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HomeMy WebLinkAbout2013-05-08 Board of Ethics minutesHAWAI‘I COUNTY BOARD OF ETHICS MINUTES – REGULAR SESSION Wednesday, May 8, 2013 10:00 a.m. to 10:48 a.m. Hawai‘i County Building 25 Aupuni Street, Room 1501 Hilo, Hawai‘i 96720 Members and Staff Present: Bernard Balsis, Vice Chair Arne Henricks, Member Glen Hisashima, Member Renee N. C. Schoen, Deputy Corporation Counsel Mary E. Fujio, Secretary 1. CALL TO ORDER Mr. Balsis called the meeting to order at 10:00 a.m. 2. STATEMENTS FROM THE PUBLIC ON AGENDA ITEMS There were no statements from the public. 3. APPROVAL OF THE REGULAR SESSION MINUTES OF FEBRUARY 13, 2013 Motion and vote: Mr. Henricks moved to approve the minutes, Mr. Hisashima seconded the motion, and they and Mr. Balsis voted aye. 4. COMMUNICATIONS a. Communication from Dan A. Cole dated February 13, 2013, regarding Order dismissing Petition 2012-08. There were no comments regarding the communication. Mr. Balsis said the letter would be filed for the record. 5. NEW BUSINESS a. Petition No. 2013-01: Former employee’s request for an opinion from the Board about his current employment with HOPE Services Hawai‘i, Inc., and its intent to submit a proposal in response to a request for proposals for a management and service provider for Nā Kahua Hale O Ulu Wini housing program in Kona. Mr. Balsis noted that the petitioner had requested a closed hearing. Ms. Schoen explained that under the Board’s rules, the Board would need to vote on whether or not to grant that request. Mr. Balsis said he had no objection to a closed hearing, but Mr. Henricks suggested they first inquire of the petitioner why he requested closure and then make a decision. Mr. Balsis asked the petitioner why he requested a closed hearing, and the petitioner said he did not think his petition was an issue necessary for full public disclosure. Also, because his agency is contemplating submitting a proposal in response to a County request for proposals, it would be beneficial to limit the amount of disclosure, if possible. Mr. Balsis asked whether it would hurt the petitioner in some way if the proceedings were not closed, and whether he felt strongly about closing it. The petitioner said no. Motion and vote: Mr. Balsis moved to proceed with the matter in open session, Mr. Hisashima seconded the motion, and they and Mr. Henricks voted aye. Mr. Balsis stated that the petitioner is Jeremy McComber, and he asked Mr. McComber to explain the petition. Mr. McComber explained that his current employer is anticipating responding to an upcoming request for proposals (“RFP”) for the Ulu Wini housing project in Kona. Because his former employer is the County, his new employer wanted to be proactive and address any concerns that could arise before the RFP is announced to the public. His employment with the County started in March 2000, and he left employment on July 31, 2012. In the last four years of his County tenure, he was responsible for managing the community development division of the Office of Housing and Community Services. This division oversees housing projects. He helped develop the first phase of the Ulu Wini project, which consists of 40 units. In the summer of 2011, the County put out an RFP for an operator to provide services and management of the first phase. There was a review and ranking panel, and the contract was awarded to HOPE Services. Mr. McComber asked Brandee Menino, the CEO of HOPE Services, to talk about HOPE’s involvement with the contract, since he was still employed with the County at that time. Brandee Menino introduced herself as the chief executive officer of HOPE Services and explained how the agreement with the County came about. It started with Community Alliance Partners, which is a committee of government officials and others concerned about homelessness in Hawai‘i County. The committee had been meeting for over a decade, and met with the County and other providers who were interested in developing services and strategies to address homelessness. When the County was developing the RFP, the committee gave input. HOPE Services was one of the providers who responded to the RFP in the summer of 2011. She wrote the grant proposal on behalf of her organization in response to the RFP, and HOPE Services was awarded a one-year service agreement to manage the units at Ulu Wini, which has 11 transitional housing units for families and 28 affordable rentals. They also contract with Aloha Coast Realty to manage the property for the affordable rentals. HOPE Services has been providing the services at Ulu Wini for over a year, and the County earlier this year extended the service agreement to June 25, 2013. They are anticipating that a new RFP will be released soon due to the current agreement expiring in June. Mr. Henricks asked Mr. McComber if the proposal they were getting ready to bid on was the one he had put together when he worked at Housing, and Mr. McComber said no. He explained that he was involved with the prior contract, the one expiring on June 25. He was not involved with the proposal coming up, as he left employment with the County in July 2012. Mr. Henricks said that the ethics concern was whether Mr. McComber held any advantage with the upcoming RFP because of his prior position with the County. He asked Mr. McComber whether he had any knowledge of the new contract that would be superior to anything any other bidders might have, and Mr. McComber said he did not. He said the only frame of reference he had is what Ms. Menino submitted for the initial contract. Mr. Henricks asked Mr. McComber whether he had any insider knowledge about the whole thing that would benefit him and hurt someone else, and Mr. McComber said no. Mr. Henricks asked if the playing field was even, and Mr. McComber said yes. Mr. Henricks asked whether Mr. McComber was very close to anyone in the County because of his prior employment, someone who would give him