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HomeMy WebLinkAbout1988 Board of Ethics Meeting Minutes -all BOARD OF ETHICS MEETING MONDAY- OCTOBER 3 , 1988 - 3 : 30 P.M. The Board of Ethics met in special session on Monday, October 3 , 1988 at 3 : 30 P.M. in the City Council Conference Room - lOth floor - City Hall . PRESENT: Rita M. Bauman, City Clerk, Don Cook, Stephen Lowney, Al Knot, City Attorney and John Mertz . ABSENT: None The meeting was called to order by John Mertz at 3 : 50 P.M. Motion by Al Knot that the minutes of the meeting of Monday, June 6 , 1988 be approved - Seconded by Don Cook - Motion Carried. Old Business : Harold Leeman/Pat Lindemann Opinion - Stephen Lowney spoke on this and recommended that an opinion be made urn and distibuted to all other members and submit it back at the next meeting. Report of Officers: None New Business : Committee on Physical Development/ Pat Lindemann - Advisory Opinion. At this time Councilmember Alfreda Schmidt entered the meeting and asked on behalf of herself and Councilmember Adado that the meeting be taped. John Mertz asked question on why this meeting should be taped and that none of the other meetings had been since this is an advisory board. Councilmember Schmidt spoke and explained her reasoning behind the request and the questions that had been asked within the letter. Al Knot asked Councilmember Schmidt to explain why this is being asked if this is for Council benefit or for accuracy. Don Cook and Stephen Lowney both spoke in regard to the taping of the meetings. John Mertz spoke on the establishment of some kind of procedure on this matter. Comments were made on the transaction that is involved and ask for some facts and consultation with persons involved. Comments were made on the Affidavit of Disclosure that is filed and that new forms needed to be set and more information needed on this form. Al Knot spoke on the filing of the affidavits and spoke in regard to City Charter Section 5-505 when they needed to be filed. John Mertz asked the City Clerk to submit more affidavits of Disclosure to be looked at. City Clerk recommended that she would see that all members of the Board will get all the affidavits that were filed in 1988 . and make a list of how many by year since this was started. Al Knot stated that the State Journal had viled a "Freedom of Information" request on this matter and asked for documents . Councilmember Adado asked for information on how this particular land was acquired. Motion made by John Mertz that the next meeting would be held on Tuesday morning - October 11 , 1988 at 10 : 00 A.M. at the Foster , Swift, Collins building at 3 ; 3 So. Washington Square.- Stephen Lowney seconded the motion - Motion Carried. Since there was no other business to become before this board a motion was made by Rita Bauman that this meeting be adjourned- motion seconded by Don Cook. Meeting adjourned at 4 : 35 P.M. REspectfully submitted Rita M. Bauman Secretary-City clerk d G� vw +/ MINUTES OF BOARD OF ETHICS SPECIAL MEETING October 11, 1988 Foster Building 313 S. Washington Sq. , Lansing, MI The meeting was called to order at 10 : 09 a. m. by Chairman Mertz . The Secretary called the Roll and the following members were present: J. Mertz , D. Cook, S. Lowney, R. Bauman, A. Knot. The Secretary announced that no members of the Board were absent and that a quorum was present. The following guests were noted to be also present: Patrick Lindemann (City Councilmember) , Betsy Assid (Caster Realty Co. ) , Greg Koessel (Councilmember Adado' s staff) , Christine Golembowski (Lansing State Journal) . SECRETARY' S REPORT: Secretary Bauman presented the minutes of the special meeting of October 3 , 1988 , which were adopted with amendments. Secretary Bauman reported that she had distributed to all Board members a report of all Affidavits of Disclosure filed with her office since 1960, and copies of all Affidavits filed in 1988 . Secretary Bauman reported that she had received copies of the City Attorney' s Pere Marquette acquisition file, and had distributed them to all Board members . The Secretary reported that no correspondence had been received or sent on behalf of the Board since the last special meeting, except as noted. CITY ATTORNEY' S REPORT: City Attorney Knot reviewed the significance of the extensive file on the acquisition of the Pere Marquette property to the Board' s current inquiries. CHAIRMAN' S REPORT: Chairman Mertz briefly discussed the object of the meeting. Chairman Mertz directed inquiries to G. Koessel concerning the nature of additional inquiries expected from Councilmember Adado, and when the Board could expect to receive them. OLD BUSINESS: Consideration of the pending response to H. Lehman, Jr. ' s Complaint of 10/8/87 was indefinitely postphoned, pending the resolution of other matters. NEW BUSINESS: The Board discussed the Physical Development Committee inquiry of 9/26/88 , and agreed to separate it into 4 areas of inquiry: 1 ) Response to the general inquiries regarding disclosure of conflicts of interest and appropriate standards of conduct for officers & employees with a conflict; 2 ) Investigation of the conduct of Councilmember Lindemann regarding his involvement in a proposed sale of Pere Marquette property; 3) Investigation of related matters that may arise during the course of -%) ; and 4 ) Review of all current Affidavits of Disclosure on file and improvement of the disclosure form for future use. The Board discussed the form and substance of responses to Lansing Board of Ethics Minutes of October 11 , 1988 Page 2 several of the general inquiries. At the suggestion of Member Lowney, Chairman Mertz proposed that the public members commit their thoughts to paper and circulate drafts of proposed answers to the other members to assist preparation of a Board response to the general inquiries by next meeting. PUBLIC COMMENT: Councilmember Lindemann requested an opportunity to address the Board at length regarding his involvement in the proposed sale of Pere Marquette property, to be notified personally of all meetings of the Board on the matter, and to receive a copy of the materials supplied to the Committee by the City Attorney. All the requests were granted, and the Councilmember was requested by Chairman Mertz to provide the Board with any relevant written materials he wished them to review by Wednesday, October 19 , 1988 . Councilmember Lindemann also questioned the personal participation of Al Knot, but not the City Attorney' s office itself, claiming he had a "conflict of interest" due to involvement in or knowledge of the events the Board was investigating. Chairman Mertz requested that the Councilman present any proof he has of this circumstance at the next meeting of the Board., when Mr. Knot can be present (having left at 11 :15 ) to respond. Greg Koessel advised the Board that Councilmember Adado would commit to writing any additional inquiries he wish the Board to respond to relating to the Pere Marquette matter, and would submit them to the Board by October 19 , 1988 . There being no further business before the Board, the meeting was adjourned at 12 :10 p.m. Respectfully Submitted, RITA BAUMAN Secretary BOARD OF ETHICS TUESDAY - October 11 , 1988 10 : 00 A.M. - Swift,Collins , Foster, Coev Buildinq- A G E N D A a) Call to Order h) Roll Call c) Excused absence d) Approval of Minutes for October 3 , 1988 e) Old Business - Committee on Physical Development/ Pat Lindemann. f_ ) Reports of Officers u) New Business h) Adjournment VERB r,; � CJ?�; ;IM -RAN SCR 1 RT rjORTION OF THE CITY C OIJNfC 1L MEETING OF SEPTEMBER 1'2 1���8 RE: PORTION PLAN--PERE MARQUETTE PROPERTY (ETHICS ISSUE MEMBERS PRESENT: COUNCILI"IEMBER LOCI ADADO C.OUNCILMECIBER C.HARLES CREAMER COUNCILMEMBER LUCILE I ELEN CC;aUNCILMEMBER PAT LINDEMANN COUNC1LMEMBER TONY BENAVIDES COUNCILMEMBER ALFREDA SCHMIDT COUNC I LMEMBER JAMES BLAIR COUNCIMEMBER SID WORTHINGTON SCHMIDT: The clerk Please read. BAUMAN: By the Committee on Phvsi`:a1 DevelopfY ent. L I NDEMANN: Madam SCHMIDT: Couracilperson Lindeiy,,,_,,nn. LINDEMANN: I'd like to be asked to be excused from voting on this issue for 1 am in conflict of interest. SPEAKERS IN BACKGROUND—UNABLE TO HEAR CLEARLY SCHMIDT: Colleague, LIM, U;'"7,..., t��`i1;`e that Mr. Lindemann be excused, Madam President. 1 MONDAY - OCTOBER 3 , 1988 - 3 : 30 P.M. The Board of Ethics met in special session on Monday, October 3 , 1988 at 3 : 30 P.M. in the City Council Conference Room - 10th floor - City Hall PRESENT: Rita M. Bauman, City Clerk, Don Cook, Stephen Lowney, Al Knot, City Attorney and John Mertz ABSENT: None OTHER GUEST: Christine Grabowski-Lansing State Journal and Gregg Koessel Council Staff Person. The meeting was called to order by John Mertz at 3 : 50 P.M. Motion by Al Knot that the minutes of the meeting of Monday, June 6 , 1988 be approved - Seconded by Don Cook - Motion Carried. Old Business; Harold Leeman/Pat Lindemann Opinion - Stephen Lowney spoke on this and recommended that an opinion be made up and distributed to all other members and submit it back at the next meeting. Report of Officers : None New Business : Committee on Physical development/Pat Lindemann - Advisory Opinion. At this time Councilmember Alfreda Schmidt entered the meeting and asked on behalf of herself and Councilmember Adado that the meeting be taped. John Mertz asked questions on why this meeting should be taped and that none of the other meetings had been since this is an advisory board. Councilmember Schmidt spoke and explained her reasoning behind the request and the questions that had been asked within the letter . Al Knot asked Councilmember Schmidt to explain why this is being asked if this is for council benefit or for accuracy. Don Cook and Stephen Lowney both spoke in regard to the taping of the meetings . John Mertz spoke on the establishment of some kind of procedure on this matter . All Members of the Board were in concurrance that the meeting not be taped. Comments were made on the transaction that is involved and ask for some facts and consultation with persons involved. At the Committee of Ways and Means meeting the request that the acquisition be looked into. Comments were made on the Affidavit of Disclosure that is filed and that new forms needed to be set and more information needed on this form. Al Knot spoke on the filing of the affidavits and spoke in regard to City Charter Section 5-505 when they needed to be filed. John Mertz asked the City Clerk to submit more affidavits of Disclosure to be looked at. City Clerk recommended that she would see that all members of the Board will get all the affidavits that were filed in 1988 and make a list of how many by year since this was started. Al Knot stated that the State Journal had filed a "Freedom of Information" request on this matter and asked for documents. Councilmember Adado asked for information on how this particular land was acquired. Motion made by John Mertz that the next meeting would be held on Tuesday, Morning - October 11 , 1988 at 10 : 00 A.M. at the Foster, Swift, Collins and Coey Building at 313 So. Washington Square - Stephen Lowney seconded the motion = Motion Carried. Since there was no other business to become before this board a motion was made Rita M. Bauman that this meeting be adjourned motion seconded by Don Cook. Motion Carried. Meeting adjourned at 4 : 35 P.M. REspectfuylly submitted, Rita M. Bauman Secretary-City Clerk SCHMIDT,, Councilperson Gelen, DELEN: i move that Mr, Lindemann be excused from voting on this issue since he feels that he might be in conflict, SCHMIDT: All those in favor of the, ah, ah, adoption of the request by Councilperson Delen allowing Councilmember Lindemann not to, ah, actively participate in this vote, dealing with the Land-Use Plan for the area acquired from railroad south of Shiawassee street to Michigan Ave, All those in favor indicate by saying "I, ALL: °I" OPPOE)ED: „0„ BACKGROUND TALK, UNABLE TO UNDERSTAND, SCHMIDT: There is a report that., ta, ah, from the commill-'ee chair o Physical Development, Councilperson Worthington, WORTHINGTON., Madam President. Madam President, the first resolution is ; S-._fing that no land be sold down in the area which is bounded by c_f igan Ave., the railroad, ah, C.lara s Restaurant. ;s right. in there, and it runs back to Shiawassee. Um, we, a, the city of Lansing, putt a road in there that provided access back into that area. There are a number of different people in that area who would Iike to acquire property for acrquisition or would like to have property for other needs, ai-'f, t)r jt they have in that 2 particular area. The committee on Physical Development looked at this and decided that the best, an, approach to this until there could be a m aster Plan developed, ah, and, da..., Presented to 'the Council would be that d a..., da, no property be sold, no options be taken anti l the master plan is completed, and too, that the, ah, we as a Counci 1 can take a, a, hard look at this, and make decisions on the, the a, dispersal of land. And with that I would ask for it to be considered read and affirmative role attached. SCHMIDT: Thank youCouncilman Worthington, Counciiperson Adado, anG, tt','=i Counc i I person BeIen. ADADO: Madam President, 1 will yield to Counci lmember Belen, she is on the committee; maybe she will answer some of the questions that I may have, at), before I asked why, not being a member of the committee..... BELEN; I dust want to say... SCHM I DT: Counc i I person Be 1 en. BELEN: Madam, President, that we, that. the City doesn't really own this property yet, Mr. T{_€bbs told me today that they have not acquired all the property. He also told me that they are already working on the plan, and I know that there are people in the audience that are concerned about the delay in time and everything. However, he said that they are working on it so that it's not going to be a month, two months, six months, or whatever; it's probably going to be a week or ten days before he comes to us with the plans, but we felt that since all of the people along that fronting on, what is 3 it, Larch, is it, Larch anio Sniawassee, were involved that-- they could :,it least nave the opportunity of IL"Anowing, that we had a plan regardless of who we sold it to, : ; 'C H Mi I D I T I T n`3 Ilk: IV 0 L I C 0 UncilpersoinBele-ini, Councilper-sonAdado, ADADO: I'vladam President, ah... I'm f ann i li ar with one of the reqUe.St S because the people that, um, have a request to, for a bid to purchase some property on the souitheast cornet-, sout-heast, corker of ih, ah., Larch and S, Mwalzsee need the. additional land Imi,nediately to the east for t1he completion of U-iejr project, They are a local Lansing business now, They want to stay in tt-,le City of Lansing. They want. to stay in the downtown area. Atli, they 1have looked and se,-arched for land in the downtown area for the laSt- eight to r'.er, rnonthis that I 'know W1, anid It could be lonaer than, that. Ah, it's- crucial that they exel-Ute an option to purchase t-hte property they of the p --qre where they are now located., their jease expires •-fit ,the encl of the year. So lunless they Inave somie prolojefty that they can r,,riove it,, to :he possibil -'y is there, that, they would not relocate in Lansing, I WOLJ!d aS11K* the committee to consider selling that property that's to the east of the property, an-d I believe that it's owned by the Lansing Cycle Shop, ail, which is the south, the SOLItheast cornet-, Take their south property I ine and extend that to the east to the railroad tracks and all property to the north of that be considered for sale at this tfirne, and the property to the south of ,;.J,Iat particularly boundary line can wait- for the Lland U-se study t-hat., ah— Tubbs Is working on now. 1've had and 1 know 'that the rest, of the Counci is hl s had de-alinas with a proposal that., da., were suppose to be up in, a we4,-'.., and sometin-tes it's a month, Sometimes it's th-- sometimes it's Oix to holcl off a week., but if not, 1 think, we should act. on it a., as soon as njossible, this week-., next week at the latest. Thank: you Sf-HIMT: Couniciin-ian Worthington, has.a...a request, WO HINGTON Urn, one js to answer the first, I guess thie last question, t,, that that my understanding afnd the understanding of I-Ai'a Conit-nittee is tnaf, TI-a, Al Tubbs, was n/resent-ly working on that report, and that t1 report. Ist?t J 1a17 rorm. Unit, ' tieeds final apovaJ retneti'bering t-Ia this i svi - 0 r 1 p n goes throlugh the citizens district. Advisory Council, and., arid, the Planning Board, an., that. the., that., that will.., that is near completion. Number two, Piease undersTaml that. in, that, a Couple of these cases, we don't own that property. And, d.a, we can't Lie optioning off property we. Clon't own, or seiiiing off property that. we don't own., and we need to get all of that together. Nlut,nber three, T here are three, four, five different interest that are all going together here, between this one little location. And there simply isn't., ulm, a...., the feeling of the Committee, it,, dealing with it as a whole with the plan rather than, than, starting to sell this off, Yes, the company that. Lou was talking about needs land for expansion., so does the others. Ulm—, everybody is not in that. much, different. of a vote it-) this s U Cuat'jot ri, And finally, a, the, the, rule having to deal with the adjacent Property has to do W I ti after` we've vacated property or we've torn down Property in the same residential area. Under a, bUt. it doesn't apply to just property that we just go o(jt acid purchase, that doesn't -3LItotnatically get sold to the ad I Jacent owners. So, and Mat's what were trying to do is assimilate property here and, da, after putting the road through, 6 nlontits before we get. answers oil some}.fling t.ha4 was going to be lip Here lt nlet�i .t.ely. tlifl.,., this is crucial. This company has been in Lansing for many years. They, the reason 1 dot. involved with it, or was Included whir it, i` the fact. that they were looking for EDC bonding, at. a time, and that's wily it was f ro!_K,ht. to my at.t.ent.ion, tiny understanding is flow that., da, they have cone the conventional r`oi`Jt.e and that's why 1 haven't been brought up to date or talked that. much abOUt. it, But, ' blink it woulcl be, it would behoove this Counc_11 to }ook: at that, and if f",r. Tubbs and the r1unicipal nrl Dec,.artment can a4_Jarant.ee that their master plan will be up flare within trsevenc7r lS Y CClls p`ctiti )ryY ��t 7J r y ,.'Sgoing M,.J be beyond that, it' s winn to be too lono. Now tine reason I'm asking that is bec.-ause the way we norrn.ally° take care of property, divide property, or sell property, or attach property on something that's owned by the City, it acres to the adjacent property owners. In this particular ease if these people we" e, to b�Jy 'U at Cycle Shop, they would be the property owners imnlediately to the west of the property that is owned by the City and they would have first option to buy it. anyway, If we fee} strongly for economic expansion and development. fin ' downtown e here, � r r tc } � k: a { r the t'l.r3tr~,Intet,�.,, ar=..a, tier ,_ is :a Chatl.�e tot` „_, =,.ci roo��. ?�. �.-hat.. My l.inderstandinq is that the type of shop that they want to pelt irl there, ah, is going to be, .a, a, more complete then what they now have, it.'s not. "list c;,ft'ring to be the !,nurchase or a,a, line of products, but". it's going to rho in t.o the service, do it yolurself type C;lercfiand!sing that's located on South Cedar Street, owned by a corporation that's outside of the, a, City of 1 ansing, so, al to me it. makes sense to } ' j� tlhi� give H every �_� r ( � and to ..., _ makes sense oor,: ti�. _, t.r:, �} vv it. ,..�e, � c.on�;,fera�_i ,r,, , ac.t. on it !dlt.fliii tEte Cie ;t severe da�fs 1t tfle l�at.est., c yr f,ai,c rile .`'sr_Jr•;anc`e LfiLat f''lt`. T_Jf it:;S i�v i}} girl nC; 'that repcJP`C. back to the '�C1CT?rYi i t.t.ee so that. they can inve it. 'tip here neA week for us to Iool at, I WOUId be wi i l ing 5 ,:�',-'HIAIDT: Councilrnan Adado, ,-,k_ i ADADO: ?Madame President. t1r, Worthington, what. was the transfer of funds that we had that purchased the property from Ilichigan Ave, to Shiawassee Street, that we transferred a hundred and some Thousand of Doi jars for last year, to buy that land. Wha-t did, we buy? What didn't we buy? WORTIF111INGTON: Well, we don't-- have the Bilkle Shop there, and we don't have a couple of those other parcels of property, now the exact ones and the ex,--)ct descriptions of them, um, Al Tubbs ha—, Al Tubbs has. The transfer, ah, was for completion of the road. ADADO: And thle purchase of the property. It purchased the property from i,,ljchlaan Ave. not t1riward to Shiawassee Street, that was behind the... BACKGRO-UND SPEAKI.ER UNABLE TO HFPF: F ADADO� That's right.; that was owned by the railroad. Now., you said we don't, own the Bike Shop.; are we negotiating to buy the BIlr,,,,e Shop'? I thought Unlat's w hr. t you said, WORTHINIGTON: 1 know... ADADO: Did you say 111-Ahat? 7 WORT}SING TON: know 1. ., we do not own t.he property, if you want, to know if we are presently negotiating with this, which I assume we are, but, what stage we're at in that.; going to have to ask,,. the Planning director. ADADO: Well, Madam President... Why are we buying the Bike Shop? Why did that. even con-ie up that- we are buying the Bike Shop? if the, if the Bike Sillot--) is for,- sale and there's private interes... private developer's wanting to buy tf,,a-t, why is the City negociating? To put a Land Use Plan, in effect'? 117 t.hat's what were doina, we're defeating Out- own PUrpo.-se, 11-1r. Worthington,, did you misspeak., of- did you tell me that we are trying to buy the Bike Shop? Me, haven't b0U(.,jh4j,-- Tile Bike Shop yet, WORTHINGTON: You refer-red to the Bike Shop in your original coma,flents as to the- he property that they were interested in, And 1 thought that, that's what you were referring ring to which Is behind.,,., its not a bicycle shop but rather the Honda, the motorcycle place. That was the property that I was referring to, that is the property that at the present time 1 l.-Inderstand we don't own. That was the prop—, I think were talking about the Same. property., the same location, owned by the presently the same people, but we don't own any of that right now. Now, what, what, stage were in, in terms of negotiations for Mat, I don't know. nj r ADADO: 11-.�idanl PrPside, L t-)11­.HMiIDT: COU-IM--flrian Main. ADADO: 1 hate to., to... 1, 1., I'm a little confused now. We talked, wi.., with, when I referred to the south property line of the, of t e-he cycle shop, that was the property on the corner, Ny understand ing is, that 'there is a strip of PropertY behind that, that's owned by the City where we put the road U',irough. We dian1 use all thal. 11and for the road so, consequently, 'there's a parcel that's vacant. that's owned by Lis. On the west side of the road there's a parcel of property t1h.-at's owned by the City of Lansing, on the east side of the road to the railroad tracks, BLAIR: Where did you get this information, Where did You get 'this iniformiation from. ADADO I got it frot'n the pet-son that wants to buy the Cycle 'Shop. BLAIR: ',:Fell, I'd think, you'd t;allk to our staff about what- we got and what we're doing. SCHIID 17: Mr. Blair- [,1s, Belen has asKed for the floor. Following Mr. Adado, AAFD(),D f1adam, President, I still have the floor., arid, and, 1, 1, 1... I don't know why I would have to talk to out- people on what we were buying, If there's a. private developer, Arid it's Capita, City Lumber, if they want to put their Marry earned money and buy that Cycle Shop and they want to buy some excess land, that's owned by the City, that's immediately adjacent to their cycle... to the property that they have an option on, and they want to buy property that's across the street- from the roadway we put through there, then I think. they should have an opportunity to buy that, 1 don't think that 9 we should be tlalkina about. buying that. I don't think we should be talking about a master plan to dictate, I believe that, that master plan that's in existence right now calls for that to be commercial. Capital City Lumber is a commercial development, as is the coffee shop that is down there., the,the, Paran-iont. Coffee that's down there, as is Clara's is down there, as is the property to the east of It that is a warehouse., as is all the other property that's south of Shiawissee Street to the railroad track-,.s south of Mlichigan Ave.,; it's all, commercial property. Some of it might even be industrial, for al I I know, Some of it is warehousing, So we're not talking about ma, of chan(lif".1a that pat't.1cf.."lar zoning in that area. All we're saying is that here's a company that's been in Lan sing for umpteen years, I remember my dad use to (10 UO Capital City Lumber to buy StUff. It's got to have been 1J.",here for over f I f ty-n I ne Years OeCaLlSe I'm f I f ty-n 1 ne years ,)I d and 'It was there before 1 was born. Now, if were fighting 'that by some scheme, then we're wrong. If they want to invest money, then we should let them invest the money., and we should get. out of it. As long as it doesn't conflict, and we've talked abOUt that area being commercial, that's the Larch, Cedar Street corner to Pere Marqette Railroad, and that's all we're talking about, that's the ]and we're -31)OLIL I just don't understand where this is coming from, why it's here right now, and the only reqUest- I'm making is that you take the SOLIt1h property I ine of that, Cycle Shop and extend it east to the railroad tracks, and say that that property, if Capital City Lumbeir can purchase the corner, we would be willing to negotiate and sell that property to them so that they COUld put their development there, They're only asking tO SCIU-1re Up t1their property, and 1 think that it's a reasonable reqUest for jriH(11, rol 00 1—jItz tIlj�--�'-' 1AF,:z'­f- --e c -1 I wronq nc, to say that. we'! joint 111 we �"011 Q '. S:4, U W look, at the property that's to the east of the existing Cycle 'Shop., :and t-he 10 property that's to the south of it can give you a master plan t.h,at includes everything but that cot-tier, I don't think. that's right, and it we own that property, we should be willing to sell it to theta if they can come up with tile terrns that we feel ;are Kiylitable. Thank you. S HEM IDT: Thr.ink, YOU. His. Beler-r. tB.ELEN Madan? trresident.. Well, i ti?ink there is conm;: confluslon, we are not to my knowledge from i11r. Tubbs trying to buy the Bicycle Shfop. However, we do have an obligation to all the people that we put to our disadvantage When we Put that road through and gave them the impression that we were going to let them nave Some Say in purchasing property or doing this or doing that. We took: ;away all the parking from, frorrf, that, what, Alan's Roy ims, or whatever it is, and even if they're poor rooms :and poor people that live there, they, too, are entitled to the rights of parking. Now, the, the suggestion that was n?ade to Mr, Tubbs, is that he come up with a plan with all of our excess lands. We don't care about the bicycle shop, let them do whrat they want., but. Our excess land has got to be planned and give,come to (is so we can be fair with all the tax payers, not just. with one individual. At-it! we dry have that reSj:onsibility, we rook away Jar?'s parking. i"lc,Namara t?as -_ilre;a{dy got. a bid in tiler e, Somebody else has indicated an Interest., so to take, to tat-.e tj, give advantage to somebody that we all knew, isn't right. We've got to nave a, if we have a plat?, then we can give it to them, if it ??eels, the plat?, It doesn't make a bit of difference, but if we ;isn't have a plan, we're going to someday have to face up to the fact that we were unfair, and if we have a plat?, lore don't 1?ave to worry about that. rlr. Tubbs I told nie that Itiney were _--jiready wort i.niq on the plan, they already have the Citizens District Council in place, SCH11IDT: COUIC11perSO111 Belen, Thank you. Councilperson Creamer, CREAMER Thank. you r1adam President, (First couple words unclear) 1 can'+[, speak a lot of the specifics of the development we're Tkaflk,'ilng, about, but all 1, 1, think. it simply put as possible. To my understanding, we have excess public property over there that a number of people want to buy. I've heard things that one per-sons been said, that boy, at some point I was promised all of it. We got other people that want other developments in there, The City Wants to put park,.Ing in there, An, there, are a variety of different interest on trIe property, and 1 thinle'. personally it makes c:orne sense of, as Lucile says, just give it to someone so it gives someone else an opportunity V it'{ unf air fa lets iust try to deal with this in a fair way, urn.... J3 and_,and do some, do sorne homeworle.. up front. Urri, I'm not sure what the situation is in terms of a specific offer on this property, but has an offer actualiv been made? Urn, there is, a, is the offer..., Y S'C'H111 I DT: b6o, an e a d, Yes. CREAMER: Which, which by the way, we've never even been told, i.Bacly.ground unclear,) 1, ah, as ?, menniber of the Physical Developrnent'-orfirnitteel, I now of no offer, Um, and that hasn't been even, that hasn't ever), been brought to Committee. SCHMIDT, Would you plF ise ident oi<rsel --arjd state where you are from and whom you :are with. ADSI T: My name is Betsy Adsit, and I'm with Casters Associate Reality. I'm working with Capital City Lumber. Um..,, we have mane an offer to the City through Capital City, for Capital City Lumber. Um, Mr. Tubbs office has, a, written a counter offer. To my understanding, it has been reviewed by the City Attorney. Ah, it is in the Mayor's office, it is contingent upon the Citizens Committee, the Cedar Larch Corridor, a, Citizens Committee Review, and also the City Council Review. We are asking that this, ah, cont-.int_re on as so it's not to delay the, um... purchase. CREAMER: Well mam, Ok, that, that is very hei4_jful ... CREAMER: I, l guess my question is, I mean if we haven't even gotten a recommendation from the Mayor on this yet, I don't think that, we might not even have a timing problem. ADADO: I don't Wilnv sere going E0 get. 01,1e, CREAMER: Um, it, well, if we haven't gotten one yet, it's my underst and;"n, that the... Well, the Mayor will give us a recommendation on this; he's apparently got it in his office, he gives his recommendation on all sale of properties, That can officially come to us next Monday, anyways, which will 13 go to comn'dittee next week, At least., I'm not, sure t-hat we hive any tin-ijing problet'n wit-.h, this, ADADO: President, T� SCHMI 1 D 1 Couric i I person Adado, ADADO: My Understanding is, Mr. Creamer., that if 'this resolutJon's adopted, it puts everything that's been done on hold. And nothing, arid nof.1",ing will conI-InU , Ehe negotiations will., will, cease. All..., the, t.he, VI Pre might be meet, any more negotiations and the, the goes the... The City has accepted.... or the.... Capital, City Lumber has accepted the counter offer by the City. Mr, Blair brought Lin the question who put the appraisal on the property, 1 don't know, But as., as, Mrs. Adsit said., the counter proposal by the City was accepted by Capital City LUmber contingent upon the Citizens Peview of that Larch Corridor Citizens board. Now, BACKGROUND 11UMBLF: ADADO: We",i lets, lets, see if we can do it again. There was an, there was an of fer by the Real Estate, firm that Mrs. Adsit- works for to purchase the excess property to the rear of the Cycle Shop on S11-Jawassee and Larch, The City gave them a counite'r-offer, Her .Pea i Estate firm, ij.--ook. 'it back to Capital City Lumber, Capital City Lumber said fine, we accept the counter-offer to buy that. 'land. Then, thils resolutJon comes forward, This resolution says we wi 11 not sell that land until we have a master plan, which puts everything that. nas been done by the Planning Departiment on hold unt!I the tmaster plan 14 has been developed and approved. So, consequently, the movement off the execution of the, the, building, and of the land that has been already negotiated is, is, gone by the wayside, And because of some, and you know and I know, that if that negotiations would of been completed, the Mayor would have said, fine, sell that land and we would have none along with selling it, but this complicates it, and this throws a curve into it. And I don't want anyone to think that I'm trying to give favors to anybody. The property that. I'JcNarnara owns is south of this boundary line of the property that i referrer_: to. The property that the coffee shop owns is south of it.. Jan's Roonhs is the extreme- south, on Michigan iigan Ave. Now what they, what use they would have of the property north of the south boundary of the Cycle o 1 close to Shlawassee Street, I don't Kthow. Tl'. r}t.rh-_! 1,1,I ! that I south of this that is owned or backs on to i,IcNair(ara's and everybody else's property should be the, the first offer should be given to those property owners that own it so that they can have their parking, and they can have their other, a, use of that land. I'm not, I'm not arguing that point one bit, I'm not trying to say that if somebody else would of bid in for that property, t.lhat would had been fine too. I stiII thin; that. if ICs adjacent to it, they, shiou i d Have it, Tl hanl•, you, S-.yf'''1IDT: Thank you, Councilman Adado. t_.ouncilperson Benavides has been recognized, and the!-) Councilperson ElYjir. C�tIVr �, l[!`7: i`'lariarr( Pt`r✓sirent. Alh t.l,is , t „ rt. t �- �; t , pat • ic:.a ,r` rPI:; .t.e �a ,_,ro lc;f,+. tip i-n my attention this afternoon, And, again, my response was when i was visiting with settle of the people, I said, that if was so itr►portant it seems to me t..hat.. the Mayor and the Planning Board, and whoever should have 15 provided at least, the Physical Development. Committee or this Council imemberS suspension or the rules or something that says we can not, ie this bid go by., we can not. let this- opportunity go on U-If". Ways]I(je-, and, therefore, ah, move to amenid the resolult-lon bec.-aluse there is not even I-, h, ution that would address whatever r1r. requested, t,a.,;- �F i h—, -esol t Adado is saying so in order to make a decision it seems to me that, that ta, it has to comn-iend through the proper channels., and if the Mayor` has not, conie out, with the., with that type of recommendation through the price of the land and to who it is .3- , -3, 1 don't see, how we, how else we could move, BEEN: Mr. Tubbs is right at our meeting. f , --HM1 DT Ms. Belein, �7i, 11r, E-1)iadr Inas been recogn!zed, Mr. Blair ha s the 'floor, if you are through Counc i 1 person Benav i des, BLAIR: N.adam President. I guess th,,--�Vs the next logical question is if were going to do C)LIr committee worle.,:'. out here on the f1loor, UnI., is., if, if, 11v Ir. TiUbb's off ice is negotiating to sell it on one hand and writ ing COUI-jrp-r offers 0'aCK, who's "nak-J,ng the request to do thr- Planinling Board stuff, or., or the plan, 1, 1 me-a.ri, did that come out of your committee or did it come out of the recon-imendation, fron-i the Planning Department., Why are they working on tills plan and if they're selling it. 1 mean, it's, they seem to Lie conflicting reports on here. Did soirriebody., con—, somebody let me know what... Mr. Worthington, SCHMjIDT: Mr, Worthinfaton. 16 BLS IR: i yield he f loor to 11r. 'Worthington. WORTHINGTON: That's, you just hit, precisely why we are doing this because we do have picked tip that there were offers, counter offers, and the whole thing was without any I�no�.roa+ler�t e of the t��}uncil any+ the need to say stop until YOU get this plan completed, anti rou get everything in place. And the Citizen's District has got their plan in order. ADADO: is that. whv ....(Unable to hear what. is Meinq said.) Sc.=H1`1IDT: Counr.i1i77an Crearner `,as the fIoor, C-PEr`!"IER,: All i w.,-inf., ! r`. Ik �` do we actual ly #� � � ter car s s .CC71, C 1, ktiC t. _ r 1 �::1 l (:r +,n.". ship i p.� of this l_� +C`i:i 3erty t. ; mean, property t.�� that we're,_� t a 1 7 Lou E� �. ; S'e �' { r� tl�`-' r< C.er �� 1 s�_ :�e't pcat. ;ai}�r:"rent. y that. L�"��_t sl:�e11<11 to, i am not so sure the spec_ifiC parce1. Do we actually have own,ership to that or is that part of the ra1_1ro1--:.,d property that were is the process of, re,._ .•acgUiC`lrig. KIN I : It's CT1;;` understandinq that... ` CHi1ID T ; ["Ir. h'.ntrt., 1°. !!.?T: ...tilat t.lieC`e is :a portion off file property t.liat. we're still negotiating on w i t h the rai fro d on. -,- Fr o even own all C property y t. s•:s� f`t`!t�•'.: .�>_s �.�� "1"s�l't. ;._.: the r ( 7 C t, yet.. 17 [<J,jo T: I p-1 y d e cz,'- d j n g .. L. Le aadCya er o)Ia h odn vyCse. Ah; tlie.... CREAMER: Well, Well.... ADADO: Point of information, CREAMER: Yes ur no, do vje ,-7wn it or no-C'? KNOT: We]I, well, I alre,7.,dry, ainswerecj your quest.jon ont- T,C.e I h e a,rf s,...ry e r 1,S n o- we don't own It, — CREAMER: All right, :NOT, .,,but as I said, we're... we're real close, g ADAD01: wilt frorn Ave'? KNOT, Oh, ;absolutely not, It's not scheduled until early fall, ADADO: The right of way isn't, we don't own the right of way yet'? KNOT, Oh, absolutely yes, we do. If fact, this Council approved ta,a, settlement, But, but I think that you...but I think in terms of negotiations, once we own the road through the combination law suit, ah.., I think it became in the best interest of the railroad to also discuss with the City 18 that they would like to sell to the City some land between the railroad and, our, now our road. Ah-, in terms of our interest on that. Since apparently some of that land now tl'iat they own is land-locked, land-locked by the very r d now that we endec_i up owning from another railroad to condemnation. CR-"j=AHF-_'I: E_INL-'_CAR::, U4,IABLE TO HEAR- WHAT'S SAID KNOT: Right ADADO: The land that who owns is land-locked? The railroad's KNOT- The railroad. Sot'n.e of the land is still owned by the railroad, on the other side of the road. AL ADO To the west,.,, to the east or west of the road? KNOT: I be]!eve the east. ADADO: can the east side of the road. KNOT: Correct, And I believe that.... ADADO: Would it be, would it be asking to much Madam President to have this Counci lmember receive from the Planning Department a sketch of the land that is owned by the City and that's, you know, the land that, all the land from Michigan Ave. to Shiawassee Street along the railroad tracks, and who owns each parcel along the road so we know what direction we're going. 19 Could we possibly get that. from the P'ianning Department or the AdminismatiCn'? And the offers 'that were made to purchase the parcels Of the land from Michigan Ave, to Shiawrise.- ;all along. `(_-an We yet sume of that information? a� iI"iIDT; I certainly tiili`slt; that that would hi+ a strong �+�sssibilit `. ,nd the lady that is address in+, us at the Council, although Counc i I person Wort.hinaton has a comment. on that.. t.o answer that. question. Co�_iriC;l(lerSC�fl 1A ortflingto i. VVORT1151HNGTON: We11, t:a, da . . no, the problem is to try to stop the Coul"'IcIll from being boxed on this issue, That is the bottom line, And we're trying to, To.... we, as the Council, rrOt. allowing for various offers, Counter Offers, things that we l~;n!7w nothing about and at the last minute up rolls a, a, ha...f;_a...1 a...litera1, up Comes a ;niece of property and its ;all been signed and agreed to, and here you've !got to accept this foll,ws. And, what Physical Development. Comtnittee is trying to do is stop 'fie Council from being boxed on this area and t1here are, ::ail+d all the competing people wllo want to buy and have expressed an interest in that property. :aCHIM(D : Thatll:: YOU COUIPi+CiltnemberWorthington. But to cal.,, jum, to answer Count=i 1pet`"on's Ada jai, there Certainly should be a f'iap, and I'm sure Hall can it WORTH NG T0 NI: 71 flat. would be the best idea that we could have. But, 'jets first. o .all get. r-n over i area Cep. that w ,' iL ow {;fit "a*' going i,- o i J!.. _ v tit_ ltrt�l _/Y .t t.l� tat k.{.� -s.1 tl I, Vb e t�t know 1J} y;�l_J 1, �I F�f�i Vf� and 20 we can al have equal access to it :find we can all deal with it in the same Way, ADADO: Presiclent, 5 C-H[1 I D T: Co u n c 1'1 p e-rs o n ,loco. ADADO: Adsit has been at that, at. Mrs. Adsit has beers at. the podium, she n-Oqzht be able to share some light on this. I would like to ask my col leaguesto grant her permission to tell Lis what she knows about this. SCHI"IIDT: There jl-ias beet', a r,notlon to recall the question, this here, this ;je.re. Do you colleagues feel that the question shOL41Id be called before the public is addressed this qUeStion? A]I 'those if,,.... L BYLAIR: Pr-1-sident, I've made a motion, SCHMI 1 D TI : YOU, there is a mo t 1 on to ca I I for` the quest I of 1. U11-11, all those i 1) favo,r Indicate by saying, "I" COI_NCIU,1EI'1BFE_RS: "I" ADADO: Pole call I, r1adam President, SCHMIDT A roie call volle, has been taken as forth, BAUMANi: Councilnian Adado 2 if ADADO- "No„ BADMAN, Belen BELEN: "I„ BAUMAN. Ben-av i des BENAVIDES: "I„ ECLAIR: ,,I„ CREAMER: "No" BAUMAN: Lindemann, oh, he didn't want to vote. BAUMAN, Schmidt. Do you want to recall the question Schmidt? SCHMIDT: Thanks, but "No„ BAUMAN: Worthington 22 THINGTON, BAUI,IAN: There's 'four "yeas" and three "nays" 4 SCHMIDT: Four nays and three yeas, Mrs. Adsit, if I'm pronc) the narne- correctly, You may address the Council, ADSIT . a I, , - --e. 0 1,--:4 W 1 SCHMIDT: On the subject that a me'l-r- --.?ddressiilng regarding, a'-; the resolution, ADADO: Mad.-:7m-i I woluld move that permission be granted for Mrs. Adsit to talpk-.. SCHMIDT, Yes, I just had indicated to her— ADADO: Well, you have to take a vote, Madam President, I have the... SCHMIDT: Ali those in favor of a]lowing Mrs. Adsit to speak on the question as it deals with this location. All those in favor indicate by sayirig "I". I-OUNCILMEMBERS., "I" SCHMIDT: Opposed. Mrs. Ads J.-,1- 2 ADS I T: Thank you, I do have a draw i ng here from Mr. Tubbs of f 1 ce. I t w 111 explain what the City owns and what they are still "Crying to negotiate for the railroad. If I could, ta, you want a look at this. We have been working with the City for at least a month now. So this hasn't really been push through very very quickly. Um, I understand that the Citizens Committee does have a Land-Use plan, and it is almost to the final draft, However, it will not be presented until sometime in October, I don't know what the delay is, but that, tum, is another month delay for us, Would you like to see this, the, BACKGROUND TALKING OF COUNCILMEMBERS, ADADO- I hope we proceed, and do whatever-- youl w o Want 1, T 0� SCHf,IIDT: Alt ight, ;_�Iriglht, al, `� - a _jht, Vie -,ire sf).1111 dealing will-h tli reso 1 regarding.., we should talk and vote again, BACKGROUND SPEAKIN6 OF COUNC I L 11 E1,11 B ER.,S, 1-11 N C LE AIR,', StCH!'111)T, Are thera, add"t-jonal ­Omn",ents wou wish to I ".W.tz" A,DS 1 T,L) Nc Nio t e. Ph a t nmu, 2­1 CHf` IDT: Co!_rnc.i1person Adado. Your, you, 1_rst left the room and that was for the ►ur'pose of, c-an you explain for-four" purpose of,.,, (Unable to un{ip tand rest o? sentence because o 'aught er), ADADOJ r he purpose of- my leaving the room? i took the cop',f of the n"lap +.1-1at the voung lady had I rom 11r, Tubbs to have some copies made so that you members o ' the C,ounc i 1 will, have a copy of a map, 'that Mr, T Bubb Y provided ed to Mrs. . dsit. C-.Hi I fT: Alright. Are there any other' co nlr•eients t(h t. ' o d be :�ppropr1ar-,� •1 111 •h.� �L� 11�t l� t I Li�..L I.-o take, to a f I V P 111;1nute It'e'•:ess if we have not.h1ng to deal with. T he question is on the floor to vote this up or down. What is your pur'... what is your... `CIHH,,liDT: Role call vote. Dealing Wit!) this. resolution, CREA ER: As is, S H1 11 DT: AS i s. S REALIE►--,. Thank You. CHI"'ilD I : Erg, urn, Ok-I, role .all vote miadam rU-lerl;,, please. BAUI •AN: C,or.rnc11rnan Ada do, 25 AD ADO: No. BAUMAN: Belen, BELEN: Yes, BA(A-lAN: Benav'ides. BENAVIDES: Yes, BAU'lAN: Blair, BIL A I R Y a. BAUMAN, Creamer, CREAMER Yes. BAUMAN: Schmidt, SCHMIDT: Yes. BAUMAN: Worthington, WO,RT iri C�T(),if,,11: 26 BAUMAN: Six "Yeas" and one "No". SCHMIDT, Six "Yeas" and one "Nay." The resolution is adopted. The, please read, 27 John F. Mertz ATTORNEY AND COUNSELOR 518 HOLLISTER BUILDING • 106 WEST ALLEGAN LANSING, MICHIGAN 48933 TELEPHONE (517) 482-5200 October 19 , 1988 Ms. Rita Bauman Lansing City Clerk Ninth Floor, City Hall Lansing, Michigan 48933 RE: Lansing Board of Ethics Investigation of Councilman Lindemann Dear Ms . Bauman: On behalf of the Board, please please invite the following persons to appear before the Board of Ethics at its Special Meeting scheduled for Friday, October 21, 1988 at 8 : 30 a.m. at the Foster Building, 313 S. Washington Square, Lansing, Michigan, for the purpose of relating to the Board any facts known to them concerning the acquisition and proposed sale of Pere Marquette city-owned land, and Councilmember Lindemann' s involvement in same: Councilmember Patrick Lindemann Betsy Assid, Caster Realty Al Tubbs , Lansing Planning Director Ron Stonehouse, Lansing Planning Department Emerson Ohl, Economic Development Corp. Councilmember Lou Adado Your anticipated cooperation in this regard is appreciated. VeeF. yours, J RTZ hBoa f Ethics JFM:me cc: D. Cook S. Lowney A. Knot LANSING BOARD OF ETHICS SPECIAL MEETING October 19 , 1988 4 : 00 p.m. Foster Building 313 S. Washington Ave. , Lansing, MI AGENDA CALL TO ORDER ROLL CALL -J. Mertz , D. Cook, S. Lowney, City Clerk, City Attorney -Introduction of Guests APPROVAL OF AGENDA SECRET Y' S REPORT /-Approval of Minutes of 10/11/88 ,-,--'Correspondence Received And Sent - vL• f` �Disclosu.res of Conflicts Filed Inquiries & Complaints Received *Materials Re: Pere Marquette (Councilman Lindemann))��' - *Inquiries Re: Pere Marquette (Councilman ,_A„dgdo) �� __-----'Rext Meeting Date *Friday, October 21, 1988 - 8 : 30 a.m. at Foster Bldg. -- CITY ATTORNEY' S REPORT isclosures of Conflicts Filed - � CHAIRMAN' S REPORT -Revised Meeting Procedures - *Agenda -- *Recording Secretary *Use Of Committee Of The Whole - *Times For Public Comment *Meeting Goals & Timetables - -Conflict of Interest of Board Members ,,._-OLD BUSINESS -Response to H. Leeman, Jr. Complaint of 10/8/87 : Proposed Advisory Opinion No. 4 (Lowney)-Tabled 1/25/88 COMMITTEE OF THE WHOLE nn NEW BUSINESSf- Adoption of Partia Response to Physical Development Committee Inquiry of 9/26/88 : Advisory Opinion No. 5 PUBLIC COMMENT BOARD ROUNDTABLE ADJOURNMENT MINUTES LANSING CITY BOARD OF ETHICS WEDNESDAY, OCTOBER 19, 1988 - 4 P.M. SOUTH WASHINGTON AVENUE The meeting was called to order at 4:13 p.m. BOARD MEMBERS PRESENT: John Mertz, Chair Steve Lowney Donald Cook Rita Bauman Alvan Knot S members present. 0 absent. GUESTS: Harold Leeman, Citizen Greg Koessel, City Council Betsy Assid, Caster & Associates Don Springer, Channel 6 Scott Allman, Channel 6 Chris Golembiewski, Lansing State Journal Francesca Doneth, Recording Secretary Patrick Lindemann, City Councilmember and Agent for Caster and Associates AGENDA APPROVED AS SUBMITTED BY CLERK BAUMAN. SECRETARY'S REPORT: Approval of Minutes: After review of the minutes of October 19, they were adopted by the Board with changes made. Correspondence Received and Sent: No correspondence sent received. Disclosures of Conflicts Filed: No disclosures of conduct filed. Inquiries and Complaints Received: Letter regarding Pere Marquette was received from Councilmember Lindemann. Councilmember Lindemann requested that he be allowed a week extension in order to provide his materials and documentation to the Board. Chair stated that this request would be considered at the end of the meeting. Letter of inquiry regarding Pere Marquette and the Planning and Municipal Department's role was received from Council President Schmidt and Council Vice-President Adado. Next Meeting Date: Friday, October 21, 1988 - 8:30 a.m. at the Foster Bulding; third floor conference room is the ;next scheduled meeting of the Board. Ms-Bauman informed the Committee that appropriate notices had been posted and the following persons have been noticed of their hearing date to provide facts to the Board: # Councilmember Patrick Lindemann • Betsy Assid, Caster Realty • Alan Tubbs, Planning & Munic. Dev. Director • Ron Stonehouse, Development Director • Emerson Ohl, Economic Development Director a Councilmember Louis Adad CHAIRMAN'S REPORT: Agenda: Chair organized the agenda as printed today- 2 Recording Secretary: Chair informed the Board that Ms. Francesca Doneth will act as Recording Secretary of the Board in order to allow Ms. Bauman to fully participate in the discussions as she is a participating member of the Board. Ms. Bauman will no longer be required to take minutes. Use of the Committee of the Whole: Chair clarified the definition of "Committee of the Whole". Discussion will take place in Committee of the Whole and the discussion will be summarized briefly in the minutes. Times for Public Comment: Members of the public will be allowed to speak for 3 minutes at the end of meeting under "Public Comment". Meeting Goals and Timetables: Board will report out an opinion (sometime in the future) on the Conflict of Interest question; address the questions asked by Councilmember Lindemann; and address the questions asked by President Schmidt and Vice-President Adado; revise current disclosure form. Conflict of Interest of Board Members: Chair stated that after his review of Charter and ordinances he is of the opinion that Mr. Knot is not in conflict in regard to this issue as he is not the focus of this investigation. The Board will play an advisory role only. Councilmember Lindemann had expressed concern at the previous meeting regarding Mr. Knot being an active member of the Board. OLD BUSINESS: Response to Mr. Leeman's Complaint of October 8. 