All right, call this meeting to order.

Please stand for the Pledge of Allegiance.

Okay.

Thank you all for attending tonight.

Will the clerk please take attendance?

Mr.

Mayor, there are five council members present.

Council members Avery and Tilton Byrne are absent this evening.

Okay.

Action to approve the agenda.

Entertain a motion to approve the agenda.

So moved.

Second.

Please call the roll.

Doran.

Aye.

Hager.

Aye.

Neemaier.

Specker.

Wendell.

Okay.

Item four open forum.

In order to provide equal access to all during the open forum and public comment portions of the meeting, each individual offering comments shall not exceed the allotted three minute period.

The podium light turns green, then to yellow where there is one minute remaining.

Your time for comment is expired when the codium light turns red.

Is there any member of the public who wishes to address the council on an item not listed on tonight's agenda?

All right.

So I cut and paste some of it into this presentation.

It was uh handy to have it available.

Excuse me, Vince.

Can you be a little more direct into your mic so we're sure to capture your how's that?

Thank you.

Okay.

And I will follow the lights, Mayor, if you need me to if you want to give me the hook.

Okay.

All right.

Conflicts of interest.

I'll go kind of fast through this and then I kind of want to spend most of my time on this uh flow chart that we created at the very end, and I think that might be where more representative questions might take place.

So when we talk about conflicts of interest from the municipal point, municipal point of view, we are talking about city council, but also school board, county commission, other officials, and uh the the layers of analysis through which you go when you're looking at a conflict of interest are constitutional, statutory, but then they set the floor and city ordinances can be more detailed and more stringent.

So I'll go into that later.

Um so those are the kind of the three the three layers from a constitutional consideration.

They uh the analysis stems from the Fifth Amendment.

No person is to be deprived of life, liberty, or property without due process.

And if there's a conflict of interest, um someone is deprived of of due process.

So that's where that comes from.

South Dakota's constitution has a very similar provision.

Article six, section two.

Again, no person will be deprived of life, liberty, or property without due process.

Um we've got a couple of cases here that I covered during the summer presentation that talks a little bit about it.

Um again uh the states may impose more rigorous standards.

Um the statutes largely talk about direct pecuniary interests for conflict of interest.

Um the statutes in South Dakota law also provide a fair amount of protection to its officials.

If you disclose a potential conflict of interest, the rest of the body can just first you can disclose it, and then you can say whether or not you believe it's a conflict of interest, and you can continue or you can not continue.

You can always recuse yourself.

That's a um a protection that you have.

So if there's any question in your mind, you're always free to recuse yourself.

But if you disclose to the body, describe the circumstances, say whether that you you think you can continue, two thirds of the body can vote to remove you and and not have you uh participate in it.

So if there's any question in your mind, you can always disclose, give the body the opportunity to remove you and move on.

Um direct pecuniary interest is not uh defined in South Dakota law.

Brookings ordinance has a little bit better of a of the definition that I'll go into later, but generally there's some case law that says it requires a showing that the property of the official will be benefited or that he or she will receive a direct financial gain from a decision on the matter before the board.

So uh the standard depends on whether an action is legislative or quasi-judicial.

In other words, if someone is going to challenge whether or not you had a conflict of interest, the standard depends on whether it's legislative.

Uh a legislative matter is a matter of general applicability, such as adopting a zoning ordinance, passing a budget.

These are matters that are applicable to everybody.

A quasi-judicial matter would be something that affects someone specifically, like approving a CUP, uh overseeing an appear an appeal on a code violation or revoking a license after a hearing.

So if it's legislative, you look to the toxic one seventeen, use your judgment to decide should you be disqualified or not, ask yourself is there a direct pecuniary interest in the matter?

And then two-thirds of the body could vote to decide whether there is a conflict.

Yes.

So for quasi judicial, the standard is similar.

You still apply those three steps, but then you also layer in this statute 6121.

6121 sets out grounds for disqualification of an officer in a quasi-judicial proceeding.

And I'm not going to sit there and read the whole statute, but generally an elected or appointed officer is presumed to be objective and capable of making decisions fairly on the basis of their circumstances.

They may rely on the officers only their own general experience and background.

So you can take your own personal experiences into consideration, what you know about the situation, what you hear around town, things like that.