an advantage in the bidding process. Mr. McComber said it was his understanding that the individual drafting the RFP is a new employee based in Kona, and he had not met the employee. Mr. Henricks asked whether he had a distinct advantage over any other bidder that could come forward, and Mr. McComber said no. Mr. Hisashima asked when the next RFP was due, and Mr. McComber said it had not been noticed yet. Ms. Menino said they were just anticipating it since the current agreement ends June 25. She explained that the next phase of units has been completed, and the County has informed them that they are going to wrap that with the first 40 units into one RFP. Mr. Balsis asked who informed them it was going to be wrapped with the first, and Mr. McComber said the Housing administrator did. Ms. Menino said she had asked Housing if they were going to continue the extension of the current agreement and was told that it was going to go back for an RFP to include an employment training center, warehouse, the next 36 units, and a wastewater treatment plant. Mr. Hisashima said that Mr. McComber had left County employment about 10 months ago. He also said the County has a history of extending contracts. Mr. McComber said that their contract, however, was the first of its type anywhere in the County. Mr. McComber said he wanted to mention a section of the Code of Ethics which was about economic gain or advantage. He was assuming that the second phase of the project would be like the first phase, in which the County would prepare the RFP and not pay anything to the provider who was awarded the contract. The current contract requires HOPE Services to provide a certain level of service on its own dollar, which means HOPE needs to coordinate with federal, county, and state funding to be able to deliver the services. HOPE is not paid for managing the project. Their salaries are allocated across all of their programs, so there would be no direct economic gain for him or his organization for running the project. Mr. Hisashima said years ago, as part of his work in the prison system, he had worked with HOPE Services. It was known back then as the Office of Social Ministry, and it helped inmates find housing. He had dealt with Ms. Menino a lot, and Mr. McComber was a part of their Going Home program. He asked whether it would be a conflict for him to vote on this matter. Ms. Schoen said that according to the rules, someone could file a request to have him disqualified due to a conflict, but otherwise the general rule is that if he believes he can be fair and impartial, despite his prior relationship with HOPE Services and the petitioner, then he can proceed with participating in the voting. Mr. Hisashima said he would participate in the proceedings. Mr. McComber explained how an RFP is different from an IFB. With an RFP, the County puts forth its idea of core things it would like in a project, and then it reviews the various proposals submitted. There could be different competitors submitting varying proposals. A requirement of the proposals is to meet the core focus of what the County is requesting. With IFBs, the County designs a project and comes up with a specifications list, then requests bids on how much it will cost. So for the Ulu Wini project, the County will be putting forth in the RFP the basic services it wants to offer, and the providers will design a program to provide the services in their proposals. Their proposals on how to provide the services may be quite different. Mr. McComber said HOPE Services will have no advantage in that regard. Ms. Schoen said she received a call from the director of the Office of Housing and Community Services, saying he was available to respond to the Board if it had any questions. Also, she had found three other petitions the Board had considered previously regarding post-employment matters, though none of them was about bidding on RFPs. The relevant sections of the Code are 2-91.2 on post-employment and 2-85(b), regarding contracting with former employees. Ms. Schoen asked Mr. McComber to clarify his former position and duties with the County. Mr. McComber said his responsibility was to oversee the community development division, which oversaw project construction management and builders. His current capacity at HOPE Services is service-based and nothing like what he did with the County. HOPE does not develop housing. It is strictly focused on delivering services to the populations residing here. Mr. Balsis asked Mr. McComber whether his involvement in the design of the original RFP influenced his present position with HOPE Services. Mr. McComber said no, and he asked Ms. Menino to explain how he came to be employed with HOPE Services. Ms. Menino explained that she is a new CEO. HOPE Services was born in October 2010. Her previous tenure had been as homeless programs administrator with the Catholic Diocese, Office of Social Ministry. All of their homeless programs were basically carved out of the Catholic Church and are non-profit, so they can be more mobile and deliver services island-wide. All of their homeless programs are also now under HOPE Services Hawai‘i, and she had to make the big transition from administrator to CEO. However, she was still assigned to being program administrator, which oversees their services. When she became CEO, her duties changed to include fiscal responsibilities, financial management, and event planning, yet she also still had her previous duties of supervising staff and making sure adequate and quality services were brought to their clients. The people they serve include people coming out of jail, people on the streets, and people in shelters. Basically, her role expanded without anyone being hired to take on her old role. Her organization severely needed additional help, as the quality of their work was being jeopardized. So in early 2012 she began engaging with her board for additional assistance, and she got support to