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HomeMy WebLinkAbout2013-12-11 Board of Ethics minutesHAWAI‘I COUNTY BOARD OF ETHICS MINUTES – REGULAR SESSION Wednesday, December 11, 2013 10:00 a.m. to 11:49 a.m. Hawai‘i County Building County Council Chambers 25 Aupuni Street Hilo, Hawai‘i 96720 Members and Staff Present: Bernard Balsis, Vice Chair Arne Henricks, Member Glen Hisashima, Member Douglass Adams, 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 NOVEMBER 13, 2013 Motion and vote: Mr. Henricks moved to approve the minutes, Mr. Adams seconded the motion, and all members voted aye. 4. NEW BUSINESS Mr. Henricks suggested the Board hear agenda items 4a and 4b together, as the petitions were very similar. The Board members agreed. Mr. Balsis explained that the only difference was the employees who were named. a. Petition No. 2013-05: Initial review of petition alleging that a County employee is in violation of Section 2-84(a)(1) of the Code of Ethics because the employee “has been assigned to appraise [the employee’s] own property” and “performed the official action of setting the assessed value of the land of [the employee’s] primary residence.” b. Petition No. 2013-06: Initial review of petition alleging that a County employee is in violation of Section 2-84(a)(1) of the Code of Ethics because the employee “has been assigned to appraise [the employee’s] own property” and “performed the official action of setting the assessed value of the land of [the employee’s] primary residence.” Mr. Balsis noted that the petitioner, Michael Drutar, was not present, though he had been given notice of the meeting. Ms. Schoen said that in the past, if a petitioner was not present, the Board had proceeded. However, the matter could also be continued for the petitioner’s presence. Motion and vote: Mr. Henricks moved to proceed, as other people involved in the petitions were present. Mr. Balsis seconded the motion, and all members voted aye. Mr. Balsis stated that the respondents in Petition Nos. 2013-05 and 2013-06 were Mary Ann Todd-Waller and Marilyn Veincent, and asked whether they were present. Ms. Veincent was present, but Ms. Todd-Waller was not. It was noted, however, that Ms. Todd-Waller had submitted a written response to the petition. Mr. Balsis called Marilyn Veincent and Stanley Sitko, the administrator of the Real Property Tax Division, forward to speak. MR. BALSIS: Have you read the petition? MS. VEINCENT: Yes, I have. MR. BALSIS: What comments do you have? MS. VEINCENT: Very simple comments. If it’s appropriate, I can read it now. MR. BALSIS: Go ahead. MS. VEINCENT: I have been employed in my current position as an appraiser with the County for 28 years. The geographic area over which the majority of my 28 years was spent was in the Hāmākua Coast. In 2012 I was assigned to the area that I currently appraise, which is a portion of South Hilo that includes Kaūmana and upper Waiākea, where I have resided for 37 years. My responsibility for this area in terms of setting values began with the current year, 2013-2014, for which no changes were necessary. This was predicated on the sales ratio study that indicated a 95% ratio of assessments to sales. In the future, should the market dictate that values be adjusted upward or downward, I will make those changes en masse, based solely on my research and not on a self-serving whim. Each year the results of our analysis must be submitted to administration for further review, where special scrutiny is given to those areas where the appraiser resides, such as mine. There is a system of checks and balances in place, as well as an audit trail maintained by our computer system, where each and every change can and will be traced. In closing, I must say I enjoy my job and would not do anything to jeopardize the reputation and integrity that I’ve built for myself, nor would I do anything to jeopardize my career with the County of Hawai‘i. Thank you. The petitioner, Michael Drutar, had walked in while Ms. Veincent was testifying. Mr. Balsis noted his presence, and Mr. Drutar apologized for being late and explained that he was not aware of the road work being done, which had delayed him. Mr. Balsis asked Ms. Veincent and Mr. Sitko to take their seats, and asked Mr. Drutar to come forward. He explained to him that they were taking Petition Nos. 2013-05 and 2013-06 together, as they were the same in nature. He noted that Ms. Veincent had made comments and asked if Mr. Drutar would like to comment. MR. DRUTAR: Thank you for the opportunity to speak. In my time working for the Department of Finance, I have witnessed an ever present and growing nature displaying capricious behavior on the applications of the Hawai‘i County Code, the Code of Ethics, and the Hawai‘i County Charter. This lack of consistency has created an environment where County employees have been assigned tasks which are possible violations of Hawai‘i County--of the County of Hawai‘i Code of Ethics. Leadership at the Department of Finance has either determined that they are exempt from following the Hawai‘i County Charter 14-5 related to the Board of Ethics and the Code of Ethics found in Hawai‘i County Code, Article 15, or they have simply chosen to seize the authority, rights, and duties granted to the Board of Ethics under the Hawai‘i County Charter. Specifically, the Department of Finance has decided on their own accord that they alone can determine ethical violations and issue judgments, and that any action taken by or signed by the Department of Finance is by definition acceptable and legal. In doing so, they have chosen with the knowledge of Corp Counsel, and the Board of Ethics Corp Counsel representative, to disregard the first function of the Board of Ethics, as listed in Section 14-5(a) of the Hawai‘i County Charter. The Hawai‘i County Charter, 14-5, creates the Board of Ethics and grants the Board authority in interpreting the Code of Ethics. The Hawai‘i County Charter does not give any other governing body, entity, or person the authority to interpret the Code of Ethics. By explicitly creating the Board of Ethics and granting the Board with its powers, and not explicitly granting the same powers to the County of Hawai‘i administration, the intent of the Hawai‘i County Charter is clear. Only the Board of Ethics and not the County of Hawai‘i has the authority to render valid opinions on ethics matters. Many County employees working in various departments within the County of Hawai‘i have been subject to disciplinary accusations, investigations, and punishments for violating the Code of Ethics without the County ever having sought an informal advisory opinion from the Board of Ethics. Each of these actions by the County of Hawai‘i directly violates the Hawai‘i County Charter. The Board of Ethics serves a purpose. The Board is an independent body with no vested interest in the outcome of any case. The creation of an independent Board of Ethics was by design. Having the independent body oversee the Code of Ethics helps ensure a fair and transparent process. The County of Hawai‘i, on the other hand, does have a vested interest in cases in which they are the accuser of an ethical violation, or when they clear themselves of ethics violations, such as this case. When the County is being the accuser in an ethics case, it is unjust for them to also be the judge and jury. This allows for the system to be manipulated. For example, office politics, where a supervisor may not like another employee. Another example would be a bias. When a director of a department issues an ethics accusation and then hands over the investigation to someone working under their authority, it is reasonable to say this creates a situation where the subordinate employee may feel it is their job to prove their supervisor’s accusation in order to avoid embarrassing their supervisor, rather than ascertain the facts. Both of these two examples illustrate why the Hawai‘i County Charter created an independent Board of Ethics. Even though the Hawai‘i County Charter created a Board of Ethics for this exact reason, with determining ethical violations for County officials as its very first duty, County officials have arbitrarily and without legal standing decided that they alone can accuse, investigate, prosecute, and judge ethical violations. When asked directly