If American Idol’s Simon Cowell sat on your city council or county commission, would he be a help or a hindrance to ethical decision-making?

             As someone who seems to be swayed by no outside opinion or influence, my guess is that, from a consideration of ethics, he would be a help.

             In past posts I’ve discussed a board’s responsibility to be impartial when engaging in a quasi-judicial decision (as opposed to a legislative decision, where impartiality is not really the issue).  Impartiality is a hallmark of one’s constitutional right to an unbiased tribunal.  Thanks to N. C. General Statute sections 160A-388 and 153A-345, some of the conflicts that impair impartiality are codified.

              Let’s poke around the unexplored corners to see what some of these conflicts are and how they might be identified.  But first, let’s repeat here the statute in question:

                 (e1) A member of the board or any other body exercising the functions of a board of adjustment shall not participate in or vote on any quasi-judicial matter in a manner that would violate affected persons’ constitutional rights to an impartial decision maker.       Impermissible conflicts include, but are not limited to, a member             having a fixed opinion prior to hearing the matter that is not susceptible to change, undisclosed ex parte communications, a close familial, business, or other associational relationship with an affected person, or a financial interest in the outcome of the matter. If an objection is raised to a member’s participation and that member does not recuse himself or herself, the remaining members shall by majority vote rule on the objection.

 A fixed opinion

            Psychologists and jury selection experts refer to a dynamic often termed the “Rule of Primacy,” which goes something like this: when making a decision, a person tends to continue believing what he or she first believed. 

             Facts and evidence often have marginal significance as jurors’ and board members’ brains assemble and interpret (or ignore) facts to prove their original beliefs, rather than to form beliefs later based upon facts first acquired.  Cases in point: except in the very rarest of circumstances, there are no “facts” that will persuade a strong conservative to become a liberal and no facts that will persuade a strong liberal to become conservative.

             Thus, a board member having a fixed opinion not susceptible to change is a big no-no.  The problem is how to identify those fixed opinions and police them.

             Board members with strong (fixed) opinions will either disingenuously claim to have an open mind or, just as common, deceive themselves into thinking that they really can be objective.  Even board members who have staked themselves out with the media and constituents will claim at the beginning of a hearing that they will be objective.  Until, that is, it’s time to press the “yea” or “nay” buttons on certain findings of fact, and then, of course, they will have been “swayed” by the evidence they chose to find probative.

             The only thing an applicant or opponent with standing can do is to request that the board member recuse himself or herself.  If they refuse, the case is made to the entire board and it decides.

             The process sounds incredibly easy.  But the typical dynamic of local, lay boards, in reality, makes such requests for recusal sound like accusations of a capital crime.

 Undisclosed ex parte communications

             For reasons I’ve never known, modern-day lawyers have hung onto some Latin words and phrases while discarding others.  Ex parte has no English equal.  An ex parte communication is, broadly described, a private conversation between the decision maker and one of the litigants.  The problem with ex parte communications is that information is exchanged that is not subject to cross-examination.

             Cross-examination is a vehicle – often the sole vehicle – for exposing evidence as flimsy, sham, false or misleading when, upon first presentation, it might seem believable and convincing.

             The reason for requiring disclosure of ex parte communications is to provide other interested parties an opportunity to discover what was said so that those claims can be cross-examined or rebutted.

 A financial interest in the outcome of the matter

             The standards for recusal are lower on a mere policy-making board or an elected board where the decision is legislative. Once the decision is quasi-judicial the essential question is how much of a financial interest a decision-maker can have before his or her ability to be impartial is impaired.  There are no objectively determined legal presumptions of bias similar to using a breathalyzer to establish legal presumptions of impaired driving.

             The standard ought to be whether a reasonable person would be influenced by the financial interest in any manner. 

             Percentage of ownership in an affected company is unreliable.  A board member’s .0001% ownership of Exxon would be enough to retire on very comfortably.  A 100% interest in a small company in Chapter 7 bankruptcy might have no affect on the person at all.

             The problem is that, all else being equal, evidence in most quasi-judicial hearings could go either way.  What would it take to sway somebody?  Or, better asked, what would make a reasonable person wince?  If an applicant placed a $5 bill in front of each board member and said “you find facts in my favor and this money is yours” we would all scream about the corruption of the process.  So, would treating the board member to lunch at McDonald’s earlier that day be the same thing?

             The more difficult questions involve contingent financial interests.  For example, what if a board member believed that granting a special use permit to this applicant might possibly have a positive effect on land he owns nearby, such as allowing a new cell tower on tract A so that the board member’s proposed subdivision on tract B can be advertized as having wireless coverage.

             And what about someone who doesn’t have a strong fear that their boss’s opposition to a project would cause them to be fired if they voted the wrong way, but they do at least wonder if the wrong vote would affect a raise, a promotion, a chance to lead a project, or some other intangible perk?

             Cartoon artists have for decades used the clichéd dollar signs in place of pupils to signify that the drawn character was affected by financial interests.  Any time a dollar sign would or could appear in someone’s eyes for any reason, recusal is arguably appropriate.

             The remaining category that creates an impermissible conflict as a matter of law is “a close familial, business, or other associational relationship with an affected person.  I’ll save discussion of that category for Installment 4 in this series on legislating ethics.

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            Many sermons and discussions on ethics include a story from an episode of The Andy Griffith Show.  Today’s post is no different.

