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LRAC PKT 09-28-2012 CITY OF FEDERAL WAY LOAN REVIEW ADVISORY COMMITTEE SEPTEMBER 28,2012 11:30 a.m—1:00 p.m. Nyberg Conference Room AGENDA 1. Call to Order 2. Roll Call 3. Election of Chairperson and Vice Chairperson 4. Old Business 5. New Business 6. Conflict of Interest,Public Records,and Open Public Meetings Act Compliance --Amy Jo Pearsall 7. CDBG&Lending Guidelines --Jay Bennett 8. Policy Discussion --Committee Member Evans 9. Calendar ; 10. Other Committee Items 11. Adjournment � CITY OF Federal Way CITY ATTORNEY'S OFFICE MEMORANDUM DATE: SEPTEMBER 28,2012 TO: LOAN REVIEW ADVISORY COMMITTEE FROM: CITY ATTORNEY SUBJECT: ORIENTATION-LEGAL ISSUES A. Committee Authoritv. 1. Authorized under Chapter 2.57 of the Federal Way Revised Code(FWRC). 2. The CDBG Loan Advisory Review Committee(LRAC)is responsible for making reports and recommendations to the city council and mayor. The duties of LRAC are as follows: a. Understand the regulations, goals and objectives governing the use of community development block grants funds. b. Ensure that loan applications comply with CDBG program regulations, goals and objectives. c. Recommend approval or disapproval of the funding of each application brought before the committee. d. Provide input and recommendations on program policy issues. e. Disclose any potential conflicts of interest. 3. Staff a. Community Services Manager Jay Bennett, 253-835-2650 b. CDBG/Human Services Coordinator Dee Dee Catalano, 253-835-2651 c. Legal Advisor Amy Jo Pearsall, 253-835-2573 B. Conflict of Interest—Code of Ethics The Federal Way Code of Ethics("Ethics Code") applies to all"members of City Boards, Commissions, Committees . . . appointed by the City Council." Ethics Code, Sec. 2.1. The premise of the Ethics Code is conducting City business in a"fair, open, efficient and accountable manner." Ethics Code, Sec. 1. To that end City representatives ... shall conduct their public and private actions and financial dealings in a manner that shall present no apparent or actual conflict of interest between the public trust and private interest. Each Official and Employee is assumed and expected to act in accordance with all laws and code of ethics that may apply to his or her position, as well as striving to avoid even an appearance of impropriety in the conduct of this Code of Ethics and meet its requirements. The focus is usually on a financial or personal gain for immediate family members as well. o Immediate family is defined as a spouse/partner and/or dependant children residing in the home. Sec. 2.5. o In addition to an actual monetary gain,there can be a"remote interest". Sec. 2.6. A remote interest generally arises via memberships on other boards,but can also come about as a volunteer to another organization. The criteria for determining if there is a remote interest is whether the individual can influence policy or funding of the other entity. Sec. 2.6(a) o Usually a conflict or the appearance of a conflict can be addressed by stating the interest in a public meeting. This allows others the opportunity to state objections and the bases for objecting to the participation. It is important for individuals to continue their service for other entities as well as continue for the City. If there is a question whether a remote interest will preclude participation, please contact the designated Legal Advisor. The City Council recently modified the Rules of Procedure to address potential conflicts of interest. At the beginning of each calendar year, Staff will give all Committee members a form to list all board memberships and employment for immediate family members. The members should complete the form and return it to the Staff representative. This list may help the Committee member remember when there is a potential conflict of interest and will help Sta�identify them beforehand as well. C. Open Public Meetings Act. The Committee must conduct its business in an open public meeting in accordance with State law. As a result the Committee will decide when it has regularly scheduled meetings to comply with the Open Public Meetings Act. Any other time that a quorum meets or a subcommittee meets to conduct business is considered a"special meeting",which requires separate notification by the City Clerk of at least twenty-four hours. Conducting business is broadly defined as"action",which includes deliberating,discussing, considering,reviewing, evaluating, and reaching a collective position(consensus)by a majority of the Committee. The courts have interpreted"action"to occur via a telephone tree, e-mails, or other forms of communication,which may not require the personal,physical presence of inembers. When responding to an email,please do not hit"reply all". 