WORKING RULES ON ETHICS ETHICS CHECKLIST FOR … · WORKING RULES ON ETHICS FOR ZONING BOARDS OF APPEALS ETHICS CHECKLIST FOR ZONING BOARD MEMBERS By Mark Davies ... ethics law. The

WORKING RULES ON ETHICSFOR ZONING BOARDS OF APPEALS

ETHICS CHECKLIST FOR ZONING BOARD MEMBERS

By

Mark Davies

Editor's Note: This article originally appeared in Talk Qfthe Towns &Topics. March/April 1996, Vol. 10, No.2, p. 28, and May/June 1996, Vol.10, No.3, p. 23. Copyright by the Association of Towns of the State of NewYork. Used with permission.

TALK OF THE

28 TO-W -l':;. S

By Mark Davies,Executive Director/Counsel,

NYC ConfliCts of Interest Board

could hire a ZBA member to paint thetown hall.

This rule against interests in con-tracts is complicated, tricky, and dan-gerous for town officials. In decidingwhether the rule applies in a particu-lar case, the town official has to an-swer four questions:

Part

(1) Is there a contract with thetown?

(2) Does the town official have aninterest in the contract?

(3) Does the town official haveany control over the contract?

(4) Do any of the various excep-tions apply?

make no sense. They contain enor-mous gaps -and so give officials littleguidance. And they are almost unin-telligible to non-lawyers.

This article will attempt to ex-plain the requirements of the stateconflicts of interest law as it affectszoning board members. But boardmembers should be aware that theirown town may have additional orstricter ethics requirements. For ex-ample, a town might prohibit certaintown officials from accepting a gift ofany size from someone doing busi-ness with the town, even though thestate law might permit a gift up to$75.00. So zoning board membersshould also check their town's localethics law.

The state conflicts of interest lawis found in article 18 of the New YorkState General Municipal Law (sec-tions 800-813). Article 18 containsthree areas of concern to zoningboard members:

Each of these questions is discussedbelow. In addition, zoning boardmembers should be aware of the pen-alties for violating this law. Lastly, theyshould be aware of restrictions onholding more than one town position(dual public employment). These top-ics are also discussed below.

(1) A prohibition on having aninterest in a contract with the town(sections 800-805);

IntroductionZ oning boards are considered to

be "quasi-judicial" bodies. They

are not courts, but they act somewhatlike courts because they interpret themunicipality's zoning law and apply itto particular cases. For that reason,the actions of the zoning board mem-bers must be above suspicion, par-ticularly when the board is dealingwith a controversial case.

So zoning board members, per-haps more than any other municipalofficials, need clear ethics guidelinesas to what they may and may not do.Unfortunately, few towns have a clearand complete code of ethics to guidetheir officials. And the state conflictsof interest provisions for municipalofficials are a disgrace. They often

--

Continued from previous page

Therefore, it appears that zoningregulations which seek to require theplacement of mobile homes in subdi-visions, parks or planned unit devel-opments may still do so providingthat the regulations are based uponlegitimate objectives pursuant to thegeneral welfare of the police powers.It also appears that such regulationscan no longer be based on safety con-siderations that are covered by theHUD regulations or the Federal Hous-ing Act. In addition, the restrictionson the placement of mobile homescannot be so draconian as to be con-sidered exclusionary. Finally, it wouldseem to be prudent for municipalitiesto reevaluate their ordinances in or-der to reflect the current status of mo-bile homes in view of current statu-tory and common law treatment ofmanufactured housing. .:.

(2). Certain disclosure require-ments {sections 803 & 809)1; and

(3) Certain miscellaneous con-flicts of interest roles (for example,on accepting gifts) (section 805-a).

Each of these areas is discussed be-low. At the end of this anicle is achecklist of common ethics questions,

(1) Is there a contract with thetown?

The law's definition of "contract"is odd. It includes not only an agree-ment with the town, "express or im-plied", but also "any claim, account ordemand" against the town. So a law-suit against the town is a "contract"with the town.