in writing, Director of Finance, Nancy Crawford, stated in writing that the Department of Finance does not need to go through the Board of Ethics to determine ethical violations. And I have a copy of that. When asked directly, Corp Counsel Renee Schoen retorted verbally, do you really think the County needs to check with the Board on ethical violations? Now that was verbally, so I don’t have a transcript of that. That was to a union representative ________. All this brings us to where we are today. I have submitted three possible ethical violations of employees within the Department of Finance. Some of these employees have simply done the job that they were assigned. These employees were not advised by the department that they may possibly be in violation of the Code of Ethics just by doing their assigned jobs. The Department of Finance could have assigned another appraiser for the individual properties in question, but chose not to of their own accord. The Department of Finance could have petitioned the Board of Ethics for an informal advisory opinion, but chose not to of their own accord. Why didn’t they? The answer is simple. The Department of Finance does not recognize that the Board of Ethics was created for this exact situation. The Department of Finance does not recognize the authority of the Board of Ethics. This is evidenced by the fact that Real Property did not seek any guidance from the Board on these ethical matters, where a prudent person would agree that, at the very least, there exists a distinct possibility that having someone appraise their own personal property could be, quote, a direct action—that’s a quote from the Code of Ethics—where an appraiser has a, quote, substantial financial interest, unquote, but that owning a business which represents people against the same department a County employee works for could be a conflict of interest. You’ll see from the documents that I’ve submitted to the Board that Real Property Tax has employees assessing their own properties. On September 17, 2013, an article appeared in West Hawai‘i Today and the Hawai‘i Tribune-Herald. In it Director of Finance, Nancy Crawford, stated that quote, according to the article, denied that any employees are assessing their own property. She stated, quote, they are not to ever touch their own property. Even if there is an allegation, we investigate. If there is an issue or a complaint we investigate, because we take it very seriously. If this is the case, where is their investigation? They were made aware of this in September and again in October. Again, this is yet further evidence that they believe they are above any other authority. I have no interest in seeing my fellow employees punished for possible ethical violations I have submitted to the Board, and I believe that the leadership of the Department of Finance, Real Property Tax, has been conditioned by many years of a culture where various rules, laws, and rights have slowly been chipped away without anyone saying a word. It seems after many years they have gone further down the proverbial slippery slope and they __________ at this time. Hawai‘i County Charter Section 14-5(d) gives the Board of Ethics the right and authority to quote, hold hearings and conduct investigations concerning application of the Code of Ethics. I believe the Department [sic] of Ethics should consider if an investigation into the Department of Finance and possibly the County administration is needed at this time based on the following. Number one, statement by Director Nancy Crawford that the Department of Finance does not need to seek an informal advisory opinion of the Board of Ethics in order to suspend employees for ethical violations. Number two, statement by County of Hawai‘i Corp Counsel and assigned advisor to the Board of Ethics, Renee Schoen, conveying the opinion that the County does not need to seek an informal advisory opinion from the Board of Ethics in order to determine ethical violations. Number three, an action by the Department of Finance in not seeking an informal advisory opinion on possible ethical violations, where at the very least a strong possibility of a conflict of interest ethical violation exists. Number four, previous disciplinary actions by the Department of Finance in the County of Hawai‘i where discipline was based on ethical violations without seeking an informal advisory opinion from the Board of Ethics, violating the Hawai‘i County Charter. Number five, statement of Director of Finance, Nancy Crawford, misleading the public about assessors assessing their own properties. And finally number six, an on-line review of the Board of Ethics minutes dating back to January of 2012 shows that the County of Hawai‘i administration is rarely utilizing the Board of Ethics for advisory opinions and that nearly all informal advisory opinions are requested by those outside County administration. In summary, the County of Hawai‘i, Department of Finance, and Real Property Tax is violating and continues to violate the Hawai‘i County Charter, Section 14-5. The Department of Finance has disciplined some employees for ethics violations without consulting the Board and assigned other employees to tasks which are clearly a more direct violation of the Code of Ethics. The Department of Finance is acting outside the scope of the Hawai‘i County Charter. Please consider taking a direct action to end their disregard for the Hawai‘i County Charter 14-5 and the authority of this Board by prohibiting the Department of Finance from issuing judgments from the Code of Ethics, and reaffirming the rights, responsibilities, and duties of this volunteer citizen Board. Thank you for your time. MR. BALSIS: The question to the petition is specifically that Mary Ann and Marilyn appraised their own properties. MR. DRUTAR: They set the land values for their personal properties. Land values are set based on neighborhoods. They are assigned the neighborhood that includes their personal property. Did I answer your question? MR. HENRICKS: May I ask a question? MR. BALSIS: Go ahead. MR. HENRICKS: Do you have a document showing that they appraised their own property? MR. DRUTAR: I’m sure they’ll tell you that they appraised their own property. MR. HENRICKS: No, do you have a document showing that they appraised their own property? MR. DRUTAR: I have not tried to pull that up in the system, but that is in the computer system _________ if you guys wanted to investigate that. That’s beyond what I can do in my job. I know that they are. MR. HENRICKS: Did you ask for one? MR. DRUTAR: I asked Mary. No, I have not asked them to participate— MR. HENRICKS: So you never tried to get a document actually stating that they appraised their own property. MR. DRUTAR: No. I would leave that to the investigative powers of the Board. I don’t know that they would deny it, sir. MR. BALSIS: What Michael has said is that with regards to loan values, they appraise the neighborhood, and that bases their – MR. HENRICKS: Indirectly, remember. MR. BALSIS: Yes. MR. HENRICKS: Okay, that’s indirect. MR. DRUTAR: And that’s the question for the Board, is whether or not that’s direct or indirect. I know at other instances they have considered that appraising or measuring a house in Kona to be a direct action when selling a house in Waikoloa, for example, for a previous situation where ethics punishment was issued without consulting the Board. It seems that someone setting the land value for their house could actually change the land value, because it’s their house. It’s in their neighborhood. They could change it for their whole neighborhood. I’m not saying that they have. I’m saying that it’s possible. And that’s a situation where someone should recuse themselves, and it could easily be assigned to another employee. MR. BALSIS: Are there any other questions? Go ahead. MR. HISASHIMA: Is there any—I’m a systems person. Is there any way that the assessment that they do is reviewed by their supervisors? MR. DRUTAR: I think all of our assessments are reviewed by the supervisors. But as I interpret—as I read the Code of Ethics and ask for your interpretation, because you’re the Board of Ethics, it doesn’t say that the County of Hawai‘i and Department of Real Property Tax has the right to put systems in place. It says you cannot take a direct action where you