1987: 3 Chair apologized to Mr Leeman for the lateness of the response to his earlier request regarding Elected Officials personal account expenditures_ Advisory Opinion No. 4 from Mr. Lowney: Mr. Lowney will be researching the question asked by Mr. Leeman and will be reporting to the Board. After the report is received, action will be taken by the Board_ This matter may be referred to the State Board of Ethics. COMMITTEE OF THE WHOLE: Chair submitted Opinion No. 5 (working draft]. Discussion took place regarding the folowing: • State Law regulations regarding disclosure_ • Local regulations per City Ordinances and City Charter regarding disclosure. • Explanation and clarification of "voluntary" and "involuntary" Mr. Lowney recommended that the definition be moved to page 3 from page 5 in order that persons reading the opinion would have a clear understanding at the onset of the meaning of voluntary and involuntary. • Mr_ Knot recommended that clarification should be made that the opinion is "general" in nature and should be reflected within the document. • Organization and clarification within the document. Recommendation by Mr.Lowney to Roman Numeral the headings of the next working draft in addition to including changes made at this meeting. Chair will work with Mr. Lowney on organization and clarity of the document. • When to call a meeting of the Board. Chair stated that upon the Clerk's receipt of a disclosure, copies will be provided to the Board members 4 and then a decision will be made as to whether a meeting is warranted. • Lengthy discussion regarding 10 day notice mandate that a person must file a disclosure statement prior to when action or voting will take place on the issue. The question of exceptions was discussed. Exceptions should be discouraged as much as possible. The following amendments to the document/opinion No. 5 were approved by the Board: Disclaimer clause be included in the document_ Provision be included that the opinion is of a "general" nature. Provision be included for exceptions and that exceptions be delineated. Page 1 - Second line; after the word "Charter" the words "and ordinance" be added. Page 3 - Second line; after the word "employees; add " as defined by Section 2-1290) and 1-205 of the City Charter. Page 5 - Fifth line; after the word "business," add "will directly"; Sixth line delete "directly or indirectly." Page 6 - Second paragraph, 12th line; delete "either directly or indirectly." Opinion not reported out at this time. Board will continue to work on a final draft. PUBLIC COMMENT: Councilmember Lindemann addressed the Board and asked the Committee to allow him some time to prepare for his presentation_ Chair stated that Mr. Lindemann already had 7 5 days to Fret and he an the 11 d Lindemann would he prepared to make his presentation to the Board on Friday. Mr. Lindemann stated that he did not know there was a meeting scheduled for Friday until today and that he could provide all of his documentation to the Committee any time after Monday. Mr. Lindemann stated that his presentation would be approximately 15 minutes to a maximum of 1/2 hour. He had made a request to the Clerk for seven days notice of any future meeting. Mr. Lindemann requested that he would like the Board to clarify his role as a City Councilmember and as a Real Estate Agent. Chair asked that he provide: • Any and all agreements and/or documents between Caster and Associates and their client regarding Pere Marquette. • Written proposal submitted to the City. • Chronology report of all activities_ Chair acknowledged request and the Board would discuss it further at Friday's meeting relative to the scheduling of Mr. Lindemann's hearing- Mr. Leeman addressed the Committee and spoke to the issue of meeting places of the board in the future. Informational only- ADJOURNMENT: Approximately 7:20 p.m. Respectfully submitted by Francesca Doneth Recording Secretary ti MINUTES LANSING CITY BOARD OF ETHICS WEDNESDAY. OCTOBER 19, 1988 - 4 P.M. SOUTH WASHINGTON AVENUE -he meeting vas called to order at 4:13 p.m. BOARD MEMBERS PRESENT: John Mertz, Chair Steve Lowney Donald Cook Rita Bauman Alvan Knot 5 members present. 0 absent. GUESTS: Harold Leeman, Citizen Greg Koessel, City Council Betsy Assid, Caster & Associates Don Springer, Channel 6 Scott Allman, Channel 6 Chris Golembiewski, Lansing State Journal Francesca Doneth, Sr. Legislative Assistant, City Council AGENDA APPROVED AS SUBMITTED BY CLERK BAUMAN. SECRETARY'S REPORT: Approval of Minutes: Corrected minutes were submitted to the Board. Minor typographical error corrected. MINUTES APPROVED 5-0. Correspondence Received and Sent: No correspondence sent received. Disclosures of Conflicts Filed: No disclosures of conduct filed. Inquiries and Complaints Received: Letter regarding Pere Marquette was received from Councilmember Lindemann. Councilmember Lindemann requested that he be allowed a week extension in order to provide his materials and documentation to the Board. Chair stated that this request would be considered at the end of the meeting. Letter of inquiry f egarding Pere Marquette and the Planning and Municipal Department's role was received from Council President Schmidt and Council Vice-President Adado. Next Meeting Date: Friday, October 21 , 1988 - 8:30 a.m. at the Foster Bulding; third floor conference room is the next scheduled meeting of the Board. Ms.Bauman informed the Committee that appropriate notices had been posted and the following persons have been noticed of their hearing date to provide facts to the Board: • Councilmember Patrick Lindemann a Betsy Assid, Caster Realty • Alan Tubbs, Planning & Munic. Dev. Director • Ron Stonehouse, Development Director • Emerson Ohl, Economic Development Director a Councilmember Louis Adad CHAIRMAN'S REPORT: Agenda: Chair organized the agenda as printed today. Recording Secretary: Chair informed the Board that Ms. Francesca Doneth will act as Reces ding Secretary os the Board in order to allow Ms. BmUman to fully participatxe in the discussions as she is a participating member of the Board. Ms. Bauman will no longer be required to take minutes. Use of the Committee of the Whole: Chair clarified the definition of "Committee of the '`hole". Discussion will take place in Committee of the Whole and the discussion will be summarized briefly in the minutes. Times for Public Comment_ Members of the public will be allowed to speak for minutes at the end of meeting under "Public Comment". Meeting Goals and Timetables: Board will report out an opinion (sometime in the future) on the Conflict of Interest question; address the questions asked by Councilmember Lindemann; and address the questions asked by President Schmidt and Vice-President Adado, revise current disclosure form. Conflict of Interest of Board Members: Chair stated that after his review of Charter and ordinances he is of the opinion that Mr. Knot is not in conflict in regard to this issue as he is not the sole focus of this investigation. The Board will play an advisory role only. Councilmember Lindemann had expressed concern at the previous meeting regarding Mr. Knot being an active member of the Board. OLD BUSINESS: Response to Mr Leeman's Complaint of October 8 1987: Chair apologized to Mr Leeman for the lateness of the response to his earlier request regarding Elected Officials personal account expenditures. Advisory Opinion No. 4 from Mr. Lowney: Mr. Lowney will be researching the question asked by Mr. Leeman and will be reporting to the Board. After the report is received, action will be taken by the Board. This matter may be referred to the State Board of Ethics. r COMMITTEE OF THE WHOLE: Chair submitted Opinion No. 5 wworking :eras as. Discussion took place regarding the folowing: • State Law regulations regarding disclosure. • Local regulations per City Ordinances and City Charter regarding disclosure. • Explanation and clarification of "voluntary-" and "involuntary" Mr. Lowney recommended that the definition be moved to page 3 from page 5 in order that persons reading the opinion would have a clear understanding at the onset of the meaning of voluntary and involuntary. • Mr. Knot recommended that clarification should be made that the opinion is "general" in nature and should be reflected within the document. • Organization and clarification within -the document. Recommendation by Mr.Lowncy to Doman Numeral the headings of the next working draft in addition to including changes made at this meeting. Chair will work with Mr. Lowney on organization and clarity of the document. • When to call a meeting of the Board. Chair stated that upon the Clerk's receipt of a disclosure, copies will be provided to the Board members and then a decision will be made as to whether a meeting is warranted. • Lengthy discussion regarding 10 day notice mandate that a person must file a disclosure statement prior to when action or voting will take place on the issue. The question of exceptions was discussed. Exceptions should be discouraged as much as possible. The following amendments to the document/opinion No. 5 were approved by the Board: ! Disclaimer clause be included in the document. Provision be included that the opinion is of a "general„ nature. Provision be included for exceptions and that exceptions be delineated. Page 1 - Second fine; after the word "Charter" the words .'and ordinance" be added. Page 3 - Second line; alter the word "employees; add " as defined by Section 2-129(1 ) and 1-205 of the City Charter. Page 5 - Fifth line; after the word "business," add "will directly"; Sixth line delete "directly yr indirectly." Page 6 - Second paragraph, 12th line; delete "either directly or indirectly." Opinion not reported out at this time. Board will continue to work on a final draft. PUBLIC COMMENT: Councilmember Lindemann addressed the Board and asked the Committee to allow him some time to prepare for his presentation. Chair stated that Mr. Lindemann already had 7 days to prepare and he and the Board understood that Mr. Lindemann would be prepared to make his presentation to the Board on Friday. Mr. Lindemann stated that he did not know there was a meeting scheduled for Friday until today and that he could provide all of his documentation to the Committee any time after Monday. Mr. Lindemann stated that his presentation would be approximately 15 minutes to a maximum of 1/2 hour. He had made a request to the Clerk for seven days notice 01 a:Iy future meeting. Mr. Lindemann requested that he would like the Board to clarify his role as a City Councilmember and as a Real Estate Agent. Chair asked that he provide: Agreement between Caster Assoc_ and weir Glenn Written propaszl submitted to the C"Y, Chronology report on behalf of the CAA. 11-hia r acknowledged request and the Board would discuss it further at Friday's meeting relative to the scheduling of Mr. f,iandemann's hearing. bli.. Jleemau addressed the Committee and spoke to the issue of meeting places of the board in the future. Informational only. ADJOURNMENT: Approximately 7:20 p.m. Respectfully submitted by Francesca Doneth Senior Legislative Assistant Lansing City Council .BOARD APPROVED AT _MEETING. SIGNED: JOHN MERTZ, CHAIR MINUTES LANSING CITY BOARD OF ETHICS WEDNESDAY. OCTOBER 19, 1988 - 4 P.M. SOUTH WASHINGTON AVENUE The meeting was called to order at 4:13 P.M. BOARD MEMBERS PRESENT: John Mertz, Chair Steve Lowney Donald Cook Rita Bauman Alvan Knot 5 members Present. 0 absent. GUESTS: Harold Leeman, Citizen Greg Koessel, City Council Betsy Assid, Caster & Associates Don Springer, Channel 6 Scott Allman, Channel 6 Chris Golembiewski, Lansing State ,journal Francesca Doneth, Sr. Legislative Assistant, City Council AGENDA APPROVED AS SUBMITTED BY CLERK BAUMAN. SECRETARY'S REPORT: Approval of Minutes: Corrected minutes were submitted to the Board. Minor typographical error corrected. MINUTES APPROVED 5-0. Correspondence Received and Sent: No correspondence sent received. Disclosures of Conflicts Filed: No disclosures of conduct filed. Inquiries and Complaints Received: Letter regarding Pere Marquette was received from Councilmember Lindemann. Councilmember Lindemann requested that he be allowed a week extension in order to provide his materials and documentation to the Board. Chair stated that this request would be considered at the end of the meeting. Letter of inquiry regarding Pere Marquette and the Planning and Municipal Department's role was received from Council President Schmidt and Council Vice-President Adado. Next Meeting Date: Friday, October 21, 1988 - 8:30 a.m. at the Foster Bulding; third floor conference room is the next scheduled meeting of the hoard. Ms.Bauman informed the Committee that appropriate notices had been posted and the following persons have been noticed of their hearing date to provide .facts to the Board: • Councilmember Patrick Lindemann • Betsy Assid, Caster Realty • .Alan Tubbs, Planning & Munic. Dev. Director • Ron Stonehouse, Development Director • Emerson Ohl, Economic Development Director • Councilmember Louis Adad CHAIRMAN'S REPORT: Agenda: Chair organized the agenda as printed today. Recording Secretary: Chair informed the Board that Ms. Francesca Doneth will act as Recording Secretary of the Board in order to allow Ms. Bauman to fully participate in the discussions as she is a participating member of the Board. Ms. Bauman will no longer be required to take minutes. Use of the Committee of the Whole: Chair clarified the definition of "Committee of the Whole". Discussion will take place in Committee of the Whole and the discussion will be summarized briefly in the minutes_ Times for Public Comment: Members of the public will be allowed to speak for 3 minutes at the end of meeting under "Public Comment". Meeting Coals and 'Timetables: Board will report out an opinion (sometime to the future) on the Conflict of Interest question; address the questions asked by Councilmember Lindemann; and address the questions asked by President Schmidt and Vice-President Adado; revise current disclosure form. Conflict of Interest of Board Members: Chair stated that after his review of Charter and ordinances he is of the opinion that Mr. Knot is not in conflict in regard to this issue as he is not the sole focus of this investigation. The Board will play an advisory role only. Councilmember Lindemann had expressed concern at the previous meeting regarding Mr. Knot being an active member of the Board. OLD BUSINESS: Response to Mr. Leeman's Complaint of October 8. 1 87: Chair apologized to Mr Leeman for the lateness of the response to his earlier request regarding Elected Officials personal account expenditures. Advisory Opinion Na 4 from Mr. Lowney:_ Mr. Lowney will be researching the question asked by Mr. Leeman and will be reporting to the Board. After the report is received, action will be taken by the Board. This matter may be referred to the State Board of Ethics. COMMITTEE OF THE WHOLE: Chair submitted Opinion No. 5 [working dral-tj. -Discussion Look place regarding the folowing: • State Law regulations regarding disclosure. • Local regulations per City Ordinances and City Charter regarding disclosure. e Explanation and clarification of "voluntary" and. "involuntary" Mr. Lowney recommended that the definition be moved to page 3 from page 5 in order that persons reading the opinion would have a clear understanding at the onset of the meaning of voluntary and involuntary. 0 Mr. knot recommended that clarification should be made that the opinion is "general" in nature and should be reflected within the document. Q Organization and clarifical-ior� wi�:_hIPA the document. Recommendation by Mr.f,fwne = to Roman Numeral the headings of the next -working draft in addition to including changes made at this meeting. Chair will work with .Mr. Lowney on organization and clarity of the docu m en t. • When to call a meeting of the Board. Chair stated that upon the Clerk's receipt of a disclosure, copies will be provided to the Board member-s and then a decision will be made as to whet.ber meeting is warranted. • Lengthy discussion regarding 10 day notice mandate that a person must file a disclosure statement prior to when action or voting will take place on the issue. The question of exceptions was discussed. Exceptions should be discouraged as much as possible. The following amendments to the document/opinion No. 5 were approved by the Board: Disclaimer clause be included in the document_ Provision be included that the opinion is of s. "general" nature. Provision be included for exceptions and [hat exceptions be delineated. Page 1 - Second line; after the word "Charter" the words and ordinance" be added. Page 3) - Second line: of ter the word `°empl, -ces; add " as defined by Section 2-i29 l ) and 1-205 of the City Charter. Page 5 - Fifth line; after the word "business," add "will directly", Sixth line delete "directly or indirecify Page 6 - Second paragraph, F }L}� I 141ine; �e-l!rule {was-per �H., .3. 6 .Y is .�_ __�_ � .. .L x Y.-..�.+:. __.3 �1 or indirectly." Opinion not reported out at this time. Board will continue to work on a final draft. PUBLIC COMMENT: Councilmember Lindemann addressed the Board and asked the Committee to allow him some time to prepare -for his presentation_ Chair stated that Mr. Lindemann already had 7 days to prepare and he and the Board understood that Mr. Lindemann would be prepared to make his presentation to the Board on Friday. Mr. Lindemann stated that he did not know there was a meeting scheduled for Friday until today and that he could provide all of his documentation to the Committee any time after Monday. Mr. Lindemann stated that his presentation would be approximately 15 minutes to a maximum of 1/2 hour. He had made a request to the Clerk for seven days notice of auy future meeting. Mr. Lindemann requested that he Mould like the Board to clarify his role as a City Councilmember and as a Real Estate Agent. Chair asked that he provide: • Agreement between Caster Assoc. and their Client. • Written proposal submitted to the City. • Chronology report on behalf of the City. Chair acknowledged request and the Board would discuss it further at Friday's meeting relative to the scheduling of Mr. Lindemann's hearing. Mr. Leeman addressed the Committee and spoke to the issue of meeting places of the board in the future. Informational only. ADJOURNMENT: Approximately 7:20 p.m. Respectfully submitted by Francesca Doneth Senior Legislative Assistant Lansing City Council BOARD APPROVED AT MEETING. SIGNED: JOHN MERTZ, CHAIR Inquiries and Complaints Received: Letter regarding Pere Marquette was received from Councilmember Lindemann. Councilmember Lindemann requested that he be allowed-a week extension in order to provide his materials and documentation to the Board_ Chair stated that this request would be considered at the end of the meeting. Letter of inquiry regarding Pere Marquette and the Planning and Municipal Department's role was received from Council President Schmidt and Council Vice-President Adlado. Next Meeting Date: Friday, October 21, 1988 - 8:30 a.m. at the Foster Bulding; third floor conference room is the next scheduled meeting of the Board. Ms-Bauman informed the Committee that appropriate notices had been posted and the following persons have been noticed of their hearing date to provide facts to the Board: a Councilmember Patrick Lindemann a Betsy Assid, Caster Realty a Alan Tubbs, Planning & Munic. Dev. Director a Ron Stonehouse, Development Director a Emerson Ohl, Economic Development Director a Councilmember Louis Adad CHAIRMAN'S REPORT: Agenda: Chair organized the agenda as printed today. Recording Secretary: Chair informed the Board that Ms. Francesca Doneth -v,,ils act as Recording Secretary of the Board in order to allow Ms_ Bauman to fully participate in the discussio—ns as she is a participating member of the Board_ Ms. Bauman will no longer be required to -Lake minutes. Use of the Committee of the Whole- Chair clarified the definition of "Committee of the Thole". Discussion will take place in Committee of the Whole end she discussion will be summarized briefly in the minutes. Times For Public Comment: Members of the public 'vhila be allowed to speak for minutes at the end of meeting under "Public Comment". Meeting Goals and Timetables- Board will report out an opinion (sometime in the futurej, on the Conflict of Interest question; address the questions asked by Councilmember Lindemann; and address the questions asked by President Schmidt and Vice-President Adado; revise current disclosure form. Conflict of Interest of Board Members Chair stated that after his review of Charter and ordinances he is of the opinion that Mr. Knot is not in conflict in regard to this issue as he is not the sole focus of this investigation. The Board will play an advisory role only. Councilmember Lindemann had expressed concern at the previous meeting regarding Mr. Knot being an active member of the Board. OLD BUSINESS: Response to Mr. Leeman's Complaint of October 8 1987- Chair apologized to Mr Leeman for the lateness of the response to his earlier request regarding Elected Officials personal account expenditures. Advisory Opinion No 4 from Mr. Lowney: Mr. Lowney will be researching the question asked by Mr. Leeman and will be reporting to the Board. After the report is received, action will be taken by the Board. This matter may be referred to the State Board of Ethics. COMMITTEE OF THE WHOLE: Chair submitted Opinion No. 5 wworking db aftl. Discussion took place regarding the folowing: ® State Law regulations regarding disclosure. Local regulations per City Ordinances and City Charter regarding disclosure. e Explanation and clarification of "voluntary„ and "involuntary" Mr. Lowney recommended that the definition be moved to page 3 from page 5 in order that persons reading the opinion would have a clear understanding at the onset of the meaning of voluntary and involuntary. • Mr. Knot recommended that clarification should be made that the opinion is "general" in nature and should be reflected within the document. Organization and clarification within the document. Recommendation by Mr.Lowney to Roman Numeral the headings of the next working draft in addition to including changes made at this meeting. Chair will work with Mr. Lowney on organization and clarity of the document. • When to call a meeting of the Board. Chair stated that upon the Clerk's receipt of a disclosure, copies will be provided to the Board members and then a decision will be made as to whether a meeting is warranted. o Lengthy discussion regarding 10 day notice mandate that a person must file a disclosure statement prior to when action or voting will take place on the issue. The question of exceptions was discussed. Exceptions should be discouraged as much as possible. The following amendments to the document/opinion No. 5 were approved by the Board: Disclaimer clause be included in the document_ Provision be included that the opinion is of a "general. nature- Provision be included. for exceptions and that exceptions be delineated. Page 1 - Second line; after the word "Charter" the words "anal ordinance" be added. Page 3 - Second line; after the word "employees; add " as del`ined by Section 2-1291, 1 ) and 1 -205 of the City Charter. Page 5 Fifth line; after the Yf7on d "business," add "will directly"; Sixth line delete „directly or indirectly." Page 6 - Second paragraph, i 2 th line; delete "either directly or indirectly." Opinion not reported out at this time. Board will continue to work on a final draft. PUBLIC COMMEND': Councilmember Lindemann addressed the Board and asked the Committee to allow him some time to prepare for his presentation. Chair stated that Mr. Lindemann already had 7 days to prepare and he and the Board understood that Mr. Lindemann would be prepared to make his presentation to the Board on Friday. Mr. Lindemann stated that he did not know there was a meeting scheduled for Friday until today and that he could provide all of his documentation to the Committee any time after Monday. Mr. Lindemann stated that his presentation would be approximately 15 minutes to a maximum of 112 hour. He had made a request to the Clerk for seven days notice of any future meeting. Mr. Lindemann requested that he would like the Board to clarify his role as a City Councilmember and as a Real Estate Agent. Chair asked that he provide: • Agreement between Caster Assoc. and their Client. Written proposal submitted to the City. ® Chronology report on behalf of the City. Chair acknowledged request and the Board would discuss it further at Friday's meeting relative to the scheduling of Mr. Lindemann's hearing. Mr. Leeman addressed the Committee and spoke to the issue of meeting places of the board in the future. Informational only. ADJOURNMENT: . Approximately 7:20 p.m. Respectfully submitted by Francesca Doneth Senior Legislative Assistant ir Lansing City Council BOARD APPROVED AT MEETING. S I GPNED: JOHN MERTZ, CHAIR LAI,ISING BOARD OF ETHICS SPECIAL 1,1EETING 0c tor)e - _I 19 0 8 4 : 00 p.m. Foster Building 313 S. Vashington Ave. , Lansing, MI AGENDA ] _ CALL TO ORDER Z, ROLL CALL -J. Mertz , D. Cook, S. Lowney, City Clerk, City Attorney -Introduction of Guests APPROVAL OF AGENDA SECRETARY' S REPORT -Approval of Minutes of 10/11/88 -Correspondence Received And Sent -Disclosures of Conflicts Filed -Inquiries & Complaints. Received *Materials Re: Pere Marquette (Councilman Lindemann) *Inquiries Re: Pere Marquette (Councilman Adado) -Next Meeting Date *Friday, October 21, 1988 - 8 :30 a.m. at Foster Bldg. CITY ATTORNEY' S REPORT -Disclosures of Conflicts Filed CP,CHAIRMAN'S REPORT -Revised Meeting Procedures *Agenda *Recording Secretary *Use Of Committee Of The Whole *Times For Public Comment *Meeting Goals & Timetables -Conflict of Interest of Board Members I. OLD BUSINESS -Response to H. ' Leeman, Jr. Complaint of 10/8/87 : Proposed Advisory Opinion No. 4 (Lowney)-Tabled 1/25/88 COMMITTEE OF THE WHOLE y. NEW BUSINESS -Adoption of Partial Response to Physical Development Committee Inquiry of 9/26/88 : Advisory Opinion No. 5 ID PUBLIC COMMENT I( , BOARD ROUNDTABLE ADJOURNMENT BOARD OF ETHICS COMMITTEE OF THE 1HOLE PROPOSED ADVISORY OPINION NO. 5 PROPOSED BOARD RESOLUTION RESOLVED, that- Proposed Advisory Opinion No. 5 , Draft No. 3 , as amended, is adopted as Board of Ethics Advisory Opinion No. 5 in partial response to the inquiry of the Physical Development Committee of the Lansing City Council dated September 26, 1988. DISCUSSION GUIDELINES 1. The attached Proposed opinion begins as the opinion of the author only. It is intended to serve as a launching pad and focus for discussion of the general queries posed by the Council Committee. As a result of the discussion, it may be amended a little, a lot, or not at all. It may even be rejected outright in its entirety and a new opinion drafted. 2. The intent of the discussion is to arrive at a consensus for a final statement to respond to the Council Committee by the end of this meeting. Assuming this draft (or any other draft proposed by any member) is an acceptable starting point, this goal is attainable. 3. In order to review the document fully, we can either proceed section by section, paragraph by paragraph; or we can .consider changes to any part of the opinion in any order. The only limit is one change (or paragraph) at a time. 4. As usual, any member can speak at any time, without being recognized first. 5. All decisions will be by consensus, unless any 3 members insist on specific language, in the case of a dispute. When a final opinion has been generally agreed upon, the Committee of the Whole will report the finished document to the Board. The Board will take a roll call vote at that time whether to adopt the proposed opinion reported out from the Committee of the Whole. 6. In order 'to allow the Committee of the whole to proceed in an expeditious fashion, a time for public comments on the opinion will be provided after the Committee of the Whole has reported a proposed opinion in final form, but before adoption of the opinion by the Board. MINUTES =I'AINSING- CITY BOARD OF E1 ¢sICS WEDNESDAY, OCTOBER 19, 1988 - 4 P.M. SOUTH WASHINGTON AVENUE The meeting; : 4alllud to order at 4:13 BOARD MEMBERS PRESENT: John Mertz, Chair Steve Lowney Donald Coop Rita Bauman Aivan Knot 5 members present. 0 absent. GUESTS: Harold Leeman, Citizen Greg Koessel, City Council Betsy Assid, Caster & Associates Don Springer, Channel 6 Scott Allman, Channel 6 Chris Golembiewski, Lansing State Journal Francesca Iloneth, Sr. Legislative Assistant, City; Council AGENDA APPROVED AS SUBMITTED BY CLERK BAUMAN. SECRETARY'S REPORT: Approval of Minutes: Corrected minutes were submitted to the Board. Minor typographical error corrected. MINUTES APPROVED 5-0. Correspondence Received and Sent: No correspondence sent received. D vcfosu. es of Conflicts Filed: No disclosures of conduct filed. John F. Mertz ATTORNEY AND COUNSELOR 518 HOLLISTER BUILDING • 106 WEST ALLEGAN LANSING, MICHIGAN 48933 TELEPHONE (517) 482-5200 October 14 , 1988 Mr. Alvan P. Knot Lansing City Attorney Fifth Floor, City Hall Lansing, Michigan 48933 RE : Board of Ethics Physical Development Inquiries Recording of Minutes Dear Al: On behalf of the Board, kindly arrange for a stenographer from your office to take minutes in all future meetings of the Board of Ethics which relate to the above matter. An accurate record of our proceedings is required, but we also need Rita' s full participation in the matters we are dealing with. A Recording Secretary would enable us to accomplish both purposes . Your anticipated cooperation in this regard is appreciated. e yours, RTZ Boa d f Ethics JFM:me cc: R. Bauman D. Cook S. Lowney October 18, 1988 Chairperson John Mertz and Members Lansing Board of Ethics C/o City Clem 9th Floor, City Hall Lansing, Michigan 48933 Dear Chairperson Mertz and Board Members: The convening of the Board of Ethics has served as a catalyst for discussion on a number of topics not necessarily included in the communication sent to you by the chairperson of the Committee on Physical Development. Consequently, we would like to take this opportunity to pose additional questions related to the series of recent events involving the City's plan to develop Pere Marquette Street. First, we call your attention to the September 23, 1988, issue of the Lansing State Journal, in which Planning and Municipal Development Director Alan Tubbs was paraphrased and quoted as saying he had given preferential treatment to a City Councilmember. The quote relates to Mr. Tubbs' handling of inquiries about potential sale of excess City property along the Pere Marquette right-of-way. We are concerned that a City - department head seems to have admitted that, contrary to the standards of conduct contained in Section 5-541 of the City Charter and in Chapter 290 of the City Code, he gave preferential treatment on an item of business to an individual because that individual was a member of Council. Therefore, we ask that you investigate this particular aspect of the Pere Marquette property dealings and determine whether or not any of the Charter's standards of conduct were violated by Planning and Municipal Development Director flan Tubbs, and the meaning of Mr. Tubbs' statement in the Lansing State journal. We are particularly interested in any observations you may have that such violations, if substantiated, are either isolated incidents or, on the other hand, may be part of a pattern that deserves the Mayor's attention. Our second question concerns the process by which the City has acquired the Pere Marquette right-of-way property. It is our understanding that money from a private individual was placed in escrow for the City's use as a security deposit, which was required to implement public condemnation. This individual's business is located adjacent to the Pere Marquette right-of-way, and he has stated an interest in obtaining excess right-of-way to expand his parcel. At first glance, it seems impossible for any City officer to deal impartially with this individual regarding excess property disposition after the generosity and helpfulness he displayed during the acquisition. Please investigate this process to again determine whether or not the City's standards of conduct were violated by any ,.,?fficers or employees. We acltnowledge the possibility that arrangement under discussion may have been an error in judgment on the parts of all involved City personnel, but we would appreciate your comments. The final matter on which we request an opinion from the Board of Ethics is participation by Councilmembers in community organizations which receive funding from the City of Lansing. If a Councilmember has a volunteer or compensated seat on the board of directors of a non-profit organization, or is a paid staffinember of such an organization, what are the Councilmember's responsibilities under the standards of conduct listed in the Charter and in Chapter 290 of the City Code? More specifically, if a Councilmember abstains from discussing and voting on funding levels or any other financial issue related to the organization with which he or she is affiliated, is a statement of disclosure required? Does the answer to this question vary by the Councilmember's status -- that is, volunteer board member vs. paid board member vs. paid staff? If a statement of disclosure is required, is one statement sufficient to cover the Councilmember's tenure with the community organization, or must the statement be resubmitted periodically? If any of our questions lead you to discussion of ethics issues that require development of specific procedures, we ask that you forward any advice you may care to give. We hope that you feel free to go beyond the limits of questions posed to you anytime you become aware of departures from expected standards on the part of City officers and/or employees_ As always, thank you for your efforts on behalf of the Citizens of Lansing. Sincerely, FREDA SCHMIDT LOUI S F_ ADADO President Vice President MINUTES OF BOARD OF ETHICS SPECIAL MEETING October 11, 1988 Foster Building 313 S. Washington Sq. , Lansing, MI The meeting was called to order at 10 : 09 a. m. by Chairman Mertz. The Secretary called the Roll and the following members were present: J . Mertz, D. Cook, S. Lowney, R. Bauman, A. Knot. The Secretary announced that no members of the Board were absent and that a quorum was present. The following guests were noted to be also present: Patrick Lindemann (City Councilmember) , Betsy Assid (Caster Realty Co. ) , Greg Koessel (Councilmember Adado' s staff) , Christine Golembowski (Lansing State Journal) . SECRETARY' S REPORT: Secretary Bauman presented the minutes of the special meeting of October 3 , 1988 , which were adopted with amendments. Secretary Bauman reported that she had distributed to all Board members a report of all Affidavits of Disclosure filed with her office since 1960, and copies of all Affidavits filed in 1988 . Secretary Bauman reported that she had received copies of the City Attorney' s Pere Marquette acquisition file, and had distributed them to all Board members . The Secretary reported that no correspondence had been received or sent on behalf of the Board since the last special meeting, except as noted. CITY ATTORNEY' S REPORT: City Attorney Knot reviewed the significance of the extensive file on the acquisition of the Pere Marquette property to the Board' s current inquiries. CHAIRMAN' S REPORT: Chairman Mertz briefly discussed the object of the meeting. Chairman Mertz directed inquiries to G. Koessel concerning na the natud from re of additiBoard lcould1expectes petoereceive Councilmember Adado, and when the them. ( OLD BUSINESS: Consideration of the pending response to H. Lehman, ost honed, pending Jr. ' s Complaint of 10/8/87 was indefinitely p P the resolution of other matters. i NEW BUSINESS: The Board discussed the Physical Development Committee inquiry of 9/26/68 , and agreed to separate it into 4 areas of inquiry: 1 ) Response to the general inquiries standa rds of disclosure of conflic regarding ts o and f interest PP ees with a conflict; 2) Investigation conduct for officers & employ of the conduct of Councilmember Lindemann Pere indemann tteegardin property;h3) involvement in a propo sed sale Investigation of related matters that may arise during the course of 3 ) ; and 4) Review of all current Affidavits of Disclosure on file and improvement of the disclosure form for future use. substance of responses to The Board discussed the form and {z 1 i Lansing Board of Ethics Minutes of October 11 , 1988 Page 2 several of the general inquiries. At the suggestion of Member Lowney, Chairman Mertz proposed that the public members commit their thoughts to paper and circulate drafts of proposed answers to the other members to assist preparation of a Board response to the general inquiries by next meeting. PUBLIC COMMENT: Councilmember Lindemann requested an opportunity to address the Board at length regarding his involvement in the proposed sale of Pere Marquette property, to be notified personally of all meetings of the Board on the matter, and to receive a copy of the materials supplied to the Committee by the City Attorney. All the requests were granted, and the Councilmember was requested by Chairman Mertz to provide the Board with any relevant written materials he wished them to review by Wednesday, October 19 , 1988 . Councilmember Lindemann also questioned the personal participation of Al Knot, but not the City Attorney' s office itself, claiming he had a "conflict of interest" due to involvement in or knowledge of the events the Board was investigating. Chairman Mertz requested that the Councilman present any proof he has of this circumstance at the next meeting of the Board, when Mr. Knot can be present (having left at 11: 15 ) to respond. Greg Koessel advised the Board that Councilmember Adado would commit to writing any additional inquiries he wish the Board to respond to relating to the Pere Marquette matter, and would submit them to the Board by October 19 , 1988 . There being no further business before the Board, the meeting was adjourned at 12:10 p.m. Respectfully Submitted, RITA BAUMAN Secretary Draft No. 3 CITY OF LANSING BOARD OF ETHICS Proposed Advisory Opinion No. 5 INTRODUCTION The Board of Ethics has received a long letter from a City Council Comittee requesting an advisory opinion elaborating on the procedures required for disclosure by an officer or employee who has a .conflict of interest between their public duties and their private interests; and on the standards of conduct to be followed by the officer or employee before and after disclosure of such a conflict. Since the Board has not before been presented with an inquiry of such broad scope as this one, it takes this opportunity to set forth its views on the subject at length. BOARD'S CHARTER JURISDICTION As the Board stated in Advisory Opinion No. 1, issued June 20 , 1983: . .The Board of Ethics is established by the City Charter . and is empowered . by that document to render advisory opinions to any person with respect to the meaning and application of those provisions of the Charter and other laws establishing standards of conduct for officers and employees of the City of Lansing. " Section 5-503.2 of the Charter further empowers the Board to " . . .recommend to the Council standards of conduct for officers and employees of the City and changes in the procedures related to the administration and enforcement of those standards. " APPLICABLE STANDARDS OF CONDUCT In respect to conflicts of interest relative to public contracts involving public servants, state law appears to supersede the Lansing City Charter and to be the sole law as to standards of conduct and procedures for disclosure. Public servants who desire to be a party to a contract with the City, directly or indirectly, are referred to MCL 15. 321 et seq. , entitled, "Contracts Of Public Servants With Public Entities" . Violation of this statute is a misdemeanor. The Board recommends that any officer or employee who intends to have business dealings with the City secure legal advice, and an advisory opinion from the Board based on the facts of their specific situation, in advance of such dealings. In all other situations involving conflict of interest, whether financial or otherwise, the Charter provides the standards of conduct for officers and employees, and procedures for public disclosure of the conflict. Advisory Opinion No. 5 Draft 3 Page Two Section 5-501 of the Charter entitled "Standards Of Conduct" , provides in Subsection 5-501 .1 that "The people of this City recognize that the continuation of the proper operation of the City requires that public officers and employees be independent, impartial and responsible to the people;that decisions and policy be made in the .proper channels of government structure; that members of the public have access to information upon which decisions affecting their City .are made; that public office and employment not be ,-,used for personal gain; that the integrity and 'operation of government be subject to scrutiny of the public; and that acts or actions not compatible with the best interests of the City be defined and prohibited." (Emphasis added) Section 2-128 of the Code of Ordinances, passed pursuant to Section 5-504 of the Charter, further states that, 11 . . .elected public office and public employment is a public trust and any effort to realize personal gain through official conduct is a violation of that trust. . . . " (Emphasis added) . Among other things, Ordinance 2-131 prohibits officers and employees from divulging confidential information to anyone in advance of the time determined for its release to the public. It also prohibits officers and employees from using their public positions, or any confidential information received through holding their positions, for personal gain for themselves, their immediate family, or for a business with which they are associated. Officers and employees may not serve in a representative capacity before the body they serve on or for. Section 5-505 .3 of the Charter provides that, "Except as provided by law, no elective officer, appointee or employee of the City may participate in, vote upon or act upon any matter if a conflict exists. " Section 3-205. 2 requires each member of the Council to vote on each question before the Council for determination, " . . .except that no member shall vote on any question upon which that member has a conflict of interest or a financial interest other than as a citizen of the City. " Ordinance 2-128 also states that its purpose is to " . . .insure that conflicts of interest be eliminated to the extent possible and that violations of rules of ethical conduct be investigated and punished where appropriate. " Advisory Opinion No. 5Fj Draft 3 Page Three N v The Boar reads these provisions together to require officers and employees to avoid voluntarily involving themselves, their immediate families , and businesses with which they are associated, directly or indirectly, in any situation that involves a conflict of interest. DISCLOSURE OF FINANCIAL AND OTHER CONFLICTS OF INTEREST Section 5-505 .1 of the City Charter requires that an officer or employee who " . . .intends to have business dealings" with the City, either directly or indirectly, or who may derive any income or benefits either directly or indirectly in addition to official remuneration as a result of Council action or a contract with the City shall file an affidavit with the City Clerk setting forth the details at least 10 days prior to the action. Notice of such filings shall be included in the Council agenda. " As a general rule, state law prohibits a full time officer or employee from having business dealings with the City. Volunteer and part time officers and employees may, if state law is complied with, have business dealings with the City. However, the logic set forth in this opinion would apply in any such instance, to members of any governing body which would have to approve the business dealings. Thus, although such activities are apparently legal, the Board declines to sanction them as ethical, in the absence of a specific inquiry about a specific fact situation. This opinion provides general guideline for all other circumstances, however. Whenever any officer or employee, whether full or part time, may derive any income or benefits either directly or indirectly in addition to official remuneration as a result of Council action or a contract with the City, the officer or employee must file a diclosure of the conflict of interest with the City Clerk. This type of conflict situation involves financial gain to an officer or employee, their immediate family, or to a related business, but by means other than direct business dealings with the City. Notice of all such disclosures shall be included in the Council agenda. Section 5-505 . 