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- Mona City is cautioned about conflict-of-interest issues and the Sunshine Law
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By Myrna Trauntvein
Times-News Correspondent
With every community audit, a list of findings is presented.
Such was the case with the Mona City audit. Greg Ogden, Certified Public Accountant, Springville, is the independent auditor for Mona City and, each year, as he presents the financial records, he also presents a list of findings, or items which the city needs to improve for the next year.
“This report is intended solely for the use of the management of Mona City,” said Ogden. “However, this report is a matter of public record and its distribution is not limited.”
One of those findings was one that, said Ogden, the city needed to be cautious about in the future.
“A company owned by a relative of a member of the city council was hired to perform finish sealing on the new sidewalks,” said Ogden. “I did not find any discussion or vote by the city council regarding the decision. I did not find a conflict-of-interest disclosure in the files.”
Ogden said that care should be taken to follow the city’s purchasing policies and state requirements followed.
He said that decisions to hire a person or company with ties to a member of the city council should be discussed and voted on by the whole council to avoid questions about conflicts of interest.
A couple of years ago, he said, the state had warned Mona council members of this and cautioned them to be careful. In rural cities, he said, there is always the potential that members of the council will be related to those seeking to be employed by the city. Diligence is needed to safe guard against practices that could be questioned.
“The council member who is related to the person being considered should, at a minimum, disclose the relationship in the city council meeting and/or file a conflict-of-interest disclosure to be kept in the city files,” he said.
The council member who is related should consider abstaining from voting on matters in which they might have a conflict of interest.
Ogden also found that two meetings of the city council started earlier than the time advertised during which significant matters pertaining to city council business were discussed, he said.
“Utah Code section 52-4-202 requires notice to be posted at least 24-hours prior to a council meeting being held,” said Ogden. “It is illegal to hold a meeting earlier than advertised.”
Ogden recommended that city council members review the Utah Code section 52-4 regarding open public meetings.
“No meetings should be held that do not comply with Utah law,” said Ogden.
The Open and Public Meetings Act (nicknamed the Sunshine Law) legislates the methods by which public meetings are conducted.
“(1)The Utah State Legislature finds and declares that the state, its agencies and political subdivisions, exist to aid in the conduct of the people’s business.
“(2) It is the intent of the Legislature that the state, its agencies, and its political subdivisions: (a) take their actions openly; and (b) conduct their deliberations openly.”
Closed meetings are legal, said Ogden, but only for very specific reasons and must be advertised in advance of the closure.
Such meeting can be held for “the discussion of the character, professional competence, or physical or mental health of an individual; strategy sessions to discuss collective bargaining; strategy sessions to discuss pending or reasonably imminent litigation; strategy sessions to discuss the purchase, exchange, or lease of real property when public discussion of the transaction would disclose the appraisal or estimated value of the property and prevent completion of the transaction on the best possible terms for the public entity; strategy sessions to discuss the sale of real property that would disclose designated information, prevent the public entity from completing the sale on the best possible terms and when the terms of the sale will be publicly disclosed before the public body approves the sale; discussion regarding the deployment of security personnel, devices, or systems; investigative proceedings regarding allegation of criminal misconduct.”
Must the description for the purpose of the closed (executive session) meeting be specific? Specificity is not required; balance is necessary between informing the public about executive session activities while not compromising the privacy interests of those whose business is discussed.
No action may be taken in a closed meeting. Utah statute would have to expressly allow for this—and it does not. Where action is taken in an open session, after a closed session, the motion need not present sensitive issues discussed in the closed session.
If the purpose of the closed meeting is to discuss character or competence of an individual or the deployment of security devices, the presiding officer need only sign a sworn statement affirming the purpose. A meeting closed for any other purpose requires an electronic recording or detailed written minutes.
Ogden also recommended that the amount of the treasurer’s bond be increased sufficient to comply with the state requirement.
“It may be wise to track the required coverage closely over the next few years so that it is high enough for the years while the sewer project is in progress and then so you can decrease it again once the project is completed and the city’s budget returns to normal levels,” said Ogden.
He said the bond needed to be increased from $100,000 to $300,000.
The state requires cities to maintain an unrestricted general fund balance that is between five percent and 18-percent of the next year’s budgeted general fund revenues, Ogden said.
During 2009, the city transferred $180,000 from the general fund to the capital project fund, however, the transfer resulted in the unrestricted general fund balance being a deficit amount.
“The city needs to transfer money back to the general fund from the capital projects fund,” said Ogden.
In addition, he said, the entry to adjust the Class C Roads to the correct year-end balance was not posted correctly.
Both of the accounting problems were due to problems with Pelorus, said Everd Squire, city finance director, and will be taken care of with the software provider so that these errors do not occur in the future.
“I am still happy that you switched to Pelorus,” said Ogden. “The move was a good one and it makes my job much easier.”
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