have a substantial financial interest. MR. HISASHIMA: I understand that, but what I’m trying to get at is if there is a system in place, the supervisor can void that assessment--or he cannot? MR. DRUTAR: I would assume so. The supervisor could absolutely do that. MR. HISASHIMA: So in this case, the supervisor could come in and say you did your own so I’m voiding it, I’m assigning another assessor. Is that possible? MR. DRUTAR: He absolutely could. MR. HISASHIMA: And have you ever seen, throughout your career, this ever done? MR. DRUTAR: In my limited career, it’s only a year and a half, I have not seen that happen, where someone says you have a vested interest, I’m going to pull you off it and put someone else on that. I have not seen that option exercised. It seems prudent to me, but that’s just me. MR. HISASHIMA: Thank you. MR. BALSIS: Douglass, you have some questions? MR. ADAMS: Not for Mr. Drutar. MR. BALSIS: At this time, Michael, I’m going to ask if you could have a seat, and we’re going to continue to ask some questions of others. MR. DRUTAR: Thank you, sir. MR. BALSIS: May I ask Marilyn and – MR. SITKO: Stan. MR. BALSIS: Stan, thank you. Marilyn, we did hear your comments before. At this time I believe Douglass has some questions for someone. MR. ADAMS: Just to get to the heart of the matter, have you ever had the responsibility—you gave us where your current area is that you have appraisal authority for, or responsibility for, which includes your current house-- MS. VEINCENT: Correct. MR. ADAMS: Correct. But have you done an appraisal of that area to this point? MS. VEINCENT: If you want to consider not making any changes an action, yes. MR. ADAMS: Okay. Well, then that would be an action. Sure. Okay, thanks. MR. BALSIS: Anybody else have questions? MR. HENRICKS: I have one question. Who did the appraisal on your property? MS. VEINCENT: I did the appraisal on my property. MR. HENRICKS: On your own property? MS. VEINCENT: Not individually. The way that the assessment systems works is that we group homogenous properties into a neighborhood by an alpha-numeric system, and when we change any value, based on our analysis submitted to our administration, that implementation is en masse. It gets applied to every parcel within that neighborhood code. MR. HENRICKS: So it includes your own property. MS. VEINCENT: It does include my property, yes. MR. HENRICKS: So in effect you are appraising your own property. MS. VEINCENT: Correct. MR. BALSIS: Glen? MR. HISASHIMA: Stan, you nodded your head about systems. If I’m an appraiser, I send you my paperwork--do you review it yourself or do you have somebody else to review it? MR. SITKO: We actually have—okay, the only part of the record that the individual appraiser is allowed to touch on their own property would be the mass appraisal land pricing for that neighborhood, if they happen to have that in their district. One of the things that is done is we review the CALP changes or non-changes for every particular neighborhood, and that is done by an evaluation analyst and, since we haven’t had one for about a year now, either the assistant administrator or myself. And we then put it into the system. If we see anything that is not substantiated by the sales ratio studies that we look at for the particular neighborhood, we ask for justification. Further, as was mentioned already, there is an auditing system in the computer. We do—we can see every change made. Now obviously, you could always ask a fellow assessor to change your--the data on your particular parcel, which is why annually I run a check of all properties owned by people in the Real Property Tax office and review all of them for why they would change up or down to see if they’re consistent with the entire mass area that they are appraising, or is being appraised. And additionally—well, at that point I do everybody’s, and then somebody does mine. MR. HISASHIMA: So what you’re saying, prior that they’re allowed to do their own, and if you see any tales of not being truthful, you have the right to disqualify. MR. SITKO: We disqualify. I mean, first off, nobody is supposed to touch the data on their own particular property. MR. HISASHIMA: Okay. Who assigns the assessors to that area? MR. SITKO: This last time around it was the appraisal supervisor. We do have problems, because we are limited in the number of people we have and where they live, so sooner or later somebody is going to be working on their area. I’ll have to give an example. I myself review the sales ratios. I have to set global values for the entire island. There’s no way I cannot quote unquote appraise my property, unless I happen to be living off-island. MR. HISASHIMA: So there are cases where you had to do your own, too, then. MR. SITKO: En masse, yes. MR. HISASHIMA: Okay. And on this system--like how many under your control that are assessors? How many employees? MR. SITKO: We have twelve zone appraisers, two specialized appraisers, and one appraisal supervisor. We are supposed to have two valuation analysts, and then that would be the whole crew outside of the administrators, who have access to changing the appraisal data. MR. HISASHIMA: So on the assessment team, I’m looking at fifteen people? MR. SITKO: That is correct. MR. HISASHIMA: And how long have you been in your position? MR. SITKO: I’ve been the Real Property Tax Administrator since 2008 and the Assistant Administrator since 2001. MR. HISASHIMA: Do you know your appraisers’ addresses? MR. SITKO: Yeah, I actually— MR. HISASHIMA: --each one? MR. SITKO: I actually have an I.D. list of all their TMKs. MR. HISASHIMA: Then my final question is then how did they get to be assigned their own address? If you knew about it, couldn’t you step in and say hey, you cannot do yours, you cannot do yours, you cannot do yours, and reassign somebody else? That’s why I’m saying systems. MR. SITKO: Okay. They were reassigned and reviewed this last spring to equalize the balance of work between each zone and each appraiser. Generally I do not consider this an issue as long as they do not touch their own specific property and the other safeguards are in place. So I did not look at that particular issue as being a problem. MR. HISASHIMA: That’s why we’re here today, because they did their own according to their assigned tasks. MR. SITKO: Well, we very easily could put in place that we would accept their neighborhood ______. Our problem is just the distribution of work, okay, so we could institute that relatively easily. MR. HISASHIMA: Okay, thank you. MR. HENRICKS: All right, I need a clarification. I keep hearing the word en masse, and I hear the word individual. Is there two different appraisals? MR. SITKO: Well, we do—it’s called mass appraisal, which is appraising a universe of properties, using the same data on each property and using statistical methods to test it. There’s also something called the fee appraisal, which you would actually just appraise the value of one parcel, and it would be very specific to that one parcel. MR. HENRICKS: But you don’t do that. MR. SITKO: No, we don’t do that. MR. HENRICKS: So in fact if--say my property, it’s part of an en masse appraisal, right, in my neighborhood? MR. SITKO: Yes. MR. HENRICKS: So therefore if she goes out and does an en masse appraisal in her neighborhood, she’s actually appraising her own property. MR. SITKO: Yes. MR. BALSIS: Are there any other—sure, go ahead. MR. ADAMS: So looking at the petitions in these two cases, it appears to me, so I guess I’ll say that—I’ll make a statement that’ll actually be a question, that there’s a catch 22 situation. First we have the County Charter and ethical code that says individuals will not take any direct action involving a substantial financial interest that they’re involved in. And yet at the same time, you have our real estate appraisers that have the responsibility for their zones and their mass appraisals, which in some cases may include homes that they own. And you’ve set up processes as a result to try and overcome the idea that there would be some type of financial conflict of interest, just by making sure that you’re able to put a series of eyes on top of that. But we still have the County Charter that doesn’t allow for those processes as being enough. The County Charter says, and the Code says, you won’t do it. You won’t