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HomeMy WebLinkAbout2001 05 31 CCNOTICE AND CALL OF SPECIAL JOINT MEETING of the CITY OF BALDWIN PARK CITY COUNCIL HOUSING COMMISSION PERSONNEL COMMISSION PLANNING COMMISSION RECREATION /COMMUNITY SERVICES COMMISSION TO: THE MEMBERS OF CITY COUNCIL, HOUSING COMMISSION, PERSONNEL COMMISSION, PLANNING COMMISSION AND RECREATION/COMMUNITY SERVICES COMMISSION NOTICE IS HEREBY GIVEN that a Special Meeting of The above agencies, boards, and commissions is hereby called to be held on THURSDAY, MAY 31, 2001, AT 7:40 P.M., at the Esther Snyder Community Center, 4401 E. Baldwin Park Blvd., Baldwin Park, California. The Special Meeting shall be for the purpose of conducting a workshop to discuss and share goals and ideas for the community. City Attorney Alvarez - Glasman will conduct a Brown Act Presentation for the benefit of all participants. SPECIAL NOTICE RECIPIENTS: Mayor Lozano, Mayor Pro Tern Gair, Councilmembers: Garcia, Pacheco, and Van Cleave; City Clerk Tlzcareno; City Treasurer Contreras; Chief Executive Officer Keller; Department Directors: Carrillo, Forintos, Nayier, Sanchez, and Acting Police Chief Kling; City Attorney Alvarez Glasman; Personnel /Risk Manager Mesa; Assistant to the CEO Bouton; Secretary to the Housing Commission Baker; Housing Commissioners: Bailey, Diaz, Weick, Gonzalez, Vargas, Marin; Secretary to the Personnel Commission Alves; Personnel Commissioners: Rivera, DePedro, Dahlen, Palaclos, Lieu; Secretary to the Planning Commission Ruelas; Planning Commissioners: Huetinck, Magdaleno, Alba, Corona, Villegas; Secretary to the Recreation /Community Services Commission Plantico; Recreation /Community Services Commissioners: DeLaTorre, Garcia, Reyes, Tarango, Vasquez, Viste and Carrillo; and SGV Tribune (Rubin) I, Rosemary M. Ramirez, Deputy City Clerk of the City of Baldwin Park, do hereby certify that the above individuals have received notification of the f regoing Special Meeting as required by law. May 22, 2001 Deputy rez, CMC CITY OF BALDWIN PARK SPECIAL JOINT MEETING AGENDA CITY COUNCIL HOUSING COMMISSION PERSONNEL COMMISSION PLANNING COMMISSION RECREATION /COMMUNITY SERVICES COMMISSION THURSDAY, MAY 31, 2001 7:00 P.M. ESTHER SNYDER COMMUNITY CENTER 4100 BALDWIN PARK BLVD. BALDWIN PARK, CALIFORNIA 91706 PUBLIC COMMUNICATIONS (Five minute maximum speaking time per speaker) "No action or discussion skull be undertaken on any item not appearing on the posted agenda, except the members of the legislative body or its staff may briefly respond to statements made or questions posed by persons ". GC §64954.2 1. NEW BUSINESS A. Conduct workshop for the purpose of sharing goals and ideas for the Community B. City Attorney Alvarez- Glasman — Brown Act Presentation. 2. ADJOURN No other matters will be discussed CERTIFICATE OF POSTING I, Rosemary M. Ramirez, Deputy City of the City of Baldwin Park, certify under penalty of perjury under the laws of the State of Califomia, that the foregoing agenda was posted not less than 24 bouAprior to said meeting. Dated this 22"d day of May, 2001 ' Rosema ' z, CMC Deputy City Clerk Copies of staff reports and supporting documentation pertaining to each item on this agenda is available for public viewing and Inspection at City Hall, 2nd Floor Lobby Area or at the Los Angeles County Public Library in the City of Baldwin Park. For further infonnotion regarding agenda items, please contact the office of the City Clerk at 626.960.4011, ext. 108, or via e-mail at rramirezdbaidwinpark.com In compliance with the Americans with Disabilities Act if you need special assistance to participate in this meeting, please contact the Public Works Department or Risk Management at 626.960.4011, !Notification 48 hours prior to the meeting will enable staff to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 34.102.104 ADA TITLE 11) ARNOLD M, ALVA REZ-G LASMAN ROGER A, COLVIN RICHARD L. ADAMS IL GREGORY A. DOCIMO WILLIAM A. VALLEJOS SCOTT E. NICHOLS DAN €EL P. AGUILERA JOANNA G. AFR3CA A. JOHN OLVERA STEPHANIE A. CHAVEZ TINA I. YATES May 31, 2001 ALVAREZ- GLASMAN & COLVIN ATTORNEYS AT LAW 100 N. HARRANCA AVENUE SUITE IOSO WEST COVINA, CALIFORNIA 9179F TEa_.EPHONE i6a5) 858 -9121 F°AC5IMILE (525) 858-2779 OF COUNSEL JAMES MARJIL CASSO Welcome, and thank you for being here this evening for the Brown Act and Conflict of Interest Presentation for the City of Baldwin Park. Tonight's introduction to the Brown Act and Conflict of Interest is being offered at the suggestion of the City Council. It is our hope that this informal seminar is both helpful and informative. After tonight's presentation, if you have any questions regarding this information, please feel free to contact our office and speak with either myself, John Olvera, Assistant City Attorney or Stephanie Chavez, Deputy City Attorney at (626) 858 -9121. Very truly yours, ALVAREZ- GLASMAN & COLVIN Arnold M, Alvarez -G asman City Attorney ARNOLD M. ALVAREZ-GLASMAN ROGER A. COLV €N RICHARD.L. ADAMS IL GREGORY A. DOCIMO WILLIAM A. VALLEJOS SCOTT E. NICHOLS DANIEL P. AGUILERA JOANNA G. AFRICA A. JOHN OLVERA STEPHANIE A. CHAVEZ TINA k. YATES A- LvAREZ- GLASMAN & C©LVIN ATTORNEYS AT LAIN 100 N. eARRANCA AVENUE SUITE fOSO WEST COVINA, CALIFORNIA 91791 TELEPHONE 16261 8S6 -9121 FACSIMILE (626) SSS-2779 BIOGRAPHY ARNOLD M. ALVAREZ- GLASMAN OF COUNSEL JAMES MARJ7L, LASSO Arnold M. Alvarez - Glasman is the founding partner of the law firm of Alvarez - Glasman & Colvin. He supervises the public agency department of his firm, which specializes in representing municipalities and other public agencies. Mr. Alvarez- Glasman currently serves as the City Attorney and Redevelopment Agency General Counsel for the cities of Baldwin Park, Pomona, Montebello and West Covina. He specializes in public agency law, land use and real estate matters, election law and redevelopment law, Mr. Alvarez - Glasman has been involved in local and state government for over twenty -five years. Arnold was elected to his first terra on the Montebello City Council in 1985 and was the youngest person to serve on the City Council in the City's eighty year old history. He served three terms as Mayor, and in 1989 was recognized as one of America's twelve leading Hispanic Mayors. He concluded twelve years of service on the Montebello City Council in 1997. As a City Attorney and Agency Special Counsel, Mr. Alvarez- Glasman has specialized in land use matters, redevelopment law, election and Brown Act issues. He has negotiated and completed numerous complex development projects. Additionally, Mr. Alvarez- Glasman has previously served as the City Attorney representative to the League's Administrative Services Policy Committee. He has also served as a panelist at League Conferences for the Council Members and Mayor's Department, as well as the City Clerk's and City Attorney's departments. Mr. Alvarez - Glasman graduated from California State Polytechnic University at Pomona (B, A. with honors, Political Science 1974) and Loyola University at Los Angeles School of Law (J.D. 1977). He was admitted to the California State Bar at age twenty -four making him one of the youngest lawyers in the state at that time. Mr. Alvarez - Glasman is very involved in many community organizations. He donates numerous hours training high school students on the operations of law and government by serving as a volunteer staff member and governing board member to the California YMCA Youth and Government Program. Arnold is also a trustee to the Mt. San Antonio College Foundation Board, and has also served on the boards of numerous other community groups and organizations. Arnold resides in Montebello with his wife, Lydia and daughters, Shelley and Natalie. 