defined under the Charter as "any interest equated with money or its equivalent." The Charter expressly excludes from the definition of "financial interest" the interest that a Councilmember has as an employee of a business where the Council decision may financially benefit or otherwise affect the business but entails no "foreseeable, measurable financial benefit" to the Councilmember. In reviewing the facts of this situation, it might fairly be said that the Council's decision with regard to the floodplain regulations for the Poudre River may "affect" The Friends of the Poudre since those regulations will determine the nature and extent of development that will be permitted in the Poudre River floodway, product corridor and floodplain. There is no indication, however, that that decision will financially benefit The Friends of the Poudre, much less Wanner himself. Wanner's compensation with the Friends of the Poudre is in a fixed amount, and no evidence has been presented to the effect that Wanner's salary will be changed or discontinued as a result of the Council's decision on the floodplain regulations. Therefore, the Board believes that Wanner does not have a financial interest in the proposed regulations. b. Personal Interest. The Charter defines a personal interest in relevant part as an interest by reason of which a Councilmember 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." Clearly, Wanner is differently situated with regard to this matter than are the members of the general public because of his employment with The Friends of the Poudre and his membership on the Board of Directors. The Charter expressly excludes from the definition of personal interest the interest of a member of a board of directors of a non-profit organization. Therefore, the question here is Ethics Opinion 2000-1 May 23, 2000 Page 3 whether Wanner will realize any "direct and substantial benefit or detriment" by reason of Council's decision on the floodplain regulations because of his position of employment. Again, there is no indication that Warmer's position of employment or the amount of his compensation would be affected by his vote or Council's decision with regard to the proposed floodplain regulations. One can speculate that, if Warner's vote proves to be inconsistent with the organization's philosophy or objectives, the Board of Directors may discontinue or decide not to renew Warner's employment. However, the Charter standard requires that the potential benefit or detriment be "direct and substantial" and not merely indirect or speculative. The Board believes that the possibility of Council's decision affecting Warner's employment is entirely speculative. In summary, the Board believes that Mayor Pro Tem Wanner does not have a conflict of interest in participating in the City Council's deliberations and vote with regard to the proposed floodplain regulations. The Board recognizes that the perception of a conflict of interest may exist whenever a councilmember is employed by, or closely associated with, an organization that is strongly interested in proposed legislation. This is especially true when the councilmember is employed in a managerial capacity with that organization. However, the City Charter rules of ethical conduct have been established to distinguish situations where councilmembers and their employers may be affected and concerned about proposed legislation from those situations in which councilmembers themselves may somehow experience some personal gain or loss as result of the Council decision. Under the Charter standards, a conflict of interest would exist in this situation only if the potential personal gain or loss to Wanner was either "foreseeable and measurable" (in the case of a financial interest) or "direct and substantial" (in the case of a personal interest). After analyzing the situation presented by Mayor Pro Tem Wanner, the Board does not believe that that kind of clear and direct benefit or detriment exists in this case. To recommend that Mayor Pro Tem Wanner declare a conflict of interest in this situation would, in the Board's view, establish a very difficult precedent that would require councilmembers to regularly refrain from representing the views of their constituents with regard to proposed legislation even when the potential benefits or repercussions to councilmembers are merely hypothetical or speculative. This advisory opinion was reviewed and approved by Councilmembers Councilmembers Byrne, Kastein and Weitkunat, members of the Ethics Review Board of the City Council. 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 June 6, 2000. Dated this 23rd day of May, 2000. tephen Roy, Ci Attorney SJR:med RESOLUTION 2003-083 OF THE COUNCIL OF THE CITY OF FORT COLLINS ACCEPTING THE ADVISORY OPINION AND RECOMMENDATION NO. 2003-1 OF THE ETHICS REVIEW BOARD WHEREAS, the City Council has established an Ethics Review Board (the "Board") consisting of three members of the City Council; and WHEREAS, the Board is empowered under Section 2-569 of the City Code to render advisory opinions and recommendations regarding actual or hypothetical situations of Councilmembers of board and commission members of the City; and WHEREAS, the Ethics Review Board met on June 23, 2003, to consider whether Councilmember Kurt Kastein has a conflict of interest in participating in City Council's consideration of (1) a possible amendment to the City's Harmony Corridor Plan (the "Plan") to allow for a life style center; and (2) the possible review of a decision of the City's Planning and Zoning Board regarding a