The Honolulu City Council approved on first reading Wednesday a measure that would subject top employees of the nonprofit company overseeing TheBus and TheHandi-Van services to the same ethics policies as city employees.

The proposal, introduced about two weeks ago as Bill 32 by Councilman Joey Manahan, would obligate nonunion Oahu Transit Services employees to follow the regulations prohibiting conflicts of interest and requiring disclosure of potential conflicts or face civil penalties. Manahan said he proposed the bill due to OTS’ noncompetitive contract, and the gray area it inhabits between being a city entity and an independent contractor.

Barbra Armentrout, one of the city’s principal advocates for better service from TheBus, spoke in favor of the measure during the City Council’s regular meeting Wednesday, saying OTS should be more transparent to the public.

OTS President and General Manager Roger Morton said earlier this week that the bill would affect the OTS board and about 115 non-Teamster employees, but that the proposal was fair overall.

OTS and its 1,850 employees oversee about $224 million in annual bus and TheHandi-Van services for the city. However, the city covers those costs.

OTS’ contract is for $448,000, which Morton said is a "management fee" that covers the salaries and benefits for him and a top deputy, as well as board trips and expenses and company holiday parties.

Bill 32 now heads to the Committee on Executive Matters and Legal Affairs. If the Council passes it on two more readings it will head to Mayor Kirk Caldwell’s desk for consideration.