2 Because the Committee must conduct business in an open meeting, it is also entitled to meeting in Executive Session provided that the topic meets the requirement and provided that the Executive Session has been properly advertised. Before advertising or scheduling an Executive Session,the Legal Advisor should be consulted to ensure that the topic or purpose meet the statutory requirements and will attend the session. D. Public Records. A public record is defined to include any and all written information relating to the conduct of the Committee. The form of the information is irrelevant(i.e. electronic,video tape, audio tape, etc.). Likewise,the location of the record is irrelevant. For example, a Committee member may have a public record, such as the Committee agenda or e-mails addressing a particular matter, on his/her private computer. In the event the City receives a public disclosure request or is involved in litigation,the personal computers of committee members may be subject to inspection. The key to determining whether the information is a public record is subject matter—not title. Generally all public documents are subject to disclosure. There are some specific exemptions that may apply in limited circumstances,but the Law Department will make that determination. Even if an exemption applies,the information will need to be released if portions of the exempt information may be blocked out. E. Use of Public Facilities 1. Cannot Be Used in Campai n�s. State law specifically prohibits the use of public facilities for an elective office or for the promotion/opposition to any ballot proposition,even if the City Council takes official action to express a collective position. RCW 42.17.130. This provision would also apply when individuals are attempting . to gather a sufficient number of signatures to place an initiative on the ballot for the upcoming election. The Public Disclosure Commission is the entity charged with the responsibility to monitor the use of public facilities. RCW 42.17.395. The State is serious about prohibiting the use of public facilities as evidenced by the fact that any individual in violation may be subject to a penalty of not more than ten thousand dollars. RCW 42.17.390. 2. Citv Purposes or Process. Generally City meeting rooms or conference rooms should be used for a City purpose. A City purpose means that Staff and/or elected officials are involved, as part of their work, in the meeting andlor event. Usually rent is not charged for the use of space in City Hall(enterprise funds like Dumas Bay and Federal Way Community Center may charge rent for City purposes). It is not a City purpose when an entity wants to use space and no Staff or elected officials are involved, or the topic is beyond the City's purview. If the request is for a use that does not fit a City purpose,there is a process to potentially obtain the space under a rental agreement. The Council's Executive Administrative Assistant administers the program. K:\training\orientation\2012\CDBG Loan Review rldvisory Committee 3 . CITY OF . -Fe�de.r,��l V�a Y . . � � �e o . . lcs . �a� , C'.�.ty Counc.�members, � Clty.M�a.�a�er ana�' . C.i,t���mplo�ees � . . � � , � _Z� . . THIS PAGE LEFT BLANK INTENTIONALLY. ' • , . °INTRODUCTION � � • City Councilmembers are elected to exercise their discretionary powers pursuant to the laws and the Constitution anrhich may often involve honest dfsagreement on policy matters; and � In the exercise of these powers the Councilmembers should operate within a framework that wiU protect the public trust and ensure public confidence in the conduct of elected officials and public employees; and • Good govemment should operate and conduct itself in an open and impartial manner, and#o a standard that ensures an�efficient, fair and accountable system; and � The Code of Ethics includes a method to appoint an�alternate Board of Ethics � , member in cases of recusement or other unavailability; and • The Code of Ethics includes sanctions for violations of the Code cif Ethics; and • The Code of Ethics grants the Board of Ethics subpoena powers in order for the Board to complete a full and fair investigation of any written complaint before the • Board; and • The Code oi Ethics provides for the stay of the complainf proceedings during the City Counci!'s consideration of the Board of Ethics application for subpoena power or during any proceeding to compel a person to respond to a properly issued subpoena. . 1 ! - Z:(� THIS PAGE LEFT BLANK INTENTIONALLY. . 2 � ( - Z�? Sec.tion 1 — Po:licv � The City of Federal Way is committed to conducting its business in a fair, open, efficient and�accountable manner. Public Officials and Employees shall conduct their public and private ac#ions and financial dealings in a manner that shall present no apparent or actual conflict of interest between the public trust and that private interest. Each Official and Employe� is assumed and expected to act in accordance with all laws and codes of ethics that may apply to his or her pasition, as well as striving�to avoid even an appearance of impropriety in the conduct ofi his or her office or business. Each Employee shouid be informed of this Code of Ethics and meet its requirements. Questbns regarding its irrterpretation should be brought to an Employee's Supervisor at�d the City Attomey for interpretation�of this Code and should proceed through protaess+�s provided#or in the Personne) Policy Manual to act upon allegations of misconduct in violation of this Code. Questions regarding the interpretation of the Code as applied to Councilmembers and allegations of violation of this Code by Councilmembers shall be referred to the Board of Ethics through the process � established herein. . � Section 2 — Definitions � . � � Throughout this Code of Ethics, the following definitions shall apply. 