Ethics Advisory Opinion No. 28
August 23, 1999
Issued By: City Attorney’s Office
Whether a City employee may receive financing under the City’s rental housing rehabilitation program and whether a former City employee may contract with the City to provide services.
The Neighborhood Action Department has asked two (2) questions: (1) whether a City employee may receive financing under its rental housing rehabilitation program; and (2) whether a former City employer may contract with the City to provide services.
The following facts are presented regarding the Department’s rental housing rehabilitation program:
Neighborhood Action Department (NAD) provides financing to private sector owners
of single and multi-family rental housing under its rental housing
rehabilitation program. Applicants for
financing must meet certain criteria including, equity participation of at
least 10% in the rental property. To aid
its efforts, the NAD engaged in a major campaign to recruit applicants to this
program. In March of 1998, the owner of
the property at
The owner of the property was previously employed by the City’s Department of Housing and Community Development. He terminated this position in 1996. Recently, he has returned to the City, working as a Special Projects Coordinator in one of the City’s Departments.
The issue is whether the owner may receive financing under the NAD’s rental housing rehabilitation program given his employment with the City. Under the Ethics Code, all City employees, whether part-time or full-time, are required to follow the standards of conduct as set forth in the Code.
Unfair Advancement of Private Interests. Part B, Section 2 of the Code prohibits all City employees from using their position to unfairly advance private interests. Given the facts presented, it is unlikely that a violation of this section has occurred or will occur in the future. The owner submitted his application in March 1997, and was approved on a date prior to his current employment with the City. Moreover, the application he submitted was evaluated according to the terms and conditions of the program, the same terms and conditions applied to all applicants. Therefore, no violation of this standard of conduct is found.
Prohibited Interest in Contract. Part B, Section 10 of the Ethics Code prohibits city employees from having a financial interest in a contract with the City or its agencies, including SAWS. Under this section, a City employee is “any employee of the City who is required to file a financial disclosure statement pursuant to Section 1(a) of Part G.” Because the owner is not a City employee as defined in this section, he is not prohibited from contract with the City and may receive financing under the NAD’s rehabilitation rental housing program.
The Indian Creek Revitalization Program, a program administered by the NAD, provides forgivable and low interest loans to homeowners for needed improvements to their property. Homeowners must qualify as a low or moderate income person or family to be eligible for a loan under the program.
In March 1996, an application was submitted for property located at 8202 XYZ. The application was initially reviewed and placed on a waiting list. At the time of this submittal, the program employed an individual as a Construction Specialist. This individual subsequently terminated his employment with the City’s program in April 1998.
A construction specialist is responsible for, among other things, comprehensive inspections, cost estimates and plan reviews for single and multi-family affordable housing rehabilitation projects. These cost estimates and plan reviews are then written into a description of work sent to contractors for bids. It is the policy of the program to secure three (3) independent bids from general contractors to provide said services.
In November 1998, the case was assigned to a construction specialist. Upon completion of this cost estimate, six (6) bids were submitted. The individual, now a general contractor, submitted the second lowest bid on this project on July 9, 1999. The owner of the property selected this same individual for the job.
The issue is whether the individual may contract with the City under the NAD’s Indian Creek Revitalization Program given his former employment with the City. Under the current Ethics Code, a former City employee is an individual who terminates employment on or after January 1, 1999. Because, he is not a former City employee as that term is defined in the Ethics Code, he is not subject to the standards of conduct as set forth therein. He must, however, follow the standards of conduct for those individuals doing business with the City, including disclosing any potential economic benefit to a City official and/or employee. Provided he abide by the standards of conduct required of individuals doing business with the City, there should be no violation of the Ethics Code regarding his performance of work under city contract.
Current city employees and former city employees are subject to the standards of conduct as set forth in the Ethics Code. For current City employees, this includes prohibiting employees from using their position to advance private interests. Because the individual in Question One received approval prior to his present position with the City under the same terms and conditions applied to all applicants, he may participate in the Neighborhood Action Department’s Rental Housing Rehabilitation Program.
Former city employees subject to the standards of conduct set forth in the Code are those individuals who terminate employment on or after January 1, 1999. The individual in Question Two terminated employment prior to this date and is therefore not subject to said standards. However, he is subject to the standards of conduct required of individuals doing business with the City. As long as he abides by such standards, he may contract with the City to provide services under the Neighborhood Action Department’s Indian Creek Housing Rehabilitation Program.
FRANK J. GARZA