Ethics Advisory Opinion No. 17
March 1, 2005
Issued By: The Ethics Review Board
Whether an individual who formerly worked for the City in the Community Action Division of the Department of Community Initiatives could accept a position as the director for a non-profit organization that receives funding from the City?
In January 2005, an individual left employment with the City of San Antonio, where he had worked as a Senior Management Analyst for the Community Action Division of the Department of Community Initiatives. In that capacity, one of his responsibilities was to oversee the preparation of the City’s annual Supportive Housing Program (SHP) proposal to the United States Department of Housing and Urban Development (HUD). This is an annual national competition through which many San Antonio and Bexar County community based programs, including the American GI Forum’s National Veteran’s Outreach Program (NVOP), receive funding for homeless services. This former employee asks whether he may accept employment with the NVOP now that he no longer works for the city.
To address this question, it is necessary to examine the SHP proposal process. The SHP grants are competitive at two levels: First, local agencies submit their proposals to the city. Second, the city prepares a consolidated proposal on behalf of the “Continuum of Care.” The continuum is an association of private and public sector agencies that provides services related to homeless issues. The city’s consolidated proposal is not simply a list of services provided by these agencies, but also a plan on how these agencies will interact with one another to most effectively use resources. The city submits the consolidated proposal to HUD. HUD then reviews such proposals submitted from across the country.
The former employee supervised technical review of the proposal to ensure that they met all HUD requirements. He did not do a qualitative review of the proposals. All local proposals were then reviewed by a ranking and rating committee, made up of representatives from homeless or housing agencies, city staff, and homeless or formerly homeless persons. This committee was approved by an assistant city manager. The individual concerned was not a member of this committee. He did, however, oversee the preparation of the consolidated proposal sent to HUD.
HUD first reviews the proposals to determine if they reach a threshold score to receive any funding. If the threshold is not met, none of the proposals that are part of that consolidated proposal will be funded. If that threshold is reached, HUD then looks at each individual proposal within each consolidated proposal and decides whether or not to fund that proposal and at what level. Generally, HUD tries to fund agencies based upon the ranking determined by the local ranking and rating Committee, however, they retain the discretion to fund agencies out of sequence and have done so in the past. Normally this is done to try to fund more agencies that provide housing services as opposed to those agencies that provide only support services. Once HUD decides on funding for the city proposal, its staff develops grant agreements with the city. The City in turn develops delegate agency contracts with the funded agencies to provide the services as outlined in the agency proposal. All of these actions are then approved by City Council through an Ordinance. The City receives 2.5% of the total funding to administer the programs, while the agencies receive the remaining 97.5%.
Through this process, the NVOP was funded to help buy, renovate and operate their Homeless Veterans Residential Center, which is projected to open in March or April of 2005. An application for continued funding for operations will have to be submitted for NVOP to continue to receive HUD funding for the Center.
The individual concerned wishes to accept a position working as the Director of the NVOP’s Residential Center for Homeless Veterans, which is one of the programs funded through the SHP grant process. The Ethics Review Board has been asked to provide an opinion on whether or not this employment would violate the City of San Antonio’s Ethics Ordinance.
The Ethics Code Provisions
The Code’s definition of a “former city employee,” is found in Division 1, Section 2-42(p). The individual is a person who, prior to termination of employee status, was listed on the City of San Antonio payroll as an employee, and whose City duties terminated after the effective date of the Code, January 1, 1999.
Division 3 of the Code lists the standards of conduct to which a former city official or employee must abide. There are four (4) standards of conduct that apply to former city officials or employees in the provisions of Division 3. Those standards of conduct concern: (1) continuing confidentiality; (2) subsequent representation; (3) prior participation in negotiating or awarding contracts; and (4) discretionary contracts. These provisions read as follows:
Division 3: Former City Officials and Employees
Section 2-55 Continuing Confidentiality
A former city official or employee shall not use or disclose confidential government information acquired during service as a city official or employee. This rule does not prohibit:
(a) any disclosure that is no longer confidential by law; or
(b) the confidential reporting of illegal or unethical conduct to authorities designated by law.
