Review and Comment on Additional Amendments to Proposed Amendments to Chapter 16 Ethics Ordinance to Include Changes to the Language Requested During Discussion and Instructions on November 19, 2012
Review and comment on additional amendments
Change in Law or Policy
Proposed amendments to Chapter 16 "Public Ethics"
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, 2011. However, since the State Ethics Commission had not yet reviewed the proposed ordinance, the Mayor and Council deferred adoption and requested additional changes. The requested changes were made and the Mayor and Council reviewed the revised ordinance on 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 on 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. On November 19, 2012, the Mayor and Council provided discussion and instructions on the proposed amendments.
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 ordinance.
A review of the more substantive pending amendments to the City's Ethics Ordinance are summarized below:
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.
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.
Amendments requested by the Mayor and Council during Discussion and Instructions on November 19, 2012
The following is an outline of the amendments requested by the Mayor and Council during discussion and instructions on November 19, 2012. These amendments are set forth in Attachment A. (Attachment B is a clean version of Attachment A.)
1. Section 16-1: Added definitions for "Dependent Child," "Designated Boards and Commissions," and "Domestic Partner." Also, added the term "domestic partner" to definition of "immediate family" and "qualified relative."
2. Section 16-3(a): Added language to require that the Mayor consult with each Councilmember prior to the appointment of the original Commission members.
3. Section 16-3(b): Added language to require that at least one of the members of the Ethics Commission must be an attorney licensed to practice law in any state in the United States, including the District of Columbia, and be a member in good standing.
4. Section 16-3(b)(1): Deleted language requiring members of the Ethics Commission to be registered to vote in the City.
5. Section 16-3(d): Deleted language requiring that the Mayor and Council appoint the Chairperson of the Ethics Commission. Section 2-219 of the City Code already provides that, unless otherwise provided in the City's Code, a City Commission "shall elect a chairperson and other officers deemed advisable from among its appointed members. The chairperson, shall serve for a term of one (1) year and is eligible for reelection." Given this provision, proposed Section 16-3(d) may be deleted in its entirety without any replacement language. (Please note that the subsections that follow have been re-lettered in order to correctly reflect the deletion of subsection (d).)
6. Section 16-3(i): Made non-substantive edits to clarify language.
7. Section 16-3(k): Added language requiring that the Ethics Commission shall provide ethics training, as necessary and appropriate.
8. Section 16-4(f): Added language to clarify that certain enforcement actions may be taken by "the appropriate authority."
9. Section 16-23(a): Added language clarifying (1) that gifts may not be solicited "indirectly" and (2) that the definition of "gift" includes employment.
10. Section 16-63(g): A question was raised during the November 19, 2012 discussion about how a candidate can be deemed to have withdrawn from candidacy if a financial disclosure statement is not filed. Given the requirements of Section 16-63(h), a person must file a financial disclosure statement in order to become a candidate. As such, staff had deleted the language in Section 16-63(g).
11. Section 16-63(k): Deleted from new language, the words "if requested."
12. Sections 16-66 through 16-70: Added new sections to provide that designated boards and commissions (currently, the Planning Commission, the Board of Appeals, and the Historic District Commission) must file financial disclosure statements in accordance with the same requirements currently in effect. Edits have been made in numerous places to properly refer to "designated boards and commissions" and to make proper references to the new Sections 16-66 through 16-70 when necessary. In addition, the following language had been added to Section 16-69(2) and Section 16-69(2)(a) after the word "corporation": "partnership, limited liability partnership, or limited liability corporation." This is the only substantive language changed in the provisions dealing with financial disclosures for designated board members. (This language has also been added to Section 16-64(2) and Section 16-64(2)(a) addressing the content of the financial disclosure statement required by the Mayor and Council.) Staff believes this additional language is necessary to capture the types of interest intended to be disclosed under this provision.
13. Section 16-80(b): Added language making clear that the granting of exemptions and modifications are "discouraged."
Responses from the State Ethics Commission
In addition, questions were raised at the November 19, 2012 meeting that staff posed to the State Ethics Commission for response.
1. Should the word "financial" be in front of the word "interest" each time "interest" is used in Section 16-64? The State Ethics Commission clarified that the word "financial" should not be included before each use of the word "interest" in Section 16-64. The State Ethics Commission stated that all interests, as defined, are required to be reported on the financial disclosure forms and that the term "financial interest" only applies to the provisions in the code dealing with conflicts of interest.
2. Does the word "compensation" in Section 16-27(c) include court costs and attorneys fees? The legal staff of the State Ethics Commission clarified that the definition of "compensation" in Section 16-27(c) may be defined by the municipality. As such, clarifying language has been added to Section 16-27(c) to exclude reimbursements of out-of-pocket expenses as "compensation." The legal staff of the State Ethics Commission has seen this proposed language and had indicated that it will be up to the State Ethics Commission when it reviews the City's proposed amendments to either approve or deny this language.
3. The State Ethics Commission further clarified that the City could add definitions of "dependent child" and "domestic partner." Both of these definitions have been added to Section 16-1, as noted above.
Financial Disclosure Mock-Up
Per the Mayor and Council's request, Attachment C is a mock-up of the State's current financial disclosure form. On the mock-up, staff has entered only first names. On a financial disclosure statement that is actually filed in accordance with law, full names must be provided. Staff has also entered fake addresses and phone numbers where appropriate. Please note that the dollar amounts provided are meant to be illustrative only.
In filling out this made-up financial disclosure statement, staff assumed that Bob is a City of Rockville Councilmember; Bob is married to Sally; both Bob and Sally own businesses located in the City of Rockville; Bob and Sally have three children--Kelly, Carrie and Bob, Jr.; Kelly is an adult and Carrie and Bob, Jr. are dependent children.
Once the Mayor and Council has accepted these additional amendments to the proposed ordinance, 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, 2011. 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. The Mayor and Council provided discussion and instructions on the proposed amendments on November 18, 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.
Attachment A - Ethics Ordinance (redlined).pdf Attachment B - Ethics Ordinance (Clean copy).pdf Attachment C-Financial Disclosure Mock-up.pdf
Debra Yerg Daniel, City Attorney
Approved on: 01/09/2013
Barbara B. Matthews, City Manager
Approved on: 01/09/2013