particular life style center on the site of the Plan amendment; and WHEREAS, the Board has issued an advisory opinion that Councilmember Kastein would not have a conflict of interest in participating in Council's deliberations with regard to these matters; and WHEREAS, Section 2-569(e) of the City Code provides that all advisory opinions and recommendations of the Board be placed on the agenda for the next special or regular City Council meeting, at which time the City Council shall determine whether to adopt such opinions and recommendations; and WHEREAS, the City has reviewed the opinion and recommendations of the Board and wishes to adopt the same. NOW, THEREFORE, BE 1T RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Opinion No. 2003-1 of the Ethics Review Board, a copy of which is attached hereto and incorporated herein by this reference as Exhibit "A," has been submitted to and reviewed by the City Council, and the Council hereby adopts the opinion and recommendation contained therein. Passed and adopted at a regular meeting of the City Council held tie lst day of July, A.D. 2000.,64. ATTEST: EXHIBIT "A" 2003-1 OPINION OF THE ETHICS REVIEW BOARD OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS June 23, 2003 The City Council Ethics Review Board ("the Board") met on June 23, 2003, to render an advisory opinion on a conflict of interest question submitted to the Board by Councilmember Kurt Kastein. The question presented is whether Councilmember Kastein would have a conflict of interest in participating in the following upcoming decisions of the City Council: (1) A possible amendment to the City's Harmony Corridor Plan (the "Plan") to allow for a life style center; and (2) The possible review of a decision of the City's Planning and Zoning Board regarding a particular life style center on the site of the Plan amendment. The question arises because Councilmember Kastein ("Kastein") is employed by LSI Logic, and LSI Logic has entered into a contract to sell the site of the proposed life style center (the "Site) to the developer of the center. The Board is of the opinion that Kastein does not have a conflict of interest in this matter under the relevant provisions of the City Charter, as explained below. THE FACTS. The evidence presented to the Board indicates that Kastein is employed as a "project leader" at LSI Logic. He is compensated on a salary basis and, in addition, holds shares of stock in LSI Logic. Kastein's job entails serving as a design engineer who is responsible for directing a team of engineers in designing particular projects. The division in which Kastein works at LSI Logic is not involved in the sale of the Site. The contract for sale between LSI Logic and the developer of the Site is not expressly contingent upon City approval of any development application. However, the developer reportedly has the option to forfeit its earnest money and terminate the contract if City approval is not forthcoming. APPLICATION OF THE CITY CHARTER PROVISIONS. The determination of this question is governed by the City's local conflict of interest provisions, as contained in Art. IV, Sec. 9 of the City Charter (the "Charter"). These provisions require that any Councilmember who has a financial or personal interest in a decision of the Council disclose such interest and refrain from voting on, attempting to influence, or otherwise participating in such decision in any manner as a Councilmember. Under the Charter, the following definitions apply: Ethics Opinion 03-1 June 23, 2003 Page 2 a. "Financial Interest" A "financial interest" is defined under the Charter as "any interest equated with money or its equivalent." The Charter expressly excludes from the definition of "financial interest" the interest that a Councilmember has as an employee of a business where the Council decision may financially benefit or otherwise affect the business but entails no "foreseeable, measurable financial benefit" to the Councilmember. In reviewing the facts of this situation, it might fairly be said that the Council's decision with regard to the Plan amendment and/or the development application would "affect" LSI Logic since an adverse decision by the City Council would likely result in the loss of the sale of the Site to the developer. There is no indication, however, that Kastein, as an individual, will receive any "foreseeable, measurable financial benefit" as a result of the Council decision(s), either through some form of compensation, or through any appreciation in the shares of common stock that he holds as a shareholder in LSI Logic. Therefore, Kastein does not have a financial interest under the Charter. b. "Personal lnterest" The next inquiry is whether Kastein has a "personal interest" under the Charter. The Charter defines a "personal interest" in relevant part as an interest by reason of which a Councilmember 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." (Charter, Art. IV, Sec. 9(u)). This benefit or detriment need not be financial in nature, but it must be "direct and substantial." Clearly, Kastein is differently situated with regard to this matter than are the members of the general public because of his position of employment with LSI Logic. The question is whether, because of his status as an employee, he might realize any "direct and substantial benefit or detriment" by reason of Council's decision on either the Plan or a future application for development of the Site. There is no evidence that Kastein's position of employment or the amount of his compensation would be affected by his vote or