            In one of the later Andy Griffith episodes when Opie is older and the show was filmed in color, a man from “somewhere up north” robs a bank in Raleigh and is caught and jailed in Mayberry.  When his big-city lawyer comes down, Andy properly leaves the jail so they can confer privately.  Opie and his friend, Arnold, however, secretly tape the man’s confession on Arnold’s reel-to-reel recorder and try to give the evidence to Andy.  Andy erases the tape and won’t let Opie tell him what he learned, explaining in two separate scenes that in America we operate by due process of law and that we must trust the procedures we have and not circumvent them.  (The man confesses, but only after Opie and Arnold privately tell him they know where the money is hidden, that they have to give it to Andy, and he would be better off fessing up).

            Now, let me bridge that story with an update on laws related to conflicts of interest in land use decisions.

            On January 19th  I posted a blog entry on new legislation which requires city and county governing boards and boards of education and boards of sanitary districts to adopt a code of ethics.  I also mentioned in my most recent blog (American Government, American Pie) that 1) the only way to address unethical conduct in government is through aggressive education regarding ethical standards, and 2) some ethical standards, although general in nature, already have been codified for land use decisions made in a quasi-judicial context. 

What do the statutes say?

             Let’s visit General Statutes 160A-388(e1) (cities) and 153a-345(e1) (counties).  These statutes contain identical provisions within the Board of Adjustment enabling legislation that govern standards for recusal in all local boards when that board engages in a quasi-judicial proceeding:

             “(e1) A member of the board or any other body exercising the functions of a board of adjustment shall not participate in or vote on any quasi-judicial matter in a manner that would violate affected persons’ constitutional rights to an impartial decision maker. Impermissible conflicts include, but are not limited to, a member having a fixed opinion prior to hearing the matter that is not susceptible to change, undisclosed ex parte communications, a close familial, business, or other  associational relationship with an affected person, or a financial interest in the  outcome of the matter. If an objection is raised to a member’s participation and that member does not recuse himself or herself, the remaining members shall by majority vote rule on the objection.”

             Today I will discuss just the first sentence only.  For background purposes, it’s a sentence of great importance.  Later this week I’ll discuss in detail the several “impermissible conflicts.”

            As a quick primer, “recusal” is a term denoting a board member’s nonparticipation in a decision-making process, typically because he or she is personally affected or otherwise has a conflict of interest.  When recusal is proper, the official must refrain from taking any action that would affect the ultimate outcome.  A “quasi-judicial proceeding” is a decision-making process that is guided by the rules of a courtroom to protect parties’ rights of due process.  A process becomes quasi-judicial when the board must “find facts” and apply laws or policies to those facts.

 What does due process have to do with ethics?

            Due process, whether practiced in Mayberry or Philadelphia, is a collection of procedural safeguards that ensure that a citizen’s constitutionally protected rights are protected when a government goes about doing whatever it is that a government does.  Typical safeguards include advance notice of action a government might take, an opportunity to appear at the hearing and a reasonable opportunity to speak, to see all information before the board, to present one’s own evidence and to cross-examine evidence provided by others.  Testimony must be under oath. 

 Competing loyalties or an impartial decision maker?

            In the statutory section above, the due process protection discussed is a citizen’s right to an impartial decision maker.

            Laypersons often think that the essential characteristic of impartiality is open mindedness. Although the ability to be open minded is critical, the more important focus is on freedom from competing loyalties (more often referred to as “conflicts of interest”).  A board member is elected or appointed to take care of the public’s business, not to use the powers bestowed by the people to look after him or herself (or the folks who happen to be related or connected in some other way).  In simplistic terms, a man cannot serve two masters.

            Some of the situations where impartiality would be compromised are codified (that is, written into law).   Each of these situations is painted with an exceptionally broad brush. A code of ethics goes beyond the broad brush of the statutes and provides guidelines for proper conduct. It should be the purpose of an ethics code and ethics education to break these situations down into their many component parts for deeper understanding and practical application. 

            Stay tuned for this detailed treatment in a later post.  In the meantime, I’ll keep my eyes glued to late-night TV for more illustrations from Andy Griffith re-runs.

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I met a girl who sang the blues
And I asked her for some happy news,
But she just smiled and she turned away.
I went down to the sacred store
Where I’d heard the music years before,
But the man there said the music wouldn’t play.

                                                       And in the streets the children screamed,
                                                       The lovers cried, and the poets dreamed.
                                                                   But not a word was spoken;
                                                               The church bells all were broken.
                                                              And the three men I admire most,
                                                                 The father, son, and the holy ghost,
                                                            They caught the last train for the coast
                                                                           The day the music died.

               Don McLean, American Pie

             The past few weeks I’ve focused on government ethics, a topic that is much in the press and hard to avoid. Each time I travel to the state’s capitol I pick up front page state government stories that in local papers are relegated to page A6.  This past week’s News & Observer front page headlines reported that former Governor Easley was keeping secret email accounts, presumably to transact the public’s business away from public view.

             I’m also told by capitol city attorneys whose ears are closer to the ground than my own that more indictments are coming in the wake of Ruffin Poole’s recent arrest, and the next may be the “Wilmington Financier” who, according to the evidence in the Poole indictment, was engaging in bribery and money laundering.

             Will the shoes ever quit dropping??

             In 1943, American painter Norman Rockwell produced four paintings for the Saturday Evening Post collectively titled “The Four Freedoms.”  One of the paintings, Freedom of Speech, depicts a man speaking from the audience of a town hall meeting.  He wears the clothes of a man who works with his hands.