take that action. And until we come to some—I mean, am I misunderstanding the situation? MR. SITKO: I can’t speak to the conflict. I will say that because they’re doing it en masse they’re not directly going there. So the other thing is, the other answer was yes. I could set up a process where I just take out that one single neighborhood and assign it and have someone else set the land values on it. Once again, they would be subject to review. I would still be checking their parcels, because you don’t want ______ that way. But to answer your question, at this point yes, they are directly or indirectly doing the mass appraisal for their neighborhood. We can fix that. MS. SCHOEN: Mr. Chair, I notice that the Director of Finance has kind of stepped forward, and she may want to provide input to the Board, if the Board is wanting to hear from her. MR. BALSIS: Yes. Nancy, did you have something you wanted to say? Sorry, there’s only two chairs, there. Somebody—Stan is the gentleman. Thank you. MS. CRAWFORD: Thank you very much. I’m Nancy Crawford, Director of Finance. And I just wanted to—I would like to add or clarify here that a lot of this goes to a definition of appraisal and what that means. The assessors do recommend models for neighborhoods in their zone, and the recommendation they make, it goes up the line, and their property might be in that area. But they’re not taking any kind of direct action—not only on their individual property, which we very clearly don’t allow, but they are also not actually taking the action on the mass appraisal model that’s submitted. That was what we were saying is reviewed and input by—currently by the administrators. And so in our view, that doesn’t constitute appraising their property in that neighborhood. Because we have—naturally we have certain centers of population on the island. It’s very difficult to balance zones so that some appraiser doesn’t live-- unless you have Kona appraisers appraising the Hilo property and otherwise, which is very impractical, we don’t see that as a direct appraisal of their property. When there have been—there was a case of someone who did touch their property, their own property specifically, which is what I felt this appraisal was about, was your individual properties—then when we found that out, there was an investigation and action taken on that, because that clearly was not appropriate. We differentiate that from recommending models of the land values for areas and neighborhoods and zones. That’s kind of like—as Mr. Sitko’s illustration is, he’s calling what he does an appraisal affecting a property, because he owns a property on this island and in setting the overall island-wide depreciation or other aspects, that’s—if you want to read it that narrowly, and that’s what you would say, we would have to have off-island appraisers doing this. MR. BALSIS: Do you have any questions? MR. HENRICKS: No. MR. BALSIS: Nancy, I want to thank you very much. MS. CRAWFORD: Thank you for the opportunity to speak. MR. BALSIS: Any questions for Stan, or for Marilyn? MR. HISASHIMA: I have one. Who does the investigation in these kind of events? MR. SITKO: Usually we ask somebody from outside of our division to look into it. MR. HISASHIMA: Outside the division, you mean another department? MR. SITKO: I’d go up to the department level and outside of my division. MR. HISASHIMA: In this case here, the two young ladies, who did the investigation? MR. SITKO: Well, the point is, we—well, if you want, very honestly, the investigation—I’m a little confused as to the term investigation. What we do is once again review the properties annually to see if they’re touching their own property. And we review the models that are assigned to us. As far as investigating anything, we did not feel that there was anything to investigate. MR. HISASHIMA: What I’m trying to clarify is on this August 13, 2013, policy, conflict of interest policy--under section 4 it says further investigations, if warranted. Who does that investigation, and on what grounds do they do the investigation? On a violation of a policy or on a code of conduct—the ethics? MR. SITKO: Oh, the violation of the ethics and/or—on either one. Anything that would be serious, we would take it upstairs and outside of our division. MR. HISASHIMA: So you folks are doing two then, for the—we call it administrative investigation and also on the ethics— MR. SITKO: First see if there’s something there. MR. BALSIS: Nancy, did you have something? MS. CRAWFORD: Well, I was just going to speak because I felt like this is a departmental—although it relates specifically to the Real Property Tax Division in this case, this policy is a department policy. And if an investigation is warranted, yes, it would be from out of my office. We would assign someone to do the investigation. However, in terms of the policy as written—I’m sorry, I was going to – in terms of the policy—but I think that our, under the general provisions of our policy, and I’m sorry if this is more than you wanted to know, but we talked about the employees may not assess, appraise, change records, or take any other official actions on individual properties in which they or a relative has a financial interest. And that’s—I guess that’s the point of our policy. Our concern is someone impacting their individual properties, and so that’s the—if we had a reason to feel that had been violated, that would trigger an investigation, if there was a complaint to that effect. MR. ADAMS: So under this general provision 3(a) that you were referring to, you’re talking specifically to the individual properties and you’re seeing that as the issue. That’s how the department sees it? MS. CRAWFORD: That’s how the department sees the issue of appraisal of a— MS. ADAMS: --Conflict of interest in a financial— MS. CRAWFORD: --conflict of interest, with a financial interest related, is because they are impacting directly their individual property. MR. ADAMS: Right, so the interpretation, then, of Section 2-84 out of the County Code, out of the Code of Ethics, Article 15, where it says no officer or employee shall take any official action directly affecting a business or undertaking in which that officer or employee has a substantial financial interest, with the definitions as we understand them, meaning substantial financial interest and official action directly affecting-- meaning, for example, their home, your interpretation, the department’s interpretation then, is that that refers to an individual property. MS. CRAWFORD: Well, and I would also say that taking official action is—their recommendation of and model for a neighborhood, which is passed on to someone else who actually reviews it, makes the final decision, and inputs that into the system—I guess I would say that I didn’t see that as the official action. I felt the official action is taking place at a higher level, that the appraiser is making a recommendation regarding land models for the various neighborhoods within their zone, and in my opinion, due to the further requirements that would ultimately result in anything that might impact their home, it means that they’re not the ones taking the official action on their home—real properties in which they have a financial interest. MR. ADAMS: I guess where I was going with the question has to do with how narrowly do we interpret what the Code says, what the section says. I think that the department is very narrowly identifying both official action interpretation and substantial financial interest interpretation. And I have to say I’m not sure that I’m in total agreement with the department’s interpretation. And finally, before the judge says something, I don’t think that—I think that what we say, actually, has precedence. MS. CRAWFORD: Absolutely. I agree. MR. BALSIS: Mr. Henricks? MR. HENRICKS: Yes, my question is if the recommendation is not official action, has it ever been overturned or changed? MS. CRAWFORD: Stan? MR. SITKO: Yes, it has. MR. HENRICKS: Often? What would you say the percentage is? MR. SITKO: I would say not very often— MR. HENRICKS: --That’s what I thought. MR. SITKO: But once again, as I said before, we review and if we have a question we go back and we work with the— MR. HENRICKS: --So overturning the recommendation would be the exception and not the rule, correct? MR. SITKO: That is correct. MR. HENRICKS: Okay. MR. BALSIS: Any other questions from the Board here? At this point I’d like to thank you for your testimonies, and the Board will go into discussion on these particular matters. If during our discussion we have questions, we’ll ask someone to come up. MR. ADAMS: If I might, I think it would be useful if Stan and Director Crawford might stay, because I think we’re going to have questions as part of the conversation, rather than them having to pop up and down all the time. MR. BALSIS: Okay. Stan and Nancy, if you could come up in the front, just in case. Do you have anything you’d like to say, Mr. Henricks? MR. HENRICKS: No. MR. BALSIS: Glen? MR. HISASHIMA: No, too many. MR. BALSIS: Too many things to state? MR. HISASHIMA: Well, reviewing the documents that was given to us, what really bothers me is the policy. It’s the only reason—it’s not the contents, but the implementation. Ms. Veincent said she’s been here for 28 years. However often have you seen this policy? Have you seen it before? Yeah, can you come up? You folks were supposed to have signed for it. MS. VEINCENT: Okay, if it’s something that I signed for, then I did see it. MR. HISASHIMA: Throughout your 28 years in the County, have you ever seen this before? The policy? MS. VEINCENT: Yes, I have. MR. HISASHIMA: You have. MS. VEINCENT: Yes. MR. HISASHIMA: Throughout your 28 years you stay in the system, when was the first time you saw this? When you started 28 years ago? MS. VEINCENT: No. It’s been more recently that I reviewed that. MR. HISASHIMA: Yeah, because it says here implementation date was August 13, 2013. Ms. Crawford, what promulgated this policy to come out? MS. CRAWFORD: We had a long-standing informal policy that had been followed since, as far as I know, many administrations back. And there was a general understanding of what is formalized here, and those terms of this policy were basically being followed within the division. And when it came to our attention that not everyone understood that, and a specific case, then we felt it was important to formalize that policy, and so we did so. MR. HISASHIMA: It wasn’t because of certain events or anything? Just that you folks figured that it should be documented? MS. CRAWFORD: Well, I would say that, in terms of an event, as I said it became clear that what we thought was well understood by all employees was not well understood by at least one. And therefore, again, we took—and I believe if you were to ask the appraisers, the concepts are not new. The document was new, and that was because it had not been formalized previously. MR. HISASHIMA: Then I have a simple question. For any appraiser—let’s say I become brand new—do you have all the policies in line for me to read what the County agrees with that is going to be my job? Like what I’m—like this is conflict of interest. What about other things that I may have to do? Do you folks have a process or policy for that? MS. CRAWFORD: Well, we certainly--for all new employees in the Department of Finance, we have a process of going through policies, and that certainly includes the County ethics policy as well as others that are in our department, County-wide policies, plus others. And then at the division level, I think there’s an orientation that takes place. And to the degree that we have written formal policies, in this case this one is part of—now at the Finance Department level. This we’d go over with the employee initially. MR. HISASHIMA: Being the director, do you know if there is a County-wide policy on conflict of interest? Not the Ethics Code—policy for every employee to review and read prior to their starting their employment with the County. Does the County have that in place, all written documents? MS. CRAWFORD: Well, this— MR. HISASHIMA: --I’ll give you a simple one. Don’t look at this one. Does the County have a policy on dress code? How they can dress, or what they cannot dress, and what is the consequences? MS. CRAWFORD: No, the County does not. Departments—those, if they’re set, are set at a departmental level, or division. MR. HISASHIMA: Yeah, but the department is the County. Every employee is a County employee. Again, an example. What union represents you? (to Ms. Veincent) MS. VEINCENT: HGEA. MR. HISASHIMA: What unit? MS. VEINCENT: Thirteen. MR. HISASHIMA: Because I reviewed the contracts of 13 and 3. There are a lot of things in that contract, in my feeling, that it is not being done by the County. I feel that. And I’ve asked people about why. And this is not the fault of the people in the County. It’s just because the way it happens, new people comes in, they don’t look at the employees’ contracts and review it. I give you example. On this policy, did you consult with the union? MS. CRAWFORD: Yes, we did. MR. HISASHIMA: How many days? MS. CRAWFORD: One moment. MR. HISASHIMA: No, no, roughly. MS. CRAWFORD: Approximately three weeks for them to take it to—and they did take it to the employees within the division. MR. HISASHIMA: Okay. Then I saw your sign-in sheet for the acceptance of the policy, yeah, for each employee. What is your—not legal right—but what is your responsibility to, let’s say, inform Ms. Veincent of this policy? What does your supervisor have to do? Just here’s the policy, sign this paper, and that’s it? MS. CRAWFORD: No, we made it—when this policy was distributed to the existing employees, each supervisor met with those employees, went over it, explained it to them, and then asked them—gave them an opportunity for questions. However, they had also had an opportunity to make comment to the union prior to that, and then they met and it was explained to them and they signed it. And now any new employees who come in, that’s actually done in our Finance Department human resources office, not in the division. It’s the same thing. We explain it to them very carefully and then ask them to sign the disclosure form. MR. HISASHIMA: Okay, thank you. MS. VEINCENT: Can I say something, please? MR. BALSIS: Yes. MS. VEINCENT: When I started my employment with the County, we were all given the set of instructions and what was considered to be conflicts of interest, and until recently we had, due to low or no attrition, long-time employees, no turnover. And so until recently, baby boomers have been retiring, and now with all of the new employees, there is a need to once again bring up the Code of Ethics. And so I think that that is a good thing to do at this time. The second thing is that even if I were to be removed from the area that I’m assessed in, and I’m not sure about the feasibility of rearranging appraisers every time someone moves, because you need to learn your area in order to do equitable, fair, and proper assessments. I can be taken out of the area that I appraise, but that still would not stop a person without scruples to make a change on their individual record. It can still be done. And that’s why I feel like the checks and balances that we have in place now should be enough to mitigate that. MR. HENRICKS: You understand in the County Code, though, we’re not looking at checks and balances. We’re looking at the action of the person that does the actual action and whether that is a conflict. Even if there are many checks and balances, it doesn’t matter at all, because it’s the initial action we’re looking at. That’s what the Code requires—to look at what the person did and not if he’s being checked or not checked. Okay? So your act of actually making that en masse evaluation, is that a conflict or not—that’s what we’re looking at. That alone. MR. ADAMS: So if I might, just to come back to the Code, because that’s our responsibility—in 2-84 it states, in 2-84(a), no officer or employee shall take any official action directly affecting, and then it goes into the one’s, two’s, and three’s. Well, official act or official actions is defined as a decision, recommendation, approval, disapproval or other action, including inaction, which involves the use of discretionary authority. I think part of the idea, the reason that we have identified—the reason not that we have identified, but the reason that the Code identifies real estate appraisers as regulatory employees that are subject to this Code, is because they have the kind of authority where financial interests are involved. And so we have this