2 of the Charter additionally requires that "An officer or employee who has any other conflict between a personal interest and the public interest as defined by State law, this Charter, or ordinance shall fully disclose to the City Attorney the nature of the conflict. " Advisory Opinion No. 5 Draft 3 Page Four In either event, the disclosure must always occur at the time the conflict of interest first arises . There is an "Affidavit of Disclosure" form developed by the City Attorney' s office currently available, that is intended to be used to satisfy the disclosure requirement, whether to the City Clerk or to the City Attorney. After reviewing several recent filings , the Board has determined to revise the form to better insure full disclosure of future conflicts. The Board has also altered its own procedure to require review by the Board of all Affidavits shortly after they are filed instead of only annually. PARTICIPATION IN THE FACE OF A FINANCIAL CONFLICT OF INTEREST Because financial conflicts of interest can sometimes be more apparent than substantive, Section 2-132 of the Code of Ordinances sets forth a procedure for justifying participation in a government decision despite the fact that an officer or employee has an actual financial conflict of interest or potential conflict of interest in the decision. In such a situation, an officer or employee is required by the Charter and Ordinance 2-132 to fully disclose the actual or potential conflict in writing, setting forth both the details of the conflict and his or her specific reasoning why, despite the conflict he or she is able to make or participate in making the decision fairly, objectively, and in the public interest. The disclosure must be filed with the City Clerk and the governing body of which the officer and employee is a member or employee (in the case of Councilmembers, with the Council President) at least 10 days before the meeting at which the action will be considered (but before any participation by the officer or employee in the matter in any way) . In all such cases, the governing body is the final arbiter of the decision to participate or not in light of the conflict of interest. The affected officer or employee is required to justify their position, on the record, to the public in either event. The Board is of the opinion that such participation is an option only when the financial conflict of interest is potential but is not actual, or when the benefits from an actual conflict of interest are remote, minimal, or speculative. WHEN PARTICIPATION IS PROHIBITED The avoidance of financial conflicts of interest is of such great importance to the maintenance of public confidence in government, that the City Charter prohibits all officers and Advisory Opinion No. 5 Draft 3 Page Five employees from participating in any government decision in which they have a substantial financial conflict of interest between their personal interests and their public responsibilities. A substantial financial conflict of interest arises when andnf ' c or employee, their family, or an associated business ,Lea be in in more than a de minimus way, other than as a member of the general public, from an action or decision the officer or employee is in a position to influence. It does not matter whether the conflict is apparent to others or not. Our system requires' self-monitoring, rather than Ethics Police. Faced with such a conflict of interest, an officer or employee is required by City Charter and Ordinance to abstain from direct or indirect participation in any way in the governmental decision making process concerning the matter in which there is a conflict. The officer or .employee is also required to abstain from any effort on behalf of his or her personal interests in the matter, except as permitted by Ordinances 2-131 and 2-132. Admittedly, it is sometimes difficult to tell whether a financial conflict of interest is substantial or not, or even if it is actual rather than only apparent (or potential) . Under such circumstances, an affected officer, employee or governing body may be wise to err on the conservative side to avoid even the appearance of impropriety. VOLUNTARY VS INVOLUNTARY CONFLICTS Conflicts of interest can arise either as a result 'of action by an officer or employee, or without any instigation by the officer or employee. "Involuntary" means that the officer or employee had nothing to do with initiating the action that triggered the conflict. On the other hand, when a Councilmember purchased property in an area of great governmental activity in which he is officially involved, he also "voluntarily" created a situation in which he is required to be doubly diligent in identifying conflicts of interest that will arise during the course of future development of the area. The net result of the land transaction discussed in Opinion No. 3 was to give rise to an apparent conflict of interest anytime the City Council considers further development that might affect the value of the concerned Councilmember' s property. The Charter requires that such latter situations be avoided as much as possible, because the apparent conflict of interest taints other decisions of the affected governing body, the :integrity of which otherwise would not be questioned. Advisory Opinion No. 5 Draft 3 Page Six Apparent conflict of interest situations entered into voluntarily give rise to loss of public confidence in governmental integrity unnecessarily. Nonetheless, we recognize that officers and employees are not so limited in their nonpublic affairs that they can never be involved in a conflict of interest with their public responsibilities. Although they are required to separate their private interests from their public duties, they are not always able to do so completely. The problem becomes more acute the higher in government an officer and employee goes. Officers and employees can only be urged to, but are not required to, avoid all situations in which it appears they have a conflict of interest. They are only required to avoid actual and substantial conflicts of interest, whether apparent to others or not. VOLUNTARY FINANCIAL CONFLICTS PROHIBITED Whether an officer or employee with an actual and substantial conflict of interest can ever completely insulate themselves from the decision making process of which they are a normal part, is arguable. Whether they actually do so when they have such a conflict of interest can never be definitely determined. The result is a public loss of confidence in government each time a new substantial conflict is revealed. Any conduct that tends to cause such a loss of confidence in the integrity of City government is incompatible with the best interests of the City and should be prohibited, pursuant to Charter Section 5-501.1. The Board is of the opinion, therefore, that no officer or employee, may knowingly enter into a situation that gives rise to an actual and substantial financial conflict of interest, whether apparent to others or not, without violating the public trust. The words "public trust" mean that an officer or employee holds their position solely for the benefit of the public as a whole. They have absolutely no right of any kind to profit from their office, directly or indirectly, except from the compensation paid for the performance of their public duties. Some of their duties (such as voting in the case of Councilmembers ) are mandated by Charter or ordinance. No officer or employee has the right to voluntarily disqualify themselves from performing their mandatory public duties so that they can instead privately profit. On the contrary, disqualification is an obligation imposed to insure the integrity of City government. To attempt to turn this obligation into a license for public servants to opt out of their duties any time they see an opportunity to profit from their position would make a cynical mockery of the high ethical standards which the obligation is imposed to help maintain. Thus, any officer or Advisory Opinion No. 5 Draft No. 3 Page Seven employee who deliberately puts themselves into an avoidable situation that thereby makes it impossible for the officer or employee to perform their mandated duties, neglects the duties of their office, and may be committing nonfeasance in the process. The public order demands that the public have absolute confidence that their elected and appointed officials are properly performing the duties for which they were selected to their posts, and are not neglecting those duties so that they can personally profit. Obviously, this means the higher up the in the City organization an officer .. or employee is, the less likely the officer or employee can deliberately enter into a situation that involves a substantial financial conflict of interest, ethically. Senior members of government are privy to all sorts of valuable and confidential information, and supervise the various works of government. The public has . a right to know that confidential information is not being sold by officers and employees for private profit to the highest bidder, to know that public officers are not getting better treatment than the public at large, and to know that their government officials are not getting rich at the public expense. Last but not least, for no other reason than to preserve the ability of government officials to freely communicate with each other about City business, there must be no question that all communications between officials are for that public purpose. This is the reason the Board believes that disclosure of a conflict is the obligation of the affected officer or employee, and that disclosure must occur at the first moment the official knows they are in conflict. It is with these considerations in mind, therefore, that the Board of Ethics answers the following general inquiries from the City Council Committee: R 1. When is a Councilmember (or other officer or employee) required to file an Affidavit of Disclosure? Whenever an officer or employee finds that their private interests and their public responsibilities conflict, they must fully disclose the details of the conflict in writing, to the City Clerk (if the conflict involves financial gain) , or to the City Attorney (in all other cases ) . Notice of all such filings with the City Clerk will appear on the agenda of the City Council. In the case of officers or employees who serve on a governing body responsible for approval of the matter in which there is a conflict, the disclosure must also be made to the governing body, as well (the Council President, in the case of Councilmembers) and Advisory opinion No. 5 Draft 3 Page Eight be included in the public record of the proceedings. The disclosure must be filed promptly upon knowledge of the conflict and if disclosing a financial conflict, at least 10 days before the meeting of the governing body at which the matter will be considered. The disclosure to the governing body must also include the reasons why the officer or employee believes he or she can participate in the consideration of the matter, in light of the conflict, if applicable. In the case of the City Council, any request to abstain from voting, whether from the Councilmember in conflict, or from any other Councilmember, must be approved by an affirmative vote of a majority of the rest of the Council not counting the member in conflict or alleged conflict. In certain instances, state law may require any action by a governing body on an item with a conflict involved to require a 2/3 majority of disinterested members for approval, if the conflict is caused by one of its members. 2. Is the filing of an Affidavit' of Disclosure required regardless of being excused from voting? An Affidavit of Disclosure is required to be filed well in advance of the meeting at which the vote to excuse from voting on an item is taken. If Councilmembers are properly alert, they should be aware of their own actual or potential conflicts of interest when they arise, as opposed to waiting for someone else to call the matter to their attention shortly before a vote. Given the length of time it takes for an issue to reach the Council for action following its initial introduction, there is no reason to expect last minute disclosures, except in an unusual circumstance. In the event the issue arises for the first time at a particular meeting, the Council may determine by vote of an affirmative majority of disinterested members if a conflict exists which requires or permits a Councilmember to be excused from voting. At the very least, however, the nature of the conflict and the reasons for excusal or nonexcusal from voting should always appear in the record of the meeting. 3 . Does being excused from voting absolve any prior actions on the same matter which were in conflict? No. 4. Who is an elected official allowed to communicate with, even if they have filed an Affidavit of Disclosure? If an officer or employee has a conflict of interest, whether or not he or she has filed an Affidavit of Disclosure, he or she may not officially or unofficially participate in the Advisory Opinion No. 5 Draft 3 Page Nine consideration of the item in conflict in any way, shape, or form, either directly or indirectly, in person or by representation, either in furtherance of his or her public responsibilities or his or her private interests, at any stage of the consideration of the matter with a conflict, except in compliance with Ordinances 2-131 and 2-132. Only the activities authorized by those ordinances are ethical. 5. What level of detail satisfies the requirement to fully disclose a conflict of interest? Both the Charter and Ordinance require specific details in a full disclosure. The affidavit must clearly identify the officer or employee and the position he or she holds in City government. The nature of the conflict must be fully described in detail, including specifically describing in what way the officer or employee is in conflict, and enumerating all the benefits the officer or employee will receive from the transaction. In the appropriate case, the disclosure must also contain the specific reasons that the officer or employee believes that he or she can, in light of the conflict, make or participate in making the decision on the matter fairly, objectively, and in the public interest. 6. What is the purpose of the Affidavit of Disclosure? Is it simply to serve notice that this person is unable to speak or vote on this matter, or is it simply to serve as notice on other parties in the decision making process that this person has a self interest as opposed to a public one? Both. An officer or employee who has filed an Affidavit of Disclosure, may not be involved in the decision making process concerning the matter for which they have a conflict, as explained in Answer 4 . At the same time, an Affidavit of Disclosure also notifies a governing body, in the appropriate case, that a public servant has a conflict of interest in one of the matters coming up before it for consideration. In the appropriate case, it also notifies the governing body (and the public) , on the record, why the member with the conflict believes he or she can, in light of the conflict, make or participate in making the decision on the matter fairly, objectively, and in the public interest. 7 . Does a person have to file an Affidavit of Disclosure on each transaction in which they are or may be in conflict, or may the Affidavit be generic in nature? An officer or employee must file an Affidavit of Disclosure on every transaction that involves a conflict. Advisory Opinion No. 5 Draft No. 3 Page Ten SUMMARY It is important that the public have confidence that City government is operating without bias or favoritism. This requires public officials to err on the side of the public interest rather than on the side of their own personal interests. Naturally, this puts an increased burden on public officials who may not otherwise be required to act so scrupulously in their other affairs. The Board is not unaware this falls hardest on parttime officials who are not solely dependent on the City for their livelihood. Nonetheless, there cannot be two standards, one for the governors and another for the governed. Respectfully Submitted, Dated: THE LANSING BOARD OF ETHICS JOHN F. MERTZ, Chairman DONALD COOK, Vice-Chairman STEPHEN J. LOWNEY, Public Member RITA BAUMAN, City Clerk ALVAN E. KNOT, City Attorney caster and associates 1915 E. Michigan Avenue Lansing, MI 48912 (517) 372-1360 October 19, 1988 Mr. John Mertz, Chairperson Board of Ethics Hollister Building Lansing, Michigan 48933 Dear Mr. Mertz, In order for the Board of Ethics to properly evaluate the questions posed to the Board it is essential that the Board of Ethics be more fully informed of all the circumstances pertaining to this issue. Moreover, given the potential damage to my public and professional careers it is absolutely critical that the Board be provided with the total picture and how it evolved. Therefore, I feel an obligation to ask the board to review more than just the issues requested by the Physical Development Committee. First, my reputation as a public servant and politician has been maligned by the accusation that I used my influence as a city councilperson in an unethical way to profit myself. I feel this is completely untrue and unfounded. I would appreciate the opportunity to address this issue before the board. Second, as a Real Estate Agent, I take great pride in the professional and ethical manner in which my firm, Caster and Associates, and myself conduct business. Such accusations are a direct insult to my integrity, a detriment to my livelihood, and greatly inhibits my ability to do business in this community. i RESIDENTIAL COMMERCIAL INVESTMENT REALTOR® Board of Ethics Page 2 10/19/88 Third, Mr Heinowski, a local businessman, was denied equal and routine access to the process built into our system of government because of the resolution from the Physical Development Committee. In reviewing the material dealing with the acquisition of the subject property, it is my opinion that preferential treatment is being provided, but not by myself. I believe the resolution was designed to profit one private individual while denying equal opportunity to all other interested parties. 1. Did I, in pursuing this sale of property J.-q College Bike Shop through Caster and Associates, do anything unethical? 2. What was the motivation behind the resolution? 3. With an offer on the table, was the resolution proper procedure for the committee to take? 4. Was the resolution consistent with past practice for the disposal of excess road right of way? 5. Was the committee acting in the public's best interest or offering preferential treatment to one individual by the passing of the resolution? 6. Is it illegal, or at the very least unethical, to use private funds for public condemnation. In other words, is it illegal for the City to use condemnation powers when acting as a Real Estate Agent for a private entity? 7. Were Mr Heinowski and his investors denied equal and fair access to the public process by the passage of the questionable resolution? Board of Ethics Page 3 10/19/88 8. As Al Knot provided legal advice and opinions to the City Administration, to the City Council, to myself and to interested third parties, can Mr Knot now offer objective opinions on the questions in front of the Board of Ethics? In closing, I am asking for the opportunity to appear before the Board of Ethics and present factual information that will fully clarify the basis for the questions posed and will refute the charges made against myself and Caster and Associates. Again, thank you for your time and consideration. S' ly, Patrick Lindemann Realtor Associates/ Councilperson October 18, 1988 Chairperson John Mertz and Members Lansing Board of Ethics C/o City Clerk 911--h Floor, City Mall Lansing, Michigan 4-8933 Dear Chairperson Mertz and Board Members- The convening of the Board of Ethics has served as a catalyst for discussion on a number of topics not necessarily included in the communication sent to you by the chairperson of the Committee or, Physical Development. Consequently, we would like to take this opportunity to pose additional questions related to the series of recent events involving the City's plan to develop Pere Marquette Street. First, we call your attention to the September 23, 1988, issue of the Lansing State Journal,, in which Planning and Municipal Development Director Alan Tubbs was paraphrased and quoted as saying he had given preferential treatment to a City Councilmember. The quote relates to Mr. Tubbs' handling of inquiries about potential sale of excess City property along the Pere Marquette right-of-way. We are concerned that a City department head seems to have admitted that, contrary to the standards of conduct contained in Section 5-501 of the City Charter and in Chapter 290 of the City Code, he gave preferential treatment on an item of business to an individual because that individual was a member of Council. Therefore, we ask that you investigate this particular aspect of the Pere Marquette property dealings and determine whether or not any of the Charter's standards of conduct were violated by Planning and Municipal Development Director Man Tubbs, and the meaning of Mr. Tubbs' statement in the Lansing Smote journal. We are particularly interested in any observations you may have that such violations, if substantiated, are either isolated incidents or, on the other hand, may be part of a pattern that deserves the Mayor's attention_ Our second question concerns the process by which the City has acquired the Pere Marquette right-of-way property. It is our understanding that money from a private individual was placed in escrow for the City's use as a security deposit, which was required to implement public condemnation. This individual's business is located adjacent to the Pere Marquette right-of-way, and he has stated an interest in obtaining excess right-of-way to expand his parcel. At first glance, it seems impossible for any City officer to deal impartially with this individual regarding excess property disposition after the generosity and helpfulness he displayed during the acquisition. Please investigate this process to again determine whether or not the City's standards of conduct were violated by anyafficers or employees_ We acknowledge the possibility that arrangement under discussion may have been an error in judgment on the parts of all involved City personnel, but we would appreciate your comments. The final matter on which we request an opinion from the Board of Ethics is participation by Councilmembers in community organizations which receive funding from the City of Lansing. If a Councilmember has a volunteer or compensated seat on the board of directors of a non-profit organization, or is a paid staff member of such an organization, what are the Councilmember's responsibilities under the standards of conduct listed in the Charter and in Chapter 290 of the City Code? More specifically, if a Councilmember abstains from discussing and voting on funding levels or any other financial issue related to the organization with which he or she is affiliated, is a statement of disclosure required? Does the answer to this question vary by the Councilmember's status -- that is, volunteer board member vs. paid board member vs. paid staff? If a statement of disclosure is required, is one statement sufficient to cover the Councilmembers tenure with the community organization, or must the statement be resubmitted periodically? f an 7 Of our G,uestiOas lead You to discussion of ethics issues that require development of specific procedures, we ask that v au forward any advice you may carp' to give. We hope that v ou feel free to go beyond the limits of questions posed to you an7txme you become aware of departures from expected standards on the part of City officers and/or employees. As always, th,12 you for your efforlk"133 nL behaff of the Citizens of Lansing. Sincerely, ALFREDA SCHMIDT LOUIS F. ADADO President Vice Presidenk-, Exhibit A BOARD OF ETHICS THURSDAY, OCTOBER 27, 1988 — 8:30 A.M. 313 NORTH WASHINGTON SQUARE [Attachment to October 27th Official Minutes] CONTINUATION OF MEETING OF OCTOBER 26th. Stenographic Synopsis of Statements Made, Alvan Knot reviewed dates and Mr. Lindemann and Ms. Assid agreed that the chronological dates of events were correct. LINDEMANN: 99,9% of the calls to Al Tubbs or Ronald Stonehouse were from Betsy Assid. I remember making one call regarding this issue, the rest of the calls I made to Ron were dealing with other city issues. KNOT: There were two additional meetings with Ronald Stonehouse and Alan Tubbs. One meeting where Pat dropped off the commission statement without Betsy? Lindemann: dropped it off after August 18th. 1 ASSID: We gave them the offer on August 20th. We met with Ron Stonehouse to do that. LINDEMANN: We met twice. The original meeting and the we dropped the commission agreement off on August 20th. We physically went out and looked at the site with Al Tubbs and Pat Lindemann and Betsy Assid between August 10th and the 18th, KNOT: On August 1 1 th Betsy made a number of phone calls to Ron Stonehouse and Pat recalls making one phone call directly to Ron at the time, LOWNEV: Then on August 10, the City land issue first raised because Mr. Heinowski made it known that he needed more land. Then an August 22nd a memo was written by Ron Stonehouse. Then on September 8th, the commission agreement was dropped off to Ron Stonehouse. KNOT: Then you came to my office on September 12th in the afternoon and the purpose of that meeting was to declare your possible conflict? In addition you wanted to check the status of the counter offer? 2 LINDEMANN: No. I need to clarify that, I wanted the meeting with you to declare my position and to obtain advice regarding my possible conflict, MERTZ: You indicated yesterday that you main reason for meeting with Al Knot was to follow up on the counter offer. LINDEMANN: I wanted to talk to him about what I could and could not do legally. MERTZ: Subsequent to the meeting with Al Knot, you went back to talk to Betsy Assid and then came downtown and both of you went up to the Council Chambers and stayed there all afternoon. Pat stayed in the lobby area and Betsy met with the Councilmembers correct? LINDEMANN: Yes. LOWNEY: Then on September 12, a resolution was passed by the Council requiring that and land to be sold would have to have a land use plan. KNOT: That was the first time in which Pat publicly declared himself in conflict. 3 LINDEMANN: declared every step of the way, This resolution was reported out. found out about it and on Monday night before any discussion took place, I declared myself in conflict and was excused from voting on this issue. KNOT: Did you state a reason? LINDEMANN: No. LOWNEY: Who was directed to prepare the resolution? KNOT: Mr. Tubbs was directed to draft the resolution for the Council agenda, LOWNEY: At the same time the counter offer was being prepared by staff. KNOT: The counter—offer draft had reached my office on September 9th. LOWNEY: 4 Then the bottom line is that potential dollars were going to occur from the sale of the bike shop but a portion of the Pere Marquette property was needed. LINDEMANN: The broker would receive 1 /2 of the total commission and then Betsy and I would split the other 1 /2 that was left. LOWNEY: What was the amount of the commission? LINDEMANN: A substantial amount. When we met with Ron Stonehouse we still did not know that City land was available. I was told by Al Tubbs that the property was promised to other sources and that there were a few problems with it. KNOT: When you left the August 10 meeting the potential existed to achieve your deal . Did Al Tubbs inform you that this piece of property was for sale. ASSID: Mr. Tubbs told us he had to talk to the rest of the property owners involved. LINDEMANN: 5 The land could not be sold per the memo of Ron Stonehouse because he did not know how much square footage existed, etc. MERTZ: At some point in time you felt you could make an offer to the City. The discussion you had with Al Knot did not discourage you from making an offer. During the course of the site inspection, Mr. Tubbs told you that the City may be able to sell a portion of this land? LINDEMANN: Yes. At the initial meeting Al Tubbs told us that there were some problems needed to be resolved before he could talk about it. KNOT: Is it accurate to state that the majority of Caster & Associates' business is with commercial properties? ASSID: Yes. I would say we do approximately 75F commercial and 25% residential . At the second meeting with the Mayor the Mayor told Mr. Heinowski that he could be helped by his Councilmember who also happened to be a real estate agent because Mr. Heinowski was disappointed about not getting the Diamond Reo property. MERTZ: The original contract was not to purchase any city land? 6 LINDEMANN: Yes, All of the lists of properties we were pursuing in the City. This particular piece of property was not on our list as it was not on the market at that time. I knew nothing about the meeting Ms. Assid had with Mr. Sears. From the start of the negotiations with Mr. Sears, I did not know about the meetings between Betsy Assid and Mr. Sears until a couple of days after they took place. August 6th was the first written offer submitted. I did not meet Mr. Sears until after the resolution was passed on September 12, MERTZ: On or about September 8th the property commission agreement was taken to the City correct? LINDEMANN: I left it with a staff person. We knew that the City was not going to pay a commission but our broker insisted that we prepare and drop one off anyway. MERTZ: If the City did pay the commission you would not receive any part of it? LINDEMANN: We did not even talk about it. I refuse to take City money from a sale of City land, 7 MERTZ: Did you understand that in going to talk to Al Tubbs if the City land was involved in the deal then you could not vote on this issue? LINDEMANN: stated my conflict up front. The meeting we had on the site was strictly for the purpose of fact finding on what the boundary lines were of the property — to try to determine that. I do not think I pushed my private interests. MERTZ: nnn't. ynll cnnsidpr nning t.n the City with the intent to purchase City land pushing your private interests? LINDEMANN: No. I did not even know that City land was available. MERTZ: The charter states clearly that a disclaimer is supposed to be filed. LINDEMANN: I felt that when the counter offer came back and was approved by the City , I felt at that time I should talk to Al Knot. I thought I should file a disclosure when signatures were affixed to the document and then I would have to file formally with the City Clerk. The resolution was out of character and did follow the normal procedures, 8 MERTZ: Mr. Stonehouse informed us during his interview that the Council often meddles in things of this nature so the resolution was not necessarily out of character considering past practice. KNOT: Thank you, Pat and Betsy for your cooperation throughout this entire process. LINDEMANN: I do not believe I did anything unethical . END OF TRANSCRIPT Respectfully submitted and prepared by FRANCESCA DONETH Dated: November 26, 1988 BOARD OF ETHICS THURSDAY, OCTOBER 27, 1986 — 8:30 A.M. 313 NORTH WASHINGTON SQUARE CONTINUATION OF MEETING OF OCTOBER 26th. The meeting was reconvened at approximately 8:47 a.m. MEMBERS PRESENT: Mr. John Mertz, Chair Mr. Donald Cook, 'Vice—Chair Mr, Steve Lowney, Member Rita Bauman, Member Alvan Knot, Member OTHERS PRESENT: Dave Poulson, State Journal Betsy Assid, Caster and Associates David Osborn, Michigan Municipal League Patrick Lindemann, Councilmember;Caster and Associates Chair distributed a chronological synopsis of discussion and interviews which took place at the October 26th meeting. Mr. Lindemann and Ms. Assid stated for the record that they concurred with the dates and events which occurred on the following dates: May 23-31 : Patrick Lindemann was contacted by constituent (Mr. Heinowski) regarding the purchase of real estate, August 3-10: Listing with/Sears (College Bike Shop). First decision was made to contact the City regarding possible purchase of land, First contact with City personnel in which Mr. Lindemann declared his potential conflict. Mr. Stonehouse clearly advised that there would be no commission paid on the sale of City land. 1 August 10: Councilmember Lindemann and Betsy Assid are under the impression that City land may be for sale. Were advised that there were problems that needed to be resolved by the adjacent property owners. August 10-18: Multiple contacts were made with the Planning Department by Councilmember Lindemann and Ms. Assid. August 18-23: Commission agreement was submitted to the City. Mr Lindemann was advised again that the City would pay no commission fee. Mr. Lindemann advised the City that his broker, Mr. Caster, ordered him to submit an agreement anyway. Councilmember Lindemann dropped off the agreement as he was on his way downtown. September 12: The City Council was lobbied to support the sale via Betsy Assid. Councilmember Lindemann attempted to follow up with the City Attorney regarding counter offer and possible conflict. Discussion followed regarding Opinion Draft #6. No action taken. Next meeting date, Monday, October 31 at 1 :30 p.m., 313 North Washington Square. MEETING ADJOURNED AT 10:06 P.M. Respectffully submitted, Francesca Doneth Recording Secretary 2 Exhibit A BOARD OF ETHICS THURSDAY, OCTOBER 27, 1988 - 8:30 A.M. 313 NORTH WASHINGTON SQUARE [Attachment to October 27th Official Minutes] CONTINUATION OF MEETING OF OCTOBER 26th. Stenographic Synopsis of Statements [,lade. Alvan Carrot reviewed dates and Mr. Lindernarin and Ms. Assid agreed that the chronological dates of events were correct. L i NDEMANN: 99.9% of the calls to Al Tubbs or Ronald Stonehouse were frorn Betsy Assid. 1 remember malfinq one call regarding this issue, the rest of the calls i made to Ron were dealing with other city issues. KNOT: There were two additional rneetings with Ronald Stonehouse and Alan Tubbs. One meeting where Pat dropped off the commission statement without Betsy? Lindemann: l dropped it cuff after- August 18th. 1 ASS U. We gave them the of f er on August 20th. We met w i th Pon Stonehouse to do that. L I NDEl"IANN: We met twice. The original meeting and the we dropped the commission agreement off on August 20th. We physically went out and loomed at the site with Al Tubbs and Fat Lindemann and Betsy Assid between August loth and the I8th. KNOT: On August. 1 1 th Betsy made a number of phone calls to Pon StonehoUse and Fat recalls making one phone call directly to Pon at the time. LOWNEY: Then on August 10, the City land issue first raised because Mr. Heinowski made it, known that he needed more land. Then an August. 22nd a memo was written by Pon Stonehouse. Then on September 8th, the commission agreement was dropped off to Pon Stonehouse. KNOT: Then you came to my office on September 12th in the afternoon and the purpose of that meeting was to declare your possible conflict? In addition You wanted to check the status of the counter offer'' L I NDEMANN: 2 Na I need to clarify that. I wanted the meeting with you to declare my position and to obtain advice regarding my possible conflict. I`lE!;TZ. You indicated yesterday that you main reason for meeting with Al Knot was to f011OW r_lp on the counter offer. I wanted to talk to him about what I could and could not do legally. IIERTZ. Subsequent to the meeting with AI Knot, you went back to talk to Betsy Assid and then came downtown and both of you went up to the Council Chambers and stayed there all afternoon. Pat stayed in the lobby area and Betsy met with the Councilmembers correct` L I NDEMANN: Yes. LOONEY: Then on September 12, a resolution was passed by the Council requiring that and land to be sold would have to have a land use plan. KNOT: That was the first. time it,, which Pat publicly declared himself in conflict. L I NDEIIANN: declared every step of the way. This resolution was reported Out. I found out about it and on Monday night before any discussion took place, I declared myself in conflict. and was eXCLIsed from voting on this iSSUe. KNOT: Girl you state a reason`? L I NC)EI'iANN: No. LOWNEY: Who was directed to prepare the resolution? KNOT: Mr. Tubbs was directed to draft the resolution for the Council agenda. LOWNE`f: At the same time the counter offer was being prepared by staff. kk:l'0T: The counter-offer draft had reached my off ice on September 9th. Then the bottom line is that potential dollars were going to Occur from the sale of the bike shop but a portion of the Pere Ivlarquette property was needed. 4 L I NDEi`IANN: The broker would receive 1/2, of the total commission and then Betsy and I would split the other 112 that was left. LOWNEY: What was the amount of the Commission? L I NDEMANN: A substantial amount. When we met with Ron Stonehor_ise we still did not know that City land was available. I was told by Al Tubbs that the property was promised to other sources and that there were a few problems with it. KNOT: When you left. the August its meeting the potential existed to achieve your deal. Did Al Tubbs inform you that this piece of property was for sale. ASSID: iIr. Tubbs told r_is he had to talk to the rest of the property owners involved. L I NDEMANN: The land Could not be sold per the memo of Ron St.onehouse because he did not know how much square footage existed, etc. I IERTZ: At some point. in time you felt you Could make are offer to the City. The discussion you had with Al Knot did not discourage you from making an 5 offer. During the course of the site inspection, Mr. Tubbs told you that the City may be able to sell a portion of this land' L l NDEMANI• : 'des. At the initial meeting Al Tubbs told us that there were some problems needed to be resolved before he could talk about it, KNOT: OT: is it accurate to state that the majority of Caster & ,associates' business is with commercial properties'? ASS 1 D: Yes. I would say we do approximately 75% commercial and 25% residential. At the second meeting with the Mayor the Mayor told Mr. Heinowski that he could be helped by his Councilmember who also happened to be a real estate argent because Mr. Heinowski was disappointed about not getting the Diamond Reo property. HERTZ: The original contract was not to purchase any city land? L I NDEI INN: (es, rill of the lists of properties we were pursuing in the City. This particular piece of property was not. on our- list as it was not on the market. at 'that time. I knew nothing about the meeting Ms. Assid had with Mr. Sears. From the start of the negotiations with Mr. Sears, I did not know about the meetings between Betsy Assid and Mr. Sears until a couple of days after 6 they 1[ook place. August 6th was the first written offer submitted. i rain not. meet. Mr. Sears until after the resolution was passed on September 12. [ 1EGTZ: On or about September 8th the property commission agreement was taker; to the City correct? L i NDEMANN: I left it with a staff person. We knew that the City was not going to pay a commission but our- broker insisted that we prepare and drop one off anyway. 1 1ERTZ: If the City did pay the commission you would not receive any part of it? L i NDEMANN: 1+4''e did not even talk about. it. I refuse to take City money from a sale of City land. MERTZ: Did you understand that in going to talk. to Al Tubbs if the City land was involved in the deal then you could not vote on this issue`? L I NDEMANN: I stated my conflict up front. The meeting we had on the site was strictly for the purpose of fact finding on what the boundary lines were of the 7 property - to try to determine that. I do not think 1 pushed my private interests. MERTZ: Don't you consider going to the City with the intent to purchase City land Pushing your private interests? L I NDEMANN: No. I did not even know that. City land was available. MERTZ: The charter state, clearly that. a disclaimer is Supposed to be filed. L 1 NDEMANN: I felt that when the Counter offer came back and was approved by the City , I felt at that. time I should talk to A] Knot. I thought ► should file a disclosure when signatures were affixed to the document and then I would have to file formally with the City Clerk. The resolution was out of character and did follow the normal procedures. MER T Z: 11r. Stonehot_!se informed us during his interview that the Council often meddles in things of 'this nature so the resolution was not necessarily out of character considering past practice. KNOT: S Thank you., Rat. and Betsy for your cooperation throughout. this entire process. I do not believe I did anything Unethical. END OF TRANSCRIPT Respectfully submitted and prepared by jtallyra-12-ce� --Po/w—e/L FRANCESCA DONETH Dated: November 26, 1988 9 BOARD OF .TF HICS THURSDAY, OCTOBER 27, 1988 - 8:30 A.M. 313 NORTH WASHINGTON SQUARE CONTINUATION OF MEETING OF OCTOBER 26th. The meeting was reconvened at approximately 8:47 a.m. MEMBERS PRESENT: Mr. John Mertz, Chair Mr. Donald Cook, Vice-Chair Mr. Steve Lowney, Member Rita Bauman, Member Alvan Knot, Member OTHERS PRESENT: Dave Poulson, State Journal Betsy Assid, Caster and Associates David Osborn, Michigan Municipal League Patrick Lindemann, Council member;Caster and Associates Chair distributed a chronological synopsis of discussion and interviews which took place at the October 26th meeting. Mr. Lindemann and Ms. Assid stated for the record that they concurred with the dates and events which occurred on the following dates: May 23-31: Patrick Lindemann was contacted by constituent (Mr. Heinowski) regarding the purchase of real estate. August 3-10: Listing with/Sears (College Bike Shop). First decision was made to contact the City regarding possible purchase of land. First contact with City personnel in which Mr. Lindemann declared his potential conflict. Mr. Stonehouse clearly advised that there would be no commission paid on the sale of City land. August 10: Councilmember Lindemann and Betsy Assid are under the impression that City land may be for sale. 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S��'.l �'L �i f�.-�W'� e �Lt p"rd f.��� CITY OF LANS I NG BOARD OF ETHICS BOARD INTERVIEWS THE FOLLOWING PERSONS REGARDING THE CASE OF COUNC I LMEMBER PATR I CK L I NDEMANN AND HIS POSSIBLE CONFLICT OF INTEREST RELATIVE TO THE DISPOSITION OF CITY LAND/NAMELY A PORTION OF THE PERE MARQUETTE PROPERTY PATR I CK L I NDEMANN, LANS I NG CITY COUNC I LMEMBER AND AGENT FOR CASTER & ASSOCIATES ALAN TUBBS, PLANNING AND MUNICIPAL DEVELOPMENT DIRECTOR RONALD STONEHOUSE, DEVELOPMENT DIVISION DIRECTOR BETSY ASSID, CASTER AND ASSOCIATES REAL ESTATE COMPANY MEETING OF THURSDAY, OCTOBER 27, 1988. MEMBERS PRESENT: Mr. John Mertz, Chair Mr. Don Cook, Vice-chair Mr. Steve Lowney, Member Ms. Rita Bauman, Member Mr. Alvan Knot, Member OTHERS PRESENT: David Osborn, Michigan Municipal League David Poulson, Lansing State Journal Louis Adado, Councilmember Betsy Assid, Caster and Associates Patrick Lindemann Caster and Associates Ronald Stonehouse, Development Director Alan Tubbs, Planning & Municipal Development Director Call to Order at approximately 8:45 a.m. THE FOLLOWING IS A SYNOPSIS OF STATEMENTS MADE. NEW BUSINESS: Chair stated for the record that the Committee had received all City records regarding the transaction and had reviewed them. He went on to say that Councilmember Lindemann had been given three extensions of his deadline to submit appropriate materials. They have been submitted to the Clerk and the Board at this time. Letter was received from Mr. Stonehouse (attached) INTERVIEW OF COUNC 1 LMEMBER L I NDEMANN; MERTZ: When did you become licensed? LINDEMANN: Approximately one year in December. MERTZ: Are you an owner or officer of this Company ( and Associates)? LINDEMANN: Sales person. Has no equity in the company. Do not receive any of the profit. MERTZ: Do you receive regular pay other than your commission? LINDEMANN: None, Share phone and desk. Do not have my own. MERTZ: is the Pere Marquette property in your ward? L I NDEMANN: Yes. MERTZ: Would you be compensated for any sale of the property? LINDEMANN: I would make an income from the sale of the Bike Shop. I was a partner with Ms. Assid in order to find land for Mr. Heinowski. We worked together. MERTZ: Regarding your relationship with Mr. Heinowski, did you have a contract with him? LINDEMANN: Mr. Heinowski was a customer. My responsibility is to the seller. Betsy Assid was the Leasing Agent. 509 of the sales commission I would receive from the sale. I would be paid by the seller, Mr. Heinowski came to the and Associates and asked for assistance in the purchase of this property. MERTZ: When did Mr. Heinowski come to see you? LINDEMANN: He went to the Mayor, He had originally had another offer on the Diamond Rea property. MERTZ: Was he aware that you were a real estate sales person at this time? LINDEMANN: No. I had met Mr. Heinowski at the Mayor's Office. I attended this meeting as a Counci]member, LOWNEY: Why did Mr. Heinowski go to and Associates for assistance? Had he worked with them before? LINDEMANN: He knew that I was a real estate agent. MERTZ: Did you solicit him? LINDEMANN: No. I did not solicit him. MERTZ: Why did he feel that he needed to hire you as a real estate agent? LINDEMANN: Pere Marquette was not even mentioned at that time. Pere Marquette was not discussed at the meeting in the Mayor's Office. Mr. Heinowski had been working with Mr. Ohl [Economic Development Director] prior to the meeting in the Mayor's Office. He was trying to work with Mr.Ohl to get funding. He had requested a list of the City's available properties. Mr. Stonehouse sent a letter to Mr. Lipps [Economic Development] saying that the Pere Marquette property was not available at this time. and Associates did not even feel that this was a viable site. MERTZ: Time line? Mr. Heinowski requested information from Economic Development Corporation without your assistance? L I NDEMANN: Yes. LOWNEY: What was the meeting with the Mayor about. Why were you there on May 23rd? LINDEMANN: Mr. Heinowski was informed by the City that his Diamond Reo site he had submitted on offer on was no longer available. At that time he was without a piece of property and he had no place to go. He wanted to get back to the Diamond Reo property and called me to f Ind out what the Administration was up to. A meeting was set up with the Mayor. STONEHOUSE: Mr. Heinowski asked for the meeting. LINDEMANN: I attended as his Ward Councilman. At that meeting I represented that I was a Councilman. LOWNEY: When did he determine that you were a real estate agent? L I NDEMANN: I do not know. You']I have to ask him. The Mayor stated that I was in the real estate business along with mentioning others. I cannot answer this question. I did not solicit his business during that meeting. He contacted me. MERTZ: When you meet with Mr. Sears, was this the first time this particular property was considered? LINDEMANN: I was not involved at this time. MERTZ: When did you find out that this particular piece of property was a possible option? LINDEMANN. I cannot say. Jim 0 and Betsy discussed this with Mr. Sears and then went and looked at the property before I was even told about it. I was out of town twice during this time. I did not solicit City property as part of this - Mr. Heinowski did. They had a meeting in regarding to getting Mr. Sears to sell. LOWNEY: Was Mr. Heinowski working with other Realtors? ASSiD: He was looking at other sites with other Realtors. L I NDEMANN: Yes. Mr. Heinowski offer to purchased the land is included in your packets. MERTZ: The meeting with Mr. Tubbs and Mr. Stonehouse, what was the date? [August 181 LINDEMANN: Mr. Tubbs could provide this date. The assumption was that the land was not available and then we met with Ron and Al to determine whether the land what was available. I declared myself to Mr. Tubbs and Mr. Stonehouse and passed out and exchanged business cards. They knew that I was a Realtor with & Associates. MERTZ: Did you then file a disclosure with the Clerk? LINDEMANN: At that time there was no need to do that. There was not an offer. MERTZ: The first meeting was with Mr. Stonehouse and Mr. Tubbs? TUBBS: It was 9.30 a.m, on August 1 Oth KNOT: We need to deal with the positions and not people. MERTZ: At that point when you advised that you advised them was there a policy on the Development Director that they would not sell the property without a land use plan? Was there any mention made of this? LINDEMANN: No. We were trying to get a handle on whether it was enough square footage. That was the express intent of Mr. Heinowski. Betsy did most of the talking. it was focused on what the City had and what problems existed with the property. MERTZ: When were you aware that there were other parties interested in this property? LINDEMANN: We knew it when Mr. Tubbs discussed the problems with the property. MERTZ: Were you aware that the Planning Department had decided to not to entertain offers on the Pere Marquette property? LINDEMANN: NO. MERTZ: Were there follow-up contacts after your offer was subm I tied? LINDEMANN: I turned the offer In. I had to be downtown and brought Betsy. LOWNEY: On August 18th? LINDEMANN: Yes, to Mr. Tubbs and Mr. Stonehouse. LOWNEY: Who were you representing? L I NDEMANN: I was st i I not a party.. MERTZ: Wasn't a portion of the contract dollars to be paid to and Associates? Would you have received part of the commission if the City agreed to the offer? LINDEMANN: Only on the motorcycle property. LOWNEY: Betsy put the offer together on August 18th. This is the first time Caster and Associates had given something to the city. We were representing Mr. Heinowski's interest. He needed a portion of the Pere Marquette property and this was contingent upon the sale of the bike property. ASSID: The Commission agreement was not given to the City at that time. My broker requested that it be taken down. Originally there was no commission agreement. My broker insisted that we take it down. LINDEMANN: The offer was received by the City on August 22nd. LOWNEY: When was the commission agreement presented? ASSID: Approximately one week later. MERTZ: Did you assist in the preparation of that agreement? L I NDEMANN: No. LOWNEY. What were the terms of that agreement? Do you have any copies of that document? ASSID: Yes. It is in your packet. KNOT: Were you told at any time that the City would not pay a commission on the property at any time? 6 LINDEMANN: I was told that sometime. LOWNEY: You dropped off the commission agreement? LINDEMANN: YES, but I was not going to get a commission off this any way. MERTZ: You would gain a commission on the contingency if the City land was purchased? L I NDEMANN. Yes, MERTZ: You were not getting any compensation for doing any work on this? LINDEMANN: Right. I was trying to get the appropriate land for Mr. Heinowski, The City property was never on the list that I was supposed to check out. Betsy Assid suggested this piece of property. LOWNEY: How could you make money? LINDEMANN: I would receive 1/2 of whatever was sold. Betsy and I worked together. MERTZ. Did Alan Tubbs or Planning Department advise you that this piece of property may be available -- At what point in time? LINDEMANN: Betsy called them every day. MERTZ: Were you in contact with the Planning Department after the offer was in? LINDEMANN: I did not contact them. Betsy Assid was the contact person. I was aware of some of the calls that she made. Once the offer was made I tried to stay away from it. I did not participate in the negotiations between Mr. Heinowski and Mr. Sears, I made a point that once the offer was received by the City I avoided the issue. MERTZ: On September 9th? LINDEMANN: I did not consider an offer a contract until It was signed. When I knew there was a draft counter offer in the City Attorney's 7 office, I went to the City Attorney's Office with Mr. Emerson Ohl and I declared myself and asked for legal advice from the City Attorney. MERTZ: Did you file an Affidavit of Disclosure at that time? LINDEMANN: I had declared my possible conflict when I had contact with the City. They knew exactly where I was coming from. LOWNEY: When did you realize you had a potential conflict? LINDEMANN: When we all sat down I declared myself. MERTZ: Did you not think you should have filed an Affidavit of Disclosure at the time there was a potential conflict? LINDEMANN: Betsy Assid was making most of the contacts at that time. MERTZ: But didn't you think you should have filed an Affidavit of Disclosure at this time? LINDEMANN: When the offer was rendered and accepted that is when I felt I should do everything. I called Ai Knot and met with him to discuss this. MERTZ: Were you aware that you should go to the Board of Ethics? That it was our jurisdiction? LINDEMANN: I did not use my political office to profit. I did not know I should call this Board. I discussed this with Mr.Knot. MERTZ: At that meeting in the Planning Department was a determination made or mentioned that in order to entertain the sale of the property a land use plan would have to be prepared? KNOT: Did Ai Tubbs direct you that the land use plan would be required before action could be taken at that meeting? STONEHOUSE: There was no official policy on the books the first of June. MERTZ: When were you aware that the Physical Development Committee was working on the September 12 resolution? 8 LINDEMANN: After the Committee prepared It. I received a note from Mr. Stonehouse saying the property was not available at this point in time per the direction of Al Tubbs because the square footage of the property could not be determined. He did not know where the resolution came from. It was prepared hastily and did not follow the regular process. MERTZ: Was any thing done by you to try and block the Council from taking action on the resolution as they had the final say. LINDEMANN: I first knew about it on Friday afternoon prior to th the Monday night passing of the resolution. MERTZ: At what point had you discussed this with Al Knot? LINDEMANN: This same Friday. KNOT: I talked to Pat at 1 1:00 a.m. the following Monday. [September 121. LINDEMANN: We had breakfast with Mr. Latterman on September Sth and then I found out the next day that a resolution was on the agenda from Physical Development. This did not follow the normal process. The resolution killed the due process that Mr. Heinowski as a citizen Is entitled to. MERTZ: How would it kill the deal? LINDEMANN: No land would be sold until a land use plan is provided. KNOT: When would the land use plan be filed. LINDEMANN: There was not enough time. Mr.Heinowski had to be relocated by January. MERTZ: Was anything done to block the resolution. LINDEMANN: Yes. KNOT. How did you f Ind out that this was on the Counci l agenda Monday night? 