7.6. SR 03-15-1993
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ITEM 7.6
MEMORANDUM
LARKIN, HOFFMAN, DALY & LINDGREN, LTD.
1500 Norwest Financial Center
7900 Xerxes Avenue South
Bloomington. Minnesota 55431
(612) 835-3800
TO:
Mayor Hank Duitsman
Members of the City Council
FROM:
DATE:
RE:
Peter Beck, City Attorney
March 10, 1993
Code of Ethics/Conflict of Interest
At its meeting on February 1, 1993, the City Council directed me
to review the Sherburne County conflict of interest policy and
advise the City Council regarding the potential adoption of a
code of ethics/conflict of interest/disclosure policy. I have
reviewed the County materials, the relevant state statutes, and
the City's existing personnel policies and make the following
report.
The City adopted a conflict of interest policy for employees
several years ago. The policy, which applies only to City
employees, is set forth in the City's Code of Ordinances, at
Section 218.08(9) (pages 2.46-2.47 of the City Code). A copy of
the existing policy is attached as Exhibit A for your
information. The policy directs City employees to avoid any
activity which suggests a conflict of interest between their City
responsibilities and their personal or family interests; defines
"family members;" sets forth several examples of activities to be
avoided; and directs employees engaging in any activity involving
either an actual or potential conflict of interest, or having
knowledge of such activity by another employee, to promptly
report said activity to the City Administrator. The policy does
not require annual disclosure of potential conflicts of interest.
The only conflict of interest policy currently applicable to the
City Council is found in Minnesota Statutes ~ 471.87-471.89.
This statute provides that a city council member may not have a
personal financial interest, either directly or indirectly, in
any contract the city makes.
The Minnesota State Ethics in Government Act, Minnesota Statutes
Chapter lOA, also addresses conflicts of interest. This law
requires that "public officials" and "local officials in a
metropolitan governmental unit" file annual statements of
economic interest with the State Ethical Practices Board and
disclose potential conflicts of interest by means of a written
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statement delivered to the officials' immediate superior. These
requirements are found in Minnesota Statutes Section 10A.09 and
Section 10A.O? These requirements do not presently apply to Elk
River or Sherburne County, because neither is a "metropolitan
governmental unit." (Sherburne County's policy was apparently
adopted in reaction to a directive from the State Auditor, rather
than by statutory requirement.) However, the state legislature
is considering amendments to the Ethics in Government Act this
session which apparently would apply to municipalities outside of
the metropolitan area, such as Elk River. We do not know at this
time whether this statute will be adopted or what its
requirements will be if it is adopted.
Elk River's existing conflict of interest policy goes beyond the
current requirements of applicable state law. However, the
policy could be strengthened further if the City Council saw fit
and, as noted above, state law may change requiring a stricter
polity. The options currently available to the City Council are
as follows:
1.
The Council could continue with the current City
conflict of interest policy, as set forth in the City
Code, revising it if and as necessary following action
by the Legislature on the proposed amendments to the
State Ethics in Government Act. We will monitor this
legislation on the City's behalf and report to the
Council if and when any legislation is adopted. Our
report would include recommendations on how to bring the
City's policy into compliance with the new state law.
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2. The Council could strengthen and expand the City's
conflict of interest policy by making it applicable to
City officials as well as employees, and broadening the
list of prohibited activities. I have prepared an
ordinance amendment for the City Council to consider
which would make the changes which we would recommend if
the Council elected to take this option. This proposed
amendment is attached as Exhibit B.
3. The Council could also adopt an annual disclosure
requirement similar to that found in the State Ethics in
Government Act and the County's "related party
transaction questionnaire." I have prepared an
ordinance amendment (Exhibit C) which would add this
requirement to the existing City Code. I have also
prepared a proposed conflict of interest questionnaire
(Exhibit D) which could be used as the annual disclosure
document. This questionnaire could be expanded and
revised from time to time without further ordinance
amendments.
