In the procurement of goods, services and construction for the city, all city employees shall comply with the rules of ethical conduct set out in §§ 3-3-1 et seq., Conflict of Interest. In addition, the following ethical provisions shall also apply to all city procurements:
(A) Employee conflict of interest. It shall be unlawful for any city employee to participate directly or indirectly in a procurement when the employee knows that:
(1) The employee or any member of the employee's immediate family has a financial interest pertaining to the procurement; or
(2) Any other person, business, or organization with whom the employee or any member of an employee's immediate family is negotiating or has an arrangement concerning prospective employment is involved in the procurement.
(B) Business conflict of interest. It shall be unlawful for any business which knowingly has a conflict of interest or an employee with a conflict of interest, which conflict of interest would allow it an unfair advantage in a competitive process, or would prevent its being able to perform fully and objectively under a contract with the city, to make an offer to the city or enter into a contract with the city.
(C) Prohibition of unfair advancement of private financial interest by any Person, Organization, Board, Committee, or Business. It shall be unlawful for any member of a city board or commission; any director, officer, or employee of a business; or any other individual or business by virtue of a personal or corporate relationship with the city to use confidential or insider information concerning the property, government, or affairs of the governmental body by which that person or corporation entity possesses a confidential relationship, for the purpose of real or potential advancement of private interest.
(1) Disclosure. Every member of a city board or commission; every business, the directors, officers, and key employees of that business; and any other individual who has an existing or potential financial interest or who has an immediate family member who has a presently existing or potential financial interest in any contract or other matter existing or pending before or within the governmental body of which that person or business is affiliated with, shall disclose that interest in writing to the City Clerk and to the City Department Head with whom that person or business is negotiating, immediately upon knowing that such a conflict exists or upon having knowledge that a conflict may potentially come into being.
(2) The city shall not enter into any contract with a business in which an employee has a controlling interest, involving services or property of a value in excess of $1,000 unless the contract is made after public notice and competitive bidding or the Chief Administrative Officer has made a written waiver of this prohibition; provided that this subsection does not apply to a contract of employment with the city.
(3) Any purchase order or contract entered into by the city with a business in which an employee of the city has a controlling interest is void if the employee failed to comply with the provisions of this section prior to the city entering into such contract or purchase order.
(4) Enforcement. In each instance in which an individual member of a board or committee, a business, or any other person knowingly uses confidential or inside information for unfair advancement of private interest, or fails to disclose real or potential financial conflict with the city, the city shall, if the offending party is a business or person affiliated with that business, cease all negotiations and contractual relationships with the offending party. If the offending party is a member of a board or committee, that person shall not be permitted to participate in continued negotiations or receive further information regarding the matter in question. Nothing in this subsection (C) shall preclude the implementation of any other remedy provided by law.
(5) Definitions. For the purposes of this subsection (C), the following definitions apply:
BUSINESS. Any corporation, LLC, partnership, sole proprietorship, firm, enterprise, company, franchise, association, organization, self-employed individual, holding company, joint-stock company, receivership, trust, whether or not organized for profit.
IMMEDIATE FAMILY. A person and his or her spouse, their children; grandchildren; parents; siblings including step or half brothers and sisters; aunts, uncles; or any natural person residing in the same household.
UNFAIR ADVANCEMENT OF PRIVATE INTEREST. Any real or potential financial gain sought or realized by use of confidential or inside information that would not be readily available to individuals and/or businesses not involved in negotiations, contracts, or other direct or indirect transactions with the governmental entity.
(D) Gratuities and kickbacks.
(1) It shall be unlawful for any person to offer, give, or agree to give any employee or former employee, or for any employee or former employee to solicit, demand, accept, or agree to accept from another person, a gratuity or an offer of employment in connection with any decision, approval, disapproval, recommendation, preparation or any part of a program requirement or a purchase request, influencing the content of any specification or procurement standard, rendering of advice, investigation, auditing, or in any other advisory capacity in any proceeding or application, request for ruling, determination, claim or controversy, or other particular matter, pertaining to any program requirement or a contract or subcontract, or to any solicitation or proposal therefor.
(2) It shall be unlawful for any payment, gratuity, or offer of employment to be made by or on behalf of a subcontractor under a contract to the prime contractor or higher tier subcontractor or any person associated therewith, as an inducement for the award of a subcontract or order.
(E) Prohibition against contingent fees. It shall be unlawful for a person to be retained, or to retain a person, to solicit or secure a city contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, except for retention of bona fide employees or bona fide established commercial selling agencies for the purpose of securing business.
(F) Contemporaneous employment prohibited. It shall be unlawful for any employee who is participating directly or indirectly in the procurement process to become or to be, while such an employee, the employee of any person contracting with the governmental body by whom the employee is employed.
(G) Waiver from contemporaneous employment prohibition and other conflicts of interest. The City Council may grant a waiver from the employee conflict of interest provision or the contemporaneous employment provision upon making a written determination that:
(1) The contemporaneous employment or financial interest of the employee has been publicly disclosed;
(2) The city employee will be able to perform his or her procurement functions without actual or apparent bias or favoritism; and
(3) The award will be in the best interests of the city.
(H) Use of confidential information. It shall be unlawful for any employee or former employee knowingly to use confidential information for actual or anticipated personal gain, or for the actual or anticipated personal gain of any other person.
(I) Recovery of value transferred or received in breach of ethical standards.
(1) The value of anything transferred or received in breach of the ethical standards of this section by an employee or a nonemployee may be recovered from both employee and nonemployee.
(2) Upon a showing that a subcontractor made a kickback to a prime contractor or a higher tier subcontractor in connection with the award of a subcontract or order thereunder, it shall be conclusively presumed that the amount thereof was included in the price of the subcontract or order and ultimately borne by the city and will be recoverable hereunder from the recipient. In addition, that amount may also be recovered from the subcontractor making such kickbacks. Recovery from one offending party shall not preclude recovery from other offending parties.
(J) Disclosure of travel expenses. Officials using taxpayer funded travel in excess of $1,000 for any trip shall disclose that trip to the City Clerk within one week after completion of the trip. All such travel expenses shall be immediately posted on the city's website and shall itemize all expected expense as well as the purpose of the trip.
(K) Penalties. To the extent that violation of the ethical standards of conduct set forth in this section constitute violations of a city ordinance or state statute, they shall be punishable as provided therein. The civil penalties set forth in this section and available for the violation of provisions of this article shall be in addition to such criminal penalties.
('74 Code, § 5-7-22) (Ord. 6-1991; Am. Ord. 30-1998; Am. Ord. 24-2000; Am. Ord. 34-2006; Am. Ord. 2019-005) Penalty, see § 1-1-99