Mayor and Council



   For the meeting on:

  November 19, 2012
   Department:   City Attorney
   Responsible staff:  Doug Barber, City Clerk
  phone: (240) 314 - 8282
  DBarber@rockvillemd.gov


Subject
Discussion and Instruction - Chapter 16 Ethics Ordinance Revisions

Recommendation
Review and provide instructions to staff


Change in Law or Policy
Proposed amendments to Chapter 16 "Public Ethics"


Discussion
Background

During the 2010 legislative session, the Maryland General Assembly enacted legislation that requires counties and municipalities to make certain changes to their ethics ordinance. On August 15, 2011, the Mayor and Council introduced an ordinance revising the Ethics Ordinance so as to comply with the new state requirements. In addition, provisions providing for an Ethics Commission were also added. The ordinance was originally scheduled to be adopted on October 26, but since the State Ethics Commission had not yet reviewed the proposed ordinance, the Mayor and Council deferred adoption but requested additional changes. The requested changes were made and the Mayor and Council reviewed the revised ordinance at its meeting of December 12, 2011.

During the 2012 legislative session, several proposed amendments to the State ethics provisions were introduced which again delayed the Mayor and Council's adoption of the pending amendments to the City's Ethics Ordinance. None of the proposed amendments introduced before the General Assembly that would have affected the City's pending ordinance were passed.

The City received comments from the legal staff of the State Ethics Commission and the proposed amendments have been revised to address these comments. The revised amendments were reviewed by the Mayor and Council at its meeting of July 30, 2012. While not required, the Mayor and Council requested that a public hearing be held on the proposed amendments to the City's Ethics Ordinance.

On September 24, 2012, the Mayor and Council held a public hearing on the proposed amendments. In an effort to solicit additional input on the proposed amendments, the Mayor and Council scheduled a second public hearing on the proposed amendments, which was held on October 15, 2012.

The State Ethics Commission has requested that the Mayor and Council send the final draft of the amendments to the Commission for review and approval prior to the Mayor and Council's adoption of the proposed amendments.

A review of the more substantive pending amendments to the City's Ethics Ordinance are summarized below:

Ethics Commission

State regulations require that a local government identify or establish a local agency to be responsible for implementing the ethics law. Currently, the City Code provides that the City Attorney is responsible for receiving and investigating ethics complaints as well as issuing advisory opinions on the application of the Ethics Ordinance. The Mayor and Council are responsible for directing the City Attorney to pursue possible ethics violations in court. In accordance with the State Ethics Commission model ordinances, legal staff has drafted proposed amendments to the City's Code that would establish an Ethics Commission to administer the Ethics Ordinance. Not only would creating an Ethics Commission bring the City in conformance with the State's recommended model ordinances, but many neighboring jurisdictions such as Montgomery County, City of Frederick, Gaithersburg, Takoma Park and Laurel also have created Ethics Commissions to administer their ethics codes. The duties of the Commission are set out in Section 16-3 and include developing policies and procedures for the processing of complaints and requests for advisory opinions. The Commission will also be responsible for enforcing the provisions of the ordinance, including assessing late fees, issuing reprimands, imposing fines and recommending disciplinary actions. The Commission may also grant exemptions and modifications in certain circumstances if the Commission finds that such an exemption or modification would not be contrary to the purposes of the Ethics provisions.

Conflicts of Interest

In accordance with the State's new legislative requirements, the City's provisions regarding gifts or favors include proposed amendments to provide more specific prohibitions for the acceptance or solicitation of gifts, including exempted gifts. Additionally, the list of gifts exempted from the prohibition includes a proposed modification to include a maximum dollar amount ($20) for unsolicited nominal gifts and a provision that meals and beverages must be consumed in the presence of the donor or sponsoring entity.

The provisions set forth in Section 16-25, "Dealing with the City when interested," have been reorganized and expanded to include more specific situations which would prohibit an official or employee from participating in a specific matter. In addition, the proposed amendments expand the definition of family members to include siblings in addition to spouses, children and parents whose interests in any of the enumerated situations would prohibit an official or employee from participating in a specific matter. Also proposed is a provision that a person who is disqualified from participating in a matter may still participate if the disqualification leaves a body with less than a quorum capable of acting, or if the disqualified individual is required by law to act or is the only person authorized to act.

