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HomeMy WebLinkAbout04-25-12 agenda item F. Gift provisions and G. removal of official Memorandum to the City of Bozeman Board of Ethics FROM: Greg Sullivan, City Attorney Aimee Kissel, Deputy City Clerk MEETING DATE: April 25, 2012 RE: Action on Recommendations to City Commission Regarding Amendments to City Code of Ethics Sections 2.03.540 (amending gift provisions) and 2.03.600 (authorizing removal of official for non-attendance at ethics trainings). RECOMMENDATION: Approve recommendations to the Bozeman City Commission to amend Bozeman Code of Ethics Sections 2.03.540 and 2.03.600. MOTION: I move to adopt the amendments to Sections 2.03.540 related to gifts and Section 2.03.600 related to City Commission oversight of an officials attendance at ethics training as shown in this memorandum; and recommend the Bozeman City Commission adopt an ordinance with the changes. BACKGROUND: This memorandum addresses two of your action items on April 25: the discussion on gift provision (agenda item F) and the discussion on the ramification for failure to obtain the annual ethics training (agenda item G). Pursuant to Sect. 2.03.600.A.4.b, the Board of Ethics may "Recommend any legislative or administrative actions regarding the city's policies and practices which the board believes would or could enhance the ethical environment in which public servants work." Upon your adoption we will forward your recommendations to the City Commission in the form of an ordinance on the next available Commission agenda. I. Amendments to the Code of Ethics' Gift Provisions. Over the past several meetings you have discussed several options for addressing the gift provision in the City of Bozeman's Code of Ethics (Chet. 3, Art. 3, BMC). At your February 15th meeting I provided you a staff report (attached) that addressed numerous options for revising the gift provision in the Code of Ethics. Based upon your discussion on February 15th, I provide the following for your consideration and adoption as a recommendation to the City Commission: Staff Memo for April 25,2012 Action Items F and G Page 1 of 4 Sec. 2.03.540. - Gifts, gratuities and favors. A. No official or employee shall accept a gift, gratuity, or favor from any person or entity that:; 1. Would tend improperly to influence a reasonable person in the person's position to depart from the faithful and impartial discharge of the person's public duties, or 2. The person knows or that a reasonable person in that position should know under the circumstances is primarily for the purpose of rewarding the person for official action taken. B. An employee or official may not accept a ig ft, gratuity, or favor that complies with 2.03.540.A if the gift, rg atuity, or favor has a value of$50 or more for an individual. C. An employee or official may accept a gift, gratuity, or favor that complies with 2.03.540.A if the ig ft gratuity or favor has a value greater than $15 but less than $50 for an individual only if the gift, gratuity, or favor is: 1. Provided incidental to and in conjunction with a public event where the official or employee's attendance is in fulfillment of their official duties, or 2. Constitutes an award publicallyspresented to an employee or official in recognition of public service. D. Upon the acceptance of a gift, gratuity, favor or award pursuant to 2.03.540.0 the recipient shall file a disclosure statement with the Board of Ethics. Such disclosure statement shall indicate the gift, it's estimated value, the person or entity making the gift, and the date of the gift. The disclosure statement is a public record. The highlighted sections address your discussion on the dollar thresholds. Subsection A creates the general rule that a gift cannot be accepted if the gift violated either A.l or A.2. The language from A.1 and A.2 is pulled directly from state law at 2-2-104(1)(b) (see code at attached 2/15/12 memo). Subsection B makes it clear that even if a gift complies with subsection A it may not be accepted if its value is greater than $50. Of course, you may alter this dollar threshold. Subsection C addresses the two main exceptions you discussed at your February meeting: (i) ensuring an official has the capacity to carry out their duties; and (ii) ensuring that employees that deserve recognition are not prohibited from accepting a personal item for that service. What is NOT expressly mentioned but is clearly authorized by implication is that a gift with a value of $15.00 or less can be accepted without facts that make it fit into the categories listed in Subsection C. The result of the proposed changes is that under no circumstances can a gift be accepted if it violates the standards of subsections A.1 and A.2. Next, even if the gift complies with A.1 and Staff Memo for April 25,2012 Action Items F and G Page 2 of 4 A.2 it cannot be accepted if it exceeds the dollar value established in subsection B. Subsection C then sets a relatively tight standard for gifts between $15 and $50. Gifts under $15 can be accepted as long as the gift doesn't run afoul of A.I and A.2. You also discussed the