Attorney deems necessary due to council member's possible conflict of interest

By Jay Peeples
Milpitas City Council at its Tuesday night meeting reaffirmed an agreement with KB Homes and Santa Clara County to build nearly 700 residential units on former Elmwood Correctional Facility lands following a recommendation from the city attorney's office to do so in light of a potential conflict of interest in relation to KB Homes.

Councilmember Bob Livengood disclosed in April he was a consultant for KB Homes from February 2003 until June 2004, and was paid $55,000 by KB. Acting City Attorney Jayne Williams said the decision, along with another item regarding KB Homes, needed to be reaffirmed because Council-member Livengood may have participated in discussions regarding the home builder while he was on the company's payroll. Williams said per the council's direction last week, the information was forwarded to the state Fair Political Practices Commission, the Santa Clara County District Attorney's Office and the Santa Clara County Grand Jury.

The council moved 3-1, with Councilmember Armando Gomez dissenting, to disclose information out of closed session regarding the potential conflict of interest.

Williams said an April article in Milpitas Post detailing Livengood's employment with KB Homes was the first time the city attorney's office was made aware of the matter. She said an investigation was initiated in late April or May.

According to Williams, two state laws possibly applied to the matter - a provision in the Political Reform Act that prohibits public officials from participating or making a decision in issues that will benefit them financially, and a state law prohibiting public officials from voting on any contracts they have a financial interest in. The latter law states the contract can be deemed void if a violation is found.

Williams said the city attorney's office reviewed several internal documents and interviewed Livengood. Williams said Livengood has provided the city attorney's office with a signed affidavit stating he did not vote on any matters or participate in discussions regarding KB Homes projects in Milpitas. She added that Livengood said he wasn't involved in closed session discussions regarding KB Homes.

Mayor Jose Esteves said he requested the city attorney look into the matter following the April Milpitas Post article.

In an effort to show that the timing of the issues seeing public light wasn't intentional - Livengood is up for re-election in less than two weeks - Esteves submitted e-mails he sent to City Attorney Steve Mattas in August asking for an update on the issue.

Councilmember Althea Polanski asked whether the agreements could be considered invalid, to which Williams said yes.

"Unfortunately, this isn't an issue I find is political," Polanski said, noting that the items needed for re-affirmation carried a value of $140 million. "I take this action very seriously."

Councilmember Armando Gomez, who voted against sending the information to enforcement agencies and delivered a stinging criticism of the council majority last week, asked how Livengood was allowed to vote on a matter in May after the city attorney's office began looking into the allegations in April.

"How isn't this malpractice? Why didn't the city attorney warn us," Gomez asked. "Why weren't those brought to our attention earlier?"

Williams responded that an investigation takes extensive review, and the city attorney's office didn't have any information on the matter in May. Williams added that Livengood had a responsibility to abstain from discussion on such items.

"It is incumbent upon the public official to notify the city attorney," Williams said. "It was not brought to our attention by the council member."

Dixon claimed the council discussed appraisals of the county land in late 2003 while Livengood was under KB Homes' employ.

Livengood did not speak on the matter because he abstained from the discussion. He also abstained from discussion on three other items on the agenda related to KB Homes.

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