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Item 4H Item 4H M E M O R A N D U M October 13, 2015 TO: Shana K. Yelverton, City Manager FROM: Stacey Black, Director of Human Resources st SUBJECT: Ordinance No. 635-C, 1 Reading, Amending Chapter 2, Article VI, Code of Ethics and Conduct of the Code of Ordinances Action st Requested: Ordinance No. 635-C, 1Reading, Amending Chapter 2, Article VI, Code of Ethics and Conduct of the Code of Ordinances of the City of Southlake to comply with provisions of Chapter176 of the Texas Local Government Code as amended by HB 23. Background Information: The Code of Ethics and Conduct was originally adopted in 1995 by Ordinance No. 635. The last revision totheOrdinance was approved in October 2007. Since that time, changes have been made to State law affectingcertain provisions of the ordinance. During the last legislative session, HB 23 was adopted into law amending Chapter 176 of the Local Government Code.HB 23 impacts the City’s Code of Ethics in three primary areas: 1.Employee Disclosure Requirements. HB 23 amends the definition of “Local Government Officer” to make it apply to many more city employees. Previously, state law only required certain individuals employed by the City disclose a conflict of interest. This change expands the conflict disclosurerequirements to any employee who exercises discretion in the planning, recommending, selecting or contracting with a vendor. Under the City’s current Code of Ethics, all employees are already required to disclose conflicts of interest using a City created form. With the new law, the disclosure must now be completed on the “Local Government Officer Conflicts Disclosure Statement” created by the state.Staff also recommends employees who do not have conflict of interest file a written statement indicating such on a form created bythe Item 4H Page 2 City.This would require that every employee file a written statement. 2.Definition of “Gift”. HB 23 amends the definition of “gift” to remove the exemption of lodging, transportation and entertainment accepted as a guest. It also amendsthe gift disclosure threshold from $250 to $100 received within a twelve month period. Political contributions, gifts from family members and food accepted as a guest are excluded from disclosure requirements. 3.Definition of “Family Relationship”. HB 23 expands the definition of “Family Relationship” to include relationships to the third degree by consanguinity (blood) or the second degree by affinity (marriage). The City’s Code of Ethics and Conduct includes language that is consistent with Chapter 176. Thisrequiresthe City make changes to Ordinance 635to comply with HB 23.A draft of the revisions to address the new law is attached. Financial Considerations: N/A Strategic Link: Strategic Focus Area: High Performance Management & Service Delivery; City Value: Integrity Citizen Input/ Board Review: N/A Legal Review: Ordinance revisions required by the new laws have been drafted by the City Attorney. Alternatives: The ordinance revisions may be accepted as drafted or modified in consultation with the City Attorney. Additionally, Council may wish to review other provisions of the ordinance for amendment or identify language additions. Supporting Documents: Amended Ordinance No. 635-C Code of Ethics and Conducts Draft Policy Document Staff Recommendation: City Council approval ofthe 1sts Reading ofOrdinance No. 635-C. ORDINANCE NO.635-C AN ORDINANCE OF THE CITY OF SOUTHLAKE, TEXAS, AMENDING CHAPTER 2, ARTICLE VI, CODE OF ETHICS AND CONDUCT OF THE CODE OF ORDINANCES OF THE CITY OF SOUTHLAKE, TO AMEND SECTION 2-265 DISCLOSURE OF INTERESTTO COMPLY WITH CHAPTER 176 OF THE TEXAS LOCAL GOVERNMENT CODE; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR PUBLICATION AS REQUIRED BY LAW;AND PROVIDING AN EFFECTIVE DATE. WHEREAS ,the City of Southlake, Texas is a home rule city acting under its charter adopted by the electorate pursuant to article XI, section 5 of the Texas Constitution and chapter 9 of the Texas Local Government Code; and WHEREAS ,the City Council of the City of Southlake adopted a Code of Ethics and Conduct applicable to the conduct of officers, employees and board members while acting in their official capacities in representing the City of Southlake which is codified as Chapter 2, Article VI of the Southlake City Code; and WHEREAS , the City Council of the City of Southlake desires to amend Chapter 2, Article VI of the Southlake City Code to reflect changes in Chapter 176 of the Local Government Code. NOW, THEREFOREBE IT ORDAINED BY THE CITY COUNCIL OF THE CITY , OF SOUTHLAKE, TEXAS: SECTION 1 . Chapter 2, Article VI, Section 2-261 “Definitions” of the Southlake City Code is hereby amended to add the following definitions: Family Relationshipmeans a relationship between a person and another person within the third degree by consanguinity or the second degree by affinity, as those terms are defined by Subchapter B, Chapter 573, Government Code. Page 1 Giftmeans a benefit offered by a person, including food, lodging, transportation, and entertainment accepted as a guest. The term does not include a benefit offered on account of kinship or a personal, professional, or business relationship independent of the official status of the recipient. Vendormeans a person who enters or seeks to enter into a contract with the City. The term includes an agent of a vendor. The term does not include a state agency except for Texas Correctional Industries. SECTION 