possibility of a disclosure requirement. I added language into subsection D. This subsection requires disclosure for gifts that fall within the dollar limit and exceptions in subsection C. This section also makes it clear the disclosure is a public record. Please note we are researching the year the $50 limit was put into Montana state law and will have more on this for your meeting on Wednesday. II.Amendments to the Code of Ethics' provisions on annual trainings for officials. You also discussed this item previously at the February 15th meeting. The citizen approved Bozeman City Charter adopted in 2008 states within Section 7.01(b) `The city commission shall appropriate sufficient funds to the city manager to provide annual training and education of city officials, city boards, and employees regarding the state and city ethics codes. City officials, board members, and employees shall take an oath to uphold the state and city ethics codes. '(Emphasis added). Ordinance No. 1759 passed in 2009 further clarified the meaning of this mandate. This is contained within section 2.01.130, BMC, Duties and Powers of the Board, A.14: "...in coordination with the City Attorney, City Manager, and other appropriate City personnel, arrange for the conduct of an annual workshop, which shall serve as an orientation for new Board members and an opportunity for experienced members to explore specific issues in depth; attendance at this workshop shall be made a condition of service as a member of the board, and, before taking office, Board members shall commit themselves to attend it." The City is now finishing up the third round of annual ethics trainings as required. Questions have been raised as to the appropriate consequences and procedures to be taken if a board or committee member (official) does not attend the annual training. In the past, the city clerk has informed Commissioners at the time of re-appointment if a board member has failed to take the training. Since terms usually extend two to four years, this practice is not timely and does little to ensure compliance with the requirement. During the February 15, 2012 Board of Ethics meeting, Deputy City Clerk Aimee Kissel asked the board for advice regarding Advisory Board model Rules of Procedure related to consequences for non-compliance with the ethics training requirement. During that meeting, board members said they would rather see consequences written directly into the code of ethics with a reference in the Model Rules of Procedure. Board of Ethics members directed staff to draft an addition to the Code of Ethics. Board of Ethics members also confirmed they would like new board and committee members to take the brief online ethics training and then also attend the more in-depth yearly training being offered that year. Re-occurring board members, having Staff Memo for April 25,2012 Action Items F and G Page 3 of 4 already taken the online training at first appointment would just be subject to the in-depth yearly training. We suggest the following amendments to the Code of Ethics to address the authority of the City Commission for an official's failure to attend the required training: 2.03.600. —Duties and powers of the board. A. 14. In coordination with the city attorney, city manager, and other appropriate city personnel, arrange for the conduct of an annual workshop, which shall serve as an orientation for new board members and an opportunity for experienced members to explore specific issues in depth_, a. -aAttendance at this workshop shall be made a condition of service as a member of the board, and, before taking office, board members shall commit themselves to attend it. b. The City Clerk shall forward to the Commission annually a list of officials who fail to take the training required under this section and the Charter. The Commission may remove an official for failing to take the required training. Board of Ethics members also discussed what alternatives board and committee members may have if extenuating circumstances prevented their attendance at one of the annual ethics trainings. Board of ethics members advised that in these cases, board members would be allowed to take the online training a second time to fulfill this requirement as long as the member was not habitually missing training. We recommend the Board of Ethics consider whether another alternative to taking the online training a second time may be appropriate for those who did not attend training due to extenuating circumstances. For example, an alternative that may be offered in the future may be watching a video recording of the training or writing essay type answers to several provided case studies. The Board of Ethics and staff could then consider alternatives on an annual basis, allowing for flexibility as the ethics program continues. Attachments: • Feb 15th Memo to Board of Ethics from Greg Sullivan Report by: Greg Sullivan and Aimee Kissel on April 23, 2012 Staff Memo for April 25,2012 Action Items F and G Page 4 of 4 City of Bozeman City Attorney's Office Greg Sullivan, City Attorney t69�,r� CO.8 0 Tim Cooper, Staff Attorney Susan L. Wordal, Staff Attorney