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HomeMy WebLinkAboutFindings & Conclusions of December 8, 2021, Daniel Zyvoloski Complaint1 THE BOARD OF ETHICS OF BOZEMAN, MONTANA FINDINGS AND CONCLUSIONS December 8, 2021, Daniel Zyvoloski’s Ethics Complaint In addition to the oral findings entered into the record by the Board of Ethics for the City of Bozeman (hereafter “the Board”) at the public meeting on February 7, 2022, and pursuant to Section 2.06.640(M)(5) of the Bozeman Municipal Code (“BMC”), the Board makes the following findings and conclusions regarding the December 8, 2021, Ethics Complaint by Daniel Zyvoloski: 1. Montana law provides that where a local government has established a panel to review complaints alleging violations of Title 2, chapter 2, part 1 of the Montana Code Annotated (hereafter “Montana Code of Ethics”), that panel “shall review complaints and may refer to the county attorney complaints that appear substantiated.” See § 2-2-144(5)(a), MCA. 2. Bozeman City Charter establishes an independent Board of Ethics. The Board reviews ethical complaints alleging that city public officials or public employees violated the Montana Code of Ethics or violated Bozeman’s Code of Ethics (Article 3, Division 4, BMC). See Sections 2.03.600(A)(3) and 2.03.640(E) & (M), BMC. 3. The Board’s authority is provided for in Section 2.03.600, BMC and Section 2.03.640, BMC summarizes the procedures for review of complaints. 4. Among other reasons, the Board is empowered to dismiss a complaint if it “does not allege facts sufficient to constitute a violation” of the Bozeman Code of Ethics or Montana Code of Ethics. See Section 2.03.640(M)(1)(a), BMC. 5. In its review of an ethical complaint, the Board may not reverse or modify a prior action of the Mayor, City Commission, or an officer or employee of the City. Instead, “[i]f the board finds a prior action of the mayor, the city commission, officer, or employee to have been ethically improper, the board may advise the appropriate party that the action should be reconsidered. Upon such advice by the board, the action shall be reconsidered by the appropriate person or public body.” See Section 2.03.620, BMC. 6. On December 8, 2021, Daniel Zyvoloski served a written Ethics Complaint (“Complaint”), and request for a “formal advisory opinion.” Mr. Zyvoloski’s Complaint originates in a dispute regarding whether and how a particular home-based daycare was subject to business licensing requirements by the City. Mr. Zyvoloski owns and lives in property adjacent to the daycare in question. 7. Mr. Zyvoloski’s Complaint alleges that: A. Staff within the City Attorney’s Office “deviated from the City’s Standards of Conduct, created a Conflict of Interest, and conducted actions that meet the standard of Improper Government Actions DocuSign Envelope ID: 75D8A16C-CD13-450B-9A26-A79A2D4AB651 2 as defined and identified in the City’s Code of Ethics by their procedural misconduct in connection with the disputed licensing of a home-based daycare in violation of the BMC”; B. The procedural improprieties surrounding the disputed licensing decision, the appeal, and related administrative rule change were not “fair and impartial”; C. His procedural rights were violated by the canceling of a City Commission hearing date, thereby denying him his appeal rights under Section 12.02.190, BMC; D. Promulgation of a new administrative rule requiring daycare licensing and subsequent communications with the daycare at issue regarding this new licensing requirement displayed unethical “favoritism, partiality and bias,” constituting an alleged conflict of interest, by allegedly advancing or protecting “the personal and/or financial interests of the home-based business that was the subject of our pending appeal” outside of the “proper channels of government structure”;1 E. The above City conduct violated the Bozeman Municipal Code’s standards of conduct at Section 2.03.490, BMC and the conflict-of-interest prohibitions at Section 2.03.520, BMC; and F. The newly promulgated rule requiring certain daycare business licenses exceeds the authority delegated to the Community Development Director under Section 12.02.050, BMC. 8. On December 20, 2021, Mr. Zyvoloski submitted “supplemental information” to the Board which he asserts demonstrates that Assistant City Attorney Kelly Rischke had improper communication with the daycare operator about filling out the newly required business license. Mr. Zyvoloski claims these communications “secured a significant personal and/or financial favor for a single home-based business owner and influenced the Community Development Department to unlawfully pass a new Administrative Rule without public review or participation and undermined our procedural due process right to provide public comment before the business license was issued.” 