The State Comptroller's Office hassaid that an application for a zoningchange and the granting of that appli-cation is not a "contract."2 It wouldseem that a zoning variance is not acontract either. But one court heldthat an application for a building per-mit, and the issuance of the permit, isa contract. 3 (A building permit is a bitdifferent from a zoning variancethough, because a building permitdoes not involve much discretion.

A. Interest in ContractsThe state's conflicts of interest

law prohibits a town officer or em-ployee from having an interest in acontract with the town if the officeror employee has some control overthe contract. For example, a townzoning board could not hire one ofits members as a stenographer for aZBA hearing, but the town board

TALK OF THE 8 29

~o--~z:_.~ --

ally or as a member of a board -hasthe power or duty to authorize or ap-prove payment under the contract; or

Suppose, for example, that atown board member is a part ownerof a moving firm and that the townboard contracts with that moving firmto move furniture out of the townhall. The town board member has aninterest in that contract, even if theboard member receives no financialbenefit as a result of that contract.

In other words, a town officialhas an interest in a contract:

(c) The official -either individu-ally or as a member of a board -hasthe power or duty to audit bills orclaims under the contract; or

A zoning variance does. So it makessense to say that a building permitcan be a "contract" but a zoning vari-ance is not.) Also, an article 78 pro-ceeding may be a contract since it is a"claim or demand,"

Putting all this together, a zoningboard member is allowed to apply fora zoning variance for his or her ownproperty (for example, to build adeck that extends into the setback).

When zoning board membershowever, apply for a variance on theirown property, they should "recuse"themselves. that is, they should nottake part in the zoning board's discus-sion and should not vote on the vari-ance. If possible, zoning board mem-bers asking for a variance on theirown property should not appear be-fore the zoning board in person, es-pecially if there is any opposition tothe variance. If they can, they shouldprobably have someone else appearfor them before the board (like anattorney, an architect, or a friend). '

(d) The official- either individu-ally or as a member of a board. hasthe power or duty to appoint an of.ficer or employee who has any of thepowers or duties listed in paragraphs(a) through (c).

(a) If the town official receives afinancial benefit as a result of the con-tract (even if he or she is not a partyto the contract); or The official does not have to act

on the matter. It is enough if he orshe has the power or duty to act onthe matter. For this reason, a viola-tion of law still occurs even if the offi-cial recuses (disqualifies) himself orherself from voting or acting on thematter. So, too, competitive biddingdoes not prevent a violation.4

(b) If the contract is with thetown official's spouse, outside busi-ness or employer, or a corporation inwhich the official owns or controlsstock (even if the official does notpersonally receive any financial ben-efit from the contract).

There is an exception to this rule.A town official does not have an inter-est in a contract just because his orher spouse, minor child, or depen-dent is employed by the town. Thismeans that nepotism is allowed. Forexample, the town board could hirethe spouse of a town board member.In fact, the town board member couldeven vote to hire is or her ownspouse. But to avoid appearances offavoritism, a town official shouldrecuse (disqualify) himself or herselffrom any involvement in the town'shiring of a relative of the official.

(3) Does the town official have anycontrol over the contract?

Even if a town official has an in-terest in a contract with the town,that interest is illegal only if the offi-cial has some control over the con-tract. There are four kinds of control:

(2) Does the town official havean interest in the contract?

A town official has an "interest" ina contract with the town if the officialreceives some financial benefit as aresult of the contract. The town oBi-cia! does not have to be a PaL1y to thecontract. For example, if the townboard hires a firm to paint the townhall, and the firm subcontracts part ofthe job to the part-time deputy townclerk, that deputy clerk has an inter-est in the firm's contract with thetown because the deputy clerk gets afinancial benefit as a result of thatcontract(although it is not a prohib-ited interest).

Under the law, a town official issaid to have an interest in:

(a) Any contract of the official'sspouse, minor children, or depen-dents; (a) The official- either individu-

ally or as a member of a board -hasthe power or duty to negotiate, pre-pare, authorize, or approve the con-tract; or

(b) Any contract of the official'soutside business or employer; and

(4) Do any of the exceptionsapply?