             The painting’s poignancy emanates not from what is seen but from what is suggested.  He appears to be an average man.  A man from Main Street. A man whose education is, by today’s standards, limited.  But he is a man who has access to government. Access to power.  He comes to a town meeting to speak and citizens turn to listen.  His voice is clear, sincere and heard.  

             The painting suggests democracy in all of the innocence and purity envisioned by fifth grade civics books and Boy Scout manuals.

             There’s a distance between government as we practice it and government as envisioned by Norman Rockwell, whose painting evokes nostalgia for a time that, perhaps, never really existed.  But I’ll take Norman Rockwell’s vision any day over the cascading revelations of the ethical gaffes of the past gubernatorial administration.

             I’m not naïve, and my vision of government is not formed entirely by the events du jour.  Power has been abused since power was first bestowed – or seized.  But the closer you get to the inner sanctums the more you realize that the dividing line between power’s use and power’s abuse is usually painted in shades of gray.

              The celebrated cases of governmental malfeasance are played in the media like the heavy chords of a Wagnerian opera, while innumerable small, day-to-day transgressions go unnoticed. Yet it’s these uncelebrated cases that corrode government at its seams, that slowly rust the bolts holding the girders of our democracy in place.

            There are times I fear that the standards of public discourse and the standards of public government have become irretrievably degraded.  Our elected servants and their appointees too often find themselves operating within cultures of what the outside world considers corrupt activity, but when you enter the playing field the lines between right and wrong begin to blur.

            Institutionalized political cultures create strong tides that only few can swim against.  In 1994 the United States Congress experienced one of the largest shifts in its history when a huge new class of freshmen Republicans was sworn in on promises of reform, Contract with America, etc., etc.  In 2006, when the political winds shifted to the Democrats, the conservative Wall Street Journal posted an article describing how the Congressional Class of 1994 had become everything they had campaigned against.  The article featured as Exhibit A Arizona congressman J.D. Hayworth, who I grew up with in High Point.  John David has just announced his candidacy for U.S. Senate, campaigning against the same congress he failed to reform.

             Judging your own behaviour through the lens of those outside the insular  culture you live in  is difficult.  Judges solicit political contributions from lawyers who will appear in their courts and it’s considered “ethical.”  Candidates for Insurance Commissioner solicit contributions from the insurance industry.  Congressmen solicit campaign funds from the industries they’ll be regulating in the next session, and it’s legal.  Yet when Meg Scott Phipps (who, as a candidate for Secretary of Agriculture, would be in a position to decide who would get the multi-million dollar contract to run the State Fair) solicited contributions from the carnival industry, she found herself on a path to a prison cell with Martha Stewart.

             The cure for our ills is not to clean house, for then we’ll only get new faces operating within the same culture.  The cure is to change the culture through a codification of ethical norms and expectations followed by an aggressive and mandatory education of those norms among elected and appointed officials.  Every self-regulating profession does it this way, and it works. 

             In land use, some of the ethical standards have already been codified.  Please stay tuned for a discussion of these standards in my next post.

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             A recent N.C. Court of Appeals case (Northwest Property Group, LLC v. Town of Carrboro, filed 22 December 2009) provides an interesting glimpse into the insane world of conditional use zoning and its multiple attendant rules.

 The facts

             The December 2009 decision is but one more stop in a journey that started when a developer applied for a conditional use permit (CUP) to construct a Harris-Teeter-anchored shopping center on a 7.1 acre tract where Barnes Street enters Jones Ferry Road in Carrboro.  The entire case hinges on access limitations to the site and whether local rules were properly followed to impose them. Harris-Teeter required its developer to provide a site with more than one entrance/exit, and the secondary entrance was through the side street (Barnes).  Neighbors complained about the traffic that would be created if Harris-Teeter traffic had access to Barnes.

             The developer’s application was ultimately approved by the Board of Aldermen, but only after the Board added 37 conditions, one of which was that the Barnes Street entrance would be limited to emergency vehicles.  The developer did not agree to this condition and sought judicial review.

 Understanding conditions

             “Conditions” is a term more easily defined as “additional restrictions and obligations.”  From a developer’s perspective, there are few conditions that don’t have a price tag.

             But conditions aren’t bad.  A responsible developer will often consider conditions before his pre-application conference with the planning staff.  Then, in a rational discussion with staff about the site’s unique features and problems, he will consider more conditions.  It is staff’s job to help him see what some of those other issues are.

             Part of the developer’s calculus involves subjectively weighing chances of approval or denial if certain conditions are not offered.  Another part of that same equation is deciding whether he can afford to incur the costs and still make money.  After all, land development is a for-profit enterprise involving risks.  Substantial risks.  Rates of return are only generally known, but development costs are usually calculable to a close penny on a per acre, per linear foot or per square foot basis.

            It is only when conditions are imposed from the dais that the process goes awry.  Well-intended board members – who often know nothing about the cash flow issues related to real estate development generally and certainly nothing about the project’s pro forma specifically –  will add burdensome and costly conditions during a motion, and the developer has no way to determine in the moment if he can absorb it. 

             In the present case, my experience suggests that a developer who agrees to 35 conditions is a responsible developer who has worked conscientiously with staff and the neighbors. And when he spends three years appealing two added conditions, there’s a good chance that those conditions really do kill the project.