'x` a rte. �i rx y How Conflict of Interest Rules Affect You o An overview yY l+m M 2 s w 'Fan ce A r3 � Y: published by: Fair Political Practices Commission 428 j Street, Ste. 620 03 = Sacramento, CA 95814 toll -free (866) ASK -FPPC (866-275-3772) or 916.322.5660 V www.fppc.ca.gov z €x z, w� �� ti Can 1 Vote? Conflicts of interest Overview This pamphlet is an overview, using non - technical terms, of your obligations under the Political Reform Act's conflict -of- interest rules. It is intended to help you understand your obligations at the "big picture" level, and to guide you to more detailed resources. Stripped of legal jargon, you have a conflict of interest with regard to a particular government decision if it is sufficiently likely that the outcome of the decision will have an important impact on your economic interests, and if the important impact on your economic interests is not also felt by a significant segment of the jurisdiction. The voters who enacted the Political Reform Act by ballot measure in 1974 judged such circumstances to be enough to influence, or to appear to others to influence, your judgment with regard to that decision. The most important thing you can do to comply with this law is to learn to recognize the economic interests from which a conflict of interest can arise. No one ever has a conflict of interest "on general principles" under the Act - -a conflict of interest can .only arise from particular kinds of economic interests, which are explained below.. If you learn to understand these interests and to spot potential problems, the battle is mostly won because then you can seek help from your agency's legal counsel or from the FPPC with the more technical details of the law. Under rules adopted by the California Fair Political Practices Commission,' deciding whether you have a financial conflict of interest under the Act is an eight -step process. If you methodically think through the steps (which are explained below) whenever you think there may be a problem, you can avoid most, if not all, mistakes. If you learn nothing else from this pamphlet, remember these things: ➢ This law applies only to financial conflicts of interest; that is, conflicts of interest arising from economic interests. ➢ Whether you have a disqualifying conflict of interest depends heavily on the facts of each governmental decision. The Political Reform Act is set forth at cal. Gov. Code §§81000-91015, and the Fair Political Practices Commission regulations are contained in Title. 2, Division 6 of the California Code of Regulations. You should not rely solely on this fact sheet to ensure compliance with the Political Reform Act, but should also consult the Act and Commission regulations. arising from economic interests. There are six kinds of such economic interests from which conflicts of interest can arise: Business Investment. You have an economic interest in a business entity in which you, your spouse, your dependent children or anyone acting on your behalf has invested $2,000 or more. Business Employment or Management. You have an economic interest in a business entity for which you are a director, officer, partner, trustee, employee, or hold any position of management. Real Property. You have an economic interest in real property in which your spouse, your dependent children or anyone acting on your behalf has invested $2,000 or more, and also in certain leasehold interests. Sources of Income. You have an economic interest in anyone, whether an individual or an organization, from whom you have received (or by whom you have been promised) $500 or more in income within 12 months prior to the decision about which you are concerned. When thinking about sources of income, keep in mind that you have a community property interest in your spouse's income - -a person from whom your spouse receives income may also be a source of a conflict of interest to you. Also keep in mind that if you, or your spouse or your dependent children, own 10% of more of a business, you are considered to receive "pass -- through" income from the business's clients - -in other words, the business's clients may be considered sources of income to you. Gifts. You have an economic interest in anyone, whether an individual or an organization, who has given you gifts which total $320 or more within 12 months prior to the decision about which you are concerned. Personal Financial Effect. You have an economic interest in your personal expenses, income, assets, or liabilities, as well as those of your immediate family- -this is known as the "personal financial effects" rule. If these are likely to go up or down as a result of the governmental decision, then it has a "personal financial effect" on you. On the statement of economic interests (Form 700) you file each year, you disclose many of the economic interests that could cause a conflict of interest for you. However, be aware that not all of the economic interests which may cause a conflict of interest are listed on the Form 700. A good example is your home; it is common for a personal residence to be the economic interest that triggers a conflict of interest despite not being disclosed. Q a bigger conflict- of- interest risk for the public official who holds the interest. ➢ On the other hand, if the economic interest is not directly involved, the materiality standard is more lenient because the indirectly involved interest presents a lesser danger of a conflict of interest. ➢ There are different sets --of standards for the different types of economic interests. That is, there is one set of materiality standards for business entities, another set for real property interests, etc. ➢ The rules vary by the size and situation of the economic interest. For example, a moment's thought will tell you that a $20,000 impact resulting from a governmental decision may be crucial to a small business, but may be a drop in the bucket for a big corporation. Thus, the materiality standards distinguish between large and small businesses, between real property which is close or far from property which is the subject of the decision, etc. Does a Conflict of Interest Result? Step Six - T'he important question: is it substantially likely that the governmental decision will result in one or more of the materiality standards being met for one or more of your economic interests? As already mentioned in the introduction, the heart of the matter is deciding whether it is sufficiently likely that the outcome of the decision will have an important impact on your economic interests. What does "sufficiently likely" mean? Put another way, how "likely" is "likely enough ?" The Political Reform Act uses the words "reasonably foreseeable." The FPPC has interpreted these words to mean "substantially likely." The likelihood need not be a certainty, but it must be more than merely possible. That which must be substantially likely is a material financial effect on one of your economic interests. A concrete way to think about this is to ask yourself the following question: is it substantially likely that one of the materiality standards I identified in step five will be met as a result of the government decision? Step six calls for a factual judgment, not necessarily a legal one. You must look at your economic interest and how it fits into the entire factual picture surrounding the decision. 