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Date of Meeting: October 21, 2008

 

 
 

#9e.

 
 

 



BOARD OF SUPERVISORS

ACTION ITEM

 

SUBJECT: Finance / Government Services and Operations Committee Report: Transparency in Government Phase II Proposals (3) and (4)

ELECTION DISTRICT: Countywide

CRITICAL ACTION DATE: None

RECOMMENDATIONS:

Committee: The Finance / Government Services and Operations Committee voted 4-0-1 (Supervisor Buckley absent for the vote) to recommend that the Board of Supervisors direct the County Attorney to provide detailed instruction regarding State and County conflict of interest laws to all appointees to citizen committees, commissions, and advisory groups. The Committee chose neither to make a formal recommendation to the Board nor to pursue further consideration of the proposal that would require certain County Employees to submit an annual Statement of Economic Interest.


BACKGROUND:

At the January 3, 2008 Board of Supervisors Business meeting Supervisor Jim Burton initiated a series of proposals under the heading Transparency in Government, Phases II and III. The purpose of this initiative was to restore public confidence in local government badly shaken by events between 2004 and 2007. These included citizen concerns regarding the exorbitant levels of campaign contributions from individuals and organizations with matters before the Board, the appointment of individuals with fiduciary interests to Board advisory committees and commissions, an overall lack of transparency in the land use decision-making process, and finally reports of an FBI investigation into the activities of various County officials.

The Board voted 8-1 (Supervisor Delgaudio voting No) to forward this item to the Finance / Government Services and Operations Committee for further review and recommendations. The Committee began discussion on the seven proposals listed under Phase II at its January 16, 2008 meeting and carried over the discussion to following meetings. The status of these seven proposals in Phase II is as follows:

No.

Proposal

Status

(1)

Adopt a revised Prudence in Political Contributions Policy.

Adopted by the Board on July 1, 2008.

(2)

Revise Land Development Guidelines to limit last-minute changes to land use applications.

Still under review by the Finance / Government Services & Operations Committee.

(3)

Expand Disclosure Requirements to Include Appointees.

F/GS&O Committee forwards alternative proposal to Board.

(4)

Expand Disclosure Requirements to Include County Employees.

F/GS&O Committee declines to pursue the proposal further. No formal action taken.

(5)

Discourage the Expansion of a “Revolving Door.”

County lacks enabling authority from the General Assembly.

(6)

Revise Public Hearing Procedures.

Adopted by the Board on September 16, 2008.

(7)

Require Timely and Complete Availability of Agenda Documentation.

Adopted by the Board on July 1, 2008.

 

(3) Expand Disclosure Requirements to Include Appointees.

The original proposal presented in the January 3, 2008 item read as follows:

Proposal:

Require all appointees to citizen committees, commissions and boards to complete annual disclosure forms as authorized by §2.2-3115 and §2.2-3118 of the Code of Virginia.

Intent:

Citizen appointees to various advisory boards, commissions, and committees often make direct decisions of economic impact (e.g., the Board of Equalization), make recommendations to the Board of Supervisors for expenditures of County funds (e.g., the Advisory Commission on Youth), or make recommendations to the Board of Supervisors to the County’s zoning ordinances and other regulations (e.g., the Ad Hoc Zoning Ordinance Review Committee, the Facilities Standards Manual Review Committee, the Route 50 Task Force). Given the importance of those decisions, the influence of their recommendations, and the appointment of industry representatives as issue experts, such appointees should be required to file a Statement of Economic Interest.

 

A copy of the relevant form is found in Attachment 1.

The Committee first considered whether such a requirement should be made of all boards, commissions, and committees or whether the Board should specify particular advisory boards, commissions, and committees. To assist with that discussion the Committee asked County staff to provide information as to whether neighboring jurisdictions required such disclosure from appointees. It also requested Supervisor Burton to return with suggestions as to which boards, commissions, and committees he might apply the requirement. A chart providing those findings is included in Attachment 2.

