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HomeMy WebLinkAboutREP FC 033 2015/09/01 (2014-2016) REPORT OF THE COMMITTEE ON FINANCE DATE: September 1, 2015 Re: Comm. No. 231.11/ Bill No. 37 (Draft 2) PLACE: Council Chambers Hilo, Hawaii TIME: 11:22 a.m. Council Chair and Members Hawai`i County Council Hilo, Hawai`i 96720 Your Committee on Finance, to which was referred Bill No. 37, reports as follows: Bill No. 37, Draft 2, transmitted by Margaret Wille, via Communication No. 231.11, dated July 27, 2015, amends Chapter 2, Article 15, of the Hawai`i County Code 1983 (2005 edition, as amended), relating to the code of ethics. This bill amends: 1) Definitions -revises definition for"agency"and adds definition for"immediate family"; 2) Fair Treatment -amends provision for use of County property to include"campaign purposes" and adds provision that places a $50,000 limit on any County contract for goods and services with a County officer or employee or a business where an immediate family member of a County officer or employee has a controlling interest of said business; 3) Conflicts of Interest -revises provisions for the ability of County officers and employees to represent private interests in legal actions/proceedings against the County or appear on behalf of private interests before any agency of the County; and 4) Contracts -establishes a$50,000 limit on any County contract with an officer or employee of the County, or a business in which the officer or employee of the County holds a controlling interest. On April 14, 2015, Council Member Margaret Wille introduced this bill via Communication No. 231,dated March 23, 2015, and explained that the administration introduced this bill in the previous term. Ms. Wille gave an overview of her changes that included an expansion of the definition of immediate family, provisions regarding the use of county property for union meetings and for other than public purposes, contracts awarded to employees of the County, and other changes. Council Member Aaron Chung and Chair Karen Eoff agreed that they would like to take another look at this bill and suggested postponement. This measure then was postponed to the call of the chair. On May 5, 2015, Council Member Margaret Wille commented regarding adjustments that were made to address concerns previously raised regarding union use of county property and contracts given to employees of the county. Corporation Counsel Molly Stebbins expressed her concerns regarding section to Section 2-83(b). that provides language regarding unions using county property and allowing campaign activity. Ms. Stebbins explained that currently under the ethics code you cannot use county facilities for campaign purposes, unless it is county facility available for rent by the general public. Ms. Stebbins questioned the intent of allowing campaigning at a county facility as long as opposing candidates are allowed to attend. Council Member Daniel Paleka commented that he has concerns regarding collective bargaining agreements between unions and the County of Hawaii regarding the use of county facilities. FC Report No. 33 FC-33 September 1, 2015 Council Member Aaron Chung shared his concern about any employee of the County not being able to contract with the County for"side jobs". Council Member Dennis Onishi stated that he does not support this measure because it singles out unions as to who they allow at their meetings, and employees of the county being given contracts that may be saving the County money. Council Member Maile David commented on her inability to support this measure with the addition of language that requires contracts to be approved by council, and the removal of the procurement language. Council Member Wille moved to amend this bill with the contents of Communication No. 231.2, and this matter was subsequently postponed to the call of the chair. On June 2,2015,Council Member Margaret Wille withdrew her motion to amend this bill with the contents of Communication No. 231.2, and moved to amend with the contents of Communication No. 231.5. Ms. Wille stated several concerns were addressed that were raised regarding the previous amendment, and gave an overview of the changes. Corporation Counsel Molly Stebbins stated her concerns with inconsistent language in sections 2-83(c) and 2-85 regarding contracts to county employees. This measure was postponed to July 1, 2015, and further postponed to the July 23, 2015, Finance Committee at the written request of Ms. Wille. On July 23, 2015, Council Member Margaret Wille withdrew her motion to amend with the contents of Communication 231.5, and moved to amend with the contents of Communication No. 231.8.,then described her newest amendments. Council Member Daniel Paleka expressed agreement in removing the section regarding unions, then commented that if a county facility was rented out for campaigning, it seems that it would not be allowed in this bill. Corporation Counsel Molly Stebbins came forward and explained that facilities rented out by the general public for campaign purposes, would be allowed with this bill, and Ms. Wille replied that the language can be clarified. Council Member Dennis Onishi commented that in the case of a disaster where we might need a particular service over the amount of$50,000, that it would prohibit the County, and that there should be a clause for emergencies. This bill was amended with the contents of Communication No. 231.8, as Bill 37,Draft 2, and postponed to the call of the chair. On September 1, 2015, Council Member Margaret Wille commented on her efforts to raise the standards of ethics, and described her changes clarifying that employees or immediately family members with controlling interests cannot contract with the county as an independent contractor for more than $50,000, and contracts less than that must he in adherence with procurement code. Ms. Wille described various other changes, and stated that her overall aim is to watch for conflicts of interest and keep employees at a higher standard of performance, ethics and morals. A motion was made to amend Bill 37, Draft 2, with the contents of Communication No. 231.12, from Council Member Dennis Onishi. Mr. Onishi stated that this amendment was made for consistency by adding"officer or employee's immediate family" into 2-85(a). FC-33 September 1, 2015 Corporation Counsel Molly Stebbins commented in response to Chair Kanuha and Council Member Dennis Onishi's inquiry about contracts during a state of emergency. Ms. Stebbins stated that the prohibition is basically on any contracts over$50,000 with no exception over that amount, and it could be possible to add language for exceptions in times of emergency. Ms. Stebbins also stated that this bill does not prohibit unions from using facilities for campaign purposes. Mr. Chung stated that he objects to the amount of$50,000, because it is an arbitrary number, and he cannot see the nexus between the dollar amount and ethical behavior. He further stated that employees of the county should be allowed to have side jobs. Legislative Auditor Bonnie Nims came forward to comment regarding transparency, and said that with her office, annual certifications of conflicts of interest are done to maintain transparency. Ms. Nims further stated that there are procedures for the review of public records, and has seen some instances where the public is provided an opportunity to see if contracts are fair and just. Finance Director Deanna Sako came forward to comment regarding transparency and favoritism. Ms. Sako explained that requests for quotes are made so everyone has a chance to bid, and that the lowest price gets the contract as long as specifications are met. She also stated that requests for proposals are reviewed by a committee to make sure compliance is met. Council Member Greggor Ilagan shared his concern about employees of the county having inside information about contracts and that they are able to go through the system and acquire them. Mr. Onishi commented that complaints can be made to the board of ethics and procurement issues should not be defined in this bill. Ms. Wille, as a final comment, stated that if this measure moves forward to council that she will have amendments ready for first reading. The motion to amend Bill 37, Draft 2, with the contents of Communication 231.12, was then approved. Your Committee on Finance is in accord with the purpose and intent of Bill No. 37, Draft 2, as amended as Draft 3, and forwards it to Council with a positive recommendation. wb AYES NOES ABS EX Respectfully submitted, CHUNG X DAVID + x COMMITTEE ON FINANCE EOFF X i { Ii ALAN fi X KANUHA X ONISHI X ?CO- --- PALEKA x KAREN EOFF, CHA POINDEXTER XFC REPORT NO.: _33 WILLE L X I - ADOPTED: _OCT 2-Q-2015