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The City Council could take any of the three options outlined
above, or could combine options 2 and 3. Perhaps the most
efficient course of action would be to await legislative action
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on the proposed amendments to the Ethics in Government Act and
revise the City Code as necessary and appropriate to comply with
the new state legislation. The decision could be made at that
time whether to go beyond the requirements of state law in
imposing annual disclosure requirements.
I will be at the Council Meeting on March 15, 1993, to present
this report and answer any questions you may have. In the
meantime, please feel free to call me.
Attachments
cc: Patrick D. Klaers, City Administrator
PKB:HZOs
EXHIBIT A
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7. Resiqnation. Employees may terminate employment with
the City at any time and for any reason upon proper notice.
With the exception of ~epartment heads, City employees are
required to submit a written resignation to their supervisor at
least ten (10) working days prior to their anticipated
separation date.
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Department heads must provide twenty (20) working days written
notice to the City Administrator prior to their anticipated
separation date. Employees who terminate employment with the
City after giving proper written notice of such termination
shall be compensated for accrued but unused vacation time as of
the date of separation. Failure to comply with this notice
procedure may be considered reason for denying an employee
future employment with the City. An unauthorized absence from
work for a period of three (3) working days may be considered a
resignation without notice.
8. Supplemental Employment. Employees must devote all work
time to City business. No work relating to supplemental
employment may be performed during an employees regularly
scheduled hours. Employees may accept supplemental employment
while a City employee only if the following conditions are met:
a. The employee informs his/her supervisor of the duties
of the supplemental position and any potential conflict of
interest with City employment;
b. The supplemental employment does not conflict with
the overtime requirements of the employee's position with
the City; and
c. The supervisor approves of the supplemental
employment if it potentially conflicts with his/her City
employment.
9.
Conflict of Interest. The credibility of local
government rests heavily upon the confidence which
citizens have in public employees to render fair and
impartial services to all citizens without regard to
personal interest and/or political influence. Thus, City
employees must scrupulously avoid any activity which
suggests a conflict of interest between their private
interests and City 'responsibilities. Employees of the
City, or their family members, shall not engage or have
financial interest in any business or other activity which
could reasonably lead to a conflict of interest with the
employee's primary City responsibilities. "Family
members" of an employee shall be deemed to be the
employee's spouse, parents, children, siblings,
brothers-in-law, and sisters-in-law and the lineal
descendants of any of them. Examples of activities which
are not in accordance with this policy include, but are
not limited to:
2.46
a. Having an interest in any business which has contacts
or other direct dealing with the City;
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b. Activities which require the employee to interpret
City codes, ordinances, or regulations when such activity
involves matters with which the employee has business
and/or family ties;
c. Consulting activities carried out within the City if
such consulting involves talents or skills primarily
related to the employee's City work responsibilities; and
d. Using an employee's authority or City position for
the purpose of personal financial gain.
Any employee engaging in any activity involving either an
actual or potential conflict of interest or having knowledge of
such activity by another employee shall promptly report .the
activity to the City Administrator. The City Administrator
shall investigate the matter and make a determination as to
whether or not an actual or potential conflict exists. If the
City Administrator determines a conflict exists, it shall be
presumed that the continuation of the practice would be
injurious to the effectiveness of the employee in carrying out
his/her responsibilities. In such cases the employee shall
immediately terminate the conflicting activity or be subject to
termination of employment.
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10. Layoffs. Layoffs may become necessary as a result of
shortage of work, shortage of funds, unexpected over staffing,
the abolition of a position, or changes in the City's
organization structure. The City Administrator shall have
authority to lay-off any employee when such action becomes
necessary as determined in the City's sole discretion.
Employees shall receive two (2) ~eeks.notice prior to a laY-Off.