9. Bozeman City Attorney Greg Sullivan and Assistant City Attorney Rischke, through counsel, submitted a response to Mr. Zyvoloski’s Ethics Complaint on January 7, 2022, arguing Mr. Zyvoloski’s claims of ethical violations were fatally vague and without factual basis. 10. The City’s response asserts that there were no violations of Mr. Zyvoloski’s due process rights because: A. The City complied with the Bozeman Municipal Code’s required procedures regarding Mr. Zyvoloski’s license complaint and appeal; B. No Municipal Code provisions barred the City either from taking action on Mr. Zyvoloski’s license complaint or amending City administrative regulations in response to the complaint; 1 Mr. Zyvoloski also extends these arguments to the City’s provision of assistance to the daycare when completing the new business license application. DocuSign Envelope ID: 75D8A16C-CD13-450B-9A26-A79A2D4AB651 3 C. City employees were permitted to be involved in the license complaint process and resolution; and D. Regardless, Mr. Zyvoloski received extensive “due process” through the City’s evaluation of Mr. Zyvoloski’s license complaint and appeal, which resulted in the relief Mr. Zyvoloski requested—the implementation of a business license requirement for home-based daycares. 11. The City contends there was no violation of either the Bozeman or Montana Code of Ethics and requests that the Board dismiss Mr. Zyvoloski’s Ethics Complaint with prejudice. 12. On January 17, 2022, pursuant to Section 2.03.640(D), BMC, the Board’s legal counsel, Jordan Y. Crosby, with the law firm of Ugrin Alexander Zadick, P.C., provided a preliminary written analysis, recommending the Board dismiss Mr. Zyvoloski’s Complaint with prejudice for failure to allege facts sufficient to constitute violations of the Bozeman Code of Ethics or the Montana Code of Ethics. 13. The Board held a public meeting on February 7, 2022, to address Mr. Zyvoloski’s Ethics Complaint and counsel’s preliminary written analysis. The affected parties to the Ethics Complaint were invited to attend and allowed the opportunity to present on their respective positions. Significant questions were asked by the Board to the participants and public comment was also taken. JURISDICTION 14. As an initial threshold matter, the Board must address the issue of its jurisdiction over the claims as alleged by Mr. Zyvoloski. 15. The Board’s jurisdiction is defined by Montana law and BMC and is limited to hearing ethics complaints related to alleged violation(s) of the Bozeman Code of Ethics and/or Montana Code of Ethics. See § 2-2-144(5)(a), MCA; Sections 2.03.600(A)(3) and 2.03.640(E), BMC. 16. In his December 20, 2021, supplement and at the February 7, 2022, meeting, Mr. Zyvoloski asserted alleged violations of Montana’s open meeting laws regarding the Bozeman City Commission December 14, 2022, meeting. 17. Montana’s open meeting laws are found in Title 2, Chapter 3, Part 2, which is not within the authority of this Board, thus the Board lacks jurisdiction to address these claims and they should be dismissed pursuant to Section 2.03.640(M)(1)(b), BMC. DUE PROCESS VIOLATIONS 18. Due process is a constitutional limitation on the deprivation of life, liberty, or property without appropriate procedure. City of Missoula v. Mountain Water Co., 2016 MT 183, ¶ 24, 384 Mont. 193, 378 P.3d 1113. 19. To demonstrate a violation of procedural due process, the party must make a showing “that a property or liberty interest exists,” as “[i]f there is a property or liberty interest at stake, procedural due process requires that a person ‘must be given an opportunity to explain, argue and rebut any information DocuSign Envelope ID: 75D8A16C-CD13-450B-9A26-A79A2D4AB651 4 that may lead to a deprivation of life, liberty, or property.’” State v. Samples, 2008 MT 416, ¶ 29, 347 Mont. 292, 198 P.3d 803. 20. A party “cannot establish a property interest in a procedure itself,” and “a public official’s discretion may prevent the creation of a property right sufficient to support a claim that due process was denied[.]” ISC Distributors, Inc. v. Trevor, 273 Mont. 185, 192, 903 P.2d 170, 174 (1995). 21. Montana law does not recognize a procedural due process right in abstract procedure without a cognizable liberty or property right that would be implicated by that procedure. Id., 273 Mont. at 192, 903 P.2d at 174. 