situation, it seems to me, where you have a job to do but we have the Code to interpret. And as I’m listening to the processes, all well intentioned, that are being explained here, it seems to me that we still—there’s a gap here, it seems to me. MR. BALSIS: Any questions? MR. HISASHIMA: No. MR. BALSIS: Any comments at this time? How about just general comments on where we want to proceed from here. MR. HENRICKS: I think we—I would like to make a motion that we move this into the next hearing level, to make it into a formal hearing for next time and ________ move it to the next level. MR. BALSIS: There’s a motion to take this into a formal hearing. MR. ADAMS: I second. MR. BALSIS: Any discussion on the motion? MR. HENRICKS: The reason I want to do that is because when we come back again, I want some clarification from the department on how they read the concept of en masse as to being directly affecting—also as to your statement about moving, every time you move you’d have to change—remember, there’s two things involved here. There’s direct action and there’s substantial interest, so if you move, it doesn’t matter where you move to if you don’t have a substantial interest in that place that you move to. You understand what I mean? So it’s only if you have a large interest in that home you’re in that we’re concerned about, that you have that _________. So it’s not just moving around that makes a difference--it’s whether you have that substantial interest that makes a difference. So if you’re renting someplace, don’t worry about the County Code and living there. It doesn’t matter. But if you’re living there and you have a—you build up an equity, then you’re starting to talk about substantial interest in that area that you’re in, and that would cause a problem. And that’s what we want to look at the next time. MS. CRAWFORD: If I can ask for clarification— MR. HENRICKS: Right. MS. CRAWFORD: So one of the appraisers buying property within the zone that they currently appraise – MR. HENRICKS: That might become a substantial interest at that point, yes. MS. CRAWFORD: Right, in which they would need—which I think is what Marilyn was alluding to there— MR. HENRICKS: --You see, what we’re looking at is the conflict of interest concept. It’s not all those checks and balances we’re talking about, or wrongdoing and all that. What it talks about is a person making a recommendation without having any other interest in it--on the recommendation they’re making. But once they live in that area, they may have an interest in it. We’re not saying they’re doing anything wrong, but they may have an interest which may guide their thinking. That’s what we’re talking about. And we don’t want that to occur. And that’s why they have conflict of interest regulations, so that your mind is not guided by something else--that your mind is totally neutral. So we’re not saying it’s wrongdoing. We just want a neutral mind. MR. ADAMS: I just think it’s important to understand that when we’re talking about conflict of interest, that there are situations and there are documents--oftentimes corporate documents will have a paragraph, for example, that talks about conflict of interest. And it’s not that those situations can’t occur, it’s that they’re disclosed. And sometimes there’s recusal, sometimes there’s not, by the individual that might have that. And so there are processes that those documents will put in place with those organizations. That’s not the situation here, because the situation here says no officer or employee shall take any official action directly affecting an undertaking or a business where they have a substantial financial interest. There isn’t really a lot of wiggle room there for mitigating processes. That’s the difference, it seems to me, when we’re thinking about a conflict of interest situation. MR. BALSIS: Okay, there is a motion on the floor to move this into a formal hearing at our January meeting. All those in favor say aye. MR. HENRICKS, MR. ADAMS, MR. HISASHIMA, and MR. BALSIS (simultaneously): Aye. MR. BALSIS: It’s unanimous in that regard. So we’ll go into a formal hearing in January. And at this point in time I’m going to ask the Board some of the specific questions that we’re going to be addressing, so that people can get the specific information for us. Is there specific information we need from the department, or do we need it from Michael, the petitioner? MR. HENRICKS: Well, as I stated, reiterating, is we’re concerned about whether en masse is a direct—we know she’s taking direct action. If she’s making a recommendation, from my consideration I see it as a direct action. Is en masse—does that qualify as being enough of her involvement to make it a conflict of interest--that’s what I’m trying to say. We definitely know if it were a property evaluation, individual, it would definitely be, but is it also en masse? Because does en masse involve enough effect upon her property that it would be almost equivalent to a direct, to an individual? MR. SITKO: If I may, just to clarify, I will try to bring information on the mass appraisal process. But basically what I’m hearing right now, if the Ethics Code is that strict, I can’t live on this island. That’s something that needs to be considered also, because it is a local— MR. HENRICKS: --No, you’re not making the direct decision. You’re evaluating— MR. SITKO: --I certify the values. MR. HENRICKS: But you’re not really involved. You’re not making the actual recommendation on your property, or the zone in your property. MR. SITKO: In some instances I do have to— MR. HENRICKS: --But you’re not making that recommendation. You may be okaying it, but you’re not making it. That’s the distinction. MR. SITKO: Okay. MS. VEINCENT: So where would the conflict be if I am removed from evaluating my own property? You mentioned that I still have a substantial interest. If my supervisor is reviewing and certifying those values to be accurate—I’m not sure if I understand your point on substantial interest. MR. HENRICKS: The substantial interest is a different issue. It’s about your property itself. If you own your property and you only have a hundred dollars’ worth in it, we’d not consider it as substantial interest. It wouldn’t matter. But if you’ve got thousands of dollars, or hundreds of thousands of dollars of value in it, then it’s a substantial interest. That’s a different issue. They are two different things. You just have to look at them, they’re two different things. There’s two things that have to be met. It has to be a direct—it has to be a decision making a direct effect, and it has to be a substantial interest. Okay, we’ve established substantial—if you rent a house, it’s not a substantial interest, okay. But if you’re making a decision on that property that will affect your own property, then that may be enough to be a direct—that’s what we’re going to look at. MS. CRAWFORD: Thank you. We will provide additional information that shows how that process works, to help you make that determination. MR. HENRICKS: And if you need any help, you can go to the other counties and see what they’re doing and ask them what they’re doing and how they’re getting around it. Maybe that would help us, if you could bring some of that forward to us at that time. MS. CRAWFORD: Thank you, that’s a good suggestion. MR. BALSIS: And then with regards to substantial interest, we would want to know the appraisers in those areas, if there is a substantial interest or not. If their equity is like you said, a hundred dollars, it’s not a substantial interest. But if there are substantial interests of magnitude – so that’s something that’s important. MS. CRAWFORD: Thank you. MS. SCHOEN: Mr. Chair, if I may just— MR. BALSIS: --Yes— MS. SCHOEN: --for purposes of clarification, and everyone’s present here. Actually you mentioned two issues, but really if you look at 2-84(a)(1), I think there are three issues that everyone should look at. And that would be official action is one, directly affecting is two, and then number three would be substantial financial interest. The second thing I wanted to mention is that if the Board is moving this into a formal hearing, then that would require the--what would be now, according to your rules—call the complainant coming back, bringing forward the case under Chapter 91, HRS Chapter 91. So he would