Council's decision in that regard. In fact, Kastein's report of his conversations with LSI officials and employees indicate to the contrary, that is, that there would be no job related ramifications based upon the manner in which Kastein votes with regard to these upcoming Council decisions. One can speculate that Kastein's vote might have some effect on his employment or position of employment if the sale of the Site is lost because of Council's decision. However, the Charter standard is that the potential benefit or detriment be "direct and substantial" and not merely indirect or speculative. As previously indicated in Opinion 2000-1 of the Board, the Board recognizes that the perception of a conflict of interest may exist whenever a Councilmember is employed by, or closely associated Ethics Opinion 03-1 June 23, 2003 Page 3 with, an organization that will be affected by a Council decision. This is especially true when the Councilmember is employed by that organization. However, the Charter rules of ethical conduct have been established to distinguish situations where Councilmembers and their employers may be affected by or concerned about an upcoming Council decision, from those situations in which Councilmembers themselves may somehow experience some personal gain or loss as result of the Council decision. Under the Charter standards, a conflict of interest would exist in this situation only if the potential personal gain or loss to Kastein was either "foreseeable and measurable" (in the case of a financial interest) or "direct and substantial" (in the case of a personal interest). After analyzing the situation presented by Councilmember Kastein, the Board does not believe that kind of clear and direct benefit or detriment exists in this case. To recommend that Kastein declare a conflict of interest in this situation would, in the Board's view, establish a very difficult precedent that would require Councilmembers to regularly refrain from performing their duties as elected officials even when the potential benefits or repercussions to them are merely hypothetical or speculative. This advisory opinion was reviewed and approved by Mayor Ray Martinez, Mayor Pro Tem Bill Bertschy and Councilmember Marty Tharp, members of the Ethics Review Board of the City Council. 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 July 1, 2003. Dated this 23rd day of June, 2003. Ci SJR:med tephetf J. Roy, y Attorne RESOLUTION 2004-129 OF THE COUNCIL OF THE CITY OF FORT COLLINS ACCEPTING THE ADVISORY OPINION AND RECOMMENDATION NO. 2004-2 OF THE ETHICS REVIEW BOARD WHEREAS, the City Council has established an Ethics Review Board (the `Board") consisting of three members of the City Council; and WHEREAS, the Board is empowered under Section 2-569 of the City Code to render advisory opinions and recommendations regarding actual or hypothetical situations of Councilmembers of board and commission members of the City; and WHEREAS, the Ethics Review Board met on October 25, 2004, to consider a question posed by Councilmember Hamrick as to whether Councilmembers who own rental property may have a conflict of interest in considering proposed regulations of such properties; and WHEREAS, the Board has issued an advisory opinion with regard to this matter; and WHEREAS, Section 2-569(e) of the City Code provides that all advisory opinions and recommendations of the Board be placed on the agenda for the next special or regular City Council meeting, at which time the City Council shall determine whether to adopt such opinions and recommendations; and WHEREAS, the City has reviewed the opinion and recommendations of the Board and wishes to adopt the same. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Opinion No. 2004-2 of the Ethics Review Board, a copy of which is attached hereto and incorporated herein by this reference as Exhibit "A," has been submitted to and reviewed by the City Council, and the Council hereby adopts the opinion and recommendation contained therein. Passed and adopted at a regular meeting of the City Council held this 16th day of November, 2004. Mayor ATTEST: Q.iitkril City Clerk x OPINION 2004-2 OPINION OF THE ETHICS REVIEW BOARD OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS October 26, 2004 The Ethics Review Board (the "Board") met on the above -referenced date at the request of Councilmember Hamrick, pursuant to the provisions of Sec. 2-569 of the City Code, to consider an ethical question posed by Councilmember Hamrick. QUESTION PRESENTED. The question presented by Councilmember Hamrick is as follows: At what point might a Councilmember who owns rental properties have a conflict of interest in participating in an official capacity in the City Council's deliberations and/or City decisions regarding the regulation of rental properties? APPLICABLE LAW. City Charter provisions pertaining to this matter include the following: Interests in other decisions. 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, shall, upon discovery thereof, disclose such interest in the official records of the city in the manner prescribed in subsection (4) hereof, and shall refrain from voting on, attempting to influence, or otherwise participating in such decision in any manner as an officer or employee. Financial interest means any interest equated with money or its equivalent. 