22. In his Complaint, Mr. Zyvoloski does not point to any property interest granted to him by either state law or BMC. 23. Mr. Zyvoloski’s lack of any cognizable property interest in the dispute precludes him from establishing a procedural due process claim here. Beasley v. Flathead Cty., 2009 MT 121, ¶ 16, 350 Mont. 177, 206 P.3d 915. 24. While procedural due process is not implicated by Mr. Zyvoloski, the record further demonstrates Mr. Zyvoloski was afforded significant process in conformity with the requirements of the BMC. 25. Mr. Zyvoloski’s initial complaint requested investigation of the daycare’s lack of a business license, appropriate action under Chapter 12 in response to the lack of a business license, and, on appeal, reconsideration of the City’s position that the daycare did not require a business license. 26. The record demonstrates that Mr. Zyvoloski was granted all these forms of relief—the City investigated the issue and was persuaded that requiring a license was reasonable. The City utilized delegated authority to craft an administrative regulation addressing the present daycare and prospectively and proactively requiring all other similarly situated daycares to obtain business licenses. The City affirmatively granted Mr. Zyvoloski the reconsideration his appeal requested. 27. Furthermore, the issue Mr. Zyvoloski presented—the daycare’s lack of a business license—ceased to exist after the City promulgated a regulation generally requiring such a license and the daycare obtained that license. As such, Mr. Zyvoloski did not have an abstract right to further pursue an appeal where the issue was mooted by the City granting the relief he sought during that appeal. Country Highlands Homeowners Ass'n, Inc. v. Bd. of Cty. Commissioners of Flathead Cty. ex rel. Hall, 2008 MT 286, ¶ 22, 345 Mont. 379, 191 P.3d 424. This action thus removed any need for further process or procedure. 28. The record further demonstrates that Mr. Zyvoloski was ultimately heard by the City Commission on December 14, 2021, pursuant to his second appeal. He and his counsel were provided a full opportunity to contest promulgation of the administrative rule and issuance of the license. 29. In summary, Mr. Zyvoloski’s due process arguments fail to allege facts sufficient to demonstrate the City took any action constituting a violation of the Bozeman Code of Ethics or violation of the Montana Code of Ethics and should be dismissed pursuant to Sec. 2.03.640(M)(1)(a), BMC. DocuSign Envelope ID: 75D8A16C-CD13-450B-9A26-A79A2D4AB651 5 CONFLICT OF INTEREST 30. Section 2.02.520, BMC provides a prohibition against a “conflict of interest” and bars City officials and employees from engaging in business which conflicts with City duties or taking official action where the official or employee “has a financial or personal interest in a transaction or matter with the city.” See Section 2.03.520(B) & (C), BMC. 31. The Bozeman Code of Ethics also prohibits, as an improper conflict of interest, employees, or officials from representing or appearing on behalf of individuals or entities in proceedings or transactions before the City. See Section 2.03.520(E) and (F), BMC. 32. The Code of Ethics defines a “financial interest” as ownership, a contractual relationship, business relationship, or other interest “which will result in a monetary or other material benefit to an official or employee[.]” See Section 2.02.470(6), BMC. 33. A “personal interest” is defined as “any interest in the matter which would affect the action of the official or employee other than a financial interest, and other than an interest because of membership in, or affiliation with, but not employment by a social, fraternal, charitable, service, educational, religious, governmental, health service, philanthropic, cultural, or similar nonprofit institution or organization.” See Section 2.03.470(10), BMC. 34. The Montana Code of Ethics at § 2-2-102(6), MCA, similarly defines “private interest” to mean an ownership interest in a business, a creditor interest, employment or prospective employment, ownership in real property, a loan, or a directorship or officership in a business. 35. A public official lacks an improper private interest where that official does not receive compensation, benefit, or gain from the entity in question. See Mountain States Ins. Co. v. State, By & Through Bd. of Hail Ins., Dep’t of Agric., 218 Mont. 365, 369, 708 P.2d 564, 567 (1985). 