City staff post-employment restrictions tightened

June 3, 2011

By Tim Pfarr

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The City Council voted May 3 to create a new section of city code that — in some circumstances — restricts former city employees from working for companies with which they negotiated, supervised or approved contracts during their city employment.

If the employee takes a job at such a company, he or she would face a $10,000 fine for violating any of four restrictions.

According to the new code:

First, for one year after leaving the city, an employee cannot accept a job with a company if he or she approved large contracts for that company and would work on the same project as he or she did at the city. The contracts are considered large if they total more than $100,000 during the employee’s last two years at the city.

Second, an employee cannot have a financial interest in any contract that he or she played a role in negotiating, supervising or awarding while working at the city.

Third, an employee cannot accept a job offer from a company if he or she knows or has reason to believe the offer has been made as compensation for his or her work while working at the city.

Finally, an employee cannot accept a job offer if the circumstances of the offer appear “to a reasonable person” to have been made as compensation for the employee’s work while working at the city.

The rules do not apply to employees who take jobs with government agencies.

The city’s previous code of ethics bars city officials and employees from general conflicts of interest. It also restricts former employees — for one year after leaving the city — from being involved in contracts in which they were involved with while at the city if the contracts were worth more than $5,000.

The code of ethics did not address fines, and the new and old code will be combined, City Manager Rob Wyman said.

City Councilman Bill Erxleben brought up the issue in late 2010. He said the issue came about after the 2003 Boeing tanker scandal gained renewed notoriety in 2008 when The Boeing Co. lost a major tanker contract with the government.

In 2003, Boeing hired Air Force official Darleen Druyun after she deliberately inflated the price of a sale in favor of her future employer. Druyun and then-Boeing CFO Michael Sears were both sentenced to prison time. Some pointed to the incident as the cause of Boeing losing the contract five years later.

Erxleben said he wanted to protect Newcastle from falling victim to that type of situation, which has historically been a problem in procurement settings.

“I wanted to plug a hole,” he said.

He said the city also ran into an issue of a perception of a conflict of interest when former Public Works Director Maiya Andrews left the city in February 2010, taking a job with engineering contractor CH2M Hill. As the public works director, Andrews worked with CH2M Hill while it did construction management work on the Coal Creek Parkway project and the Newcastle Transit Improvement project — formerly known as the Newcastle Transit Center.

“While there is no evidence whatsoever that I know of that there was any impropriety, it looks like hell,” Erxleben said about CH2M Hill hiring Andrews.

Andrews signed change orders for contractors C.A. Carey Corp. and Marshbank Construction, which handled the physical labor on the Coal Creek Parkway project. CH2M Hill continued billing the city as change orders increased the duration of the project.

Andrews did not respond to phone calls or emails from Newcastle News.

Wyman said he also knows of no evidence of wrongdoing, and he said it would be reasonable to assume Andrews would not be in violation of the new code had it been in place when she left the city.

The council approved the new code by a 6-1 vote, with Councilman Sonny Putter dissenting. While the council majority applauded the new code as a step forward, Putter said the code was flawed.

“My concern is that as proposed, this ethics language is far too broad,” he said before the code’s adoption May 3. He said the city should have directed the code specifically at the public works director, as the public works director handles large contracts the code addresses.

He said the code could also be damaging to the city’s contracting options.

“As a small city, we have limited options,” Putter said. “Our goal is to contract where we can.”

On the web:

Read the new code, section 2.67.020, on the city’s website, www.ci.newcastle.wa.us. Click “City Hall,” “Documents & Press Releases” and “Municipal Code.”

 

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