Staff and some Supervisors raised concerns that such a requirement would have a chilling effect on citizens’ willingness to volunteer. In order to gauge any such impact Committee Chair Burton, at the Committee’s request, requested feedback from the various the advisory boards, commissions, and committees. This request was made through a letter sent to the Chair and Staff Contact of each group. The Committee received feedback from eight groups. Copies of these responses are found in Attachment 3. The responses received broke out into the following categories:

  • Members are already filing these forms;
  • The effort will enhance transparency in government;
  • No problems with filling out the forms;
  • Concerns about the complexity of the forms and any legal liability for failure to fill out the forms correctly or completely;
  • Concerns about the form’s lack of specificity to Loudoun;
  • Concerns about the detail of information requested (particularly with regards to family members);
  • Concerns about making personal and financial information available to the public;
  • Concerns about the potentially chilling effect on volunteerism.

Given the limited number of responses received and noting misunderstandings regarding the requirements of the form, Committee Chair Burton sent a second letter. This letter generated seven responses; with one exception all were restatements from the same boards, committees, and commissions which replied to the original letter. This letter specifically addressed the issues and concerns raised as summarized below.

Complexity and Legal Liability

The forms are determined by State Code and the Board has no authority to alter them whether to make them simpler and easier to understand or to change the type of information requested. While the Board has no authority to alter the forms to make them easier to understand, it can request that the County Attorney make staff available to answer questions by appointees and to assist them with the forms. The County Attorney’s Office could also make presentations regarding the forms, similar to the FOIA presentations it currently makes to various committees.  

Detail of Information Requested

Without close reading of the definitions, explanatory material, and other fine print, the level of detail may seem both overwhelming and invasive. However, the fine print does provide important exclusions. These include the following:

  • With the exception of honorariums or expense reimbursements for official attendance at meetings and functions (Section IV) the form does not require that the appointee state any actual dollar amounts;
  • The form does not require that the appointee disclose real estate that is not located in Loudoun County or a county, city or town contiguous to Loudoun County.
  • The form does not require that the appointee specify banks or accounts;
  • The form does not require that the appointee list clients;
  • The form does not require that the appointee report stock holdings in any business unless such holdings are 3% or greater than the total equity of the firm or income received from those holdings is $10,000 or more. Nor does the form require that the appointee report the holding of bonds or other debt instruments in any business unless such holdings are 3% or greater than the total assets of the business. Such floors would eliminate the concern that an individual would have to list every holding of any mutual funds in which they or a family member had invested.

Public Release of Personal and Financial Data

As noted in the above section, the form exempts most financial data from disclosure unless it surpasses the thresholds listed in the last bullet point.

As noted above, the forms are determined by State Code and the Board has no authority to alter them or redact information, such as home addresses. However, the home addresses -- and telephone numbers -- of many appointees may be found simply by looking their names up in the White Pages or on the Internet.   In addition, the resumes submitted by volunteers as part of the appointment process -- and which typically contain addresses, telephone numbers, and work history -- are already part of the public record and subject to release under the Freedom of Information Act.

Lack of Specificity to Loudoun County

At least one Committee Chair questioned the relevance of providing information about interests unrelated to Loudoun County, referring particularly to Section III, which asks the appointee to list “businesses I have represented…before any state governmental agency” or “businesses that have been represented…before any state governmental agency…by persons with whom I have a close financial association.” However, Section IV-B specifically states that Section III-A and III-B are not applicable to officers and employees of local governmental and local advisory agencies.

The Economic Development Commission and the Planning Commission expressed the greatest levels of concern with commission chairs responding to both letters. In a letter dated 5 September 2008 the Chair and Vice Chair of the Loudoun County Economic Development Commission wrote, “Requiring disclosure of explicit financial information would unfairly expose Loudoun’s business leaders who desire to serve their community and would undoubtedly deter well-qualified and experienced business leaders from applying to serve the County in an advisory fashion.” The neighboring jurisdictions of Alexandria, Arlington, and Fairfax, however, do require that members of their Economic Development Commissions file annual Financial Disclosure Statements.