36. Mr. Zyvoloski fails to put forth any facts demonstrating any City employee has a “financial interest” in the subject daycare as that phrase is defined by Section 2.03.470(6), BMC. 37. Beyond unclear and unsubstantiated allegations that City officials desired the subject daycare to become licensed, Mr. Zyvoloski also does not allege facts sufficient to demonstrate a “personal interest” as that phrase is defined in Section 2.03.470(10), BMC. 38. Whether the financial or personal interest of the subject daycare was furthered by City action is irrelevant under the controlling “conflict of interest” definitions. There is no indication in the record that any City employee or official acted, either through promulgation of the administrative rule or assistance with the daycare’s subsequent application, to improperly further that employee or official’s financial or personal interest. See Section 2.03.520(E) and (F), BMC 39. Nor is there any indication or claim that any City official or employee derived any financial or personal gain or benefit from any action taken in response to Mr. Zyvoloski’s complaints and appeals, as that is defined under Montana’s Code of Ethics. DocuSign Envelope ID: 75D8A16C-CD13-450B-9A26-A79A2D4AB651 6 40. Mr. Zyvoloski’s Complaint fails to allege facts sufficient to demonstrate the City, and more importantly Assistant City Attorney Rischke, took any action in response to his complaints or appeals due to an improper “conflict of interest” as defined by the Bozeman and/or Montana law, and such claims should be dismissed pursuant to Sec. 2.03.640(M)(1)(a), BMC. STANDARDS OF CONDUCT 41. Bozeman Code of Ethics “standards of conduct” generally require fair, impartial, moral, and honest discharge of City responsibilities. Sec. 2.03.490, BMC. 42. Per Section 12.02.050, BMC, the Bozeman City Commission has expressly delegated administrative authority to the Community Development Director to “promulgate and enforce all reasonable rules and regulations necessary to the operation and enforcement of this chapter.” As a check on this agency’s authority, such promulgated rules are “subject to commission review and modification.” Section 12.02.050, BMC. 43. On December 14, 2021, the City Commission heard Mr. Zyvoloski’s appeal and directly considered the procedural propriety of the promulgation of Administrative Rule 2021-01. A 5-0 vote of the City Commission upheld the adoption of Administrative Rule 2021-01. The City properly exercised its right to review the rule. 44. Furthermore, the facts presented demonstrate that the general application of the administrative rule, promulgated to impose a new requirement sought by Mr. Zyvoloski, suggests that the rule was impartially developed to apply to a broad range of future daycare applicants, not just the subject applicant here. 45. Mr. Zyvoloski failed to present evidence that City employees, in particular Assistant City Attorney Rischke, assisted the daycare with applying for a business license in a dishonest manner outside the normal range of interactions with any potential applicant for a City license. 46. Nor did Mr. Zyvoloski offer evidence beyond speculation that the City Attorney’s office delayed consideration of his second appeal to disadvantage his presentation. The record of the December 14, 2021, hearing demonstrates that Mr. Zyvoloski and his counsel were allowed to fully present the same substantive arguments that motivated his licensure complaint from the beginning. 47. Mr. Zyvoloski also fails to demonstrate that the City’s actions in promulgating the administrative rule, assisting with the daycare’s license, dismissing the first appeal, or scheduling the second appeal were unfair, partial, immoral, or dishonest. 48. Mr. Zyvoloski fails to allege facts sufficient to demonstrate that City employees deviated from the “standards of conduct” found at Section 2.03.490, BMC, and such claims should be dismissed pursuant to Sec. 2.03.640(M)(1)(a), BMC. DocuSign Envelope ID: 75D8A16C-CD13-450B-9A26-A79A2D4AB651 7 IMPROPER GOVERNMENT ACTIONS 49. An “improper government action” is an action that violates the standards of conduct in the Bozeman Code of Ethics, violates standards in the Montana Code of Ethics, or is intended to harass, intimidate, or retaliate against a member of the public for protected conduct. See Section 2.03.470(8), BMC. 50. The Bozeman Code of Ethics requires complainants to specifically describe the factual bases for alleged ethical violations. See Section 2.03.640(B), BMC. 51. Mr. Zyvoloski does not offer separate support for his “improper government action” claims beyond a cursory connection with the allegations he makes to other alleged ethical violations. 