be responsible for the burden of proof and the burden of persuasion. So what I hear from you all, though, is that you have specific questions that the department needs to respond to. So I’m just kind of throwing out whether or not it’s—what you’re asking for is more of an informal hearing, where the parties come forward and provide information to the Board. MR. HENRICKS: If we went back to an informal hearing, then what we’re hearing now—we could not make a finding as to the guilt or innocence at that point. It would have to go to a formal hearing to do it, so we’d have to go one more step further. I don’t see that that’s necessary. I’m saying let’s go to a formal hearing now. I’m saying at this point, as far as I’ve read everything, he’s had enough of a prima facie case for me to find there is a violation, unless I’m giving the Board [sic] a chance to come forward. If they want to knock that off, they can, all right? Is that what we understand at this point? MR. BALSIS: Yes, and I’ll ask legal counsel. If you do get into an informal hearing, is Mr. Henricks correct in that we cannot find guilt or non-guilt? MS. SCHOEN: Actually, my understanding is you could. The Board could find a violation of the Code of Ethics even after informal. But in the past, you have conducted formal hearings, just so that it’s more of a formal type hearing, following Chapter 91 in terms of having people represented, the issues being specific. MR. ADAMS: If I may, in our rules as well, it does indicate that at our discretion we may determine that we are in fact the complainant, or may become a co-complainant, which may take some of the onus off of the current petitioner and place it more on us as needing to find the information. MS. SCHOEN: I don’t disagree with—I mean yeah, it does say that in 6.2. MR. HENRICKS: All right, I don’t care what kind of hearing we call it. It doesn’t make any difference to me. If we can make a finding at the next hearing, I’ll call it informal— MR. ADAMS: --I think the point of all that was we want to make sure we’re going to get the information that we want. MR. HENRICKS: Right. MR. BALSIS: Yeah. And I believe that we’ve discussed specifically the kind of information that we want to get into and discuss. MR. HENRICKS: And if we can make a finding of guilt at that particular time, a finding of a violation at that particular time, at an informal hearing, I’ll just _____ informal hearing. Is that all right? MR. ADAMS: You can do whatever you’d like, Judge. MR. HENRICKS: Exactly. Does that make you happy? MS. SCHOEN: Yeah, I’m fine. MR. HENRICKS: Okay, let’s make a motion to go another informal hearing, to make further—to take further information from the parties involved. MR. ADAMS: Is that an amendment of the current one? MR. BALSIS: Yes. MR. ADAMS: And since I gave the second, then I’d be happy to second that amendment. MR. BALSIS: All those in favor? MR. HENRICKS, MR. ADAMS, and MR. HISASHIMA (simultaneously): Aye. MR. BALSIS: Aye. Let’s move forward. MR. ADAMS: And we are talking about just -05 and -06. MR. BALSIS: That is correct. MR. HENRICKS: Can we take a break? Mr. Balsis announced a five- to ten-minute break, and Mr. Adams asked if Ms. Veincent was required to stay for the next agenda item. Mr. Balsis said she could leave and they would see her next month’s hearing. Mr. Henricks said she did not need to return next month, as they already had her testimony. It was up to her whether she wanted to attend. 11:08 a.m.: The Board recessed. 11:15 a.m.: Mr. Balsis called the meeting back to order. c. Petition No. 2013-07: Initial review of petition alleging that a County employee “may possibly” be in violation of Sections 2-84(a) and 2-84(d) of the Code of Ethics because the employee represents the County of Hawai‘i in tax appeals and the employee’s wife “represent[s] tax payers against the County of Hawai‘i at Tax Appeals, for compensation.” MR. BALSIS: Michael, would you like to make any more statements on this, or the previous statements were sufficient? MR. DRUTAR: I’ll let that speak. MR. BALSIS: Okay. Jaime Ortiz, would you like to come up, please? And of course Stan. Have you read the petition? MR. ORTIZ NAVA: Yes, I have. MR. BALSIS: Outside of any other comments that you’ve made, would you like to say anything? MR. ORTIZ NAVA: I would, just to clarify— MR. BALSIS: There you go. MR. ORTIZ: I would, just to clarify, that my wife is a real estate appraiser, certified real estate appraiser, residential appraising, and she—indeed she works for Bloom Appraisers, which is a family owned company. And the president and chief operation is my father-in-law, Robert Bloom, appraiser. MS. SCHOEN: Excuse me, Mr. Ortiz, could you speak into the microphone so Mary can catch what you’re saying. MR. ORTIZ NAVA: Would you like me to repeat what I just stated? SECRETARY: No, just – MR. ORTIZ NAVA: Okay. Another clarification I would like to make is that in the petition, they mention several times that the appraisers, the certified appraiser--in this case, my wife, represents the interests of—or represents the clients at tax appeals. The fact is that she has never represented any client in the tax appeals, either in this jurisdiction or any other. __________ my employment with the County ___________, that’s not one of her duties as a certified _________ appraiser working at Bloom Appraisers. So that in the petition was not stated. Another thing that I would like to clarify is that real estate—real certified appraisers do not represent interests of anybody. They are independent. And in the petition we have this day that my wife will represents interests, which is not true whatsoever. It would be a conflict ___________ which any certified appraiser like myself has to find. So with those points, I will stop. MR. BALSIS: I’d like to ask, how have you notified your supervisor that your wife is also a certified appraiser? MR. ORTIZ NAVA: I was hired in June 4, 2012. Prior my employment—prior my job acceptance, I stated in my application that my previous job, prior working for the County as Appraiser V, which is my title, dealing with commercial properties, no residentials, I stated that I worked for Bloom Appraisers since 2005 to the previous, couple days before my employment with the County in 2012. So I stated who my father-in-law was, who my wife was, what I’m ___________. So it’s in my job application, and my supervisor, the assistant administrator, director, pretty much all the appraisers knew—the supervisor of the appraisers knew that—they were in the interview, the job interview. So I stated that, who is my previous employer and the relationship that I have. MR. BALSIS: Questions? MR. HENRICKS: All right, one question and it’ll cover everything, all right? Is your wife now, or has she ever been, an employee or officer of the County? MR. ORTIZ NAVA: No, she has never. MR. HENRICKS: All right, that’s it. MR. BALSIS: Questions? Do you have any questions? MR. ADAMS: I do, just so I can understand. Just so I understand, make sure that I understood what you said. Your wife has never represented anyone at a County tax appeal hearing? MR. ORTIZ NAVA: To clarify that, there is no representation and no, she had never appeared in front of any tax board or appeal, in this jurisdiction or any other. MR. ADAMS: Has anyone in your company ever done that— MR. ORTIZ NAVA: --Yes, myself and my father-in-law. MR. ADAMS: Okay. And then your connection currently with your home company—you’re obviously a member of it as well? MR. ORTIZ NAVA: No. A legal member of the company, you mean? MR. ADAMS: Right. MR. ORTIZ NAVA: No. I’m employed for the County. MR. ADAMS: The County and no longer a part of the— MR. ORTIZ NAVA: --the Bloom Appraisers, no. MR. ADAMS: Right. MR. ORTIZ NAVA: I terminated my employment prior to my— MR. ADAMS: --But your wife is, and your father-in-law are? MR. ORTIZ NAVA: Correct, and my sister-in-law, which she’s also a certified appraiser, and my mother-in-law, which is also certified appraiser. MR. ADAMS: Okay, thanks. MR. BALSIS: Any other questions from the Board here? MR. HISASHIMA: No. MR. BALSIS: Do you have any comments? MR. HENRICKS: Yeah, I have one comment. This is the Ethics Code. The Ethics Code specifically states to be under the jurisdiction of the Ethics Code you have to be an officer or employee of the County. Your wife