2. Chapter 2, Article VI, Section 2-265 of the Southlake City Code ishereby amended as follows: Sec. 2-265 Disclosure of Interest (a)If any city officer, employee or advisory board member has a substantial interest in a business entity or real property involved in any decision pending before such officer, employee, or advisory board member, or the body of which he or she is a member, such officer, employee, or advisory board member shall disclose such interest as provided in subsection (de)below and shall not, except as provided in subsection(b)below, discuss the substance of the matter at any time with any other member of the board of which he is a member or any other body which will vote on or otherwise participate in the consideration of the matter. (b)If any of the following interests or relationships are involved in any decision pending before any city officer, employee, or advisory board member, or the body of which he is a member, such officer, employee, or advisory board member must disclose such interest or relationship as provided in subsection (de)and, inthe case of an interest described in subsection (b)(6), as provided in subsection (e) below,but he shall be permitted to vote on and participate in the consideration of such matter: (1)A decision concerning a bank or other financial institution from which the officer, employee, or advisory board member has a home mortgage, automobile loan, or other installment loan, if the loan is not currently in default, was originally for a term of more than 2 years and cannot be accelerated except for failure to make payments according to the terms thereof; (2)A decision concerning a bank or other financial institution in which the officer, employee, or advisory board member holds a savings account, checking account or certificate of deposit and which is fully insured by the U.S. government or an agency thereof; Page 2 (3)A decision concerning a business entity with which the officer, employee, or advisory board member has a retail or credit card account; (4)A decision concerning the approval of substitution of collateral by a city depository bank; (5)A decision concerning real property in which the officer, employee or advisory board member has a substantial interest if it is not reasonably foreseeable that such decision would have a special economic effect on the value of the property, distinguishable from the effect on the public (see Section 171.004, Texas Local Government Code). (6)A relationship between a city officer, advisory board member or employee and a person who has contracted with the City or is considering doing business with the City, if the city officer, advisory board member, employee or family member of the city officer, advisory board member or employee has received one or more gifts from a person who has contracted with the City or with whom the City is considering into a contract and the gift(s) have an aggregate value of more than $250 in the twelve (12) month period preceding the date the person becomes aware of a contract with the City or that the City is considering entering into acontract with the person. This shall not apply to gifts given as a political contribution as defined by the Election Code, gifts given by a family member of the person accepting the gift, or gifts of food, lodging, transportation or entertainment accepted as a guest. (c)If aCity Officer, Advisory Board member, or a City employee, or a family member a City Officer, Advisory Board member, or aCity employee,receives one or more gifts that have an aggregate value of more than $100 in the twelve month period preceding the date the City executes a contract with the vendor or considers entering into a contract with the vendor,the City Officer, Advisory Board member, or the City employee must disclose such gift as provided in subsection (f), (g) or (h), as applicable,but he shall be permitted to vote on and participate in the consideration of such matter. This requirement shall not apply to gifts accepted by the City Councilmember, the City Manager or City employee if the gift is a political contribution as defined by Title 15, Election Code, or food accepted as a guest. (cd)If any the following relationshipsexist between a vendor and a City Officer, Advisory Board Member, or aCity employee,the City Officer,Advisory Board Manager or the City employee must disclose the relationship as provided in subsection (f), (g) or (h) as applicable If the following relationship exists between any council member, the City Manager or a family member of a council member or the City Manager, such council member or the City Manager must disclose such interest as provided in paragraph E below and shall not, in accordance with subsection (a),discuss the substance of the matter at any time with any other member of the board of which he or she is a member or any other body which will Page 3 vote on or otherwise participate in the consideration of the matter:. A relationship shall exist if the council member, the City Manager, or family member of the council member or City Manager receives taxable income, other than investment income, that exceeds $2,500 from a person who contracts with the City or with whom the City is considering entering into a contract if such income was received during the twelve month period preceding the date the council member or City Manager becomes aware of the existing or potential contract. (1)The City enters into a contract with a vendor or is considering entering