 The process

             It’s important . . . check that . . . it’s critical to understand that in conditional use zoning a board must make findings of fact based upon facts and evidence that are properly presented to the board.  Because it is similar to what judges do in a courtroom, this type of decision-making is called “quasi-judicial.”  If the board merely voted based upon what it felt like doing it would be acting in what is called a “legislative” capacity where facts and evidence aren’t required.  Or logic or common sense.

             When issuing a conditional use permit, a board may add conditions it determines are reasonably necessary in order for it to make certain findings.  In this case, the board basically eliminated use of Barnes Street so that it could find that the development would not “materially endanger the public health or safety,” one of the local ordinance standards for issuance of a CUP.

             The operative question is whether the board had been presented evidence that indicated closure of Barnes Street from retail traffic was necessary to protect the public from a “material” danger.  The only evidence cited by opponents (evidence that actually was supplied by the developer’s traffic study) is that there had been ten accidents at this intersection over a five year period, making it the third worst intersection in Carrboro.  However, neighbors presented zero evidence that a Harris-Teeter-based shopping center would do anything to “materially endanger” public health and safety or to increase the number of accidents.  No studies.  No statistics.  They did, however, make numerous claims based upon their opinions that their lives would be severely endangered.  In a conditional use permit hearing an opinion is not evidence of a fact any more than a juror in a courtroom simply looking at a defendant and forming an opinion, based on that glance, that he is guilty.  Or not. 

             As Judge Hunter said in his dissent, quoting N.C. case law “Speculative assertions, mere expressions of opinion, and generalized fears about the possible side effects of granting a permit are insufficient to support the findings of a quasi-judicial body.” (Howard v. City of Kinston)

             So what evidence was there that access to Barnes was not a safety issue?  Plenty, but it didn’t stop a political board from making a decision that was . . .  well . . .  political.

             An engineer-sealed Traffic Impact Analysis indicated that the intersection would – after development – operate at “level of service A,” the best category available. Traffic Impact Analyses are based on sophisticated computer modeling and continually updated statistics. They are analogous to a civil engineer’s study of how many tons of concrete a bridge needs to safely hold a 10 ton truck.  The traffic engineer testified at the hearing that this intersection was “pretty far away” from meeting NC DOT standards for a traffic signal.  Neither the Carrboro Transportation Advisory Board nor the Planning Board recommended that Barnes be limited to the occasional fire truck.

             The board’s decision was typical.  Even though this type of development was contemplated by the comprehensive plan and the existing zoning allowed such development (subject to a conditional use permit), lots of neighbors complained and the board reacted politically to unsubstantiated fears and speculative opinions.  Basing an opinion or a condition upon unsubstantiated opinions is OK until you commit yourself to quasi-judicial processes. Then you have to consider facts that contradict the emotions of insistent voters.

             Since this case originated in 2006, only the laws in effect at that time were considered.  This past summer the General Assembly passed Senate Bill 44 which codified the role of a traffic study, saying that, in essence, neighbors who wish to use traffic as a basis for denying a conditional use permit must have hard facts, such as a traffic study.

 The decision

             If you print the opinion off of the Court of Appeals website, it is a 48 page document that gets bogged down in the minutiae of whether Carrboro’s poorly worded ordinance allowed the board to add conditions once it determined that the application met ordinance requirements.  I could have more easily followed a medieval debate over how many angels could safely dance on the head of a pin.

             Judge Ervin’s conclusion that the ordinance allowed the board to add conditions in that circumstance was possibly correct.  But the result was remand of the decision to the town board for findings of fact so that the same case could wind its way through the courts yet again – another three years? – before resolution.

             Judge Hunter simply said, in so many words, forget that.  He could tell from the record that the ultimate decision was clear: there was insufficient evidence to support closing Barnes Street and remand was a waste of everybody’s time and money.

             I’ve been on all sides of zoning disputes, but the injustice on the “added cost” issue is that whoever prevails in a zoning battle need not hire an attorney on appeal. Their legal counsel is paid for by taxpayers because the town attorney represents the board in an appeal.  Only the appealing party has to hire legal counsel.  But such is the cost of development, and such is the cost of living in a country where disputes are resolved rationally, if slowly, in courts of law.

             And if the developer prevails, my bet is that neighbors will use the Barnes Street entrance as quickly as anybody and soon forget the alleged danger as they focus on its convenience.

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              When the economy returns, when developers begin to develop and builders begin to build, local governments will wake up to fair housing legislation passed last August.  The bill created legislative handcuffs that will affect affordable housing zoning and land use decisions in interesting ways, and you won’t need to see Paul Revere’s lanterns hanging in the church belfry to tell you that the lawsuits are coming.

             The legislation was not without reason.  Anyone who has represented a developer before a city council that caves in when two neighbors appear to protest knows how difficult some types of projects can be to get approved. Housing for lower income citizens is one of those types of development, and the reason for the difficulty is, simply stated, prejudice. 

             Senate Bill 810, codified as amendments to N.C.G.S §41A-4 and 5, makes it illegal to discriminate against housing for families or individuals whose incomes are below 80% of the areas median income.  But that’s just the start. 

             Let’s look at this legislation.

 High-end developments might be included

             After August 4, 2009 it is considered a discriminatory housing practice to discriminate in land-use decisions based on “the fact that a development or proposed development contains affordable housing units for families or individuals with incomes below 80% of area median income.”

             A typical “affordable” development is comprised entirely of affordable units.  The wording of the statute, however, is “contains affordable housing units.”

