City Council Expands Conflict of Interest Code
At the November 17 City Council meeting, Piedmont came into compliance with State of California conflict of interest laws. All council members present voted to approve the revised policy. Although a biannual Council review is required by State law, the Council had not reviewed the City policy since 1988.
After considerable discussion, the Piedmont Police and Fire Pension Board members and the City Engineer were added to the list of those required to provide personal economic disclosure on Form 700. Vice Mayor Jeff Weiler objected to Council member Tim Rood’s suggestion of requiring Piedmont’s consulting City Engineer to be named on the list, because he felt it was unnecessary and an invasion of privacy. When the votes were cast, Weiler voted aye along with the other approving council members, while noting his objections.
The consulting City Engineer has previously been voluntarily providing his financial disclosure information to the City. The City Engineer is charged with the evaluation and oversight of public works projects including contracts, design and construction.
Newly added to the list was the Piedmont Police and Fire Pension Board, responsible for overseeing distribution of retiree benefits, investment of pension fund assets and post employment benefits investments by Osterweis Capital Management. The assets are valued at tens of millions of dollars.
A question arose regarding application of economic disclosure requirements for specific appointed committees and commissions who interview and advise on auditors, contractors, consultants, bond underwriters, etc. The Acting City Attorney provided advice that the disclosure was not necessary as those appointed bodies did not make the final decision on selection of providers. In recent years, it has been the practice of the City Council to approve committee and commission recommendations on various providers.
The City Council and Planning Commission along with certain employees have historically been complying with State economic disclosure laws in filing Form 700.
Financial disclosure is intended to alert the public, legal authorities and Fair Political Practices boards to personal interests that might be affected while appointed or elected officials are performing their official duties (i.e., making governmental decisions). Government Code 87500 identifies elected and appointed officials who are required to file Form 700, the Statement of Economic Interests.
Information disclosed can include:
- Investments in business entities (e.g., stock holdings, owning a business, a partnership)
- Interests in real estate (real property)
- Sources of personal income, including gifts, loans and travel payments
- Positions of management or employment with business entities
The form is required to be filed annually. Filed forms are public documents, available to anyone who requests them.
Read more about Form 700 here.
After the failed private undergrounding utility project costing Piedmont taxpayers over $2 million, the City Council in an attempt to avoid conflicts of interests adopted new policies and procedures for large public works projects.
Legal resolution to determine fault of the costly undergrounding debacle has yet to be resolved despite years of litigation. Fault is pivoting around the City Council, City employees, contractors, engineers, and legal counsel. The majority of the participating Piedmont employees and City Council members involved in the problematic private utility project are no longer in their positions. There has been no announcement regarding final resolution of the pending litigation.
The former City Attorney, in place for 40 years, approved and signed the contracts for the benefit of the special interest Piedmont Hills Undergrounding Utility District (“PHUUD”). Those contracts allowed liability for the overruns to be transferred to and paid by all taxpayers. Had more bedrock been found, we would have paid more than “just” two million dollars.
To Tim’s point about including the City Engineer in the conflict of interest code, as a consulting city engineer, Coastland may have other clients that have business with the city either as applicants or contractors (http://www.ci.piedmont.ca.us/html/govern/staffreports/2012-07-02/coastland.pdf) so it is appropriate that such interests be disclosed.
The undergrounding debacle was not caused by a failure of financial disclosure but by an ethical and administrative lapse of judgement. The consulting city engineer was also acting as the chief project engineer, a clear conflict of professional standards and faulty contract language went undetected. Council adopted the Risk Management Policy and Procedures (http://www.ci.piedmont.ca.us/html/govern/staffreports/2014-01-06/project_risk_management.pdf) which hopefully will be applied to the upcoming Hampton Field project.
The “ethical and administrative” lapses are very troubling. By the end of August, six weeks into the project, the bedrock change work orders had exceeded the entire project contingency. The financial hole continued to get excavated deeper and deeper as change work orders continued after August. Publicly, we have been told that staff did not inform council or any residents until November. And likely, this communication was because of the Mid-October Crest Road collapse where staff elected to have taxpayers foot the $296,000 bill rather than the undergrounding district.