into a contract with a vendor and the vendorhas an employment or other business relationship with the City Officer,Advisory Board Member or City employee, or family member of the City Officer,Advisory Board Member or City employee, that results in the City Officer,Advisory Board Member, or City employee, or their family member, receiving taxable income, other than investment income, that exceeds $2500 during the 12-month period preceding the date the contract between the City and the vendor is executed,or the date the City considers entering into a contract with the vendor; or (2)The City enters into a contract with a vendor,or is considering entering into a contract with a vendor,and the vendor has a family relationship with the City Officer,Advisory Board Member or City employee. (ed)A city officer, employee or advisory board member shall disclose the existence of any substantial interest in a business entity or real propertyinvolved in any decision pending before such officer, employee or advisory board member, or the body of which he is a member. To comply with this paragraph, a city officer or advisory board member shall, prior to any discussion or determination of the matter, either file an affidavit of disclosure as required by § 171.004 of the Texas Local Government Code or, if not so required, shall publicly disclose in the official records of the body or of the city secretary the nature of the interest. To comply with this paragraph, a city employee shall notify his or her superior, and the director of human resources in writing of the nature of any substantial interest he may have in a business entity or real property which would be affected by an exercise of discretionary authority by the city employee. The employee's superior shall assign the matter to another employee. (fe)ACity cCouncil member,or the cCity mManageror a City employee shall disclose a relationship as defined in subsections (b)(6) (c) and (cd) that exists between the City cCouncil member, the Ccity mManager, the City employee,or family member of the cCouncil mMember,or cCity mManageror City employee and vendorwith a person who enters into a contract the city or with whom the city is considering entering into a contract by filing a conflicts disclosure statement with the city secretary as required by § 176.003 of the Texas Local Government Code. The disclosure statement form is available from the city secretary.or by visiting www.ethics.state.tx.us/whatsnew/conflict forms. This disclosure shall be filed not later than 5:00 p.m. on the seventh business day after the date on which the City cCouncil member,or theCcity mManager, or the Page 4 City employeebecomes aware of the existence of a relationship as defined in subsections (b)(6)(c)and (cd). (gf)An advisory board member shall disclose a relationship as defined in subsections (b)(6) (c) and (cd) that exists between the advisory board member, or family member of the advisory board member with a person who enters into a contract with the city or with whom the city is considering entering into a contract vendor by filing a written statement with the city secretary on a form promulgated by the city secretary for that purpose. This statement shall be filed not later than 5:00 p.m. on the seventh business day after the date on which the advisory board member or employee becomes aware of the existence of a relationship as defined in subsections (b)(6)(c)and (cd). (gh)An employee of the citywho does not have a shall disclose arelationship as defined in subsections (b)(6) (c) and (cd) that exists between the employee, or family member of the employee, with a person who enters into a contract with the city or with whom the city is considering entering into a contract vendor shall indicate such by filing a written statement with the director of human resources on a form promulgated by the human resources department for that purpose. This notification shall be provided not later than 5:00 p.m. on the seventh business day after the date on which employee becomes aware of the existence of a relationship as defined in subsections (b)(6) (c) and (cd). SECTION 3. This ordinance shall be cumulative of all provisions of ordinances and of the Code of Ordinances of the City of Southlake, Texas, as amended, except where the provisions of this ordinance are in direct conflict with the provisions of such ordinances and such Code, in which event the conflicting provisions of such ordinances and such Code are hereby repealed. SECTION 4. Should any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal or invalid, the same shall not affect/ the validity of this ordinance as a whole, or any part or provision thereof other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Code of Ordinances as a whole. Page 5 SECTION 5. The City Secretary of the City of Southlakeis hereby directed to publish this ordinance to the extentrequired by law. SECTION 6. This Ordinance shall take effect immediately from and after its passage and approval, and it is so ordained. PASSED AND APPROVED ON FIRST READING this ____ day of _______________, 2015. ___________________________________ Mayor ATTEST: ___________________________________ City Secretary PASSED AND APPROVED ON SECOND READING this ____ day of _______________, 2015. ___________________________________ Mayor ATTEST: ___________________________________ City Secretary EFFECTIVE:_______________________ APPROVED AS TO FORM AND LEGALITY: Page 6 _________________________________ City Attorney Page 7 DRAFT-REDLINED CITY OF SOUTHLAKE CODE OF ORDINANCES ORDINANCE NO. 635 CHAPTER 2, ARTICLE VI. -CODE OF ETHICS AND CONDUCT Effective Date : March 21, 1995 Revision Dates : No. 635-A–June 6, 2006; No. 635-B–October 2, 2007; No. 635-C–November 3, 2015 Sec. 2-261.