There are 15 exceptions to therule on prohibited interests in con-tracts. They are listed in section 802of the General Municipal Law. Someof these exceptions are rather rare.Some are quite common. The mostcommon exceptions are the following:

(a) Outside employment.If a town official's interest in a con-tract is illegal merely because the offi-cial is an officer or employee of theperson or business that has the con-tract with the town, then the officialmay keep that interest, provided that(a) the pay the official receives fromthe employer is not affected by thecontract (e.g., the official does notreceive a commission or bonus as aresult of the contract) and (b) theofficial's duties for the outside em-ployer do not involve the contract.Note that the exception does notapply if the official is a director, part-ner, member, or stockholder of theoutside employer.

(b) Non-profit organizations.A town official's interest in a contract

Continued on page 30

(c) Any contract ora corporationin which the official owns or controlsstock.

(b) The official- either individu-

TALK OF THE

30 TO-W-N S

board; or(d) As the town assessor; or

(e) On the board of education; or

(f) As the town superintendent ofhighways; or

(g) As a member of the town po-lice department; or

(h) As a commissioner of thetown water district; or

(i) As the deputy town supervisor.

Continued from page 29

with the town is allowed if the con-tract is with a non-profit organization.

(c) Grandfathered contracts.A town official's interest in a contractwith the town is allowed if the con-tract was entered into before the offi-cial became an officer or employee ofthe town. But this exception does notapply to a renewal of the contract. Forexample, if someone is elected to thetown board and at the time she iselected her husband has the town'sinsurance business, that contract isallowed. But the town cannot renewthe insurance contract as long as thetown board member remains in office.

(d) Stocks.Where a town official's interest in acontract with the town is illegal be-cause the official owns or controlsstock in a corporation that has thecontract, the interest is allowed if thestock is less than five per cent of thecorporation's outstanding stock.

(e) Small contracts.If the total money payable under alltown contracts the official has an in-terest in is $100 or less during the fis-cal year, then the official's interest inthe contract is allowed.

Also, the same person may serveas secretary to both the zoning andplanning boards.8 However, a zoningboard member should recuse (dis-qualify) himself or herself if any mat-ter relating to his or her other mu-nicipal position comes before thezoning board. For example, a zoningboard member who is also on theboard of education should recusehimself or herself from participatingin the discussions and vote if a matterinvolving school district propertycomes before the zoning board.

On the other hand, a member ofa town zoning board of appeals maynot serve:9

(a) On the town board; or

(b) On the town planning board,if local zoning regulations give thewning board the power to reviewdecisions of the planning board.

Also the secretary to the townwning board may not at the sametime be a member of the town board,and the clerk to the zoning boardmay not be the assistant town build-

ing inspector.]oThe service of relatives on differ-

ent town bodies usually presents noproblem, unless a town ordinance orlocal law provides otherwise. For ex-ample, a person may serve on thezoning board even if his son or wifeserves on the planning board.]]

It is sometimes hard to knowwhether two offices are compatible.The New York State AttorneyGeneral's office has published hun-

(5) What are the penalties for vio-lating this law?

If a town officer or employee"willfully and knowingly" violates the

.law against having a prohibited inter-est in a contract with the town, theofficial has committed a misdemeanor.The offidal may also be subject to dis-ciplinary action, including removalfrom office. Moreover an official "will-fully and knowingly" violates this lawif the official knows the facts thatmake the interest prohibited. The oOi-dal does not hare to know that his orher interest in the contract is illegal.In addition, the contract, if willfullyentered into, is "null, void and whollyunenforceable". The town cannot gothrough with the contract even if itwants to.5

Suppose, for example, that a townboard member is a part owner of alocal hardware store. The HighwayDepartment buys a snowblower from

(b) As town director of finance; or

(c) As administrative assistant tothe supervisor, provided that thetown board does not make decisionssubject to review by the zoning

the hardware store. The town boardmember has a standing order with hispartner that whenever any town em-ployee buys anything for the town,the partner keeps 100% of the profitfrom the sale and also sends a noticeto the board member and the townclerk that the sale was made.