5 ➢ Understand the "big picture" of the rules. For example, know why the rules distinguish between directly and indirectly involved interests, and why the public generally exception exists. ➢ Realize the importance of the facts. Deciding whether you have a disqualifying conflict of interest depends just as much - -if not more- - on the facts of your particular situation as it does on "the law." ➢ Don't try to memorize a lot of rules. Once you understand the "big picture" you'll know how to look up and understand the particular rules you need to apply to any given case. ➢ Don't be afraid to ask for advice. It is available from your agency's legal counsel and from the FPPC. 02%01/01 Fair Political Practices Commission 428 J Street, Ste. 624, Sacramento, CA 95814 (866) ASK -FPPC (Tall -free) or 916. 322.5664 www.fppc.ca.gov fax -on-demand: 1.888.622.1151 For Loc Gov Offi �� r.-� w Pocket Guide to Conflict of Interest Laws For Local Government Officials Fall 1995 LE OF CONTENTS lntroductionlOverview 4 Political Reform Act Disqualification Requirement i Economic Disclosure 14 Gifts and Honoraria 16 Campaign Contributions Iy Contractual Conflict of Interests 22 Constitutional Prohibition on Free or Discounted Travel 25 Common Law Prohibitions 26 >. Incompatible Offices 7. Resources 29 3 Con0fo 01 Incerests Guide PURPOSE OF THIS BOOKLET "No man can serve two masters." This simple principle from the New Testament is the underlying tenet of the hundreds of code sections which have been enacted to define conflict of interests and regulate against them. This booklet is designed to alert you to the situations where you as a local official could face conflict of interest questions, so that you may seek advice from experts and avoid trouble. Conflict of interests can arise in many different ways. and often at the last minute. without warning. Trying to determine whether one has a conflict of interests in such circumstances can he very difficult. This guide is intended to assist you in making that determination. In using this guide, peep in mind that It is only a summary, not a treatise. It does not attempt to address all situations or problems. Specific questions should be directed to your agency's legal counsel. OVERVIEW OF LAWS DISCUSSED The following California laws governing conflict of interests will he discussed in more detail in subsequent pages. Political Reform Act. Enacted by the voters in 1974, the Political Reform Act (we will refer to it as the PRA) covers a variety of subject areas. However. this booklet discusses the four parts that are most significant to members of boards and commissions. Penalties for violation may include administrative or civil fines. injunctive relief, misdemeanor sanctions for willful violations, and in some instances may include disqualification from running for public office for four years. DisquaIifcation, The PR�1s primary provision prohibits public of icials from making. participating in making, or attempting to influence governmental. decisions in which they have reason to know they have a Imanciaf interest. The Act provides a five -pan test to determine if a conflict of interests exists. The Act also Provides exceptions See pages I '. C,milicr o! inion- srsk;urc Reporting Requirements. Elected officials and most appointed fficials must file economic interest statements. These state- ments: • are public records: • disclose certain assets and income of the official. ■ are generally #fled when: • taking office; • annually while in Office: and • upon leaving public office. Candidates for elected office also have detailed reporting equirements on campaign contributions and expenditures. Gifts and Honoraria. The PRA generally precludes public )fficials from receiving gifts from any one person aggregating nore than $280 per year and prohibits receipt of honoraria, !xcept to reimburse reasonable travel expenses, See pages 6 -17. Campaign Contributions. The law: • prohibits officials from soliciting, receiving or directing campaign contributions of more than $2id1 from persons who are parties to, or participants in. a license or permit proceeding during the pendency of the proceeding and for three months after the proceeding; • requires the official to disqualify himself or herself from such a proceeding if the official has received more than $2 50 in campaign contributions from a party within the prior 12 months: and • requires disclosure of such campaign contributions. These provisions do not apply to elected officials serving on :he board or council to which they were elected. but apply to hem when serving on other bodies, the most common one Being a Local ,-agency Formation Commission (LAFCO). See )ages 19.21. Contractual Conflict of Interests- Until the felony onviction of former Supenntendent of Public Instruction Bill Honig, Gowrnment Code Sutton 2090 was little known outside :he circles of public attorneys. This code section contains an rbsoiute prohibition on a public officer or employee entering into contract in which he!she has a financial interest. 0011 lint a/ IfIfOrPSiS GlOdr Unlike the PRA, even if a board or council member does not participate in the decision, a public agency may not enter a contract with one of its officials or an entity in which the official has a fznancial interest. Specific exceptions are contained in succeeding sections of the code to address situations in which the official's interest is small enough to permit the contract if the official does not participate in the decision, or so small that it does not create a conflict, Penalties are severe. The contract is void and unenforce- able with the official forfeiting anything he /she gained under the contract; and for willful violation, felony prosecution and a lifetime preclusion from holding public office. See pages 22-24. Finally. this booklet describes other conflict of interests. including: Free Transportation, The state Constitution prohibits a public officer from receiving free passes or discounts from a transportation company. The penalty: forfeiture of the public office. See page 25. Incompatible Offices. State law precludes a public officer from simultaneously holding two offices which are incompat- ible. For example, a court found that the offices of general manager of a county water district and county supervisor were incompatible, if the two are found Incompatible, the office held first is automatically vacated. See page 27, Other Prohibitions or Requirements. In addition to these specific statutory prohibitions, the common law may proscribe a conflict of interests. Loc'aI ordinances and charters may contain stricter prohibitions than state law. Additionalfv, laws applicable only to certain types of local entities, such as hospital districts, school districts and air quality management districts, may contain prohibitions or requirements applicable to only that one type of local public agency. �,rnl ?irt al Iairrrsu 61adc C LITICAL REFORM ACT Z DISQUALIFICATION REQUIREMENT Government