And if someone challenges your decision, in court, there would have to be a showing of clear and convincing evidence that your authority statements or actions regarding the issue demonstrated prejudice or an unacceptable risk of bias.

So you can receive public on a quasi-judicial matter, directly or indirectly about a matter of public interest.

That contact alone does not require the officer to recuse themselves.

You can take your own life experience or knowledge into consideration.

You can take chatter around town into consideration, and you're presumed to be objective and capable of making decisions fairly.

So that's a fair amount of discretion.

If you cannot be objective about it, if you in your own mind know I can't make a fair and impartial decision, I can't be fair and impartial about this, then you probably should recuse yourself.

But the statutes give you a fair amount of discretion.

Only by showing clear and convincing evidence that your statements or actions show that you have an unacceptable risk of bias, will you be deemed disqualified?

And that's in a quasi-judicial proceeding.

So there is an illustrative case called Holborn, and I'm just going to go through this very quickly.

The reason I picked this case out is because it shows some facts and circumstances that one might think would lead to a conflict of interest.

Four or five, four of the five board members in this matter had alleged conflicts.

One of them had an agreement with a wind company.

This was a matter involving I think permitting for wind towers.

One member had an agreement with the wind company.

The company terminated the contract once it was determined that that member's land wasn't needed.

One member had two agreements, which the member terminated because of his belief that they would constitute a conflict of interest on these applications.

And he had brothers with agreements with the wind companies.

Another member had employed has had employers with agreements with the wind companies.

So the people he worked for had agreements with wind companies.

And then finally, a fourth member had invested in other wind projects, so he was interested in the business.

He had a business that might have potentially benefited, but didn't wouldn't certainly benefit.

And then he also had a business that had an agreement not to oppose wind projects, wind projects in general, not just the wind project in question.

The court held that both of these statutes did not support disqualification of any of the members.

And there's no pecuniary interest involved here.

And every situation is going to be different.

So as we go through this analysis, you just have to remember you do have a lot of discretion.

And once again, when I get to this flowchart at the end, I think it'll be it'll be helpful.

So this is just kind of a review breaking down the case.

One, disclose the potential conflict of interest to the other council members, identify the nature of the conflict of interest, indicate whether you believe that you can impartially act.

After you make that disclosure, the other council members must be allowed to inquire further, meaning they can ask you questions about it.

They might be able to, they might make they might recommend whether the council member should be permitted to participate.

But if after receiving that feedback, the potentially conflicted member believes that they can participate and that a conflict does not exist, they re-identify the issue, state that they believe they can participate fully, and the council has the opportunity to disqualify that that member.

Following the conclusion, you can proceed as usual.

So the takeaways from state level is if you're not comfortable, you can always recuse yourself, and you can always consult legal counsel for guidance if you want.

Some people have in the past, we're happy to talk you through it.

Um the two points that conclude on this PowerPoint are, as I mentioned earlier, that the ordinances may and in fact in the case of Brookings do impose more strict requirements and they contain more details or procedures in state law.

That's not the case in all cities.

Some are virtually silent and some are even more detailed.

And then obviously uh you should just generally be aware that, especially in the pecuniary issue, uh, there is criminal liability if you knowingly use funds or property that have been entrusted to the public and and you violate it uh through a conflict of interest, which was built in uh benefit to you or or a family member or a business associate.

Um at this point, Bonnie, do you think you could pull up the ordinances?

Oh, I gotta use the mouse for that, don't I?

Okay, thank you.

Okay.

So there's two sections in the Brookings ordinances that you should be aware of and that address conflicts of interest.

The first one is in the city charter.

So that's section two six three.

Oh, that's the policy here.

Section 8.01 of the city charter.

Can you pull that one up?

8.01.

There.

So it's pretty clear it speaks for itself.

The use of public office for private gain is prohibited.

And the uh the council will implement the prohibition by ordinance.

So again, I'm not going to read through the entire thing.

It's fairly short and fairly straightforward.

I think you guys can read it and check it out.

It's important that you know that that exists.

And then the other place that you should be aware of it is here in section two six three.

Uh the city of Virkings has a conflict of interest policy.

This ordinance is a little more in depth.