2.1 City Council For the purposes of this Code of Ethics only, "City Council"or"Councilmembers" also includes members of City Boards, Commissions, Committees, or other multi- member bodies appointed by the City Council. . � 2.2 Family . Spouse, parent, child, sibfing, aunt, uncle, niece, nephew, cousin, grandchild, grandparent or any parent-in-law, son-or daughter-in-law, or brother-or sister-in- law. - 2.3 Financiallnterest � (a) Existence—A financiai int�erest may be deemed to exist in any of the following situations: (1) A creditor, debtor or ownership interest in any corporation, partnership,joint venture or other entity(inc{uding without�limitation, � ownership evidenced by stock purchase) in an amount or value to or greater than a one percent (1%) interest in any such entity, or (2) . Any paid employee, agent, consultant or officer of any corporation, � � partnership,joint venture, business or other entity. . 3 ���2� � . . (b) Exceations—Nofinrithstanding the provisions of Sectibn 2.3 (a)(1) and (2), a financial interest shall not be deemed to exist in any component investment within any fund or plan where an owner of an interest in a mutual or other pooled investment fund or in any employee or retirement benefit plan (including without limitation, pension plans, profit sharing plans ar�d deferred compens�tion.plans): 1)has no right to control or influence the selection of component investments; 2) has not influenced the sele�tion of component investments; and 3) has not created�or used ' the fund or plan to subvert the.intent of this code. 2.4 Gift A rendering of money, property, senrices; discount, loan forgiveness, payment of , indebtedness, reimbursements from or payments by persons, other than the City of Federal Way for trevel or lodging or anything else of value in retum for�which , legal consideration of equal or greater value is not given and received, excluding: (a) Things of m.inimal value. � (b) Any contribution under chapter 42.17 RCW (Disclosure—Campaign ' Finances— Lobbying— Records). (c) Any informational material transferred for the purpose of infor.ming the. recipient about matters pertaining to official City business, and that is not intended to financially benefit the recipient. ��� Any svmh�tic pr�s�ntation n9t intended #o finan�i�lly benQfit#he r�Gipi�n#, (e) Things of value not used and that,within thirty(30)days after receipt, are rgturned.to the donor or delivered to a charitable organization without being claimed as a charitable contribution for tax purposes; (fl Things of value received in the normal course of private business or social interaction or from family that are not related to public policy decisions or City actions. ' (g) The acceptance of a gift on behalf of the City pursuant to City Council � rules regarding acceptance of gifts. � . 2.5 Irr�mediate Family Spouse and dependent children. 2.6 Rernote Interest . A remote interest may be deemed to exist where an individual is: (a) An unpaid office�, Board member, Qr oth�er person who functions in a � decision-making capacity which can influence policy or funding of a corporation, partnership,joint venture�or other entity; ' � (b) A landlord or tenant of an entity contra�ting with the City of Federal Way; or,� (c) A holder of less than one percent (1%)of the shares of, or ownership interest in a business entity contraction with the City; provided no interest 4 . t "Z� . shall be deemed to b.e remote where a Councilmember influences or attempts to influence any other Courrcilmember or City Employee to take any action which financially benefits the Councilmember by or through the interest. 2.7 City Employee Any individual who is appointed as an Employee by the appointing authority for the City. . 2.8 �Manager The individual who has been appointed by the City Manager of the City of Federal Way by the Federal Way City Council. . �ection 3 -- Personal Gair� or Profit 3.1 A Councilmember, the Manager or Employee shail not knowingly use his or her office or position for.personal or family gain or profit. . 3.2 A Councilmember, the Manager or Employee shall not use City-owned property ' or City services for personal or family gain or profit. ' . 