Office of the City Attorney

C I T Y O F B O U L D E R, C O L O R A D O

Municipal Building

1777 Broadway

Post Office Box 791

Boulder, Colorado 80306

Telephone (303) 441-3020

Facsimile (303) 441-3859

To:Jane Brautigam, City Manager

From:Erin Poe, Acting Deputy City Attorney

RE: Legal Opinion Robert Morehouse Complaint

Date:July 13, 2017

______

INTRODUCTION

This memorandum is in response to your request for an opinion regarding conflict of interest and contract compliance issues relating to Robert Morehouse and Vermilion, Inc. (“Vermilion”). This memorandum assumes the facts presented to this office are true and that all relevant facts have been presented. Omitted facts could greatly change the nature of this opinion. Records prior to 2013 have not been provided to the City Attorney’s Office. The contracts available for review and the term of each are as follows:

1.Contract for Annual Consulting Services. January 9, 2013 – January 31, 2017

2.Contract for Climate Commitment. July 2013–November 2013

3.Contract for Zero Waste Project. February 2015– October 2015

4.Renewal for Annual Consulting Services. January 1, 2015– January 31, 2015

5.Renewal for Annual Consulting Services. January 1, 2017 – January 31, 2017

Vermilion, Inc. is a Colorado corporation that advertises services of brand development, digital marketing, web design, packaging design, and environmental design. Vermilion has performed work as a consultant for the City every year since 2005. The CEO for Vermilion is Robert Morehouse. Mr. Morehouse is alleged to have lobbied city council on multiple occasions concerning the city’s efforts to municipalize the electric utilityover the past four years. He is alleged to have done this as a member of Empower Our Future which describes itself as “a coalition of community organizations, local businesses and individuals.”

QUESTIONS

The following specific concerns were presented by a member of the public:

The city’s contract for annual consulting prohibits Mr. Morehouse for advocating around climate change and municipalization without express permission from the City.[1]
Mr. Morehouse was awarded the contract for communications work for the Chautauqua shuttle service while he is a board member of the Colorado Chautauqua Association.[2]

Lobbying and Annual Consulting Contract

The City’s current annual consulting contract was entered into January 9, 2013 through December 31, 2013. SectionVII.C.2. of the2013 annual consulting services contract states that the consultant “shall not, without the prior written consent of the City. . . Lobby any City agency on any pending matter while they are under contract with the City . . ..” The “consultant” is defined by the contract as Vermilion, Inc. The 2013 annual consulting contact was renewed for the period of January 1, 2015 through January 31, 2015 and January 1, 2017 through January 31, 2017.

Vermilion did not have written permission from the City to testify before council. However, in 2013, Mr. Morehouse asked for more information about this provision and was advised verbally by city staff that he could speak publicly about matters that were not included in the scope of his existing contracts. None of the contracts with Vermilion included work on Boulder’s Energy Future or municipalization.

In addition, it is alleged that Mr. Morehouse lobbied on behalf of municipalization as a member of Empower Our Future and not as CEO of Vermilion. This does not constitute a breach of contract,because the contract does not extend the prohibition on lobbying to employees, officers or directors of Vermilion. Only Vermilion as an entity is prohibited from lobbying.The 2015 and 2017 annual consulting renewals did not change the lobbying language, and the 2013 climate commitment contract and the 2015 zero waste contract have identical lobbying language.

2. Contract for CommunicationsWork

Vermilion consulted regarding the Chautauqua Access Management Plan pilot (CAMP). The work for the CAMP project was to develop: (1) “Unique temporary branding for the ‘Park to Park’ shuttle,” and (2) “Additional print collateral to distribute information throughout the community.” Mr. Morehouse is a member of the board of directors for the Colorado Chautauqua Association, a 501(c)(3) Colorado nonprofit corporation. Mr. Morehouse is not a member of any city board or commission.

The City of Boulder Code of Conduct establishes rules of conduct that apply to City employees and officials. Mr. Morehouse does not fall into either of these categories. The definition of “public employee” in § 2-7-4, B.R.C, 1981,expressly excludes consultants who have independent control over their work product. The Vermillion contracts provide for such independent control and treat Vermillion as an independent contractor.[3] Thus, neither Mr. Morehouse nor Vermillion is subject to the city’s code of conduct.

The Colorado Chautauqua Association is referenced by Vermilion in its scope of work to note that “if the CAMP project can be connected with a 501(c)(3) nonprofit, possibly CCA, we may be eligible for the Google nonprofits program which includes a grant for up to $10k/month in free paid search ads.” Anotherpossible reference occurs with a reference to “additional shareable social graphics will be designed for use by partner organization to help spread the message along with email templates.” It is possible that the Colorado Chautauqua Association was an entity that would benefit from the shared graphics.

Because the Code of Conductis not relevant to this matter, I reviewed the city’s purchasing procedures for guidance. Section 2-8-8, B.R.C., 1981,“Selection of Bids for Consultants, Purchased Services and Insurance” states:

In determining whether to accept a proposal for consultant’ services, purchased services or insurance, the city manager shalldetermine, based on an evaluation of all the proposals, which bidder best meets the needs of the city, considering whether each bidder:

(a)Possesses adequate technical and financial resources to perform the project or services or the ability to obtain the resources required for performance;

(b)Possesses necessary experience, organization and technical skill in the relevant fields or the ability to obtain them, including, without limitation, arrangements with subcontractors;

(d) Has a satisfactory record of performance in developing and implementing similar projects or providing similar services in other jurisdictions; and

(e)Will perform the project or services at a reasonable cost, compared with the level of effort to be expended.

There is no evidence that Vermilion fails to meet these criteria. Nor, is there any evidence that city staff violated the Code of Conduct by awarding the contract. The implication is that city staff is impermissibly favoring Vermilion. If city staff chose Vermilion to favor a personal friend, that would be a violation of §2-7-8(f)(4), B.R.C., 1981. However, the fact that Mr. Morehouse’s beliefs concerning municipalization align with City Council direction does not create a violation of the Code of Conduct. The Code of Conflict does not prohibit awarding contracts to entities that share the city’s vision or values.

CONCLUSION

In the matterof Vermilion, the City Attorney’s Office finds neither a Code of Conduct violation nor a breach of the Vermilion contracts. However, the City Attorney’s Office understands how the lack of an informal bidding procedure to solicit quotes from similar consultants could create the impression that city staff is favoring Vermilion for improper reasons. The City Attorney’s Office recommends that departments using Vermilion services work closely with city purchasing staff to ensure that the purchasing codes and policies are followed. The process for routing contract renewals to the City Attorney’s Office should also be followed.

[1] The annual consulting contract is in fact between Vermilion, Inc. and the City.

[2] The contract for the Chautauqua shuttle service was also with Vermilion, Inc.

[3] This memorandum does not address whether Mr. Morehouse violated the Colorado Chautauqua Association’s conflict of interest policy.