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. (Charter of the City of Fort Collins, Art. IV §9) DISCUSSION. The relevant standard to be applied in reviewing this particular question is the Charter "personal interest" standard. The first question to be addressed under this standard is whether a proposed ordinance requiring the registration and/or licensing of rental properties, or a change to the "more Ethics Opinion 2004-2 October 26, 2004 Page 2 than three unrelated persons" ordinance would, in the judgment of a reasonably prudent person, result in some "direct and substantial" benefit or detriment to the owners of rental properties. For the purposes of this opinion, the Board assumes the existence of a direct and substantial benefit or detriment. The key phrase in the definition of personal interest in this situation is the phrase "different in kind from that experienced by the general public." There are hundreds, if not thousands, of people in the City who own rental properties. Therefore, a Councilmember who owns one or more rentals is part of a very large category of persons who would be affected by the proposed changes in City regulations. Such Councilmembers would not be uniquely affected by the proposed legislation unless, perhaps, property rental was a Councilmember's sole or primary source of income, in which case the number of similarly situated City residents would be greatly reduced. Numerous opinions of the Ethics Review Board have focused on the size of an affected group in determining whether a conflict of interest exists. For instance, in Opinion No. 93-3 the Board rendered the opinion that Councilmember Bob McCluskey did not have a conflict of interest in participating in Council deliberations regarding the establishment of storm drainage utility fees that would affect property he owned in a particular storm drainage basis. In support of that opinion, the Board cited the following as important factors in determining whether a conflict of interest exists: The extent to which the decision "focuses" on the individual Councilmember. If a Councilmember's interest is like hundreds of others who are similarly situated, then it is likely that the Councilmember can participate in the decision. The smaller the group of affected interests, the more likely it is that the Councilmember who is a member of that group should not participate in the decision." The magnitude of the potential financial or personal impact of the decision on the individual Councimember. If the Councilmember will only be slightly impacted, either financially or personally, by a Council decision, then he or she is less likely to have a financial or personal conflict of interest in the decision. On the other hand, if the impact will be a very substantial one, a conflict is more likely to be found. The need for the Councilmember to participate in the decision as an elected representative. If the decision is of substantial importance to a Councilmember's constituents, either as a district representative or as Mayor, then the Councilmember should carefully consider whether his or her decision to declare a conflict of interest would leave those constituents without a representative voice in the decision. The constituents' entitlement to a representative voice must be balanced against the degree of personal interest which the Councilmember may have in the decision. Ethics Opinion 2004-2 October 26, 2004 Page 3 Similarly, in Opinion 92-8, the Board noted that "Councilmembers should be able to participate in policy level decisions unless the policy decision is so immediately and directly tied to a financial or personal interest of the councilmember that the policy decision cannot be effectively separated from the personal interest (as opposed to the personal views) of the councilmember." CONCLUSIONS. The Board believes that the following guidelines will assist Councilmembers who own rental properties in determining whether a conflict of interest exists when Council is considering the proposed regulation of rental property. 1. Whether income derived from rental properties constitutes a primary source of income for the Councilmember, or for his or her relative, or is instead a supplemental source of income; and 2. Whether participating in the Council decision might enhance or diminish the business interests, personal assets, or employment status of the • Councilmember, or his or her relative, in a way that is different from other rental property owners. As with all conflict of interest questions, this question must be addressed more specifically on a case - by -case basis. The point of the case -by -case inquiry would be to determine whether the Councilmember, as a rental property owner, would be differently affected by the proposed regulations than most other owners of rental property because of the magnitude of the Councilmember's rental property holdings. This advisory opinion was reviewed and approved by Mayor Martinez, Mayor Pro Tem Bertschy and Councilmember Weitkunat, as regular members of the Ethics Review Board, for distribution to members of the Council and for distribution to the City Clerk, to be maintained in the permanent file of opinions of the Ethics Review Board. Dated this 9th day of November, 2004. Stephen !. Roy, City Attorney RESOLUTION 2012-020 OF THE COUNCIL OF THE CITY OF FORT COLLINS ACCEPTING THE ADVISORY OPINION AND RECOMMENDATION NO. 2012-1 OF THE ETHICS REVIEW BOARD WHEREAS, the City Council has established an Ethics Review Board (the "Board") consisting of three members of City Council; and WHEREAS, among the responsibilities of the Board is the duty to review and investigate complaints of unethical conduct filed against Councilmembers or board and commission members; and WHEREAS, a complaint was filed with the City on January 13, 2012 against