9 LINDEMANN., When I picked up my packet., KNOT, You were not advised by anyone? What did you do then? LINDEMANN: Absolutely nothing. I then met with Al Knot on Monday. MERTZ: What was done to block the Council action? LINDEMANN, Betsy Assid called up the Counciimembers and discussed this issue and explained Mr. Heinowski's offer. KNOT: What did you do of ter you lef t my of f ice on Monday? LINDEMANN: I filed an affidavit for computers, I did not have any conversation with Betsy. MERTZ: Why did you not file and affidavit of disclosure at that. time? KNOT: When you left my office did you go and contact Betsy Assid? LINDEMANN: I talked to Emerson Ohl first and then called her. I do not remember what then. ASSID: I came up to City Hall and attempted to locate the Counciimembers. I went up with Pat to City Hall. LINDEMANN. I talked to no one. ASSID: I talked to everyone except Councilmember Blair as he did not want to get involved. KNOT: Where was Pat? LINDEMANN: I was in the City Hall lobby and in my office. I was not part of any discussion that Betsy was having with any of the Counciimembers. KNOT: You talked to no one regarding this matter other than Betsy Assid? LINDEMANN: i talked to Lou Adado but only to introduce Betsy, i introduced her and told Lou that she had something to talk to him about. 10 KNOT: Did you identify that you were in conf 1 ict to other Counci lmembers. LINDEMANN: Yes, i did not talk to anyone. LOWNEY: What is the relationship between the Council and the Planning Department, Does Mr. Tubbs work for Council? LINDEMANN: Mr. Tubbs works for the Administration as all department heads do except the City Attorney who works for the Mayor and Council. Counci 1 makes poi icy, levies taxes and writes laws. LOWNEY: Through this whole process no Affidavit of Disclosure was filed even after you discussed this matter with the City Attorney. You knew there was a potential conflict and even though Mr, Tubbs and Mr. Stonehouse work for the Administration they would at least answer a telephone call, etc...Why didn't you file an Affidavit of Disclosure in August? LINDEMANN: We were just trying to get the details of the property from the Planning and Municipal Department. I declared I was in a potential conflict at that time. I expected no special treatment from them. LOWNEY: Why didn't you let Betsy Assid do the fact finding instead? LINDEMANN: I did not file an affidavit but I did disclose that I was a real estate agent. LOWNEY: In discussing the square footage at the meeting in the Planning Department you did not feel there was a potential conflict in doing that? LINDEMANN: No. Betsy Assid was doing all the fact finding and she was making all of the calls. MERTZ: At what point in time did you think there was a conflict? LINDEMANN: I was pursuing my list of other potential properties. Betsy Assid prepared the offer. At that point he wanted you stay away from everything. 11 MERTZ: You did not feel that there was a conf 1 ict of interest at that time? LINDEMANN: I did not think that a conflict of interest would exist until a counter-offer was made. I did not perceive a conflict would exist until there was an offer on the table. I felt that once the offer hit the table then a potential conflict existed and then I would not make contact with any City people after that time. MERTZ: When did you feel that someone should file an Affidavit. of Disclosure? At what point? LINDEMANN: i thought that when the counter of f er came back to us that I would have a conf 1 ict. I went to see the City Attorney at that point when I though a counter offer existed. I was going to file an Affidavit of Disclosure once the counter offer was joint to be received. COOK: Because there was going to be a vote on this matter didn't you feel there was some conflict as you would have to vote on it and did you Betsy get preferential treatment because she was a partner with you with City personnel? LINDEMANN: The focus at this time was not on City land. MERTZ: in your opinion at the point in time an offer is made did you feel that an affidavit should have been filed because of a potential future conflict or did you feel that the point in time the City counter offer was received that an Affidavit should be filed? L I NDEMANN: yes. MERTZ: Do you feel your are allowed to lobby before an affidavit of disclosure is filed? LINDEMANN: Absolutely not. I would have to stay out of it entirely. MERTZ: Do you feel that Councilmembers should take steps to avoid these types of conf 1 ict, in your opinion? LINDEMANN: The City Charter created our positions as part time. Conflicts are evil if you misuse your power. All Councilmembers do other things because they are a part time legislative body. Under your 12 opinion -T5 even a plumber would have to Tile an attldavlt as they get permits from the City Building Department. In that respect I disagree with that opinion for that reason, i feel I handled myself correctly, professionally and ethically. MERTZ: Should a Councilmember avoid getting in these conflicts? LINDEMANN: I would tell someone to go somewhere else. I contacted the Planning and Municipal Development Director 2 times. Not once did I use my political authority. KNOT: Was the focus of your meeting on Monday with me regarding the proposed resolution (Sept. 12)? LINDEMANN: No. I needed to discuss this issue in terms of conflict. I filed an Affidavit of Disclosure after our meeting because I sold the City Council office ribbons. KNOT: Were you following the counter-offer to my office as you knew the draft was there, not to deal with the resolution? LINDEMANN: We had to talk. MERTZ: What is the ethical limits on what a Councilmember can to to make a living regarding doing business with the City? LINDEMANN: I am a commission sales person for AMS [Advanced Management Systems]. I do not use my authority as a Councilmember to make a sale. MERTZ: How does the public know? LINDEMANN:: When an Affidavit of Disclosure is filed. MERTZ: Prior to the sale or after the sale? LINDEMANN: Under $ 10,000 1 would have to file an Affidavit of Disclosure per our Purchasing Ordinance, MERTZ: Did you solicit these sales? LINDEMANN: No. 13 MERTZ: If you are aware your staff needs something then you can sell it to them? LINDEMANN: I did not actively pursue selling the City anything. i did not go in there with my briefcase, etc. intending to make a sale. MERTZ: Did you actively solicit the sale of the ribbons? LINDEMANN: No. Absolutely not. I do not feel I should solicit. A plumber would have to file a disclosure when requesting a permit. Fran asked me if we carried ribbons and I told her yes and she asked me if I could get multi colored ribbons for her as Tony likes brown ink and i told her yes. I delivered them to her. By the way 2 months later we finally got paid. I got $6.40 sales commission on this sale. [Further discussion regarding computer sales] MERTZ: How can the public be assured that this Is done. LINDEMANN: I did what was proper and Just. [Went further to discuss how he felt about being elected Councilmember) MERTZ: Was Implicit pressure used? LINDEMANN: No. Not by me. You are barring certain professions from being able to serve on the City Counc11, COOK: What happens If this purchase of land was not In the best interest of your Ward. What would you have done? LINDEMANN: I was elected from the First Ward but my responsibility is to the entire City. I represent the entire City. COOK: How could you wear two hats at the same time? LINDEMANN. I did not do anything unethical in my actions. MERTZ: An Af f idavi t is to be f i led when there is intent to do business with the City. Like the point in time contact was made with the City Council Off ice. Is it your responsibility to do that? LINDEMANN: Yes but. Tony Benavides derives funding from the City, His salary is paid by the City from the Human Resources Department and he's going to have to stop talking to Jackie [Human Resources 14 Director) and ne nas never med an artwavrt of disclosure. i teit that I could discuss this matter with the Department Head until a contract was going to be entered into. I to date have not disclosed anything because I have not received on answer from the Mayor regarding the counter-offer. I believed I behaved in a professional matter. I continued to research other sites from my list as part of my partnership agreement with Betsy. MERTZ: What penalty do you think is appropriate for someone who is in conflict? LINDEMANN: I have not thought about it. I believe I followed the proper procedure. I take an immense amount of pride of hold a public office. I try to do what is best for the City. I think I have been a very good farce on the Council. 1 have made a lot of sacrifices to serve on the Council. 1 am not unethical. 1 did not have a plan to profit from the City. I feel the rules should be rewritten and the disclosure form should be rewritten in order for the Board to obtain additional information. Mr. Latterman at the breakfast meeting with myself and Betsy informed me that he needed a commitment from the City not to condemn the property as he intended to have a portion of the Pere Marquette property. I considered this a bribe. BOARD RECESSED. RECONVENED AT 1 1: 10 A.M. INTERVIEW OF ALAN TUBBS, PLANNING AND MUNICIPAL DEVELOPMENT DIRECTOR. MERTZ: Questions will be asked regarding the alleged statement made to the newspaper and would like to discuss the appearance of a flip- f lop in policy and will be asking questions regarding your first meeting with Mr. Lindemann , Ms. Assid and Mr. Stonehouse in June. LOWNEY: How long have you been employed with the City? TUBBS: Since 1965, minus one year leave of absence. LOWNEY: Current title? TUBBS: I am the Director of the Planning and Municipal Development Department. My department deals with all land development , uses 15 with the City, loans for home owners for rehab and economic development. LOWNEY: How long have you been in the capacity of Director? TUBBS: Since approximately June of 1983. LOWNEY: Have you handled most of the dealing with this issue or was this delegated to one of your staff? TUBBS: After the initial discussion Mr. Stonehouse would handle the follow-up details. MERTZ: [Discussed his copy of an agenda for a staff meeting submitted by the Planning Department] A notation was made on this agenda that the Pere Marquette property was not to be sole per Al Tubbs, TUBBS: I issued this directive to Ronald Stonehouse. I also approached by other people and informed them that the property was not for sale. A member of his staff had shown this property to several different people and that is why I issued the directive and had it removed from the active list. There were some problems that needed to be resolved concerning the property. Some land had to be given up for the Embassy Suites project in order for them to be able to expand. The McNamara company had personally come to me and informed me that they would like some of the property to be sold to them. Various property owners in the area wanted land for expansion. it was unclear at that time what was needed for different people in the area. STONEHOUSE: Staff wrote letters to the people who were shown the property and were informed that the property was not available. MERTZ: This same day a letter was sent by Turney Gratz to two person stating that the land was avai]able. TUBBS: I wans not aware of those letters. KNOT: Mr. Tubbs' staff people wrote a couple of letters without him knowing and this was clarified at a staff meeting, A letter was subsequently sent out to clarify that this property was not for sale. This happened in June sometime? 16 MERTZ: Who is affected by this directive'? TUBBS: This is a directive to my staff. The problem all along was getting the road in. MERTZ: Mr. Latterman was told at this point in time that the land was for sale? Subsequently when was the intent to sell property and when was the counter of f er drafted? TUBBS: We had previously told Mr. Heinowski that this site was not available verbally through Turney Gratz of my Department, That was sometime in June. If any Counci]members came to me and asked me to reconsider something I would reconsider. If any Counc]lmembers had come to him to reconsider it he would, Mr. Lindemann told him that he did not intend to participate in this. He did not think that Counciimember Lindemann was in conflict at this point. In previous years with another City Attorney he was of the understanding that the questions when it began to enter the action process then it was at that point in time a conflict was something certain. If he would have come to me and I thought he was in conflict I would not have reconsidered. I did not know he was in conflict based on previous and past practice because of various opinions by former City Attorney Sawyer. I was told by Mr. Sawyer that it was ok for a Councilmember who may have an interest in something to discuss it and it did not become a conflict until it entered the decision making process. MERTZ: If I came in as a citizen and asked you to reconsider would you? TUBBS: Probably not. If a Counciimember came to see me I would reconsider. You would probably not get to me and my staff would advise you that the land is not available. Capital City Lumber had offer in on the Diamond Reo property. They were competing with another offer that had been submitted for the same property. The Mayor made the decision on which proposal to accept. He chose the other interest. This was a factor in reconsideration because they were not accepted for the Diamond Reo site. They could not provide the dollars needed in the timetable set up that everyone had agreed to. After the environmental problems arose no one benefitted from his property. We wanted to keep this business in the City and were therefore willing to work with them on finding another site. 17 LOWNEY: When did Pat Lindemann come in? TUBBS: On August 10, as a result of their meeting he did not feel it was a conf 1 ict because of past practice. MERTZ: Have you been asked by other Counci)members to change a decision? TUBBS: There have been a few instances when some questions were raised i.e. Museum Drive issue. KNOT: Did this happen before or after 1978 when the new charter was passed? TUBBS: I do not recall whether these things happened before or after the new charter. LOWNEY: How often do Councilmember call you or talk to you? TUBBS: Every day. Each and every Councilmember. KNOT: How many came to ask you, particularly in making an administrative decision where, a Councilmember may derive a financial income from your decision? TUBBS: None. 1 do not check to see if an Affidavit of Disclosure has been filed. I have maybe a couple of times. MERTZ: Would it help if these this were brought to your attention? TUBBS: I think it would be a good policy if it would go to everyone. Pat Lindemann was told that the city was not going to pay any commission fee on this piece of property. Pat asked me whether there was any possibility that any additional land could be made available so this sale could occur. We do public/private partnerships in order to make things happen. Mr.Lindemann handled himself about board and was professional. LINDEMANN. I met with him in order to define what was what. KNOT: Were you aware of the time constraints involved? 18 TU13135: I knew 1t was a desire for them to make their move by January 1 st of 1989. 1 understood there was a need to m make a decision by January 1. After talking to several people I learned that the property owners problems were being resolved to their satisfaction regarding a portion of the land and I then advised Pat and/or Betsy that the property may be available and then they submitted on offer on a portion of land that I told them may be available and then we received an offer on the landing Including the land including the area I told them was available. The Mayor chose not to counteroffer. KNOT: What was the process after the offer was made? TUBBS: I wanted to define for them what could be made available. They made an offer that was not in agreement with what the staff wanted and then a counter-offer was drafted. MERTZ: Does the City Council give the final direction regarding land? TUBBS: Yes, The Master Plan was endorsed by the City Council, The City Council sets the policy guidelines. The resolution as reported out by Physical Development and passed by the Council Is not considered a mandate by the Administration, The resolution that I was directed to draft by the Physical Development Committee did not preclude the sale. I told Betsy Assid that any proposed sale would have to be forwarded to the Citizens District Council of that area, We wanted to try to accommodated Mr. Heinowski to keep this business within the City limits. MERTZ: Do you think Counci]members should be involved in things of this type if they have a financial interest in it. TUBBS: It would be alot easier if this situation did not exist. I would prefer it if they were not allowed to. IOWNEY: Would this work in the real world, TUBBS: The Affidavit of Disclosure should be up front not only verbally. When Councilmembers come to a Planning board to lobby a rezoning it places the board members in an uncomfortable situation as the Council ultimately confirms their appointment to the Board. I feel a little uncomfortable as I work for the Mayor and answer to him but the Council approves my budget for my department and for my 19 position. So I feel that Counciimembers could be considered In conflict when they attend board meetings KNOT: Yes. Counciimembers do confirm Board appointments after they are referred up from the Mayor. MERTZ: is the problem worse when there is a profit involved? KNOT: Is there any difference to the amount of pressure between ward Councilmembers and at large Counciimembers? TUBBS: There is no difference. I feel that he was playing by the rules. It makes me a little more uncomfortable when a financial gain is involved. in regard to access to me - in house vs out house my secretary would have probably referred anyone else to one of my staff members, either Turney or Ron Stonehouse. LOWNEY: Can you give me the specifics of what happened at this meeting? TUBBS. Pat declared that there may be a conflict here. KNOT: IF a Counciimember comes in and discloses that there might be a potential conflict what then? TUBBS: I would sti I treat him as a Counci(member. I do not know whether I knew what the subject was about that Mr. Lindemann wanted to meet with me about. I view his request as a Counciimember request. LOWNEY. Summarize what happened after he announces that there may be a potential conflict? TUBBS: I would think about what was best for the City and then I would think about whether Counciimember Lindemann would obtain a benefit.. I felt that the conflict was triggered when some formal action was needed from the City Council. MEETING RECESSED FOR LUNCH. RECONVENED AT 1,25 P.M. ALL MEMBERS PRESENT. GUESTS RETURNED EXCEPT FOR COUNCILMEMBER ADADO., CONTINUATION OF INTERVIEW WITH MR. TUBBS:_ 20 LOWNEY: Was any preterentlal treatment given to Mr. Lindemann because he is a Councilmember and that is why you reconsidered your previous decision. TUBBS: Yes. INTERVIEW OF RONALD STONEHOUSE, DEVELOPMENT DIRECTOR: MERTZ: Are the previous statements regarding timing accurate? STONEHOUSE: Yes. It is pretty accurate. The City Charter of the City requires that city land be disposed of in a fair market pursuant to the ordinance. The ordinance has been adopted by the City Council. Lansing can be disposed of through public auction, directly negotiated, etc.. If a piece of property is valued at $50,000 or more a public hearing must be held after a 30 day holding period . After the 30 day holding period the terms of the public sale must be placed on file in the City Clerk's Office. After 30 days a public hearing is held. Council cannot act on the sale until at least one week after the public hearing. That is the disposal procedure. Another section of the Charter gives the Mayor property management responsibilities. The Mayor is to be notified of the proposed sale and if he recommends it then it is then referred to the City Council. We were just reaching this point when the City Council adopted the September i 2th resolution. It takes 6 votes of the Council to sell land. Sometimes it requires a vote of the public before it can be sold. KNOT: Would you have sold this property to whoever at less than fair market value? STONEHOUSE: NO. We work on a fair market system unless special policy to the contrary is passed by the City Council. KNOT: One of the restrictions is that an appraisal must be done on the property. One was done this year. There was never any discussion regarding selling this property for anything less than fair market value? STONEHOUSE: There were two appraisals. The issue of selling this property for less than fair market value was not discussed. KNOT: Did you feel any pressure to expedite the process or avoid any of the steps? 21 STONEHOUSE: There was no justification to avoid any of the steps. KNOT: In addition to selling the land for no less than fair market value. is it correct to say that the disposition of any land would have to go through a number of committees before final action is required from the Council and it would take 6 votes for properties valued over $50,000? Also it would he held for 30 days; a public hearing would be conducted, and then the detai is would then be required to be f i led with the City Clerk no matter whom you sold the property to? Did anyone ask you to avoid any of these steps? Did you ever get any impression that you were expected to avoid any of these steps? STONEHOUSE: No. MERTZ: You had an explicit offer to purchase 1n June and in August another commission was appended to the offer to purchase the property? There also were other people interested in the property at that time. How would you negotiate with on party over the other? STONEHOUSE: The city has a history of working with Capital City Lumber Company, The City could not meet their needs on another site, namely a portion of Diamond Reo and we were trying to accommodated their needs by investigating the possibility of their acquiring a portion of the Pere Marquette property. The big piece was the Sears property. The Planning and Municipal Development Department wanted to try to save the property. Other interests did not define what they would be using it for and the other party did and that was the department focused on. MERTZ: There is a statement in your memo regarding "expediting the matter". It happens that Capital City Lumber was under a time factor. Do you respond this way in any normal transactions? Was this an unusuairequest? STONEHOUSE: This message was a message to Al Knot requesting him to review the problem in a timely manner. He expedites any requests that come from any member of the City Council. MERTZ: So you mean that the word "expedite" meant to pay close attention to the matter? 22 LOWNEY: were you invoiveo with the two meetings with Al Tubbs ano Pat Lindemann? Did you feel the same uncomfortableness that Mr. Tubbs felt? STONEHOUSE: i felt differently because I am responsible to Mr. Tubbs directly. Mr. Tubbs is not accountable to the City Council not me. I am accountable to Mr. Tubbs so I did not feel the same way he felt. LOWNEY: Did you perceive any potential conflicts? STONEHOUSE: I was concerned about the potential of a conflict. IT is not my job to report them or decide them. On August i Oth I made it very clear that a commission fee would not be paid to a Realtor - any Realtor. I felt in regard to a potential conflict that at the appropriate time Ai Tubbs and Pat Lindemann would have to deal with this issue at some point in time. LOWNEY: How could the process be redesigned for future use without tying your hands? STONEHOUSE: If there is a real problem, then I think the rules should be clearly designed by the Board of Ethics and the City Council. I think it should be put in writing as to when it clearly becomes a conflict. At what point? It is critical that so many roadblocks not be laid down so that we could not do anything. Have written rules that everyone could understand and have access to. KNOT: Absolutes? STONEHOUSE: Yes. It would be beneficial for those people who have a potential to be in conflict. LOWNEY: Would you suggest that Department heads all be forwarded all copies of disclosures filed with the Clerk? STONEHOUSE: Yes, just like we get the Agendas. Some Department Heads do not get the agendas but I do. [Discussion followed regarding the distribution of the disclosures] MERTZ: We have had problems presented to the Board twice in two years regarding possible conflicts, There should be guidelines also to 23 let the public know what their elected officials should and should not do. STONEHOUSE: To reiterate, I made it clear in the first meeting that there would be no commission fee paid. The public can have access to any plans through our department. He does not know of any confidential plans. Public can any information through the Freedom of Information Act. Any committee can make any changes to any proposal or plan at any time before formally acted upon at the Council meeting. KNOT: A proposal could be turned down at the Council level and any time. Was this handled uniquely or generally? STONEHOUSE: This was unique as in the middle of the entire process a resolution was adopted by the City Council requiring a special land use plan be submitted before any land is sold. I feel that the timing of the passing of the resolution was unusual. But please do not make so many restrictions on a sale of land that the City cannot receive valuable input from their elected officials in good conscience. LOWNEY: Do you think real estate agents should have special attention? STONEHOUSE: Probably. LOWNEY: Maybe we need a simple special process of disclosure for real estate deals involving City land. INTERVIEW OF BETSY ASSID, Caster AND ASSOCIATES: LOWNEY: When Pat Lindemann introduced you to Councilmember Adado on Monday did he tell him that you had something to discuss with Mr. Adado and then did he leave? What was it you talked about and did anything come out of that discussion? ASSID: He was one of the Councilmembers I talked to that day. I talked to all of them except Counc I I member Blair. First the resolution came up so fast that the Councilmembers did not know about Capital City Lumber, the offer on the Pere Marquette property. I tried to explain the proposal of Capital City Lumber. I went over the offer and also informed him of the counter-offer. I wanted to keep moving on the process. The resolution was just going to stop 24 everytning, the entire process. I was hoping that the Council woula not accept the resolution. MERT7_: Did you tell Pat Lindemann what you were going to talk with the Councilmembers about and how you were going to proceed from there? ASSID: No, LINDEMANN: We did not have a planned approach or attack. The resolution if it was adopted would have stopped the normal process that Mr. Heinowski was entitled to. I did not talk to anyone. KNOT: How many Councilmember did you talk to before Monday night? ASSID: I talked to everyone except Councilmember Blair. LOWNEY: When did you find out about the counteroffer? ASSID: We were promised to receive it on September 9 and they did not get it drafted until September 12th. The draft of the counter of f er was on September 12, 1988. 1 T was a Monday. I t was the same night as the Council meeting. LOWNEY: On September 12th the resolution was passed? ASSID: Yes. The next day Alan Tubbs provided them with a timetable. KNOT: Were you making the calls to the Councilmembers to Ron Stonehouse and Al Tubbs? ASSID: Yes. KNOT: They were mostly your conversations? Did you go and look at the site? ASSID: Yes myself and Pat visited the site in addition to the other two meetings. KNOT: When did this happen? TUBBS: Approximately two weeks after our meeting with them on the 10th of August. 25 STONEHOUSE: No one knew where the road was going to be. KNOT: There were three meetings then? One on the site two weeks after the August 1Oth meeting. LOWNEY: [to Mr. Tubbs] How often are you the person to go out and visit the sites with potential developers? TUBBS: I had a concern regarding the McNamara property at that time. I did not know what area they were talking about and did not know where the property lines were. LOWNEY: Is this unusual that you would personally walk the site? TUBBS: No. I visit many sites personally. This is normal procedure. LOWNEY: Without Pat Lindemann's involvement would you have visited the site with Betsy Assid alone? TUBBS: We went out there at my suggestion. I had previously met with McNamara people regarding expansion and I wanted to see what we were talking about. KNOT: In terms of the phone calls from Betsy Assid - Did you receive a number of phone cal is from Betsy subsequent to the August 10 meeting? STONEHOUSE: I received the calls. KNOT: Was it Betsy Assid or did you receive calls from Pat. Lindemann subsequent to the August 10 meeting? STONEHOUSE: I do not have any recollection of Pat Lindemann calling me. I do not recall. LINDEMANN. I called him on constituent problems, Pertaining to this issue I did call Ron to tell him that Betsy wanted to talk to him. KNOT: What were the particulars if Mr. Sears would have sold the property on the commission in relation to the meeting of August. l Oth? 26 A55ID: The otter was returned 3o pays atter acceptance. I wrote the offer. The sellers wife signed it and then Mr.Heinowski did not want to sign it right then because he knew that if he signed it, it would start the 30 day clock. KNOT: At what point in time was there any terms in writing or verbal commitments for this deal discussed and if this deal went through Pat would have received part of the sellers commission? LINDEMANN. Whatever deal was finally sold to Mr. Heinowski, I would split the commission profit with Betsy Assid. KNOT: is it true that after Mr. Heinowski called you after the meeting In the Mayor's Office? LINDEMANN: Yes, Mr. Heinowski called me. KNOT: When did he first call? LINDEMANN: The first call was about the Diamond Reo site. That was what he contacted me about f irst. He wanted me to help him KNOT: Did you call him? LINDEMANN: Once I knew that Mr. Heinowski needed 3.5 to 5 acres of land he discussed a deal with Betsy Assid. KNOT: Assuming Mr. Heinowski called to sell, would you receive pat of the sale commission relative to City property. Or wasn't this property considered at the time? At what point would the commission be received from the Sears sale? When would it happen? ASSID: I had a one part listing with Capital City Lumber. KNOT: At what point did you get the one page listing from Sears? ASSID: August 3rd. Pat and I agreed in writing to split the commission. After that Mr. Heinowski wanted to purchase the piece of City land. KNOT: is that why the meeting was held on the i Oth? 27 LINDEMANN. It was not our intent to sell City land. We did not think it was an option at that time. KNOT: When was the decision made to call Al? When did the purchase of City land enter into the discussion? LINDEMANN: We were really confused at the time as to what exactly was available. ASSID: Between August 9th and 10th we found out that City property may be available. Discussion was held regarding interviewing Mr. Adado and Mr. Ohl. MEET I NG RECESSED AT 3:00 P.M. THE MEET I NO WI LL RECONVENE ON THURSDAY, OCTOBER 27TH AT 8:30 A.M. Prepared by Francesca Doneth Senior Legislative Assistant Lansing City Council Recording Secretary for the Board of Ethics. APPROVED. SIGNED JOHN MERTZ, CHAIR DATE APPROVED 28 LANSING BOARD OF ETHICS SPECIAL MEETING OCTOBER 26 , 1988 8 : 30 A.M. FOSTER BUILDING 313 SO. WASHINGTON SQUARE LANSING, MICHIGAN A G E N D A CALL TO ORDER — ROLL CALL: / JOHN MERTZ ON COOK, STEVE LOWNEY, CITY CLE v CITY ATTORNEY. RK, Introduction of Guests ,, APPROVAL OF AGENDA1� SECRETARY'S REPORT: - Approval of Minutes of 10/21/88 - Correspondence Received and Sent. - Disclosures of Conflicts Filed - Inquiries & Complaints Received. - Next meeting date. CITY ATTORNEY-S REPORT Disclosures of Conflicts filed. OLD BUSINESS : 1 . Response to H. Leeman, Jr. Complaint of 10/8/87: Proposed Advisory Opinion No. 4 (Lowney} - Tabled 1/25/88 COMMITTEE OF THE WHOLE NEW BUSINESS - Further inquiry of Pere Marquette purchase and proposed sale involving a COunCilmember. PUBLIC COMMENT. BOARD ROUNDTABLE ADJOURNMENT October -7, 1988 Mr. John Mertz, Chairperson Board of Ethics 518 Hollister Building Lansing, Michigan 48933 TIMETABLE FOR CASTER AND ASSOCIATES M ay 23 Meeting with the Mavor: Mr. Heinowski, Air. Howell, Mr. Ohl, Mr. Lindemann, Mr. Knot, Mr. Tubbs, Mr. Stonehouse and Mr. Gratz met with the Mayor to discuss Mr. Howell's and Mr. Heinowslffs offer to the City on the Diamond Rea Property. Mr. Heinowsl:i was told by the City that his chance of getting the Rea Property was slim due to pollution problems. End of May Mr. Heinowski contacted Air. Lindemann at Caster and Associates: Mr. Heinowski indicated an interest in having Caster and Associates work with him regarding a location for Capitol City Lumber project. At this time, because of the size of the project, Mr. Lindemann solicited the aid of Ms. Assid to work with him as a team in locating 3 to 5 Acres for the Lumber Company. The customers, Air. Heinowski and Mr. Howell, desired location 1 was in the Cedar Larch Corridor, North of Mt Hope, South of Grand River Avenue. After assembling approximately 25 sites which met his requirements, ( Pere Marquette - City Property or College Bike Shop Property not being one of them ) a priority list was established which led us to our first offer Air. Heinowski requested, from the Economic Development Corporation, any available City owned sites where he could locate his project. One of the sites Mr. Heinowski asked about was the Pere Marquette Property. Air. Lipps, of the Economic Development Corporation, relayed a communication to Air. Heinowski, through Mr. Lindemann, knowing that Mr. Lindemann was working with Mr. Heinowski. The response, dated 6/29/88, from Mr. Stonehouse to Mr. Lipps, in regard to the Pere Marquette property was that it is "not available at this time, per Mr. Tubbs. Square footage may change when road design is completed". (Copy attached). Caster and Associates did not consider the Pere Marquette site to be a viable option at this time and relayed that. information several times to Mr. Heinowski. June 27 Offer to Railroad, South Washington Site: Five Acres of land on South Washington, between Washington and Cedar, North of Diamond Roo, commonly known as the Dopot. Restaurant Property, was chosen as first desired site. An offer was written to the Grand Trunk Railroad by Caster and Associates followed by of phon,- .t lls to 2 Mr. Rigley, the Real Estate Manager for Grand Trunk, located in Detroit, to no avail. Since we received no response from the Railroad, we continued to pursue the other locations on the priority list and also looked for any other sites which fit.the perimeters given to us by Mr. Heinowski. Since Mr. Heinowski kept emphasizing that he had to move before the end of the year, Mr. Lindemann and Ms. Assid split up the list of possible sites and each proceeded to gather details on the various locations on their lists. It was the last week of July when Ms. Assid made contact with Mr. Scars, owner of the College Pile Shop, to see if he might. be interested in selling his property on the South East- corner of Larch and Shiawas scc and relocating t.hc i il:c `'hop. Mr. Sears indicated he would sell if the right. price and t.crms could be reached althougli he would romain in that location. otherwise, Ms. Assid showed Mr. IIcinowski the prop,^.rt.y and acquired floor Plans and site Plans, so he could discuss t.hc site with Mr, and the other investors. After evaluating the site, it was decided by Mr. Heinowski and Mr. Howell that the Bike Shop Property was not large enough to accommodate their project. although the location vitas just what they were looking for. At this time they inquired about a PORTION of the Pere Marquette Property to make up the difference in Square Footage to facilitate the project. Mr. Sears indicated to Ms Assid that he understood that he would be able to purchase from the City the excess property from his South property line straight East to the railroad tracks, excluding the road right of way. Mr. Lindemann and Ms. Assid, in an attempt to clarify the situation, set up a meeting with Mr. Tubbs and Mr. Stonehouse. 3 At the beginning of the meeting, introductions were made and Mr. Lindemann indicated his association with Ms. Assid and Caster and Associates. During the meeting, Mr. Tubbs reiterated that the property was not for sale at this time because they were waiting for final plans from Capitol Consultants on the Pere Marquette Road and the exact square footage remaining. Mr. Tubbs indicated there was a problem with the land, it was promised to someone else and he had not previously been aware of that promise. There were other problems which have to be solved concerning other property owners, specifically Claras and MacNamaras. He indicated that he would meet with the other concerned parties to try and resolve those problems and explain Mr. Heinowski's project and his need for some of the road right-of-way. Aug 4 Began negotiations with Mr. Sears: A offer was written, from Mr. Howell and Mr. Heinowski to Mr. Sears for the College Bike Shop Property, contingent upon the purchaser's ability to acquire additional land to the East from the City. Aug 18 Offer to City: Mr. Lindemann and Ibis. Assid met with Mr. Tubbs and Mr. Stonehouse and presented them with an offer from Mr. Howell and Mr. Heinowski for a portion of the excess right-of-way. 4 Sept 6 Mr. Heinowski agreed on offer with Mr. Sears: Sept S £:15 am Breakfast with Mark Latterman: At the request of Mr. Tubbs, Ms. Assid and Mr. Lindemann met with Mr. Latterman at the Flap Jack Shack. Ms. Assid and Mr. Lindemann explained to Mr. Latterman the project of Mr. Heinowski and Mr. Howell and their need for additional land over and above The College Bike Shop property. Mr. Latterman at that time explained to Mr. Lindemann and Ms. Assid that his client needed room to expand and was expecting to receive all the excess land north of Clara's to Shiawassee Street and east of The Bike property from the City. He also indicated that the property north of McNamara's, which is an odd-shaped piece of property, should be turned into a city parking lof.. He %Tas adamant that. McNamara's should not be given or to purchase any of the city larid. This position was puzzling. 11e also tliat. 1-I" VTar willing t(-� gi�'4' tip Srime or t.h:, I)r(:)! land if certain condit.ir,t,c 1-Fisted, and stated, if you Can bCt. me a sibncd statement from t.hP City saying t-hat they will not. condemn Mr. kadr-way', property between Cedar and Larch, he would let. us have enough property to fulfill the Car)it(-)l Cit-y L,umkicr project.. Mr. Lindemann indicated in t.ho conversation that he was not. willing to do such a thing nor could he commit a future city council or any city council to such an agreement. 5 Mr. Latterman proceeded to state that in lieu of such and agreement, he felt then, that a land use plan should be done. At this time, Mr. Latterman said to Mr. Lindemann and Ms. Assid that he would get back to his client, Mr. Radewav, and see if something could be worked out. Breakfast ended. Later on that afternoon, unknown to Caster and Associates or their clients or customers, the Committee on Ph�Tsical Development adopted a resolution halting the sale of any property and asking for a land use plan. In all the research that we have done, as Caster and Associates, we cannot find mention anywhere, in previous material, the reference to a land use plan prior to the aforcmcnt.ioncd breakfast with Mr, Latterman. The rclnlution was offered by Councilperson Belen. Seat 9 Counter Offer promised to Caster and Associates: Ms. Assid was told by Mr. Stonehouse that an offer would be ready by September 9th and had indicated that the counter offer was prepared and in i'Tr. Knot's office to be approved as to legal form. At this time, Mr. Lindemann called Mr. Knot and indicated that he needed to talk to him concerning this issue and would also pick up the counter offer, if it was ready. Ms. Assid also called Mr. Stonehouse to make arrangements to pick- up the Counter Offer and was told it would not be ready until Monday. Mr. Lindemann met with Al Knot and Emerson Ohl, in Mr. Knot's office. ,Mr. Lindemann declared his conflict to Mr. Knot and asked for the proper procedure to follow in representing his client and customer. Mr. Knot 6 indicated that Mr. Lindemann must refrain from voting and participating in any debate pertaining to the land sale. Mr. Lindemann agreed to those conditions and indicated to Mr. Knot that Mr. Tubbs and Mr. Stonehouse were previously aware of his conflict. To further verify that fact that Mr. Stonehouse and Mr. Tubbs were well aware that Mr. Lindemann was with Caster and Associates and in conflict in this issue, we refer to letter dated 9/9/88 from Ron Stonehouse to Mr. Knot. ('Copy attached). Mr. Knot indicated that he and Mr. Stonehouse had to present the counter offer to the Mayor. At this time, Caster and Associates and Mr. Heinowski still had no signed offer from the City. Later on September 9, Mr. Lindemann first learned of the resolution from the committee, which had been passed out of committee on September 8 th. Sept 12 Ms. Assid met with Mr. Stonehouse to pick up the counter offer which was to be signed by the (Mayor at a 2:00 pm meeting with Mr. Tubbs and Mr. Knot. Ms. Assid was informed at that time, that the Mayor wanted to wait until after Monday nights Council Meeting to get the Councils reaction to the Resolution and Caster and Associates would have a response on Tuesday, September 13th. Ms. Assid tried to meet with all of the members of City Council to explain the situation regarding the resolution. 7 At the City Council meeting, Mr. Lindemann declared his conflict and ushed to be excused from voting, a motion was made and passed. Mr. Lindemann left the horseshoe during the discussion and sat in the audience. The resolution passed. Sept 13 The Counter Offer from City promised: Due to the passage of the Resolution, the Mayor would not sign the Counter Offer. Ms. Assid met with Mr. Stonehouse, was informed of this and was given a timetable for the Cedar-Larch Corridor Land Use Plan which put the possible sale of excess road right-of-way off until late December. Sept 19 Meeting with the Mayor: Ms. Assid set up a meeting with the Mayor so that Mr. Heinowsl�i and Mr. Howell could relay their concerns and their wish to keep Capitol City Lumber Company Project in the downtown market area. Also present at that meeting was Mr. Caster, Owner of Caster and Associates, Mr. Tubbs, Mr. Stonehouse, Mr. Boyd and Mr. Eding, a representative for TrueValue Hardware from Cleveland. After the meeting, Ms. Assid continued to try to talk to the City Council Members and also to have them meet with Mr. Heinowski and Mr. Howell before the Monday night Council Meeting, hoping City Council would reconsider the Resolution. 8 At the Council Meeting, Mr. lleinowsl:i spoke along with Ms. Assid, Ir. Adado made a motion to reconsider the Resolution. Mr. Lindemann again declared his conflict, asked to be excused from voting, and removed himself from the horseshoe and sat in the audience. The motion to reconsider the resolution failed after a lengthy debate. (Video tapes of both Council Meetings can be made available) Sept 22 Physical Development Committee Meeting ':00 pm.: At the Physical Development Committee Meeting, the Committee Members decided to send the issue to the Ethics Board. Respectfully submitted, CASTER & ASSOCIATES Betsy Assid atrick Lindemann Associate Associate 9 COMMITTEE ON PHYSICAL DEVELOPMENT WHEREAS, the City of Lansing is acquiring property owned by Conrail and C&O Railroads, between Shiawassee and Michigan Avenue just east of Larch Street, for the purposes of constructing a public street (Pere Marquette Street) to provide access to several businesses between Shiawassee and Michigan Avenue and; WHEREAS, the City Council has established a Citizens Committee to develop a land use plan for the Cedar/Larch Corridor, including the railroad properties and; WHEREAS, the City Council is aware of the desire of several businesses abutting this new street to purchase excess property for expansion of their business and/or to solve problems created because of the development of a public street; NOW, THEREFORE, BE IT RESOLVED that the City Council requests the administration to complete the land use plan for this area prior to the time the Council will approve any sale of land along the future Pere Marquette Street. pF L4 ._ CITY of o LANSING INTEROFFICE COMMUNICATION 416 .1..1.■►1Gn TO: Alan E. Tubbs Director DATE: 3 /88 a 'N oulFROM: Jarfie ds ector D a mentoet f Planning & Municipal Develo ment SUBJECT: CEDAR/LARCH PLAN - HEARING SCHEDULE 1) Public Hearing-Planning Board Tuesday, October 18, 1988 2) Urban Development Committee-Planning Board Thursday, October 27, 1988 3) Recommendation by Planning Board Tuesday, November 1, 1988 Send to Mayor Thursday, November 3, 1988 4) Council Agenda Monday, November'7, 1988 5) Council Hearing Committee Consideration and Decision in December This schedule assumes a noncontroversial review and adoption of the Cedar/Larch Plan. Z142 -- - Ili � - -- . . . . ii - GREATER LANSING BOARD OF REALTORS°-- -- ------ -- - - Agreement to Pay Commission 2L ` 11 ress Date Ct ri., This agreement is between �f /J as SELLER(S) and ? �Ji/ as LISTING REALTORO BROKER regarding the above captioned property sold to SELLER agrees to pay LISTING REALTORO BROKER above named at closing, a commission equal to f� for negotiating this sale. Acceptance of this agreement and receipt of a copy are hereby ackn dge)d by SELLER and LISTING REALTORO BROKER. SALESPERSON SE DESIGNATED REALTOR® SELLER® BROKER Expiration date "This form is provided as a service of the Greater Lansing Board of Realtors® . Those who use the form are expected to review both the form and the details of the particular transaction to ensure that each section of the form is appropriate for the transaction. The Greater Lansing Board of Realtors® is not responsible for misuse of the form, for misrepresentation, or warranties made in connection with the form." OCopyright 1984 by Greater Lansing Board of Realtors® 146(REV.t/ES) fA, CITY of LANSING INTEROFFICE COMMUNICATION _- Z. TC: Alvan P. Knot , City P.ttcrnev DATE 9/9/88 FROM: Ronald G . Stenehouse Development 0-4vision Director A� I SUSJ'CT- Offer to Purchase City-Owned Property Located East of 340 N. Larch Street This office, on August 22 , 1988 , received an offer to purchase certain city-owned real estate located east of 340 N. Larch Street. This property is part of the surplus property remaining after the right-of-way needs for Pere Marquette Drive have been met, and part of the right-of-way for North East Street: The purchaser is Marvin Howell, acting on behalf of a corporation to be formed. Mr. Howell is one of the individuals attempting to' 'restructure Capitol City Lumber Company, which is trying_ to buy 340 N. Larch and this surplus city property so that it can be used as the new location for- Capitol City Lumber Company. Mr. Howell has thus far been represented by Caster and Associates, ..'.and :,.our , contacts with Caster and Associates have been Bethany Assid 'and ' ;' Patrick"E. Lindemann Attached hereto you will find a copy of the Buy and Sell Agreement, along with 'addenda I and =I, that has been submitted on behalf of Mr. Howell. Mr. Tubbs and I cannot recommend this Buy and Sell Agreement as it is written. Mr. Lindemann has requested that we prepare a counter-offer on behalf of the City. A proposed counter-offer in the form of Addenda III and IV, is attached hereto. I am requesting that you review the attached documents and advise m3 of an,• modifications or additions you feel are necessary to protect the interests of the City or improve the form of the documents. Once these documents are in a form acceptable to you, this office, through Mr. Tubbs , will seek Mayor McKane ' s approval to issue a counter-offer. It is my understanding from. Mr. Lindemann that Caster and Associates has successfully negotiated a Buy and Sell Agreement between the owners of 340 N. Larch and Mr. Howell, contingent upon the City agreeing to sell the property identified in Addendum IV to Mr. Howell. Mr. Lindemann has , therefore, requested that we expedite the counter-offer on this matter. If you have any questions on this matter, please contact me. CC: Alan E. Tubbs , Director, Planning & Municipal Development Enclosure - W 6.j ;1 iF ltJ Z 0 0 -4 1 S V .rr sP=GZ`11-6 d O /0 '7 COO /6F 11t1H NO3 C m < ``" 'PO St ors - N / cnUT m sF 3A11H0 IVA1Hd d ~ ' H0 _ 3113flOHVW r!} 3HH31d �Y, ----- �► vas .bb ,is —o ` �•�e ,A l 0.4 147 £ m gtvr I 1 s 0 to 1n 14 OD M T� asf. ` °�� z z z _ :+ r lk ►:�� �b •� CA rrr- t o y�wO O nr `� 3 I I ( I IP1. lJ❑ iJj' .J'/A .rIA (1 �.{F 01 ''ld „� -,s'!B ,it/A ,rr•if f;j1. toBy+.�', .I!•.f� II ,f'!i T LOX I XI k.—'CJrllj T� Ly 1 FO I Ln l Ar al LU ij O ~<:': �:..''�: ......— .--'- ��-- - - -- k�a.7�,:o�.yi.z: �►.i...�:it..�j� I / \ 1' t p N„-.; .1/ o � f• In 1 • r 1. PURCHASER'S OFFER (11°"D' er Lensing Board of RFALTORS') spouse or other The undersigned Marvin HO.iell, for a corporatjrtt_ to be hereinafter called the Purchaser, HEREBY OFFERS TO BUY FROM SELLER THROUGH Caster b. Associates THE FOLLOWING PROPERTY located In the City/Twp.of T.ansi ng ,County of Tnaham ,Michigan,commonly known as(Address)34(1 N T arph and,Legally described as: T ntc 1 ,2 3,4, F. N7 9 1 5ft Tot- ri Ta xr COM 45 15f t S of SE corner T^t 4 Th S 30f W 30 t, NF Tv 42 43ft tom, AsseaCnrS Plot No 36 of Bloc) 243 61"}r -lei; SUBJECT TO ANY EXISTING BUILDING AND USE RESTRICTIONS,ZONING ORDINANCES AND EASEMENTS,IF ANY,for the sum of _. (s._ _ ) Dollars. 