May a County assessor have secondary employment working as an appraiser in the private sector performing appraisals for an appraisal company for matters other than tax appeals?
Conclusion:
Yes. Under present circumstances, it would not violate the Ethics Code for a County assessor to have secondary employment in the private sector, working as an appraiser for an appraisal company in matters other than tax appeals.
Facts:
The requesting parties are County employees employed as assessors who wish to have secondary employment in the private sector, performing appraisals in matters other than tax appeals. They wish to perform this work both in and outside of New Castle County.1 As County assessors, they assess property in New Castle County, determining the property's value in 1983, the base year used in calculating the ad valorem tax. The assessment method required to be utilized by the County assessors involves the application of a mathematical formula and affords little discretion to the individual assessors. The assessors, as part of their job duties, are required, at times, to testify on behalf of the County in tax appeals. Individuals challenging a tax assessnient must present their private appraisals, as to the value of their property in 1983, through private appraisers' testimony at a hearing before the Board of Assessment Review. In performing private appraisals in their secondary employment, the assessors would be estimating the current market value of property. The asessors/appraisers' "client" is a lending institution, and not an individual taxpayer or property owner.2
Analysis:
Majority Analysis
(by D. Facciolo,Esq., J Figueras,Esq., F. West, Esq.)
The New Castle County Ethics Code, section 2-83, prohibits County officials and employees from engaging in behavior constituting a conflict of interest or an appearance of impropriety. The New Castle County Ethics Code, section 2-82, defines "conflict of interest" as:
Use by a county official or county employee of the authority of his or her office or employment or any confidential information received through his or her holding county office or employment for the private pecuniary benefit of himself or herself, a member of his or her immediate family or a business with which he or she is associated . . ."
No facts are presented which suggest that by holding secondary employment as an appraiser, a County assessor would be using his or her official position for personal financial gain. Advisory Opinion 93-03 (January 7, 1994).
Appearance of Impropriety
The Ethics Code, section 2-83, also prohibits conduct which constitutes an appearance of impropriety, defined as:
the conduct of a county official or county employee which does not constitute a conflict of interest but which undermines the public confidence in the impartiality of a governmental body with which a county officer or employee is or has been associated by creating an appearance that the decisions or actions of the county official, county employee or the governmental body are influenced by factors other than the merits.3
In Advisory Opinion 93-03 (January 7, 1994), the New Castle County Ethics Commission advised that there would be an appearance of impropriety and an erosion of public confidence, if an assessor employed by the Assessment Division simultaneously held employment in the private sector as an appraiser. The Ethics Commission noted that, while the assessor might perform his or her official duties without regard to the interests of his private clients, and while the assessor might not seek to overtly influence fellow assessors in the performance of their official duties, it considered the facts analogous to those presented in Advisory Opinion 92-07 (January 28, 1993), which discussed County inspectors holding secondary employment in the private sector. In Advisory Opinion 92-07, the Ethics Commission advised that County Inspectors were prohibited from accepting employment in the construction industry, except work not subject to County inspection or work outside New Castle County. It also advised that county inspectors must not be associated with any business which does any construction subject to County inspection and further opined that the ethical problem could not be cured by having another County inspector inspect the work done by a co-inspector. See also, Advisory Opinion 97-07 (April 12, 1997) (holding a County public works employee, whose official duties included reviewing plans for persons or businesses seeking permits, would create an appearance of impropriety, if he accepted secondary employment with a business which commonly submitted plans for County review and worked in tandem with the Construction trade, even if all the work he would be doing would be for projects outside the County).
While the Ethics Commission recognizes the importance of upholding precedence, additional facts, not discussed in the body of its prior opinion, weigh more heavily toward a finding that an appearance of impropriety is not created under the facts presented and distinguish it from its prior decision. These additional facts are: (1) the assessment and appraisal processes are two different processes--the former requiring the application of a mathematical formula with little or no discretion, and the latter being a more subjective evaluation; (2) assessments focus solely on the value of property in 1983, while appraisals are done for current year valuations; (3) the usual clients in private appraisals are lending institutions, as opposed to residential or commercial owners, and thus, do not have a vested interest in the County's assessment of the property; and (4) the assessors have agreed that they would not accept private appraisals for tax assessment purposes.
The Ethics Commission recognizes that, if the County assessor is not prohibited from holding secondary employment as an appraiser, the situation may arise where the County assessor, or his or her County co-worker, may be testifying before the Board of Assessment Review in support of the County's assessment, in the same hearing that his or her private employer co-employee or supervisor is testifying in support of the private land owner's appraisal. The Ethics Commission, however, finds this situation to be too tenuous and believes the risk of an assessor's private appraisal, not originally performed for tax appeal purposes, being used in a tax appeal hearing too remote to mandate a prohibition of secondary employment.
Dissenting Analysis
(by P.C. Collins, Esq., L. Mosberg, Ph.D., concurring in part, dissenting in part)
The above listed members of the Commission, while concurring in the conclusion of the opinion, do not concur fully in the rationale, including the rationale that the methodology and purpose between assessments and appraisals is a controlling distinction.
Finding:
Accordingly, the Ethics Commission finds that there is no violation of the Ethics Code for a County assessor to have secondary employment as a private appraiser for an appraisal company, assuming his private employment is not for tax assessment purposes. To the extent that this opinion is contrary to Advisory Opinion 93-03 (January 7, 1994), Advisory Opinion 93-03 is overruled in this part alone. This opinion does not overrule any other portion of Advisory Opinion 93-03, i.e. the prohibition on tax appeal appraisal work, appraisals for individuals, real estate work, or the advertisement of appraisal or real estate work on 'County property4. Additionally, since the Ethics Commission was persuaded, at least in part, that use of the 1983 base year constitutes a basis upon which to distinguish this opinion from other advisory opinions not addressing this fact, in the event that a new base year is approved by County Council, reconsideration of this issue shall be required.
Finally, the Ethics Commission notes that each department, board or other unit of County goverment is free to impose greater restrictions on its officials and employees than that imposed by this opinion. This opinion "does not usurp a director, department head, or board's authority to establish a more restrictive rule as part of its own policy". Advisory Opinion 91-07 (revised and reissued: December 9,1992).
BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON JUNE 20, 2000.
_______________________________
David J.J. Facciolo, Chairperson
Decision: Majority analysis: D. Facciolo, J. Figueras, F. West. Minority analysis: concurring in part, dissenting in part: P.C. Collins, L. Mosberg.
Footnotes:
1Two of the requesting parties wish to perform the private appraisals, both in and outside of New Castle County. One of the requesting parties, however, has limited her request to appraisals outside of New Castle County.
2 The Requests for Advisory Opinions filed by the requesting parties state that the "client is not the taxpayer/property owner; the client is the lending institution (that is who requests the appraisal and that is who pays for it.)". Accordingly, this decision does not revisit the issue whether such assessments may be performed for private individuals. Nor does this opinion specifically address the situation where the lending institution is seeking an appraisal for property it owns.
3Section 2-82, Definitions.
4The issue of secondary employment in the real estate business or the advertisement of real estate or appraisal work on County property is not presently before the Ethics Commission.