Based on the State amendments, a provision has been proposed that prohibits a member of the Mayor and Council from representing another party for compensation in a matter that is the subject of legislative action for a period of two years after leaving office.

Financial Disclosure


The new State legislation requires that the City expand the parties required to file a financial disclosure statement to include individuals appointed to fill a vacancy in an office for which a financial disclosure statement is required and an individual who leaves an office (by any reason other than death) for which a statement is required. In addition, the required retention period for financial statements has been increased from two to four years.

In accordance with the new requirements, the list of financial interests required to be disclosed has been amended to include the interest in all real property wherever located, not just in the State of Maryland; all financial interests acquired during the reporting period; and all salaried employment held by the individual and the individual's immediate family. Also amended is the level of information required to be disclosed in connection with liabilities owed to any company doing business with the City and the schedule of all sources of income.


Summary of Comments Received

Based on testimony received at the two public hearings as well as written comments received, the following is a summary of the issues that were raised along with staff responses related to the proposed amendments dealing with 1) the City’s Ethics Commission; 2) conflicts of interest; and 3) financial disclosures. In formulating the responses, staff reviewed the ethics ordinances from other jurisdictions including City of Frederick, Takoma Park, College Park, Montgomery County, Frederick County, and Baltimore City (“Other Jurisdictions”). Gaithersburg is not included in the Other Jurisdictions because its ethics ordinance has not yet been amended in accordance with the new State Law requirements. In addition, the City Manager has requested clarifying language to Section 16-4(f) to clarify that the additional penalties listed in that subsection would be issued by the appropriate authority as provided by law.


1. City’s Ethics Commission


a. Section 16-3(a) – Composition and Administration of the Ethics Commission.

Comment: Based on the amendments as currently drafted, the City’s Ethics Commission would be comprised of five members appointed by the Mayor and confirmed by the City Council. A concern was expressed that allowing the Mayor and City Council to appoint and approve the members of the Commission would make the Commission “too political” rather than independent and neutral. It was suggested that someone other than the Mayor and City Council, such as the City Manager, should be allowed to appoint and approve one or more members to the Ethics Commission.

Response: The Mayor and Council has the discretion to add language to the proposed amendments to allow someone other than the Mayor and City Council to appoint one or more members to the Ethics Commission.

It may be worth noting that the proposed ordinance staggers the terms of the members, thus lessening the possible political influence of any given Mayor and City Council, especially given that the Mayor and Council themselves are up for election every two (2) years. Section 16-3(c) specifically states that the Commission members serve for a term of three (3) years, initial appointment of one member shall be for one (1) year, two members shall be for two (2) years, and two members for (3) years.


b. Section 16-3(b) – Composition, qualification for membership

Comment: Concerns were expressed regarding the qualifications of candidates for the Ethics Commission. Specifically, a concern was raised about requiring that a member be registered to vote in the City since it may discriminate against non-citizens who have lived in the City for a long period of time but cannot vote.

Another suggestion raised was requiring that members of the Ethics Commission have specialized knowledge and skills such as requiring one or more members be member(s) of the Maryland Bar and/or be individuals of known personal integrity who possess recognized knowledge in government and civics.

Response: The Mayor and Council has discretion to decide what qualifications, if any, it wishes to impose on members of the City’s Ethics Commission.

Upon review of the requirements of other jurisdictions, it appears that most do not require that members of the Ethics Commission be registered to vote in the municipality. As such, the Mayor and Council may wish to delete that requirement.

With regard to requiring the members to possess specialized knowledge and skills, most other Jurisdictions do not require any specialized knowledge and skills. However, Baltimore City does require that two members on its five-member Ethics Board must be members of the Maryland Bar and that each member of the Ethics Board must be an individual of known personal integrity with recognized knowledge and interest in government and civics.

If the Mayor and Council are interested in adding requirements to membership on the Ethics Commission, staff would recommend requiring one or more members be members of the Maryland Bar.


c. Section 16-3(d) – Chairperson

Comment: Several individuals expressed concern regarding the requirement that the Mayor and City Council appoint and approve the chairperson on an annual basis and suggested that the selection of a Chair should be left to the members of the Ethics Commission. The concern is that this method of appointing the Chair could politicize the position.

