R2003-01 ESTABLISHING CONFLICT OF INTEREST POLICY

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, • , . agent of the grantee or sub grantee shall participate in the selection, or in the award or administration of a contract supported by federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when, the employee, officer or agent, any member of his or her immediate family, his or her partner, or an organization which employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award. Recently, HUD has taken a very conservative interpretation of the laws covering conflict of ' interest and has advised, in writing that, those having even a non financial interest must recuse themselves from reviewin , scorin and a rovin all applications in the group competing for the g g PP g same pot of money. In the opinion of HUD's Regional Counsel far the Midwest, Any member of City staff or City Council,who is a board member of an agency requesting federal funds, or entering into a contract or subcontract with the City of Decatur that will be paid with federal funds, must recuse themselves totally from the decision making process. In the ' instance of sub recipients, since applicants are all competing for the same pot of money, HLTD has determined that staff or City Council members who are also board members of an agency submitting an application for funding must not take part in discussion or voting for any of the sub recipient applications. As in the past, if any City Council member or direct relative are in a position with even the appearance of a conf]ict of interest, the member should recuse him/herself from voting; the newer interpretation from HUD suggests City Council members who serve on Boards of any groups, whether there is a financial benefit or not, should sever the relationship rather than risk the group being ineligible for CDBG funding. As a result, if Council members or spouses serve on any group that may now or in the future be an applicant for and receiver of CDBG funding, it would be advantageous to sever the relationship with the community group. More fundamentally, however, staff alerted City Council some time ago of our recommendation that the City terminate, after the current year,the practice of annua.11y doling out CDBG money to competing community groups. Given the needs in the Near North and the aggressive campaign of city government to cleanup neighborhoods and assist low and moderate income families, funding for such activities has become very problematic. There is seldom enough funding provided to any one group to be of significant impact, and the process is necessarily very subjective. We will recommend that the City terminate this program, as it has been practiced in the past, after this year. This action will resolve the issue of City Council members serving on community groups boards and commissions if the City Council follows staffrecommendation. So long as the City Council is making decisions on funding for such groups, as you are this year, the newly applied rules discussed herein should be considered. Questions on this topic should be addressed to John Couter(424-2807).