Code Section 87100 The heart of the Political Reform Act (PRA) is Government ,ode Section 87100. It prohibits any public official from malting, iarticipating in malting, or attempting to influence a govern - nental decision if it is reasonably foreseeable that the dec'is'ion :ould have a material financial effect on the official, the ifl'icial's immediate family, or on specified economic interests of he official, if that financial effect is different from the effect on he general public. There are five basic questions that you as a public official seed to ask yourself in determining whether or not you have a onflict of interest with respect to a specific decision under the IRA. a Are you making, participating in making, or using your "official position" to influence a governmental decision: (see page 7) a Do you have an economic interest involved in the decision% (see page 8) a Is it reasonably foreseeable that the decision will affect your economic interest. {see page 9) a Will the effect of the decision on your economic interest be material- (see page 10) a Will the effect of the decision on your economic interest be different from the effect on the general public. (see page 12) If the answer to all of the above questions is yes. there you liavr a milict of interests and must disqualify yourself from making, rrucipating in making, or evrn injlumcing the decision. }nu shoulr ,rk further advice from your agency s legal counsef. Are you making, participating in making, or using your official position to influence a governmental decision: a Are you voting on a decision regarding ordinances. regulations or resolutions. contract awards. purchases oritlici of tnIer"Srs Cs ildr or leases; hiring, Firing or other personnel actions; permits, zoning variances or other land use issues; or any decision coming before you in your role as a public official: Remember that whether you vote for or against an issue, or for or against your economic interests. you are still making a governmental decision. Are you participating in the making of a decision set forth in the prior paragraph by responding to com- ments, taking part in discussions or malting recom- mendations regarding any of the above topics or decisions' , .Are you in any way using your "official position" to influence the outcome of a governmental decision of your agency or an agency smith members appointed by, or which is subject to, the budgetary control of your agencyr You are using your official position to influence a governmental decision ii you contact, appear before, or otherwise attempt to influence. any member, officer, employee or consultant of the agency. if the answer to any of the above three questions is yes, you need to answer the question in part 7, below. If the answer to all of the questions is no, you probably do not have a coriflfct of interests. 2. Do you have an economic inheres[i will the decision Financially affect any of the following. • Your personal expenses, income, assets or liabilities, or those of your immediate family. • Business interests. Business entities are economic interests if you have an investment in the business worth `tS I.i)00 or more, or you are a director. officer. partner, trustee. employee, or hold any position of management in the business entity. A nonprofit organization is not a "business entity:` however. it may still be a source of income as discussed below. • Real properril. Real property is an economic interest if you have an interest in the property worth SI. €)t)(} Or more. Please note that mortgages. options to buy and leasehold interests are all considered to be interests .n real property. although moiuh -to -month tenancies are nor. wnJiirr ,,I 1n[rrrsts t;�rd. Income and gifts. Sources of $250 or more in income and donors of gifts aggregating $280 or more within the past 12 months are considered economic interests under the PRA. Both "income" and "gift" are broadly deCined to include virtually any payment received other than campaign contributions (and other expressiv enumerated exceptions), "Income" also includes your community property interest in the income of your spouse and a pro -rata share of any income to any business or trust in which you, your spouse or dependent children. own directly, indirectly or beneficially, a 10 percent interest or greater. Indirect interests. indirect interests are also considered economic interests under the PRA. Indirect interests are investments and real property owned by your spouse or dependent child. or by any business entity or trust in which you or your immediate family have a 10 percent interest or greater, Please note, an indirect interest includes investments and property owned by your spouse as separate property. If the answer to the above question is yes. you wed to ansiver the uestim in part 3. below. If tfje answer is no. you probably do not [ave a rang ict of interests. Will the decision foreseeably affect an economic interest identified in section 2, above: A conflict of interests may be present when there is a 'substantial likelihood" that there will be a foreseeable financial affect on your economic interests. Even during the preiimmary ,tapes of the decision- making process, you must consider vhether the end result of a decision is likely to have a foresee - ibie financial effect on your economic interests. i ��rtjiirt ��! Irrtr�rrsts f;ar3de If you answered yes to the question of whether there, is a substantial likelihood that your economic interests identif ere in pari 2 above will be financially affected, you :teed to answer the question in number 4 below If you answered no, you probably do not have a conflict of Interests. 4. Will the effect on you or your economic interests be material? Whether or not a financial effect is material will depend upon the types of economic interests involved. Ownership of real property ■ Will the decision affect the zoning, annexation, sale, lease, use of, or taxes or fees imposed on your real property, or a license, permit or other land use entitlement for the property% a Hoes the decision involve the inclusion of your propert, in (or exclusion from) any city, county district or other local governmental subdivision, or the designation of a survey or project area, adoption of a preliminary plan, certification of an environmental document. adoption of a redevelopment plan, or the addition of Ierritory to a redevelopment area in which you own any interest it real property within the boundaries or proposed boundaries of the affected areas a Will the decision result in new or substantially improved services for your property, n Does the decision concern real property: A decision concerns real property if it is: • within 3(}i) feet of your property and the decision will have some financial effect on vour property; • more than 3(x} feet from, but within 2.�E3li feet of Your property and the decision will affect the value of the property by $M.000 or more. or the rental value by `;i. {1! }t) or more per 1 2 -month period; or more than 2.500 feet from your property but there are specific circumstances regarding the decision that make it reasonably foreseeable that the value of the property will be affected by $ IO )M or more. or zhe ren[a] value by S l.ilclt} or more per i? month period 10 G)IT:I!rr of Irurrrsts Cumr Leasehold interests r Will the decision increase or decrease the amount of rent that is paid on the property by the greater of $250 or 5 percent during any 12 month period, or will it significantly affect the use or enjoyment of the property or its legally allowable use: income /assets r Will the decision affect the income, assets or liabilities of you, your spouse or dependent children by at least $? 