2, PURCHASE SHALL BE FINANCED AS Indicated by "X" below and other unmarked financing terms do not apply. Purchaser agrees to make any necessary application for financing by on and accept financing promptly If tendered.PAYMENT OF SUCH MONEY SHALL BE MADE IN CASH,CERTIFIED CHECK,OR BANK MONEY ORDER. CASH ❑ The full purchase price upon execution and delivery of Warranty Deed. NEW MTGE ❑The full purchase price upon execution and delivery of Warranty Deed,contingent upon Purchaser's ability to obtain a year mortgage In the amount of$ or In the amount of percent of the purchase price on or before the date the sale Is to be closed. CONTRACT [X$ - - upon execution and delivery of L^Mt Contract,on Greater Lansing Board of REALTORSM Contract for the Sale of Real Estate, (Latest Revision),or other form specified In Item#14 wherein the balance ci a_. �. shall be payable In monthly principal and interest Installments of 3_ - = ? or more Incluohig::::*rest at_ percent per annum,Interest to start on date of closing and first such payment to became due au aays after closing date,and said contract shall be due and payable(balloon)on or before_20—years alter closing date,and In addition: ❑ 1/12 of Seller's estimate of annual real estate taxes shall be yable by Purchaser each month by❑add back,or❑escrow,OR All real estate taxes shall be payable when due by Purchaser. EQUITY ❑ Upon execution and delivery of: ❑Warranty Deed subject to existing mortgage,with monthly OR ❑Assignment of Vendee Interest In Land Contract,with monthly principal and interest installments of E at percent interest,provided indebtedness is assumable by Purchaser.Purchaser to pay the difference(approximately$ )between the purchase price and balance of said Mortgage or Land Contract �indebtedness approximately$ ),which Purchaser assumes and agrees to pay.PURCHASER AGREES TO REIMBURSE SELLER FOR NY FUNDS HELD IN ESCROW,WHICH SHALL BE CURRENT. 3. ALL BUILDINGS,IMPROVEMENTS,APPURTENANCES,AND LANDSCAPING,IF APPLICABLE,ARE INCLUDED IN THE PURCHASE PRICE,including BUT NOT LIMITED TO THE FOL- LOWING:T.V.Antenna and complete rotor equipment;carpel;lighting fixtures and their shades;drapery and curtain hardware;window shades and blinds;screens and storm windows and doors;stationary laundry tubs;water softener(unless rented);water heater;incinerator;heating and air conditioning equipment(window units excluded);fuel in lank(s);water pump and pres- sure tank;buid in kitchen appliances including garbage disposal;garage door openers and controls;awnings;mail box;all plantings;lence(s).EXCEPTIONS: Non-o 4. All matters related to,but not limited to,zoning,soil borings,Iranchsing,use permits,drain easements,right of way,etc.,are to be secured and paid for by Purchaser unless otherwise specified in other provisions as set forth in Paragraph 14 of this Agreement or in any Addendum attached hereto.SURVEY:Purchaser will provide:❑Mortage Report❑Stake Survey ❑Recertified,or❑None.EXCEPTIONS: Nnnp 5. PRORATIONS:Rent,Insurance,If assigned,association fees,Interest on any existing indebtedness,or other lien assumed by the Purchaser,shall all be current and adjusted to date of clos- Ing of the sale. 6. A SPECIAL ASSESSMENTS which are or become a lien on the property on or before date of closing of this Agreement shall be paid by the Seller.EXCEPTIONS: Any costs incurred by the construction of the ne_ta road to the East_of the subject property_ B TAXES shall be deemed to cover the CALENDAR YEAR in which the TAXES become a lien.TAXES which become a lien in years prior to year of closing shall be paid by SELLER wlhout prora- tion.Taxes which become a lien in year of closing shall be prorated so that Seller shall be charged with[axes from the first of the year to closing date and Purchaser charged with taxes for balance of year.If any bill for taxes proratable hereunder is not yet issued,the corresponding tax bill for the last previous year shall be substituted,therefore,and used in proration hereunder. EXCEPTIONS: Nmp 7. 10 AN OWNER'S POLICY OF TITLE INSURANCE,with standard exceptions,covering the foregoing in the amount of the purchase price will be furnished without expense to the Purchaser. or❑A COMPLETE ABSTRACT showing marketable title,also a ten-year tax history,tax lien search,and financing statement search all certified to a dale subsequent to the acceptance of this offer will be furnished without expense to the Purchaser. B. 1AAny evidence of title and supporting documents are to be examined by the attorney herein named: TO be named (Attorney's name) Or (Address) I/We hereby acknowledge that you,as Broker,have recommended to me/us that I/we retain an attorney to pass upon the marketability of the title to the above mentioned property,to review the details of the sale,and to ascertain whether or not the details in the sale of the above mentioned property have been strictly adhered to,before the transaction is closed.I/we hereby declare that contrary to such recommendations, I/we do not desire to retain an attorney. 9. SALE shall be closed within S days after all necessary closing documents are ready provided,however,that It title detect(s)exist(s)and Seller Is notified of same,in writing, 30 days from such notice shall be allowed Seller to cure such defect(s),In default of which this Agreement shall terminate,unless otherwise agreed to in writing between Purchaser and Seller. PROVIDED, HOWEVER,that SALE shall be closed within 1 • months after date of this Agreement. 10. The Seller shall deliver and the Purchaser shall accept possession of said property at closing,subject to the rights of present tenants,If any. If the Seller occupies the property,it shall be vacated on or before days after closing.AT CLOSING,Seller shall pay the Purchaser the total sum of$ based on$ per day,as occupancy charge for period from closing dale through agreed surrender date.In the event property Is surrendered by Seller before the agreed surrender date,Purchaser shad promptly refund to Seller the unearned portion of the occupancy charge as determined by date property Is vacated and keys surrendered to Purchaser. 11. PURCHASER HAS PERSONALLY EXAMINED THIS PROPERTY AND AGREES TO ACCEPT SAME IN ITS PRESENT CONDITION EXCEPT AS MAY BE SPECIFIED HEREIN AND AGREES THAT THERE ARE NO OTHER OR ADDITIONAL WRITTEN OR ORAL UNDERSTANDINGS. 12. PURCHASER HEREWITH DEPOSITS E 5,000.00 evidencing Purchaser's good faith,said deposit to be deposited In Selling REALTOR' BROKER'S trust account and apply as part of the purchase price.If this offer Is not accepted,or title Is not marketable or Insurable,or if the terms of purchase are contintent upon ability to obtain a new ADDENDUM TO BUY AND SELL AGR� ;SENT 0fit`` A.M. p ADDENDUM NUMBER I Dated September , IS88 P•M. 340 N. Larch, Lansing Michigan This agreement to be part of and incorporated into the Buy and Sell Agreement between Marvin Howell, for a corporation to be formed as PURCHASER(S) and Melv'n D. and Mar T. ear as SELLER(S)dated 988 regarding the above captioned property. The above referenced Buy and Sell Agreement shall be amended as follows: (2) Purchasers will provide satisfactory financial statements and credit re its to all prin2ipals to Seller. 3 Offer contin ent u n the followin : A- Satisfactory CitV inspection at purchasers expense. B- Seller to remove aas tanks) and clean up any on site contaminates. C- Purchasers ability to acquire City owned -property from subject. proPgrtys East boundry to the railroad tracks. E Purchasers ability to get combined financing for Capitol City Lumber prafect. A.M. Date September . 19 88 P.M. RECEIPT IS HEREBY ACKNOWLEDGED BY Purchaser OF A COPY OF THIS AGREEMENT. WITNESS X DEVELOPMr-NT DIVISION /0/zbl kY Y: !4�,;� Department of Planning and Municipal Development .o . 2nd Floor,Washington Square Annex v 119 N.Washington Square Lansing, Michigan 48933 *' \= 7* (517)483-4040 !>yjCu'�Gp,�1A Terry J. McKane, Mayor October 24 , 1988 Rita M. Bauman, City Clerk City of Lansing 9th Floor, City Hall Lansing, MI 48933 Dear Ms. Bauman: This is written in response to your letter dated October 21 , 1988 , in which you requested that I attend the Board of Ethics meeting scheduled to be held at 8 : 30 a.m. on October 26 , 1988 . Please be advised that I do plan on attending that meeting, as requested. On October 3 , 1988 , I supplied a copy of my file, on the proposed sale of the "Pere Marquette" city-owned property, to Alvan P. Knot, City Attorney, who is a member of the Board of Ethics pursuant to Section 5-502 . 1 of the Lansing City Charter. I assume that Mr. Knot has shared that information with all members of the Board of Ethics, including especially my memo to Mr. Knot dated September 9 , 1988, and its attachments , and a resolution adopted by the Lansing City Council at its meeting held on September 12 , 1988 . In the event the above assumption is incorrect, I reserve the right to distribute copies of any written materials from my file on this matter to the members of the Board of Ethics at the October 26 , 1988 , meeting. Whether or not such material is considered by the Board of Ethics will, of course, be a decision that will have to be made by the Board of Ethics . Sincerely, CITY OF LANSING, MICHIGAN DEPARTMENT OF PLANNING & MUNICIPAL DEVELOPMENT DEVELOPMENT DIVISION Ronald G. Stonehouse Development Division Director RGS :eg "Equal Opportunity Employer" CITY OF LANSING BOARD OF ETHICS ADVISORY OPINION NUMBER 5 INTRODUCTION The Board of Ethics has received a long letter from a City Council Comittee requesting an advisory opinion elaborating on the procedures required for disclosure by an officer or employee who has a financial conflict of interest between their public duties and their private interests; and on the standards of conduct to be followed by the officer or employee before and after disclosure of such a conflict. SCOPE OF OPINION The Board notes that the applicable Charter rules have been in effect since 1979. The Ordinance involved was passed in 1982. The Board has issued 2 opinions of its own on the subject of financial conflicts, and the City Attorney has issued several private opinions on the subject in the past. This opinion does not announce any new rules, rather it explains the existing ones, all in one place. While it may be impossible to cover all situations, the Board believes that this opinion provides general guidelines for all officers and employees in most circumstances involving a financial conflict of interest. I WHICH STANDARDS OF CONDUCT APPLY A. STANDARDS OF CONDUCT: CONTRACTS WITH THE CITY. When there is a conflict of interest relative to a public contract involving an officer or employee of the City, state law supersedes the Charter and Ordinance and is the sole law as to standards of conduct and procedures for disclosure. Officers and employees who desire to be a party to a contract with the City are referred to MCL 15. 321 et seq. , entitled, "Contracts Of Public Servants With Public Entities" . As a general rule, state law prohibits a full time officer or employee from having direct business dealings with the City (although the Charter does not) . Volunteer and part time officers and employees may, if state law is complied with, have business dealings with the City. However, the Board declines to approve such dealings as generally ethical, in the absence of a specific fact situation. Violation of this statute is a misdemeanor. The Board recommends that any officer or employee who intends to have business dealings with the City secure legal advice, or an advisory opinion from the Board based on the facts of their specific situation, in advance of such dealings. B. STANDARDS OF CONDUCT: ALL OTHER CONFLICTS. In all other situations involving a financial conflict of interest, the Charter provides the standards of conduct officers and employees must observe, and the procedures they must follow to publicly disclose Advisory Opinion No. 5 Page Two the conflict. Section 5-501 of the Charter entitled, "Standards Of Conduct" sets forth City policy in Subsection 5-501.1 : "The people of this City recognize that the continuation of the proper operation of the City requires that public officers and employees be independent, impartial and responsible to the people;that decisions and policy be made in the proper channels of government structure; that members of the public have access to information upon which decisions affecting their City are made; that Public office and employment not be used for personal gain; that the integrity and operation of government be subject to scrutiny of the public; and that acts or actions not compatible with the best interests of the City be defined and prohibited. " Section 2-128 of the Code of Ordinances, passed pursuant to Section 5-504 of the Charter, states that, " . . .elected public office and public employment is a public trust and any effort to realize personal gain through official conduct is a violation of that trust. . . . " Sections 3-205. 2 and 5-505. 3 of the Charter prohibit elective officers, appointees or employees of the City from participating in, voting upon, or acting upon any matter if a conflict exists . Sections 2-131 and 2-132 provide the only exceptions that apply to that rule. Ordinance 2-128 also states that its purpose is to " . . .insure that conflicts of interest be eliminated to the extent possible and that violations of rules of ethical conduct be investigated and punished where appropriate. " The Board reads these provisions together to mean that it is City policy that officers and employees avoid, as much as Possible, financial conflicts of interest between their private interests and their public duties. II PROHIBITED FINANCIAL CONFLICTS OF INTEREST A. WHEN A FINANCIAL CONFLICT IS AVOIDABLE. Financial conflicts of interest can arise without any action by an officer or employee. Such conflicts, for purposes of this opinion, are called "involuntary" . "Involuntary" means that the officer or employee had no control or opportunity to control the conflict situation. Involuntary conflicts are generally "unavoidable" (although not always so) . On the other hand, when a Councilmember purchased property in an area of governmental development activity which he is in a position to influence, he "voluntarily" participated in a situation in which he had control or opportunity to control whether a conflict of interest arose or not. Apparent, if not actual financial conflicts of interest, will arise anytime the City Council considers further development that might affect the value of the concerned Councilmember' s property. All of those conflicts are "avoidable" because they would not arise had the Advisory Opinion No. 5 Page Three Councilmember not voluntarily purchased property where he did in the first place. B. WHICH AVOIDABLE FINANCIAL CONFLICTS ARE PROHIBITED. The Board of Ethics recognizes that officers and employees are not so limited in their nonpublic affairs that they can never be involved in a financial conflict of interest with their public duties . As discussed above, state law allows officers and employees to directly contract with the City in certain circumstances . Since state law supersedes the Charter with respect to such transactions, avoidable financial conflicts allowed by state law may not be prohibited by local rule. As discussed in the next section, avoidable financial conflicts that are insubstantial are not encouraged, but are also not prohibited. However, the Board is of the opinion that avoidable conflicts of interest, that involve substantial financial conflicts, cause losses of public confidence in governmental integrity unnecessarily,' are against the public interest, and are prohibited by the City Charter. C. INSUBSTANTIAL FINANCIAL CONFLICTS ARE NOT PROHIBITED. Because financial conflicts of interest can sometimes be more apparent than substantive, Section 2-132 of the Code of Ordinances sets forth a procedure for justifying participation in a government decision despite the fact that an officer or employee has a financial conflict of interest or potential conflict of interest in the decision. The provision implies that such conflicts, while not encouraged, are not strictly prohibited either. The Board is of the opinion that such participation is an option only when the avoidable financial conflict of interest is potential, as opposed to actual; or when the benefits from an actual conflict of interest are insubstantial, indefinite and indirect, as opposed to substantial, definite and direct. Moreover, the provision cannot be interpreted to permit officers and employees to voluntarily participate in substantial financial conflicts of interest, because that would be contrary to the Charter. Admittedly, it is sometimes difficult to tell whether an avoidable financial conflict of interest is substantial or not, or even if it is actual rather than only apparent (or potential) . Under such circumstances , an affected officer, employee or governing body must use their own best judgment as to whether to proceed or not. The Board feels that it may be wise to err on the conservative side in such an instance to avoid even the appearance of impropriety. The Board is always available to issue an advisory opinion, in advance of the activity, to help an officer or employee who may be in conflict to observe the proper standards of conduct. Advisory Opinion No. 5 Page Four D. WHY SUBSTANTIAL FINANCIAL CONFLICTS ARE PROHIBITED. An "actual and substantial financial conflict of interest" arises when an officer or employee, their family, or an associated business , will benefit, in more than a de minimus way, other than as a member of the general public, from an action or decision the officer or employee is in a position to influence. It does not matter whether the conflict is apparent to others or not. The words "public trust" mean that an officer or employee holds their position solely for the benefit of the public as a whole. Officers and employees have absolutely no right of any kind to profit from their office, except from the compensation paid for performing their public duties. Senior members of government are privy to all sorts of valuable and confidential information, and supervise the various works of government. The public has a right to know that confidential information is not being sold by officers and employees for private profit to the highest bidder ; to know that public officers are not getting better treatment than the public at large; and to know that their government officials are not getting rich at the public expense. However, whether an officer or employee with an actual and substantial conflict of interest can ever completely insulate themselves from the decision making process of which they are a normal part, is arguable. Whether they actually do so when they have such a conflict of interest can never be definitely determined. The problem becomes more acute the higher in government an officer and employee is, especially when a conflict involves someone with oversight responsibilities . There is a public loss of confidence in government each time a new substantial financial conflict of interest at the upper levels of government is revealed. An officer or employee with a substantial financial conflict of interest is required by City Charter and Ordinance to abstain from direct or indirect participation in any way in the governmental decision making process concerning the matter in which there is a conflict. The officer or employee may not pursue his or her personal interests in the matter either, except as permitted by Ordinances 2-131 and 2-132. However, some of the duties of officers and employees are mandated by Charter or ordinance ( such as voting in the case of Councilmembers ) . No officer or employee has the right to voluntarily disqualify themselves from performing their mandatory public duties so that they can instead privately profit. On the contrary, disqualification is an obligation imposed to insure the integrity of City government. The public is not served by elected and appointed officials who can neglect their duties so that they can personally profit. Advisory Opinion No. 5 Page Five In the opinion of the Board, therefore, any officer or employee who voluntarily participates in an avoidable substantial financial conflict of interest situation that makes it impossible for the officer or employee to perform his or her mandated duties (except as allowed by state law) violates the public trust, and may be committing nonfeasance in the process. E. WHAT IS PROHIBITED. No officer or employee may voluntarily participate in a situation that gives rise to an actual and substantial financial conflict of interest which disables them from performing their mandatory duties (except as allowed by state law) . Obviously, this means the higher up the in the City organization an officer or employee is, the less likely the officer or employee can participate in a situation that involves a substantial financial conflict of interest, ethically. III DISCLOSURE OF FINANCIAL CONFLICTS OF INTEREST A. WHEN DISCLOSURE MUST OCCUR. The avoidance of public loss of confidence in government decisions due to financial conflicts of interest is of such great importance that the City Charter and Conflict of Interest Ordinance prohibit all officers and employees from participating in any government decision in which they have a substantial financial conflict of interest between their personal interests and their public duties, except in very limited circumstances . Section 5-505 .1 of the City Charter requires that an officer or employee who may derive any income or benefits either directly or indirectly in addition to official remuneration as a result of Council action or a contract with the City shall file an affidavit with the City Clerk setting forth the details at least 10 days prior to any action. Notice of such filings shall be included in the Council agenda. Obviously, the intent of this provision is to provide the Council (and other affected officials ) advance notice of any financial conflicts before they take any action on the matter. This is why disclosure of a financial conflict is the obligation of the affected officer or employee, and that it must occur at the first moment the official is in conflict. B. WHAT MUST BE DISCLOSED. There is an "Affidavit of Disclosure" form available from the City Clerk' s office that is intended to be used to satisfy the disclosure requirement. After reviewing several recent filings, the Board has determined to revise the form to better insure full disclosure of future conflicts . The Board has also altered its own procedure to require review by the Board of all Affidavits shortly after they are filed instead of only annually. The Board will also redesign the form to make it easier to fully disclose details needed to Advisory Opinion No. 5 Page Six ensure compliance with City standards of Conduct. In the meantime, the Board feels that every disclosure must at least include the name of the officer or employee and what position they hold with the City; and specify in what way they are in conflict, including whether the conflict will prevent the officer or employee from performing any mandated duties, and if so, which ones ; how much benefit they, their family, or a related business will receive and what kind of benefit they will receive. It is with these considerations in mind, therefore, that the Board of Ethics answers the following general inquiries from the City Council Committee: 1. When is a Councilmember (or other officer or employee) required to file an Affidavit of Disclosure? As soon as a conflict exists, an officer or employee must promptly file an Affidavit of Disclosure with the City Clerk, but in no event less than 10 days before any meeting of any governing body at which the matter will be discussed or considered. Where an officer or employee serves on a governing body responsible for approval of the matter in which there is a conflict, the disclosure must be made at the same time as the filing with the City Clerk, to the governing body (the Council President, in the case of Councilmembers) and be included in the public record of the proceedings . Last minute disclosures, except in an unusual circumstances, do not comply with the Charter. However, in the event the issue unavoidably arises for the first time at a particular meeting, the Council may determine by vote of an affirmative majority of disinterested members if a conflict exists which requires or permits a Councilmember to be excused from voting. At the very least, the nature of the conflict and the reasons for excusal or nonexcusal from voting should always appear in the record of the meeting. An Affidavit of Disclosure must then be filed as soon as practible after the meeting. 2. Is the filing of an Affidavit of Disclosure required regardless of being excused from voting? Yes . The Charter requires an Affidavit of Disclosure is required to be filed as noted in Answer 1 in all cases where there is a financial conflict of interest. 3 . Does being excused from voting absolve any prior actions on the same matter which were in conflict? No. Advisory Opinion No. 5 Page Seven 4 . Who is an elected official allowed to communicate with, even if they have filed an Affidavit of Disclosure? If an officer or employee has a conflict of interest, whether or not he or she has filed an Affidavit of Disclosure, he or she may not officially or unofficially participate in the discussion or consideration of the item in conflict in any way, shape, or form, either directly or indirectly, in person or by representation, either in furtherance of his or her public responsibilities or his or her private interests , at any stage of the consideration of the matter with a conflict, except in compliance with Ordinances 2-131 and 2-132 . 5 . What level of detail satisfies the requirement to fully disclose a conflict of interest? Both the Charter and Conflict of Interest Ordinance require complete and specific details in order to satisfy the requirement of a full disclosure. The affidavit must include at least the items discussed in Section III , B. of this opinion. In the appropriate case, the disclosure must also contain the specific reasons that the officer or employee believes that he or she can, in light of the conflict, make or participate in making the decision on the matter fairly, objectively, and in the public interest. 6 . Is the purpose of the Affidavit of Disclosure to serve notice that a person is unable to speak or vote on a matter, or is it simply to serve as notice on other parties in the decision making process that a person has a self interest as opposed to a public one? Both. As described in Section II C. , in the appropriate case, it also notifies a governing body (and the public) , on the record, why the member with the conflict believes he or she can, in light of the conflict, make or participate in making a decision on the matter fairly, objectively, and in the public interest. 7 . Does a person have to file an Affidavit of Disclosure on each transaction in which they are or may be in conflict, or may the Affidavit be generic in nature? An officer or employee must file an Affidavit of Disclosure on each separate transaction that involves a financial conflict, regardless of the amount involved. Advisory Opinion No. 5 Page Eight SUMMARY The Charter and the Conflict of Interest Ordinance require all financial conflicts be fully disclosed. Similarly, it is these documents that require noninvolvement in conflicts of interest as much as possible, including outright prohibition of certain activities , as outlined in this opinion. The Board is not publicizing any new rules here. It is important that the public have confidence that City government is operating without bias or favoritism. This requires public officials to err on the side of the public interest rather than on the side of their own personal interests . Naturally, this puts an increased burden on public officials over private citizens who are not required to act so scrupulously in their own affairs. The Board again recommends that opinions on specific fact situations be requested from the Board anytime there is uncertainty as to the conduct required in a given situation, as the Council Commitee has done here. REQUEST FOR CIRCULATION OF OPINION Due to the nature of this opinion, and its applicability to all City officers and employees , the Board of Ethics requests that a copy of this opinion be distributed to all current and future officers and employees, so that there will be aware of the standards of conduct required of them while in public service. Issued pursuant to a unanimous roll call vote on the 21st day of October, 1988 . Respectfully Submitted, THE LANSI G BOARD OF ETHICS RITA BAUMAN, City Clerk :JO2HF, MERTZ , ai man ALVAN P. KNOT, City Attorney DONALD COOK, Vice-Chairman � / i %l - !Jy 4 STEPHEX J. �;Cyt�TNEY, Pub l c Member I I i ZK r= L A N S I N G M I C H I G A N CITY COUNCIL AREA CODE 517-483-4177 48933 10TH FLOOR, CITY HALL September 26 , 1988 Mr. John Mertz , Chairperson Board of Ethics 518 Hollister Building Lansing, MI 48933 Dear Mr. Mertz : As you are no doubt aware, the last couple of weeks has brought discussion over the actions of a city councilmember. The discussion revolves around the new road being built by the City called "Pierre-Marquette Street" . On Thursday, September 22 , 1988 , the Physical Development Committee of the City Council passed a Motion asking the Ethics Board for an advisory opinion on this conduct. As the Chairperson of the Committee, I am writing to formally request the opinion. The Physical Development Committee will take no action on this issue until we receive your opinion. In summary, the Committee is asking whether a conflict of interest occurred directly before the councilmember spoke with the City Attorney and whether it has occurred directly or indirectly since then. Second, if a conflict of interest has occurred, what procedures would you recommend Council to follow for the eventual sale of land along Pierre-Marquette? Statement of Facts The following statement of facts is based upon Physical Development Committee ' s understanding of the situation. The City of Lansing, by Council resolution, called for the construction of a new road to be referred to as "Pierre-Marquette Street" . The street is to run from Michigan Avenue to Shiawassee Street parallel to the Conrail railroad tracks. The resolution authorized public condemnation of the property and construction. Several land owners along this proposed road had expressed interest in the completion of the road for possible expansion of their businesses . To avoid any possible conflict, the Council also asked that all land be held off the market until a master plan was completed for the area. "Equal Opportunity Employer" Recently it came to the attention of the Council that Capitol City Lumber (not one of the original land owners ) was interested in purchasing a parcel in the area. In fact, an offer and proposal for counter-offer had been made. A concern was raised on Council regarding what effect selling one parcel would have before the completion of the road and plan. The Council then passed a resolution affirming that no sales of land were to be considered until completion of the land use plan. It was also discovered at that time that for some months a councilmember had been the real estate agent for Capitol City Lumber, and, as states in The Lansing State Journal of September 20 , 1988 , has been disucssing the sale directly with the Director of Planning and Municipal Development and his staff . As a result of these meetings , apparently, a decision was made to accept Capitol City Lumber ' s offer . While the councilmember excused himself from voting on the resolution, he has never filed an affidavit of disclosure . Statement of Questions The ultimate question seems to be : In future dealings on the sale of land along Pierre-Marquette Street, what procedures and recommendations should the Council follow to insure public confidence that the land disposition is being made to all interested persons fairly? obviously, the above is moot if the councilmember was not acting in conflict of interest. Hence, the penultimate question is whether the councilmember, in not filing an affidavit and speaking with a department head on a matter with which he had a direct financial interest ( if verified as to fact) , was in a conflict of interest. Sri the issue of whether an individual is acting in conflict of interest, several issues need clarification in our minds . First, when is a councilmember required to file an affidavit? Second, is the affidavit required regardless of being excused from voting? Third, does the being excused from voting absolve any prior actions on the same matter which were in conflict? Fourth, who is an elected official allowed to communicate with, even if they have filed an affidavit? Fifth, what level of detail satisfies the affidavit requirement? Sixth, what is the purpose of the affidavit requirement? Is it simply to serve notice that this person is unable to speak or vote on this matter, or is it simply to serve as notice on other parties in the decision making process that this person has a self-interest as opposed to a public one? Seventh, does a person have to file an affidavit on each transaction which they are or may be in conflict or may the affidavit be generic in nature, ie. I am a seller of machinery for road building" , as opposed to, "on Contract X I am planning to bid"? -2- The motion of Councilmember Creamer was to refer this not "entire matter" to the Ethics Board. As a result, you shoulook at the specific questions as a limitation as much as a focus . Your consideration, help, and guidance on this issue is most appreciated. As I am sure you understand, this is a pending matter before Council and any expediting of your opinion would be most appreciated. If we can be of any further assistance, please contact us . In the course of your investigation and opinion, the resources of the City are at your disposal. For the Physical Development Committee ; Lucile Belen, Charles Creamer, Sidney P. Worthington - Members , By: id P. Worthington Chairp s n -3- CITY OF LANSING BOARD OF ETHICS MEETING OF NOVEMBER 1 , 1988 - 3:00 P.M. 313 SOUTH WASHINGTON AVENUE Call to Order at approximately 3: 10 p.m. MEMBERS PRESENT: Mr. John Mertz, Chair Mr. Don Cook, Vice-chair Mr_ Steve Lowney, Member Ms. Rita Bauman, Member Mr_ Alvan Knot, Member OTHERS PRESENT: David Osborn, Michigan Municipal League David Poulson, Lansing State Journal Betsy Assid, Caster and Associates Patrick Lindemann Caster and Associates Ted Kline, MSU News Francesca Doneth, Recording Secretary APPROVAL OF AGENDA: NEW BUSINESS: `_--hair submitted written draft -11'5 of Board of Ethics Opinion �6. Corr►rrlittoo reviewed docllment, Mr. Po(dson, `>Late tloClrnil, addressed the Chair regLiosting cop'les of all (:it:cl,ir-rlerit s ir)ck!ldjng drafts. -Br-af�"3 Advisory Opinion 6 Page 5 private matter rather than on official City business. V DISCUSSION In Opinion No. 5 we said that the Charter provides that a Councilmember who has control or the ability to control whether a financial conflict of interest arises , may not choose his personal financial interests over his public obligations. A Councilmember also may not avoid the duty to exercise his judgment on behalf of his constituents by allowing others whose actions he controls or directly influences to enmesh him in substantial conflicts. A Councilmember does not lose control by delegating or consenting to prohibited conduct by another family member, a partner, or another employee of a business with which he is affiliated. There is no difference between being recused for that reason and being recused for personally creating the conflict. Both are prohibited by the City Charter . Both situations deprive constituents of representation on specific issues so. that the Councilmember, a family member, a partner, or a business with which he is associated, can financially benefit. To allow prohibited conduct by persons other than a Councilmember, but over whom. the Councilmember has control or direct influence, only exalts form over substance, but does not remove any of the policy concerns arising from any other voluntary substantial financial conflict. When a Councilmember participates in a fiduciary capacity in a business enterprise, he or she is in a voluntary conflict everytime the enterprise transacts with the City in any way. Here, the Councilmember says that he was involved in a joint venture with another real estate agent to arrange a sale of real estate to a local businessman. That means he had a fiduciary duty to use his best efforts to further the object of the enterprise. The Councilmember controlled or was in a position to control whether the joint venture participated in any dealing that would give rise to a financial conflict of interest. The Councilmember readily admits that he had no legal obligation to enter into any specific arrangement for the businessman. The Councilmember Is partner solicited the contract that placed the Councilmember in conflict. Although the Councilmember claims to have had no control over the agreement until it was already in existence, this is not entirely correct. As an equal partner in the joint venture, he controlled, or was in a position to control, which contracts and dealings the joint venture participated in. He had an affirmative obligation to not only avoid conflicts personally, but also to see that his joint venture avoided them. Clialr si_:l4ec_I that all i'nateclai,_ Would be for�rtarardeC i"" e` e .� �. 1 t��j � ir�. Poulson ,kept tl-i worIking drafts of the Board w iich were not open; to the public as they were draft documents only. l"lr. Poulson submittedletter in writing requestingall documents and materials used by the Board, [,attached to original minutes riled with the City Clerk] After discussion;, Nember Cook moved that the Opinion �6 be reported out as si_ibimit.ted, ROLL 'CALL VOTE. UP;IAW10US. [Opinion -46 attached to original rni inutes filed with the Clerkl CIr. Poulson; again addressed the Board expressing his concerns relative to the receipt of documents utilized by the Board. ADJOURNMENT: 5: 15 p.m, Respe +f Jl1y` ui:irJiit.t.ed, E o�.;�iJ:_.f�.i i. s FQ'I—ANC-P---)'CA t?t:NETH Pecord-Ing Secretary Lansing State Journal 120 E. Lenawee St., Lansing, MI 48919•Phone 517/377-1000 October 31 , 1988 To: John Mertz Chairman , Lansing Board of Ethics This request is made under the federal Freedom of Information Act, 5 U.S.C. 552 and the Michigan Freedom of Information Act, public act no. 442 of 1976 as amended by act no. 329 of 1978. The Lansing State Journal is asking that its representative be allowed to examine the same documents and records provided to members of the Lansing Board of Ethics during all of that public body' s deliberations. Those documents include, but are not limited to, draft opinions and evaluations of Lansing City Councilman Pat Lindemann's conduct as a real estate agent. If all or any part of the request is denied, please cite the specific exemption(s) which you think justifies your refusal to release the information and inform me of your agency' s administrative appeal procedures available to me under the law. I would appreciate your handling this request as quickly as possible, and I look forward to hearing from you within five working days, as Michigan law stipulates. --� Sincerely - ------- J c r Dave Poulson Reporter Air GAMIETT wa.foof FFE.ENTwCE5 w Mf of f9 E[WMSVE a.S ADVISORY OPINION NO. 6 I INTRODUCTION A Council Committee and a Councilmember have asked for a Board of Ethics opinion whether the Councilmember' s participation as a real estate agent in a sale of city land was ethical. - To respond to the inquiry, the Board reviewed the City' s file on the acquisition of the property, and the file on the proposed sale, and materials submitted by the Councilmember. The Board also conducted extensive interviews of all the government officials involved in the transaction. The cited facts were all confirmed by the Councilmember. II JURISDICTION OF BOARD OF ETHICS The Board of Ethics is an Advisory Board created by Chapter 5 of the City Charter. The Board renders opinions to any person with respect to the meaning and application of those provisions of the Charter and other laws establishing standards of conduct for officers and employees of the City of Lansing. The Board also recommends to the City Council standards of conduct for officers and employees , and changes in the procedures related to the administration and enforcement of those standards of conduct. Finally, the Board reviews any documents required to be filed under ordinances establishing standards of conduct. III APPLICABLE STANDARDS OF CONDUCT Councilmembers have greater restrictions on their_ conduct than do other members of government. That this impacts more stringently on, some professions than others cannot be avoided. The Board notes the recent State Bar Ethics Opinion C-241 that does not allow attorneys and their firms to repesent anyone before any City body when a member of the firm or an employee serves on the Council. The reasoning followed was the same as this Board' s in Opinion No. 5 respecting the obligation to vote. The restrictions apply more stringently to Councilmembers that are also professional real estate agents. The State conflict of interest statute governs a contract to pay commission on the sale of city land that involves a Councilmember, as dj,,,scussed in Opinion 5. The common law of fiduciary obligations applies to situations involving dual agencies by a Councilmember involved in the real estate business. The City Charter provides Standards of Conduct for cases involving an actual Advisory Opinion 6 Page 2 and substantial financial conflict of interest, such as this one. In Board Opinion No. 5 , the Board noted that an "actual and substantial financial conflict of interest" is involved anytime a Councilmember, their family, or a business with which they are associated, stands to receive a financial benefit (other than a de minimus one, or as a member of the general public) from a decision of Council or of a subsidiary City body. Because Councilmembers are required to vote on all issues before the Council for decision, but may not vote if they have a substantial financial conflict of interest, the Charter prohibits Councilmembers from voluntarily entering into substantial financial conflicts of interest that prevent them from voting (except as allowed by state law) . The duty of Councilmembers to vote is more important than their right to advance their private financial interests. Members of Council are elected as representatives of the people to exercise their judgment in the public interest. The obligation to vote is so important that the Conflict of Interest Ordinance allows voting, despite an actual financial conflict of interest, when the conflict is only insubstantial, indefinite and indirect. Once involved in a substantial financial conflict, voluntarily or not, a Councilmember is prohibited from working to further his or her own private financial interests and from performing his or her normal public duties in respect to the matter in which there is a conflict, except as provided by state law. As soon as a substantial financial conflict of interest arises, a Councilmember must fully disclose the conflict in writing to the City Clerk, but in no event less than 10 days before the Council or other body considers the matter. When contracting directly with the City, state law requires the filing of the disclosure before any business dealings take place. Disclosing in any manner other than in writing and, to the City Clerk does not comply with the City Charter or state law. In matters which will eventually come before the City Council, the disclosure must also be filed with the Council President. IV RELEVANT FACTS On May 23 , 1988 , at a meeting with the Mayor, a local businessman looking to relocate, was told that city land he had expected to buy was not available for reasons beyond the City' s control. The businessman' s ward Councilmember was introduced to him at the meeting. Shortly thereafter, according to the P--ka= 5 Advisory Opinion 6 Page 3 Councilmember who is also affiliated with a local real estate company, the businessman asked him for professional assistance in finding an alternate location for his business . The Councilmember formed a joint venture with another real estate agent (affiliated with the same firm as the Councilmember) to find suitable property for the businessman and split any commissi_-ons earned on sales to him. After extensively reviewing properties around the City, the businessman offered on August 6 , 1988 to purchase some privately owned land, but made the offer contingent on the purchase of some contiguous city land as well. This offer was arranged by the real estate agent working in concert with the Councilmember, but without the initial knowledge of the Councilmember. After learning of the offer, the Councilmember set up a meeting for August 10 , 1988 with the head of the City' s Planning and Municipal Development Department to discuss purchase of the city land. The Councilmember told the Department Director at the start of the meeting that he was representing the businessman as a real estate agent rather than as a Councilmember. During the next week, the Councilmember again met with the " Department Director, this time to view the area of proposed purchase. He also discussed the matter with the Director of the Redevelopment Division at least once on the telephone. The Councilmember' s partner also discussed the sale several times with the Redevelopment Director, a subordinate of the Department Director. The discussions lead to a reversal of an internal decision by the Planning And Municipal Development Department not to sell the property until a land use plan for the immediate area ( including-, the involved parcel) was completed. This reversal was attributed by the Planning And Municipal Development Director to the participation of the Councilmember in the sale, and to the identity of the business involved, a long-time Lansing firm. The policy reversal was followed by an offer to purchase the City land dated August 18 , 1988, which was personally submitted by the Councilmember. While the offer was being considered, the Councilmember also personally presented a proposed contract dated September 8 , 1988 for the City to pay a 10% commission to his real estate company on the sale of the City .land. The Councilmember claims he would not have accepted any of this commission, if paid. However, if the offer to purchase the City land was accepted, the Councilmember' s real estate company had a contract with the owner of the private land to receive a commission, of which the Councilmember would receive a part. The Councilmember, without disclosing the amount, agreed that the commission would have,been substantial. There were additional contacts with the City officials between August 22 and September 8 , to follow-up on the officials ' promise to make a counteroffer to the original offer, n�ft—& Advisory Opinion 6 Page 4 the latter not being acceptable to the City as written. On September 8 , after other members of the City Council learned that a proposed sale involving the Councilmember was in the works, a City Council Committee passed a resolution demanding a land use plan before any sale, and passed that along for full Council approval on September 12 . On September 9, a proposed counteroffer was sent by the officials to the City Attorney for language approval. On September 12 , the Councilmember visited the City Attorney to follow-up on the counteroffer. At that meeting, the Councilmember told the City Attorney of his personal financial involvement in the transaction and asked for advice in how to proceed since the businessman was opposed to the proposed Council resolution. He was advised by the City Attorney to disclose his conflict and to not participate in the decision, due to his conflict of interest. Following his meeting with the City Attorney, the Councilmember discussed the proposed Council resolution with the agent acting as his partner in the transaction, took' her to City Hall in his car, and introduced her to at least one other Councilmember so that she could lobby against the resolution, seen as threatening their sale to the busii,nessman. At the City Council meeting, the Councilmember disclosed publicly that he had a conflict of interest in the matter, but did not give any details. He was excused by the Council from voting. After the resolution passed, there was continued lobbying over the next week, in an unsuccessful attempt to reverse the Council policy statement. The second time the matter was considered, the Councilmember again advised he had a conflict without giving any details, and was again excused from voting. His partner continued to participate, however. The matter was then referred to the Board of Ethics for its opinion. Since that time, the businessman has decided to look outside the city for property, with the assistance of the Councilmember and his partner. The Councilmember never filed a written disclosure with the City Clerk, even though he agrees that he had a substantial financial conflict of interest at the time he first contacted the Planning And Municipal Development Director. He maintains that he was only required to file such a disclosure prior to any Council vote on the matter. In this instance, he did not have sufficient time to file the disclosure 10 days prior to the meeting due to the short time he had knowledge of impending Council action.... The Councilmember also maintains he (and any partner) may contact other City officials on behalf of real estate customers and clients as long as the individual City official is aware the contact is on a Advisory Opinion 6 Page 6 The word "involuntary" does not apply to situations created by the consensual acts of a Councilmember. The Councilmember in this case did not initially set out to engage in a purchase of City land, but it became a' voluntary part of the situation when a client was solicited by his partner and -an offer was made to the client by the businessman on August 6 , 1988, contingent on such a purchase. This gave rise to an actual and substantial financial conflict of interest involving the Councilmember. This conflict was voluntary and was prohibited by the City Charter. As a consequence of the conflict of interest in this case, both the Councilmember and his partner in the joint venture were prohibited from contacting City officials whose decision about the matter the Councilmember was in a position to influence. Thus all of the contacts with the members of the Planning And Municipal Development Department and the City Attorney about the purchase of City land did not conform to the Standards of Conduct required by the City Charter. Similarly, the introduction by the Councilmember of his partner agent to one or more of the other Councilmembers to .assist her in lobbying them in favor of the sale of the land, did not conform to the Standards of Conduct required by the Charter. The partner continued to lobby for the sale until the matter was reconsidered a week after the initial resolution. Her conduct is attributable to the Councilmember, and it did not conform to the Standards of Conduct required by the City Charter. Of course, the businessman himself was not restricted from any actions on his own behalf. He had the right to try to buy City land. He was also entitled to enlist the aid of an agent ( such as an attorney or a real estate agent) to further his cause. The Charter restrictions on the conduct of City Councilmembers and related parties restrict their ability to represent "principals" before the City. The Charter does not restrict the principals themselves , or the use of agents unrelated to the Councilmembers. Councilmembers are in an unique position to influence the decisions of other members of City government. They pass on the budget ( including the salaries) of all other departments. The Department Head here admitted that he was unable to distinguish between the Councilmember in his official capacity and the Councilmember in his private capacity. He felt the necessity to review his earlier decision in either event. It is hard to tell how the pressure on the Department Head Braft--- , Advisory Opinion 6 Page 7 would have been lessened even without the direct involvement of the Councilmember, given his known financial interest and the continued involvement of his real estate partner anyway. That is why the City Charter also prohibits the voluntary involvement of a Councilmember' s family members and business enterprises in transactions with the City which the Councilmember would normally approve, or over which the Councilmember has influence, except as provided by state law. Either direct or indirect attempts to influence the decision of another City official is contrary to the Standards of Conduct required by the Charter. In this situation, the City Charter required the Councilmember to promptly file a written disclosure of the conflict with the City Clerk. The disclosure should have been made before any contact with members of City government about the matter was made. Telling a Department Head of a personal interest and passing out business cards at a meeting is not disclosure. Disclosure is made to the public, not only to other members of City government. In this respect, the Board notes that no disclosure of this transaction was ever made by the Councilmember. Even the minutes of the Council proceedings reflect only the recusal of the Councilmember without reasons stated.The Councilmember' s conduct in this regard did not conform to the Standards of Conduct required by the City Charter. The Board also notes the presentation by the Councilmember of a direcC contract with the City to pay a commission on the sale of the City land to the Councilmembers affiliated real estate company was not preceeded by an Affidavit of Disclosure as required by state law, .and thus was a possible violation of the state Conflict of Interest statute. Dated: October 31, 1988 Respectfully Submitted, THE LANSI ARD OF ETHICS RI�TA BAUMAN, City Clerk JOHN MERTZ , Cha m n ALVAN P. KNOT, City Attorney DONA D COOK, ice-Chairman STETHfEN J. LOWNEY, is Member TRANSCRIPT COMMITTEE OF THE WHOLE MEETING OF THURSDAY, NOVEMBER 3, 1988 - 4 P.M. DISCUSSION REGARDING BOARD OF ETHICS OPINIONS -95 AND #6 OPINION -c5 DEALS WITH THE REQUIREMENTS OF DISCLOSURE. OPINION -96 DEALS WITH WHETHER COUNC I LMEMBER L I NDEMANN'S PARTICIPATION AS REAL ESTATE AGENT IN A SALE OF CITY LAND WAS ETHICAL. COUNCILMEMBERS PRESENT: ALFREDA SCHMIDT, PRESIDENT LOU I S ADADO, VICE-PRESIDENT LUCILE BELEN TONY BENAVIDES JAMES BLAIR CHARLES CREAMER 1 PATR I CK L I NDEMANN S I DNEY WORTH I NGTON OTHERS PRESENT: Walter Jones, Citizen Alvan Knot, Law Louis Klimecky, Internal Audit Ronald Onufer, City Council Greg Koessel, City Council Francesca Doneth, City Council SCHMIDT: That brings us to Other Business and we have on the agenda .. ADADO: Madame Chairman, I see you have Board of Ethics Advisory Opinion *5 and 416. That was not originated by the Council Committee of the Whole. It was originated by Physical Development and I would suggest or move that this go to Physical Development for their review and report back to us what they find. SCHMIDT: A motion on the floor. BELEN: Well, I don't think it requires any action at all. I would think it would be just received and placed on file, myself. 