            As we move towards more mixed-use and new urbanist growth models there will be increasingly more developments that “contain” a percentage of affordable units.  As councils and county commissions push developers to negotiate with neighbors on density, design, buffers and other issues, how the affordable component is treated becomes a serious matter.  Could litigation on the entire project’s denial rise and fall solely on the board’s view of the affordable units?  It is quite possible.  Whether it should rise and fall on that issue is a separate question.

             When statutes are clear and unambiguous, standard canons of construction allow no room for interpretation. The General Assembly is like Dr. Seuss’s Horton, the elephant, who famously intoned “I meant what I said and I said what I meant.”

 How low is a plaintiff’s burden of proof?

             Pretty low.  The outcome of many legal disputes is partially pre-determined by who has the burden of proof and how high – or, in this case, how low – the burden of proof is.

             Under G.S. 41A-5(a)(3), a local government will be found to have intended discrimination against affordable housing if “the government was motivated in full, or in any part at all, by the fact that the development contains affordable housing units . . .”

             If I were a city or county attorney advising my board, that language would make me nervous.

             Here is an important nuance.  In a civil case a jury is charged with deciding which party has established its case “by the greater weight of evidence.”  The common description is a set of scales that requires just one grain of sand to tip one way instead of the other.

             But when you then look at what it is that a plaintiff must prove (“or in any part at all”), finding that grain of sand has been made, arguably, rather simple.

             The “any part at all” standard suggests that if one board member is just a wee bit concerned about the affordable housing proposal, or expresses an honest hesitation about the housing but votes no based entirely on other factors, the local government will more likely be sued and very possibly found liable for discrimination.  In legal jargon the evidence needed to prove “any part at all” is referred to as “a mere scintilla” of evidence. In street lingo the more apt word is “gotcha.”

             The legislation also allows intent to be established by circumstantial evidence.  Circumstantial evidence does not directly demonstrate the causation of an event.  Rather it establishes a series of facts or observations that, through inference, would lead a reasonable person to conclude their causation of the event.  For example, the hypothetical board member referenced above may aggressively ask questions from the dais expressing concern about the effect of affordable housing on the community.  Even though those questions are answered in favor of the developer, the appearance of hostility would enable a jury to infer discriminatory thoughts, depending upon tone, number of questions, etc., especially if that  board member voted no.

             When viewed through a local government’s lens, the “any part at all” standard is draconian.  A board may vote unanimously to deny rezoning for an affordable housing complex on density, comprehensive plan inconsistency, traffic issues and any number of other legitimate issues, but if one of the nine votes is slightly tainted by improper considerations, the entire vote is tainted even if that one vote did not create or change the outcome.  In other words, the General Assembly has established a zero tolerance standard for thinking discriminatory thoughts.

             The “one tainted vote is enough” standard is not new.  Earlier cases have established that a petitioner’s rights of due process can be denied if just one board member is biased.

             But let’s look at it from the perspective of housing proponents.  Discrimination is typically quite difficult to prove.  It requires a plaintiff to peer into someone’s thoughts.  And we all know that the alleged discriminator, when asked in a deposition about his or her true intent, will vehemently deny having met a poor person or affordable housing development they didn’t like.

             The same is  true for neighborhood opponents in zoning cases who will argue that their concerns are traffic and the environment when their real concern is that the smaller lot subdivision proposed on adjacent land will attract residents of different racial, ethnic or international backgrounds.  In this situation, the distance between what you “know” and what you can prove is great.

             Finally, the legislation applies to “the permitting of development,” which means administrative officials with permitting authority are covered under this act. 

 Effect vs. intent

             The new statute creates yet another basis for litigation.

             Even if intent cannot be demonstrated, a plaintiff could argue that the decision has a discriminatory effect under G.S.41A-5(a)(4).  Land use and permitting decisions that have a deleterious impact on affordable housing in a community can also be found to be discriminatory. 

 Defenses

             Local governments may discriminate if the denial is based on intent to limit high concentrations of affordable housing.  Local governments may also make a decision with unintended discriminatory effects if the decision was “motivated and justified by a legitimate, bona fide governmental interest.”  In a practical sense, this is more than a legal defense.  It is a shifting of the burden of proof to the local government once a plaintiff establishes discriminatory effect.

             In my experience, fair housing proponents do a good job of knowing the law.  The General Assembly has just handed them new weapons to advance fair housing in North Carolina.  Based on my experience with elected boards and neighborhood opponents, it won’t be long before those weapons are used.

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            Local governments everywhere continue to look for signs of a recovering economy.  When tenants disappear, landlords can’t pay the property taxes that, in turn, pay for a variety of public services.  When retail sales fall, so does a government’s share of sales tax.  Budget season gets media coverage in May and June, but it starts in January.

             A month ago I introduced the Planning Commission Index, or “PCI” as a unique, local marker of economic activity.  The PCI tells us how many local projects are being started. Rezoning applications are rough indicators of local entrepreneurial confidence and banks’ lending practices to small businesses.

             The PCI is helpful because it’s simple and because national headlines are too confusing.  Let’s look at just one example.  On January 27, 2010, my hometown paper, the High Point Enterprise ran the following headlines on the same business page:

             “Ford to bring 1,200 jobs to Chicago” and “Home Depot to lay off 1,000”

            “Consumer confidence rises” and “Market slides on financial stocks”

            “IMF: Global economy recovering” and “Nucor 4Q profit falls 44%”

             I can decipher some of this information, but it remains confusing and inconsistent.  So let’s return to the PCI using the same random communities I picked a month ago.