50 (not including real property); Business interests • Was the proceeding initiated by a business in which you have an economic interest or is the business the subject of the proceeding: • Will the governmental decision otherwise have a material financial effect on a business in which you have an economic interest: Nonprofit entities ■ Was the proceeding initiated by a nonprofit entity in which you have an economic interest: r Will the governmental decision otherwise have a material financial effect on a nonprofit entity in which you have an economic interest: Individuals who are sources of income or gifts ■ Will the decision affect an individual wvho is a source of income or gifts by 5 i.(KM or more, or will it materially affect the individual's real property., � onPir'tof lntrrr5ts6vide 11 If you answered yes to any oj. the questions itr this part, the questions ill part 5 below need to be answered. If the arinver to all of the questions is rto, you probably do riot have a con /lict of interest. 5. Is the effect on your economic interests distinguish- able from the effect on the general public? ■ Will the material financial effect on you or your economic interests be different from the financiai effect on the general public: You do not have a conflict of interests if the effect of the decision on your economic interests is substantially the same as its effect on most other people in the jurisdiction. For examr)le. a decision to impose a city sales tax will affect you no differently than any other member of the general public, By contrast. if your agency is acquiring or improving land close to your business or property, the decision probably will affect you differently than it will affect the general public and therefore would potentially be considered a conflict of interests for you. If you answered yes to this questiori, you have a conflict of, interests acrd must disqualify yourself from the decision or issue. !f You arrswercd rro to this question, you do not have a conflict of interest and may participate in making the decision. VIOLATIONS OF THE POLITICAL REFORM ACT Violations of the PRA can result in severe penalties. These may include administrative penalties, civil penalties imposed by the Fair Political Practices Commission {FPPCI, or imposition of criminai ,sanctions. including foes or imprisonment. 1-2 Cowlirt i frrtrrrsts C;ut <ir ADVICE Your agency's legal counsel can give you valuable advice on the PRA and conflict of interests. Compliance with that advice is not, however, a guarantee against imposition of penalties by the FPPC. That type of immunity can only be achieved by seeking formal written advice from the FPPC and then comply- ing with the advice rendered. Compliance with the FPPC formal written advice is a complete defense in any enforcement action initiated by the FPPC, and evidence of good faith in any civil or - riminal proceeding. Please note that the FPPC is required to respond to requests for formal written advice within 21 working Says of the date that the FPPC has all the facts pertinent to the question. In addition, informal telephone advice is available from the 'taff of the FPPC. Compliance with such advice does not. 7owever, provide any immunity. .)n)lirt 0.1 Interests t;utdr 13 ECONOMIC DISCLOSURE MUST I DISCLOSE MY ECONOMIC INTERESTS: Under the PRA, certain public officials must disclose personal economic interests which may be affected by their decisions. This disclosure is made on forms called statements of economic interests which are filed on an annual basis. Copies o; these forms are generally provided to you by your agency, or may be obtained from the FPPC, These statements are public records. To determine whether you are required to Fife a statement of economic interests you must ask; yourself the following: • ■ Are you listed in your agency's conflict of interests coder If as part of your official duties, you participate in making decisions that may have a foreseeable effect on your personal economic interests, your position must be listed in your agency's conflict of interests code. Those persons holding positions listed in the conflict of interests code must file the 730 version of the statement of economic interests. r Do you fall into one of the following groups: member Of planning commissions, member of the board of supervisors. district attorneys, county counsels, county treasurers, chief administrative officers of counties. mayors, city- managers. city attorneys. city treasurers. chief administrative officers of cities. members of city councils, or other public officials who manage public investments: The persons holding these positions must fife the -21 version of the statement of economic interests. WHEN MUST I FILE: Statements of economic interest must he filed: ■ when you assume cif ice (i.e appointed): ■ annually thereafter, and E tilhen vnu feilve otrce. are sworn in or 14 Cowlirt of lriteresis C;imr State law or your agency's conflict of interests code will specify the date on which the annual statement must be fled. as well as a "grace period" for filing assuming and leaving office statements, (generally 30 days). WHICH INTERESTS MUST BE REPORTED? You must disclose any interests in real property, investments, sources of income and gifts which you could potentially affect in your public capacity. The previous section contains a general discussion of economic interests that may be useful in determin- ing which interests are reportable. Interests in real property which must be reported are those which are either: • within the jurisdiction of the agency: or • within two miles of the jurisdiction. You need to report sources of income and investments when the source or entity: ■ is doing business within the jurisdiction of your agency: ■ is planning to do business in the jurisdiction: or e has done business within the jurisdiction during the previous two years. W14 AT ELSE SHOULD I KNOW: Except for gifts (H•hich are addressed in the following section) you do not have to report the specific amount of your economic interests, Simply check the appropriate range listed on the form: less than $1 -000, greater than S 1.000. or greater than $ If1,( }€ O. The appropriate value range is determined by the gross amount receii,rd, rather titan the Ater. You may have reportable income even when you sell real or personal property at a foss. ��nflirt 01 15 You must report all interests in real property and investments held by your spouse and dependent children. If you oWn more than 10 percent of a business, you must disclose the sources of income to that business. You must also report any investments made by the business entity and any real property owned by the business entity. GIFTS AND HONORARIA GIFTS In addition to gift and honoraria restrictions imposed on state officials, the PRA now imposes limits on the value of gifts that may be accepted by: r local elected officers; s designated employees of local government agencies (i.e.. individuals required to file statements of economic interests under a local agency's conflict of interests code): ■ elected or appointed members of the governing board of any special district; and r candidates for any of these offices or positions. Such persons may not accept gifts from any singie source totaling more than 5280 in a calendar year. (The gift limit is adjusted every two years to reflect changes in the Consumer Price Index and will be readjusted in 1996.) The PRA broadly defines "gift" to include any payment or other benefit received by a public official (including meafs), unless the official provided consideration of equal or greater value in return. A gift includes a rebate or discount in the price of anything of value unless the rebate or discount is made in the regular course of business to members of the public without regard to your offcial status. 