Um again, I'm not going to read the whole thing, but generally speaking, um, what you should be aware of is that the public official must not participate in any official action if he or she has a conflict of interest in the matter of understanding.

The city's conflict of interest policy is intended to avoid the appearance of impropriety, whether or not there is an actual conflict of interest, it applies to the mayor, to the city councils, to the city officers, employees, and members of all boards, commissions, and committees.

And the city code has a definition for conflict of interest, which is a little bit different than state law, a direct personal or financial interest of a of a public official, his or her spouse, household member, business associate, employer, or employee, and the outcome of a cause proceeding, application, or any other matter pending before the official or before the public body in which he or she holds office or is employed.

So a financial interest is defined as an expectation of receiving a financial benefit.

City code further states that a person has a conflict of interest in a decision if a financial interest of that person will vary with the outcome of the decision.

So obviously, when there's financial interest involved, the level of uh scrutiny is a little bit higher.

A financial interest does not include a personal or financial interest, which is not of the magnitude that would exert an average on an influence on an average reasonable person, a person or financial, a personal or financial interest of a type which is generally possessed by the public or a large class of persons to which that official or employee belongs, and an action or influence which would have an insignificant or conjectural effect on the matter in question.

So again, you can get into some gray area here, and if there's any doubt in your mind, you always have the ability to recuse yourself, and the council always has the ability to disqualify you after you disclose it.

Lastly, I'd like to switch over to the document viewer.

We generated this conflict of interest flow chart for you guys to refer to.

And this should cover both state law and city ordinance if you start from the top.

You start by identifying a conflict of interest, and Susan and I, Susan helped me put this together, and Susan helped me present uh to the IMLA or the SDML conference in this summer.

Our position is that if you identify a conflict conflict of interest, you immediately disclose it to the body.

Okay.

Then you state whether you believe you can consider and vote on the matter in a fair and pro and in unbiased manner.

So if you believe that you can proceed, then you go down to yes, you ask yourself about the financial implications.

Do you, your business partner, employer, etc.

have a financial interest in the matter?

If the answer is yes, then you go to the is the interest minor widely shared by the general public or too uncertain or insignificant to cause a reasonable person to exert impermissible influence on the matter.

If the answer is yes, the council still has the ability to vote to disqualify you.

If the answer is no, then you can still continue.

We believe that you should conclude the matter by re-identifying it after your explanation.

Just conclude by saying again, this is the conflict of interest that I or the potential conflict of interest that I wanted to bring to the council's attention.

I believe that I can continue and consider the matter fairly.

Conclude your statement there, and then the council has the opportunity to ask you questions.

They may make suggestions that you may uh you might disqualify yourself, and ultimately they can make a motion to vote to disqualify you.

If they do, you're disqualified, you shouldn't participate in the discussion, and you cannot vote.

Any questions?

There's there's lots of gray area.

Bonnie, I knew you'd challenge me.

I'm gonna start.

I'm gonna start with public first.

Public have any questions, comments.

Yeah, I was just saying we have a number of uh chairs, vice chairs here in the room tonight.

If you guys want to come forward and ask any questions, you're more welcome to so we had a we had three years ago the city had a conflict of interest, I don't know, consultant or something that came in and talked to us and asked this question, so I'm gonna ask it again because you're the city attorney.

If I am working for a company and they come in, because we deal with TIFFs, if I work for that company or my wife works for that company, should I uh recuse myself from voting on that in favor of a TIFF?

Because that can be millions of dollars in potential.

So that's why I wanted to see what your thoughts were on that.

Sure.

Thank you.

Uh when you say voting, you're you're talking about as a body, you're voting as uh as a city body.

I'm on the planning.

Okay.

So you have to analyze in every question, you know, what's what's the level of pecuniary interest or financial gain that you might that you might realize?

Okay, if it's your employer, you're working on the project, uh, you have the ability to vote uh as to whether or not the project will proceed.

That would result in dollars to your employer, and that seems very close to me.

And so uh in that instance, I think that you know it's very possible that you do have a conflict of interest and you should recuse yourself.

But we have other instances.

Uh we've had other counselors say, you know, I'm part of a larger organization, like for example, a university, and there's a there's some city funding that goes to some branch of the university, it's really not in my area.