Section 2-56 Subsequent Representation of Private Interests.
(a) Representation of Private Interests Before the City by a Former Board Member. A person who was a member of a board or other city body shall not represent any person, group, or entity for a period of two (2) years after the termination of his or her official duties:
(1) before that board or body;
(2) before city staff having responsibility for making recommendations to, or taking any action on behalf of, that board or body, unless the board or body is only advisory in nature; or
(3) before a board or other city body which has appellate jurisdiction over the board or body of which the former city official or employee was a member, if any issue relates to his or her former duties.
(b) Representation of Private Interests Before the City by Former City Officials and Employees. A former city official or employee shall not represent for compensation any person, private group, or private entity, other than himself or herself, or his or her spouse or minor children, before the city for a period of two (2) years after termination of his or her official duties. This subsection does not apply to a person who was classified as a city official only because he or she was an appointed member of a board or other city body. 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.
(c) Improper Representation of Influence. In connection with the representation of private interests before the city, a former city official or employee shall not state or imply that he or she is able to influence city action on any basis other than the merits.
(d) Representation in Litigation Adverse to the City. A former city official or employee shall not, absent consent from the city, represent any person, group, or entity, other than himself or herself, or his or her spouse or minor children, in any litigation to which the city is a party, if the interests of that person, group, or entity are adverse to the interests of the city and the matter is one in which the former city official or employee personally and substantially participated prior to termination of his or her official duties.
Section 2-57 Prior Participation in Negotiating or Awarding of Contracts
A former city official or employee may not, within two (2) years of the termination of official duties, perform work on a compensated basis relating to a discretionary contract, if he or she personally and substantially participated in the negotiation or awarding of the contract. A former city official or employee, within two (2) years of termination of official duties, must disclose to the City Clerk immediately upon knowing that he or she will perform work on a compensated basis relating to a discretionary contract for which he or she did not personally and substantially participate in its negotiation or award. This subsection does not apply to a person who was classified as a city official only because he or she was an appointed member of a board or other city body.
The Ethics Review Board has examined the SHP funding process and the former employee’s role related to that process. Section 2-57 of the Ethics Code provides that a former employee cannot “perform work on a compensated basis relating to a discretionary contract, if he or she personally and substantially participated in the negotiation or awarding of the contract.” Under the facts presented in this inquiry, clearly the employee was knowledgeable and involved in this process. Also, the SHP-HUD grants appear to constitute a major source of funding to NVOP, the employee’s prospective employer. Accordingly, in working for NVOP, the former employee would be “performing work on a compensated basis” related to the delegate agency contract between the city and NVOP.
The former employee’s role in the SHP process however, appears to have been limited to technical review and preparation of documents related to that procedure. All substantive decision-making was done by the city’s ranking and review committee and HUD. The delegate agency contracts between the city and the continuum agencies were approved by the City Council based on HUD’s decisions on the consolidated proposals. Because the former employee’s role did not include substantive decision-making, this employee is not prohibited from accepting employment with NVOP, even though NVOP’s funding comes primarily from the SHP-HUD grants.
However, the employee must remain mindful of Section 2-55 (Confidentiality) and Section 2-56 (Subsequent representation of private interests). Under Section 2-56, although the former employee may accept employment with NVOP, he cannot represent NVOP’s interests before the city or before city staff for compensation for a period of two years after the end of his employment with the city.
Under the facts presented, the former employee may accept employment with the city’s delegate agency. However, he cannot represent that agency’s interests for compensation before the city or city staff for a period of two years after terminating his service with the city.
ARTHUR DOWNEY, District 9
 Section 2-58 pertaining to discretionary contracts between the city and a former city officer or employee is not applicable because this employee was not in the category of employees who filed financial disclosure statements. See City Attorney’s Ethics Advisory Opinion No. 91 (2004) for discussion on the prohibited contracts provision of Section 141 of the City Charter and Section 2-52 of the City Code (Ethics Code) as it relates to current employees who file financial disclosure statements. Section 2-58 is the parallel provision regarding former employees.