–DEFINITIONS. For the purposes of this code of ethics and conduct the following words and phrases shall have the meanings ascribed to them by this section. Advisory boardshall mean a board, commission or committee of the city that functions only in an advisory or study capacity. Business entityshall mean a sole proprietorship, partnership, firm, corporation, association, holding company,joint stock company, receivership, trust, or any other entity recognized by law. Employeeshall mean any person employed by the city, including those individuals on a part-time basis, but such term shall not be extended to apply to any independent contractor. Family membershall mean a person related to another person within the first degree by consanguinity or affinity, as described by Subchapter B, Chapter 573, Government Code. Family Relationshipmeans a relationship between a person and another person within the third degree by consanguinity or the second degree by affinity, as those terms are defined by Subchapter B, Chapter 573, Government Code. Giftmeans a benefit offered by a person, including food, lodging, transportation, and entertainment accepted as a guest. The term does not include a benefit offered on account of kinship or a personal, professional, or business relationship independent of the official status of the recipient. Knowingly.A person acts knowingly, or with knowledge, with respect to the nature of his or her conduct or to circumstances surrounding his or her conduct when he is aware of the nature of his or her conduct or that the circumstances exist. A person acts knowing, or with knowledge, with respect to a result of his or her conduct when he is aware that his or her conduct is reasonably certain to cause the result. Officershall mean any member of the City Council, the Planning and Zoning Commission, the Board of Adjustment, the Building Board of Appeals and any member of a board, commission or committee established by ordinance, charter or state law that has final approval authority over any application, permit, license or other City approvals; provided, no member of an advisory board shall be deemed an officer of the city. Substantial interest. (1)A person has a substantial interest in a business entity if: DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 2 a.The interest is ownership of10 percent or more of the voting stock or shares of the businessentity or ownership of either 10 percent or more or $5,000.00 or more of the fair market value of the business entity (see Section 171.002, Texas Local Government Code); or b.Funds received by the person from the business entity exceed10 percent of the person's gross income for the previous year (see Section 171.002, Texas Local Government Code); or c.The person holds a position of member of the board of directors or other governing board of the business entity; or d.The person serves as an elected officer of the business entity; or e.The person is an employee of the business entity; or f.The person is a creditor, debtor or guarantor of the business entity in the amount of $5,000.00 or more; or g.Property of the person has been pledged to the business entity or is subject to a lien in favor of the business entity in the amount of $5,000.00 or more. (2)A person does not have a substantial interest in a business entity if: a.The person holds a position as a member of the board of directors or other governing board of a business entity; and b.The person has been designated by the City Council to serve on such board; and c.The person receives no remuneration, either directly or indirectly, for his or her service on such board; and d.The primary nature of the business entity is either charitable, nonprofit or governmental. (3)A person has a substantial interest in real property if the interest is an equitable or legal ownership interest with a fair market value of $2,500.00or more(see Section 171.002, Texas Local Government Code). (4)A person has a substantial interest under this ordinance if the person's Family Member has a substantial interest under this chapter (see Section 171.002, Texas Local Government Code). Vendor means a person who enters or seeks to enter into a contract with the City. The term includes an agent of a vendor. The term does not include a state agency except for Texas Correctional Industries. Sec. 2-262.DECLARATION OF ARTICLE POLICY. It is hereby declared tobe the policy of the city that the proper operation of democratic government requires that public officials and employees be independent, impartial and responsible only DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 3 to the people of the city; that governmental decisions and policy should be made in the proper channels of the governmental structure; that no officer, employee or member of any board, commission or committee should have any interest, financial or otherwise, direct or indirect, or engage in any business, transaction or professional activityor incur any obligation of any nature which is in conflict with the proper discharge of his duties in the public interest; that public office and public employment are positions of public trust imposing the duty of a fiduciary upon all employees and