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TPJ Exclusive: Little Documented Oversight for City Employee Moonlighting

Little Documented Oversight for City Employees Moonlighting as Private Contractors

Almost a year after two employees were fired over a similar controversy, the city of Bellingham still has few written policies and even less documented oversight when it comes to public employees moonlighting as private contractors.

The difficult economic climate has made entrepreneurs out of some public employees but when I asked Janice Keller, communications manager for the city of Bellingham if they tracked employees’ private ventures she said she is unaware of any attempt by the city to centrally track the number of city employees who are moonlighting.

One such example is Don Burdick. He is the city of Bellingham Geographic Information Systems (GIS) manager in the Public Works department. His job is to manage a team of five employees who work with computers to do much of the mapping work our city requires.

They are so effective that they also take on contracts from other municipalities. This was a recommendation of the 2009 Fiscal Alternatives for Stability Taskforce (FAST) report, that the city “provides its quality services to other jurisdictions on a fee-for-service basis. Under the auspices of the PW Director, this should be permitted and marketed. Estimated Annual Revenue: $15,000.” While Ted Carlson is the Public Works Director, Don Burdick is listed as the "Contract Manager" for these negotiations. In May 2011, the city of Bellingham did GIS work for the Department of Ecology (see the contract here), generating $10,750 of revenue for the city.

However, Burdick also has a private interest in the outcome of any contract negotiations. He and two of the employees he oversees moonlight as private contractors. They have formed a company called Salish Coast Sciences and they offer services similar to the work they do for the city. As private contractors, they also seek out contracts from other municipalities, having signed a contract with the city of Grants Pass, OR and recently, with the city of Bellevue, WA. Here are the minutes of the City Council meeting in Grants Pass, OR where they discuss hiring Salish Coast Sciences. Note they describe the company as made up of “Ex-City (of Bellingham) employees."

When asked if Burdick’s dual role of GIS manager and principal of his own GIS consulting company posed a potential conflict of interest, Peter Ruffatto, Senior Assistant City Attorney for the city of Bellingham refused to speak to any specific circumstance but stated, “Any question about (potential conflicts of interest) would be dealt with like any other large organization. We would look into it and see if there was any financial concern.” Ruffatto says there is no specific process set in place for how to deal with employee moonlighting, but there is a standing committee, the Policy Review committee, that is currently discussing creation of a board consisting of human resources personnel and city legal staff to oversee any moonlighting ventures by city employees.

The only official policy Ruffatto was able to cite was set in 1980 by Mayor Ken Hertz. This two-page policy (see here) only applies to Public Works employees and states, “Every employee of the Public Works Department is responsible to insure that any outside employment (“Moonlighting”) activities are not in conflict with the best interest of the City of Bellingham.” It provides for exceptions: “Exceptions to this policy must be submitted to the Division head in writing for his review and approval.”

Based on a public records request of the city of Bellingham, no such exemption was ever documented as being submitted or approved in Burdick’s case. In the past two years, there have been only a handful of emails to or from Don Burdick or Ted Carlson that mention Salish Coast Sciences, and of them, only one makes reference to any sort of review process. See pdf versions of the emails here. When asked about what vetting occurred, Carlson said, “All moonlighting issues are reviewed using adopted city policies by the appropriate city departments. It is not the city's practice to share the specifics of individual cases externally.” When asked about the fact that there is no adopted city policy for moonlighting, Carlson did not respond by the time this post was published.

There was an email and an informal meeting between Burdick and Lorna Klemanski, interim director of Human Resources for the city of Bellingham concerning Salish Coast Sciences. When asked about the email, Klemanski said she was familiar with the situation. “We reviewed it and it did not conflict with city business. I chatted with Don, but I don’t know if there was any documentation that a meeting took place. He showed me the brochure for his business and I gave my informal approval. I don’t know what happened from there.” When asked if there was any official process, she said she was not certain and directed the question back to Burdick’s boss at Public Works, Ted Carlson.

Beyond that, she was concerned about public perception. “Something is trying to be made out of this, and that’s troubling to me. (Burdick) came forward and did what he needed to do; someone is trying to make something out of this.” When asked why someone would make something out of this, Klemanski responded, “I don’t know, maybe you can tell me.”

City of Bellingham Communications Manger Janice Keller also contends there was more oversight that was not documented. “In addition to the emails and financial information you received through public disclosure requests, Don Burdick’s outside business has been the subject of reviews, meetings, discussions, and recent memos with Legal, Human Resources, and his supervisor, Ted Carlson, Public Works Director.” The Political Junkie has submitted a second series of public records requests to see if any of these reviews or memos can be made available to the general public and will publish them if and when they are. Keller also spoke highly of Burdick’s behavior, “Don (Burdick) came forward, apprised Ted of his outside business . . . Don has been forthcoming and cooperative throughout this conversation.” However, Keller did confirm that Burdick has been intimately involved in negotiations with other municipalities about the work the city of Bellingham can do. “Don has in the past, and continues to consult with Ted about potential GIS services the city can provide other jurisdictions, has consulted with Ted about the details of his outside work.”

