Commission Re-Affirms Support for Limited Neighborhood Council Financial Disclosure

    As policy discussions about the appropriate role of personal financial disclosure for neighborhood council board members continue in the city, the City Ethics Commission re-affirmed its support for limited disclosure tied to the creation of neighborhood council files, or NCFs. At its meeting on September 5, the Ethics Commission considered an alternative proposal requested by the City Council’s Education and Neighborhoods Committee to require annual disclosure. The staff report proposed to modify the Ethics Commission’s Form 52, which was first transmitted to the Council in March 2008. The Commission’s special meeting was called to enable the ethics panel to consider the issue and then share its views with Education and Neighborhoods Committee members at their meeting on September 9th.

    After hearing from neighborhood council activists and others, the Ethics Commission concluded that the twin goals of transparency and enhanced citizen participation for neighborhood councils would be most appropriately balanced at this time by periodic disclosure tied only to the creation of an NCF. On a 4-1 vote, the Commission restated its continuing strong belief that the financial disclosure required of neighborhood council board members should reflect their advisory role and should not rise to the level and scope of disclosure required by state Form 700.

    This issue first arose in January 2008, when the City Council approved a two-year pilot project authorizing neighborhood councils to create NCFs. As part of the pilot project, the City Council added a requirement that neighborhood council board members who participate in creating an NCF file a Form 700 relating to that NCF. Under City law, however, neighborhood councils are currently exempt from filing Form 700. If that exemption were eliminated, neighborhood council board members would be permanently subject to filing Form 700 on an annual basis and would also be subject to other City laws.

    In response to requests for input from several councilmembers, the Ethics Commission observed that neighborhood councils are advisory bodies and, in its opinion, should not be required to file financial disclosure statements regarding matters over which they have no ultimate authority, such as NCFs. However, acknowledging the potential for conflicts of interests under state law, as well as the City Council’s stated desire for financial disclosure, the Commission adopted Form 52 as an alternative to Form 700 for neighborhood council board members. Form 52 asks for disclosure regarding key financial interests, such as employers, real estate interests, and business interests. It also asks for disclosure regarding other financial issues that could be affected by the particular NCF that triggered the filing. Only those neighborhood council board members who vote on an NCF would be required to file Form 52.

    The Education and Neighborhoods Committee considered financial disclosure by neighborhood councils for several months and, on August 12, stated its preference for an annual financial disclosure requirement for all neighborhood council board members. The committee asked the Ethics Commission to revise Form 52 so that it is an annual filing that is not tied to an NCF. Rather than revise Form 52, the Commission suggested Form 53 as a alternative disclosure tool, should the Council decide to adopt an annual filing requirement. Form 53 asks for disclosure of the same core financial matters of employers, real estate interests, and business interests; and it also asks for the disclosure of gifts totaling $390 or more per year from a single source with business before the filer’s neighborhood council.

    On September 5th, the Commission directed its staff to communicate its strong support for NCF-based disclosure made through Form 52. However, citing its understanding that the City Council might prefer a universal annual disclosure requirement, the Commission urged the Council to use Form 53, rather than Form 700, for that purpose.

    On September 9th, the Education and Neighborhoods Committee considered both Form 52 and Form 53. After receiving input from the Ethics Commission, the Department of Neighborhood Empowerment, and neighborhood council activists, the committee voted to recommend that the NCF pilot project move forward without any financial disclosure requirement. The full City Council is expected to make a final decision in the coming weeks.

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