Kyla Murray, Staff Attorney Ryan McCarty, Staff Attorney Anna Saverud, Staff Attorney February 15, 2012 To: Bozeman Ethics Board FR: Greg Sullivan, City Attorney C: Aimee Kissel; Trisha Gowen; Chris Kukulski RE: Ethics Code provisions implementing the Charter; proposal for addressing gifts and discussion on post-employment activities in the City and State ethics codes Charter on Ethics: The Bozeman Charter (Sect. 7.01(a)) establishes specific ethical principles that are required to be addressed "by Ordinance" (i.e. through the City's Code of Ethics). As a tool for your use in addressing legislative changes I provide a list of each Charter principle required to be addressed in the Code of Ethics. Within each principle I then provide a list of the Code provisions that I believe directly and indirectly address that provision. "The use of public office for private gain is prohibited. The Commission shall implement this prohibition) by Ordinance the terms of which shall include but not be limited to: Acting in an official capacity upon matters in which the official has a private financial interest clearly separate from that of the general public; to the acceptance of gifts and other things of value; acting in a private capacity on matters dealt with as a public official, the use of confidential information; in the appearances by city officials before other city agencies on behalf of private interests. This Ordinance shall include a statement of purpose and shall provide for reasonable public disclosure and finances by officials with major decision making authority over monetary expenditures and contractual and regulatory matters. " Bozeman City Charter, Sect. 7.01(a). f. The use of public office for private gain is prohibited. a. 2.03.460 (Declaration of policy) b. 2.03.490.D, F (Standards of Conduct) c. 2.03.500 (Use of City resources) Streel,?A QsP� ]North Rouse Phone: (406)582-2309 Mailing Address:P.O. Box 1230 Fax: (406)582-2302 Bozeman,Montana 59771-1230 TDD: (406)582-2301 d. 2.03.520.A, B (Conflict of Interest) e. 2.03.530.B (Confidential Information) £ 2.03.540 (Gifts, gratuities, favors) g. 2.03.550 (Financial disclosure statement) h. 2.03.560.A (Post-employment activities) 2. Acting in an official capacity upon matters in which the official has a private financial interest clearly separate from that of the general public. a. 2.03.460 (Declaration of policy) b. 2.03.470.A (Definition offrnancial interest and personal interest). c. 2.03.490.A, B, D, F (Standards of Conduct) d. 2.03.500 (Use of City resources) e. 2.03.520.A, B, C, D (Conflict of Interest) f. 2.03.530.A, B (Confidential information) g. 2.03.540 (Gifts, gratuities, favors) h. 2.03.550 (Financial disclosure statement) i. 2.03.560.A (Post-employment activities) 3. The acceptance of gifts and other things of value. a. 2.03.460 (Declaration of policy) b. 2.03.540 (Gifts, gratuities, favors) c. 2.03.500 (Use of City resources) d. 2.03.490.A (Standards of Conduct) 4. Acting in a private capacity on matters dealt with as a public official. a. 2.03.460 (Declaration of policy) b. 2.03.490.A, B, D, E, F, G (Standards of Conduct) c. 2.03.520.A (Conflict of Interest) 5. The use of confidential information. a. 2.03.460 (Declaration of policy) b. 2.03.530.A, B (Confidential information) c. 2.03.490.A, B, F (Standards of Conduct) 6. The appearances by city officials before other city agencies on behalf of private interests. a. 2.03.460 (Declaration of policy) b. 2.03.520.A, B, C, D, E (Conflict of Interest) c. 2.03.560. A (Post-employment activities) d. 2.03.570 (Public notice required) 7. Statement of purpose. a. 2.03.460 (Declaration of policy) Page 2 of 6 8. Provide for reasonable public disclosure and finances by officials with major decision making authority over monetary expenditures and contractual and regulatory matters. a. 2.03.550 (Financial disclosure statement) b. 2.03.560.A (Post-employment activities) c. 2.03.570 (Public notice required) Gifts: The current Bozeman Municipal Code's gift provision states: Sec. 2.43.540. - Gifts, gratuities and favors. No official or employee shall accept a gift, gratuity, or favor from any person or entity, except as authorized by law. As requested during the Iast meeting, I provide the following options as you consider formulating a legislative recommendation to the City Commission. The Board could consider the following (or a combination of the following): • No action. The result would be the BMC's prohibition on acceptance of gifts would remain. • Repeal the Bozeman Municipal Code's gift provision. o The result would be the gift provision in the Montanan Code Annotated (MCA) would apply (see attached at 2-2-102 and 104, MCA). This approach may not fully comply with the Charter requirement that the Code of Ethics address "the acceptance of gifts and other things of value." ■ The Board could, however, consider replacing the existing Code of Ethics provision in place of a provision that states the acceptance of gifts and other things of value by officials and employees his subject to the limitations in state law]. • Amend the prohibition to state a gift may be accepted "in compliance with" state law rather than "as authorized by state law." I do not recommend this approach as it has the potential to create confusion and would serve the same purpose as a repeal of the municipal code provision in favor of state law (see above). Sec. 2.03.540.