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HomeMy WebLinkAbout3.c. Conflicts of Interest DiscussionCITY OF ROSEMOUNT EXECUTIVESUMMARY FOR ACTION CITY COUNCIL MEETING DATE: JULY 7, 1992 AGENDA ITEM: CONFLICTSOFINTEREST AGENDA` SECTION: DISCUSSION DEPT. HEADS REPORTS PREPARED BY: 'SUSAN M. WALSH AGENDA fa—n A . ADMINISTRATIVE ASSISTANT # t3 ATTACM0NTS: MEMORANDUM APPROVED BY: City Attorney Mike Miles will comment on the topic of conflicts of interest. Attached is a memorandum and support law regarding this issue. RECOMMENDED ACTION: NONE COUNCIL: ACTION: MEMORANDUM TO: ROSEMOUNT CITY COUNCIL FROM: MIKE MILES�,ZX DATE: June 30, 1992 RE: CONFLICTS OF INTEREST In response to the request of City Administrator Steve Jilk and several members of the Rosemount City Council, the following is a brief review of the law regarding potential conflicts of interest involving members of the City Council. In addition to this summary, copies of the applicable state statutes are attached for your information. The principal statute regarding conflicts of interest impacting on members of the City Council is Minn. Stat. §10A.07. Essentially, that provision states that if a local elected official in the discharge of official duties would be required to take an action that would substantially affect the officials direct or indirect financial interest in a way greater than other persons of the same profession or occupation, the local official must take the following actions: 1. Prepare a written statement describing the proposed action and potential conflict of interest; 2. Provide a copy of the statement to the Mayor; and 3. Abstain from taking action with respect to the specific issue involved. An example of a conflict of interest under this statute would be: if you had a partial interest in a piece of real estate and a decision proposed by the City Council would augment the value of that real estate (i.e. rezoning, allowing for subdivision of the property, etc.), you would be subject to the requirements of §10A.07. An example of a situation which does not entail a conflict of interest would be: if as a council person you were to participate in a decision to locate a new fire house in your neighborhood and such decision might slightly benefit the value of your property because of fire safety considerations but would also have a similar effect on all other property owners within your neighborhood. The other, more particularized prohibition found in state law appears in Minn. Stat. §471.87 and 5471.88. Section 471.87 prohibits public officials from having a personal financial 1 interest in any sale, lease or contract in which that public official will have decision making authority as part of his or her official duty. There are numerous exceptions to this provision in §471.88 (i.e. contracts involving designation of a bank, official newspaper, contracts of a modest amount, etc.) and these exceptions are set forth fully in the attached statutory materials. In summary, state law simply says position in order to receive a different from other citizens. Attachments 2 that you cannot use your official financial or personal benefit 10A.07. Conflicts of interest Subdivision 1. Disclosure of potential conflicts. A public official or a local official elected to or appointed by a metropolitan governmental unit who in the discharge of official duties would be required to take an action or make a decision that would substantially affect the official's financial interests or those of an associated business, unless the effect on the official is no greater than on other members of the official's business classification, profession, or occupation, shall take the following actions: (1) prepare a written statement describing the matter requiring action or decision and the nature of the potential conflict of interest; (2) deliver copies of the statement to the official's immediate superior, if any; and (3) if a member of the legislature or of the governing body of a metropolitan governmental unit, deliver a copy of the statement to the presiding officer of the body of service. If.a potential conflict of interest presents itself and there is insufficient time to comply with clauses (1) to (3), the public or local official shall orally inform the superior or the official body of service or committee of the body of the potential conflict. Subd. 2. If the official is not a member of the legislature or of the governing body of a metropolitan governmental unit, thesuperior shall assign the matter, if possible, to another employee who does not have a potential conflict of interest.. If there is no immediate superior, the official shall abstain, if possible, in a manner prescribed by the board from influence over the action or decision in question. If the official is a member of the legislature, the house of service may, at the member's request, excuse the member from taking part in the action or decision in question. If the official is not permitted or is otherwise unable to abstain from action in connection with the matter, the official shall file a statement describing the potential conflict and the action taken. A public official shall file the statement with the board and a local official shall file the statement with the governing body of the official's political subdivision. The statement must be filed within a week of the action taken. V • , Subd. S. Interest in contract; local officials. This section does not apply to a local official with respect to a matter governed by sections 471.87 and 471.88. L RIGHTS, POWERS, DUTIES § 471.87 471.87 Public officers, interest in contract; penalty Except as authorized in section 471.88, a public officer who is authorized to take part in any manner in making any sale, lease, or contract in his official capacity shall not voluntarily have a personal financial interest in that sale, lease, or contract or per- sonally benefit financially therefrom. Every public officer who violates this provison is guilty of a gross misdemeanor. Laws 1951, c. 379, § I. Amended by Laws 1955, c. 41, § 1. 471.88 Exceptions Subdivision 1. The governing body of any port authority, seaway port authority, town, school district, county, or city, by unanimous vote, may contract for goods or services with an in- terested officer of the governmental unit in any of the following cases. Subd. 2. In the designation of a bank or savings association in which the officer is interested as an authorized depository for Public funds and as a source of borrowing, no restriction shall apply to the deposit or borrowing of any funds or the designa- tion of a depository by such authority or governmental unit in any bank or savings association in which a member of an au- thority or officer of a governmental unit shall have an interest if such deposited funds are protected in accordance with chapter 118; provided, however, that any member or officer having such an interest shall disclose that he is a director or employee of the bank or savings association, which disclosure shall be entered upon the minutes of the authority or governmental unit, such disclosure shall be made when such bank or savings association is first designated as a depository or as a source of borrowing, or when such member or officer is elected whichever is later, and such disclosure shall serve as notice of such interest and need not be made with each successive transaction; Subd. 3. The designation of an official newspaper, or publi- cation of official matters therein, in which the officer is inter- ested when it is the only newspaper complying with statutory or charter requirements relating to the designation or publication; Subd. 4. A contract with a cooperative association of which the officer is a shareholder or stockholder but not an officer or manager; Subd. 5. A contract for which competitive bids are not re- quired by law and where the amount does not exceed $5,000 when the commodity or service contracted for is not otherwise available in the affected governmental unit; Subd. 6. A contract with a volunteer fire department for the payment of compensation to its members or for the payment of retirement benefits to these members; Subd. 7. A contract with a municipal band for the payment of compensation to its members; Subd. 8. Contracts for goods or services when the considera- tion does not exceed $5,000 in any year and the contracting gov- ernmental unit has a population of less than 5,000; Subd. 9. When a port authority commissioner is engaged in or employed by a firm engaged in the business of importing or 0 471.88 MUNICIPALITIES exporting or general trade, it shall be lawful for the authority to do business with the commissioner or his employer provided that in the fixing of any rates affecting shippers or users of the ter- minal facility, said commissioner shall not vote thereon. Subd. 10. When a seaway port authority commissioner is en- gaged in or employed by a firm engaged in the business of im- porting or exporting or general trade, it shall be lawful for the authority to do business with the commissioner or his employer provided that in the fixing of any rates affecting shippers or users of the terminal facility, said commissioner shall not take part in the determination of, except to testify, nor vote thereon. Subd. 11. When a commissioner of any public housing or port authority is employed by a bank engaged in making loans or performing trust services involving real or personal property affected by any plan of such housing or port authority, no re- striction shall apply to any such loans made or trust services performed by said bank if the commissioner shall disclose the nature of such loans or trust services of which he has personal knowledge, which disclosure shall be entered upon the minutes ..of such authority.