officeholders, who are not to use their public position for personal gain; and that the public should have confidence in the integrity of its government. To implement such a policy, the city council deems it advisable to enact this code of ethics and conduct for all officers, employees and advisory board members, whether elected or appointed, paid or unpaid, to serve not only as a guide for official conduct of the city's public servants, but also as a basis for discipline for those who refuse to abide by its terms. This code of ethics and conduct is cumulative of other ordinances, city Charter provisions and state statutes defining and prohibiting conflict of interest. Sec. 2-263. –PENALTIES FOR VIOLATION OF ARTICLE; FORFEITED POSITION; EXEMPTIONS; INJUNCTIONS. (a)Except where otherwise provided by state law, it is not the intent of this code that violations thereof be subject to criminal penalties. (b)Whenever the City Council has determined that any officer, employee or advisory board member has violated any provision of this article, such officer, employee or advisory board member shall be subject to discipline, including forfeiture of his or her office or position. Nothing in this ordinance shall be construed to prohibit such officer, employee or advisory board member from being re-elected, reappointed or otherwise rehired to any position forfeited under the provisions of this code. (c)The City Council may exempt from the provisions of this articleany conduct found to constitute a violation by an officer, employee or advisory board member if it finds that the enforcement of this articlewith respect to such conduct is not in the public interest. (d)Any contract or transaction which was the subject of an official act or action of the city in which there is an interest prohibited by this article, or which involved the violation of a provision of this article, shall be voidable at the option of the City Council. (e)At the discretion of the City Council, the city attorney shall have the power, where a violation of the provisions of this articleis threatened or has occurred, to bring a civil action or proceeding, at law or in equity, for a judgment enjoining any violation of the provisions of this code or requiring the relinquishment of any prohibited interest or the voiding of any such contract or transaction, taking into account the interests of the city and any third persons who may be injured thereby. Where the City Council determines that the public interest may best be served by not voiding a contract or transaction entered into in violation of this code, such contract or transaction may be enforced and an action or proceeding may be brought against any officer, employee or advisory board member found in violation of provisions of this code for damages, not to exceed twice the DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 4 damages suffered by the city or twice the profit or gain realized by the officer, employee or advisory board member, whichever is greater. Sec. 2-264–STANDARDS OF CONDUCT. (a)No city officer, employee or advisory board member, or their spouses, shall knowingly: (1)Accept or solicit any gift, favor, service or thing of value from any person, group or business entity, including a promise of future employment, that might reasonably tend to influence him in the discharge of his or her official duties or that the officer, employee or advisory board member knows or should know is being offered with the intent to influence the officer’s or employee’s official conduct. This prohibition shall not apply to: a.An occasional non-pecuniary gift, insignificant in value; or b.An award publicly presented in recognition of public service; or c.Any gift which would have been offered or given to the officer employee or advisory board member or his or her spouse if he/she were not a city officer, employee or advisory board member; or d.Any travel and related expenses to attend ceremonial functions,provided that such acceptance and attendance have been approved by the City Council prior to the occurrence of the ceremonial function. (2)Grant in the discharge of his or her official duties any improper favor, service or thing of value to any person, group or business entity; (3)Knowingly disclose any confidential information gained by reason of the position of the officer, employee or advisory board member concerning property, operations, policies or affairs of the city, or use such confidential information to advance any personal interest, financial or otherwise, of such officer, employee or advisory board member, or others. This subparagraph shall not preclude disclosure of such confidential information in connection with any investigation or proceeding regarding whether there has been a violation of the standards of conduct set forth in this code. (4)Use one's position or office of employment or city facilities, personnel, equipment or supplies to secure special privileges or exemptions for himself or others or for the private gain of the city officer, employee, advisory board member or his or her spouse. (5)Engage in any exchange, purchase or sale of property, goods or services with the city, except: a.Rendering services to the city as an officer, employee or advisory board member; b.Paying taxes, fines, utility service or filing fees; c.Executing and performing any developer's agreement or plat in compliance with laws and regulations applicable to any person; provided, DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 