- Gifts, gratuities and favors. No official or employee shall accept a gift, gratuity, or favor from any person or entity, except as in compliance with state law authorized by4aw. • Clarify that a public recognition of service is not a gift. Page 3 of 6 o The Board could consider defining certain contributions to city employees or officials as other than gifts. For example, the Board could consider defining gift to mean other than an award publically presented to an employee or official in recognition of public service. Please note this language mirrors Montana law at 2-2-102(3)(b)(ii), MCA. You could also consider placing an upper dollar value on such a publicly granted gift. See below. • Clarify that items provided to an employee or official which are incidental to attendance at a public event are not gifts. o The Board could consider defining gift to not include gratuities to officials or employees incidental to and in conjunction with a public event where the official or employee's attendance is ui in fulfillment of their official duties. • A specific dollar amount could be used to help define "incidental." • The Board could also consider the language adopted in Montana law at 2-2- 102(3)(b)(ii) which excludes from the definition of "gift of substantial value" certain "food and beverages consumed on the occasion when participation in a charitable, civic, or community event bears a relationship to the public officer's or public employee's office or employment or when the officer or employee is in attendance in an official capacity." Please note that the above exeg tion is for "food and beverages" only. • Address "intent" of the gift and/or the "value" of a gift. o Currently, Montana law provides rules regarding gifts to public employees and official in terms of purpose/intent of the gift and the dollar value of the gift. See the attached statutes. ■ 2-2-104, MCA, prohibits a public officer/employee from accepting a "gift of substantial value" which "...would tend improperly to influence a reasonable person in the person's position to depart from the faithful and impartial discharge of the person's public duties; or that the person knows or a reasonable person in that position should know under the circumstances is primarily for the purpose of rewarding the person for official action taken." • The key phrases in the first subsection are: o "tend improperly to influence" o "reasonable person in the person's position" o "depart from the faithful and impartial discharge of the person's public duties" • The key phrases in the second subsection are: o "person knows or a reasonable person in that position should know" o "under the circumstances" o "primarily for the purpose of rewarding the person" o "for official action taken" Page 4 of 6 o The Board could consider addressing an upper limit on the value of a gift. Montana law provides a benchmark of$50 as to whether a gift is of"substantial value." State law does not prohibit gifts above $50 if the proscribed intent provisions are not violated. Also, State law does not provide a temporal component to the rule (i.e. "within a year period"). • You have previously discussed whether $50.00 would be an appropriate amount. 1 suggest you continue that discussion in terms of changes to the cost of goods/services over time and in relation to specific items which may most often be given as a gift (tickets/meals/awards, etc.). • Such a statement could read something along the lines of notwithstanding any other provision of this division an official or employee may not accept a gift, gratuity,favor, or award of more than $xx.xx. o The Board could consider creating an outright prohibition on acceptance of a gift only if the purpose of the gift is to improperly influence or reward:No employee or official may accept a gift, gratuity, favor, or award of any kind if the gift, gratuity, favor, or award is made for the purpose of improperly influencing the employee or official to depart from the faithful and impartial discharge of employee's or official's public duties or, except as provided in [award exception], is made to reward that employee or official for official action taken. o You also discussed a disclosure requirement. The Board could consider language in the gift provision similar to that currently in 2.03.570 (public notice required [for post employment activities]): Upon the acceptance of a gift, gratuity, or award pursuant to [this section] the recipient shall file a disclosure statement with the Board of Ethics. Such disclosure statement shall indicate the gift, its estimated value, the person or entity making the gift, and the date of the gift. Such disclosure is a public record and shall be made available to the public by posting on the City's external website. Post-Employment Activities: The current City post-employment activity provision is found at 2.03.560. Montana