Response: If the Mayor and Council decide to leave the selection of the Chair to the Ethics Commission, the Mayor and Council would just need to delete Section 16-3(d) since Article III of the City Code, Sections 2-216 and 2-219, would then provide that the Ethics Commission select its own Chair on an annual basis.


d. Article V – Exemptions and Modifications

Comment: Concerns were raised regarding the Ethics Commission’s ability to grant exemptions and modifications to requirements under the Conflicts of Interest and Financial Disclosure sections.

Additionally, a suggestion was offered that the Mayor and Council should add language requiring that any requests for an exemption or modification be filed in writing and signed under oath.

Response: Under the proposed amendments, and in accordance with the Model Ethics Law set forth by the State Ethics Commission, the City’s Ethics Commission may grant exemptions and modifications to the conflicts of interest and financial disclosure requirements to employees and to appointed members of the City Boards and Commissions upon finding that the application of the requirements of the code would (1) constitute an unreasonable invasion of privacy; and (2) significantly reduce the availability of qualified persons for public service. While the Mayor and Council may choose to eliminate these provisions, legal staff recommends keeping this language in the proposed amendments. This language only applies to employees and appointed members of the City’s Boards and Commissions. The language does not permit an exemption or modification to the conflicts of interest and financial disclosure requirements for members of the Mayor and Council.

The ethics ordinances in all other jurisdictions, with the exception of Takoma Park, contain language providing for exemptions and/or modifications. Most contain language identical to the proposed amendments.

With respect to requirements related to the form of what is required to be filed with the Ethics Commission, legal staff recommends allowing the Ethics Commission to address those matters through its own adopted rules, regulations and procedures.


e. Training

Comment: There were several suggestions related to ethics training for elected officials, the Ethics Commission and other Boards and Commissions.

Response: The Mayor and Council has the discretion to include language in the Code to address training. The Mayor and Council may also decide to allow the Ethics Commission to address training in its own adopted regulations.

The only other jurisdictions that have training provisions in their ethics laws are Baltimore City and College Park. Baltimore City’s provisions are very specific as to who the training applies to and how long the training must be. College Park’s provision states as follows: “The Commission shall provide ethics training to the City’s elected officials, candidates for elected office, employees and board and commission appointees, as necessary and appropriate.” College Park’s language does not address training for members of the Ethics Commission.


2. Conflicts of Interest


a. Section 16-1 – Definition of “Gift”

Comment: Request that the definition of “Gift” be broadened to include “jobs.”

Response: Section 16-23 – Gift or Favors, already addresses this concern. Section 16-23, specifically states that “No elected or appointed official or salaried employee (decision making or non-decision making) shall directly solicit any gift, whether in form of service, loan, thing or promise from any person, firm or corporation.” (Emphasis added.) The word “promise” would include the promise of a job.


b. Article II – Section 16-25(b)(3) - Conflict of Interests – Dealing with City When Interested

Comment: Concerns were raised regarding the provision that permits disqualified/conflicted officials or employees to participate in matters in circumstances where a body would be left without a quorum based on the conflict. The proposed ordinance permits a disqualified/conflicted individual to participate under the following circumstances:

(i) The disqualification leaves the body with less than a quorum capable of acting,
(ii) The disqualified official or employee is required by law to act, or
(iii) The disqualified official or employee is the only person authorized to act.

Response: This language is identical to the language in the State Ethics Commission’s Model Ethics Law. The language recognizes that there may be instances where the City will not be able to act unless a person who is otherwise conflicted out of participating in a decision, can participate in that decision.

The ethics ordinances in all other jurisdictions contain language providing for participation of a person otherwise conflicted under certain circumstances. Most contain language identical to the proposed amendments.

While the Mayor and Council may choose to eliminate these provisions, legal staff recommends keeping this language in the proposed amendments.


3. Financial Disclosures


a. Section 16-1 – Definitions and Section 16-61 – Scope

Comment: Amend definition of Elected Officials to add Board of Supervisors of Elections and amend other provisions as necessary to require members of the Board of Supervisors of Elections to file financial disclosure statements.