5 however, that if any city ordinance, rule or regulation allows any discretion by the appropriate officers or employees of the city in the interpretation or enforcement of such ordinance, rule or regulation, any such discretion shall be exercised in favor of the city in connection with any such developer's agreement or plat; d.Advisory board members who are not otherwise officers or employees of the city, may engage in any exchange, purchase or sale of property, goods or services with the city, or enter into a contract with the city, provided that the board on which they are a member has no advisory function or cognizance, direct or indirect, present or prospective, with respect to the transaction in which such advisory board member engages or proposes to engage. (6)Hold himself/herself out as representing the city in any capacity other than that for which he was appointed, elected or hired. (7)Engage in or accept private employment or render a service when such employment or service is incompatible with the proper discharge of his or her official duties or would tend to impair his or her independent judgment in the performance of his or her official duties. (8)Make or permit the unauthorized use of city owned vehicles, equipment, materials or property. (9)Grant any special consideration, treatment or advantage to any citizen beyond that which is available to every other citizen. (10)After termination of service or employment with the city, appear before any board or commission of the city in relation to any case, proceeding or application in which he or she personally participated or which was under his or her active consideration, during the period of his or her service or employment. (11)Transact any business in his or her official capacity with the city with a businessentity in which he/she has a substantial interest. (12)Engage in any dishonest or criminal act or any other conduct prejudicial to the government of the city or that reflects discredit upon the government of the city. (13)Knowingly perform or refuse to perform any act in order to deliberately thwart the execution of city ordinances, rules or regulations or the achievement of official city programs. (b)No officer, advisory board member or city employee shall knowingly represent, directly or indirectly, any person, group or business entity: (1)Before the City Council or any department, agency, board or commission of the city; (2)In any action or proceeding against the interests of the city or in any litigation in which the city or any department, agency, board or commission thereof is a party; or DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 6 (3)In any action or proceeding in the municipal courts of the city which was instituted by a city officer or employee in the course of his or her official duties, or a criminal proceeding in which any city officer or employee is a material witness for the prosecution. (c)The restrictions in this section do not prohibit the following: (1)A city employee, officer or advisory board member (other than City Council), or his or her spouse, appearing before the City Council or a city department, agency, board or commission to represent himself or herself in a matter affecting his or her property; provided, however, that no such person, or his or her spouse, shall appear before the board or commission of which he or she is a member; or (2)A city employee or officer of an employee organization appearing before the City Council or a city department, agency, board or commission to address employment matters. (d)The restrictions in this section do not apply to business associates of officers, employees or advisoryboard members, but only personally to the officers, employees and advisory board members themselves. Sec. 2-265. -DISCLOSURE OF INTEREST. (a)If any city officer, employee or advisory board member has a substantial interest in a business entity or real property involved in any decision pending before such officer, employee, or advisory board member, or the body of which he or she is a member, such officer, employee, or advisory board member shall disclose such interest as provided in subsection (de)below and shall not, except as provided in subsection (b) below, discuss the substance of the matter at any time with any other member of the board of which he is a member or any other body which will vote on or otherwise participate in the consideration of the matter. (b)If any of the following interests or relationships are involved in any decision pending before any city officer, employee, or advisory board member, or the body of which he is a member, such officer, employee, or advisory board member must disclose such interest or relationship as provided in subsection (de)and, in the case of an interest described in subsection (b)(6), as provided in subsection (e),subsection(f), or subsection(g) below,but he shall be permitted to vote on and participate in the consideration of such matter: (1)A decision concerning a bank or other financial institution from which the officer, employee, or advisory board member has a home mortgage, automobile loan, or other installment loan, if the loan is not currently in default, wasoriginally for a term of more than twoyears and cannot be accelerated except for failure to make payments according to the terms thereof; (2)A decision concerning a bank or other financial institution in which the officer, employee, or advisory board memberholds a savings