Ethics Advisory Opinion No. 11
February 28, 2003
Issued By: The Ethics Review Board
Whether having raised funds for a project, may an individual serve in an advisory capacity to the engineering firm selected to design the project; and
Whether that same individual can continue to serve on the Hays Street Bridge Restoration Group in their efforts to raise additional funds, some of which will come from the City; and
Whether these actions would constitute a conflict of interest, thus violating the City Ethics Code.
Early in the year 2000, Douglas Steadman initiated a project to restore the old Hays Street Bridge in San Antonio. He first sought to have the bridge classified as a Historic Civil Engineering Landmark, which led to the bridge being declared a Texas Historical Civil Engineering Landmark on March 28, 2001. After receiving support from the Eastside’s community leaders, he began raising funds, including receiving a pledge from the San Antonio Conservation Society Board for $50,000. Engineering firms and groups also pledged a total of $40,000, and public companies and foundations pledged another $50,000.
Mr. Steadman worked with contractors, material suppliers, the Texas Department of Transportation (TxDOT) Bridge Division and District 15 offices, and with engineering firms to prepare a restoration budget. Brian Chandler of the City's Planning Department did the most of the work in preparing the submission for TEA-21 Funds. A group of supporters was formed known as The Hays Street Bridge Restoration Group. Members of the group included representatives from the Conservation Society, Eastside Community, Engineering Societies, and the Hike and Bike Subcommittee of the Metropolitan Planning Organization (MPO).
The San Antonio City Council passed a resolution committing $93,000 per year for three years for a total of $279,000. At the end of January 2002, the Hays Street Bridge Restoration Group and the City were notified that the bridge project had been approved for 80% funding ($2.86 million) to be administered by TxDOT. TxDOT then contracted with the City to manage the project, and the City is currently in the process of selecting an Engineering Firm to design the Restoration Project.
Several engineering companies applying for the project have contacted Mr. Steadman to see if he would join them. Concerned that there might be a perception of a conflict of interest, he contacted the State Board of Registration for Professional Engineers and was told that he was not precluded from working for one of the firms under the engineer’s code of ethics, but should write a letter to each team considered, explaining his position. Mr. Steadman also requested this opinion from the City’s Ethics Review Board.
Before addressing the specific questions, it is pointed out that the provisions of the Ethics Code apply to "City officials and employees" as defined therein. Under Section 2 of Part A of the Code, the term "official" includes, among others, "members of all boards, commissions (except the Youth Commission whose members are minors), committees, and other bodies created by the City Council pursuant to federal or state law or City ordinance, including entities that may be advisory only in nature: and board members of any entity who were appointed by the City Council to such board membership. " The Hays Street Bridge Restoration Group is not an included entity.
Another issue is whether Mr. Steadman is required to register as a lobbyist. This turns on the requirements for registration set forth in Section 3 of Part E of the Code.
The applicable standards of conduct as set forth in the City’s Ethics Code are:
“An action is likely to affect substantially an economic interest if it is likely to have an effect on that interest that is distinguishable from its effect on members of the public in general or a substantial segment thereof…”
(a) General Rule. “A city official or employee may not use his or her official position to unfairly advance or impede private interests, or to grant or secure, or attempt to grant or secure, for any person (including himself or herself) any form of special consideration, treatment, exemption, or advantage beyond that which is lawfully available to other persons.”
(b) Special Rules. (2) Reciprocal Favors. “A city official or employee may not enter into an agreement or understanding with any other person that official action by the official or employee will be rewarded or reciprocated by the other person, directly or indirectly.”
(a) Charter Provision. “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 services…”
(a) Disclosure of Parties, Owners, and Closely Related Persons. For the purpose of assisting the city in the enforcement of provisions contained in the City Charter and this code of ethics, an individual or business entity seeking a discretionary contract from the city is required to disclose in connection with a proposal for a discretionary contract on a form provided by the city:
(1) the identity of any individual who would be a party to the discretionary contract;
(2) the identity of any business entity that would be a party to the discretionary contract and the name of:
(A) any individual or business entity that would be a subcontractor on the discretionary contract; and
(B) any individual or business entity that is known to be a partner, or a parent or subsidiary business entity, of any individual or business entity who would be a party to the discretionary contract; and
(3) the identity of any lobbyist or public relations firm employed for purposes relating to the discretionary contract being sought by any individual or business entity who would be a party to the discretionary contract.
Section 3 provides as follows:
Except as provided by Section 4,n a person who engages-in lobbying must register with the City Clerk if
(a) with respect_ to any client, the person engages in lobbying activities for compensation of more than one thousand dollars ($1000) in a calendar quarter; or
(b) the person expends more than one thousand dollars (S1000) for lobbying in a calendar quarter.
The terms "compensation " and "expenditure " are defined in Section 2 of Part E.
A review of the provisions of Part B of the Ethics Code relating to present city officials and employees indicates that the provisions of Part B have no application to Mr. Steadman. Part B, Section 10 of the Ethics Code prohibits city officers from having a financial interest in a contract with the City or its agencies. This section is not subject to violation for two reasons. First, Mr. Steadman is not a city official or employee as defined by the Code. Secondly, in order for Mr. Steadman to have a financial interest, he must own 10% or more of the voting stock or shares of one of the engineering firms or own 10% or more of the fair market value of the business. Mr. Steadman would be a consultant of the company, not partial owner. However, even if Mr. Steadman were an owner, it would not be a violation of the Code because he is not a city officer under this section of the code.
Unless and until Mr. Steadman either engages in lobbying activities (as described in Section 2(h) of Part E) for compensation of more than one thousand dollars ($1000) in a calendar quarter or expends more than $1,000 for lobbying in a calendar quarter, he is not required to register as a lobbyist.
It is the opinion of the Ethics Review Board that under the Ethics Code of the City of San Antonio, there is no legal impediment preventing an individual who appears/has appeared before the City from being employed by a firm doing business with the City provided he abides by the standards of conduct as set forth. The Ethics Review Board observes that Mr. Steadman has taken care to avoid the appearance of impropriety and compliments him on his rectitude.
ARTHUR DOWNEY, District 9