When asked about other areas of review, Carlson said there was oversight to ensure that Burdick, Stark, and Small were not working on private business on public time. “(There is) monitoring of work plans, scheduled deliverables, and general performance review. The city can also review emails and computer usage if warranted.” Keller reaffirmed this view: “If an employee is not performing, or productivity is in question, we look at many potential reasons and remedies."

This situation shares some similarities to the firing of Paul Leuthold and Mark Handzlick in 2010. Handzlick, an engineer at the Public Works department, was accused of using his city staff connections to set up a private contracting business with the help of Department of Parks and Recreation head Paul Leuthold’s help. Read the Herald's story here.


Last word from The Political Junkie: I started working on this story over the last month because I was curious how a municipality deals with potential conflicts of interest. After examining documents and speaking with half a dozen beleaguered employees at city hall, I can tell you right now there doesn’t seem to be any malicious intent. However, when you have one person dealing with competing private and public interests, there needs to be vigorous and well-documented oversight. I will continue to update this story as more information becomes available.

About Riley Sweeney

Citizen Journalist • Member since Aug 10, 2009

Riley Sweeney, raised in the Pacific Northwest, moved to Bellingham during the Bush years, worked on a cross-section of political campaigns during the Obama years, and then fled to the [...]

Comments by Readers

Ham Hayes

Nov 28, 2011

Rather than look aghast at this practice, I favor a more entrepreneurial approach.  After all, the city is in some need of additional revenues, not so?

The City by offering these services to other jurisdictions, read “customers” here, is directly competing with the private sector.  Assuming that the city only quotea the direct costs for the city employee’s labor, they have a substantial economic advantage over a private business.  That should effectively put Salish Coast Sciences (SCS) out of business and eliminate the conflict of interest and possible accusations of theft of city property problems. 

However, if SCS is using the City’s intellectual property, including cost of employee training in the skills required, software acquisition and maintenance costs, computer time, and other general administrative and overhead costs, then SCS may have the competitive edge.  So let’s charge SCS for the use of those items…that takes away the possibility of illegality and adds to our coffers.

I’m guessing that the taxpayer is in fact paying for all these other indirect costs that a normal business would have to pay, essentially underwriting either SCS or the City or both. 

So let’s at least unburden the taxpayer here. First, any contract awarded to SCS should have a royalty added to it to reimburse the taxpayer’s contribution and investment to that enterprise’s success.  This happens ALL the time in private business.  Second, the City needs to go through an open and competitive bidding process that includes all of the indirect costs to make sure that we B’hamsters are not underwriting some other city.  In fact if our city GIS employees are so good at this, I would expect a return on our, the taxpayer’s, investment….a tax reduction or improved services bennie would be nice.

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Ham Hayes

Nov 28, 2011

And Riley, an amazing revelation…very good job!

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Paul deArmond

Nov 29, 2011

Good work by Riley.  This is a complex situation where the city needs to put more thought into oversight.

One of the outstanding questions: is the city getting first opportunity at the services provided to other jurisdictions.  If this is so and the city has a review process for assuring that it gets first opportunity, then a conflict of interest is at least regulated in a responsible way.

The danger lies in the city being placed at a disadvantage by omission.  Ham’s point about the city not assuming costs of private enterprise is a good one.  It’s a basic principle of state law.

The city needs a transparent review process.  If this was in place, these awkward questions would not have come up in the first place.

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Wendy Harris

Nov 29, 2011

Riley, thanks for exposing the City’s “Don’t Ask, Don’t Tell” policy (i.e., don’t ask about employee conflicts, and don’t tell the public if they exist).  It is a disservice to the public, and to those City employees who do not seek private benefit from a public position. 

I am not sure what is worse:
1)  Allowing a direct competitor to represent the public’s interest in business negotiations,
2)  Not understanding the inherent problem with this,
3)  Failing to learn after similar incidents in the same Department led to employee discharge,
4)  A Human Resource Director handling matters in an informal and undocumented manner,
5)  A City Attorney stating that there is no specific policy in place, when in fact there is a 2 page policy exactly on point,
6) Attempts by the City to withhold information regarding employee financial conflicts that could impact the public’s interest.

Please let us know what you discover in your follow-up public record request. I certainly hope that the City Council will make an inquiry into this matter and that the Mayor can provide some clarification.

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Riley Sweeney

Nov 30, 2011

Just a quick note, the City Legal department said there was no procedure, not that there was no policy, they did note that there was the two page policy and sent it to me.

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Scott Wicklund

Nov 30, 2011

These moonlighting City employees are able to leverage their health care and pension benefits and provide a “safety net” that is not available to the competition.  “Savvy businessmen” indeed!

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Wendy Harris

Nov 30, 2011

Riley, the policy includes a procedure section.  Where the conflict of interest policy applies, an employee must submit a written request justifying outside employment and obtain approval from the Director of Public Works. Because outside employment activities that conflict with City employee work is so broadly defined (may conflict, may be interpreted to conflict or may have the potential to conflict) it clearly applies to this situation.  In other words, for outside employment activities that are even remotely related to Public Works Department employment, you must submit a letter and obtain the Director’s approval.

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