is neither an officer or employee of the County, so she does not come under our jurisdiction. There is no way she can violate this Ethics Code, all right? Bottom line. MR. BALSIS: At this time I’m going to ask—I’d just like to ask Michael, do you have any comments? MR. DRUTAR: Just to clarify the reason, may I come up? MR. BALSIS: Yes. MR. DRUTAR: First of all, Jaime’s a great guy. He’s a very good professional. I think he does good work. The reason I brought it up wasn’t to somehow—it wasn’t a question against his wife at all, but there’s part of the Code of Ethics that says basically that your financial interests—the financial interests of a brother, sister, spouse, dependent child, mother, father, are basically the same as your own. Some have said—I have talked to—there was an article in West Hawai‘i Today on the 17th, and it kind of illustrated his situation a little bit. And in talking with a number of people in the community, they seemed to be pretty flabbergasted by it. I thought maybe it would be prudent to have it decided by the Code [sic] of Ethics, who has the right to say if it’s right or wrong, whether or not that situation is fair. I did not investigate or say that his wife has, or I did not intend to say that his wife has, represented people, but they do advertise on their website that they do. They do advertise on their website that they represent you, which is a USPAP violation. There’s another part on their website where they make another USPAP violation, but that’s not under the purview of this Board so it’s not really that important. The question was is having someone else’s—is it a conflict of interest to have a situation where his wife could—she hasn’t—represent taxpayers in their tax appeals? It says on their website that that’s what they do. To be honest, on this one I was kind of responding a little bit more to what I heard from—I heard from a number of friends in the community that they were all really pretty shocked by it, and I thought if I’m going to bring up the other ethics thing I should just bring it all up and let you guys decide what’s right and what’s not right. You all are the judges. MR. ADAMS: If I might? MR. BALSIS: Go ahead. MR. ADAMS: Just so that we’re clear. You used the term determine whether there is a conflict of interest. Actually it’s to determine whether there’s a violation of the Ethics Code. Conflict of interest is one element of that. MR. DRUTAR: Yes. MR. ADAMS: And it’s pretty clear within the Code that the conflict of interest section refers to substantial financial interest, and that’s related to—and the connection there is made to spouse or dependent children, okay? And so you’re now trying to take that part, it seems to me, take that part where there’s that connection and say now we have somebody who’s an officer or employee of the County who would then be doing something for pay and representation at another County agency. The two don’t commingle that way, in my view. MR. DRUTAR: Okay. And that was the question—I wasn’t sure about that, to be honest, and you may notice that in my petition I stated it a little bit differently than I stated things in my other petitions, in that I said this may be. I wasn’t sure if those do, as you say, commingle. MR. ADAMS: Hypothetical, in order words. It’s purely a hypothetical, and I may get my hand slapped, but a hypothetical would be one where an individual who was an officer or employee of the County also assisting in a private undertaking that they had that financial interest in. If there wasn’t more of a direct connection there, where they’re then actually also doing that work, then maybe there’s a situation. But where you have just the fact that there’s a spouse or a dependent child business undertaking, as long as they’re not taking any direct action associated with that particular undertaking, that particular business, then there’s not the conflict of interest as we understand it. The other portion of a conflict of interest has to do with are they of themselves engaged in, for compensation, advocating against a County board or hearing. And you’re not saying, and I’m not seeing it said in any of the paperwork here, that the appraiser—the County appraiser’s doing that. MR. DRUTAR: Correct. MR. BALSIS: With those comments in mind, do we have any motions? MR. HENRICKS: I move that this petition be dismissed for lack of sufficient evidence, or jurisdiction over the ________ too. MR. BALSIS: Is there a second to this motion? MR. HISASHIMA: Second. MR. BALSIS: There has been a motion and it’s been seconded to dismiss the petition on two counts—number one, insufficient evidence, and also lack of jurisdiction. Any discussion? MR. ADAMS: I do. MR. BALSIS: Go ahead. MR. ADAMS: It’s not on the merits of the motion, to be honest with you, because I agree with the motion. But I’d like to incorporate an element of -07 in our—I may have to make a motion to do this, but incorporate an element of -07 into the informal hearing we’re going to be having that deal with -05 and -06, and it has to do with the response to the petition that Mr. Nava provided to us, where he identifies the investigatory element that occurred by the department. I have some real questions about how the investigations occurred, the determination—where was due process associated with this. None of that was necessarily identified, but it was clear that the department was involved in an investigation, and in fact they call it an investigation, when they were looking at this particular petition. And so the element where we’re talking about the department’s investigation into alleged potential violations of the Ethics Code, I’d like to be able to address that in our informal hearing that we’re going to have on -05 and -06 as a discussion of the department’s policy. MR. HENRICKS: I disagree. MR. ADAMS: You disagree. MR. HENRICKS: I disagree--opening a can of worms. MR. BALSIS: We presently have a motion on the floor, and if there’s no further discussion I’d like to vote on that motion. All those—and that is the motion to dismiss -07. All those in favor? MR. HENRICKS, MR. HISASHIMA, MR. ADAMS, and MR. BALSIS (simultaneously): Aye. MR. BALSIS: The motion [sic] is dismissed. 5. UNFINISHED BUSINESS a. Petition No. 2013-04: Review draft order dismissing the petition alleging that Councilmember Brenda Ford was in violation of Section 2-84 (conflicts of interest) of the Code of Ethics because of her participation in Bills 109 and 113, “both impacting and putting papaya growers out of business as conventional farmers while claiming to grow non-GMO papaya on 1/4 acre at her farm.” Ms. Schoen asked the Board to continue this matter to the next meeting so she could complete the document for the Board’s review. Mr. Balsis said that was fine. b. Petition 2013-08: Review draft informal advisory opinion requested by William Hanson regarding his involvement with the Big Island Amateur Radio Club and his employment as an administrative officer with the Hawai‘i County Civil Defense Agency. Ms. Schoen asked the Board to continue this matter to the next meeting so she could complete the document for the Board's review. Mr. Balsis said that was fine. Motion and vote: Mr. Balsis moved to go into executive session for the purpose of reviewing confidential financial disclosures and the executive session minutes of the last meeting. Mr. Adams seconded the motion and said that any discussion they needed to have with their counsel regarding the Board's authorities would be included. All members voted aye. 11:31 a.m.: The Board left regular session. 11:48 a.m.: The Board returned to regular session. 6. VOTING ON EXECUTIVE SESSION MATTERS a. Review of the executive session minutes of November 13, 2013. Motion and vote: Mr. Balsis moved to approve the minutes, Mr. Henricks seconded the motion, and all members 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. Motion and vote: Mr. Balsis moved to approve the two confidential financial disclosures, Mr. Adams seconded the motion, and all members voted aye. 7. ANNOUNCEMENTS Mr. Balsis announced the Board's next meeting: January 8, 2014, at 10:00 a.m. at a location to be determined. He also said he may not be available to meet in March. 8. ADJOURNED Mr. Balsis adjourned the meeting at 11:49 a.m. Respectfully submitted: Mary E. Fujio, Secretary (with her signature)