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HomeMy WebLinkAboutMemo re Wellness Union Foundation Issues 12 3 20 final To: City of Bozeman Board of Ethics Fr: Greg Sullivan, City Attorney Date: December 4, 2020 RE: City Wellness Program, Union Benefits, Discounts, and Affiliated Foundation Gifts On October 8, 2019 I provided you a memorandum on the City Wellness Program and Union Benefits. See attached. During the October 9, 2019 meeting we briefly discussed whether benefits other than medical related benefits provided by the City to its employees constitute gifts. We also briefly discussed whether benefits other than labor representation provided by a labor union to its members who are City employees are considered gifts. This issue also includes discounts available to employees through their professional affiliations. During our meeting I suggested an amendment to the code of ethics to address the above. I continue to believe such an ordinance could be beneficial to ensure none of these categories are considered gifts prohibited by the City’s Code of Ethics. Due to COVID and other priorities, we have not had an opportunity to develop such an ordinance. These issues have recently come up again and are in need of resolution. As such, I have drafted this memorandum to memorialize my opinion and to seek your concurrence in my opinion (see below). If you concur please do so by motion. We can draft an ordinance for your review in the next six to nine months. The gift provision is found at 2.03.540, BMC. The legislative intent section states, The intent of this section is to further implement the declaration of policy set forth in 2.03.460 and establish specific standards of conduct related to gifts, gratuities, and favors that are provided to a person because of a person's employment or official position with the city. These standards recognize legitimate governmental interests exist that allow an employee or official to accept a gift, gratuity or favor in limited circumstances without such acceptance being considered the use of public office for private gain. These interests include, but are not limited to, establishing effective relationships with citizens, acceptance of professional and community awards for public service, and attending public events in an official capacity. At the same time, these standards make it clear that each public officer and employee holds such office or employment as a public trust. The City’s Charter prohibits “the use of public office for private gain.” I believe the intent of the Charter provision and the code of ethics’ gift provision is to ensure employees are not influenced in the performance of their work by outside persons or entities in such a manner as to have the employee shift their commitment and dedication away from public service to their own personal interests or the interests of an outside entity or person. Based on the intent of the Charter provision and the intent of the gift provision in the code of ethics, clearly, discount ski tickets provided by the City as an employer do not violate this intent. The issue is not as clear when a discount or benefit is provided by an outside entity. Nevertheless, based on the Charter and gift provision intent statements, I believe an employee’s professional organizations or an employee’s labor union may, in keeping with the Charter’s requirement, provide benefits to their members beyond what is provided by the City as long as those benefits, be it discounted products or services, are not provided to influence an employee to “depart from the faithful and impartial discharge of person’s public duties” or to “reward[] the person for official action taken.” Again, based on the intent of the Charter provision and the intent of the gift provision in the code of ethics, I believe the same standard applies for a discount for a product or service provided by a private entity to an employee because of their professional status, but only if the City does not purchase goods or services from the entity. This last condition is critical. These types of discounts could include discounts provided by private entities to “first responders” or “public safety personnel.” I also rely upon the existence of the statutory prohibitions addressing gifts and conflicts of interest as these form an important backdrop and ensure public employees and officials do not accept gifts, discounts on goods or services, or other things of value that are designed to or could be construed as improperly influencing the official or employee to depart from the faithful discharge of their duties. These statutory provisions include: 7-5-4109, MCA (control of conflict of interest); Title 2, Chapter 2, MCA (standards of conduct include the State code of ethics and proscribed acts related to contracts and claims); 45-7-104, MCA (gifts to public servants by persons subject to the jurisdiction (criminal)); and 45-7-101, MCA (bribery in official and political matters (criminal)). Based on the above, it is my opinion that: 1. Benefits provided by the City as an employer beyond salary and medical related benefits and which are available to all City employees are not gifts. These include discount ski tickets, discounts to memberships at gyms, etc. 2. Discounts on good or services or other benefits provided by a labor union to its members who are employees of the City are not gifts as long as the benefit is generally available throughout the state or the country to the same category of union member and is not provided to influence an employee to “depart from the faithful and impartial discharge of person’s public duties” or to “reward[] the person for official action taken.” 3. Discounts on good or services or other benefits provided by an employee’s professional organization are not gifts as long as the benefit, including discounts on merchandise or services, are generally available throughout the state or the country to the same category of profession and are not provided to influence an employee to “depart from the faithful and impartial discharge of person’s public duties” or to “reward[] the person for official action taken.” 4. Discounts on good or services or other benefits provided by a private entity to an employee because of their status as a “first responder” or other professional category are not gifts as long as those discounts are generally available throughout the state or the country to the same category of profession, the City does not purchase goods or services from that entity, and the discounts or benefits are not provided to influence an employee to “depart from the faithful and impartial discharge of person’s public duties” or to “reward[] the person for official action taken.” In addition to the above, I have recently been asked a similar question: whether a private foundation affiliated with the City may provide gifts of cash to members of a City department. These foundations include the library foundation and the police foundation. Both are non-profit entities organized for the benefit of the City department and its employees. I believe this issue is distinguishable from the above as the gift is provided directly to an employee because of their employment. Unlike the other issues where an employee is provided the discount or benefit because of their membership in a union, a professional organization, or their professional status, the direct gift by an affiliated foundation is made solely because the person receiving the gift is an employee of a specific department. Assuming a foundation’s gift does not conflict with 2.03.540.B (improper influence or reward), the employee can accept the gift if it is under $25. If the gift is over $25, however, an employee may accept such a gift only pursuant to 2.03.540.C: An employee or official may accept a gift, gratuity, or favor that has a value greater than $25.00 but less than $100.00 for an individual only if such gift, gratuity or favor: 1. Complies with 2.03.540.B.1 and 2; and 2. Is provided incidental to and in conjunction with a public event where the official or employee's attendance is in fulfillment of their official duties. This section requires the gift to be presented “in conjunction with a public event…” This section also limits the gift to no more than $100.00. The library and police foundations have historically held events to honor City employees that work in the library or police departments. In the past, the Library Foundation has provided cash donations to library employees but only at a publicly accessible event. Due to COVID, in person events are not possible. Based on the above code provision, it is my opinion that a gift between $25 and $100 to an employee by a private affiliated foundation is permissible under the code of ethics but only if presented at a public event “where the official or employee’s attendance is in fulfillment of their official duties.” Both foundations could host a zoom or Webex meeting, post notice of the meeting inviting the public to attend, and present the gifts to employees. An employee need not be in attendance if the gift is presented to the department director or another person representing all employees. Finally, I have been asked whether an affiliated foundation may establish a scholarship fund of up to $1,500 per year to a child of an employee to assist in their education. Again, assuming the scholarship award does not conflict with 2.03.540.B.1 and 2, I believe such a scholarship program is not “the use of public office for private gain.” However, I believe such a scholarship is similar to a gift by the foundation directly to an employee because of their employment and because the dollar amount exceeds the $100 limitation in the current gift code such a scholarship is not currently authorized. As such, I suggest the board authorize an amendment to the gift provision that would recognize the creation of a scholarship program such as this and include an exception. I believe a scholarship program as described above comports with the legislative intent and should be permissible. These types of programs enhance City goals such as recruitment and retention of employees. Also, the establishment of such a scholarship program is widespread throughout the country. See, e.g., the program established in New York City and the program established in Colorado Springs. Again, the purpose of this item is to discuss the above and provide you an opportunity to concur or consider a different approach. If you concur with my opinion on the items included in this memorandum please do so by motion.