2 ADADO: Well, I think it is up to your Committee to discuss and then you report back but I don't think receive and place on file is appropriate. I read it and I've got some concerns about it. About Opinion *5, that is the one that is in general and 6. SCHMIDT: There is a motion on the floor. Mr. Worthington has asked to be recognized. WORTHINGTON: The concern ultimately, and there is another opinion that is going to come out and that is how, and which was the concern of the Committee is how do we properly dispose of the land and do that fairly and all of those considerations. Of course, there were a number of questions that had to be answered prior to that. What is related to us specifically is the disposal of the land. That is what we are dealing with. Now, as I say questions had to be asked as to whether even that was necessary to be answered and that is in 5 and 6. Physical Development is not an Ethics Committee and I would think that that would be much more - better handled by the Committee of the Whole. SCHMIDT: Did your Committee ask other questions other than for the disposal of the land? WORTHINGTON: Yes. SCHMIDT: Did they deal with any of the issues that may have developed - to develop this opinion of 5 and 6? 3 WORTHINGTON: Most certainly. SCHMIDT: OK. Mr. Blair. WORTHINGTON: But, I hope my point is understood that those questions had to be answered before you could answer the questions "How do we dispose of this land?' It may be that we just had no need to consider any special consideration or if there hadn't been a conflict. Pardon.. ADADO: I've lost you some place. You sent this to the Board of Ethics to see about disposing of land? WORTHINGTON: Ultimately Yes. That is Physical Development's issue. ADADO: I understand that this is Physical Development but where does the Board of Ethics come in to play that we have disposed of a hundred times in the last fifteen years. We have disposed of excess property. So why does the Board of Ethics have to get into this particular one on the disposal of some land? WORTHINGTON: Lou, the question was raised as to the possible conflict of interest. The issue before Physical Development since we had the issue of disposal of that land at that time with a resolution became 1 ) is if there is a conflict of interest how do we as a Council, what procedures etc., do we follow so that we are above board; everybody understands what we are doing and the recommendations back from the 4 Board of Ethics as to how to handle that in the public's mind and to do that fairest. ADADO: If no one on the Council - Advisory Opinion -1r6 is the one that deals with a member of Council who was in the real estate business. If no one on the Council was in the real estate business that makes a decision on this why does the Board of Ethics have to tell you how to dispose of the land? WORTHINGTON: Lou, um. LINDEMANN: They should not tell you anyway. Regardless. It is not an issue for them or it shouldn't be. ADADO: That is what I am trying to find out Pat. I don't know where the Board of Ethics comes in on the disposal of property. The Board of Ethics comes in on conduct of City Officials and elected officials - period. Now what has that got to do with the disposal of the property unless there is another question that you asked about somebody's conduct on or in the receiving of the property and the disposing of the property. WORTHINGTON: You've all read the letter and you know what the letter said. ADADO: In your opinion then it is not answered in this Advisory *6? 5 WORTHINGTON: Part of what was answered. Let me try again. The issue that came up was first of all we had a question of possible of that land down there. There was a questions then that was raised as to whether a member of the Council was in conflict of interest. If that person was not in conflict of interest then we could just simply go about our business dealing with it as we had in the past. That is we put together the land use plan and we dispose of it as to how we are -- discretion of the Committee. You don't mind if I keep the f loor do you? However if a Counci lmember was in conflict of interest and then we proceeded to dispose of the land and that got disposed to the person that the Counci imember was representing then there was a question on the part of the public as to whether we had done that fairly. Whether we had or we hadn't. So to separate the question of conflict from the question of disposal of the land we asked for recommendations back from the Ethics Board as to how to do that. ADADO: I still don't see the connection. Madame President, I still don't see the reason or the need for a Board of Ethics to tell you how to dispose of the land. There is a procedure to follow for the disposal of property. WORTHINGTON: I guess somebody else try. I have made it about as clear as I know how to make it. CREAMER: I am a little surprised by your questions because you sent the Ethics Board, yourself, another question - I mean I got a copy of the letter you and Alfreda sent that asked specific questions dealing with 6 the process of how this whole thing `took place and those are all issues ultimately related to hove you deal, sell and dispose of the land fairly and equitably in the future. ADADQ: The letter didn't say that.. CREAMER: You asked specific questions about how the land was developed and who was involved and I just think those as one of the member of the committee that those questions should be answered first and apparently the Ethics Board is planning to respond to the questions and answer them before the Physical Development Committee deals with the ultimate disposal. We know how dispose of land but.. ADADD: That is fine but what your telling is you are going to hold up the disposal of the land until all the questions are answered by the Ethics Committee but that does not have to do with how you dispose of the land. CREAMER: Technically how you dispose of the land - there is only one way to do and we are pretty much governed by that. ADADD: I agree that is why I don't know why you sell it. Now we asked the Ethics Board to look into the question of what was said by some members of the Administration. CREAMER: But you also asked very specific questions about who was involved in the.. 7 ADADO: It was reported back to us that there was an offer made. Condemnation proceedings took place after that offer was turned down and stuff like that. We want to know if that was ethical but that has nothing to do with disposing of the land. CREAMER: You want to dispose of the land before those questions get answered? ADADO: I don't know. I don't want to dispose of the.. CREAMER: Well, we are agreeing with you. WORTHINGTON: Yeah. CREAMER: That is what we are saying. WORTHINGTON: We are all on the same plane. CREAMER: We are all on the same plane. ADADO: Then there, I asked you specifically if there were other questions they were looking at on the conduct. Not on the disposing of the land but on the conduct of people involved in the process. WORTHINGTON: And they answered your question in five and six. .8 ADADO: But there is still some more to come. WORTHINGTON: There is one, yeah, still to come. CREAMER: But Al is saying three more apparently. But we are not going to deal with it anymore until we get those answers so we agree. That is fine. WORTHINGTON: The only thing that I am saying is technically, what we are concerned about is the disposal of the land and that five and six is probably best left within Committee of the Whole. That's all. BELEN: Five and Six. KNOT: The Board broke all the questions down that Councilmember Lindemann asked and that Councilmember Adado and Schmidt and the Physical Development Committee. We tried to categorize them all and I believe they broke it down into five general issues. Five opinions. Five and Six answered two of the issues. There is still three remaining 1 ) the conduct of the an Administration Official; and I am not taking them in the order that the Board will necessarily decide them. 2) would be the acquisition process and 3) would be the disposition of the property. I don't know in what order the Board is going to do them. I know they want to take a break for one week because a couple of the members are in private practice ... ADADO: Make some money? 9 SCHMIDT: They would like to make a living huh? CREAMER: Madame Chair, I think what Mr. Worthington is attempting to say is that at least two out of the three remaining ones are probably ones that need to go to Physical Development Committee and that we need to wait on disposal of the property until we get those answers. I think further what he is saying is that these two items really aren't necessarily Physical Development committee matters that they are really more Committee of the Whole. SCHMIDT: Are there any other questions of any other Councilpersons? Mr Blair? BLAIR: Are you going to withdraw your motion. ADAD®: If they don't want it - yeah. There is no sense sending it to their committee if they don't want it. We'll keep it in Committee of the Whole. DLAIR: I was going to speak to the motion if you are going to vilthdraw it I don't need to speak to that motion. ADADD: Don't speak to it. I withdraw it. SCHMIDT: Motion-ls withdrawn. Then it will remain here in Committee of the Whole. Is that the direction I am getting Mr. Blair? 10 BLAIR: Madame Chairman it is here and it is on the agenda. I take it we are going to try to move one step with it today. I guess I would like to ask the City Attorney you know what are the Council's options and what -- Since you are on the Ethics board we can't ask you what to do. What your recommendation is to do? So could you lay out what the Counc i l's options are? BELEN: Do we have to do anything? BLAiR: Well, that may be one of his options to do nothing. CREAMER: Well let's ask him to get the answer. SCHMIDT: Mr. Blair has the floor. He has directed the questions to Mr. Knot. Mr. Knot? KNOT: ......(tape fading in.- and out) ... complaints against individuals for Councilmember Lindemann, physical Development Committee, Councilmember Adado, Schmidt - it is our understanding based upon those letters that we were requested to provide advisory opinions . We attempted to answer and giving advice. In -terms of the options, based upon that I guess Council has a number of options. One is to review the advisory opinions and reading their advice and ....educated from it and moving on ..which is obviously something the Board was hoping would happen. No matter what happened. The second option would be as pursuing in terms of Advisory Opinion 1`6 to be in a Committee of the 11 BLAIR: Well, that may be one of his options to do nothing. CREAMER: Well let's ask him to get the answer. SCHMIDT: Mr. Blair has the floor. He has directed the questions to Mr. Knot. Mr. Knot? KNOT: ......(tape fading in and out) ... complaints against individuals for Councilmember Lindemann, Physical Development Committee, Councilmember Adado, Schmidt — it is our understanding based upon those letters that we were requested to provide advisory opinions . We attempted to answer and giving advice. In terms of the options, based upon that I guess Council has a number of options. One is to review the advisory opinions and reading their advice and ....educated from it and moving on ..which is obviously something the Board was hoping would happen. No matter what happened. The second option would be as pursuing in terms of Advisory Opinion -6 to be in a Committee of the Whole and I guess and dealing in particular with Opinion -1116 as a Council which, of course, is your option under Charter. Number three and I guess there is one extent with Opinion -`16 in terms of dealing with the State Law violation and have to check the Statute -- we could refer that. That is not the Board's jurisdiction and refer that to the Attorney General or someone who would have jurisdiction over State Law to get more clarification on the State Law issue. The Board just doesn't have the jurisdiction to deal with it or dumber Four 12 SCHMIDT: You sound like any other department head. BLAIR: And since you cannot make a recommendation, hour do we get a recommendation on a Special City Attorney. We always look to you to make those recommendations to us and since you can't make them what._. KNOT: The Charter requires, I think that I have to recommend. You don't have to accept my recommendation but, what I am saying ..... a Special City Attorney would only come back with a recommendation on what to do next on the potential violations is what I am saying. I would not feel comfortably as the City Attorney having sat on the Ethics Board coming back with a recommendation on it so... BLAIR: I didn't know that you could. I thought you might feel funny even about recommending to us a person. KNOT: I would probably would give you a selection of two or three out of that and just ask in Committee of the Whole if you' have any problems with any one of them. You know in ranking and then give your option... BLAIR: Well, Madame Chairman, I think that -- I guess I disagree with Lucile that we ought to receive this and place it on file. I mean, Lucile I have heard to try to be real candid here today. 1 have heard talk in the hallway here today that basically this article that was in the paper was threatening Councilmembers on Monday , or what was that Sunday 13 where it named several Councilmembers and Mr. Lindemann said that there was potential conflicts amongst the rest -of us up here and so forth and so on and you know I guess I would like to have this thing dealt with openly and fairly so that the public doesn't think this Council is sweeping anything under the rug and I guess my recommendation would be that we ask the City Attorney to... I don't think we are capable of doing it. I am not a lawyer and I don't particularly want to sit here and be in judgment of another Counci lmember. We may end up having to do that anyway some day but I guess I like his Option -94 which is to hire a special City Attorney to look into in to see if there are things that he thinks this Council should pursue and if he doesn't really go .. I say he.. He or she and live with that person's recommendations since the City Attorney can't make recommendations because he is on the Ethics Board. I just don't think you can walk away with it when there's been in the paper what BELEN: But that is not a part of this... What is in the paper. It was just -something that somebody said, Jim and I know I was mentioned but frankly when I was elected to the Council I was already in the flower business. Our family business has been established 53 years so everybody that voted for me and everyone has voted for me knew that I was in the flower business so I don't have any problem. If you feel that vie need to get some legal advice it is certainly Ok with me. SCHMIDT: Mr. Creamer. 14 CREAMER: There's also been a number. First of all to be real candid with you I haven't gone over these in great detail but I have heard lots of comments about item -1115 also. BLAIR: I have problems personally with 1"5. CREAMER: I have heard, you know, we have heard comments about it and I need to look at a little closer too but I think if you are going to have somebody look at -`% then I think you should also have them look at -,-'5 and I guess my question is would that -- is that appropriate Al as long you are having someone take a look at it. SCHMIDT: Mr Knot, I guess KNOT: Advisory Opinion -95 is generic. It is the Board - the Board wanted to state since apparently they felt base upon some comments that Opinion -1113 which basically said the same thing apparently hadn't at least the Chairperson said maybe sunk in. They at least attempted to draw a coherent philosophy together to send to every Counci lmember and say if you send any question to us regarding this you can probably read Opinion -95 - take that and try to apply it to the facts and probably come up with the logic of what the Board would do. They were trying to offer guidelines. I guess I would submit an outside Attorney can be appointed and come in and I want make sure that this was not a City Attorney looking at it and I guess the problem that you run into is even if you get an outside City ;Attorney you appoint to come in and read it I guess what the Board is basically saying and the City Attorney might 15 agree with that is ....City Attorney and then appeals it to the Board, the Board still might be disagreeing with the City Attorney. I guess this is in essence what they are really saying so I would see what you grant is a consistent, coherent, and I think Councilmember Lindemann asked for that. The other members there asked for it, was some overall approach right or wrong saying how you approach a gift at this point. If you feel that the Board does not interpret the law properly under their jurisdiction or as I understand based upon newspaper comments that there is some misinformation, conveying it, I know a number of Board members have called me this morning and of course they are very anxious to make it clear to you exactly where they stand on this issue in terms of their approach. They don't want any misunderstanding on it and I am sure that is going around from.. Even I have heard comments on ®pinion -�5 so.. CREAMER: Madame President I guess I would ask how about if we do it this way? Instead of no having an outside attorney and also before we decide on that is maybe we have Mr. Knot or whoever our--City Attorney feels is appropriate.. have somebddy come in and explain to the Committee of the Whole Opinion - "5. 1 would like it.. SCHMIDT: The board of Ethics board? CREAMER: I would like to have -- I would move that someone from the Board of Ethics whoever they feel is appropriate, come into the Committee of the Whole and give us a briefing or ®pinion �5 and be 16 prepared to answer questions from Councilmembers and other interested parties. KNOT: The Board has also indicated that if there are particular concerns they would be more than glad to entertain those and obviously if they've misinterpreted something they have also indicated to me that they would be more than glad to reclarify Opinion --6�5. This was their attempt to set up a .... SCHMIDT: Let me ask Jim, did you have yours in a form of a motion? BLAIR: I threw it out to the floor for a reaction. It was my recommendation (everyone speaking at once) BENAVIDES: I would also like for the record because my name was also mentioned in this particular article in question, I have absolutely no questions in terms of doing whatever has to be done in order to clear the air. However, I just want this Council to know that Cristo Rey Community Center has been receiving monies from the Human Resources for the last twenty years. This money that is in question or that is received is used for food, shelter, snacks for children, transportation for seniors, nutritional meals, whatever it is out of Jackie Warr's department that goes directly into the program and there is the Internal Auditor report that you get on a monthly basis or quarterly by the Internal Audit so there is absolutely nothing that goes to the salary of the Executive Director which happens to be me. I think it is just misinformation that we don't just know how the Center actually 17 operates but I just want you to know that this is not something new that has happened since Tony Benavides became a Councilmember. We have been doing it since Model Cities days and it is a commitment from the City and the department of Model Cities or Human Resources and it has been there and it's got paper trails, audits and .. well you can just go down to the third floor and get them because all of the reports are there. SCHM I DT: Thank you Tony. WORTHINGTON: You've got a motion? ADADO: Charlie's got a motion. CREAMER: I had a motion at least on.. Well I am sorry if I am out of order on yours... BLAIR: I didn't make a motion. CREAMER: I did on item 4l"5 and SCHMIDT- All those in favor of the motion by Mr. Creamer indicating ... ADADO: You mean I can't ask any questions on item 4%. They are coming to explain item —"-5? EVERYONE SPEAKING AT ONCE. 18 ` WORTHINCTON: We are going to have a special lawyer and we are going to have.... BENAVIDES: No. No this is just to have Mertz come in. President bangs the gavel.. CREAMER: As I said Item -95 that is the base from which alot of this Operates. 1 really think we really need to have a session on that issue and that was my motion. SCHMIDT: Any questions on the motion? All in favor of the motion indicating that we will have Chairman of the Board of Ethics , Mr Mertz come in. CREAMER: Madame President my motion that we invite the Ethics Board to designate an individual to come to a Committee of the Whole meeting. SCHMIDT: All of those in favor of the motion indicate by saying Aye. UNANIMOUS It is passed. (Councilmember Lindemann did not vote) ADADO: When I asked the question I thought you said we could talk on both of them. CREAMER: I restated my motion. 19 BLAIR: 1 would like to make a motion that we request the City Attorney to make us a recommendation to the next Committee of the Whole meeting a recommendation regarding a special City Attorney to review Opinions. ADADO: Madame Chairman. I don't think that is in order at this point in time. There are some questions that affect all members of this Council that are in six also and I would like to have whoever comes down from the Ethics Board to explain what they mean when they say the duty of a Counci lmember is to vote, more importantly than their right to advance their private financial interest. They also refer in here that anybody in a member's family that is working on the outside and submits a bid, that Counci]member could be in a conflict. It's far reaching. BLAIR: That is right in our own ordinance that you and I adopted. You know that. ADADO: I understand that. They say a "substantial" . What do they mean by substantial and then they say 'except where exempt by State Law." What do they mean by that? What is the State Law? Do you know what it is? Any member here on the Council know what the State Law reads on conflict of interest. BLAIR: We read it when we passed the ordinance but it has been years. ADADO: But do we know what it is? 20 DLAIR: I couldn't say... ADADO: They refer to it. Those are some questions we should. I would 1 ike to have... WORTHINGTON: State Laty refers to full time employees. ADADO: Is that what State Law means only? DLAIR: The problem Lou is that we can't drag this thing out. Pat wants ...I would think that Pat would want some kind of a decision on this thing so he could start getting his Council business back in order. You know it is difficult for him to talk to us about anything. I mean and I don't want and I think for the public's interest, for this Council's best interest, for everyone's best interest is that we move on this thing quickly and get it out of the way and show to the public that we are going to deal with it fairly and openly and quickly. ADADO: And you want to deal on 6 before we get the other answers. BLAIR: This is just the first step on getting a name for next week and then we will decide whether we want to hire the person and do it but this going to take a week or two to set this meeting up and all these things can be working at the same time. I just say we don't leave one sitting while we are working on the others. Let's get it over with. 21 SCHMIDT: Any other questions of the motion. Call for the motion. Do you want to read that motion back? I have a recommendation regarding a special City Attorney to review -vf. Those in favor say Aye. MOTION CARRIED (Councilmember Lindemann had left the meeting) END OF TRANSCR I PT BY FRANCESCA DONETH SENIOR LEGISLATIVE ASSISTANT NOVEMBER 21 , 1988 22 LANSING BOARD OF ETHICS SPECIAL MEETING OCTOBER 21 , 1988 8 : 30 A.M. FOSTER BUILDING 313 S . Washington Ave. , Lansing, Mi. AGENDA CALL TO ORDER ROLL CALL - J. Mertz , D. Cook, S. Lownev, City Clerk, City Attorney - Introduction of Guests1 APPROVAL OF AGENDA SECRETARY' S REPORT - Approval of Minutes of 10/ 19/88 - Correspondence Received and Sent. - Disclosures of Conflicts Filed I nqu_i -i e-s-&-C=c mph a�nts�c e c e 1 e * /Materils Re- Pere,-Marquette (Co_uncil- an^L�d..em,-a ie�-:Re: Pere Mla-r'que�t�t (Cou-n-c i l an Adado) - Next Meeting Date (��C- ��` � � i�t �6�S� �.' �G r�•M * CITY ATTORNEY' S REPORT Disclosures of Conflicts filed OLD BUSINESS : 1 . Response to H. Leeman, Jr . Complaint of 10/ 8/87 : Proposed Advisory Opinion No. 4 (Lowney) - Tabled 1/25/ 88 2 . Adoption of Partial Response to Physical Development Committee Inquiry of 9/26/ 88 : Advisory Opinion No. 5 COMMITTEE OF THE WHOLE i NEW BUSINESS - Further Inquiry of Pere Marquette PUBLIC COMMENT BOARD ROUNDTABLE ADJOURNMENT i 1 I I i N 0 T I C E BOARD OF ETHICS MEETING - FRIDAY - OCTOBER 21 , 1988 8 : 30 A.M. THE BOARD OF ETHICS OF THE CITY OF LANSING WILL HOLD A MEETING ON FRIDAY - OCTOBER 21 , 1988 at 8 : 30 A.M. at THE FOSTER, SWIFT, COLLINS AND COEY BUILDING - 313 SO. WASHINGTON SQUARE. RITA M. BAUMAN LANSING CITY CLERK MINUTES LANSING CITY BOARD OF ETHICS SPECIAL MEETING OF FRIDAY, OCTOBER 21, 1988 The meeting was called to order at 8 : 47 a.m. at the Foster Building, 313 South Washington Square, Lansing, Michigan. BOARD MEMBERS PRESENT: John Mertz , Chair Steve Lowney Donald Cook Rita Bauman Alvan P. Knot 5 members present, 0 absent OTHERS PRESENT: Betsy Assid, Caster & Associates Kathleen Frantz-Wise, Admn. Assistant to City Attorney Sue Merrill, Premo Office Services to take notes on behalf of Patrick Lindemann AGENDA APPROVED AS SUBMITTED BY CLERK BAUMAN. SECRETARY'S REPORT: Approval of Minutes. After review of the Minutes of the Board of Ethics meeting of October 19 , 1988 , they were adopted by the Board with changes made. Mr. Knot requested all future drafts of minutes of the Board of Ethics meetings be first submitted to John Mertz , Chair, for review and, thereafter, to Clerk Bauman for distribution to board members. Official minutes, after approval, shall be filed in the City Clerk' s office. Approved by consensus . Correspondence Received and Sent: The Chairman sent a letter regarding October 21, 1988 meeting requesting the City Clerk to invite Councilmember Lindemann, Betsy Assid, Al Tubbs , Ron Stonehouse, Emerson Ohl, and Councilmember Adado to answer inquiries by the Board. Disclosures of Conflicts Filed: None Inquiries and Complaints Received: None J Next Meeting Date: Wednesday, October 26 , 1988 , at 8 : 30 a.m. at the Foster Building, 313 S. Washington Square, 3rd Floor Conference Room, Lansing, Michigan. Ms . Bauman informed the Committee that appropriate notice will be posted. The Board determined that the following persons will be notified of the hearing date and asked to provide facts to the Board: * Councilmember Patrick Lindemann * Betsy Assid, Caster & Associates Realty * Alan Tubbs, Director of Planning & Development * Ronald Stonehouse, Director of Development Chair indicated he would send a letter to Patrick Lindemann with regard to the documents he has been requested to provide, ie. any and all agreements and/or documents between Caster & Associates, and a chronological report of his activities which will be due to the City Clerk no later than Monday, October 24 , 1988 at 4: 00 p.m. CHAIRMAN'S REPORT: Agenda: Chair organized the agenda as printed today. Recording Secretary: Chair informed the Board that Ms . Kathleen Frantz-Wise of the Lansing City Attorney' s office is present to take the minutes of this meeting as Recording Secretary. Meeting Goals and Timetables: Chair stated that no further requests or questions will be accepted for the Board' s review in connection with the Pere Marquette issue after Monday, October 24 , 1988 , at 4 : 00 p.m. The Board will consider Advisory Opinion #5 at today' s meeting. The Chair advised that the interview of Patrick Lindemann in regard to Pere Marquette would be held at the next Board of Ethics meeting scheduled on Wednesday, October 26, 1988 at 8 : 30 a.m. -2- OLD BUSINESS: Response to H. Leeman, Jr. Complaint of 10/8/87: Chair will respond to this request regarding Elected Officials personal account expenditures in the future. Response to Physical Development Committee letter of 9/26/88: ( 1 ) The generic questions will be answered today. ( 2 ) Councilmember Lindemann' s conduct will be reviewed and an advisory opinion regarding same will be issued as the first item of business on 10/26/88 . ( 3 ) In regard to the procedure for the future sale of Pere Marquette property, the City Attorney will prepare a Memorandum of Law and the Board will issue an Advisory Opinion in this regard separately. Response to Council President Schmidt and Councilmember Adado' s letter of October 18, 1988: In response to the first question on page one, paragraph two, regarding The Lansing State Journal paraphrasing Al Tubbs, this question will be considered by the Board of Ethics and a separate opinion issued. In response to the second question stated on page two, regarding the process in which the City acquired the right- of-way property, the Board of Ethics will provide a separate opinion ( in the future) . Response to Councilmember Lindemann's letter of October 19, 1988: In response to question 1 (page two) , this will be considered beginning at the next meeting of the Board of Ethics, on Wednesday, October 26 , 1988 , at 8 : 30 a.m. In response to questions 2 , 3 , 4, 5 , and 7 , these questions appear to be outside the province of the Board of Ethic ' s jurisdiction as they deal with political not ethical considerations . In response to question 6 , this will be answered ( in the future) by a separate opinion. In response to question 8 , Mr. Knot is not "involved" in this investigation as that term is used in the Charter. Personal knowledge of events discussed does not disqualify him. He is not the personal attorney for any Councilmember, only the Council as a whole. The Charter mandates his -3- participation in the Board of Ethics ' activities unless he is the focus of the investigation. COMMITTEE OF THE WHOLE: Response to Physical Development Committee - Advisory Opinion No. 5 Concerning Financial Conflict of Interest: Chair submitted the proposed Opinion No. 5 (working draft 4 ) . Discussion ensued regarding the draft and several changes were proposed and accepted. * This opinion shall be typed in summary form in the future and be circulated to all City officers and employees . Following the discussion by the Committee of the Whole, it made the following report: Draft 4 of the Proposed Opinion No. 5 , as amended, should be adopted as Advisory Opinion No. 5 and should be put in a summarized form for quick reference and distributed to all City officers and employees. NEW BUSINESS: Resolved: The Board of Ethics adopts the Report of the Committee of the Whole dated 10/21/88 as its Advisory Opinion No. 5 ; APPROVED 5-0. No further business was considered. PUBLIC COMMENT: Ms . Assid inquired as to what documents Mr. Lindemann would need to submit regarding Pere Marquette at the meeting on Wednesday, October 26, 1988 . The Board indicated Mr. Lindemann should provide any and all agreements regarding this matter, including the agreements in connection with the listing and/or sale of the College Bike Shop, including any commission agreement, no later than Monday, October 24 , 1988 at 4 : 00 p.m. The Board also indicated Mr. Lindemann would need to provide a written chronological report of his activities no later than Monday, October 24 , 1988 at 4 : 00 p.m. Clerk Bauman inquired who Mr. Lindemann should submit the above documents to and the Chair indicated Mr. Lindemann may submit them to the City Clerk who would then provide them to the Chair . -4- Mr. Lowney reiterated that the interview of Patrick Lindemann regarding Pere Marquette would be held on Wednesday, October 26 , 1988 , at 8 : 30 a.m. Chair indicated he would send Mr. Lindemann a letter advising him of the interview on Wednesday, October 26 , 1988 , at 8 : 30 a.m. , in which he should be prepared to answer inquiries regarding Pere Marquette per the City Ordinance. Ms . Assid was advised that as far as the interview at Wednesday' s meeting, the goal is to provide information to the Board of Ethics . Ms . Assid advised the Board that Pat Lindemann did not have a real estate license when the land was purchased, however, did receive his license last fall. BOARD ROUNDTABLE: Chair indicated this Advisory Opinion No. 5 will be presented to the Physical Development Committee by cover letter from the Chair. Mr. Knot requested that a member from the Board, other than himself, represent the Board of Ethics at this meeting. Chair indicated he does not believe the Board needs to detail each and every question presented at the meeting on Wednesday, October 26, 1988 , regarding Pere Marquette. However, the Chair does feel the Board should define the scope of this investigation and make a general statement. The Board members indicated their appreciation to John Mertz , Chair, for his contribution in drafting Advisory Opinion No. 5 . ADJOURNMENT: APPROXIMATELY 12:12 P.M. Respectfully submitted, fa�thleen Fr tz- ise Recording Secre ry -5- CITY OF LANSING BOARD OF ETHICS MEETING OF WEDNESDAY, OCTOBER 26, 1988 - 8:30 A.M. 313 SOUTH WASHINGTON AVENUE Call to Order at approximately 8:45 a.m. MEMBERS PRESENT: Mr_ John Mertz, Chair Mr_ Don Cook, Vice-chair Mr_ Steve Lowney, Member Ms_ Rita Bauman, Member Mr_ Alvan Knot, Member OTHERS PRESENT: David Osborn, Michigan Municipal League David Poulson, Lansing State Journal Louis Adado, Councilmember Betsy Assid, Caster and Associates Patrick Lindemann Caster and Associates Ronald Stonehouse, Development Director Alan Tubbs, Planning & Municipal Development Director Francesca Doneth, Recording Secretary NEW BUSINESS: The Board by concensus omitted all agenda items except New Business and immediately proceeded to the investigation of Councilmember Lindemann's conduct regarding his involvement ins a sale of City owned land. Chair stated for the record that the Committee had received all City records regarding the transaction and had reviewed them. He went on to say that Councilmember Lindemann had been given three extensions of his deadline to submit appropriate materials and missed all of them. The Board then interviewed the following: Patrick Lindemann, Lansing City Councilmember and Agent for Caster and Associates Alan Tubbs, Planning and Municipal Development Director Ronald Stonehouse, Development Division Director Betsy Assid, Agent, Caster and Associates. A synopsis of statements are attached (Exhibit A) Letter was received from Mr. Stonehouse (Exhibit B) Following the interviews discussion was held regarding the possibility of interviewing Councilmember Louis Adado and Mr. Emerson Ohl. No action was taken. MEETING RECESSED AT 3:00 p.m. THE MEETING WILL RECONVENE ON THURSDAY, OCTOBER 27TH AT 8:30 A.M. TO CONSIDER THE BOARD'S FINDINGS OF FACT BASED ON TODAY'S INTERVIEWS. Respectfully submitted, FRANCESCA DONETH Recording Secretary LANSING BOARD OF ETHICS SPECIAL MEETING OCTOBER 2�, 1988 8 : 30 A.M. FOSTER BUILDING 313 S . Washington Ave. , Lansing, Mi. AGENDA CALL TO ORDER ROLL CALL - J. Mertz , D. Cook, S. Lowney, City Clerk, City Attorney - Introduction of Guests APPROVAL OF AGENDA SECRETARY ' S REPORT - Approval of Minutes of 10/ 19/88 - Correspondence Received and Sent. - Disclosures of Conflicts Filed - Inquiries & Complaints Received i T -znqu�-ries Re t - Next Meeting Date CITY ATTORNEY' S REPORT Disclosures of Conflicts filed OLD BUSINESS: 1 . Response to H. Leeman, Jr . Complaint of 10/ 8/87 : Proposed Advisory Opinion No. 4 (Lowney) - Tabled Gemfflit-tP $S2 nrlvi cnry n,,; �11�n Nn 5 J COMMITTEE OF THE WHOLE nn NEW BUSINESS - Further Inquiry of Pere MarquetteQ �a�ea PUBLIC COMMENT BOARD ROUNDTABLE Q ADJOURNMENT I I 1 i i i i N 0 T I C E THE BOARD OF ETHICS MEETING OF WEDNESDAY, OCTOBER 26, 1988 WAS RECESSED AT 3 : 00 o ' clock P .M. and will reconvene on THURSDAY, OCTOBER 27 , 1988 at 8 : 30 A.M. at THE FOSTER, SWIFT,COLLINS AND COEY BUILDING AT 313 SO. WASHINGTON AVE. LINDEMANN: I talked to Lou Adado but only to introduce Betsy. I introduced her and told Lou that she had something to talk to him about. KNOT: Did you identify that you were in conflict to other Councilrnembers. LINDEMANN: Yes. I did not talk to anyone. LOWNEY: What is the relationship between the Council and the Planning Department. Does Mr. Tubbs work for Council? LINDEMANN: Mr. Tubbs works for the Administration as all department heads do except the City Attorney who works for the Mayor and Council. Council makes policy, levies taxes and writes laws. LOWNEY: Through this whole process no Affidavit of Disclosure was filed even after you discussed this matter with the City Attorney. You knew there was a potential conflict and even though Mr. Tubbs and Mr. Stonehouse work for the Administration they would at least answer a telephone call, etc...Why didn't you file an Affidavit of Disclosure in August? LINDEMANN: We were just trying to get the details of the property from the Planning and Municipal Department. I declared I was in a potential conflict at that time. I expected no special treatment from them. LOWNEY: Why didn't you let Betsy Assid do the fact finding instead? LINDEMANN: I did not file an affidavit but I did disclose that I was a real estate agent. LOWNEY: In discussing the square footage at the meeting in the Planning Department you did not feel there was a potential conflict in doing that? LINDEMANN: No. Betsy Assid was making all of the calls. MERTZ: At what point in time did you think there was a conflict? 11 EXHIBIT A. MEETING OF OCTOBER 26, 1988. CITY OF LANSING BOARD OF ETHICS BOARD INTERVIEWS THE FOLLOWING PERSONS REGARDING THE CASE OF COUNC I LMEMBER PATR i CK L I NDEMANN AND HIS POSSIBLE CONFLICT OF INTEREST RELATIVE TO THE DISPOSITION OF CITY LAND/NAMELY A PORTION OF THE PERE MARQUETTE PROPERTY. PATRiCK LINDEMANN, LANSING CITY COUNCILMEMBER AND AGENT FOR CASTER & ASSOCIATES ALAN TUBBS, PLANNING AND MUNICIPAL DEVELOPMENT DIRECTOR RONALD STONEHOUSE, DEVELOPMENT DIVISION DIRECTOR BETSY ASS I D, CASTER AND ASSOCIATES REAL ESTATE COMPANY The following is based on a stenographic record made of the interviews. This is not a verbatim transcript but statements are as reasonably accurate as contemporaneous recording allows. They are intended to assist the Board in its deliberations only and are not a part of the official minutes of the meeting INTERVIEW OF COUNC I LMEMBER L 1 NDEMANN: MERTZ: When did you become licensed'? LiNDEP-lANN: Approximately one year ago in December. MERTZ: Are you an owner or officer of (Caster and Assoc:iates)? LiNDEMANN: Sales person. Has no equity in the company. Do not receive any of the profit. MERTZ: Do you receive regular pay other than your commission L I NDEMANN: None. Share phone and desk. Do riot have my own. MERTZ: Is the Pere Marquette property in your ward? LINDEMANN: Yes, MERTZ: Would you be compensated for any sale of the property? LINDEMANN: I would make an income from the sale of the Bike Shop. I was a partner with [1s. Assid in order to f ind land for i''ir. Heinowsk:i. We worked together. MERTZ: Regarding your relationship with Mr. Heinowski, did you have a contract with hire? LINDEMANN: Mr. Heinowski was a customer. My responsibility is to the seller. Betsy Assid was the Leasing Agent. 50 of the sales commission 1 would receive from the sale. I would be paid by the seller. Mr. Heinowsk.i carve to the and Associates and asked for assistance in the purchase of this property. MERTZ: When did Mr. Heinowski come to see you? LINDEMANN: He went to the Mayor. He had originally had another offer on the Diamond Reo property. MERTZ.: Was he aware that you were a real estate sales person at this time? LINDEMANN: No. I had met Mr. Heinowski at the Mayor's Office. I attended this meeting as a round lmember, LOONEY: Why did Mr. Heinowski go to caster and Associates for assistance? Had he worked with there before'? LINDEMANN: He knew that I was a real estate went. MERTZ: Did you solicit him? LINDE11ANN: No. I did not solicit him. MERTZ: Why did he feel that he needed to hire you as a real estate agent? LINDE 1ANN: Pere Marquette was not even mentioned at that tirne. Pere Marquette was not discussed at the meeting in the Mayor's Office. Mr. Heinowski had been working with Mr. Ohl [Economic Development Director] prior to the meeting in the Mayor's Office, He was trying to work with Mr.Ohl to get funding. He had requested a list of the City's available properties. Mr. Stonehouse sent a letter to Mr. Lipps [Economic Development] saying that the Pere Marquette property was not available at this time. Caster and Associates did not even feel that this was a viable site. MERTL: Mr, Heinowski requested information from Economic Development Corporation without your assistance? LINDEMANN: Yes, LOWNEY: What was the rneeting with the Mayor about. Why were you there on May 23rd? LINDEMANN: Mr. Heinowski was informed by the Cite that his Diamond Reo site he had submitted on offer on was no longer available. At that time he was without a piece of property and he had no place to go. He wanted to get back to the Diamond Reo property and called me to f ind out what the Administration was up to. A meeting was set Lip with the Mayor. STONEHOUSE: Mr. Heinowski asked for the meeting, LINDEMANN: I attended as his Ward Councilman. At that meeting I represented that I was a Councilman. LOWNEY: When did he determine that you were a real estate agent'? LINDEMANN: I do not know. You'll have to ask. him. The Mayor stated that I was in the real estate business along with mentioning others. I cannot answer this question. I did not solicit his business during that meeting. He contacted me. MERTZ: When you meet with Mr. Sears, was this the first time this particular property was considered? LINDEN IANN: I was not involved at this time. iyiERTZ: When did you f ind out that this particular piece of property was a possible option? LINDEMANN: I cannot say, Jim Caster and Betsy Assid discussed this with Mr. Sears and then went and looked at the property before I was even told about it. I was out of town twice during this time. I did not. solicit City property as part of this - Mr. Heinowski dirt. They had a meeting in regarding to getting Mr. Sears to sell. LOWNEY: Was Mr. Heinowski working with other Realtors? ASSID: He was looking at other sites with other Realtors. LINDEMANN- Yes. Mr. Heinowski's offer to purchase the land is included in your packets, l'1ERTZ: The meeting with I'1r. Tubbs and Mr. Stonehouse, what was the date? [August 101 LINDEMANN: Mr. Tubbs could provide this date. The assumption was that the land was not available and then we met with Ron and Al to determine whether the land was available. I declared myself to Mr. Tubbs and Mr. Stonehouse and passed out and exchanged business cards. They knew that. I was a Realtor with Caster & Associates. MErRTZ: Did you then file a disclosure with the Cierk? LINDEMANN: At that time there was no need to do that. There was not an offer, HERTZ: The first meeting was with Mr. Stonehouse and I1r. Tubbs? TUNES: It was; 9:30 a.m, on August 10th I:NCT: We need to deal with the positions and not people. IvIERTZ. At that point when you advised that you advised there was there a policy on the Development Director that they would not sell the property without a land use plan? Was there any mention made of this? LINDEMANN: No. We were trying to get a handle on whether it was enough square footage. That was the express intent of P1r, Heinowski. 