Ethics Advisory Opinion No. 96
Issued By: City Attorney’s Office
May a city employee contract with the city to provide services as an independent consultant?
city employee has expressed interest in seeking a contract with the City of
III. Ethics Code
The City Charter and the Ethics Code both prohibit city officers and higher-level staff members from having an interest in a contract with the city. Section 141 of the City Charter states:
“No officer or employee of the City shall have a financial interest, direct or indirect, in any contract with the City, or shall be financially interested, directly or indirectly, in the sale to the City of any land, materials, supplies, or service, except on behalf of the City as an officer or employee. Any willful violation of this Section shall constitute malfeasance in office, and any officer or employee guilty thereof shall thereby forfeit his office or position. Any violation of this Section, with the knowledge, expressed or implied, of the person or corporation contracting with the Council shall render the contract involved voidable by the City Manager or the Council.”
This prohibition is reiterated in Section 2-52 of the Ethics Code. The “prohibited contracts” provision strictly forbids an officer or employee from having an interest in a contract with the city. The sanction for a willful violation is forfeiture of the employee’s position with the city. City Charter, Section 141. The critical issue, therefore, is whether this prohibition applies to this employee.
Section 2-52(e)(1) defines “employee” for purposes of applying the “prohibited contracts” regulation as any employee of the city who is required to file a financial disclosure statement pursuant to Section 2-73 of Division 7 (Financial Disclosure Report). “Financial disclosure” employees are executive-level staff such as department directors and assistant department directors.
The “prohibited contracts” provision does not apply to “specified” employees who file the one-page gift report under Section 2-78, or to the remaining employees who not subject to any financial disclosure requirement. The employee in this inquiry is not subject to any financial disclosure requirements. For this reason, the “prohibited contracts” provision of Section 141 of the City Charter does not apply to her. She is not prohibited from entering into a contract with the city.
B. Conflicts of Interest
The City Ethics Code prohibits city officials or employees from participating in a matter before the city that could affect their personal financial interests or those of their family or household members. Ethics Code, Section 2-43. As noted above, the employee will have no contact with this contract selection or administration in her capacity as a city employee. Accordingly, her effort to secure this contract would not violate the city’s conflicts-of-interest rules.
C. Conflicting Outside Employment and Use of Public Resources
Under the Ethics Code, city personnel cannot accept or engage in outside employment that may impair the judgment or faithful performance of their responsibilities as city employees. Ethics Code, Section 2-48. Further, city staff cannot use or permit the use of city facilities, equipment, supplies or time while on city duty for private purposes. Ethics Code, Section 2-49.
The employee must be cognizant that her work in connection with the consulting contract cannot impair or interfere with her employed position. In addition, she may not use any time or other city resource in her service as a city employee to conduct work in connection with this contract, other than those provided for pursuant to the contract.
D. Representation of Private Interests Before the City
The code prohibits a city official or employee from representing any person, group or entity, other than himself or herself or immediate family, before the city for compensation. Section 2-47(b)(1). The employee of this inquiry intends to represent herself in her attempt to secure the contract. Also, there is no indication that she would be compensated by any person or entity for this effort. Accordingly, this provision of the code would not prohibit her from seeking this contract.
Because the employee is not subject to financial disclosure requirements under Section 2-73 of the Ethics Code, she is not precluded from contracting with the city. The employee should remain cognizant of the other provisions of the code, though, that prohibit the interference of the outside work with her responsibilities as a city employee.
 Section 2-52(e)(2) defines “city officers” to include (A) the Mayor or any Council member; (B) a Municipal Court Judge or Magistrate; (C) a member of any board or commission which is more than advisory in nature. The term does not include members of the board of another governmental entity even if some or all of these members are appointed by the city.