When does an elected official have a conflict of interest?
Often, the city's elected officials decide to not participate in a vote on a particular issue because of a conflict of interest. The range of circumstances that could create a conflict are too numerous to provide a list for each possible scenario, however, a general example is when a city council member owns a business that will be impacted by an upcoming vote. The city and state have ethics rules governing officials and that define when a council member must be prohibited from participating, or require the disclosure of matters that may create a conflict of interest or present the appearance of a conflict. The city's code states specifically, "Conflicts of interest will naturally occur from time to time and in such cases when they may or do in fact arise, should be presented publicly to diminish the potential of actual or perceived special interests." With optional consultation from the city attorney, Scott Howard, each of Charlevoix's city council members must decide whether they have a conflict on any particular issue in each council meeting. If they feel they have a conflict it is their responsibility to remove themselves from participation. This means literally leaving their seat on council and physically sitting in the audience as the general public would. At Mondays city council meeting, Mayor Luther Kurtz acknowledged his conflict in setting the public hearing for a tax abatement transfer on the sale of a building he owns. Ron Way of Stoneycroft Farms LLC purchased 100 Van Pelt Place from Luther Kurtz (Celebrate Me Home LLC) on February 1, 2021. This property was receiving a commercial facilities tax abatement. The original tax program was granted by city council in 2017 and extends for 12 years to 2029. This program freezes the taxable value of the building after rehabilitation for 12 years. After the 12 years, the building is then taxed at the taxable value after rehab. The statute allows for exemption certificates previously issued to be transferred but needs a public hearing and city council approval for the transfer. However, sometimes it is not clear to all parties involved if a conflict exists and there can be a difference of opinions. Also at Mondays city council meeting, Ward 1 council member Janet Kalbfell stated she did not think she had a conflict regarding the agenda item in which the possibility (and annual price) of a dedicated parking space for her business  Little Traverse Charters  was to be discussed. Kalbfell said she had consulted with many individuals regarding the issue and she did not have a conflict. However, some of the other council members believed a conflict existed and Kalbfell recused herself. At the same meeting, Ward 1 council member Aaron Hagen, owner of Bridge Street Tap Room, acknowledged his interest as a retailer of alcoholic beverages regarding the agenda item discussing whether or not alcohol should be allowed in public parks downtown. Specifically, Bridge Park  which is directly in front of the Tap Room. Although the topic was one that could potentially financially benefit his business, he did not feel that he had a conflict of interest because he was one of more than a dozen similar businesses in the city with the same interest. There is case law supporting the notion that if there is a general financial interest in a topic, the elected official does not need to recuse themselves. The definition of general is what is not so clear. According to attorney and Cooley Law School professor Gerald Fisher, in order to maintain the operation of local government there needs to be some leeway when it comes to the definition of conflict of interest  a community does not want to prohibit officials from making a living and also wants representatives who are involved in the community. Fisher said Hagen was appropriate in not recusing himself from Mondays meeting because the vote on the issue only scheduled a public hearing date. However, he said that Hagen should recuse himself from the final vote on the issue. Fisher said that although there are several other businesses that could benefit financially, Hagen definitely had a unique financial interest in the issue and it could not be considered a general one. Fisher also believed that because Hagen disclosed his interest at the beginning of the meeting on Monday his discussion of the issue during the meeting was warranted due to his expertise in the matters at hand. The city's legislation specifically states:  "No member of the Council shall vote on any question in which he, she or a member of their immediate family as defined in this chapter, has a financial interest, other than the common public interest, or on any question concerning his or her own conduct. Council Members who may have a financial interest shall state such interest and then refrain from debating, commenting, or otherwise seeking to influence the Council on such question." In regards to actions the city's legislation states:  "If a member of City Council believes that another member of City Council has a conflict, he or she shall raise such perceived conflict. If the member in question does not concede a conflict, the majority of the remaining Council Members may vote to prohibit that Council Member or the Mayor who may have a conflict from participating in that item of business. The Council shall solely be the judge of its own members and the Mayor." Mayor Luther Kurtz feels that even if a conflict of interest doesn't "technically" exist it is important for each elected official to be transparent in their disclosure to the public. "I think it is important for us to disclose where there is some interest even though there is not technically a conflict of interest so that the public has the opportunity to take that into consideration when you are talking about something," said Kurtz.