52. Accordingly, Mr. Zyvoloski has failed to allege facts sufficient to demonstrate that City employees engaged in improper government action, and such claims should be dismissed pursuant to Sec. 2.03.640(M)(1)(a), BMC. PUBLIC TRUST 53. Mr. Zyvoloski perfunctorily claims that the above City actions breached the “public trust” as defined in the Montana Code of Ethics. 54. Mr. Zyvoloski fails to substantiate his allegations of a public trust violation in a manner different from the above allegations. 55. Accordingly, in line with the above conclusions, Mr. Zyvoloski fails to allege facts sufficient to demonstrate that City employees breached the public trust, and thus such claims should be dismissed pursuant to Sec. 2.03.640(M)(1)(a), BMC. . CONCLUSION 56. For the reasons stated herein, and the oral findings entered into the record by the Board at the public meeting on February 7, 2022, the Board accordingly dismisses the entirety of Mr. Zyvoloski’s December 8, 2021, Ethics Complaint pursuant to Sec. 2.03.640(M)(1)(a), BMC with prejudice for failure to allege facts sufficient to constitute a violation of the Bozeman Code of Ethics or violation of the Montana Code of Ethics. DATED this _____ day of March, 2022. Board of Ethics: ___________________________________ ____________________________________ Chairperson Sara Rushing Board Member Melissa Frost ____________________________________ Board Member Kristin Taylor DocuSign Envelope ID: 75D8A16C-CD13-450B-9A26-A79A2D4AB651 31 Certificate Of Completion Envelope Id: 75D8A16CCD13450B9A26A79A2D4AB651 Status: Completed Subject: Please DocuSign: Findings Conclusions 3.31.22.pdf Source Envelope: Document Pages: 7 Signatures: 3 Envelope Originator: Certificate Pages: 5 Initials: 0 Mike Maas AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-07:00) Mountain Time (US & Canada) Stamps: 1 PO Box 1230 Bozeman, MT 59771 Mmaas@bozeman.net IP Address: 69.145.83.100 Record Tracking Status: Original 5/13/2022 7:54:13 AM Holder: Mike Maas Mmaas@bozeman.net Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Bozeman Location: DocuSign Signer Events Signature Timestamp Kristin Taylor ktaylor@bozeman.net Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Signed by link sent to ktaylor@bozeman.net Using IP Address: 71.15.208.172 Sent: 5/13/2022 8:08:19 AM Viewed: 5/13/2022 9:45:17 PM Signed: 5/13/2022 9:47:43 PM Electronic Record and Signature Disclosure: Accepted: 5/13/2022 9:45:17 PM ID: 43cfc815-e9d2-41b0-9032-77e43ab7baff Melissa D Frost mfrost@bozeman.net Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Signed by link sent to mfrost@bozeman.net Using IP Address: 69.145.230.156 Sent: 5/13/2022 8:08:19 AM Viewed: 5/17/2022 5:20:54 PM Signed: 5/17/2022 5:21:39 PM Electronic Record and Signature Disclosure: Accepted: 5/17/2022 5:20:54 PM ID: c3608b38-3f6a-4921-b5be-cc356c4537bf Mike Maas mmaas@bozeman.net City Clerk City of Bozeman Security Level: Email, Account Authentication (None) Signed Using IP Address: 69.145.83.100 Sent: 5/13/2022 8:08:20 AM Viewed: 5/19/2022 12:21:16 PM Signed: 5/19/2022 12:21:22 PM Electronic Record and Signature Disclosure: Accepted: 1/6/2020 4:08:14 PM ID: 79370d6f-72a4-4837-866f-9ec31f00062f Signer Events Signature Timestamp Sara Rushing srushing@bozeman.net Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Signed by link sent to srushing@bozeman.net Using IP Address: 71.15.194.199 Sent: 5/13/2022 8:08:19 AM Viewed: 5/13/2022 11:59:02 AM Signed: 5/13/2022 11:59:31 AM Electronic Record and Signature Disclosure: Accepted: 5/13/2022 11:59:02 AM ID: 83348c8f-5535-4813-a5c6-2de7e8daa2f8 In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Jordan Crosby jyc@uazh.com Shareholder/Partner Security Level: Email, Account Authentication (None) Sent: 5/13/2022 8:08:20 AM Viewed: 5/13/2022 8:21:46 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Taylor Chambers tchambers@bozeman.net Deputy City Clerk City of Bozeman Security Level: Email, Account Authentication (None) Sent: 5/19/2022 12:21:03 PM Viewed: 5/19/2022 12:22:17 PM Electronic Record and Signature Disclosure: Accepted: 3/24/2022 1:28:15 PM ID: 7770590b-35e8-4919-90d1-558ea0905ea5 Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 5/13/2022 8:08:20 AM Certified Delivered Security Checked 5/13/2022 11:59:02 AM Signing Complete Security Checked 5/13/2022 11:59:31 AM Completed Security Checked 5/19/2022 12:21:22 PM Payment Events Status Timestamps Electronic Record and Signature Disclosure CONSUMER DISCLOSURE From time to time, City of Bozeman (we, us or Company) may be required by law to provide to you certain written notices or disclosures. 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