11. Report of Personnel Changes. The City attempts to
maintain complete and accurate personnel information on its
employees (i.e., address, phone number, etc.). It is the
responsibility of each employee to notify the City
Administrator when changes occur. The City Administrator may
prescribe certain forms for reporting such personnel changes to
the City.
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12. Government Data Practices Act. Numerous types of data
are categorized as private, non-public, or confidential under
the Minnesota Government Data Practices Act. Minnesota
Statutes 13.01-13.90. In many circumstances, data may not be
disclosed except with authorization of the subject of the data
or pursuant to court order. . To ensure that the Data Practices
Act is not violated, employees are strictly prohibited from
disclosing to a third party, within or outside the City, any
personnel data, data relating to pending civil legal actions,
or any other data that might be classified as private,
non-publiC, or confidential without the City Administrator's
express authorization. Pursuant to the Minnesota Government
2.47
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EXHIBIT B
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ORDINANCE NO. 93 -
CITY OF ELK RIVER
AN ORDINANCE AMENDING SECTION 218.08(9) OF THE ELK
RIVER CITY CODE OF ORDINANCES REGARDING THE CITY'S
CONFLICT OF INTEREST POLICY
The City Council of the City of Elk River does hereby ordain as
follows:
Section 1. Section 218.08(9) of the Elk River Code of
Ordinances is amended to read as follows:
218.08(9) Conflict of Interest.
a. Introduction. The credibility of local government rests
heavily upon the confidence which citizens have in public
officials and employees to render fair and impartial services
to all citizens without regard to personal interest and/or
political influence. Thus, City officials and employees must
scrupulously avoid any activity which suggests a conflict of
interest between their private interests and City
responsibilities. Officials and employees of the City, or
their family members, shall not engage or have financial
interest in any business or other activity which could
reasonably lead to a conflict of interest with the official's
or employee's primary City responsibilities. "Family members"
of an official or employee shall be deemed to be the official
or employee's spouse, parents, children, siblings, brothers-in-
law, and sisters-in-law and the lineal descendants of any of
them. Examples of activities which are not in accordance with
this policy include, but are not limited to the following:
(1) Having an interest in any business which has contacts
or other direct dealing with the City;
(2) Activities which require the official or employee to
interpret City codes, ordinances, or regulations when
such activity involves matters with which the
official or employee has business and/or family ties;
(3) Consulting activities carried out within the City if
such consulting involves talents or skills primarily
related to the official's or employee's City work
responsibilities;
(4) Using an official's or employee's authority,
influence or City position for the purpose of private
or personal financial gain;
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(S) The use of city time, facilities, equipment, or
supplies for the purpose of private or personal
financial gaini
(6) Receipt or acceptance of any compensation or other
considerations from anyone other than the City for
the performance of an act which the official or
employee would be required or expected to perform in
the regular course of his/her City employment, or as
a part of his/her duties as an official or employee.
Compensation does not include awards, plaques or
momentos recognizing the official's or employee's
contribution in their area or to a charitable
organization, honoraria or other expenses in
conjunction with a presentation or demonstration in
the employee's field of expertise or
scholarships/financial grants for schools;
(7) Entering into a business transaction when it involves
using confidential information gained in the course
of employment or is with an individual or entity that
has contacts or other direct dealings with the City;
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(8) Accepting other employment or public office where it
will affect the official's or employee's independence
of judgment or require use of confidential
information gained as a result of City duties;
(9) Acting as an agent or representative for another in
any matter pending before the City or Council, except
in the proper discharge of duties. For example, an
official or employee should not appear before City
Council on behalf of a third party and seek to use
their position or influence to sway the Council;
(10) Conducting personal business while working regularly
scheduled hours; and
(11) Accepting rebates or procuring any financial gain
through the bidding process or employment of outside
personnel.
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Any official or employee engaging in any activity involving
either an actual or potential conflict of interest or having
knowledge of such activity by another official or employee
shall promptly report the activity to the City Administrator.
