Yesterday Mike Lonergan and the City of Tacoma received the go-ahead on an agreement that clarifies the council member-elect may take his seat in January while he continues to serve as the Tacoma Rescue Mission’s executive director.
The agreement settles city concerns about a potential conflict-of-interest problem under the city charter and state law.
Still unresolved are issues under U.S. Department of Housing and Urban Development regulations governing city contracts with the Tacoma Rescue Mission that involve federal funds.
“I’m pleased to get this squared away so I can go to work on the council and also serve the community through the mission,” Lonergan said.
Tacoma sought a declaratory statement from Pierce County Superior Court Dec. 5 to determine whether Lonergan’s dual service as a city council member and the mission’s executive director was consistent with the city charter, the city ethics code, state law and federal regulations.
In general, those laws prohibit city officers from participating in decisions that would result in financial benefit to the officer – including awarding of contracts.
Judge Frank E. Cuthbertson approved the agreement – a “stipulation” – between Lonergan, the mission and the city, to settle a portion of the declaratory judgement action.
The agreement limits the mission’s compensation to its executive director to a fixed salary while he serves on the city council. That means Lonergan will not receive bonuses or fluctuating pay based on performance.
The stipula-tion is meant to help the city and the mission to comply with the city charter, the city’s Code of Ethics and state law by making Lonergan’s interest in the mission’s contracts “remote interests” and thus avoiding an impermissible conflict of interest.
The Code of Ethics and state law exempt remote interests from being treated as conflicts of interest where it is demonstrated that an employee has no money interest in a contract, and the only interest is as a salaried employee of a contractor.
Furthermore, under the stipulation, the mission will clearly designate Lonergan as an “employee” rather than an “officer.” For example, he will no longer sign contracts on behalf of the mission.
Lonergan will not be involved in administering the mission’s contracts with the city, and as a city council member, he will not participate in city council discussion or action on contracts with the mission.
Meanwhile, the city and the mission will ask HUD for either a ruling that Lonergan’s dual service does not violate federal regulations, or an exemption from conflict-of-interest language contained in service contracts and loan documents for federal community development block grant funds and emergency shelter grants.
HUD contract language says, in part: “No member of the city council and no other public official of the city who exercise any functions or responsibilities in connection with the administration of the loan shall have any interest, direct or indirect, in the proceeds of the loan, or in any contract entered into by the borrower for the performance of work financed in whole or in part with the proceeds of the loans.”
The mission estimates federal grants coordinated by the city make up approximately 10 percent of the agency’s budget.
“Mike Lonergan and the Tacoma Rescue Mission have served our community admirably for many years,” Mayor Mike Crowley said. “The last thing we want to see is valuable services for the homeless jeopardized because we didn’t take the time to ensure we were following the letter of the law. We’ve cleared one hurdle already with hopes of clearing the contracts next.”
Lonergan was elected to an at-large city council position. He will take his seat Jan. 1, 2002.
The Tacoma Rescue Mission has provided Tacoma’s homeless – including food, shelter and training – since 1912. The organization provided more than 123,000 meals and more than 58,000 beds for men, women and children in fiscal year 2001.