account, checking account or certificate of deposit and which is fully insured by the U.S. government or an agency thereof; (3)A decision concerning a business entity with which the officer, employee, or advisory board member has a retail or credit card account; DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 7 (4)A decision concerning the approval of substitution of collateral by a city depository bank; (5)A decision concerning real property in which the officer, employee or advisory board member has a substantial interest if it is not reasonably foreseeable that such decision would have a special economic effect on the value of the property, distinguishable from the effect on the public (see Section 171.004, Texas Local Government Code). (6)A relationship between a city officer, advisory board memberor employee and a person who has contracted with the City or is considering doing business with the City, if the city officer, advisory board member, employee, or family member of the city officer, advisory board member or employee has received one or more gifts from a person who has contracted with the City or with whom the City is considering entering into a contract and the gift(s) have an aggregate value of more than $250 in the twelve (12) month period preceding the date the person becomes aware of a contract with the City or that the City is considering entering into a contract with the person. This shall not apply to gifts given as a political contribution as defined by the Election Code, gifts given by a family member of the person accepting the gift, or gifts of food, lodging, transportation or entertainment accepted as a guest. (c)If a City Officer, Advisory Board member, or a City employee, or a family member a City Officer, Advisory Board member, or a City employee, receives one or more gifts that have an aggregate value of more than $100 in the twelve month period preceding the date the City executes a contract with the vendor or considers entering into a contract with the vendor, the City Officer, Advisory Board member, or the City employee must disclose such gift as provided in subsection (f), (g) or (h), as applicable, but he shall be permitted to vote on and participate in the consideration of such matter. This requirement shall not apply to gifts accepted by the City Council member, the City Manager or City employee if the gift is a political contribution as defined by Title 15, Election Code, or food accepted as a guest. (d)If any the following relationships exist between a vendor and a City Officer, Advisory Board Member, or a City employee, theCity Officer, Advisory Board Manager or the City employee must disclose the relationship as provided in subsection (f), (g) or (h) as applicable If the following relationship exists between any city officer, advisory board member, employee or family member of a city officer, advisory board member or employee, such officer, advisory board member or employee must disclose such interest as provided in subsection (e), subsection(f)or subsection(g)below and shall not, in accordance with subsection (a), discuss the substance of the matter at any time with any other member of the board of which heor she is a member or any other body which will vote on or otherwise participate in the consideration of the matter.: A relationship shall exist if the city officer, advisory board member, employee, or family member of the city officer, advisory board member or employee receives taxable income, other than investment income, that exceeds $2,500 from a person who contracts with the City or with whom the City is considering entering into a contract if such income was received during the twelve month period preceding the date the city officer, advisory board member or employee becomes aware of the existing or potential contract. DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 8 (1)The City enters into a contract with a vendor or is considering entering into a contract with a vendor and the vendor has an employment or other business relationship with the City Officer, Advisory Board Member or City employee, or family member of the City Officer, Advisory Board Member or City employee, that results in the City Officer, Advisory Board Member, or City employee, or their family member, receiving taxable income, other than investment income, that exceeds $2500 during the 12-month period preceding the date the contract between the City and the vendor is executed, or the date the City considers entering into a contract with the vendor; or (1)(2)The City enters into a contract with a vendor, or is considering entering into a contract with a vendor, and the vendor has a family relationship with the City Officer, Advisory Board Member or City employee. (c)(e)A city officer, employee or advisory board member shall disclose the existence of any substantial interest in a business entity or real property involved in any decision pending before such officer, employee or advisory board member, or the body of which he is a member. To comply with this paragraph, a city officer or advisory board member shall, prior to any discussion or determination of the matter, either file an affidavit of disclosure as required by §171.004 of the Texas Local Government Code or, if not so required, shall publicly disclose in the official records of the body or of the city secretary the nature of the interest. To comply with this paragraph, a city employee shall notify his or her superior, and the Director