4 Betsy died most of the talk,:ing. It was focused on what. the City had and what p oblerns exited with thie property. MERTZ: When were your aware that there were other parties interested in this property? LINDEMANN: We knew it when Mr. Tubbs discussed the problems with the property. MERTZ: Were you aware that the Planning Department had decided to not to entertain offers on the Pere Marquette property? LINDEMANN: NO. MERTZ: Were there follow-up contacts after your offer was subm i t.ted? LINDEMANN: I turned the offer in. i had to be downtown and brought. Betsy. LOWNEY: On August 1 Bth? LINDEMANN: Yes, to Mr. Tubbs and Mr. Storehouse. LOWNEY: Who were you representing? LINDEMANN: I was still not a party.. MERTZ: Wasn't a portion of the contract dollars to be paid to Caster and Associates`' Would you have received part of the commission if the City agreed to the offer? LINDEMANN: Only on the motorcycle property. LOWNEY: Betsy put the offer together on August 13th. This is the first time Caster and Associates had given something to the city. You were representing Mr. Heinowski`s interest. He needed a portion of the Pere Marquette property and this was contingent upon the sale of the bike property. ASSiD: The Commission agreernent was not given to the City at that time, My broker requested that it be taker. down. Originally there was no commission agreement. My broker insisted that we take it down. LINDEMANN: The offer was received by the City on August 22nd. LOWNEY: When was the commission agreement presented? ASSID: Approximately one week: later. MERTZ: Did you assist in the preparation of that agreement? LINDEMANN: No. LOWNEY: What were the terms of that agreement? Do you have any copies of that document.? ASSID: Yes. It is in your packet. KNOT: Were you told at any time that the City, would not pay a commission on the property at any time? LINDEMANN: I was told that sometime. LOWNEY: You dropped off the commission agreement'? LINDEMANN: YES, but I was not going to get a commission off this any way. MERTZ: You would gain a commission on the contingency if the City land was purchased? LINDEMANN: Yes. MERTZ: Your were not getting any compensation for doing any work oil this? LINDEMANN: Right. I was trying to get the appropriate land for Mr. Heinowski, The City property was never on the list that I was supposed to check out. Betsy Assid suggested this piece of property. LOWNEY: How could you make money? LiNDEI"IANN: I would receive 1/2 of the commission on whatever was sold. Betsy and I worked together, Iw1ERTZ: Did Alan Tubbs or Planning Department advise you that this piece of property may be available -- At what point in time? LINDEMANN: Betsy called them every day. MERTZ: Were you in contact with the Planning Department after the offer was in? LINDEMANN: i did not contact them. Betsy Assid was the contact person. I was aware of some of the calls that she made. Once the offer was made I tried to stay away from it. I did not participate in the negotiations between Mr. Heinowski and Mr. Sears. 1 made a point that once the offer was received by the City I avoided the issue. MERTZ: Or,, Septefriber Oth? LINDEMANN. I did not consider an offer a contract until it was signed. When i knew there was a draft counter- offer in the City Attorney's office, I went to the City Attorney's Office with 11-. Emerson Ohl and i declared myself and asked for legal advice from the City Attorney, i'1ERTZ: Did you file an Affidavit of Disclosure at that tirne? LINDEMANN: i had declared my possible conflict when I had contact with the City. They knew exactly where I was coming from. LOWNEY: When did you realize you had a potential conflict? LINDEMANN: When we all sat down I declared myself. 1''IERTZ: Did you not think you should have filed an Affidavit of Disclosure at the time there was a potential conflict? LINDEMANN: Betsy Assid was making most of the contacts at that time. MERTZ: But didn't you think you should have filed an Affidavit of Disclosur-e at this time? LINDEMANN: When the offer was rendered and accepted that is when i felt I should do everything. I called Al Knot and met with him to discuss this. MERTZ: Were you aware that you should go to the Board of Ethics? That it was our jurisdiction"? LINDEMANN: I did not use my political office to profit. I did not know I should call th1s Board. I discussed this w1th Mr.knot.. MERTZ: At that meeting in the Planning Department was a determination made or mentioned that in order to entertain the sale of the property a land use plan would have to be prepared? KNOT: Did Al Tubbs direct you that the land use plan would be required before action could be taken at that meeting? ST�?NEHO! SE- There was no official policy on the books the first of June. MERTZ- When were you aware that the Physical Development Committee was working on the September 12 resolution? LINDEMANN: After the Committee prepared it. I received a note from i'1r. Stonehouse saying the property was not available at this point in time per the direction of Al Tubbs because the square footage of the property could not be determined, He did riot know where the resolution came from. It was prepared hastily and did not follow the reg!r 1 ar process. MERTZ: Was any thing done by you to try and block the Council from taking action on the resolution as they had the final say. LINDEMANN: I first knew about it on Friday afternoon prism to th the Monday night passing of the resolution. MERTZ: At what point had you discussed this with AI Knot? LINDEI"1ANN: This same Friday. KNOT: i talked to Pat at 1 1:00 a.m. the following Monday. [September 121. LINDEi,1ANN: We had breakfast with Mr. Latteri,nan on September 8th and then I found out the next day that a resolutions was on the agenda from Physical Deveiopment, This did not follow the normal process. The resolution killed the due process that 1`1r. Heinowski as a citizen is entitled to. MERTZ: How would it kill the deal? LINDEI,'IANN: No land would be sold until a land use plan is provided. KNOT: When would the land use plan be filed. LINDEMANN: There was not enough time. Mr.Heinowski had to be relocated by January. i"iERTZ: Was anything done to block the resolution. L I NDEr'IANN: Yes. KNOT: How did you find out that this was on the Councii agenda Monday night? LINDEMANN: When I picked up my packet. KNOT: You were not advised by anyone? What did you do then? LINDEMANN: Absolutely nothing. I then met with Al Knot on Monday. MERTZ: What was done to block the Council action? LINDEi"IANN: Betsy Assid called up the Councilmembers and discussed this issue and explained Mr. Heinowski's offer. KNOT: What did you do after you left my office on Monday? LINDEMANN: I filed an affidavit for computers. i did not have any conversation with Betsy. MERTZ: Why did you not file and affidavit of disclosure at that time? KNOT: When you left my office did you go and contact Betsy Assid? LINDEMANN: I talked to Emerson Uhl first and then called her. I do not remember what then}. ASSID: I came up to City Hall and attempted to locate the Counci]members. I went up with Pat to City Hall. LINDEMANN: I talked to no one. ASSID: 1 talked to everyone except Counci imember Blair as he did not want to get. involved. KNOT: Where was Pat? LINDEMANN: 1 was 1n the City Hall lobby and in my office. I was not part of any discussion that Betsy was having with any of the Counci Imembers. KNOT: You talked to no one regarding this matter other t1han Betsy Assnd? LINDEMANN: I talked to Lou Adado but only to introduce Betsy. I introduced her and told Lou that she had something to talk to him about. KNOT: Did you identify that you were in conflict to other Counc i irrnerribers. LINDEMANN: Yes. I did not tali; to anyone. LOWNEY: What is the relationship between} the Council and the Planning Department. Does Mr. Tubbs work for Council? LiNDEMANN: 11r. Tubbs works for the Administration as all department heads do except_ the City Attorney who works for the Mayor and Council. Council makes policy, levies taxes and writes laws. LOWNEY: Through this whole process no Affidavit of Disclosure was filed even} after you discussed this matter with the City Attorney. You knew there was a potential conflict and even though Mr. Tubbs and Mr. StonehoUse work for the Administration they Would at least answer a telephone call, etc...Why didn't you file an Affidavit of Disclosure in August? 10 LINDEMANN: We were just trying to get the details of the property from the Planning and Municipal Department. I declared I was in a potential conflict at that time. I expected no special treatment from them. LDWNEY: Why, didn't you let Betsy Assid do the fact finding instead? LINDEMANN: I did not file an affidavit but I did disclose that I was a real estate agent. LDWNEY: In discussing the square footage at the meeting in the Planning Department you did not feel there was a potential conflict in doing that? LINDEMANN: No. Betsy Assid was doing all the fact finding and she was making all of the calls. 11EPTZ: At what point in time did you think there was a conflict? LINDEMANN: I was pursuing my list of other potential properties. Betsy Assid prepared the offer. At that point he wanted you stay away from everything. MERTZ: You did not feel that there was a conflict of interest at that time? LINDEMANN: I did not think that a conflict of interest would exist until a counter-offer was made. I did not perceive a conflict would exist until there was an offer on the table. I felt that once the offer hit the table then a potential conflict existed and then I would not make contact with any City people after that time. I"IERTZ: When did you feel that someone should f i le an Af f idavit of Disclosure? At what point? LINDEMAP.N: I thought that when the counter offer came back to us that I Would have a conf I ict. I went to see the Cite! Attorney at that point when I though a counter offer existed. I was going to file an Af f i day 1 t of D 1 sc l osure once the counter of f er was rece ived. COOK Because there was going to be a vote on this matter didn't you feel there was some conflict as you would have to vote on it and did I you, Betsy, get preferential treatment because she was a partner with you with City personnel? LINDEMANN: The focus at this time was not on City land. MERTZ: In your opinion at the point in time an offer is made did you feel that an affidavit should have been filed because of a potential future conf l ict or did you feel that the point in time the City counter offer was received that an affidavit should be filed? L I NDEt,IANN: yes. MERTZ: Do you feel your are allowed to lobby before an affidavit of disclosure is f i led? LiNDEi"iANN: absolutely not. I would have to stay out of it entirely. MERTZ: Do you feel that Councilmembers should take steps to avoid these types of conf 1 ict, in your opinions' LiNDEMANN: The City Charter created our positions as part time. Conflicts are evil if you misuse your power. All Councilmembers do other things because they are a part time legislative body. Under your. Opinion 05 even a plumber would have to file an affidavit. as they get permits from the City Building Department. in that respect I disagree with that opinion for that reason. I feel I handled myself correctly, professionally and ethically. MERTZ: Should a Councilmember avoid getting in these conflicts? LINDEMANN: I would tell someone to go somewhere else. i contacted the Planning and Municipal Development. Director 2 t.imes, Not once did I use my political authority. l'NOT: Was the focus of your meeting on Monday with me regarding the proposed resolution (Sept. 1 2)? LiNDEMANN: I needed to discuss this issue in terms of conflict and to see whether the draft of the counter offer had reached your office. I then went and filed an Affidavit of Disclosure after our meeting because i sold the C.rty Council office ribbons. 12 KNOT: Were you following the grunter-coffer io f,ny office as you knew the draft was there, riot to deal with the resolution'? L i NDEMANN: We had to talk. MERTZ: What is the ethical limits on what a Councilmember can to to make a living regarding doing business with the City'? LINDRIANN: I am a commission sales person for AMS [Advanced Management Systems]. I do not use my authority as a Councilmember to rnake a sale. MERTZ: Hour does the public know? L1NDEMA:NN:: When an Affidavit. of Disclosure 1s filed. i-IEPTZ. prior to the sale or after the sale? LINDEMANN: Under $ 10,OOO 1 would have to file an Affidavit of Disclosure per our purchasing Ordinance. MEPTZ: Did you solicit these sales? L I NDEMANN: No. h"IEPTZ: I f you are aware your staf f needs something then you car-, sel l it to them? LINDEMANN: I did not actively pursue selling the City anything. i did not go in there with my briefcase, etc, intending to make a sale. MERTZ: Did you actively solicit the sale of the ribbons'? LINDEMANN: No. Absolutely riot. I do not feel I should solicit. A plumber would have to file a disclosure when requesting a permit. Fran asked me if we carried ribbons and I told her yes and She asked me if i could get multi colored ribbons for her as Tony likes brown ink and I told her yes. I delivered them to her. By the way 2 months later we finally got paid. I got $6.40 sales commission on this sale. [Further discussion regarding computer sales] MERTZ: Hour car,, the public be assured that this is done. 13 LINDE["IANN: I did what was prober and just. [Went further to discuss hour he felt about being elected CouncilmernberJ MERTZ: Was implicit pressure used? LiNDEMANN: No. Not by me. You are barring certain professions from being able to serve on the City Council. COUI': What happens if this purchase of land was not in the best interest of your Ward. What would you have done? LINDEMANN: I was elected from the First `ward but my responsibility is to the entire City. I represent the entire City. COOK.: Hour could you year two hats at the same tirrre? LINDEMANN: I did not do anything unethical in my actions. MERTZ: An Affidavit is to be filed when there is intent to do business with the City. Like the point in time contact was made with the City Council Office, Is it your responsibility to do that? LINDEMANN: Yes but Tony Benavides derives funding from the City. His salary is paid by the City from the Human Resources Department and he's going to have to stop talking to Jackie [Human Resources Director] and he has never filed an affidavit of disclosure. I felt that I could discuss this matter with the Departr,nent Head until a contract was going to be entered into. I to date have not disclosed anything because I have not received on answer from the Mayor regarding the counter-offer. I believed I behaved in a professional matter. I continued to research other sites from my list as part of my partnership agreement with Betsy. MERTZ: What penalty do you think is appropriate for someone who is in conf 1 ict'? LINDEMANN: I have not thought about it. I believe i followed the proper procedure. I take an immense amount of pride of hold a public. office. I try to do `ghat is best for the City. I think I have been a very good force on the Council. I have made a lot of sacrifices to serve on the Council. I am not unethical. I did not have a plan to profit from the City. I feel the rules should be rewritten and the disclosure form should be rewritten in order for the Board to obtain additional 14 infort-nation. 1,Ir. Latterrnan at the breakfast meeting with myself and Betsy inforr'ned me that he needed a commitment from the City not to condemn the property as he intended to have a portion of the Pere Marquette property. I considered this a bribe. BOARD RECESSED. RECONVENED AT 1 1:1 q A.M. INTERVIEW OF ALAN TUBBS. PLANNING AND MUNICIPAL DEVELOPMENT DIRECTOR. MERTZ: questions will be asked regarding the alleged statement made to the newspaper and would like to discuss the appearance of a flip- flop in policy and will be asking questions regarding your first meeting with Mr. Lindemann , Ms. Assid and Mr. Stonehouse in June. LOWNEY: How long have you been employed with the City? TUBBS.- Since 1965, minus one year leave of absence. LOWNEY: Current title? TUBBS: I am the Director of the Planning and Municipal Development Department. Ivey department deals with all land development ., uses with the City, loans for horse owners for rehab and economic development. LOWNEY: How long have you been in the capacity of Director" TUBBS: Since approximately June of 1983. LOWNEY: Have you handled most of the dealing with this issue or was this delegated to one of your staff? TUBBS: After the initial discussion Mr. Stonehouse would handle the follow-up details. MERTZ: [Discussed his copy of an agenda for a staff meeting submitted by the Planning Department] A notation was made on this agenda that the Pere Marquette property was not to be sole per Al Tubbs. 15 TUBBS: I issued this directive to Ronald Stonehouse, i also approached by other people and informed them that the property was not for sale, A member of his staff had shown this property to several different people and that is why I issued the directive and had it removed from the active list. There were some problems that needed to be resolved concerning the property. Some land had to be given up for the Embassy Suites project in order for there to be able to expand. The McNamara company had personally come to me and informed me that they would like soine of the property to be sold to them. Various property owners in the area wanted land for expansion. It was unclear at that time what was needed for different people in the area. STONEHOUSE: Staff wrote letters to the people who were shown the property and were informed that the property was not :available. 11ERTZ: This same day a letter- was sent by Turney Gratz to two person stating that the land was available. TUBBS: I was not aware of those letters, KNOT: Mr. Tubbs' staff people wrote a couple of letters without him knowing and this was clarified at a staff meeting. A letter was Subsequently sent Out to clarify that this property was not for sale. This happened in June sometime? 11ER T Z: Who is affected by this directive? TUBBS: This is a directive to my staff. The problem all along was getting the road in. MERTZ: Mr. Latterman was told at this point in time that the land was for sale? Subsequently when was the intent to sell property and when was the counter offer drafted? TUBBS: We had previously told Mr. Heinowski that this site was not available verbally through Turney Gratz of my Department. That was sometime in June. If any Counci Imembers came to me and asked me to reconsider- something i would reconsider, if any Councilmembers had come to hirr, to reconsider it he woUid. i1r. Lindemann told him that he did not intend to participate in this. He did not think that Councilrneniber Lindemann was in conflict at this point. I1-1 previous years with another City Attorney he was of the understanding ding that the 16 questions when it beganto enterthe action process thenit was at that point iri time a conflict was something certain. If he would have come to me and I thought he was in conf I ict I would not have reconsidered. I did not know he was in conf l ict based on previous and past practice because of various opinions by former City Attorney Sawyer, I was told by Mr. Sawyer that it was ok for a Counciimember who may have an interest in something to discuss it and it did not become a conflict until it. entered the decision making process. MERTZ.- If I carve in as a citizen and asked you to reconsider would you? TUBBS: Probably not. If a Counciimember came to see me I would reconsider. You would probably not get to me and my staff would advise you that the land is not available. Capital City Lumber had offer in on the Diamond Reo property. They were competing with another offer that had been submitted for the same property. The Mayor made the decision on which proposal to accept. He chose the other interest. This was a factor in reconsideration because they were not accepted for the Diamond Reo site. They could not provide the dollars needed in the timetable set up that everyone had agreed to. After the environmental problems arose no one benefitted from his property. We wanted to keep this business in the City and were therefore willing to work with them on finding another site. LDWNEY: When did Pat Lindemann come in? TUBBS: On August icy, as a result of their meeting he did not feel it was a conflict because of past practice. MERTZ: Have You been asked by other Coy unci lmember-s to change a decision? TUBBS. There have been a few instances when some questions were raised i.e. Museum Drive issue. KNOT: Did this happen before or after 197E when the new charter was passed? TUBBS: i do not recall whether these things happened before or after the new charter. LOWNEY: How often do Councilrnember call you or talk to you? 17 TUBBS,: Every day. Each and every Councilrnember. KNOT: How mane came to ask you, particularly in making an administrative decision where, a Councilmember may derive a financial income from your decision? TUBBS: None. 1 do not check: to see if an Affidavit of Disclosure has been filed. I have maybe a couple of times. f 1ERTZ: Would it help if these this were brought to your attention? TUBBS- I think it would be a good policy if it would go to everyone. Pat Lindemann was told that the city was not going to pax` any commission fee on this piec_.e of property. Pat asked me whether there was any possibility that any additional land could be made available so this sale could occur. We do public/private partnerships in order, to make things happen. Mr.Lindenriann handled himself about board and was professional. LiNDEM:ANN: 1 met with him in order to define what was what. KNOT- Were you aware of the time constraints involved? TUBBS,, I knew it was a desire for them to make their move by January 1 st of 1989. I understood there was a need to n-i make a decision by January 1. After talking to several people I learned that the property owners problems were being resolved to their satisfaction regarding a portion of the land and I then advised Pat and/or Betsy that the property may be available and then they submitted on offer on a portion of land that I told them may be available and then we received an offer on the landing including the land including the area I told them was available. The i Iayor chose not to counter offer. KNOT: What was the process after the offer was made? TUBBS: i wanted to define for them what could be made available. They made an offer that was not in agreement with what the staff wanted and then a counter-offer was drafted. MERTZ: Does the City Council give the final direction regarding land', 18 TUBBS: Yes. The 11aster Plan was endorsed by the City Council. The City Council sets the policy guidelines. The resolution as reported out by Physical Development and passed by the Council is not considered a mandate by the Administration. The resolution that I was directed to draft by the Physical Development Committee did not preclude the sale. I told Betsy Assid that any proposed sale would have to be forwarded to the Citizens District C:o►.tncil of that area. We wanted to try to accommodated Mr. Heinowski to keep this business within the City limits. HERTZ: Do you think Councilmernbers should be involved in things of this type if they have a financial interest in it. TUBBS: It would be alot easier if this situation did not exist. I would prefer it if they were not allowed to. LOWNEY: Would this work in the real world, TUBBS: The Affidavit of Disclosure should be up front not only verbally. When Councilmembers come to a Planning board to lobby a rezoning it places the board members in an uncomfortable situation as the Council ultimately confirms their appointment to the Board. I feel a little uncomfortable as I work for the ►'Mayor and answer to him but the CounciI approves my budget for my department and for my position. So I feel that Councilmembers could be considered in conflict. when they attend board meetings KNOT: `des. Councilmembers do confirm Board appointments after they are referred up from the Mayor. MERTZ: is the problem worse when there is a profit involved? KNOT: Is there any difference to the amount of pressure between ward Councilmernbers and at large Councilrembers' TUBBS: There is no difference. I feel that he was playing by the rules. It makes me a little more uncomfortable when a financial gain is involver. In regard to access to me - in house vs out house my secretary would have probable` referred anyone else to one of my staff members, either Turney or Ron Stonehouse. LOWNEY: Can you give me the specifics of what happened at this meeting? 19 TUFF5: Pat declared that there may be a conflict here. KNOT: IF a Councilmember comes in and discloses that there might be a potential conflict what then? TUBES: I would sti 11 treat him as a Counci]member. I do not know whether I knew what the subject was about that f1r. Lindemann wanted to meet with me about. I view his request as a Counci lmember request. LOWNEY: Summarize what happened after he announces that there may be a potential conflict? TUBES: I would think about what was best for the City! and then I would think about whether Councilmember Lindemann would obtain a benefit.. I felt that the conflict was triggered when some formal action was needed from the City Council. MEETING RECESSED FOR LUNCH. RECONVENED AT 1.25 P.M. ALL MEMBERS PRESENT, GUESTS RETURNED EXCEPT FOR COUNCILMEMBER ADADO., CONTINUATION OF INTERVIEW WITH MR. TUBBS: LOWNEY: Was any preferential treatment given to 'Mr. Lindemann because he is a Coun i ii-nerriber and that is why you reconsidered your previous decision. TUBES: Yes. INTERVIEW OF RONALD STONEHOUSE, DEVELOPMENT DIRECTOR: MERTZ: Are the previous statements regarding timing accurate? STONEHOUSE: Yes. It is pretty accurate. The City Charter of the City requires that city land be disposed of in a fair market pursuant to the ordinance. The ordinance has been adopted by the City Council. Lansing can be disposed of through public auction, directly negotiated, etc.. If a piece of property is valued at $50,000 or more a public hearing must be held after a 30 day holding period . After the 30 day holding period the term of the public sale must be placed on file in the City Clerk's Office, After 30 days a public bearing is held. Council cannot act on the sale until at least one week after the public hearing. 20 That is the disposal procedure. Another section of the Charter gives the Nayor property management responsibilities. The Mayor is to be notified of the proposed sale and if he recommends it then it is then referred to the City Council. We were just reaching this point when the City Council adopted the September l2th resolution. it takes 6 votes of the Council to sell land. Sometimes it rewires a vote of the public before it can be sold. KNOT: Mould you have sold this property to whoever at less than fair market value? STONEHOUSE. NO. We work: on a fair market system unless special policy to the contrary is passed by the City Council, KNOT: One of the restrictions is that an appraisal Must be done on the property, One was done this year. There was never any discussion regarding selling this property for anything less than fair market value? STONEHOUSE: There were two appraisals. The issue of selling this property for less than fair market value was not discussed. KNOT: Did you feel any pressure to expedite the process or avoid any of the steps'? STONEHOUSE: There was no justification to avoid any of the steps. KNOT: In addition, to sell ing the land for no less than fair market value. Is it correct to say that the disposition of any land would have to go through a number of committees before final action is required from the Council and it would take C votes for properties valued over $50,000? Also it would he held for 30 days; a public: hearing would be conducted, and then the detai is would then be required to be filed with the City Clerk: no matter whom you sold the property to? Did anyone ask you to avoid any of these steps? Did you ever get any impression that you were expected to avoid any of these steps? STONEHOUSE: No. 1 1ERTZ: You had an explicit offer to purchase In JUne and in August another commission was appended to the offer to purchase the property? There also were other people interested in the property at that time. How would you negotiate with on party over the other? 21 STONEHOUSE: The city has a history of working with Capital City Lumber Company, The City could not meet their needs on another site, namely a portion of Diamond Reo and we were trying to accommodated their needs by investigating the possibility of their acquiring a portion of the Pere Marquette property. The big piece was the Sears property. The Planning and Municipal Development Department wanted to try to save the property. Other interests did not define what they would be using it for and, the other party did and that was the departr-rient focused on. MERTZ: There is a statement in your memo regarding "expediting the matter". It happens that Capital City Lumber was under a time factor. Do you respond this way in any normal transactions? Was this an unusual request? STONEHOUSE: This message was a message to Al Knot requesting him to review the problem in a timely manner. He expedites any requests that come from any member of the City Council. MERTZ: So you mean that the word "expedite" meant to pay close attention to the matter? LOWNEY: Were you involved with the two meetings with Ai Tubbs and Pat Lindemann? Did you feel the same uncornfor tab lerress that Mr., Tubbs felt? STONEHOUSE: I felt differently because I am responsible to Mr. Tubbs directly. Mr. Tubbs is not accountable to the City Council not me. I am accountable to Mr. Tubbs so I did not feel the same way he felt. LOWNEY: Did you perceive any potential conflicts? STONEHOUSE: I was concerned about the potential of a conflict. IT is not my job to report there or decide there. On August 1 Oth i made it very clear that a commission fee would not be paid to a Realtor - any Realtor. I felt in regard to a potential conflict that at the appropriate time Al Tubbs and Pat Lindemann would have to deal with this issue at some point in time. LOWNEY. How could the process be redesigned for future use without tying your hands? 22 STONEHOUSE: If there is a real problem, then I thins; the rules should be cI ear Iy designed by the Board of Ethics and the City Council. 1 think it should be put in writing as to when it clearly becomes a conflict. at what point? It is critical that so many roadblocks not be laid down so that we could not do anything. Have written rules that everyone could understand and have access to. KNOT: Absolutes? STONEHOUSE: Yes. It would be beneficial for those r)eot)le who have a potential to be in conflict. LOWNEY: Wouid you suggest that Department heads al i be forwarded all copies of disclosures filed with the Clerk? STONEHOUSE: Yes, just like we get the agendas. Some Department. Heads do not get the agendas but I do. [Discussion followed regarding the distribution of the disclosures] MERTZ: We have had problems presented to the Board twice in two years regarding possible conflicts. There should be guidelines also to let the public know what their elected officials should and should not do. STONEHOUSE: To reiterate, I made it clear it,, the f first meeting that there would be no commission fee paid. The public can have access to any plans through our department. He does not know of any confidential plans. Public can any information through the Freedom of Information act. Any committee can make any changes to any proposal or plan at any time before formally acted union at the Council meeting. KNOT: A proposal could be turned down at the Council level and any time. Was this handled uniquely or generally? STONEHOUSE: This was unique as in the middle of the entire process a resolution was adopted by the City Council requiring a special land use plan be submitted before any land is sold. I feel that the timing of the passing of the resolution was unusual. But please do not make so many restrictions on a sale of land that the City cannot receive valuable input from their elected officials in ;good conscience. 23 LOWNEY: Go you think real estate agents should have special attention? STONEHOUSE: Probably. LOWNEY: Maybe we need a simple special process of disclosure for real estate deals involving City land. INTERVIEW OF BETSY ASSID, Caster AND ASSOCIATES: LOWNEY: When Pat Lindemann introduced you to Councilmember Adado on Monday did he tell him that you had something to discuss with Mr. Adade and then did he leave" What was it you tallied about and did anything come out of that discussion? ASSID: He was one of the Councilmembers I talked to that day. I talked to all of them except Councilmember Blair. First the resolution carve up so fast that the Councilrnernbers did not know about Capital City Lumber, the offer on the Pere Marquette property. I tried to explain the proposal of Capital City Lumber. I went over the offer and also informed him of the counter-offer. I wanted to keep moving on the process. The resolution was just going to stop everything, the entire process. I was hoping that. the Council would not accept the resolution. MEPTZ: Did you tell Pat Lindemann what you were going to talk with the Councilmembers about and how you were going to proceed from there? ASSID: No. LINDR IANN: We did not have a planned approach or attack. The resolution if It was adopted would have stopped the normal process that Mr. Heinowski was entitled to. I did not talk to anyone. KNOT: How mane Councilmember did you tall: to before Monday night? ASSID: I tall{.ed to everyone except Councilmember Blair. LOWNEY: When did you find out about the counter offer? 24 ASSiD: We were promised to receive it on Septet'r,ber 9 and they did not get it drafted until September 12th. The draft of the counter offer was on September 12, 1988. iT was a Monday, It was the same night as the Council meeting. LOWNEY: On September 12th the resolution was passed? ASSID: Yes. The next day Alan Tubbs provided them with a timetable. KNOT: Were you making the calls to the Councilmembers to Ron Stonehouse and Al Tubbs? ASSID: Yes. KNOT: They were mostly your conversations? Did you go and look. at the site'? ASSID: Yes myself and Fat visited the site in addition to the other two meetings. KNOT: When did this happen? TUBBS: Approximately two weeks after our meeting with them on the 1 Oth of August. STONEHOUSE: No one knew where the road was going to be. KNOT: There were three meetings then? One on the site two weeks after the August 1 Oth meeting. LOWNEY: [to Mr. Tubbs] How often are You the person to go out and visit the sites with potential developers'? TUBBS: I had a concern regarding the McNamara property at that time. I did not know what area they were talking about and dir not know where the property lines were. LOWNEY: Is this unusual that you would personally walle the site? TUBBS: No. I visit many sites personally. This is normal procedure. LOWNEY: Witi-tout Fat Lindemann's involvement would you have visited the site with Betsy Assid alone? 25 TUBE)5: we went out there at my suggestion, I had previously met with McNamara people regarding expansion and I wanted to see what we were talking about. KNOT: in terms of the phone calls from Betsy Assid - Did you receive a number of phone calls from Betsy subsequent to the August 10 meeting? STONEHOUSE: I received the calls. KNOT: Was it Betsy Assid or did you receive calls from Pat Lindemann subsequent to the August 10 meeting? STONEHOUSE: I do not have any recollection of Pat Lindemann calling me. I do not recall. LINDEMANN: i called hire on constituent problems. Pertaining to this issue I did call Pon to tell him that Betsy wanted to tauk to hire. KNOT: ghat were the particulars if Mr. Sears would have sold the property on the commission in relation to the meeting of August 1Oth? ASS ID: The of f er was returned 30 days after acceptance. I wrote the offer. The sellers wife signed it and then Mr.Heinowsk,i did not want to sign it right then because he knew that if he signed it, it would start the 30 day clock. KNOT: At what point in time was there any terms in writing or verbal commitments for this deal discussed and if this deal went through Pat would have received part of the sellers commission? LINDE[ 1ANN: Whatever deal was finally sold to Mr. Heinowski, I would split the commission profit with Betsy Assid. KNOT: Is it true that after Mr. Heinowski called you after the meeting in the Mayor's Office`' LINDEMANN: Yes. Mr. Heinowski called me. KNOT: When did he first call? 26 MINUTES COMMITTEE OF THE W14OLE THURSDAY, NOVEMBER 10,1988 - 4 P.M. COUNCIL CONFERENCE ROOM/IOTH FLOOR, CITY HALL The meeting was called to order at 4:12p.m. MEMBERS PROk-NT: Councilmember Alfreda Schmidt, President Councilmember Louis Adado, Vice-President Councilmember Lucile Belen Councilmember Tony Benavides Councilmember James Blair Councilmember Charles Creamer COUncilmember Sidney Worthington COuncilmember Patrick Lindemann, Absent/Excused OTHERS PRESENT: Ronald Onufer, City Council Alvan Knot, City Council Steve Lowney, Board of Ethics Donald Cook, Board of Ethics John Mertz, Board of Ethics - Greg Koessel, City Council Francesca Doneth, City Council APP';Z0VA 1, OR MINUTES: ,MOTION MADE TO APPROVE MINUTES OF NOVEMBER 3RD AS SUBMITTED. CARRIED 7-0. PRESENTATION BY BOARD OF ETHICS: Etl ics Board made a presentation to the Committee to discuss and clarify questions relative to Ethics Board Opinion #3. TRANSCRIPT OF STATEMENTS ARE ATTACHED TO THE ORIGINAL MINUTES. 1 CITY ATTORNEY RECOMMENDATION RE OUTSIDE LEGAL COUNSEL FOR THE BOARD OF ETHICS OPINION #6- Mr. Knot submitted recommended that the City retain Mr. Donald Reisig to assist the City Council relative to Opinion #6 of the Ethics Board as to what option, the City Council should take based on the facts. COUNCILMEMBER BLAIR MOVED TO CONCUR, CARRIED 7-0. Letter from City Attorney will be on Council agenda Monday night.. (This portion of the meeting is included in the attached transcript) SPECIAL COUNCIL MEETING- Discussion was held regarding the Gentilozzi project. Only five members of Council will be in attendance at the November 28th meeting as Councilmembers Belen, Creamer and Blair will be attending a conference with the Board of Water and Light. It was the consensus of the Committee that the City Council meeting of November 28th be recessed to another day in order that Councilmembers can be in attendance to deal with the Grand Towers issue COMMITTEE REPORTS. Ways and Means: Environmental Bonding issue was discussed. General Services: 161 0 demolition. ADJOURNMENT- 5:45 p.m. Respectfully submitted, FR ANCESCA DONETH SENIOR LEGISLATIVE ASSISTANT APPROVED BY COMMITTEE SIGNED ALFREDA SCHMIDT, PRESIDENT 2 TRANSCRIPT COMMITTEE OF THE WHOLE MEETING OF THURSDAY, NO'VEMBER 1-0', 1988 - 4 P.M. MEMBERS PRESENT: Councilmember Alfreda Schmidt, President Councilmember Louis Adado, !lice-President Councilmember Lucile Belen Councilmember Tong Benavides Counci]member James Blair Councilmember Charles Creamer Councilmember Sidney Worthington ABSENT/EXCUSED: Councilmember Patrick Lindemann OTHERS PRESENT: Ronald Onufer, City Council Staff Alvan Knot, Law Steven Lowney, Ethics Board Donald Cook, Ethics Board John Mertz, Ethics Board Greg Koessel, City Council Staff Francesca Doneth, City Council Staff - DISCUSSION REGARDING 1 BOARD OF ETHICS OPINION �S WITH ETHICS BOARD MEMBERS; JOHN MERTZ, STEVE LOWNEY AND ALVAN KNOT. OPINION -�S DEALS WITH THE REQUIREMENTS OF DISCLOSURE. SCHM I DT: I have talked with Ear. Mertz. Mr. Mertz along with his members of his committee are with us today. We welcome you. I would like to ask Mr. Mertz to introduce himself and members of his Board and would I suggest that Mr. Mertz make his Presentation regarding proposal -25. In the event that there are questions by any colleagues, I would suggest at that time it would be and appropriate time to ask the questions. MERTZ: Thant: you Madame President. The members that are present Mere today in addition to myself are Steve Lowney who is an attorney in town. Don Coop who works for the State of Michigan - the other public member and Aran Knot who is, of course, the City Attorney as you Know. Rita Bauman, I understand is not present due to election wrap up responsibilities. I understand she %vas up to three in the morning or something. We have a request that since 2 this is all being taped, that we be supplied a copy of the transcription whenever that is prepared by the Council so we have for our own records. SCHNIBT: It has been requested by Councilmember Lindemann that we tape the discussion regarding Opinion -2�5. Mr. Onufer would you please start the tape? UNUI=ER: It's started_ CREAMER: Just a clarification are we going tP honor Mr. Mertz' request? SCl-MIDT: Sure. And his request was ._ MERTZ: That we receive a copy of the transcript that we assume is going to be prepared from this tape. BELEN: We weren't going to prepare a transcript. UNUEER: Not a verbatim transcript, No. 3 SCHMIDT_ You could have the tape. MERTZ: Just mare us a copy of the tape and we will just throw it in our f i le drawer since we are considering this a meeting of the Board. SCHMIDT: Surely. MERTZ: In order to ._..this perspective on Opinion -11"5 which is I understand y►our main interest is, I would just life to take a couple of minutes and review four opinions in front of it. Actually only three since the fourth opinion isn't really germane to the discussion here today. First of all you start out with the City Charter which was passed '78_ Then about '83 we started issuing opinions as a Board. That followed the passage of the of the Conflicts of Interest Ordinance which the Council passed. In Opinion '1- 1 we said the Charter and the Conflict of Interest Ordinance did not prevent a Councilmember from contacting other city officials on his own behalf relating to his private concerns v,hen that did not involve a matter of personal gain. In Opinion ��e discussed when a Counciimember may vote on an issue which he has a conflict of interest or financial interest other than as a citizen of the City. We said then that the Charter did not allow voting in cases of clear conflict but with potential conflicts there might be situations where voting was allowed. That was in accordance with the ordinance. In either event we indicated that the Charter required disclosure of the particulars of the conflict on record and at that time we urged Councilmembers to consult us before any such votes were taken as opposed to after. This Opinion apparently dated 2-6- 1964. Then in -2"3 we were given the situation where a Councilmember had received a benefit from the City, arguably an easement and there was some questions as to whether or not he had avoided or whether he had acted properly. In that situation the Councilmember had disclosed his interest properly and publicly avoided all involvement in the decision making process of all levels of government including at the Council level. However at that point we indicated, I think particularly at the end of the opinion, it was particularly bothering to us that the property had been purchased in an area where there was Council involvement and then we indicated that we thought this was going to cause problems in the future whenever a Councilmember should get themselves involved in this type of situation. In -"'6 which I have cover briefly. We-addressed ourselves to the problems that occur when a Councilmember does not cease to be involved in a situation in which they have a conflict of interest and what happens when a Councilmember intentionally involves himself in a conflict of interest and order to prepare six the board felt since some of the members had changed, and we were talking about different members who had been involved in the previous three opinion, that we should re-review the rules to insure ourselves 5 that we were all operating on the same understanding of what the rules were. You have to appreciate, I guess, that some of the concepts we started out with go back as far as 1863 in an early Supreme Court which discussed the fidiciary obligations of Counci]members. Specifically, the Councilmembers are agents of City government and they are trustees of the public trust. They have mandatory duties and the major mandatory duty is that of voting as a Councilmember on issues before the Council. That is the specific reason why they are the most powerful people in the City government as a collective whole and if you start with that proposition then I think you can understand where Opinion 5 is coming from. ghat we said in Opinion 5, basically that except in the liatited area that is regulated by State Law and .....involve directs contracts between a Councilmember and the City itself. That except in that area the Charter sets the standards of conduct which govern Councilmembers. The Charter says quite clearly that it is the intent of the Charter to avoid conflicts of interest as much as possible. That being the casP. the Board feels the rule was quite obvious that that means no one can intentionally enter into a conflict of interest since to do so would be a clear violation of what the Charter expressed intent is, and Councilmembers the reason this is so serious is because you have the responsibility to vote. From voting on everybody's budget; on specific issues such as land sales; other contracts that are involved. You vote on everything so as a matter of fact then, that makes it extremely difficult for Councilmembers to get themselves into situations that may cause them to lose their 6 ability to vote. As a matter of fact then ghat the Board found was that the Charter rules specif ical ly said that you may not do so. Despite what the State Law says that you could do it in the area of that is regulated by the State law, that is in the area of direct contracts with the City. You may not do i,t in any other area because the Charter controls there and the Charter was written at a time, if you will, following Watergate in which there was an attempt by the Charter Commission to set fairly high standards in government. Now if you `snderstand that the effect of this is no different than the effect is on alot of other people then you won't be approaching the questions from the standpoint of your right to male a living so much as you will loots at it from the standpoint of your duty to vote. That's where we are coming from. 1 am going to say one word about the Councilmember Lindemann's situation because it also applies to attorneys. Councilmember Lindemann and Mr. Blair are both professional agents. All right now you are already agents as public servants_ We're even agents as we sit as volunteers on the Board of Ethics. We are considered public servants in State Law and considered officers of the City according to the Charter so we have the same rules that govern us in general, when we deal with the City as do CouncHmembers except for the fact that we are unpaid volunteers we have a few outs that you may not have and you have a few outs that full time employees or officers don't have and as you can at least get involved in direct contracts with the City as where no one else who is a full time employee or officer can. That's almost completely barred. Then in -the case where you -are a professional 7 agent then, you have to understand that when an agent undertakes an agency for someone other than his principal he must disclose that agency conflict immediately and he must obtain the permission of both principals before he may proceed. In the Lindemann matter, you had a clear case where a person who was already an agent for one principle took on an additional principal and failed to disclose that and failed to obtain permission to proceed. Inf act the State Law does not allow you to proceed in the sense of approaching other city officers or lobbying on the Council or doing the other things that we found improper. All right. That's where - that particular instance would .....what we call the standards of conduct were. In a case of an attorney, the State Bar has ruled that should a member of my law firm, for example, even the lowliest employee I have sit on this City Council, I could not represent anyone doing any business with the City in any circumstances including litigation in the form of criminal cases. I could only involve myself in civil litigation because the Court process is considered to be sufficiently protected to avoid influence. I could not represent people in front of Planning Boards. I could not represent people in front of the City Council or any City Officer of way, type shape or form. My law firm couldn't' and would be only because my employee worked there and that in this case was on the City Council. If a member of my firm was it would be alot easier to tell that that would be improper but the State Bar has said its the imputation of the ability to influence that they consider to be inappropriate so where you have a situation where you have dual agencies, you got 8 particular problems and five goes in basically to say that when you are representing your own pocket book, your family's pocket book, your business' pocket book and you are gonna wake a profit and that profit requires you to then disable yourself from voting. You've engaged in conduct that is improper so you may not -intentionally involve yourself in situations of that type. SCHMIDT: Questions at this time? Councilperson Adado? ADADO: In Opinion 5 on the second - third page where it says "..avoidable findings of conflicts are prohibited" you refer to the State Law but I couldn't find any place in here where I could research the State Law to see what it said and I heard you say that something about direct contracts. LOWNEY: There's a cite on page one in cap "A. Standards of Conduct." Then there is a MCL cite 15-321 which is is the Act. That is the State Act right there. ADADO: Olt. LOWNEY: Do we have a copy of that John? 9 MERTZ: 1 have one in my tile_ LOVINEY: So John has one if somebody wanted to run a copy that would be appropriate to do that. We have a copy here with us. ADADO: We can run a copy. BELEN: Ron can run it. ADADO: And then what is considered insubstantial and a financial interest? LOWNEY: 1 guess while John is looking at that, as we view insubstantial, we go into that a little bit on page 3 in cap 'C" there. Don't we talked about the -- pardon? Page 3, capital C. ADADO: Ok. -- _ ----LOWNEY: 10 And it's really what I think we are looking for is something is remote; something that is of a diminutiveness nature. We did not feel comfortable with coming up with some type of a dollar amount because we don't think that that's going