Um, it doesn't affect me personally.

Um, I might, you know, somehow have some contact theoretically or hypothetically with somebody that's involved in this program.

Um that's pretty remote, and I don't see that it's going to have any uh direct pecuniary um uh benefit to you.

So, you know, I think the in the flow chart, if you refer to the flow chart to this bubble specifically, is the interest minor, widely shared by the general public, or too certain or insignificant to cause a reasonable person to exert impermissible influence on the matter.

You know, and I think the example that was given probably does not fall under this category.

It seems like it's not a minor interest, it's not widely shared by the general public, it's not uncertain or insignificant, and a reasonable person would probably conclude that that would result in an impermissible influence on uh the decision maker.

Does that answer your question?

No, thank you.

Okay.

All right.

Any other public questions from public council member Specker?

I have a question on your last slide before the question slide.

This one.

Yeah, I don't understand the last part of the criminal liability.

Like any public official who commits a direct criminal conflict of interest.

What's a direct criminal conflict of interest?

Unfortunately, that's the language of the statute, and sometimes the statutes are not worded in the manner that I would word them.

Uh, but I think that you know, the way I would interpret it is that it's it's defining knowingly using these funds as a uh to your benefit, knowingly uses funds or property that's entrusted to the public.

Uh, that's a criminal conflict of interest, and it's defining that as theft.

So I think that uh that would trigger then the criminal theft statutes in terms of figuring out the level of penalty um, you know, type of crime that it would be like misdemeanor felony, how how theft is generally treated under the criminal code.

Okay, thanks.

Thank you, counselor.

Councilman Merduran.

Thank you, Mayor.

Thank you for this presentation.

I have uh a few questions.

Um is I think one of the most common situations that a lot of our counselors struggle with is the perception of conflict of interest and how to best navigate that with the public.

Would you have any best practices or advice on on how we should navigate that or with our volunteer boards as well?

Uh yeah, so it's a hard question to answer.

I think what what perhaps a good way to look at it is to look at what you can show.

In looking at our uh our flow chart, you know, one of the things again that you can look at is there a pector interest?

Or is it so far removed that it's not something that a reasonable person would conclude that you would be influenced by?

Every person is different, you could have some closer calls, right?

And so I think it all starts, the analysis really starts with what do you think?

Do you think that this is gonna influence you or not?

And then if you think that you can proceed, then the next step is well, is there a financial component to it?

And then I have to disclose this to the rest of my board and give them the opportunity to object.

Remember, you always have the ability to recuse yourself.

So you've always got that out, and your second layer of protection is after full disclosure, the rest of the board can vote to disqualify you.

And you know, there are certain things that um council members believe are more controversial than others, and if you if you believe that there's an appearance of impropriety because you're too close to it, I'm trying to think of an example that maybe isn't something that's that I know is going on in Brookings right now.

I don't know.

Say, for example, there's something going on in your direct neighborhood that might affect your property value or might affect your enjoyment of your house or something like that.

Um you can get closer to the appearance of impropriety because this personally affects you, and it might not personally affect some of the other people, you might have a personal role in it.

Um again, every situation is unique, and um we're happy to analyze it with you.

All you have to do is ask.

Sure.

So to confirm when you say disclose to the board, are you saying like an internal disclosure like we email or text uh other board members, or would that be a public disclosure at a meeting before the voting item is up?

Well, I would do it at the meeting.

Um, you know, and I think we had a a meeting not too long ago where where you did just that.

Um do it before the discussion is had uh because if you do have a conflict, you shouldn't participate in the discussion.

And then at the conclusion, you repeat what the uh after your explanation.

If your decision is that you're going to stay, then at the at the conclusion of your explanation, you just repeat the fact that it's a could be a perceived conflict, but you believe you can be fair and impartial for the reasons that you stated, and then the council will have or the council or whatever board you happen to be on will have the opportunity to vote on it.

Okay.

Or they might not, and you just resume with the agenda.

Sure.

And for those who may not be um as familiar with it, is it uh a new best practice to actually leave the room if you are not going to vote or participate in the discussion?

Uh yes, we've gone kind of back and forth on this a little bit.

Um I I changed my view recently to uh you should leave the room in terms of not uh being involved in this in the discussion.

