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HomeMy WebLinkAbout1994-120-08/02/1994-AFFORDABLE HOUSING BOARD ETHICS REVIEW BOARD OPINION 94-1 RESOLUTION 94-120 OF THE COUNCIL OF THE CITY OF FORT COLLINS ACCEPTING THE ADVISORY OPINION AND RECOMMENDATION NO. 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 or board and commission members of the City; and WHEREAS, the Board met on July 26, 1994, to consider whether members of the City's Affordable Housing Board who were involved with the development of particular affordable housing projects would have any conflict of interest in participating in the formulation of recommendations to the City Council regarding affordable housing programs for the City; and WHEREAS, after review of the relevant facts and the standards contained in the City Charter, the Board rendered an advisory opinion and recommendation on the foregoing subject; 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 opinion and recommendation; and WHEREAS, the City Council has reviewed the opinion and recommendation of the Board pertaining to the duties and functions of the members of the Affordable Housing Board and agrees with such opinion and recommendations and wishes to adopt the same. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Opinion No. 94-1 of the Ethics Review Board, a copy of which is attached hereto and incorporated herein by this reference, has been submitted to and reviewed by the City Council , and the Council hereby adopts the opinion and recommendations contained therein. Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 2nd day of August, A.D. 1994. �� Mayor A TEST: City Clerk 94-1 OPINION OF THE ETHICS REVIEW BOARD OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS July 26, 1994 The Ethics Review Board met on the above-referenced date to address a question presented by Councilmember Gina Janett, liaison to the Affordable Housing Board ("the Board"). In attendance were Ethics Review Board members Ann Azari, Bob McCluskey and Gerry Horak, as well as Councilmember Janett and several members of the Board. The question presented to the Ethics Review Board was the following: Whether any members of the Affordable Housing Board (by reason of their involvement in particular affordable housing projects) may have a conflict of interest in participating in recommendations to the City Council about a funding program for which their projects might be eligible. BACKGROUND INFORMATION On June 28, 1994, the City Council met at a work session with the Board to discuss, among other things, alternative proposals for disbursing monies from the City's Affordable Housing Fund ("the Fund"). The Board then met on July 7, 1994, to discuss those alternatives. During the course of that meeting, the Board formulated a recommendation to the Council, which is scheduled for Council's consideration at its regular meeting on August 16, 1994. The Board's recommendation is that $133,000 be appropriated from the Fund to be used to provide rebates, ranging in amounts from $2,100 to $4,200, to affordable housing projects that meet certain criteria. CHARTER PROVISIONS Under Article IV, Section 9, of the City Charter, officers and employees of the City are prohibited from "voting on, attempting to influence or otherwise participating in" (as an officer or employee) any decision in which he or she has a personal or financial interest. Under such circumstances, the officer or employee must file a conflict of interest disclosure statement with the City Clerk. A financial interest is defined as "any interest equated with money or its equivalent." Financial interest does not include either of the following: (1) The interest of an employee of a business, or a holder of an ownership interest in such business, in a decision of any public body, when the decision financially benefits or otherwise affects such business but entails no foreseeable, measurable financial benefit to the employee or interest holder; Ethics Opinion 94-1 July 26, 1994 Page 2 (2) The interest of 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; . . . . (City Charter, Section 9[a].) A personal interest is defined as follows: . . . any interest (other than a financial interest) arising from blood or marriage relationships or from close business, political or personal associations or concerns which would, in the judgment of a reasonably prudent person, tend to impair independence of judgment or action in the performance of official discretionary duties. (City Charter, Section 9[a].) RELEVANT CODE PROVISIONS The Affordable Housing Board was created by Ordinance No. 84, 1993. The Board consists of nine members appointed by the City Council. Those members, as required by Section 2-82 of the City Code, possess expertise in affordable housing issues, including, without limitation, issues pertaining to development, finance, lending, charitable and low income services and general community issues. The duties and functions of the Board, as described in Section 2-83 of the Code, are as follows: (1) To advise the Council on all matters pertaining to affordable housing issues of concern to the city; (2) To aid and guide the development of city-wide affordable housing programs to address currently existing and potential affordable housing issues; (3) To promote citizen participation and public education on city-wide affordable housing issues; (4) To be aware of and coordinate with the various other city boards and commissions whose actions may affect affordable housing in the community; and (5) To perform other such duties and functions and have other powers as provided by the Council. Ethics Opinion 94-1 July 26, 1994 Page 3 ANALYSIS: 1. Overview. All members of City boards and commissions run the risk of encountering situations that entail potential conflicts of interest, because they are generally appointed to a particular board by reason of the fact that they have some experience or expertise in the Board's area of interest. This can often mean that their employment situation or other personal or professional associations may require them to refrain from participating in a particular decision of the board. With regard to the Affordable Housing Board, the risk of a conflict of interest may be greater than usual. This is because one of the Board's functions is to "aid and guide the development of city-wide affordable housing programs." In performing this function, it is predictable (and perhaps unavoidable) that the Board will be called upon to make specific recommendations to the Council about ways in which financial assistance might be given to affordable housing projects. This conflict of interest question arises because many of the Board members are involved, in one capacity or another, with projects that could, either immediately or in the foreseeable future, seek funding assistance from the program which is they subject of their recommendation. 