16 i tnafiicr of Inrerrsts Giade The PRA also provides a variety of exceptions to the gift limit. These exceptions include, for example: gifts from a spouse. child, parent, grandparent, grandchild, brother. sister, parent -in -law, brother -in- law, sister- in -iaw, aunt, uncle, niece, nephew, or first cousin or the spouse of any such person, unless he or she is acting as an agent or intermediary for another person who is the true source of the gift; gifts of hospitality involving food, drink or occasional lodging that is received in an individual's home when the individual or a member of his or her family is present; or gifts approximately equal in value exchanged on holidays, birthdays or similar occasions. HONORARIA in addition, local elected officials, designated emplovees of local government agencies, elected or appointed members of the governing board of any special district, and candidates for such offices are prohibited from accepting any honoraria, Honoraria are payments made in consideration for any speech given, article published. or attendance at any public or private conference, convention, meeting, social event, meal, or like gathering. The PRA also provides a variety of exceptions, including: a payment that is made directly to a bona fide charitable, educational, civic, religious. or similar tax - exempt. nonprofit organization. However, the donation may not be a condition for the speech. article or attendance and may not be claimed as a deduction far income tax purposes. in addition, the donation may not have a reasonably foreseeable financial effect on You or on any member of your immediate family, and You may not be identified to the nonprofit ors "arization in connection with the dtmaticn. C')11l71rr of Intrrrsts (, urlr 17 a income earned for personal services if the services are provided in connection with a bona fide business, trade, or profession —such as teaching, practicing law. medicine, insurance. real estate. banking, or building contracting —and the services are customarily provided in connection with the business. trade or profession. FPPC regulations define what is consid- ered to be a bona fide business. trade or profession. • This exception does not apple if the sole or predomi- nant activity of the business. trade or profession is making speeches. ■ Certain payments provided to an official at an event at which the official gives a speech, participates in a panel or seminar. or provides a similar service are exempt from the honoraria ban and are not consid- ered "gifts" by the PRA. These include free admission to the event, refreshments and similar non -cash nominal benefits received at the event, necessary lodging and subsistence provided directly in connec- tion Agth the speech, panel. serninar, or service, and transportation to the event (limited to within the state), CAUTION: This is a general discussion of the gift and honoraria provisions of the PRA. Please note: the PRA also contains special definitions appiicabie io these provisions and a variety of exemptions. ;Moreover. some payments exempt from the "gift" or "honoraria" provisions may still have to be reported by the recipient or may result in a conflict of interests. You should seek legal advice if either the gift limit or honoraria prohibition becomes an issue for you. The FPPC has prepared a fact sheet on gilts. honoraria and travel. For a copy. please call the FPPC at 191 hi 332-56h? 18 Conflict ,I Intrrrsrs Cu1d CAMPAIGN CONTRIBUTIONS (Government Code Section 84308) THE GENERAL RULE Certain "covered" local agency officials must disqualify themselves from participating in proceedings regarding licenses, permits and other entitlements for use if the official has received campaign contributions of more than $250 during the previous 12 months from any party or participant. In addition, these officials are prohibited from receiving soliciting or directing a contribution of more than $ 2 50 from any party or participant in a license, permit or entitlement proceeding white the proceeding is pending and for three months afterward. WHO IS COVERED BY THE RULE? Covered officials include local agency heads {such as a district manager) but do not include officials directly elected to the board of local agencies white acting in the scope of the office for which they were elected. However, elected officials are covered by the prohibitions of Gorernmcnt Code Section 84308 when they sit as members of other boards for which they were not elected such as joint power agencies, regional government entities or Local Agency Formation Commissions. These prohibitions are applicable only with respect to campaign contributions from persons who are financiaily interested in the outcome of the specified proceedings. Those interested persons include: parties to the proceeding, such as applicants for the permit, license or entitlement. and. a participant who is not a party but who actively supports or opposes a particular decision in a proceeding involving a license. permit or other entitlement for use. and who has a financial interest in the outcome of the decision. A person qualifies as a 'participant" if he or she attempts to influence the officers or employees of the agency with respect to the decision, or testifies in person before the agency with respect to the Secision. C onllict of lnterrsts Giudr 19 WHAT KINDS OF PROCEEDINGS ARE COVERED? The general rule applies to all proceedings involving a license, permit, or the entitlement for use. The statute defines these terms as including: ■ all business, professional. trade and land use licenses and permits: ■ all entitlements for land use: ■ all franchises: ■ all contracts. other than competitively bid, labor or personal employment contracts. Examples of entitlements for land use would include • conditional use permits, zoning variances, and tentative subdivision and parcel maps. Examples of covered contracts include consulting contracts, whether engineering, architec- tural or legal. WHAT ACTIONS MUST BE TAKEN? Disclosure, When someone files a permit, license or entitle- ment application, he or she must publicly report all covered officials to whom they made contributions of more than $ 2 50 during the previous 1' months. Likewise, a covered official must publicly disclose on the record of the proceeding any party or participant who has contributed more than $2 50 during the previous 12 months to that official. The disclosure must be made prior to the agency rendering any decision in the proceeding (without the members participation). Disqualification. If. prior to making a decision in the proceed- ing, a covered official knoitringly receives more than $250 in campaign contributions from a party during the previous 12 months, that official must disqualify himself or herself from participating in the proceeding. Likewise. with respect to contributions received from a participant. the covered official must disquaiifv himseif or herself it he or she has reason to know. prior to making a decision in the proceeding, that the participant is financiaily interested �n the outcome of the proceeding - A covered official may avoid disqualification if he or she 20 C'oWhrt of 1wrrrsts 6wdr turns the contribution, or that portion which is over $? 