In a second letter dated 16 September 2008 the Chair and Vice Chair offered an alternative approach: “[W]e firmly believe that the EDC can adhere to conflict of interest regulations and current statutes and will take concrete steps to ensure this without the additional burden, red-tape, and deterrent to membership of detailed filings. These concrete steps include: appropriate training of new members about the Code of Conduct; a new requirement that all EDC members sign an acknowledgement that they have reviewed and understand the Code; and a proposal to change our by-laws to reflect these requirements, subject to Board of Supervisor approval.”

At the October 8, 2008 Committee meeting Supervisor Waters proposed that the Committee consider an alternative to the original proposal made by Supervisor Burton.   She moved that the Committee recommend that the Board of Supervisors direct the County Attorney or his designee to provide formal instruction to each appointee regarding the State’s Conflict of Interest laws and the appointee’s responsibilities thereunder. Such instruction could be provided in a group setting, in writing, or in some other format as determined by the County Attorney. The Committee supported Supervisor Waters’ motion 4-0-1 (Supervisor Buckley absent).

ISSUES

1). The Committee’s alternative proposal should ensure that appointees recognize their legal responsibilities to disclose conflicts of interests as defined in the Code of Virginia in Title 2.2, Chapter 31 (see Attachment 4). However, it is not clear that the proposal will meet the original intent of the initiative, which was to restore public confidence by increasing the information available to them regarding those persons appointed by the Board to advise them or by the Circuit Court in a decision-making capacity (e.g., Board of Equalizations).

Where an appointee has an interest in a contract or transaction before them, the Code requires a public disclosure of that interest and possibly recusal. Such disclosure must occur either in writing or verbally at the meeting prior to taking up the matter. In the case of the latter, the interested citizen must scan the records of every meeting to locate disclosures. Where such disclosures are made in writing, the level of effort that a citizen must undertake will be a function how a Staff Contact maintains such files.

Further, because the Code requirements are specific to the occurrence of a particular contract or transaction, it is not clear how they apply to situations where no transactions occur or where the entire subject matter of the advisory board, commission, or committee is the transaction. In the case of the former, no public disclosure would likely occur. The latter scenario is resembles the situation which generated the original proposal.

2). Neither the original proposal nor the Committee’s alternative provide a means of verification. Both are dependent on the willingness of the appointee to provide disclosure that is both honest and complete.

FISCAL IMPACT

The fiscal impact of the Committee’s alternative proposal is a function of the time the County Attorney or his designee spends preparing any materials and meeting with the various appointees and in. There may also be a production cost for any materials.

SUGGESTED MOTIONS

1.      I move the recommendation of the Finance/Government Services and Operations Committee that the Board of Supervisors direct the County Attorney to provide detailed instruction regarding State and County conflict of interest laws to all appointees to citizen committees, commissions, and advisory groups. Such instruction can be provided in a group setting, in writing, or in some other format as determined by the County Attorney.

OR

2.      I move an alternate motion.

(4)   Expand Disclosure Requirements to Include County Employees.

The original proposal presented in the January 3, 2008 item read as follows:

Proposal:

Require all Loudoun County staff with public decision-making authority, including but not limited to administrative land use applications, permits, procurement, property assessment (both real and personal), and tax relief programs, to complete annual disclosure forms as authorized by §2.2-3115 and §2.2-3117 of the Code of Virginia.

Intent:

Many County employees at all levels of the organization make decisions with an economic impact: subdivision applications, well and wastewater permits, occupancy permits, etc.   Given the importance of these decisions, such employees should also be required to file a Statement of Economic Interest

 

A copy of the relevant form is found in Attachment 5.