It would seem that the townboard member acted ethically, but infact he violated the law and commit-ted a misdemeanor. The snowblowersale was a contract. The town boardmember has an interest in that con-tract because the contract is with hishardware store, even though theboard member receives no moneyfrom the sale. The exception for out-side employment does not apply be-cause the board member is an ownernot an employee of the store. Sincehe knew these facts, he "willfully andknowingly" violated the law, and thesale is null and void.

Luckily for zoning board mem-bers, they do not have control oververy many contracts. However, be-cause the penalties for violation ofthis law are so serious, zoning boardmembers must be aware of it. If theyhave any questions at all, they will

i need to ask their town attorney.

(6) What about dual publicemployment?

The law on prohibited interests incontracts also applies to somethingcalled "compatibility of public offices"-that is, to employment in two mu-nicipal positions, either two town po-sitions or a town position and a posi-tion with another municipality. TheNew York State Town Law also hasrules in this area.6

For example, a member of a townzoning board of appeals may alsoserve:

(a) One the board of trustees of aI village within the town; or

TALK OF THE

~o-w -l',r S 31

dreds of opinions in this area. Zoningboard members with compatibility ofoffice questions should contact thatoffice (518-474-3429).

Article 18 requires disclosure incertain land use applications. This dis-closure is made by the applicants, notby the zoning board member. Specifi-cally, the disclosure must be made inevery application, petition, or re-quest:

B. DisclosureApart from annual financial dis-

closure, which state law requires onlyin municipalities with a population of50,000 or more, zoning board mem-bers face another kind of disclosure:disclosure of interests in contracts. Inaddition, applicants for approvals inland use matters must make certaindisclosures.

(a) For a variance, amendment, orchange of zoning; or

(b) For approval of a plat or ex-emption from a plat or official map; or

(c) For a license or pennit underthe town's zoning or planning law orregulations.

The application, pem1it, or reoquest must state, to the extent the ap-plicant knows:

(a) The name and home addressof any New York State officer, of anytown officer or employee, and of anyofficer or employee of the county whohas an interest in the applicant; and

(b) The nature and extent of theinterest.

board member to recuse (disqualify)himself or herself from acting on theapplication. Court decisions, how-ever, do require recusal by the zon-ing board member. So any time thateither the zoning board member or amember of his or her family has aconnection with an applicant beforethe zoning board, the membershould disclose that fact and dis-qualify himself or herself from actingon the application if the connectionfalls into one of the above categories.

In addition, zoning board mem-bers should recuse themselves fromacting on a matter if they have al-ready spoken publicly about the mat-ter. For example, if a zoning boardmember speaks out, as a neighbor,before the planning board on a par-ticular case, the zoning board mem-ber should recuse himself or herselffrom considering that case if it latercomes before the zoning board.12

On the other hand, zoning boardmembers should not recuse them-selves unless one of the above situa-tions occurs, for two reasons. First,zoning board members are ap-pointed to the board to review anddecide cases, not to disqualify them-selves. Second, since it takes a major-ity of all of the members of the boardto act on a matter, a recusal is, in ef-fect, a no vote since the recusal doesnot count toward approving the ap-plication. To avoid this problem,some towns have established alter-nate members of the zoning board,or appoint ad hoc members, who

i only act on a case if a regular zon-I ing board member has a conflict ofI interest.13

Under the law, town officers andemployees are said to have an interestin the applicant if they or theirspouses or their brothers or sisters ortheir parents or their children or theirgrandchildren or the spo'use of any ofthem

(a) Is the applicant, or

(b) Works for the applicant, or

(c) Owns or controls stock of theapplicant (with certain exceptions), or

Continued on page 32(d) Is a member ora partnershipor association applicant, or

(1) Disclosure of interests incontracts

If a town zoning board memberhas, will have, or later obtains an in-terest in an actual or proposed con-tract with the town, he or she mustpublicly disclose that interest undersection 803 of the General MunicipalLaw, even if the interest is not illegal.(There are some exceptions to disclo-sure.) The zoning board membermust make the disclosure in writingto the town board as soon as heknows he has or may have a possibleinterest in a contract with the town.The written disclosure becomes partof the town board's records.

