Traverse City commissioners will discuss establishing an ethics ordinance and hear the second of a two-part presentation on city water and sewer rates – which could be overhauled as part of this year’s budget process – at their 7pm study session tonight (Monday) at the Governmental Center.

Ethics Ordinance
Commissioners tonight will consider the possibility of establishing an ethics ordinance that would help guide behavior for elected and appointed officials.

The city already has a conflict-of-interest policy in place that applies to all departments and administrative/bargaining unit employees – but does not cover elected and appointed officials, according to a memo from City Attorney Lauren Trible-Laucht. That policy is limited in scope and primarily prohibits employees from profiting off their city positions or otherwise engaging in financially compromising behavior when conflicts exist between their jobs and personal or outside interests. Beyond that, “the idea of an ethics policy or ordinance has been explored by past commissioners, but it never got much traction,” Trible-Laucht wrote.

There are resources available to guide ethical behavior, Trible-Laucht noted, including an Ethics Handbook for Michigan Municipalities created by the Michigan Municipal League and Michigan Association of Municipal Attorneys in 2008. City employees “who hold particular certifications are also bound by the ethical rules associated with their professions – such as law or engineering, for example,” she wrote. “Thus, the realm of ethics as it relates to the city is not a void, but there is always room for improvement.”

Mary Grover, who lives in Traverse City and helped edit the Ethics Handbook, will be in attendance as a resource at tonight’s study session with the goal of commissioners giving Trible-Laucht direction on what they’d like to see in a new ordinance, which staff could then draft and bring back to a future meeting for approval. Commissioners could alternatively establish an ad hoc committee to work with Trible-Laucht and/or Grover on crafting an ordinance for consideration.

Trible-Laucht said her impression after talking with several commissioners is that the board is looking for “something much more comprehensive” than the existing conflict-of-interest policy to guide ethical standard. Commissioners would need to determine who the new ordinance would apply to and possible behavior it would regulate, ranging from nepotism to political activity to financial/property disclosures to improper use of positions. Such an ordinance should also outline penalties and enforcement, Trible-Laucht indicated. Some disciplinary actions applying to elected officials are regulated by state law, but steps like public censure or misdemeanor violations could also be included.

The ethics discussion arose in part from an IT contract commissioners approved in 2024 following a ransomware attack that affected both the City of Traverse City and Grand Traverse County. Commissioners agreed to separate the city and county IT systems going forward and to hire Millenium Digital Technologies at a cost of up to $518,634.86 for professional services and hardware acquisition to facilitate the separation. City Manager Liz Vogel, who recommended the firm, also recommended waiving the competitive bidding process and hiring Millenium Digital Technologies for a three-year contract at just over $127,000 annually to provide ongoing IT support services. However, commissioners rejected the latter recommendation and opted instead to use a request-for-proposals (RFP) process so they could review multiple bids for three-year IT services.

During that discussion, some commissioners questioned Vogel’s friendship with the president of Millenium Digital Technologies, Ken Andrews, which Vogel did not initially disclose. She later acknowledged knowing Andrews personally as a family friend but also said she’d worked with him professionally and trusted his company. “That relationship has not influenced my decision in any unethical or untoward manner,” she wrote to commissioners in November. “It is worth underscoring that I stand to gain nothing from this decision, aside from the satisfaction of protecting our city’s data and resources in a time of unprecedented vulnerability.” Mayor Amy Shamroe also pointed out at the time that the city’s conflict-of-interest policy governs financial conflicts and that she didn’t see any way in which Vogel stood to financially gain from recommending Millenium Digital Technologies.

Trible-Laucht said Grand Traverse County Prosecutor Noelle Moeggenberg reviewed the situation and found no criminal wrongdoing. However, she declined to review “any possible policy or ethical considerations,” wrote Trible-Laucht, as those are outside of the purview of her office. Contract procurements and personal relationships – irrespective of financial gain – could be some of the potential areas addressed in an ethics ordinance.

Water/Sewer Rates
City staff will present the second of a two-part presentation on city water and sewer rates to commissioners tonight. The discussion will cover irrigation billing and practices, including recommended changes to be able to bill residents for irrigation year-round instead of just from May 1 to October 31 as is done currently. Staff will also review a history of the city’s meters and endpoints, including a shift to Badger endpoints that will allow customers to see nearly real-time usage updates and detect leaks or other abnormal activity. Those endpoints have a 90-cent monthly surcharge to customers. Staff will also review the city’s approach to collecting unpaid balances and possible solutions for handling that going forward.

Staff presented the first part of the water/sewer rate overview to commissioners in December. That discussion included the city’s planned transition to a new “ready to serve” rate intended to cover the costs of keeping the city’s water and wastewater plants maintained and “ready to serve customers.” The plan, which would charge a fixed rate even if water or sewer service isn’t being used, is common in other municipalities and will help more equitably distribute costs across users, staff said – especially with $30 million in water projects and $54 million in sewer projects planned in the next five years. Rate changes are proposed to be incorporated starting in the city’s 2025-26 budget, which will be reviewed by commissioners this spring ahead of a targeted June approval.