BANGOR – City councilors determined in a 5-1 vote Monday that two members who helped initiate a petition aimed at calling for a citywide vote on the city’s agreement with the developer of a proposed $30 million racetrack casino do not have a conflict of interest.

In related business, the council also authorized City Manager Edward Barrett to draft a resolve urging Gov. John Baldacci to call the Legislature into special session to establish a gaming commission and enact gaming laws.

The councilors considered the resolve at the request of Rep. Patricia Blanchette, D-Bangor, who noted that the need for gaming oversight and regulation did not exist when the Legislature adjourned last spring, long before the Nov. 4 statewide vote authorizing slot machines for the state’s two commercial racetracks, Bangor Raceway and Scarborough Downs.

Because of the council’s determination, addressed during a brief session before Monday night’s regular council meeting, Councilors Anne Allen and Gerry Palmer will be permitted to participate in council discussions and actions regarding the petition and the raceway project.

The two council members did not participate in the vote over conflict of interest. Neither did Councilor David Nealley, who already has been deemed in conflict because he is employed by developer Capital Seven LLC, the company owned by Hawaiian entrepreneur Shawn Scott that is in the process of developing a racetrack casino, known in the gaming industry as a racino.

According to City Solicitor Norman Heitmann, the city’s code of ethics states that city councilors are prohibited from participating in deliberations and voting on matters in which the councilor or the councilor’s immediate family have a financial or special interest, other than an interest held by the public in general. A special interest is defined as a direct or indirect interest having value to a specific individual or group, economic or otherwise, that could increase in value as the result of the passage or denial of a council order, ordinance or resolution.

Allen and Palmer, two of three councilors who opposed the city’s Oct. 30 deal with Capital Seven LLC, lent their names to the petition, which purportedly aims to overturn the council’s 5-3 vote to partner with the firm.

Filed shortly after the Nov. 4 statewide slots vote, the petition is a required first step in launching a citywide referendum. Upon receipt of the petition documents, issued Friday, petitioners have 45 business days to collect the needed signatures – in this case 2,274, or 20 percent of the votes cast in the last gubernatorial election – to send the matter to voters.

Heitmann, however, said earlier that the petition, as worded, would not have the effect its creators envisioned because it does not ask whether voters want to end the city’s relationship with Capital Seven. Capital Seven’s critics say the deal was struck in haste and the city should consider other proposals.

At least one other developer, Iowa-based Kehl Management Co., is ready to step in should Capital Seven be unable to fulfill its obligations to the city.

Any councilor who believes he or she might be in conflict must disclose his or her interest, financial or special, and the extent of that interest in any agenda before the council, the code states. In addition, any councilor who believes a fellow councilor has an interest in a matter must disclose it.

Once a potential conflict has been raised, the rest of the councilors must review the facts as disclosed to them and decide if the individual has an interest in the agenda item before that item is considered.

If the council finds that a conflict of interest exists, the member at issue is to be excused from participating in discussion, deliberation or a vote on the relevant agenda item.

During the meeting, Councilors Allen and Palmer said they had neither a financial nor a special interest in the racino. As such, they maintained they had a right to take part in council actions related to it. Though the rest of the councilors asked numerous questions about potential liability the city might face if the petition effort succeeds, none said they believed the two councilors were in conflict.

The decision to urge the governor to put racino regulations into effect and establish a gaming commission was made during the council meeting.

A member of the Legislature’s Legal and Veterans Affairs Committee, Rep. Blanchette wanted councilors to adopt a resolve Monday but councilors wanted time to review the issue. Though officials proposed taking the matter up during the council’s next regular meeting, set for Dec. 8, Blanchette said she was worried that waiting until then might push the state’s actions into January. As a compromise, Mayor Dan Tremble recommended that the council instead review a draft resolution regarding oversight and laws during a committee meeting on Dec. 1.

Baldacci and several lawmakers already have asked Attorney General Steven Rowe to clarify several aspects of the law involving regulation, location and the number of slot machines permitted.

For now, Baldacci’s primary focus reportedly is to ensure the state has regulations in place to deal with a racino, and he is proposing a new state commission to regulate slot machines.