law addresses similar but different principles at 2-2-201 and 2-2-202, MCA. The main differences between the BMC and statutory provisions are: • The City Code of Ethics has a 12-month period for both officials and employees. There is no statutory period related to contracts for officials in state law but state law does address a statutory period of 6-months for employees. Montana law also has a 12-month period for which an officer or employee may not "obtain employment." See discussion below. • The City prohibition is directed toward: o "making any formal or informal appearance before, or negotiate[ing] with any decision maker on any matter which was under the public servant's direct responsibility as a public servant;" and Page 5 of 6 o "act[ing] on behalf of any party other than the city in connection with any matter in which the former public servant participated personally and substantially as a public servant." • The City Code of Ethics provides a means to avoid the local requirements for post-employment activities upon notice. 2.03.570. State law does not provide a similar provision. • The Montana statutes prevent "officials" and "employees" of the city from being "interested in" a contract made by them in their official capacity or by any board...of which they are a member if they are "directly involved in the contract." • The Montana statute prevent "employees" from contracting with or being employed by an entity that contracts with the with the state or any of its subdivision in "matters with which the former employee was directly involved during employment." • The Montana law provides a definition of"be interested in," "directly involved," and "former employee." • Montana law also prohibits an employee during the 12-months following employment from obtaining employment "in which the officer or employee will take direct advantage, unavailable to others, of matters with which the officer or employee was directly involved..." The prohibition continues by making it clear these matters are specific rather than general and must have been ones "that the officer or employee actively helped to formulate and applications, claims, or contested cases in the consideration of which the officer or employee was an active participant." AS you can see, the "post employment activities"provisions in the City's Code of Ethics address similar but different principles than the state law. The City provisions address "appearing before" or "negotiating with" City decision makers while the Montana statutory provisions address contracts/claims and employment in situations in which the former public servant could rely upon specific information obtained while in service. I have not formulated specific recommendations regarding the post-employment provisions of the City Code of Ethics as I believe additional discussion may be helpful. Page 6 of 6 Montana statutory gift provisions: 2-2-102. Definitions. As used in this part, the following definitions apply: (3) (a) "Gift of substantial value" means a gift with a value of$50 or more for an individual. (b) The term does not include: (i) a gift that is not used and that, within 30 days after receipt, is returned to the donor or delivered to a charitable organization or the state and that is not claimed as a charitable contribution for federal income tax purposes; (ii) food and beverages consumed on the occasion when participation in a charitable, civic, or community event bears a relationship to the public officer's or public employee's office or employment or when the officer or employee is in attendance in an official capacity; (iii) educational material directly related to official governmental duties; (iv) an award publicly presented in recognition of public service; or (v) educational activity that: (A) does not place or appear to place the recipient under obligation; (B) clearly serves the public good; and (C) is not lavish or extravagant. 2-2-104.Rules of conduct for public officers, legislators, and public employees. (1) Proof of commission of any act enumerated in this section is proof that the actor has breached the actor's public duty. A public officer, legislator, or public employee may not: (a) disclose or use confidential information acquired in the course of official duties in order to further substantially the individual's personal economic interests; or (b) accept a gift of substantial value or a substantial economic benefit tantamount to a gift: (i) that would tend improperly to influence a reasonable person in the person's position to depart from the faithful and impartial discharge of the person's public duties; or (ii) that the person knows or that a reasonable person in that position should know under the circumstances is primarily for the purpose of rewarding the person for official action taken. (2) An economic benefit tantamount to a gift includes without limitation a loan at a rate of interest substantially lower than the commercial rate then currently prevalent for similar loans and compensation received for private services rendered at a rate substantially exceeding the fair market value of the services. Campaign