Nepotism Policies, Conflict of Interest and Post-Election Personnel Decision-making

1. Nepotism Policies, Conflict of Interest and Post-Election Personnel Decision-making Karen Arland Ice Miller LLP September 25, 2012

2. Nepotism Policies • County must adopt and implement nepotism policies. • Restrictions on employment of family members. • Disclosure of contracts with family members. • County must include information concerning its nepotism policies in its annual report to the State Board of Accounts of names, business addresses and compensation of all county officials and employees (R-100).

3. Nepotism Policies • County's R-100 must include a certification that the county has adopted and implemented both nepotism policies. • State Board must notify DLGF if information is not provided. • DLGF may not approve county budget or any additional appropriations until information is provided to State Board of Accounts.

4. Nepotism Policy – Restrictions on Employment of Family Members • Effective July 1, 2012 – Adds IC 36-1-20.2 • Does NOT apply to persons employed by county on July 1, 2012. • County must adopt and implement a policy that at a minimum prohibits employment of relatives that results in one relative being in the direct line of supervision of another relative. • County may adopt more restrictive policy.

5. Nepotism Policy – Restrictions on Employment of Family Members • An elected official or employee who is in the "direct line of supervision" is able to affect the terms and conditions of another individual's employment, including decisions about work assignments, compensation, grievances, advancement, or performance evaluations. • "Employment" includes full-time employees, part-time employees, temporary employees, individuals employed on an intermittent or hourly basis, and individuals who are covered by an employment contract.

6. Nepotism Policy – Restrictions on Employment of Family Members • Employment does not include service as an elected official. • A "relative" is: • A spouse. • A parent or stepparent. • A grandparent. • A brother, sister, half-brother, half-sister, stepbrother or stepsister. • A niece or nephew. • An aunt or uncle. • A daughter-in-law or son-in-law.

7. Nepotism Policy – Restrictions on Employment of Family Members • Unless the county's nepotism policy provides otherwise, individuals who are employed by the county at the time a relative assumes elected office and who would otherwise be subject to the nepotism policy requirements may remain employed by the county and maintain their current rank and position even if that places them in the direct line of supervision of a relative.

8. Nepotism Policy – Restrictions on Employment of Family Members • Unless the county's nepotism policy provides otherwise, such an individual may not, however, be promoted to a position that would be within the direct line of supervision of a relative.

9. Nepotism Policy – Restrictions on Employment of Family Members • Unless the county's nepotism policy provides otherwise: • a sheriff's spouse may be employed as the county prison matron and in the sheriff's direct line of supervision. • a current coroner who is ineligible to run for an another term of office but who has completed the training course offered by the Indiana law enforcement academy may serve as deputy coroner in the direct line of supervision of a relative who is elected to the office of coroner.

10. Nepotism Policy – Restrictions on Contracting with Relatives of Elected Officials • County must adopt and implement a policy that at a minimum permits the county to enter into a contract or renew a contract for the purchase of supplies or services or a contract for a public works with an individual who is the relative of an elected official or with a business entity wholly or partly owned by the relative of an elected official only if: • the elected official does not violate the criminal conflict of interest statute (IC 35-44.1-1-4); • complies with the disclosure provisions of that statute; and • files additional disclosure concerning the contract or purchase.

11. Nepotism Policy – Restrictions on Contracting with Relatives of Elected Officials • Disclosure filed by elected official must: • be in writing; • described the contract or purchase to be made by the county; • describe the relationship between the elected official and the individual or business entity that is a party to the contract or purchase; • be affirmed under penalty of perjury; • be submitted to and accepted by the county legislative body in a public meeting before final action on the contract or purchase; • be filed not later than 15 days after final action with the Board of Accounts and the county clerk

12. Nepotism Policy – Restrictions on Contracting with Relatives of Elected Officials • County agency that is a party to the contract or purchase must certify that: • the contract amount or purchase price was the lowest amount or price bid or offered; and • explains the reasons why the vendor or contractor was selected; and • County satisfies any other requirements under IC 5-22 (purchasing statute) or IC 36-1-12 (public work statute).

13. Nepotism Policy – Restrictions on Contracting with Relatives of Elected Officials • The county may adopt a policy that includes more stringent or detailed requirements or applies to individuals not covered by the minimum requirements. • The county may prohibit or restrict an individual who is not covered by the minimum requirements from contracting with the county.

14. Nepotism Policy – Restrictions on Contracting with Relatives of Elected Officials • An "elected official" is a member of the county board of commissioners or the county council and does not include any other county elected official. • A "relative" is:  • A spouse. • A parent or stepparent. • A grandparent. • A brother, sister, half-brother, half-sister, stepbrother or stepsister. • A niece or nephew. • An aunt or uncle. • A daughter-in-law or son-in-law.

15. Conflict of Interest • IC 3-5-9 – Effective January 1, 2013. • Not the traditional "conflict of interest". • Prohibits a person holding elected office from also serving as a government employee of the unit for which the person holds an elected office. • An "elected office" is the office of county commissioner or county council member. • A "government employee" is a county employee.