Gino Campana, a member of the Planning and Zoning Board; and WHEREAS, the City Council has referred the complaint to the Board under Section 2- 569(d)(1)(b) of the City Code for an advisory opinion as to whether the violation alleged in the complaint has occurred and, if so, the action, if any, that should be taken with regard to such violation; and WHEREAS, at meetings held on February 23 and 27, 2012, the Board has reviewed and investigated the complaint and has concluded that Mr. Campana did not violate the conflict of interest provisions of the City Charter as alleged in the complaint; and WHEREAS, under Code Section 2-569(e), after investigation, the Board is to forthwith issue an advisory opinion and recommendation to the City Council, which shall be available for public inspection, and which are to be place on the agenda for the next special or regular City Council meeting, at which time the City Council is to determine whether to adopt the same; and WHEREAS, the Board has issued an advisory opinion and recommendation with regard to the complaint, attached hereto as "Exhibit "A"; and WHEREAS, the City Council has reviewed said opinion and recommendation and wishes to adopt the same. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Opinion No. 2012-1 of the Ethics Review Board, a copy of which is attached hereto and incorporated herein by this reference as Exhibit "A," has been submitted to and reviewed by the City Council, and the Council hereby adopts the opinion and recommendation contained therein. Passed and adopted at a regular meeting of the City Council held this 20th day of March, 2012. Interim City Clerk EXHIBIT A 12-1 OPINION OF THE ETHICS REVIEW BOARD OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS February 27, 2012 Background. On January, 13, 2012, a complaint was filed with the City Clerk's Office by David Bell ("Bell"). A copy of the complaint is attached. The complaint alleges that Gino Campana ("Campana"), a member of the City's Planning and Zoning Board (the "Board"), violated the conflict of interest rules contained in the City Charter by improperly participating in discussions of the Board regarding a proposed change in a particular Land Use Code ("LUC") provision (the "LUC Amendment"). The provision in question is LUC Section 3.4.1(E), the purpose of which is to establish a buffer zone the developed portions of property adjacent to the Poudre River (the "River") and other waterways and the edge of the areas to be protected. Staff recommended the LUC Amendment to clarify the point from which the buffer zone is measured. The complaint is based on the fact that, at the time of such discussions, Campana was negotiating for the purchase of a parcel of real property (the "Bender Property" or the "Property") that could be affected by the LUC Amendment Under Section 2-569 of the City Code, the complaint was referred to us by the City Council (the "Council") for an opinion and recommendation as to whether the violation alleged in the complaint occurred and, if so, what action, if any, should be taken by the Council with regard to the violation. Summary of Opinion and Recommendation. The information presented to us indicates that the Bender Property was among a relatively small group of properties in the City that could be directly affected by the LUC Amendment. Based on that information, however, it does not appear that at the time Campana participated in the Board's discussions regarding the LUC Amendment he would have, in the judgment of a reasonably prudent person, experienced any direct and substantial benefit or detriment as a result of that amendment. Therefore, it is our opinion that Campana did not violate the conflict of interest provisions of the Charter. On a related note, the information presented to us suggests that there is some confusion among Board members about the application of the Charter's conflict of interest rules to recommendations made by the Board about legislative matters such as the LUC Amendment, as opposed to Board decisions about quasi-judicial matters. To address this concern, we recommend that the City Attorneys' Office provide additional training on that subject to the members of the Planning and Zoning Board and to other City boards that perform both legislative and quasi-judicial functions. f Opinion of the Ethics Review Board Opinion 12-1 February 27, 2012 Page 2 of 5 The Information Presented to the Review Board. Information was presented to us with regard to the complaint at our meetings on February 23 and 27, 2012. Draft minutes of those meetings are attached, together with: (1) a written summary of facts presented to us and to Campana by the City Attorney prior to our meetings; and (2) copies of the written materials presented during the course of the meetings. At the meetings, additional information was presented by and on behalf of Campana, the members of the Board, and City staff. After reviewing that information, we have reached the following conclusions about the facts related to this matter: • There is a divergence of opinion among professional engineers as to whether the LUC Amendment has helped clarify the way in which the buffer zone between proposed development and waterways in the City should be established. • The LUC Amendment, as applied to the Bender Property, may or may not result in a change in the size or location of the buffer that will be required of the developer of the Property. It does appear that the adoption of the LUC Amendment will result in a change in the location of the initial 300-foot buffer, as prescribed by the