Uh there was actually a uh a speaker on this at the IMLA conference that uh I went to this last fall, and he they addressed that very question, and his recommendation was that the person with the conflict that's recused or or or is uh is not gonna participate that they leave the room.

He did in my defense state that he had no direct authority for that, but um that was his recommendation, and I agree it probably is a good practice.

Sure.

Uh a couple more questions.

One is you had mentioned at the very beginning of your presentation that there were protections for officials since our uh within our ordinance we define a couple other um factors of the city like our agencies, volunteers, our employees.

Do they also have those protections?

Or could you elaborate a little bit more on what that meant?

Well, generally speaking, the conflict of interest analysis that I'm going through is for boards or committees that are official bodies of the city.

Okay.

So that's the context in which I was analyzing it.

Uh is that does that answer your question?

Yes, yep, that that answered it.

Uh and then my last question is just based on your expertise with working with other cities.

Um, I feel that our ordinance, I appreciate the definitions that we include in there.

Do you feel that it is adequate enough?

Or you mentioned, you know, there's still a lot of gray area.

Do you have any um expertise that you would like to provide on things that we should consider adding?

I think the ordinance is well written.

I think there's a lot more definition there than there is in state law.

I mean, that's just a fact.

There's just it's bigger, there's more words, more definitions, there's you know, not a whole lot in state law.

Um, you know, I like to tell people that it's really impossible to draft a perfect contract.

A lot of times, no matter how perfect your contract is, it's only as good as a person's ability to pay or follow through with it or be honest.

Okay.

And so I think that the city ordinances do a good job of defining some terms that are not defined in state law, I wish state law was a little more specific about it.

But I don't think there's any changes that I would recommend right now.

Okay, thank you very much.

End of my questions.

All right.

Any other council members?

Questions?

Councilmember Wendell.

Thank you, Mayor.

Vince, I don't know how much you've been following some of the conflict of interest discussion at the legislative level, and there's been a couple of pieces of legislation that have come forward in the last couple of years around conflict of interest or perceived conflict of interest.

Some of them even like looking at prior service before holding elective office and you know, the one or two years before you're in office if that creates a conflict.

Have you heard chatter about whether or not there's discussion of that being focused at a municipal level in addition to the state level, or is that really just kind of narrowly focused on legislators?

To my knowledge, it's not at the municipal level.

Uh I have a partner who is a full-time lobbyist that I could certainly follow up with on that issue.

I just know that when conversations like that start, they may have a fairly narrow intent, and then by the time they become state statutes, sometimes that ends up broadening.

So I'm just kind of curious if there's been some thought about municipal elected office officers in that.

Not to my knowledge, but I will certainly look into that.

Thanks.

Thank you.

All right.

Any other comments, questions?

I might just uh call out again if any chairs or vice chairs, any members of the boards of committees have any questions or concerns.

I know you're often dealing with uh items that will come before city council.

Uh and if you don't, that's fine too.

But I just want to make sure that everyone knows that Vince is available to you as well for potential questions.

But I didn't know if there's any common issues you guys are dealing with right now or had it here most recently that you might want to bring forward.

That's fine.

Along with that, uh thank you for attending this evening.

And if you do have any questions in the future, I'm sure Vince would be available for any of those questions.

Thank you.

Thank you.

All right.

So we have uh a meeting next week, a regular meeting.

Uh we have a bid award for construction manager at risk for the uh police department building.

Uh looking at first reading on amending chapter 14 regarding animals, and then uh uh revised division three dead dying disease and infested trees.

Uh we had first reading last meeting, second reading be next week, and then uh we're uh voting on an agreement with the county on the election agreement, and then we will have a city progress report.

Is there any uh member of the council that wants to add anything to a future agenda?

Conversations.

All right, we will be going to executive session.

There will be no business after we uh uh uh exit uh executive session.

Um item 7a executive session pursuant to SDCL 1-25-2.1 for discussing the qualifications, competence, performance, character, or fitness of any public officer or employee or prospective public employer officer or employee.

The term employee does not include any independent contractor.

I entertain a motion to go into executive session.

So moved.

Second um vote in favor to go to executive session, say aye.

Aye.

We are going into executive session.

Thanks coming, guys.