create a new position. The title started out as administrator but has since changed to director of operations. They needed someone who could do what she had done—grant writing, program development, and delivery of services. They needed to bring up the scale of the middle managers so they could manage the various departments instead of her. So they advertised the opening in June of 2012 in the newspaper and received a small response. They selected candidates to interview, and Mr. McComber was the strongest candidate. Mr. Balsis asked Ms. Schoen whether they needed to vote on this matter or just provide an opinion, and Ms. Schoen said they needed to decide on whether Mr. McComber was in conflict. Mr. Henricks said the question was whether it is a violation of Section 2-91.2, because using the word “conflict” opens it up to all kinds of stuff. They needed to stay with the Code. Motion: Mr. Henricks moved that the Board find no violation of Section 2-91.2 as stated by the evidence produced at this time. Mr. Hisashima seconded the motion. Mr. Balsis asked if there was any further discussion on the motion, and there was none. Vote: Mr. Balsis, Mr. Henricks, and Mr. Hisashima voted aye. The motion passed. Mr. McComber asked whether the earlier reference to Section 2-85(b) needed to be included in the vote. Ms. Schoen said that section deals with contracts that the County is prohibited from entering into, and read it: “A County agency shall not enter into a contract with any person or business which represented or assisted personally in the matter by a person who has been an employee of the agency within the preceding two years and who participated while in County office or employment in the matter with which the contract is directly concerned.” The question is whether Mr. McComber personally participated in the contract while employed by the County, and if so, whether his participation directly related to the upcoming contract which could ultimately be obtained. Mr. Henricks said it was his understanding that the current contract is going to be terminated by the time the new one is entered to. It will be the same type of contract, but not the same contract. Mr. Balsis said that Mr. McComber had mentioned that the new contract will have similarities, but will also have a much wider scope. Mr. Hisashima said people cannot predict what they will be doing two years in the future. He asked who reviews contracts for the legal aspect. Ms. Schoen said that a department itself can draft a contract. There are also situations when a department needs the assistance of the Finance Department to draft an RFP or contract. Usually a department will have a selection committee which will review a contract or RFP and then award. So how a contract comes about varies from situation to situation, depending on what type of contract it is. Often a department knows what it wants and will ask the Finance Department will draft the language. The department the contract is for will administer the contract. The Ethics Code looks at whether an employee had any type of interest or knowledge or direct involvement in the terms of a contract. Mr. Balsis said the last part of Section 2-85(b) is about who participated in the matter of the contract. It is concerned with a future contract and is not looking at a past contract. Mr. Henricks said that was why his first question to Mr. McComber was whether he had any part in putting together the proposal to be bid on, because that would likely be a violation. But since he was not involved in the subsequent proposal, he did not see a problem. He said he would amend his motion. Amended motion and vote: Mr. Henricks moved to amend the Board’s findings to include Section 2-85. Mr. Hisashima seconded the motion, and they and Mr. Balsis voted aye. Ms. Schoen said she would prepare the order for the Board’s review at the next meeting, at which time they could propose changes or approve it as drafted. In the meantime, the Board’s decision stands as of today. Ms. Menino asked whether they could get the Board’s decision in writing before the next meeting in case the RFP came out before then, and Ms. Schoen said the Board’s secretary would prepare the minutes as soon as she could. Mr. Henricks said that the Board’s findings mean that Mr. McComber will not get into trouble with the Board on this issue, but that there may be other issues unrelated to the ethics code. Mr. McComber thanked everyone for their time. 6. UNFINISHED BUSINESS There was no unfinished business. Motion and vote: Mr. Henricks moved to go into executive session for review of the confidential matters agendized therein. Mr. Hisashima seconded the motion, and they and Mr. Balsis voted aye. 10:32 a.m.: The Board left regular session. * * * * * 10:45 a.m.: The Board returned to regular session. 7. VOTING ON EXECUTIVE SESSION MATTERS a. Approval of the executive session minutes of February 13, 2013. Motion and vote: Mr. Henricks moved to approve the minutes, Mr. Hisashima seconded the motion, and they and Mr. Balsis voted aye. b. Review of Confidential Financial Disclosure Forms filed pursuant to Section 2-91.1(d), Hawai‘i County Code, by County board and commission members and designated County employees, where personal matters will be reviewed. Mr. Balsis said that in reviewing the disclosures, the Board noted that numbers 2, 4, and 11 were incomplete. They would be re-reviewed at the next meeting, after the secretary contacted the filers for completion. Motion and vote: Mr. Balsis moved to approve the remaining eight disclosures, Mr. Henricks seconded the motion, and they and Mr. Hisashima voted aye. 8. ANNOUNCEMENTS Mr. Balsis announced that the next meeting is scheduled for June 12, 2013, at 10:00 a.m. in Room 1501 of the Hawai‘i County Building in Hilo, or at another location to be determined. 9. ADJOURNMENT Mr. Balsis adjourned the meeting at 10:48 a.m. Respectfully submitted: Mary E. Fujio, Secretary (with her signature)