50, ithin 30 days from the time the official knows or has reason to iow of the contribution and the proceeding. Disqualification means that the official shall not participate making any decision in the proceeding, and shall not in any ay attempt to use his or her official position to influence the cision. Note that disqualification is required due to actual ceipt of campaign contributions. not simply solicitation of mpaign contributions if none are received. No Contributions During the Proceeding. While the. permit. sense or entitlement proceeding is pending and for three onths after the decision, covered officials are prohibited from liciting or receiving campaign contributions from either Irdes or participants whom they know or have reason to know e financially interested in the outcome. This prohibition eludes a prohibition against soliciting, receiving or directing ntributions on behalf of another person or on behalf of a mpaign committee. Likewise. all parties and participants are prohibited during is period of time from making contributions of more than `.50 to any officials involved in the proceedings. rrllrri of linrrest 6 urdr 21 Relationship of Government Section 1090 et seq. to the Political Reform Act Government Code Section I090 et seq. deals with public contracts in which a public official has a financial interest. These provisions are in addition to the restrictions of the Political Reform Act. All references in this summary of contractual conflict of interests are to the Government Code. The Basic Prohibition, Section 1090 Public officials shalt not have a financial interest in any contract made by them in their official capacity. or by any board of which they are a member. Making a contract. The making of a contract includes preliminary discussions, negotiations, planning and solicitation of bids. Application of Prohibition to Officers. A member of the governing board of a local agency (including a board of supervisors, board of directors, city council. school 'board.) is an "officer ", and is conciusiMy presumed to have made any contract executed by the board or council, or any person or agency under its jurisdiction, even if the board or council member disqualifies himself or herself from any participation in the contract. Financial bltrrrst. A "financial interest" includes a direct or indirect financial interest. A direct financial interest is present when the official is the party contracting with the agency. An indirect financial interest involves an official who has a Financial relationship vvith the contracting parr}' or will receive some benefit from the making of the contract with the contract- ing parry. 22 10141(f "VS ('"W& Effect of Violations / Potential Penalties Any contract made in violation of Section I U90 is void (Section 2090. The transaction will be undone and: ■ the public agency keeps the benefits it has received: ■ the officer who violated the law must give back to the agency any benefits received (that is, compensation), plus interest on any money. Por example. in 1985 the California Supreme Court decided that a city acquired land owned by a council member by a contract that violated Section I U90. The Supreme Court ordered the council member to surrender the land. and he had to return the city's money. The practical effect was that he made a gift of the land to the city, Also, if the officer willfully violates this lain, he or she is subject to a fine of not more than S 1,000 or state imprisonment (Sertion I097). The penalty also permanently disqualifies the officer from ever holding public office in the state. This is the section of law under which former Superintendent of Public Instruction Bill Honig was convicted. Exceptions to the Prohibition There are exceptions to the general prohibition where the officer has a financial interest but will still be ailowed to enter into the contract. Remotr Interrst Excrption. A local agency may enter into a contract where a board or council member has a "remote" interest. Section 1091 lists these remote interests. Several of the most common remote interest exceptions include: r that of an officer or empiovee of a nonprofit corporation: ■ that of an employee of the contracting party, if the contracting party has 10 or more employees and the employee commenced his or her empfovment at least three years prior to initially assuming office: and C ,)Fo7icl of Guidr, 23 ■ that of a supplier of goods or services, when those goods or services have been supplied to the contract- ing party by the officer for at least five years prior to assuming office. A remote interest exception applies to a board or council member if the officer's interest is one listed as remote in Section 1091, and the following steps are followed: the board or council member discloses the financial interest to the board or council, and disqualifies himself or herself from participating in all aspects of the decision; the disclosure is noted in the official records of the board or council: and the board or council. after such disclosure, approves, ratifies or authorizes the contract by a good faith vote of the remaining qualified members of the Board or council. Non - interest Exception. Some potential interests are so small that the Legislature has classified them as non - interests in a contract. One example is an officer of a board who receives public services provided by the officer's board on the same terms that the services are provided to the general public; for example a member of a water district board may receive water service. Sectim 1091.3 provides a full list of excep- tions. Limited Rule of 'Necessity. Even if there is not an exception from the prohibition. an official may still enter into a contract if the rule of necessity applies. In general. this ruse will permit an agency to acquire an essential supply or service. The rule also permits an officer to carry out essential duties of his or her office inhere he or she is the only one who may legally act. Be sure to consult with legal counsel when situations arise involving Section Io90 rt seq. 24 �,oll(bct of Iml.'ests Guide Article 12, Section 7 of the California Constitution arovides that: transportation company may not grant free passes or discounts to anyone holding an office in this State: and the acceptance of a pass or discount by a public officer ... shall work a forfeiture of that office ..." The prohibition applies to all personal or business travel, whether intrastate or interstate. The Attorney General has opined that where the holding of public office is not related to 'he free or discounted travel. the prohibition does riot apply, and