            The High Point Planning Commission meets January 26th and has an agenda that is comprised entirely of staff initiated street abandonments, one university (non-profit) rezoning for fraternities and sororities, and two other large (non-profit) institutional requests to amend conditional use permits issued a decade ago.  Not a good local PCI for growth and expansion in the private markets.

             The Wilmington Planning Commission didn’t even meet in January, skipping from December 2nd to February 3rd.  No February agenda is available on their website, but I note that local governments typically cancel a regularly scheduled meeting when there is no business to attend to.

             The Winston-Salem/Forsyth County Planning Board met January 14th.  The board considered two text amendments, one church’s development plan and three insignificant rezonings of .65, .34 and 2.19 acres respectively.  Still no sign of life.

             Randolph County’s planning board meets February 2nd to consider only ‘a special use permit related to a veterinarian’s office and a 33 acre development for 19 homes.  The latter could be a positive omen or a fluke.  It’s early to tell and difficult to say without knowing more about its financing.

             And finally, the City of Greensboro Zoning Commission has shown a little bit of activity with seven private-initiative rezonings, most involving small tract residential to residential or residential to moderate commercial changes. If the trend continues into March I would consider this a PCI trend rather than a blip.

             So what’s next?  Wait for a formal index to appear a month from now when I add several more cities and counties to the list. New additions will be more evenly distributed across the state.  Over time maybe we’ll all get to see a graph with a line that rises left to right.

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            Earlier this week I wrote about ethics laws affecting local governing boards.  On Friday I was in Raleigh where the News & Observer ran the front page banner headline “51 Charges for Former Easley Aide.”       

             I met Easley aide Ruffin Poole briefly only once.  I have dealt with him on three or four matters over the years, but only by phone or letter. I can’t even recall what those matters were. I do recall, however, that he was a likeable person.

             The N&O article led me to suspect prosecutorial overkill. Bribery.  Mail fraud.  Extortion. Racketeering. Money laundering.  But with the help of the internet and my law school classmate, Mark Finkelstein, I pulled the 64 page indictment. 

             From paragraph to paragraph I winced and cringed.  A Wilmington developer and financier who flew Poole to Costa Rica every year in a private jet.  The same developer cutting Poole sweetheart deals in several coastal developments where his risks were non-existent but exorbitant profits were quick and guaranteed.  Money channeled back to Poole indirectly through unrelated family businesses.  The business relationship unreported on annual ethics disclosures.

             And throughout it all, Poole was using his power as the governor’s right hand man to lessen the time it took for the developers to obtain permits from the Department of Environment and Natural Resources. Using his power to ensure favorable treatment by employees reviewing permit applications.  Using his power to shorten the time it would take to get his investment return.

             Whether a public official operates on a local, state or federal level, the precepts of ethical conduct remain the same.

             In cities, hamlets, counties, congressional districts and states across the country, we entrust average citizens with great power to look after the rest of us.  The operative word is “entrust.”  An elected or appointed official is a fiduciary of that power just as a bank officer is a fiduciary of customers’ money.

              The power to control the levers of government is the most sacred power a democracy bestows.  Abuse of that power is not defined by the stupidity of an official’s decisions or the repercussions of his or her actions.  Abuse of entrusted power is marked, foremost, by whether the action was intended for self benefit.

             If the indictment allegations are true, Poole sold more than his soul.  He sold his sacred office.

             It’s easy to villainize officials who abuse power when the dynamics are never so black and never so white as we pretend.

             Elected officials soon discover that power is a necessary tool placed at their disposal, just as a mechanic keeps a wrench on the shelf.  Power is how a congressman gets grandmother her social security check.  Power is how a council member gets constituents’ potholes repaired.  Power is a way to help other citizens.  Democracy cannot function without it.

             But the slope is greasy.  Power is how a victorious candidate in an expensive election can repay a supporter with a prestigious board appointment.  Power is how friends are hired and former law partners are appointed to judgeships, none of which is inherently unethical.

             It’s not that power is corrupting as much as it is seductive and blinding.

             Government officials are occasionally caught in that common political vortex where the circular currents on the outer edges are slow, but with each revolution they get tugged ever closer to the center where the currents are swifter and stronger and escape is impossible as they are sucked faster and deeper into the abyss.

             What started as kindnesses from wealthy friends was arguably just that.  What was routine political assistance with a cumbersome, labyrinthine state bureaucracy was possibly nothing more.  But somewhere in the process, when Poole’s own money and interests became entangled, he crossed a line. A serious line.

             Codes of ethics remind those entrusted with power – just as they remind those entrusted with money – what their duties are and to whom their duties run.  They are written to tell us which lines are clear and how to recognize the ones that are blurry.

             The allegations are meticulous and persuasive.  They indicate he knowingly crossed the line, knowingly abused his power, and knowingly tried to cover his tracks. It’s easy to channel the anger felt by citizens who have a right to expect much more from their government. But there’s also a sad, personal tragedy hidden in this narrative.

              The political class has responded with expected sanctimony.  But the better response is less theatrical.  The better response is to acknowledge that all humans are capable of intentional as well as unintentional wrong, but constant reminders through codes of ethics and education regarding fiduciary duties keep all of us – attorneys, accountants, real estate brokers, journalists, bankers, planners, physicians and, of course, government officials – mindful.

            January 1, 2010 marked the beginning of both a new year and, potentially, a new era in local government.