16. Conflict of Interest –Firefighters • A person who serves as a volunteer firefighter for a fire department (paid or volunteer) that provides fire protection services to the county may not assume or hold an elected office of that county. • A person who is a county employee, serving as a full-time paid firefighter or a volunteer firefighter for a department providing fire protection services to more than one unit, including the county, (excluding mutual aid agreements) may not hold an elected office of any unit receiving fire protection services from the department.

17. Conflict of Interest – Other Employees • A government employee is considered to have resigned from county employment when the person assumes an elected office of the county which employs the person. • "Assuming the office" is not defined. • Receiving certificate of election? • Taking the oath of office?

18. Conflict of Interest - "Safe Harbor" • A county employee may assume or hold an elected office of a unit other than the employing county. • A firefighter (paid or volunteer) may assume or hold an elected office of a unit other than a unit that receives fire protection services from the department in which the volunteer firefighter serves. • A person who assumes or holds an elected office may also be appointed to and serve on a board, commission or committee of the county.

19. Conflict of Interest – Elected Office on January 1, 2013 • A county employee who holds or assumes an elected office on January 1, 2013 may continue to hold the office and serve as a county employee until the term of the elected office the county employee holds on January 1, 2013, expires. • After the term of office held on January 1, 2013 expires, the county employee may not hold or assume elected office and remain a county employee.

20. Post-Election Personnel Decision-making • Newly elected officials consider "changing the guard" to assure that key employees will be loyal and support the elected officials public agenda. • The First Amendment prohibits a public employer from making an employment decision about an employee or independent contractor on the basis of political affiliation, unless party affiliation is an appropriate requirement for the position involved. • A public employer can dismiss an employee for political reasons only if the employee is in a policymaking or confidential position. • There may be circumstances in which political affiliation is an important consideration even if position is not policymaking or confidential.

21. Post-Election Personnel Decision-making - Policymaker • Does the position authorize meaningful input into government decision-making on issues where there is room for principled disagreement on goals or their implementation? • Analysis must focus on the powers of the office, not on the activities performed by the person holding the office.

22. Post-Election Personnel Decision-making - Policymaker • Some positions in which persons have informally functioned as policymakers may not be so, because of the inherent powers of the office are not that of a policymaker. • Other factors include: • High salary • Supervisory responsibilities • Broad range of duties • Functions as advisor or formulates plans for implementation of broad goals.

23. Post-Election Personnel Decision-making –Confidential Employee • A person who holds a position that has special access to and close communications with an elected official or appointed policymaker. • Person would be likely to be a party to politically sensitive communications and information critical to the policymaking process.

24. Post-Election Personnel Decision-making –Confidential Employee • Loyalty may be an issue – if the person is disloyal, can he/she interfere with a given political program. • Consider the position's general scope of responsibility, not the particular activities the person engages in. • Nature of the duties in determinative.

25. Post-Election Personnel Decision-making • For both types of positions, job descriptions may be important – if they are objective and reliable. • Elected official may not rely on an official job description if it has been altered not to reflect actual changes in the duties of a position, but to allow the position to be filled with a political favorite.

26. Post-Election Personnel Decision-making - Guidance • Don't make any public statements (or private ones, if possible) about replacing, demoting, or transferring employees upon being elected to office. • You can talk about improving government efficiency and performance through personnel changes, but indicate that these decisions will be based on non-political job performance criteria.

27. Post-Election Personnel Decision-making - Guidance • Don't promise anyone a job promotion, salary increase or other benefit. • After election, prepare a list of all positions and analyze which ones fall within the confidential or policymaking exceptions. • Gather all job descriptions for non-merit jobs and categorize them in three groups: • Clearly ministerial • Clearly policymaking or confidential • Mixed functions.

28. Post-Election Personnel Decision-making - Guidance • Employees holding clearly ministerial positions may not be dismissed merely because of party affiliation. • Dismissals for competency or budgetary reasons must be well-documented before implementation. • Employees in clearly policymaking or confidential positions may be dismissed simply because they belong to the other party, as elected official will want own policymaking team on board from the beginning.

29. Post-Election Personnel Decision-making - Guidance • Mixed function category will be the largest category, and the most problematic. • Study job descriptions to determine duties for which political affiliation is an appropriate requirement for effective performance. • May be opportunities to revise job descriptions, stressing formal, job-related criteria. • Any revisions must be justified by actual changes in duties.

30. Post-Election Personnel Decision-making - Guidance • Any reason for discharge other than political affiliation should be clearly documented before discharge is initiated. • If performance or competency is at issue, documentation must support conclusion. • If budgetary concerns are at issue, a financial plan should be available showing that decisions were made without regard to political affiliation of affected employees.

31. Post-Election Personnel Decision-making - Guidance • It would be useful to compile a record of campaign promises and acknowledged areas of disagreement between the newly elected official and the departing officeholder. • This assists in supporting determination that a particular position involved duties for which political affiliation was an appropriate requirement.

32. Post-Election Personnel Decision-making - Guidance • Legal advice should be sought before any employment decisions are made, particularly when any change in position could be viewed as politically motivated. • Once serving, new elected official should establish and follow a system for making all employment-related decision-making as objective as possible. Job descriptions should be detailed and reflect policymaking or confidential nature of a position and expressly provide whether the position is policymaking or confidential.