The City Administrator shall investigate the matter and make a
determination as to whether or not an actual or potential
conflict exists. If the City Administrator determines a
conflict exists, it shall be presumed that the continuation of
the practice would be injurious to the effectiveness of the
official or employee in carrying out his/her duties and
responsibilities. In such cases the official or employee shall
immediately terminate the conflicting activity or be subject to
termination of employment or removal from office.
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b. Officials. For the purposes of this Section 218.08(9),
the term "official" shall include all elected and appointed
officials of the City including, but not limited to, the City
Council, the Economic Development Authority, and the members
of the Boards and Commissions established by Chapter II of
the City Code of Ordinances. "Employee" shall include any
individual employed by the City on a full or part-time basis.
c. Elections. No elected official shall require, either
directly or indirectly, any employees of the City to campaign
on his/her behalf as a condition to employment. No employee
shall use City time or resources in promoting or advocating
the election of any individual.
d. Ap9licability. Nothing in this policy is intended to
violate, supersede, or conflict with any applicable state or
federal law regarding conflicts of interest in public
employment or disclosure requirements such as those set forth
in Minn. Stat. Chapter lOA.
Section 2. This ordinance shall be effective upon adoption and
publication, according to law.
Passed and adopted by the City Council of the City of Elk
River, this ____ day of , 1993.
Hank Duitsman, Mayor
Attest:
Sandra Thackeray, City Clerk
PKB:HZ1s
EXHIBIT C
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ORDINANCE NO. 93 -
CITY OF ELK RIVER
AN ORDINANCE AMENDING THE ELK RIVER CITY CODE OF
ORDINANCES TO ADD SECTION 218.08(9) (e) REQUIRING
ANNUAL DISCLOSURE BY CITY OFFICIALS AND EMPLOYEES
OF POTENTIAL CONFLICTS OF INTEREST
The City Council of the City of Elk River does hereby ordain as
follows:
Section 1. Section 218.08(9) of the Elk River Code of
Ordinances is amended to add Section 218.08(9) (e) as follows:
218.08(9) (e) Conflict of Interest Disclosure. Every City
official and employee shall annually disclose all actual and
potential conflicts of interest by filing a completed Conflict
of Interest Questionnaire with the City Administrator. City
officials and employees holding office or employed on the date
of the adoption of this ordinance shall file a Conflict of
Interest Questionnaire on June 1, 1993 and annually thereafter.
New City officials and employees shall file a Conflict of
Interest Questionnaire within sixty (60) days of taking office
or accepting employment, and on each June 1st thereafter. The
Conflict of Interest Questionnaire shall be submitted on a form
prepared by the City Attorney and approved by the City Council.
Section 2. This ordinance shall be effective upon adoption and
publication, according to law.
Passed and adopted by the City Council of the City of Elk
River, this day of , 1993.
Hank Duitsman, Mayor
Attest:
Sandra Thackeray, City Clerk
PKB:HZls
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EXHIBIT D
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CITY OF ELK RIVER
CONFLICT OF INTEREST
QUESTIONNAIRE
Please complete this questionnaire to determine if you have a
conflict of interest with the City of Elk River. For purposes of
this questionnaire, "family member" means your spouse, parents,
children, siblings, brothers-in-law, sisters-in-law, and the
lineal descendents of any of them.
~. Have you or any of your family members had any material
interest (over $2,000), direct or indirect, in any business
transaction with the City of Elk River since January 1, 1992?
YES
NO
2. As of today's date do you or any of your family members have
any material interest, direct or indirect, in any pending or
incomplete business transaction with the City of Elk River?
YES
NO
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3. Have you or any of your family members been indebted in an
amount equal to or greater than $2,000 to any vendor that you
believe the City does business with at any time since
January 1, 1992? Please exclude amounts due.
YES
NO
[Other questions could be included
as deemed appropriate by the Council]
I have answered the above questions correctly to the best of my
knowledge and belief.
Department
Date
You Name (Please Print)
. Signature