Once the zoning board memberhas made the disclosure about a par-ticular contract, he or she does nothave to disclose any additional con-tracts with the same part for the restof the fiscal year. Also, the law doesnot require that the board memberrecuse (disqualify) himself or herselfin the matter, although often recusalis a good idea if it would otherwiseappear that the board member was

doing something improper.If a zoning board member "will.

fully and knowingly" fails to disclose,the member commits a misdemeanor.It would seem that a "willful andknowing" violation occurs if the zon-ing board member knows that he orshe has an interest in the contract,even if the board member did notknow that he or she was required todisclose that interest.(2) Disclosure in land use

applications

(e) Has an agreement with theapplicant to receive anything if theapplication is approved. n art II of this article, 'An Ethics

Checklist for Zoning BoardMembers" will appear in theMay/June issue of Talk of the

Towns. J

A "knowing and intentional" viola-tion is a misdemeanor.

This law requires only disclosureby the applicant. It does not requiredisclosure by the zoning board mem-ber nor does it require the zoning

1

TALK OF THE

32 ~o-w- N S

Continued from page 31

NOTES:1. There are also annual financial dis-closure requirements for towns havinga population of 50,000 or more. Thesefinancial disclosure requirements arein sections 810-813 of the General Mu-nicipal Law but are not discussed inthis article.2. Opinion of the State ComptrollerNo. 83-114.3. People v. Pinto, 88 Misc. 2d 303, 387N.Y.S.2d 385 (Mt. Vernon City Ct. 1976).4. 1979 Op Atty Gen (int) 231.5. See Landau v. Percacclolo, 50N.Y.2d 430, 429 N.Y.S.2d 566 (1980).6. Town Law Sections 20(1)(d), 20(4),267(3), 271(3).7.1986 Op Atty Gen (int) 131; 1988Op Atty Gen (int) 124; 1986 Op AttyGen (.int) 53; 1986 Op Atty Gen (inf)94; 1984 Op Atty Gen (inf) 172; 1988Op Atty Gen (int) 47; 23 Op StateCompt 283 (1967); 1982 Op Atty Gen(int) 100; 27 Op State Compt24(1971).8. 1990 Op Atty Gen (int) 1135.9. Town Law Section 267(3); 1990 OpAtty Gen (int) 1099; 93 Op Atty Gen(int) 1005. I.10. 1990 Op Atty Gen (inf) 1099; 1964Op Atty Gen (int) Jan. 23.11. 1993 Op Atty Gen (in£) 1062); 1988Op Atty Gen (in£) 89.12. See 1993 Op Atty Gen (in£) 1098;1988 Op Atty Gen (int) 115.13. See 1982 Op Atty Gen (in£) 178;1984 Op Atty Gen 150.

For a model local ethics law that con-tains a real code of ethics, see MarkDavies, Keeping the Faith: A Model Lo-cal Ethics Law .Content and Commen-tary, 21 Fordham Urb. L.J. 61 (1993).

TALK OF THE

"J"1 ~ 'VT ~ T~8 -.I. ~". 2~

-

This is Part II of an article en-titled "Working Rules on Ethics

for Zoning Board ,1cfembers" byI.Vark Davies, Executive

DirectOr/Counsel, NYC Conflictsof Interest Board. Part 1 ap-

peared in the MarchiApril1996issue of Talk of the Towns

with another municipality while youare still a town zoning board member.check with your town attorney orthe New York State AttorneyGeneral's Office (518-474-3429) tomake sure you are allowed to holdboth positions.

(3) Miscellaneous EthicsRequirementsFolloMng is an ethics checklist for

zoning board members. Thischecklist is not a substitUte for readingthe law. But it should prove helpful.

and your spouse, minor child or de-pendent?

If the answer to questions (a)through (c) is yes and no exceptionsapply, then the interest is prohibited.You must give up the interest or re-sign from the zoning board.

If the answer to questions (a) and(b) is yes but the answer to question(c) is no, you do not have a prohib-ited interest, but you must disclosethe interest.