Solution: If the Mayor and Council were to add the Board of Supervisors of Elections to the definition of Elected Officials, the members of the Board of Supervisors of Elections would be required to file financial disclosure statements required of elected officials along with the Mayor and Council, the Planning Commission, the Board of Appeals, and the Historic District Commission. The Mayor and Council have the discretion to require that the Board of Supervisors of Elections file financial disclosure statements required of elected officials. The Mayor and Council have already added language to the proposed amendments to require that members of the Ethics Commission file these financial disclosure statements.

It may be important to note that, of the other jurisdictions, only Baltimore City and Montgomery County require certain members of its Board and Commissions to file financial disclosure statements required of the elected officials. All of the Other Jurisdictions only require that members of Boards and Commissions file statements disclosing any gifts and any employment or other interest that raises a conflict of interest, which is similar, if not identical, to the requirements set forth in the proposed amendments.

If the Mayor and Council decide to require that members of the Board of Supervisors of Elections file financial disclosure statements, language will be added to the appropriate provisions including Sections 16-1, 16-61, 16-63(c), and 16-63(h). As a housekeeping matter, while the current amendments require that members of the Ethics Commission file a financial disclosure statement, for consistency and clarity, the Ethics Commission should be added to certain other provisions as well including the definition of Elected Official. These additional amendments will be added to the version brought back to the Mayor and Council on December 3, 2012.


b. Section 16-63(d) – Statement Required

Comment: A concern was raised that an individual appointed to fill a vacancy would only be required to file a financial disclosure statement within 30 days after they are appointed under Section 16-63(d). The concern was that allowing appointees to disclose their finances after they have been appointed defeats the objective of promoting accountability and transparency.

Response: Under Section 16-63(b) and (c), all candidates for elected office and applicants for positions on Boards and Commission whose members are required to file a financial disclosure statement must file a financial disclosure statement at the time they file their petition or application. As such, the concern raised seems to be addressed. Section 16-63(d) appears to be a catch-all provision that would cover, for example, a situation in which the Mayor and Council needed to fill a position quickly and did not wait for an application.


4. Additional Clarifying Language

In addition to the comments raised above, the City Manager has requested some clarifying language to Section 16-4(f) to clarify that the additional penalties would be issued by the appropriate authority as provided by law. The clarifying language would be added as follows:

(f) In addition to any other enforcement provisions in this Chapter a person who the Commission or a court finds has violated this Chapter:

(1) May be subject to termination or other disciplinary action, removal from office, or other sanction by the appropriate authority as provided by law; and
(2) May be suspended by the appropriate authority from receiving payment of salary or other compensation pending full compliance with the terms of an order of the Commission or a court.

Legal staff has no objection to the clarifying language.

Conclusion

Legal staff will incorporate any additional amendments directed by the Mayor and Council and bring a new draft of the ordinance to the Mayor and Council on December 3, 2012 for review and approval. Once all amendments have been reviewed and approved by the Mayor and Council, the draft ordinance will be forwarded to the State Ethics Commission for review and approval prior to the final adoption of the ordinance by the Mayor and Council.

Mayor and Council History
The ordinance was introduced by the Mayor and Council on August 15, 2011 and was originally scheduled for adoption on October 26. However, since the State Ethics Commission had not yet reviewed the proposed ordinance, the Mayor and Council deferred adoption but discussed the revisions and requested additional changes. The attached ordinance has been modified to include those changes as well as changes requested by legal counsel for the State Ethics Commission. The Mayor and Council reviewed the proposed ordinance at its meetings of December 12, 2011, and July 30, 2012, and held public hearings on September 24, 2012, and October 15, 2012. The record closed on October 22, 2012.


Next Steps
December 3, 2012 - Review and amend pending ordinance to include any changes to the language requested during Discussion and Instructions on November 19, 2012.

Send draft to State Ethics Commission for final review and approval.

Schedule adoption of ordinance by Mayor and Council after final approval by State Ethics Commission.

Attachments
Attachment B - Chapter 16 - (Ethics) Clean Copy.pdf Attachment A - Ch. 16 (Ethics) - redlined copy.pdf

Department Head:



Debra Yerg Daniel, City Attorney
Approved on: 11/15/2012

City Manager:

Barbara B. Matthews, City Manager
Approved on: 11/15/2012