             Beginning January 1, all governing boards of cities and counties and boards of education and sanitary districts must adopt a code of ethics guiding decisions by that board.  The code of ethics must contain at least the following:

             ●          the need to obey all laws

            ●          the need to uphold the integrity and independence of the board member’s  office

            ●          the need to avoid impropriety

            ●          the need to faithfully perform the duties of office

            ●          the need to conduct the affairs of government in an open, public manner

             Additionally, each board member must take a two-hour course each calendar year in conflicts of interest and ethical standards of conduct.  School board members must take an additional 10 hours of annual instruction in public school law and finance.

             Democracy, for all its strengths, is messy, and one of its problems is the elevation to public office of men and women with no previous exposure to the thousands of laws they must apply or lessons in the standards of conduct of a public fiduciary.  On the whole, therefore, this is good legislation and a great step in the direction of better government.

             If there are future amendments to this legislation it will be requiring additional hours for city and county board members – similar to school boards – for regular, annual seminars on local government laws and finance.  You heard it here first.

             But if you are reading this blog for deeper insight into new laws, let’s dig a bit.

             This legislation did not come out of the blue.  The General Assembly appointed a study commission on local government ethics in the early nineties, and possibly at other times.  The political climate in 2009, however, created a sense of urgency.  This is the wrong year to vote against legislation that furthers ethics in government.

             The conceptual problem I have with the legislation is that three of the five ethical standards are existing legal duties. Obeying the law and faithfully performing the duties of office are included in every oath of office (N.C. Constitution Article VI. §7).  Conducting the affairs of government in an open and public manner is already governed by public records and open meetings laws.

             So what do we gain by “ethicalizing” a legal duty?  Probably nothing if your focus is enforcement, but everything if your focus is the ability to require education and to promote sensitivity to these duties.

             A conflict of interest is not as difficult to define as pornography, but unlike Justice Potter Stewart claiming to recognize pornography, you don’t always recognize a conflict of interest when you see it.  Understanding what constitutes a conflict in a public decision-making forum is a small part intuition and a large part training.

             The places where conflicts will be most pronounced are the smallest of towns and counties where just about every applicant or petitioner before a board is at least one board member’s minister, business partner, father-in-law or child’s school teacher. And when your child’s passing grade in algebra is on the line, how you vote on a matter affecting the child’s teacher could possibly be an ethical conflict of interest – depending upon the code adopted – but not a legal conflict of interest.

             It’s complicated.

             And if you haven’t raised this question in your own mind yet, let’s raise it now.  Is there a “what if” built into this legislation?  What if a governing board member chooses not to take his or her two hours of ethics courses?  What if a school board member doesn’t take the extra ten hours of instruction?  What if an ethical duty is breached?  Can the board member be fined?  Does a member of the public have standing to seek a court order forcing their attendance at an ethics course?  Can they be removed from office?  Is violation a criminal act?

             The answer to the last question is “yes, possibly,” but only because we now have an ethical duty (as opposed to a mere legal duty) to obey all laws.  Whereas formerly taking a bribe is “just” a criminal act, it is now an ethical violation as well.  Violation of a civil law would also be ethically wrong, but what if it’s a regulatory infraction, such as failing to renew your car license?  An ethical violation?  Well, that’s certainly how the law reads.

             But the point still remains.  This is legislation creating new duties for public officials with no real teeth for enforcement. 

             Another (somewhat minor) omission – from my perspective as a land use and governmental attorney – is that cities and counties often delegate final land use decisions to a planning board. Similarly, all matters before a Board of Adjustment are final decisions by statute (subject to appeal). These board members have been delegated tremendous powers to affect and control other citizens’ lives and livelihoods. Would or should the same ethical standards adopted by the governing board apply to Boards of Adjustment and to planning boards making final decisions?  I would hope so.  And I would rest easier knowing that these appointed board members who don’t answer to the citizens at the ballot box have had some sort of formal training in recognizing and handling conflicts of interest.  Of course, legal standards of conduct always apply, including recusal in cases of impermissible bias.

            I bare my teeth at the General Assembly many times each year.  On this one, though, the teeth you see reveal a smile.

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            For six months I’ve posted regular commentary on North Carolina’s economy and its evolving laws and developments related to local government, zoning, general land use and the environment.

             Today I’d like to talk about . . . God.

             Follow me here.  There’s a segue.

             Cecil Bothwell was sworn in last month as a new Asheville City Council member. By all accounts, he’s educated, informed, competent and likeable.  But he doesn’t profess to believe in God, and that is what some Asheville voters claim eliminates his right to serve in public office and further denies the rights of fellow citizens to choose him as their representative.

             They are correct when they assert that an existing law forbids Bothwell’s right to be sworn in.  North Carolina Constitution Article VI, § 8 states “The following persons shall be disqualified for office: First, any person who shall deny the being of Almighty God.”  Even the North Carolina Religious Liberty Clause provides no help, granting citizens the liberty to worship God as they choose, but not the liberty to choose not to worship or believe in God at all (Article I, § 13). 

             The clarity of the state constitution on this point means that a lawsuit could not be dismissed on the pleadings or for failure to state a claim.  That’s lawyer jargon that means plaintiffs can get a hall pass from the courthouse door to the counsel’s table in the courtroom.  But a judge who follows established legal precedent should not let a religious test for public office get far.  The United State Supreme Court settled this matter 48 years ago in Torcaso v. Watkins.

