Ethics
Advisory Opinion No. 62
May
13, 2002
Issued
By: City Attorney’s Office
Whether a
business owned by a member of the GKDA may contract with the City of
A member of the Greater Kelly Development
Authority has asked whether his business may contract with the City of
On September 1, 1999, the Texas Legislature
enacted Senate Bill 655, codified in Chapter 378 of the Texas Local Government
Code, providing for the establishment of a special district inside the
boundaries of Kelly Air Force Base. To comply with the requirement of the new
legislation, the City Council passed and approved Ordinance Number 90826,
creating the Greater Kelly Development Authority ("GKDA"), on
November 4, 1999. The Board of the GKDA is appointed by the City Council and is
authorized to, among other things, "oversee[ ] the redevelopment of
Kelly Air Force Base."
A member of the Board of the GKDA is
currently a majority partner of a small minority woman owned business seeking
to contract with the City of
Because the members of the GKDA are
appointed by the City Council, its members are city officials as defined in
Part A, Section 2[1]
of the Ethics Code and are subject to the standards of conduct set forth
therein. The issue is whether a member’s business may contract with the City if
he relinquishes ownership interest to less than 10%.
Improper Economic Benefit. As a general rule, a City official may not take any
official action that is likely to have an effect on, among others, his economic
interest or the economic interest of a business in which he holds an economic
interest. The effect must be one that is distinguishable from its effect on the
public or a substantial segment thereof. If such action is required, the City
official is under a duty to recuse himself and disclose, in writing, to
the City Clerk the economic benefit.
It is unlikely that a matter involving the
member’s business will come before the GKDA. If, however, that should occur,
the member need only recuse himself from discussing and/or voting on the matter
and disclose such to the City Clerk.
Representation of Private Interests. Part B, Section 5 of the Code[2]
addresses representation of private interests before the City by a member of a
City board. Section 5(a)[3] states:
"A city
official . . . who is a member of a board . . . shall not represent any person,
group or entity:
- before that board or body;
- before city staff having responsibility for
making recommendations to, or taking any action on behalf of, that board
or body [ ]; or
- before a board or other city body which has
appellate jurisdiction over the board or body of which the city official
or employee is a member, if any issue relates to the official’s or
employee’s duties."
Representation before the City includes
actions by word or conduct made to induce either the City Council and/or City
staff to take action on behalf of the outside entity.
Pursuant to Section 5(a)[4],
the Commissioner may not represent the business before the GKDA, before City
staff providing support to the GKDA or before the City Council on an issue
involving his duties on the GKDA. The Commissioner may, however, represent
himself and/or the business before other boards and commissions and city staff
provided he neither assert nor imply that, by virtue of his membership on the
GKDA, he is able to influence City action.
Prohibited Financial Interest in Contract. Part B,
Section 10[5] prohibits
City officers from having a financial interest in a contract with the City or
its agencies. Under this section, a City officer includes, among others, "members
of any board or commission which is more than advisory in function."
Because the GKDA is more than advisory in nature, the individual is a City
officer for the purposes of this section.
To be in violation of this section, the
officer must have a financial interest in a contract with the City or its
agencies, such as the San Antonio Water System or City Public Service. A
financial interest includes, but is not limited to, a contract in which the
officer, the officer’s parent, child or spouse or a business entity in which
any of those named owns 10% or more of the voting stock or shares or 10% or
more of the fair market value of the business that is a party to a City
contract. If the member owns less than 10% of the business, the business may
seek to contract with the City. If, however, the member retains ownership
interest of 10% of more in the business, a violation of this section will exist
where the business contracts with the City and/or any of its agencies or
subcontracts on a City contract.
SUMMARY
Members of Boards and Commissions appointed
by the City Council are governed by the standards of conduct set forth in the
Ethics Code of the City of
ANDREW MARTIN
City Attorney