to fit every case. So we have used some gray language or fuzzy language which is the insubstantial, indefinite and indirect, which I think all comes do un to a remote and somewhat of a diminutiveness involvement or amount that might be involved. ADADO: {Madame President if I may? SCHMIDT: Surely, you have the floor. ADADO: Mould that include where a select number, not that you've selected, but say there's a maybe a third of the population mould benefit from an action that you took and you might be included in that third. I think you are going to find that if you are a ward councilman that you are gonna always be making decisions in which you are going to get a benefit if you are living in the ward that you are voting on the issue of. The intent I think is, I think, is if it's that large and I am not sure what the population of Lansing that you are actually governing but it well over a hundred thousand.. II BELEN: One hundred and thirty nine thousand. ME€?TZ: Ok so you can assume that it is four wards .so that's twenty five percent of the population - it's what 30 some thousand~ or 34 thousand. If you are just one of those 33 thousand, and you are getting the same benefit the other 33 are getting I don't think that is a problem. I think that insubstantial, indirect, and indefinite. I think what -- That's language that's essential lifted out o6 the Court case. I think you have to be a little bit flexible in looking at it. I guess you might look at it in terms of its relationship of the nihole. If your• benefit, say was at the level of twenty five dollars in a deal that involves hundreds of thousands of dollars that is going to be considered insubstantial and I am going to assume that at that point that it was largely unavoidable since it would be small enough to be easily avoidable otherwise. There is plenty of situations where somebody is going to do which street you are going to reprove, which curbs you are going to redo, who is going to pay for them and how that is going to be spread. All of those things I think are not intended - you are not intended to be disabled from because it happens....I think it would be clearly improper if you only stood behind one street getting done and it happened to be the street that you all lived on. I've seen it in Arkansas. The only road that .....is the supervisor's house, you know. 12 EVERYONE SPEAKING AT ONCE. DELEN: Yes, even in some of the townships. MERTZ: f you have hundreds of streets to do and your's happens to be one of the ones that...the stuff, I don't see that there is a problem there. I don't think the Board would find ....in conflict. I think it is easier to pick the ones which your are substantial, direct, and financial.. LOWNEY: I think of it in terms on financial, something like that is not the evil that people are concerned about. I think it is the dollar and cents that the people are concerned about. MERTZ: Let me give you one from your own past because I remember you used to have this problem - what are you retired now? ADADO: Yes. MERTZ_: But you were working over at [HOC at one time and occasionally things would come up from there. I know and two actually 13 I I involved a situation originally and it came up from there and I know Steve Sawyer wrote an opinion on what to do in those kinds of situations. Essentially, if there is no contract involved, the State would consider that not to be a conflict of interest per say because in your position you had nothing to do with this thing coming up. 1 mean you had no discretion or area of authority over at GM to decide whether or not these things were put before the Council and 1 think it in most cases you felt that it looked bad so you didn't vote but I doubt there was any rule that prevented you from voting because if I remember correctly there was also some stock involved and the amount of stock was considered so small that whatever benefits you got, relative speaking, would not trigger any particular benefit to you although obviously if Oldsmobile did better, you know the value of your stock, and your dividends would ultimately get to you_ That is considered to be insubstantial, indirect and indefinite. You can't really point to it and say there is a specific amount .... BELEN: Well Mr Brenke when he was on, although he was retired, just to avoid conflict divulged himself of it and divested himself of stock down to a certain low level just to avoid it but while we are on the same subject.. SCHM I BT: I thin(; -- We are on the same subject 01c. 14 ADADO: What did he divest it down to? CREAMER: One hundred thousand shares- SCHMIDT: Are you through Mr. Adado? ADADO: No. Miss Belen's got a question. BELEN: Right along that sa-ne line many of us are on boards. Volunteer Boards. We don't get any money for of them- In fact the take from our time. We have disqualified ourselves when something came up regarding that particular .. Iffle the Center for the Arts or the Symphony or whatever it is but it seems to me none of us - the whole community is benefitting by whatever happens in that particular area. None of us will benefit in any way at all and I would think we could vote but I am just asking you that question? Because vie don't benefit a thing. We even give our time for free, our gas and oil, our parking and everything else. MERTZ: That's one that is dealing with I recall a future opinion we are going to address ourselves. What do you do on for people who set 15 on both boards. We are sorry to defer at this point but we don't want to answer that question but we are going to want to answer that question, at least the complexity of it in writing and say this is where we are coming from. I can see where there are going to be some problems and there's probably some places in which there are not. LOWNEY: Again, my view is that we are looking at the financial gain as really the evil, you know, if there is an evil that we are trying to avoid and to the extent that there's not that it is indirect. If there is any at all it's a good indication as to the propriety of the action that's all so but I think that we could address that. BENAVIDES: That's basically cash. LOWNEY: Well, not cash but i mean there could be some significant other cash..... EVERYONE LAUGHING. BENAV I DES: Let's get it out on the table. We are talking about cash. LOWNEY: - - 16 The ordinance is very broad though_. Right. SC3-:NI®T: Mr. Creamer has the floor. CREAMER: Mr. Mertz, I just if we can revisit what I think your major premise is here. I just want to make sure I understand it and so if you don't mind if we revisit it for just a moment. If I understand correctly what you are really suggesting here is that there is the greatest duty of a public official is to vote. MERTZ: Councilmember, yes. CREAMER: Yes. The greatest duty of a Lansing City Councilmember is to vote and to represent the ......that elected them and that that duty supersedes our own personal interest of hoes ule make a living or could affect the way we matte a living because you shouldn't put ourselves in a situation of conflict because the greatest duty is to vote. if I understand that correctly if I am an attorney, speaking about -- I am an attorney and I want to run for City Council I should know, that the greatest duty is to vote and I either matte that decision s I go into the elective process or I live with that decision after I maybe change to a different occupation and that could mean in this particular case that my firm who I 17 work, for if I am presently working for them or if they accept me as a new association if I go in a new job is that they will no longer be able to have - do deal°ngs with the City because of my position. I just can't simply say that I am to conflict and the,efore not to vote. You are really suggesting that the greater duty is to vote and that means that we should not be putting ourselves in a conflict of interest even if that may affect our decision to run for office or the way we make a living. MERTZ: Right. if you look at it from the standpoint of the right of the people that elected you to be represented then the problem is particularly acute when you talk about tuard Councilo-nembers because you are elected from an area. When you are supposed to be voting for the people of that area and you take yourself out because you want to make a buck on the deal then you have deprived all of your constituents of your vote and there is no way that you can justify doing that on ethical grounds. It's clearly an unjustifiable situation and the problem is not so much that you are doing something necarious or terrible or something, it goes to that obligation to vote, yes and the right to be represented by the people the are electing you. SCHN I DT: Mr. Blair. BLAIR: - - Y, 1£ On Opinion 5, 1 guess one of my questions is, where is the line between when you are still allowed to be a citizen. Speak at public hearings on issues that say - not before the City Council but say on a neighborhood matter within your community that may come up on a Planning Board_ There is a rezoning down the street and you are given notice of that rezoning hearing before the Planning Board. Those land of things. My tax assessment they just raised the assessment on goy home and by State Law my first appeal is to the Board of Review and 1 can't bypass the Board of Review, I then ..By strict reading of your opinion, it looks as if I can't even hire an attorney to come in or someone else to represent me. I have.. MERTZ: You can hire an attorney to go to the Board of Review. BLAIR: He's my agent and he would be there representing. The way I read it i couldn't send a person to represent me because that is really me standing in front of that body and not just. MERTZ: You could go yourself on your own property, your own house, on your own assessment you can probably go yourself. You got to be aware of the fact all the Board of Review is looking at is a Councilmember. They are not looking at your as a private citizen. If you ask any of these people, I mean when we ask, that is what 19 we hear from them. They don't see you folks as private citizens when you walk through the door they see you as the guys that control the budget. Aloe^i if you are talking about going in front of a... the Board of Review, it's like public citizens anyway and you are talking about representing your own property, your ovin particular house `sphere you lire on there, I don't think this body is going to have a particular problem of doing it and I think the ordinance specifically says you can do that. I think you can even go in front of the Council in respect to that kind of an item. ECLAIR: I'm confused then. I am confused with that because those are the kind of things. I am wondering about things like the Board of Review and the planning Board. I was out.. The other night there was a hearing before the Eastside Neighborhood Organization was having a neighborhood meeting with the members of the Cedar/Larch Corridor Study and the people that were there were appointed to male up this master plan and after your opinion came out I didn't know if I could go as a citizen to talk about -- because I own a piece of property on Cedar Street to go to that citizens group and speak to the issue of the master plan of that Cedar/Larch Corridor. So I guess... Well that is why I am saying. Where is the line? That's a piece of property I own_ MERTZ: Les me answer your question. Remember you are asking about apples and oranges here. If you are asking about your personal 20 resident you are going to find that you are probably going to get a little bit more freedom to act in respect to your own personal residence,all right. Although I am not saying that you can do anything you want. BLAI R: I guess I don't see the difference_ BELEN: If there is financial gain. BLAIR: Well there is financial gain in your oven residence too. MERTZ: Let me come in from the standpoint that you got appreciate that when you go to somebody whom you pass on their budget all right and we got to distinguish between people that you have financial or administrative control over as opposed to people or bodies that you do not. When you are talking about a city official whose budget you are going to vote on somewhere along the line you are in a conflict when you go see that person on any personal matter all right. The intent is that you only go see these people on City business. Now, when you get into a situation where you want to see these people on a personal matter then I suggest what you do is you come and ask us first. Tell us exactly what you want to do 21 and find out whether or not you can do it before you do it, not after. BLAI R: That's the other problem with the opinion.. MER T Z: Well, if you know going your assessment is going to come up next year you don't have to wait until March 15th to ask us whether or not you ought to be able to deal with it. BLAIR: I got two days notice of this public hearing out here before this neighborhood group. Two days. They did a flyer around and I found it stuck in the door. So many times, many of the issues the way the Council is set up up here is that a Committee on Economic Development of which I am not_ a member might be working on something that could throw me into a conflict of interest Monday night or Friday when I pick up the agenda that I didn't even know they were working on. I don't have time between Friday at 5 and f,donday night at 5 to have you have a meeting real quick. So I am just, those are my two areas that I was concerned about. ME-R Tx: Are you going to pass it ultimately as a Councilmember the Cedar/Larch Plan? 22 iBELEN: Probably. BLAI R: Probably_ MERTZ: Then you are in conflict if you go down to any level of government that is passing on that plan. LOWNEY: That's the Charter. The Charter says to the extent you are gong to gain some sort of benefit directly or indirectly based on Council action, that's a problem. SCHM I DT: Even if he doesn't vote on it? BLAIR: IF you are one -- three percent of the total area. Again I am sitting here in a situation where the Cedar/Larch I am three percent of the total plan. I would think that that would be inconsequential. LO g NEY: I mould tend to agree, sure. 23 BLAI R: But I am just saying -- but you are saying that 1 can hire an attorney to represent me. That will help if I could hire an attorney to represent me before these boards and commissions. If that -- then that would solve that problem. At least I would feel like I could then put my two cents out regarding the ultimate p 1 an_ MFRTZ: suggest you make a request to us in writing laying out the details exactly as to what your interests are and what you are concerned about and we will gibe you back an opinion real fast as to what you can and cannot do. You are asking us a hypothetical that has more variables than I think you want us to commit ourselves to on an informal opinion. Let me suggest to you though, if you are ultimately going to pass on the plan that is involved and when you have got property where that is that you may have a conflict and under those circumstances it -would well behoove you to investigate the situation early on in the process as opposed to late on in the process. We appreciate that things come up on short notice. We also appreciate that if the system is operating correctly, that your are going to get notice through the agenda whenever they come anywhere near the Council and certainly if you are actively involved in something that you know is ultimately going to come up there is no excuse for, not coming out early and saying look I've got a problem dawn here so that everybody in the process that there is a problem. You've got 24 better information than anyone else in town does as to what you've got and as to what you don't have. The fact that the specific issue is now going to come tip. I mean what I arm suggesting to you is that you are sitting on a property that you oven in a corridor that you I:now you are going to pass on a plan and that plan is now working it's way down to City Government,you are ultimately going to have a conflict on that. You can tell that when it first starts. You don't have to wait until it gets up to the City Council. BLAIR: See, Well, that's my problem. I don't Known that I have a conflict with three percent ownership you Know in a master plan. MERTZ: So disclose it. BLAIR: It's been disclosed for years. I mean it's a matter of record. MERTZ: In writing? To the City Clerk? BLAIR: Yes. MERTZ: 25 Then at least from this point on any of those disclosures we will pick up and we will find it. BELEN: It vvas there the last time you ran for office so the public knew it. BLAI R: You guys issues an opinion on the same piece of property. 1 mean, everybody has knowledge of that piece of property that € own - that I've owned for four or f ive years. I'm just - MERTZ: Are you talking to the piece we did Opinion 3 on? BLAI R: Opinion 3 on is a piece on Cedar S'reet which is.. MERTZ: In the words ....when you pop a piece of property into a place where you knows the City Government's actively involved and you knew they were because they were a big pusher of the riverfront to begin wjth, you stuck yourself at that point into the situation so you had disclose and now every time when this thing comes up you got to be extra concern. 1 can't tell you in a blanket... BLAI R: 26 I am extra concerned about it_ MERTZ: We've heard that - rumors that you have been. What I am suggesting is that we can't tell you that in every single instance you are going to be able to vote or in every single instance your are not going to be able to vote because it is going to vary. I would say that the closer the development gets to you the more likely it is you won't be able to vote but that is not necessarily a universal rule. So you just got to watch out for that stuff when it comes. FLAIR: Yeah, well... SCHMIDT: Well let me ask, you a question. DLAIR: I should probably ask you an official opinion on who can represent me on that and how we can do that. LOWNEY: We prefer that to do that, I mean tot he extent that we have time to do that. I meant to the fact that that's today, I mean we know the situation today and it's coming down the line and when we have time to respond in a fashion when you are concerned about 27 something and we certainly then have the time to respond and give you; an answer that you can then live with or at least you will have some ideas as to what our views are. That's what I meant by the amount of time that's involved. I mean if something isn't happening tomorrow or the next day. BLAI R: Nothing is happening with this right of way- LOWNEY: So that was my point. SCHMIDT: Let me follow up with that. You say vie must vote, however, you may rule that there is a conflict- What are you suggesting then, that he complete a form or that you haven't developed - you haven't referred to that area yet. Can you do that. MERTZ: Well all conflicts require disclosure- That's the universal rule. Because you are agents whenever you get into a situation where your loyalties_ You see that duty that we are talking about, the duty to vote also includes the duties of loyalty and fidelity to the principal and Jim's nodding his head and because he is :dell versed in that he is a professional agent so that is the first thing you learn when you are a professional agent that you principal is boss and you are supposed to be loyal and faithful to him and so you 28 cannot do things that inconsistent with that. In order for you to even consider doing something inconsistent with that basic duty of loyalty and fidelity you have disclose to both your, principal and to the person who is going to lead you astray if you will - did not mean that in a derogatory sense - I mean to the person to whore you are also considering of representing. So disclosure has to occur at the very earliest time that you recognize that there is a potential problem, all right. SCHMIDT: Then as soon as the person does that then they are clarified and they can vote's MERTZ: No because at that point it depends upon what the nature of the conflict is. ADAD®: Whether it is substantial or not. LOWNEY: As to whether there is going to be any substantial direct pecuniary benefit to this individual. But the ordinance itself allows a Counci lmember to vote so long as there has been disclosure and it is public interest, sure. SCHMIDT: 29 You've just answered my question. LOWNEY: Right. SCHMIDT: -- You've just said something different and he just said no. MERTZ: What I said was tnat it was not an automatic rule. It depends upon the nature of the conflict itself. For example, if you are talking about a direct contract if you are new in the city and you are going to sell something to the City, Lind of a contract. That is regulated by Stat Law. State Law provides there are certain instances when even though you do have such a contract you can still vote. All right? I am not going to get into the specifics of that. If any of you want to do that you can look up the statute. It says clearly in there when you can and when you can't but essentially they allow that to happen is because of certain small Jurisdictions, if they waived the entire Council, wow, they would have nobody left to vote. They couldn't get quorums together and under certain circumstances iiuhen a quorum is necessary they will even allow you to vote in the fact of what amounts to a financial benefit but you have to disclose all the vray from start one one it and you have to put it on the Council record in such a case and you have to make it absolutely clear what you are doing and why you are doing it. Our Charter has a similar kind of an D"0 escape provision to resolve the problem that you have because the Charter says you must vote and the Charter also says you can't if you are getting money out of it or you have some other kind of a conflict of interest. So ishen you disclose that you have a conflict of interest, if it is a nature of let's say voting on a tax exemption certificate for GM and you happen to own a few thousand dollars of GM stock but it's less than $25,000 in GM stock and you hold no positions in GM in which you have any discretionary authority over that tax exemption, that does not involve a contract with the City. You don't have a conflict of interest and your financial benefit is considered to be insubstantial, indirect and indefinite. Ok. In such an instance you can clearly cite that those reasons for not voting do not outweigh the reasons for voting. I think in one instance we were asked was it ok for Mr. Adado to vote on the bit where the City was going to trade Oldsmobile and ten foot wedge of park land .__[tape change] You are asking if you have no financial benefit coming out of their decision? ADADO: bight. MERTZ: Then I guess, I don't want to be facetious but you the word unjust influence, if you took that word out of there does that have an influence on them? �1 ADADO: 0k. MERTZ: IF this was a member of the public, we'd say we'd hope so. That's how we expect to get things done. ADADO: Is that good or bad? MERTZ: That's good. ADADO: That's not a conf 1 ict? MERTZ: No that is what you are elected for. That part is good. It's the part that about malting money out of it that is the bad part. As long as you are not getting a benefit out of it then that is to be encouraged when you see those kinds of things. BLAI R: Al - ghat do you think Al? KNOT: 32 Both as a City attorney as a member of the Board there is another kind of conflict which is called incompatible offices which doesn't involve any financial benefit and I guess. I know we've been asked as an Ethics Board to rule on whether a Councilmember legitimately influence the Planning Board by appearing in front of them since Councilmembers vote on their confirmation of their appointment because the Planning Board have felt influence they have felt beyond a just influence. They've asked for it. They've said you know we are getting clot fo Councilmembers down here.. CREAMER: See I don't go there. KNOT: ...pare feel uneasy even though there is no Councilmember appearing there as a Councilmember and not as getting a direct influence so I just want to at least indicate that we are going to take a look at that and that would be the kind of conflict. It would be an incompatible office, it would be like someone reviewing someone's work or something when basically they are both tied together. I don't have an opinion one way or the other. I know a concern has been expressed by a particular board. I think also the Traffic Board, Mr. McCaffery has brought it to my attention. Those two boards have asked the Ethics Board- EVERYONE SPEAKING AT ONCE. J3 SCHM I DT: If you tell me not to go I am not going to like your opinion, I can to I I you that. KNOT: In all honesty -- the answer to that question fs going to be coming in writing. I do not know what it will be. HERTZ: The normal situation though when you are doing constituent service that does not involve a conflict of interest and that is the point I was making. SCHM I DT: Mr Blair and then Mr. Benavides. BENAV I DES: He got my message. WORTHINGTON: One last question from me. You are on the City Council, you are a contractor, former electrician, heating person, a whole variety of kinds of things like that you have to get permits from the City of Lansing is that diminutiveness or is that a conf I ict? MERTZ: It's a hypothetical is what is. Are there any contractors here? 34 WORTHINGTON: Yeah. Jim is.. BLAI R: I'm a licensed builder. I go down and take out building permits. I have to pay fees. They have to come up and inspect my— MERTZ: Because although I am involved in the real estate business I rarely every deal with permits and stuff if I might request, why don't you put down what you would normally do as a contractor that involves the City and send it to us and let us then look at it that bay. BLAIR: I am not operating a business at the moment. I've got the license. At the moment, I am not.;:.. MERTZ: Perhaps you could give .. BLAIR: think that is what he is getting to. MERTZ: I know what he is asking but I don't know if I can answer that. h 35 WORTH i NGTON: Administrative permits_ MERTZ: We'll take a look at it. You known can a plumber get a permit from the City of Lansing if he is on the Council? I don't know, we don't have any plumbers. BELEN: Going back to this questions though of Councilmembers, and i particularly don't go to some of these board meetings though I would like to, because I really feel that you do as a Councilperson intimidate a Board member who has to come up before you for a vote of confirmation and if this person is supposed to be making a decision on their best judgment, and they see you standing there and they want to continue to serve on that board they many times will vote differently than they would -yote on whether it was a pure decision. Now that is my thinking. Now maybe I am wrong but it just seems to me that ._ KNOT: Some board members are telling us that too. BELEN: Board members are saying that. 36 KNOT: That they feel intimidated. B L A I R: But there is a difference between sitting i.n on them and just going to down there to represent a constituent. BENAVIDES: For example, I had 50 or 100 people that says you are my Councilman, we want you there with us,what are you going to do if you are representing.. this is what you were elected for to represent your people and to take care of them and if they ask you to be at this meeting and you can are you going to say now I am sorry.. LOWNEY: That depends if 50 or 100 Leant you there and you are going to be there and there is now - you don't have a personal, financial stake in it well then I think you got to do job and represent your constituents to the extent. MERTZ: I appreciate the discomfort but what the heck at least us three public members are all here... EVERYONE SPEAKING AND LAUGHING AT ONCE 37 Because I don't get paid so if you want to throw me of this, it will save me alot of time EVERYONE SPEAKING AND LAUGHING AT ONCE I appreciate the opportunity. I volunteered to do this you know I am just saying it doesn't intimidate me to have to answer the questions other than the normal you are going to get because somebody is going to say hey look it did somebody do something wrong and you are going oh boy. No one I ike to say that. BELEN: Well, Al you should be the one to inform them if they talk to you or the department head talks to you, you should be the one to inform the department head that those people are to make the decision and that they should not feel threatened by a Councilmember coming down to do his duty. KNOT: think what the Boards were asking for the two board in particular, was something in writing from the Ethics Board so they would feel comfortable. So they know where they stand and that would also allow you to know where you stand. BELEN: WeII then you are going to handle it. 38 KNOT: Well, the Ethics board has volunteered to lend assistance. SCHMIDT: Is that an announcement this evening to the rest of your colleagues here's MERTZ: Sounds like it. ADADO: In your .opening statement John, you said something about the Council approves the department's budget which is true but I think I read some place where and I don't think it was in the opinions, maybe it was in the newspaper that we set their salaries which we don't. We do not review salaries given the Council per se, that is strictly up to the Mayor. He has a commission that looks at it so we don't set any salaries. MERTZ: Actually though, I think it is an early Attorney General opinion that looks at it from the standpoint that they just a recent case in Ionia that involved people that were on the City Council and who also happened to work for the hospital. They said there was an inconsistency with their holding office because they ultimately voted on some measure of the budget of which their salaries were derived. There is a recent Court of Appeals case, I 39 think, in which a Police Officer rented a building to a bar which, you may not - you can't be a police officer and a landlord at the same time for a bar because that is an indirect interest in the liquor license. Owning the building and getting the rent - that you have a financial interest in whether that bar was there or not and that meant that you had a financial interest in the license whether or not you had any control over the license at all. The law is really -- ADADO: What you are saying is that because we do set the department budget -- affect the salary. MERTZ: Then you in effect supervise his salary. WORTHINGTON: And you.. could wipe the department by reorganization. ADADO: We tried but we weren't successful. WORTHINGTON: I Just raise the point because.... EVERYONE SPEAKING AND LAUGHING AT ONCE. PRESIDENT BANGS THE GAVEL!!!! 40 SCHMIDT: Are there any other real direct questions or the time is moving and these fine people have been here since 4 o'clock. Mr Adado do you have a question? CREAMER: Madame Chair? SCHMIDT: Mr. Creamer. CREAMER: I just as one person I mean we talked about all of the worked - we very much appreciate it. BELEN: You will become experts in ethics law and you can represent somebody in another City. KNOT: And you can go practice in Eaton County. BLAI R: No, our regional boards would be Eaton, Clinton and Ingham. ADADO: 41 The conference room where you held your meetings was donated by Foster, Swift... MERTZ: The use of it, I assume. LOWNEY: I think that is what happened. SCHMIDT: Did it come out of your salary? LOWNEY: The coffee did. They have been threatening me. KNOT: He is not sure yet. ADADO: Would that prohibit us from doing business with Foster, Swift? LOWNEY: No. I don't think so. We'll have to bring that up with the Board, I mean if you are serious me being serving on this board or being involved certainly has an implication that we need to review. Certainly based on the Bar opinion - the recent Bar opinion, as to the impact. 42 WORTHINGTON: If anyone has a reason to squawk it's me. BELEN: Oh boy how about that. WORTHINGTON: I don't want to excite you all too much early. SCHM I DT: Mrs. Doneth's husband is an attorney, maybe._ BELEN: But he practices some place else. MERTZ: He's out in Okemos. BLAI R: He practices at City Hall. EVERYONE SPEAKING AT ONCE.. SCHMIDT: We appreciate you coming. We need these instructions. I view this and I know the other colleagues do -----if there is any measure 43 of correction, you put us on notice and I think that is the way we are accepting it. Again, I say that it's a positive direction that you've guided us through and I am sure we will be in closer contact with you as a result of your formal opinion. MERTZ: We appreciate that. We appreciate that that the Counci lmembers have to put in to perform their duties and our job is to assist you in that an if we can do that in any way we urge you please to ask us -- you know the time is time but that is what we are here to spend, is to help you out. BENAV I DES: Basically, I think every one of us should submit a letter to you then for whatever just to check it out. CREAMER: Because I breathe the air? BENAV I DES: You might be breathing the wrong way. ADADO: I don't have a conflict Tony. I am retired. SCHM I DT: If there are no other formal questions we will move to ... 44 BELEN: Thank you so much for coming. You put alot of time into this. You'll be experts. We'll send reference around. SCHMIDT: City Attorney recommendation regarding outside legal counsel for Board of Ethics Opinion -11"6. Mr Knot. KNOT: Per unanimous Council direction last week at Committee of the !Whole, I was given a time frame of coming up with a name of an attorney, at least I would recommend, to explore with you the options that Council might want to examine based upon Opinion -4'6. 1 have been in contact with a number of attorneys in the greater Lansing area and discussed with them. In terms of coming up with a name I recommend, I would at this point submit the name of Don Reisig who I have talked with again as of this morning and he has indicated that he is interested in doing it if so authorized by City Council to do so. I believe most of you know Don, at least publicly and I think his activities speak for himself. He was a past City Attorney. He was a past Ingham County Prosecutor. He's is currently State Bar President. He was a Circuit Judge in Ingham County, I mean we could go on and on. I heard it all when I was at the Ingham County Board function where he was honored and I heard it before when I worked for him but he comes highly recommended. There's other people too who 45 have indicated an interest who are also highly recommended but at least I would submit initially the name of Don Reisig as someone you might want to consider for this type of activity and he has indicated he would be interested in doing something. BLAIR: I move the recommendation of the City Attorney BENAV I DES: 'Veil how much is this going to cost? BELEN: What is he going to answer over and above what he told us? SCHMIDT: There is a motion on the floor and then I will recognize all questions and that's the first person is Miss Belen. BELEN: wonder what are we going to ask Don Reisig. I think these men made a very detailed explanation today. Now what are you going to ask Don and what is his directive going to be other than the explanation these people gave. That is what I would like to know? SCHMIDT: Sid and then Lou. 46 WORTHINGTON: All that the Board talked about today was Opinion -*S. Opinion -0�6 the Ethics Committee did not address at all and Opinion -41'6 addresses a number of cases, their feeling, where an individual Councilmember at least on four or five occasions was in conflict of the City Charter. He was in conflict of interest and that starts on page six and it runs over to page seven and there is one, two, three, four, five, six and a possible seven violations of the City Charter and as I understand this in our discussions last week. It either could be referred back to the ethics Board to say explore this directly. This was we asked originally for an advisory opinion. Now we would like to know whether this should be taken further and because the City Attorney last week said, well I am sitting on that Board we .decided we would go to an outside attorney and that was voted on unanimously and it will be to pursuing those 6 violations. BELEN: Number 6? WORTHINGTON: Number 6 and the seven violations --possible violations that are listed here. BELEN: 47 This may be facetious but I consider Don Reisig a real friend of mine. I sat beside him up here when he was City Attorney would I be in conflict in voting for him. MERTZ, LOWNEY, COUNCILMEMBERS: No. -- BELEN: Ok, I just want to be sure. I just want to be sure. BLAI R: He is not a partner of yours in the f lower shop? BELEN: No. All right, I just want that clear. SCHMIDT: Mr. Adado has the floor. ADADO: We still have a couple of opinions coming I believe do we not? KNOT: At least three on this issue. ADADO: .40 I think one of them had to deal with a department head. I'm just wondering if it would not be better to wait until we get that opinion and have one attorney look at both of those. WORTH I NGTON: What was the other opinion you are waiting for? ADADO: We asked if there was anything that Al Tubbs done based on the statements in the paper, you know, was there any improprieties there? If there was. That's my concern,why don't we wait and expand that so that Don can look at both things rather than just one? BENAVIDES: Any possible violations on the part of the employees. ADADO: That's right. SCHMIDT: Mr Blair. BLAIR: Madame Chair, I would like to see us get moving on number 6 if a number 7 comes down the road or a number S comes down the road subsequently then I think that we can expand. All it takes is five votes of this Council to expand the person's duties but right now we are talking about hiring him to review Opinion 6 and as I say we will already have him on board. Let's get him working and, Lou again as 1 said last week we need to get through this thing quickly. Time doesn't give justice to anyone and I think we need the clear the question on the Council. The community needs to have the questions cleared and the individual needs this thing cleared. You see he is not here today. You know he is not participating in the Council meetings. He's not talking us I mean we've got a real problem and to hold it up several weeks or depending on how quickly they can do it is doing an injustice to all three of us. But I will be willing to expand in the future if there are other opinions that need to have investigation. I will support you Lou to have the scope of his service expanded. SCHMIDT: Any other questions for Mr. Knot? ADADO: Just a review of what Mr Knot said. Mr. Knot last week you said we could take some action, we could hire an attorney to interpret.. KNOT: I guess those were my, at least based on the Charter and Ordinance, interpret but I think that is one of the things that I went through kind of generically and stated that I would hesitate - I only stated what I observed. That is one of the reasons why you are going to hire an outside lawyer. I think he will come back and tell you all of the things that you can and can't do and examine all the options, so I don't want to say that what I stated. That was my interpretation that Mr. Reisig would necessarily agree or disagree witty -that- You know I am just saying I -- WORTH I NGTON: And recommendations. KNOT: Exactly and recommendations but I at least would suggest that you ask him to first of all identify all of your options. What I did was nothing but verbal and strictly and then secondly and you indicated make recommendations regarding all of those options because I haven't done any legal research on it at all. SCHMIDT: Last week's vote did identify the option that we chose to take. ADADO: There were four.. SCHMIDT: _.employ an outside legal attorney. ADADO: One was to pursue it ourselves. The other one vias to receive it and place on file. Refer option 6 to the Attorney General's office for clarification of state law and then the final one was to hire an outside attorney_ SCHMIDT: There is a motion on the floor to concur with the recommendation of Attorney Don Reisig. Are you ready for the vote? All of those in favor indicate by saying Aye. Opposed? VOTE--UNANIMOUS. WORTH I NGTON: Just one thing I think should be-- I think we're all very fortunate to be able to pick up somebody of the stature of Don Reisig. I mean I was flabbergasted that he was available to do this. You've got probably the finest, at least one of the finest Attorneys and judicial minds in the State of Michigan and I think everybody r,¢,rill BELEN: He has knowledge of City government too. WORTH I NGTON: Yes, he has all of those backgrounds and I think everybody will know once he makes a recommendation that it has been done fairly and if there is anybody who could put the entrepreneur of fairness BENAV I DES: He's good. WORTH I NGTON: Well, more than good Tony. He respected and I think everybody will say regardless of the recommendation this is that --- a fair opinion. ADADO: I wish we sensor Mr. Worthington on his confirmation of Don Reisig. We want to get out by six. WORTHINGTON: I'm done, I'm done. SCHMIDT: Good job Mr Knot. Well,let's see. CREAMER: Madame President, what are you going to do next? ADADO: Do we need a letter on the agenda? JZ7 KNOT: That is what I was going to ask. Is this sufficient or. ADADO: We'll have to suspend the rules to put it on. KNOT: I mean yeah, I could write a letter. If you are going to do letter in con-Junction with Lou, I know as we are going through the other three opinions obviously, you know, some concerns have been raised in terms of my involvement, I at least would also, if you are going to put a letter suggest that in order to continue to expedite this, not only for Mr. Lindemann's benefit but for Mr. Tubbs, obviously knows the concern there that maybe in the letter you could consider giving as a point of information tentative authority that if I feel at some point I need to step down form the Board that Mr. Reisig will be my replacement provided I notify of you that or something like that so the Board can continue to meet or something on that. As a matter of courtesy. ADADO: Wouldn't that give rise to a conflict of interpretation of 6. KNOT: That's all over with. The Board has issued their opinion. He didn't sit in on anything. He didn't do anything but I know you have raised some concerns in particular in terms of one of the issue facing the Board and I guess I have arrays said that if I felt that I was in conflict I would remove myself regardless of what the Board felt. You haven't got into that and I guess then you would have a replacement and you would have an ex-City Attorney also sitting in there and I think he would very comfortably represent the City. CREAMER: But if you then asked him to interpret a subsequent opinion.. ADADO: No he wouldn't be able to do that. You would have to find someone else. SCHMIDT: But would that be fair. He would be employee and the other members are volunteers. There is a different. KNOT: He would be replacing an employee. I mean l am an employee. MERTZ: We'll stick him with all the work. BEAIR- Not at what he will charge us an hour. Let's not give him any extra work. KNOT: 55 You are right Mrs. Schmidt except that the person he would be replacing would be the same set up we currently have, the three public members and the two paid City employees. He would be replacing me and he would be getting paid by the City but I am getting paid by the City too. SCHMI DT: Well the we are paying for that position twice. ADADO: No, because he would be doing something else Madame President. Al would not have to be there. He would be working on something else so you wouldn't be paying two people for the same job. KNOT: I guess if you paid me or not, I guess if I felt I was in conflict legally I could not sit on the Board is what I am saying_ Whether I was getting paid or not. ADADO: Can we get a student from Cooley Law School to sit your place? BENAV I DES: A resident? KNOT: 56 By that I might kill two birds with one stone is what I am saying.' SCHM I DT: Who is going to write that resolution then. WORTH I NGTON: It will be a letter. KNOT: If you want a letter on I will be glad to. ADADO: I think it should be a letter and I think that is a good suggestion. CREAMER: Madame President_ SCHM I DT: Mr Creamer. CREAMER: Al in all due respect I think it is in error to do that. First of all you are incurring addition costs. You are incurring out of pocket expenses by putting in a contract employee on the Ethics Board and - in your place because we are going to continue to pay you and we are going to incur additional costs to do that. Secondly, if 57 there are subsequent opinions that this Council has already indicated this afternoon that they may be interested in having Mr. Reisig also take a look at it would disallow him to do that if he rendered the initial opinion. I just think it makes it a bit convoluted, logistically difficult and I would suggest that we just - that we have Mr. Reisig. Take him up on his offer to do the one and if the have additional ones we would expand the scope of it and IQt's pick someone else to replace you on the Board that has nothing to do with either of those two areas. That would be my recommendation. BELEN: I think you're right. KNOT: I Brought it up in the spare of the moment in honoring of Mr. Adado's request - because I thought that might resolve it. I can see your point.,of view too. SCHMIDT: I would be more comfortable with that. Instead of double dipping. ADADO: What we want is comfort. SCHMIDT: Ail right. cn KNOT: So I will put a letter on for Monday night dealing with opinion 6. END OF TRANSCRIPT PREPARED BY FRANCESCA DONETH SENIOR LEGISLATIVE ASSISTANT LANSING CITY COUNCIL DATED NOVEMBER 25, 1988. CITY OF LANSING BOARD OF ETHICS MEETING OF NOVEMBER 22, 1988 - 3:00 P.M. 313 SOUTH WASHINGTON AVENUE Call to Order at approximately 3:10 p.m. MEMBERS PRESENT: Mr. John Mertz, Chair Mr. Don Cook, Vice-chair Mr. Steve Lowney, Member Ms. Rita Bauman, Member Mr. Alvan Knot, Member OTHERS PRESENT: Angela Miles, Channel 10 Chris Golembiewski, State Journal Francesca Doneth, City Council APPROVAL OF AGENDA: APPROVED. COMMITTEE OF THE WHOLE: Mr Lowney submitted letter in response to Mr. Leeman's request for opinion regarding Councilmember Patrick Lindemann's Officeholder expense account. This issue in not in the jurisdiction ofthe Board of Ethics. Signatures were affixed and the Recording Secretary was directed to forward the letter to Mr. Leeman. Next meeting date, December 7, 1988 - 2 p.m. Chair asked that every member review the minutes and transcripts provided by the Recording Secretary. Discussion followed regarding disclosures filed with the City Clerk since 1978. Mr. Knot and Ms. Bauman are to review all disclosures filed since 1978 to determine which ones are current in nature. The Board will then review the disclosures per recommendation of Mr. Knot and Ms. Bauman. Mr. Knot to provide a list of current disclosures and an opinion regarding the request from Patrick Lindemann relative to 1915 East Michigan Avenue at the next meeting. Chair is to provide draft wording for disclosure form with clear and precise directions and cover letter to go to persons who currently have a disclosure on file. Mr. Lowney is to provide pending opinions. ADJOURNMENT: 3:50 p.m. Respectfully Submitted, FRANCESCA DONETH Recording Secretary 2 LANSING BOARD OF ETHICS SPECIAL MEETING TUESDAY - NOVEMBER 22, 1988 - 3:00 P.M. FOSTER, SWIFT, COLLINS and COEY BUILDING 313 SO. WASHINGTON SQUARE - LANSING§ MICH. A G E N D A CALL TO ORDER ROLL CALL: _ John Mertz, Don Cook, Steve Lowney, City Clerk, Rita M. Bauman, City Attorney - Al Knot - Introduction of Guests APPROVAL OF AGENDA COMMITTEE OF THE WHOLE OLD BUSINESS: NEW BUSINESS: PUBLIC COMMENT: BOARD ROUNDTABLE ADJOURNMENT: ffb 4- FA, U V Ob y November 22, 1988 Mr . Harold J. Leeman , Jr . 529 North Francis Lansing , Michigan 48912 Re : October 8 , 1987 Request - Advisory Opinion No . 4 Dear Mr . Leeman : By letter dated October 8 , 1987 , you asked the Lansing Board of Ethics to review the post-election primary statement of the Lindemann for City Council Campaign Committee regarding a loan of $154 . 00 from Mr. Lindemann ' s "Officeholder Expense Account" . Upon review, it appears that this issue is not within the jurisdiction of the City Board of Ethics. The "Officeholder Expense Account" referred to by you is not created under City Ordinance but appears to be an account created under :State law pursuant to the Campaign Finance Act ( 1976 PA 388 ; MCLA 169. 201 et . seq . ) . Section 15 of the Act provides that the Secretary of State has the responsibility for determining whether there has been a violation of the Act . In view of the foregoing , it is our conclusion that the Lansing Board of Ethics is without jurisdiction in this matter. As was indicated to you by the Board in a recent meeting , we apologize for the belated nature of this response . Very truly yours , LANSING BOARD OF ETHICS John F . Mertz , Chairman Donald Cook, Vice-Chairman Stephen J . Lowney, Public Member Alvan P . Knot , City Attorney Rita M . Bauman , City er December 5, 1988 BOARD OF ETHICS MEMBERS ENCLOSED ARE THE FOLLOWING DOCUMENTS. ® Ethics Minutes of November 22 • Exhibit A/Stenographic transcription of October 27th meeting. a Verbatim Transcript of September 12, 1988 City Council meeting/Discussion of the Pere Marquette Property. a Ethics Minutes of November 1 , 1988 * Minutes and Transcript of the November 10, 1988 Comfn,Qluee of the Whole Meeting PENDING DOC MEE ; S Ti 0 BE FORTHCOMING AS SOON AS POSSIBLE. FD T fr s nnscript of November 17th Committee of the Whole Meeting. ® Verbatim Transcript of a portion of the September 19th City Council meeting de-a2JIng with the Pere Marquette Property. Verbatim Ti—anscript of a portion of the October 31st City Council meeting dealing with the Pere Marquette property. Sincerely, Fran Doneth