table contained in LUC Section 3.4.1(E). The western end of that buffer will be moved approximately 45 feet further from the River. However, the final size and location of the buffer will be negotiated between City staff and the property owner using certain "performance standards" contained in the LUC. • The Bender Property is presently located in unincorporated Larimer County but, under an intergovernmental agreement between the City and the County, will need to be annexed to the City before it can be developed. • In July, 2011, Campana actively participated in discussions of the Board regarding the LUC Amendment, both at a work session held on July 15, 2011, and at a subsequent formal meeting of the Board held on July 21, 2011. He was instrumental in defeating the amendment at the Board meeting. He argued that the revision should be postponed until something more concrete and definable was developed and that the proposed definition would make buffers more restrictive for the land owner, which he considered unfair. However, the LUC Amendment was reconsidered by the Board in October, 2011, at staffs request and was adopted unanimously without his participation. • Campana is an active developer of properties in Northern Colorado and is regularly involved in the possible acquisition and development of a large number of properties. On June 9, 2011, Campana entered into a contract to exchange a number of condominiums that he owns for the Bender Property. The contract gave both property owners broad latitude to inspect and evaluate the properties being exchanged and to terminate the contract "if issues were discovered." As of July 6, 2012, Campana had decided not to pursue the property exchange on the terms and conditions contained in the contract. However, in August, 2011, active negotiations resumed between Campana and the owner Opinion of the Ethics Review -Board Opinion 12-1 February 27, 2012 Page 3 of 5 of the Bender Property when the owner reduced his asking price for the Property in response to a counteroffer Campana had made. Carnpana purchased the Property in September, 2011, and has since submitted a conceptual plan to the City for redevelopment of the Property. • Campana did not participate in any discussions of the Board regarding the LUC Amendment after the July work session and July meeting of the Board. • Campana first learned of the 45-foot difference in the basic buffer requirement for the Property during the course of our meeting on February 23, 2012. Analysis of the Issue Presented. The conflict of interest provisions of the City Charter are attached. The question of whether Campana had a conflict of interest that required him to recuse himself from the Board's consideration of the LUC Amendment and file a conflict of interest disclosure statement with the City Clerk hinges upon whether Campana had either a fmancial or personal interest in the approval or rejection of the LUC Amendment. We do not believe that Campana had a fmancial interest in the matter because there is no indication that the Council's decision about the LUC standard would have resulted in any immediate financial return to Campana. Whether he had a personal interest in the decision is a closer question. The definition to be applied in making that determination reads as follows: "Personal interest means any interest... by reason of which an 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." Because there are several components to this definition, we have considered each one separately. First, in determining how the "reasonably prudent person" would judge the situation, we have applied that standard to the facts as they were known to Campana at the time of the July work session and Board meeting. Campana knew at that time that he was engaged in negotiations to acquire the Bender Property, and that the Property was differently situated in relation to the application of the LUC provision in question than the vast majority of properties in the City. The LUC Amendment applied only to properties that are located next to waterways, as is the Bender Property. As previous Ethics Review Boards have noted in earlier opinions, the size of the affected group of which an officer or employee is a member determines whether that person's interest is different in kind from that of the general public. We believe that Campana's interest in the LUC Amendment was different in kind (and not merely in degree) from that shared by the general public. Opinion of the Ethics Review Board Opinion 12-1 February 27, 2012 Page 4 of 5 Next, we looked at whether a reasonably prudent person would believe that Campana would experience a direct and substantial benefit or detriment as a result of the adoption or rejection of the LUC Amendment. It is our opinion that a reasonably prudent person knowing all the relevant facts would not believe that to be true. With regard to how directly the decision on the LUC Amendment might affect Campana, we consider it significant that, at the time of his participation in the Board's discussions of the amendment, it appeared unlikely that he would be successful in acquiring the Bender Property. Moreover, the effect on the Bender Property was uncertain because the Property was —and still is —located in the County. As such, it is not immediately subject to the proposed new buffer standard. We recognize that, under the City's intergovernmental agreement with the County, the owner of the Bender Property will need to petition for annexation to the City before developing the Property. However, the timing and that annexation petition