3.3 A Councilmember, the Manager or Employee shall not use information acquired , in confidence from a City customer, supplier, lessee or contracto�for other than . City purposes. Section 4'— Conflict of Interest 4.1 A Councilmember, the Manager or Employee shall not knowingly engage in ' activities which are in conflict, or which have the potential to create a conflict, v�ith pertormance of official duties. Examples of conflicts, or potential conflicts of interest include but are not necessarily limited to, circumstances where the Councilmember, Manager or Employee: (a) influences the selection or non-selection of or the conduct of business - between the City and any entity when the Councilmember, Manager or Employee has a financial interest. (b) Solicits for himself or herself or for another, a gift or any other thing of • value from the City or from any person or entity having dealings with the City; provided, however, that no conflict of interest for the Councilmember, Manager or Employee shall be deemed to exist with respect to solicitation for campaign contributions required to be reported under Chapter 42.17 RCW or for chari#able contributions. 5 �v�� . (c) Accepts any retainer, compensation, gift or.other thing of value which is contingent upon � spec�c action or non-action by the City Council, City Manager or Employee. (d) Accepts a gift in any manner other than as provided in Section 5 (Acceptance of Gifts). � (e) Intentionally uses or discloses information not available�o the general public and acquired by reason of his or her official position which financially benefits himself or herseff, family,friends or others. 4.2 A Council member s�iall not take part in any Councit a�tion. as that term is � defined in Chapter 42.30 RCW, conceming any contract, property, or other matter of�any kind, in which the Councilmember or his or her immediate family has a financial interest, or which otherwise creates a cvnflict of interest. 4.3 A Councilmember shall disclose the#act and �xtent of a remote irrterest#or the • official minutes of the City Council prior to taking any action related to the interest ar�d, thereafter, all acfion taken by the City Council related to such interest shali be by a yote sufficient for the purpose without counting the vote of the Councitmember having the remote interest. 4.4 Restrlctions After Leaving the.City (a� For Qne �11 y�ar aft�r leaving the �ity; a Councilmember,#h� M�n�ger pr an Employe� may not hold or�cquire a financia! interest,direct or indirect, , personally or through their family, in any contract made by,through�or unde�their supervision, or accept, d'irectly or indi�ectly, any compensation, gratuity, or reward from any person interested in such a contract or transaction. (b) For one (1)year after leaving the City, a Councilmember�the Manager or an Employee may not(a) assist anyone in proceedings involving the City where such Councilmember� Manager or Employee worked on a matter in which they were officially involved in the course of their dutiss; (b) � represent.any private person�as an advocate on a matter in which they were involved; or . ' (c� Compete for a City contract when they were involved in determining the scope of work or the selection proces�. A Councilmember, the Manager or an Employee may never disclose or use the City's privileged or proprietary information except to p.erfo�m official duties. . 6 . t -3 � � Section 5-- Accep#ance of Gifts . 5.1 Except as provided in Section 2.4, a Council member or Employee may not . accept gift�of cash in any amount. � 5.2 The Councilmembers,the City Manager and City Employees may not accept personal gifts. • Section 6 — CampaiQn Act�vities . � City Employees may participa#e in#he political process only on fheir own time, and only outside of the workplace by warking on campaigns for the elections of any person to any office, or for the promotiort of or the opposition to any ballot proposition, and shall not use or authorize the use of the facilities of the City for such purposes except as may � be authorized by law under the provisions of Chapt�r 42.97.130 RCW. Section 7 — Board of Ethics ' Complaint Against a Councitmember and Advisory Opinions Regarding Councilmembers 7.1 There is created a Board of Ethics for the'City of Federal.Way. The purpose of this Board of Ethics is to issue advisory opinions on the provisions of this Code of . ' Ethics and to investigate and report to the City Council on any alleged violations of this Code of Ethics, all as set forth below. 7.2 The Board.of Ethics shalt be composed of three (3)members, and one(1) alternate member ("first alternate") none of which shall be a City Councilmember or City Employee. The Board members shall be appointed by the City Council. The alternate member may attend all meetings of the Board, but shall have no voting rights except as othennrise provided herein. The tenn of each Board member shall be three (3)years. The first three members shall be appointed for one (1), two (2)or three (3) year terms, respectively. The first Chair of the Board shall be determined by the Council and the Chair ' shall be appointed to the three (3) year term. The other terms are to be � determined by lot. After the first year of the Chair's term,the Board shall determine and elect its Chair thereafter. The Chair'shall serve for a period of one (1)year, unless reelected. In the event a Board member must recuse himself or herself or otherwise be unavailapfe to conduct Board business, the first alternate member shall•serve in his/her place. If a second altemate member is required, 7 . l -3 Z-- . the Board shall select such alternate member from a pool consisting of prior Board members who have served during the three (3) prior terms ("second alternate"). The second alternate Board member shall be chosen by agreement of the remaining Board members. In the event no former Board members are ' available, the City Council shall appoint an alternate Board member. In filling any , vacancy or making an appointmerrt to the Board of Ethics�the City Council shall � strive to select members with diverse perspectives and areas of-expertise . appropriate to the review of ethical matters, and who are of good general reputation and character. . 7.3 . A majority of the Board of Ethics shatl constitute a quorum. The Board shall � meet as frequently as it deems necessary and in accordance with the provisions of the Code. The Board shall adopt pro�edures consistent with the provisions of � the Code.goveming the conduct of�its meetings� investigations, hearings and the issuance of opinions, . � 7.4 Speciflc Complaint Against a Councilmember (a) Any person may submit a written complaint to the City Clerk alleging one (1)or more violations of this Ethics Code by a Councilmembec. The allegation must set forth specific facts with precision and detail, sufficient for a Deterinination bf Sufficiency by tMe Board. In add.ition, the complaint !?'!��St se#f�!tn the��cific seCtinnc an���ubsectlons�+f thi��G!+�e that.�hP facts violate, and the reasons wh.y. Each complaint m�st�be signed by the persori or persons submitting it, must state the submitter's correct name� address at which mail may be personally delivered to the submitter, and the telephone number at which the submitter may be contacted. (b) The �ity Clerk shall submit that complaint'to the Board for Determination of Sufficiency of the c�mplaint. A complaint cannot b� sufficient unless it precisely alleges and describes unjust�ed aCts which constitute a prima facie showing a violation of a specified provision or provisions of this Code. The purpose of requiring that the complaint be sufficient is to ensure that the complaint is supported by identifiable facts, and to ensure that the complaint is not based on frivolous charges. � � (c) The Board shall submit a written report with a finding of sufficiency or insufficiency within ten (10)days of its receipt of the written complaint. The Determination of Sufficiency by the Board is final and binding, and no � administrative or other legal appeal is available. If the find�ng is one of ' � sufficiency of the c�mplaint, then the complaint shall be investigated�and reported as set forth�below. � (d) The Board shall conduct an investigation of the written complaint before it. The Board shall begin the investigation no later than ten (10)calendar days after the Determination of Sufficiency of the complaint and shall conclude the investigation no later than fourteen (14)calendar days after it commences the investigation.unless a longer time period has been 8 I --�33 . . requested by tMe Board and has�b.een ap,proved by the Council; provided, however, that the running of th�se time periods shall be tolled and the complaint proceedings shall be stayed in the event the Board makes application to the City Council for subpoena power or in the event the�City Council issues a subpoena and any,person refuses to obey such subpoena. The stay of the complaint proceedings shall continue until such time as the subpoena is either reissued or denied by the City Council or until such time as a Superior Court issues an order on the subpoena. The Board shall render a written opinion, setting forth its findings of fact and conclusions and opinion as to whether or not the individuaf against whom the complaint was filed has violated the Code of Ethics. (e) The City Council may issue subpoenas in response to the Board's application for the attendance and testimony of witnesses and the production of documentary evidence relating to a�y matter under investigation by the Board or in connection with any hearing�conducted by the Board. The Board shall request subpoena power by making a written application to the Mayor and Deputy Mayor describing in detail the subject matter of the proposed subpoena and an explanation of why such • information is reasonably necessary_in order to�conduct the Board's investigation or hearing. The subpoena may be issued in the event the Mayor and Deputy Mayor determine the subpoena request is reasonable. In the event the Mayor and Deputy Mayor are unable to agree upon such a determination or the complaint alleges a violation of the Ethics Code by the Mayor or the Deputy I�llayor, the entire City Council shall make a determination as to the reasonableness of the Board's application for subpoena power. In the event any person disobeys a subpoena, the