If the answer to questions (a)through (c) is yes but an exceptionapplies, you do not have a prohibitedinterest, but you must disclose theinterest, unless it falls under GeneralMunicipal Law, §802(2).

WARNING: THIS CHECKLIST DEALSONLY WIm STATE LAW. MAKE SUREYOU ALSO CHECK YOUR TOWN'SETHICS CODE.

(2) Dual Employment(1) Interest in Contracts

Before you accept a second posi-tion with the town (in addition toyour position as a zoning board mem-ber) .or before you accept a position

"

WARNING: VIOLAllNG mIS LAW IS AMISDEMEANOR.

(a) Do not ask for anyone for agift if they have, or have recently had,any dealings with the zoning board.

(b) Do not accept a gift (or gifts)worth $75 or more from someone ifthey have, or have recently had, anydealings with the zoning board. Thisincludes free tickets and meals.

(c) Do not disclose confidentialinformation that you received as partof your town duties.

(d) Do not use any confidentialinformation for your own interests.

Continued on page 24(a) Does the case before the zon-

ing board involve any contract withthe town, including any claim againstthe town? NOTE: YOU DO NOTHAVE TO BE A PARTY TO THE CON-TRACT.

(b) If so, will you receive any fi-nancial benefit as a result of that con-tract or will your spouse or outsidebusiness or employer or a corpora-tion you own stock in receive a finan-cial benefit as a result of the contract?

(c) If so, do you have any controlover the contract. that is, either as anindividual or as a member of theboard, do you have the power to ne-gotiate, prepare, or approve the con-tract or approve payment under it oraudit bills under it or appoint anyonewho does? NOTE: IT DOES NOT MAT-TER IF YOU DISQUALIFY YOURSELF;mE QUESTION IS IF YOU HAVE mEPOWER OR DUTY TO DO ANY OFmOSE mINGS.

(d) If so, do any of the exceptionsin General Municipal Law section 802apply or is the contract an employ-ment contract between the town

TALK OF THE

-, ~O-W-NS24

you also should not speak by oragainst the application as a privatecitizen. If you have a financial rela-tionship with the applicant but donot work for, own, or have stock inthe applicant (for example, the appli-cant is your customer), you shoulddisclose that fact. Whether you shouldrecuse yourself will depend on thefacts; If in doubt, recuse.

Continued from page 23(e) Do not make any agreement

(or take anything of value) in connec-tion with any matter before the zon.ing board (e.g., you cannot be hiredas a contractor on a developmentwhen the development is before thezoning board).

(f) Do not make any agreement(or take anything of value) in connec-tion with any matter before anyagency of the town if your pay dependson the outcome of the matter (e.g., donot agree that you will get paid as areal estate broker on a sale only if theplanning board approves the plat; in.stead, either tie your commission tosome other. event not involving thetown or fix your fee based on the rea-sonable value of your services).

NOTE: If you violate theserequirements, it is possible that youcould be disciplined (that is, removedfrom office) but only uyou knew thefacts (e.g., that your brother works forthe applicant). It is possible that acourt will void the zoning board's ac-tion. No other penalties exist.

WARNING: AGAIN, CHECK YOURTOWN'S CODE OF EnIICS FORADDI-nONAL OR STRICTER PROVISIONS.

(4) Recusal (disqualification)

before the zoning board in the fol-lowing cases:

(a) If you are the applicant;(b) If the applicant is your

spouse, parent, child, brother, sister,grandchild, or the spouse of any ofthose people (e.g., your sister's hus.band);

(c) If you or any of those relativesworks for, owns part of, or ownsstock in the applicant;

(d) If you or any of those relativeshas any agreement with the applicantto receive anything if the applicationis approve (e.g., your brother gets afinder's fee if the application is ap-proved);

(e) If you have already spokenout publicly on the matter (e.g., op-posed it as a citizen before the plan-ning board);

(f) If the applicant is your client.Not only must you recuse your- I

self as a zoning board member, butYou should recuse (disqualify)

yourself from acting on an application