During its first meeting on the subject, Staff and Committee members asked for greater clarification as to which employees specifically such a requirement might apply. The Committee requested that Supervisor Burton prepare an initial list of suggested positions. It also requested that County Staff research whether other jurisdictions required such disclosure, and if so, of which positions. Supervisor Burton’s proposal can be found in Attachment 6.   Staff provided information from Fairfax, Arlington, and Prince William Counties as well as the City of Alexandria. Copies of the relevant ordinances from each of these jurisdictions can be found in Attachment 7. County Staff also provided a list of recommended positions. A copy of this memo can be found in Attachment 8.

The County Administrator weighed in with two memos, which can be found in Attachment 9. Despite discrepancies between his understanding of what the Fairfax County ordinance contained and what the actual ordinance contained, it was his firm recommendation that if the Board chose to require disclosure it should not drill down below Department Heads, Deputy/Assistant Directors, and Division Managers. He expressed a belief that the role of a manager included accountability for the actions of his/her subordinates. He also suggested that the County’s current hiring processes, which may include a credit and criminal background check, its Code of Conduct (relevant sections of which are included in his second memo), and the application of State Conflict of Interest laws should provide the public with sufficient levels of transparency.

Over the course of two meetings members of the committee debated whether to accept the County Administrator’s recommendation or apply disclosure requirements to specific positions at lower levels. The Committee discussed past experiences of known ethics breaches in Loudoun and in neighboring jurisdictions, the majority of which occurred at levels below management. The Committee also discussed the particular issues raised as a result of past Boards’ decisions to delegate the Board’s decision-making authority to County Building and Development Staff for by-right land use applications and waivers of the Facilities Standards Manual.

Members of the Committee also expressed concerns regarding employee privacy and safety issues, in particular making the addresses of County employees a matter of public record. With regards to the latter, a close reading indicates that the form exempts disclosure of a respondents’ principal residence. Specifically, it asks that the respondent list the State and County or City of real estate owned “other than your principal residence.” Further, the contact address requested is a business address, which would be the respondent’s County office address.

Committee members also expressed concerns regarding the manner of implementation, communications, and possible impact on employee morale, especially given future budgetary considerations.

At the Committee’s October 8, 2008 meeting Committee Chair Burton took an informal poll of Committee members and determined that Committee members were neither willing to take a formal action on this proposal nor to give it further consideration at a future meeting.

ISSUES

1). Do current County policies and State conflict of interest law provide the public with sufficient confidence in the actions of their government?

2). Should County employees making land use decisions traditionally reserved for elected officials, but delegated by the Board to those employees, be held to a similar standard of disclosure as elected officials?

FISCAL IMPACT

There is no direct significant fiscal impact associated with this proposal.

SUGGESTED MOTIONS

There is no action associated with this proposal.

ATTACHMENTS

Attachment 1: Financial Disclosure Statement

Attachment 2: Information Regarding The Application of Disclosure Requirements to Advisory Boards, Committees, and Commissions

Attachment 3: Feedback from Advisory Boards, Committees, and Commissions on the Proposal

Attachment 4: Relevant Sections from the Virginia Conflict of Interest Law

Attachment 5: Statement of Economic Interest

Attachment 6: Proposal by Supervisor Burton

Attachment 7: Disclosure Ordinances from Neighboring Jurisdictions

Attachment 8: County Staff Memo

Attachment 9: County Administrator’s Memos

 

STAFF CONTACT

Mary Bathory Vidaver, Staff Aide to Supervisor Jim Burton, x0210

 

Burton Proposal (Attachment from February 20, 2008 Meeting)

To what staff would this apply?

The original proposal recommended that the expansion include “all Loudoun County staff with public decision-making authority, including but not limited to administrative land use applications, permits, procurement, property assessment (both real and personal), and tax relief programs.” As such, this might include the following:

Deputy and Assistant County Administrators

Board Staff Aides

County Division and Department Heads

Real and Personal Property Tax Assessors

Planning Project Managers

Referral Staff

Building and Development Project Managers

Building, Health, and Zoning Inspectors

Procurement: those responsible for managing and evaluating bids