Mayor Alex B, Morse ‘Law Department City of Holyoke August 30, 2018 Holyoke City Couneil 536 Dwight Street Holyoke, MA 01040 On August 7, 2018, Councilor Rebecca Lisi requested the Law Department provide a egal opinion evaluating whether certain provisions of a host community agreement between the City and marijuana cultivator pose legal and/or ethical issues. Host Community Agreement Charitable Donations 1) How the dedicated funds for Wards 1 and 2 should be established as a result of the Host Community Agreement with RISE Holdings (formerly GTI)? 2) If there are any legal or ethical issues with the way that those funds are currently established and disbursing money? On April 12, 2017, the City and GTI-Massachusetts NP Corporation executed a host ‘community agreement pertaining to GTI’s medical marijuana cultivation operations (hereinafter, “medical HCA"), The Agreement contains a ‘charitable donation’ provision stating that “Operator will commit to donate a minimum of Fifteen Thousand and 00/100 dollats ($15,000) to local charity and/or non-profit organizations after discussions and upon the recommendation of the City Council, specific Ward leaders and/or neighborhood associations.” On May 17, 2018, the City and Rise Holdings, Inc, executed a host community agreement pertaining to Rise Holdings’ recreational marijuana operations (hereinafter, “recreational HCA”), The recreational HCA does not contain a charitable donation, requirement, City and RISE negotiated the subsequent recreational HCA as separate and in addition to the existing medical HCA. The continued enforceability of the charitable contribution requirement does not violate the statutory cap on impact fees pursuant to MGL ¢. 94G, §3(4) as the medical agreement was executed several months prior to the enactment of §3(4) on July 28, 2017. Charitable donation requirements are not uncommon among host community agreements—both within Holyoke and across the Commonwealth. Although not included in the City’s revised host community femplate agreement template, such charitable provisions are present in comparable marijuana establishment agreements across the 20 KOREAN VETERANS PLAZA - ROOM 204 - HOLYOKE, MASSACHUSETTS 01040-5000 TELEPHONE: (413) 322-5580 + FACSIMILE: (413) 322-5581 Birthplace of VolleyballCommonwealth as well as City agreements with private businesses from non-marijuana industries/sectors.! Although charitable donation requirements are facially permissible, a municipal official's conduct in relation to a private party’s financial activities may give rise to ethical issues pursuant to applicable state conflict of interest laws, M.G.L. c. 268A, and local ethics ordinances, Holyoke Code of Ordinances, Section 2-69. A municipal official may not act in a manner that would cause a reasonable person to think that she would show favor toward someone or that she can be improperly influenced. M.G.L. 268A, §23(b). The official may rebut the appearance of conflict by filing a public disclosure of the relevant facts. Id. Additionally, under state and local law, a municipal official must abstain from participation in a matter in which they or an immediate family member have a financial interest. M.G.L. ¢.268A, §19. Elected officials must both disclose and abstain from participating in a matter they have a financial interest. Id. Law Department Advisory Role with Ethical Questions and Investigation 3) Ifthe Law Department identifies any legal or ethical issues, how might they be addressed and mitigated? 4) How can the City help build uniformity and transparency into the establishment of those funds and the process by which residents and community groups access those funds? Municipal officials may obtain an advisory opinion ftom the state or local government on whether particular conduct complies with state ethics laws. Holyoke Code of Ordinances Section 2-69(i) and MGL Chapter 268A, §22 provide that a municipal official may request an advisory opinion from the City Solicitor on questions related to duties, responsibilities and interests under the local ethics ordinance and state conflict of interest laws, respectively upon “the submission of detailed existing facts which raise a question of actual or prospective violation.” See In the Matter of John A. Deleire, State Ethics Commission Disposition Agreement, no, 289 (May 24, 1985) (declining to defer to City Solicitor’s oral advice or written opinion where not accompanied by or based on “a detailed submission of facts”).? An advisory opinion rendered under M.G.L. ¢, 268A is subject to review and revision by the Commission within thirty days of submission of the opinion to the Commission. 930 CMR 1.03. Asa practical matter, where no advisory opinion is sought, but where the Department ears of information suggesting a possible conflict of interest, the Department may * For example, a host community agreement between the City of Holyoke and United Waste Management (now, Cassella) provides that UWM shall “pay $10,000 per calendar year to a Springdale community organization or organizations as designated by the City.” 2 available at, https//www.mass.gov/settlement/n-the-matter-of-john-a-deleire.notify and consult with an employee about potential conflicts. Nothing in MGL ¢. 268A, §22 (or its local counterpart) grants the Department authority to initiate a formal investigation. Instead, the state conflict of interest laws establish specific investigatory procedures exercised by the Commission’s Enforcement Division upon the filing of a complaint with the Commission. According to the Commission, many complaints are resolved confidentially at the conclusion of the initial staff review with a private educational letter being sent to the subject of the complaint. In these cases, no formal charge of a violation is brought and the matter remains confidential. Likewise, the city’s consultation with Municipal officials are encouraged to contact the Law Department to request an advisory opinion on conduct which may give rise to an actual or perceived conflict of interest. If such conduct has not yet occurred, the official may also request advice of the State Ethics Commission.’ 5) Does the Green Fund/Verde Fund as its currently drafied meet legal/ethical sserutiny? ‘The City of Holyoke is not a party to any agreement with the Verde Fund nor does the City directly or indirectly participate in any arrangements made between the Fund and Marijuana Establishments. ‘Therefore, responding the above question is beyond the scope of the Department’s role with respect to ethical obligations of municipal employees and officials. L trust the above addresses the questions raised. As stated above, a copy of the State Ethies Commission Summary of the Conflict of Interest Law for Municipal Employees (rev. 11/14/2016) is attached for reference. Please contact me should you seek further information or would like to request an advisory opinion regarding your particular conduct. Best Regards, <) Ly a ail Payer 3 See Enforcement Procedures, Stale Ethics Commission (rev. 02/17/2016) (detailing investigatory stages {rom initial review and informal investigation arising frory media reports or complaints through preliminary inquiry and show cause adjucicatory hearing), available at htpsi/www.mass.gov/service-detailsstate~ cthics-commission-enforcement procedures, * available at https://wiww.mass.gov/request-advice-from-the-stae-ethies-commission.