of Human Resources in writing of the nature of any substantial interest he may have in a business entity or real property which would be affected by an exercise of discretionary authority by the city employee. The employee’s superior shall assign the matter to another employee. (d)(f)ACity cCouncil member,orthe City Manageror a City employeeshall disclose a relationship as defined in subsections (b)(6)(c)and(cd)that exists between the City cCouncil member, the City Manager, the City employee,or family member of the City cCouncil member,orCity Manager, or City employee and vendorwith a person who enters into a contract the City or with whom the City is considering entering into a contract by filing a conflicts disclosure statement with the City Secretary as required by §176.003 of the Texas Local Government Code. The disclosure statement form is available from the City Secretaryor by visiting www.ethics.state.tx.us/whatsnew/conflict_forms. This disclosure shall be filed not later than 5:00p.m. on the seventh business day after the date on which the City cCouncil member,orthe City Manageror the City employeebecomes aware of the existence of a relationship as defined in subsections(b)(6)(c)and(cd). (e)(g)An advisory board member shall disclose a relationship as defined in subsections(b)(6)(c)and (cg)that exists between the advisory board member, or family member of the advisory board member with a person who enters into a contract with the City or with whom the City is considering entering into a contractvendorby filing a written statement with the City Secretary on a form promulgated by the City Secretary for that purpose. This statement shall be filed not later than 5:00 p.m. on the seventh business day after the date on which the advisory board member or employeebecomes aware of the existence of a relationship as defined insubsections (b)(6)(c)and(cd). DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 9 (f)(h)An employee of the city who does not have shall disclose a relationship as defined in subsections(b)(6)(c)and(cd)that exists between the employee, or family member of the employee, with a person who enters into a contract with the City or with whom the City is considering entering into a contractvendorshall indicate such by filing a written statement with the Director of Human Resources on a form promulgated by the Human Resources Department for that purpose. This notification shall be provided not later than 5:00 p.m. on the seventh business day after the date on which employee becomes aware of the existence of a relationship as defined in subsections(b)(6)and(c). Sec. 2-266. –ENFORCEMENT. (a)The City Council shall have the primary responsibility for the enforcement of this code. The City Council may direct the city attorney to investigate any apparent violation of the code or it may employ or appoint any qualified attorney to investigate any violation or series of violations of this code by one or more persons. At the direction of the City Council, the city attorney shall have the power to investigate any complaint, and to take any action on behalf of the city where such action is appropriate. (b)Any person who believes that a violation of any portion of the code has occurred may file a complaint with the City Council who may then proceed as provided in paragraph A above. However, nothing in this code shall be construed to prevent complainants from instituting direct legal action through the appropriate judicial authority. Sec. 2-267. -ADVISORY OPINIONS. (a)Where any officer, employee or advisory board member has a doubt as to the applicability of any provision of this code to a particular situation, or as to the definition of terms used herein, he may apply to the city attorney for an advisory opinion. The officer, employee or advisory board member shall have the opportunity to present his or her interpretation of the facts at issue and of the applicability of provisions of the code before such advisory opinion is made. (b)Until amended or revoked, any advisory opinion shall be binding on the city, the City Council, and the city attorney in any subsequent actions concerning the public officer, employee or advisory board member who sought the opinion and acted on it in good faith, unless material facts were omitted or misstated in the request for the advisory opinion. Such opinion shall not be binding in any action initiated by any private citizen. Sec. 2-268. -DISTRIBUTION OF COPIES OF ARTICLE. The city secretary shall cause a copy of this code of ethics and conduct to be distributed to every officer, employee and advisory board member of the city within thirty (30) days after enactment of this code. Each officer, employee and advisory board member thereafter elected, hired or appointed shall be furnished a copy before entering upon the duties of his or her office or employment and shall sign a DRAFT-REDLINED Ordinance 635 Code of Ethics and Conduct Page 10 written statement acknowledging receipt of the copy. A copy of the ordinance shall be furnished to each officer, employee and advisory board member each year. Sec. 2-269-EMPLOYEE BUSINESS CODE OF CONDUCT. The Council hereby directs the City Manager to prepare and bring before the Council for adoption by resolution, an Employee Business Code of Conduct to be included in the City Personnel Manual which shall incorporate the provisions of this Code of Ethics and Conduct and proscribe conduct in accordance with adopted Southlake Values. DRAFT-REDLINED