contributions reported as required by statute are not gifts or economic benefits tantamount to gifts. Montana statutory provisions related to "post employment activities" 2-2-201. Public officers, employees, and former employees not to have interest in contracts. (1) Members of the legislature; state, county, city, town, or township officers; or any deputies or employees of an enumerated governmental entity may not be interested in an contract made by them in their official capacity or by any body, agency, or board of which they are members or employees if they are directly involved with the contract. A former employee may not, within 6 months following the termination of employment, contract or be employed by an employer who contracts with the state or any of its subdivisions involving matters with which the former employee was directly involved during em to ent. (2) In this section, the term: (a) "be interested in" does not include holding a minority interest in a corporation; (b) "contract" does not include: (i) contracts awarded based on competitive procurement procedures conducted after the date of employment termination; (ii) merchandise sold to the highest bidder at public auctions; (iii) investments or deposits in financial institutions that are in the business of loaning or receiving money; (iv) a contract with an interested party if, because of geographic restrictions, a local government could not otherwise reasonably afford itself of the subject of the contract. It is presumed that a local government could not otherwise reasonably afford itself of the subject of a contract if the additional cost to the local government is greater than 10% of a contract with an interested party or if the contract is for services that must be performed within a limited time period and no other contractor can provide those services within that time period. (c) "directly involved" means the person directly monitors a contract, extends or amends a contract, audits a contractor, is responsible for conducting the procurement or for evaluating proposals or vendor responsibility, or renders legal advice concerning the contract; (d) "former employee" does not include a person whose employment with the state was involuntarily terminated because of a reduction in force or other involuntary termination not involving violation of the provisions of this chapter. History.En. Sec. 1020,Pol.C. 1895;re-en.Sec.368,Rev.C. 1907;re-en. Sec.444,R.C.M. 1921;Cal.Pol. C. Sec. 920;re-en. Sec.444,R.C.M. 1935;amd. Sec. 1,Ch,43,L. 1973;R.C.M. 1947, 59-501;amd. Sec. 1,Ch. 377, L. 1979; amd. Sec. 1, Ch.458,L. 1981; amd.Sec. 1,Ch.65,L. 1991;amd. Sec. 1,Ch.322,L. 1993;amd. Sec. 1, Ch. 181,L.2001, 2-2202. Public officers not to have interest in sales or purchases. State, county, town, township, and city officers must not be purchasers at any sale or vendors at any purchase made by them in their official capacity. History: En. Sec. 1021,Pol. C. 1895;re-en. Sec.369,Rev.C. 1907;re-en. Sec.445,R.C.M. 1921;Cal.Pol.C. Sec. 921;re-en. Sec.445,R.C.M. 1935;R.C.M. 1947,59-502. 2-2-105. Ethical requirements for public officers and public employees. (1) The requirements in this section are intended as rules of conduct, and violations constitute a breach of the public trust and public duty of office or employment in state or Iocal government. (2) Except as provided in subsection (4), a public officer or public employee may not acquire an interest in any business or undertaking that the officer or employee has reason to believe may be directly and substantially affected to its economic benefit by official action to be taken by the officer's or employee's agency. (3)A public officer or public employee may not within 12 months following the voluntary termination of office or employment, obtain employment in which the officer or employee will take direct advantage, unavailable to others, of matters with which the officer or employee was directly involved during a term of office or.during employment. These matters are rules, other than rules of general application,that the officer or employee actively helped to formulate and applications, claims, or contested cases in the consideration of which the officer or employee was an active participant. (4)When a public employee who is a member of a quasi-judicial board or commission or of a board, commission, or committee with rulemaking authority is required to take official action on a matter as to which the public employee has a conflict created by a personal or private interest that would directly give rise to an appearance of impropriety as to the public employee's influence, benefit, or detriment in regard to the matter, the public employee shall disclose the interest creating the conflict prior to participating in the official action. (5) A public officer or public employee may not perform an official act directly and substantially affecting a business or other undertaking to its economic detriment when the officer or employee has a substantial personal interest in a competing firm or undertaking. History:En. 59-1709 by Sec. 9,Ch. 569,L. 1977;R.C.M. 1947,59-1709; amd. Sec.4, Ch. 562,L. 1995.