             What the potential plaintiffs fail to realize is that the legal issue is not whether Mr. Bothwell should believe in God. That’s a theological question that we don’t turn to politicians or courts to answer.  The legal issue is whether we have ever granted to our government the ability to define and control our rights as citizens according to our religious beliefs – or lack thereof.  And serving in elected office is an inherent right of citizenship.

             We establish governments for many purposes, but deciding for us what we should believe about God or whether we are required to believe in God at all is not one of them.  Some things are none of government’s business.

             In almost 25 years practicing law I have appeared before elected and appointed bodies and agencies in more than 100 cities, towns and counties from Hyde, Currituck and Brunswick Counties in the east to Jackson County in the west on matters related to sewer lines, heights of cell towers, traffic mitigation, building setbacks, floodplains, bonds, signage regulations, stream buffers, airport overlays, water rights, marina permitting, water allocation, landfills, development densities and asphalt plant permits, just to start the list.

             If a board member’s belief or lack of belief in the “being of Almighty God” has been germane to a single issue I never realized it.

             But if we were serious about establishing constitutional limitations on qualifications for public office, we should make the limitations relevant. For example, I would disqualify for office any elected official who never felt constrained when making expenditures from the public’s purse or who habitually spoke to other board members in rude and uncivilized tones.

             Better yet, perhaps we could disqualify any citizen from returning to local public office if after their first term they have not learned the precepts of local government finance, the basic elements of sewer and road systems or the rationales for protecting water supplies and other natural resources.

             Someone who ascends to public office becomes a fiduciary for the well being of other citizens, and part of that fiduciary obligation is the duty to become educated about governmental services, how we pay for them, and the many issues each community faces year in and year out.

             Fortunately, the city council member or county commissioner who chooses to govern in ignorance is the exception.  Learning curves are longer for some than others, but most elected officials work diligently to erase knowledge deficits.  Unfortunately, the exceptions often are controlling votes on vital issues, and disqualifying them from holding elected office is only a playful fantasy. 

             After all, democracy is imperfect because we are imperfect.  And when I speak of “perfection,” of course, it is in a non-theological sense.

 [To read previous blog posts, simply continue to scroll down or click on a category of interest in the right hand column]

            When the economy collapsed the real estate sector was hardest hit. As a real estate professional – of sorts – I’m constantly asked when I think the economy will rebound. 

             I’m not an economist. I do know, however, that the distant early warning signs of economic collapse and rejuvenation are found in more places than the jobless rate, the prime lending rate and the list of housing starts.

             As one example, look at furniture.  When I was affiliated with a High Point law firm, another lawyer and I would lease our firm’s downtown parking lot each fall and spring furniture market and sublease all the spaces over the weekend.  Demand for centrally located parking was high and the supply was limited.  Consequently, the price for our spaces went up.  We learned after a few markets that we could accurately predict the market’s later-reported success by how early in the morning market attendees arrived at our lot, how long they stayed before leaving for another area, how willing they were to park like sardines, and their readiness to pay our usurious rate rather than move to a distant and lower priced lot.

             The real estate economy is no different.  There are numerous telltale signs visible on the ground but not at ten thousand feet where economists spend their time. 

             One of these economic signs is the planning commission calendar.  Let’s call it the PC Index, or the PCI so that it has a cache that makes folks sit up and listen.

             The PCI right now is low. Very low. And low is bad.

             If you glance across the state at the November and December planning commission agendas, very little rezoning activity is taking place.  Calendars are full of staff-initiated zoning ordinance text amendments and occasional rezonings and special use permits sought by the government sector (especially schools) and churches.  No subdivisions.  Practically no shopping centers.

            In Randolph County, the November PC calendar contained only two items: special use permit requests for a utility substation and an auto repair ship.  In Wilmington, the December 2nd planning commission meeting was shorter. It had only one rezoning and a staff-initiated, uncontested street closure.

             The Greensboro Zoning Commission met November 9th. Three years ago the Commission would start its meetings at 2:00 p.m. and occasionally go until 9:00 at night. This agenda had only three items: a rezoning for a school “day treatment” program, a 3.46 acre rezoning for some apartments, and land rezoned for university use. The Winston-Forsyth Planning Board met December 10th and only considered requests from two churches, one text amendment, one rezoning for a small retail store, and a site plan for a .46 acre tract and building.

             High Point’s Planning and Zoning Commission met December 15 to hear requests to abandon three platted but unconstructed streets, a 1.3 acre rezoning and annexation related to a failed septic system, and a request to amend a conditional use permit issued four years ago.

             These agendas were not cherry picked.  I chose them at random.

             The point is simple.  There are no signs anywhere that projects are leaving the drawing boards and finding their way into the permitting and rezoning chambers of city hall.  We may soon begin to see a loosening of credit leading to more sales of existing real estate, but existing sales don’t do for the economy what new development does.

             Now that we’ve established that the patient still has no pulse, the question is how we shock its heart back into rhythm.

             A few months ago one of my colleagues at the bank soon-to-be-formerly-known-as-Wachovia put it this way.  “We ate lots of bad loans and business deals and it’s just going to take some time for them to be digested and passed through our financial intestines. Then we can make more loans.”

              OK.  I certainly understand that.

             Real estate deals occur only when money can flow freely through the system from lender to borrower, typically collateralized by the real estate itself.  According to the tea leaves I’m reading, the PCI is just as low now as it was in July. 

             But when it starts to rise I will let you know.

[To read previous blog posts, simply continue to scroll down or click on a category of interest in the right hand column]