City • Council may invoke the aid of any Superior Court of the state. Such court may issue an order requiring such person to appear before the Boarci, to produce documentary evidence, and/or to provide testimony. and any failure to obey such order may be punished by that court as contempt. (fl No opinion may be issued by the Board unless a person or entity ' - , complained against has had an opportunity to present information on his, her or its behalf a# a hearing before the Board. � (g) A copy of the written opinion shall be delivered to the City Council and the complaining party within seven (7)calendar days of conclusion of the hearing unless a longer time period has been requested by the person against whom the complaint is focused, and has been approved by the Board unless a longer period has been Fequested by the Board and has been approved by the City Council. (h) In the event the advisory written opinion provides that the individual against whom the complaint has been filed has violated the Code of Ethics . 9 � . j _ � and the City Councilmembers adopt thi�opinion by a majority vote, then ' the City Council may take any of the,following actions by a majority vote of the Council: (1) Admonition—An admonition shall be a verbal non-public statement made by the Mayor to the individual. ' � (2) Reprimand—A reprimand shali be administered to the individual by letter. 7he�letter shall be prepared by the City Council and shall be . signed by the Mayor. If the individu�l objects to the content of such letter, he or she may frle a request for review of the content of the letter of reprimand with the City Council. The City Cou�cil shall review the letter of reprimand �n light of the advisory opinion and the request for�review, and may take whatever action a�pears appropriate under the circumstances. The action of the City � Council shall be final and not subject to further review. (3) Censure—A censure�shall be a written statement administered ,personally to the individual. Tfie,individual shall appear at a time and place direated by the City Council #o receive the censure. Notice shall be given at least twenty(20)days before the scheduled � appearance at which time a copy of the proposed censure shall be � provided to the individual. Within �five (5)days of receipt of the , notice,the individual may file a request for review of the content of the proposed censure with the City Council. Such a request will . � stay the administration of the censure. The City Council shall review the proposed censure in light of the advisory opinion and the request for review, and'may take whatever action�ppears appropriate under th�circumstances. The action of the City Council shall be final and not subject to further review. If no such request is received, the censure shall be administered at the time and place set. It shall be given publicly, and the individual shall not make any statement in support of or in opposition thereto or in . mitigation thereof. A censure shall be deemed administered at the time it is scheduled whether or not the individual appears as required. � (4) Removal— In the event the individual�against wMom the complaint � has been filed is a member of a City Board, Commission� � Committee, or other multi-member bodies appointed by the City . Council, the City Council may, by a majority vote, remove the individual from such Board, Commission or Committee; provided, however, that nothing in this section authorizes the City Coun�il to remove a Councilmember from his or her office. In tFre-event the � individual against whom the complaint has been filed is a . 10 • � ���� . Councilmember,y#he City Gouncii, by a majority vote� may�,remove ° the individual froi�n the positjon of Mayor or'l�epu#y Mayor and the Mayor may remove such indivklual from the pos�ian of Chairperson of any Council committee. 7.5 The Board of Ethics may also render written opinions conceming the applicability of the cmde of Ethics to hypothetica! circumstances or situations upon the request of any person. , 7.6 The City shali release copies of any written advisory opinions or opinions resulting ftam an inves�gatian of a complaint and any written censures or reprimands issued by the Gi#y Council in response to public records requests as - consistent with Chapter 42.17 RCV11 and any other applicable public disclosure ' ' laws. 7.7 TMe City Manager shall provide staff, as he or she deems appropriate, to assist . the Board of Ethics. 7.8 Board members shall be reimbursed by the City for•reasonable expenses incurred in its exercise of the official business of.the Board, consistent with the expense reimbursement policies of the City.. ' Sec�ion 8 — Complaints Apainst Emalovees -Any and al!complaints regarding C�ty Employees shall be brought#o th� Employee's supervisor. The supervisar, or appropriate�ndivicival as determtned by the City Manager, shatl investigate the compla�rit. All action related to complairrts about Clty '� Employees shaA be tn accordance with the Personnel Policy Manual. � 11 j � 3� .