is uncertain and the outcome is not guaranteed since all annexation decisions are discretionary with the Council. In addition, it was unclear and remains unclear whether the LUC Amendment will actually have any effect on the size and location of buffer on the Bender Property. At the time of the July work session and Board meeting, no measurements had been done to see what effect the new definitions would have on the location of the 300-foot buffer and, perhaps more importantly, the buffer standards are often not applied in a rigid way because, under LUC Section 3.4.1(E), the buffer must be increased or decreased to meet certain performance standards in order to ensure that it serves its intended purpose. For these reasons, it is the Board's opinion that a reasonably prudent person would not consider the link between the LUC Amendment and Campana's financial interests to be a direct one. A number of variables would have to fall into place in order for that direct connection to exist. The next question is whether the effect of the LUC Amendment on the Bender Property —and on Campana's overall financial interests —would be "substantial." We believe that this standard should be applied objectively. In other words, whether a City decision will make a "substantial" difference to an officer or employee should be judged in terms of the potential effect of the decision on the average person, rather than on the particular officer or employee. Otherwise, a very wealthy officer or employee would be free to participate in decisions that an officer or employee of more modest means could not. Such a result would very likely undermine the public's confidence in the integrity of the government. Applying the "substantiality" standard objectively, we believe it is unclear whether the LUC Amendment will have a substantial effect on the way in which the Bender Property can be developed or on the overall profitability of the development. That is because, as mentioned above, the buffer zone for the Property may not change as a result of the Council's adoption of the LUC Amendment. The standard 300-foot buffer will be subject to the same possibility of modification under the LUC Amendment as it was under the previous LUC standard. Therefore, at the time that Campana participated in the Board's consideration of the LUC Amendment, we do not believe that a reasonably prudent person knowing all the relevant facts would have thought he had anything substantial to gain or lose as a result of Council's decision on the amendment. Opinion of the Ethics RevieWBoard Opinion 12-1 February 27, 2012 Page 5 of 5 Board Members' Uncertainty about the Applicability of the Conflict of Interest Rules. It is clear from the information provided to us that there is some confusion among Planning and Zoning Board members as to the extent to which the Charter's conflict of interest rules apply to recommendations made by the Board to the City Council with regard to policy matters such as the LUC Amendment. In carrying out its duties under the City Code, the Board deals with two kinds of matters: decisions regarding specific development proposals, and recommendations to the Council regarding proposed LUC changes or other policy matters. Information provided to us by several current and past members of the Board suggests that, while they are very cognizant of the impartiality rules that apply to decisions they make about specific development proposals when acting in a quasi-judicial capacity, they are less certain about the way in which the Charter's conflict of interest rules should be interpreted and applied to recommendations they are called upon to make with regard to policy matters. Opinion and Recommendation. For the reasons stated above, it is our opinion that Campana did not have a conflict of interest that prevented him from participating in the Board's discussions and recommendations regarding the LUC Amendment. Nonetheless, we believe that it was entirely appropriate for this matter to have been brought to the attention of the City by Mr. Bell, since the many factors reducing the probability of this decision having a direct and substantial financial impact on Mr. Campana become clear only after careful examination of the situation. It is critical that the officers and employees of the City remain vigilant in trying to ensure that their participation in the City's decision making processes is motivated solely by an interest in the public good and not by an interest in personal gain. Because of the input we received from members of the Board, we recommend that, to the extent reasonably possible, the City Attorney's Office and City staff supplement the training that is currently provided to City board and commission members to further clarify the application of the conflicts of interest requirements to both quasi-judicial and legislative matters. It is important that all board and commission members understand the conflict of interest rules that are applicable to their service with the City and recognize when those rules might require their recusal. In particular, we further recommend that a representative of the City Attorney's Office meet with the members of the Planning and Zoning Board in the near future to review the ethical rules applicable to Board members' participation in both quasi-judicial decisions and in the recommendations that the Board makes to the Council regarding policy matters. We also recommend that the City Attorney's Office provide similar clarification to other City boards that perform both quasi-judicial and legislative functions.