(A) The city seeks to prevent and avoid any conflicts of interest in the conduct of its business operations and to avoid the appearance of such conflicts to the public it serves. Each elected and appointed official has the duty to place the interests of the citizens of the city foremost in any dealings on behalf of the city and has a continuing responsibility to comply with this section. This section applies to any elected or appointed official who serves on the Council, who serves on any board, committee, or commission of the city, or who is appointed to serve the city in any capacity pursuant to SDCL Chapter 9-14 (collectively referred to as “official”).
(B) Conflicts of interest may exist when an official, or an immediate family member of such official, has a personal or financial interest clearly separate from that of the general public on a matter before the official. An immediate family member, for purposes of this policy, is any person related to an official within the first degree of consanguinity and includes: a spouse; parent; child; grandparent; grandchild; or an individual claimed by the official or his or her spouse as a dependent for federal income tax purposes. Such conflicts of interest may be financial or personal, direct, or indirect, and the existence of a conflict of interest is dependent upon the unique facts or a particular situation.
(C) It is the policy of the city to follow state law regarding conflicts of interest, and this policy is not intended to be more strict than the applicable requirements of state law. Generally, state law provides that an official may not have a personal financial interest in any city transaction for the purchase of labor, services, materials, supplies, or real or personal property that belongs to the city. An exception to this general rule may apply if the transaction is reasonable and just, if the contract is made without fraud or deceit, and if the official discloses the conflict and recuses himself or herself from participation in the decision for which there is a conflict of interest. These exceptions include the following:
(1) A contract for $5,000 or less;
(2) A contract awarded by competitive bidding procedures if more than one competitive bid is submitted, or if only one competitive bid is submitted, and the procedures in SDCL § 6-1-2.1 have been followed;
(3) A contract for professional services;
(4) A contract awarded off of the state contract list at the established price or less;
(5) A contract that does not require competitive bidding when there is no other source of supply or services and when the total or any such contracts does not exceed $50,000 for a public improvement, or $25,000 for a contract for supplies or services; or
(6) A contract with an entity for which competitive bidding is not required unless the majority of the governing body are members or stockholders who collectively have a controlling interest, or any governing board official is an officer, manager, or such entity.
(D) No department director who is authorized in his or her official capacity to sell or lease any property or to make any contract may be personally interested, directly or indirectly, in any such sale, lease, or contract.
(E) If an official who is a member of the Council, or a board, committee, or commission has a disqualifying interest in a matter before the body on which the official serves, he or she shall disclose the conflict to the body prior to its consideration of the matter. Once this disclosure is made, the official shall not formally participate in the official discussion, any executive session, or any vote on the matter. If the official has a conflict or interest in the matter and chooses to participate in the discussion, the official should leave the dais and speak on the item from the audience as a member of the public.
(1) If it is alleged that an official has a disqualifying conflict of interest in a matter before the Council, or a board, committee, or commission on which the official serves, and if the official does not voluntarily refrain from participating in the matter, then the official may be disqualified from officially participating in consideration or the matter upon a two-thirds’ vote of the Council, board, committee, or commission on which the official serves. The Council, board, committee, or commission voting to disqualify such official must make a specific finding of the disqualifying conflict of interest for which it has excluded the official from participating in the matter under consideration. An official disqualified in this manner may not participate in the official discussion, any executive session, or any vote on the matter.
(2) If any official desires assistance to determine if that official, or another official, has a disqualifying conflict of interest, the official may request an advisory opinion from the City Attorney’s office. Such opinion shall be made available to all members of the Council, or the board, committee, or commission, about which the opinion is provided, but shall not be available for public inspection, unless a majority of the members or the Council, or the board, committee, or commission, to which the opinion is provided votes to make such opinion public.
(F) Upon adoption of this policy, the City Finance Officer shall distribute this conflict of interest policy and all pertinent state law provisions to all city officials. The policy and state law provisions shall be timely provided to all newly elected or appointed officials.
(Res. 2019-08, passed 5-6-2019)