2. Financial Interest. The first question to be addressed by the Ethics Review Board is whether any members of the Affordable Housing Board may have a financial interest in participating in recommendations about funding programs for affordable housing projects by reason of their own involvement with particular projects. In applying the definition of financial interest contained in the Charter, the Ethics Review Board does not believe that Board members who are placed in this position do have a financial conflict of interest. This is because the recommendations of the Board are also accompanied by staff recommendations and, ultimately, the decision whether to adopt the criteria is a decision to be made by the City Council rather than the Board. Thus, the Board's recommendation is only one factor in one step along the way in determining the kind of program that will be made available for affordable housing projects and the criteria that will be established to determine the eligibility of particular projects. Therefore, within the meaning of the Charter provision, the Board's recommendation to the Council on this subject is sufficiently removed from the actual award of any funding that it does not entail any measurable financial benefit to any member of the Board. 3. Personal Interest. A closer question is presented by the personal interest standard in the City Charter. Obviously, all members of the Board have a strong interest in the subject of affordable housing. Otherwise, they would not have been considered to be qualified for service on the Board. The Charter Ethics Opinion 94-1 July 26, 1994 Page 4 prohibition, however, is directed toward a more particular kind of personal interest, that is, an interest in a particular agency or organization or project which might, in the judgment of a reasonably prudent person, interfere with that Board member's independence of judgment in formulating a recommendation to the Council about funding programs for affordable housing projects. In Opinion 93-3, the Ethics Review Board has previously articulated the following factors which should be considered in determining whether a personal interest exists: • The extent to which the decision in question "focuses" on the individual officer or employee. • The magnitude of the potential financial or personal impact of the decision on the individual officer or employee. • The need for the officer or employee to participate in the decision. In applying these criteria to the situation at hand, the formulation of eligibility criteria for affordable housing applicants is not focused on any individual Board member. Instead, the Board members are part of a larger class of individuals in various professions who are interested in the subject of affordable housing, some of whom may potentially be applicants for funding. The criteria recommended by the Board for Council consideration are very general in nature, and none of them guarantee the eligibility of any particular affordable housing project. As to the second factor to be considered, it is unlikely that the establishment of the criteria will have a substantial impact on the personal circumstance of any individual Board member. As to the third factor, because of the particular expertise and various perspectives represented by each member of the Board, there is a strong need for Board members to be able to participate in the formulation of eligibility criteria for affordable housing projects. Absent the benefit of the special expertise of the members of the Board, the Council would be left without an invaluable source of information as to the kinds of programs that might effectively attract affordable housing projects. In the balance, the Ethics Review Board does not believe that any member of the Affordable Housing Board should be ineligible to participate in discussions and recommendations about affordable housing programs, including recommendations concerning eligibility criteria for applicants. Board members should be aware, however, of the potential for a personal or financial conflict of interest as the decisions of the City become more focused on individual applicants. At such time as any decisions are made about the award of funds to individual agencies, those Board members who have a financial or personal interest in particular projects that may seek funding from the City should refrain from participating. Each Board member Ethics Opinion 94-1 July 26, 1994 Page 5 should continue to carefully assess his or her own circumstance on a case-by-case basis in determining the point in the decision-making process when a conflict of interest may exist. Board members are encouraged to seek the advice of the City Attorney's office in making that determination, and additional questions of conflict of interest with regard to this matter can be submitted to the Ethics Review Board for a subsequent opinion and recommendation. This advisory opinion was reviewed and approved by Mayor Azari, Mayor Pro Tern Horak and Councilmember Bob McCloskey, regular members of the Ethics Review Board. Pursuant to Section 2-569(e) of the City Code, this opinion and recommendation is to be immediately filed with the City Clerk and made available for public inspection. Additionally, this opinion and recommendation shall be placed on the agenda for the next meeting of the City Council on August 2, 1994. Dated this 27th day of July, 1994. /Stephe . Roy, City Attor y SJR:whm