City of San Antonio, Texas
Ethics Advisory Opinion No. 91
September 1, 2004
Issued By: City Attorney’s Office
May a city employee purchase real estate
and enter into a development contract with the
San Antonio Development Authority (SADA)?
I. Factual Background
A city employee and her husband own a home-building company. The employee works for the city’s Development Services Department. The employee inquires whether she and her husband may purchase lots from the San Antonio Development Company (SADA), the city’s urban renewal agency. She also inquires whether her company may seek to enter into a contract with SADA to build homes on the lots.
II. The Ethics Code
A. Prohibited Interest in Contracts
Section 141 of the City Charter and Section 2-52 of the Ethics Code bar a city officer or employee from having a financial interest in a contract with the city or in the sale of any land, materials, supplies or service to the city. In general, a city employee is an individual listed on the city payroll. However, for purposes of Section 141 of the City Charter, the definition of “employee” is limited to employees who are required to file a financial disclosure statement under Section 2-73. Ethics Code, Section 2-52(e)(1).
Accordingly, an employee who files a financial disclosure statement may not have any interest, direct or indirect, in a contract with or in a sale of supplies or services to the city. Such an employee would also have a prohibited financial interest if he owned 10% or more of a business that had a contract with the city. Ethics Code Section 2-52(b). A willful violation of this provision results in the employee’s forfeiture of his position with the city and the contract becomes voidable by the City Manager or the City Council. City Charter Section 141, Ethics Code Section 2-52(a).
The employee of this inquiry is not subject to the financial disclosure statement requirements under Section 2-73. Therefore, the “prohibited interest in contracts” provisions do not apply to her. The employee and the business owned by her and her husband may enter into an agreement with the city to purchase lots through SADA without creating a prohibited interest for the employee in violation of these provisions. They may also seek a contract with SADA to build on those lots.
B. Conflicting Outside Employment
Section 2-48 of the Ethics Code states that a city employee cannot solicit, accept or engage in concurrent outside employment which could impair or interfere with the employee’s official duties. From the information provided in the inquiry, there is nothing to indicate that the city employee’s outside business impairs or undermines her work for the city. Assuming that this outside work does not interfere with her work for the city, there is no violation of this provision of the Ethics Code.
In addition, under Municipal Civil Service Rule XXIV, an employee must obtain written approval from his department director before engaging in the outside employment. Assuming that the outside employment will not interfere with the employee’s work for the city and assuming the director has approved the additional employment in writing, the employee may engage in the outside employment.
C. Improper Economic Benefit
A city official may not take any official action that is likely to have an effect on his or her economic interest or the economic interest of someone in the official’s immediate family, household or business entity with which the individual is closely connected. Ethics Code, Section 2-43.
Section 2-42(v) defines “official action” as
(1) any affirmative act (including the making of a recommendation) within the scope of, or in violation of, an official or employee’s duties, and
(2) any failure to act, if the official or employee is under a duty to act and knows that inaction is likely to affect substantially an economic interest of the official or employee or other closely related person or entity.
This employee works for the Development Services Department. Because the employee’s business may require services of that department, there is a potential that a matter concerning the employee’s business might come before the employee in her capacity as a representative of the city.
In such a situation, she would be prohibited from taking any official action or neglecting to take action in any matter concerning that business. She would also be precluded from using her position with the city to influence other city employees, especially those in her department from taking or not taking action.
SADA programs are a matter of public information and are available to any member of the public to apply. So long as the employee and her husband apply for and are considered for these plot purchases and development contracts under the same standards and procedures as any other member of the public, the Ethics Code would not preclude the employee and her business from engaging in these transactions.
D. Unfair Advancement of Private Interests
Section 2-44 of the Ethics Code prohibits the use of a city official’s position to unfairly advance or impede the private interests of another or to grant or secure for any person, including the official himself, any form of special consideration beyond that which is lawfully available to other persons.
Again, should some issue regarding the employee’s business come before her department, she must not participate in any related action, nor use her position to influence others who work for the city.
Further, any representative of SADA must also adhere to this standard of conduct and consider any applications or contract proposals from this employee’s company under the same standards and procedures applied to other members of the public.
E. Representation of Private Interests
Section 2-47 states:
A city official or employee shall not represent for compensation any person, group, or entity, other than himself or herself, or his or her spouse or minor children, before the city. For purposes of this subsection, the term compensation means money or any other thing of value that is received, or is to be received, in return for or in connection with such representation.
Representation or appearance “before the city” means representation before the City Council; before a board, commission, or other city entity or before a city official or employee. Section 2-42(d). “Representation” is a presentation of fact – either by words or by conduct – made to induce someone to act. Representation does not include appearance as a witness in litigation or other official proceedings.
Pursuant to these standards, the employee may not represent an incorporated entity or other separate legal entity for compensation before the city. She may represent herself before the city and the business if it is a sole proprietorship that does not have a separate legal existence from the individual. See Ethics Advisory Opinion No. 65 (2002).
F. Confidential Information
A city employee may have access to confidential information not available to the general public. Under Section 2-46, an employee cannot obtain or disclose confidential information for any purpose other than the performance of his or her official duties.
G. Public Property and Resources
A city employee shall not use, request or permit the use of city facilities, personnel, equipment or supplies for private purposes except to the extent and according to the terms that those resources are lawfully available to the public. Ethics Code, Section 2-49.
The Ethics Code precludes an official or employee required to file a financial disclosure statement from having an interest in a contract or transaction with the City. Since the employee is not subject to the financial disclosure reporting requirement, the “prohibited interest in contracts” provisions do not apply to her. However, the employee should remain cognizant of the other provisions of the code that may potentially apply to her circumstances.
 The employee reports that she is a “specified employee” who is required to file an annual gift report pursuant to Section 2-79 of the Ethics Code. “Specified employees” are not “employees” for purposes of the application “prohibited interests in contracts” provisions of Section 141 of the City Charter or Section 2-52 of the Ethics Code.