where the public office is related, the prohibition applies. Examples: ■ The prohibition did riot apply where the elected official received a first -class airline upgrade because he was going on his honeymoon, and the upgrade was given to all honeymooners. a The prohibition dirt trot apply to an elected official who received free airline travel because he was the spouse of a flight attendant. ■ The prohibition did apply where an airline gave a first -class upgrade to 20 prominent local citizens, and one of those citizens was the mayor. Further, the mayor could not escape the prohibition by paying for the value of the upgrade when he learned of the prohibition. Corillic: of Inirrests Gmdr 25 COMIMON LVW PROHIBITIONS Although California statutes largely cover the scope of conflicts, court decisions remain on the books as well, The common law still requires a public officer to exercise his or her Powers with disinterested skill, zeal and diligence, primarily for the benefit of the public. The Attorney General has cautioned that where there is no conflict under statutory law, there may still be special situations where a conflict of interest violating the common law could still arise. Prudence is advised to avoid any situations where private interests might be enhanced through official actions. 26 �:owlier of Irirrrrsts Guide �"MPATIBLE OFFICES 6° On occasion, a person holding one public office is elected or appointed to another. In these cases, the doctrine of "incompat- ibility of office" may arise. If the public official is found to be holding two "incompatible" public "offices," the official automatically vacates the first one held. When a public official has a conflict between his or her )ublic duties and private financial interests, conflict of interest aws apply. However, when there is a potential clash between he public duties of two public offices the doctrine of incompat- bility of office comes into play. Incompatibility normally refers D the "public- public" situation where no personal conflict of nterest is involved. The courts have created the doctrine of incompatibility of iffice, which prevents an individual from occupying two public offices having overlapping or conflicting functions and duties. 'he court -made rule is supplemented, but not displaced by, onstitutionai and statutory provisions prohibiting certain ,,pes of dual office holding. his common law doctrine cf incompatibility applies if: ■ both positions are public positions: ■ the positions are incompatible: and ■ both are "offices," that is, neither is merely a public "employment." The holding of one office does not necessarily disqualify the .cumbent from holding another office at the same time if there no overlap or conflict in the functions of the two offices in iestion. But where the functions potentially overlap or inflict, they are incompatible. Office vs. Employmoit. The .Attorney General has defined the rM "office" for purposes of this doctrine as ".A position in government: r Which is created or authorized by the Constitution or some lain: ■ the tenure of which is continuing and permanent. not occasional or temporarl: Ml ?ict of interrstsGu�dr 27 a in which the incumbent performs a public function for the public benefit and exercises some of the sovereign powers of the State." By contrast, employment depends primarily upon contract or civil service law. Some examples of positions the Attorney General has ruled to be "employment ": ■ school teacher: ■ legal counsel to a legislative interim committee; ■ manager of a district agricultural association; a engineer for a community services district; a civil service position of Assistant Superintendent of Public Instruction: ■ membership on committee of bar examiners, ■ membership on city personnel board. An individual is prohibited from being sworn into office as an elected or appointed member of a local agency's governing board if he or she is an employee of the local agency. if the employee does not resign, the employment automatically terminates upon being sworn into office. Individuals who are both an employee and an elected or appointed member of a local agency's governing board prior to January 1, 1996 must comply with these provisions upon re- election or reappoint- ment on or after January 1. 1996. County employees and volunteer firefighters are exempt from these provisions. The law regarding school district and community college district employees' governing board membership remains unchanged. Test of Incompatibility. The Attorney General has articulated the test with the following two questions: "Do the duties and responsibilities of the offices so conflict that the public interest will be harmed when both offices are held by the same person; Is it against public policy for the same individual to hoid both offices'-" Some examples of offices found incompatible are: a one office is subordinate to the other and subject in some degree to the supervisory power of the other; a the incumbent of one office has the power to remove the incumbent of the other; or a one has the power w audit the accounts of the other. 28 Con_fIicr of interests Gu. IFSC This guide is intended as a basic reference document to alert you to situations where you may face a problem with the various conflict of interest laws. Listed below are other publications and sources of information available to you for more detailed advice. 1. Legal counsel to your local public agency 2. Fair Political Practices Commission 438 ) Street, Suite 800 Sacramento, CA 95814 r The Commission has numerous publications on various aspects of the law, which are periodically updated. For advice concerning disclosure of economic interests, call (916) 322 -5661 For advice concerning the disqualification requirement, call (916) 322 - 5901. 3. California Attorney General's Office Public Inquiry Unit P.O. Box 944255 Sacramento, CA 94244 -3550 (800) 952 -5775 ■ The Attorney General has published and periodically updates a pamphlet titled "Conflict of Interests." Individual copies may be ordered free of charge. 4. California State Legislature Senate Local Government Committee ■ The Committee published a booklet in 1992 titled ,.YOUR GUME TO CONFLICT OF INTERESTS LAW: How We Govern Our Public Officials." It focuses on 'he Political Reform Act. It may be purchased for $4.30 per copy, plus current California sales tax. from: Senate Publications 1100 j Street, 13 -15 Sacramento. CA 9 58 14 When ordering, request Senate Publication Number 532 -S. and make checks payable to the Senate Rules Committee. tonl7ict of Interests Ginde 29 The following associations contributed to the creation of this publication Association of California Water Agencies Association of California Hospital Districts California Association of Sanitation Agencies California School Boards Association California Special Districts Association California State Association of Counties Community College League of California League of California Cities Special thanks to: John Wallace. Fair Political Practices Commission Ted Prim, office of the Attornev General Kronick, iMosl ovitz. Tiedeman & Girard Tim Stephenson. CSBA graphic design ®mPa +G mqUH _l@dm®Kjol ea al nmJ ; @ m»a -> ƒ/22` CL ! »3 l ;i ;ee« \I\ /� §(¢) �&f X. IBS fI/ (E\ �!- ($\ k \) GiE _ l2II epuado p.mne »2.100!3a Aw -n ©t oe- �g \Q�g227 ! ;«¢§_ ) \\JoE\ »!., ■! §)! §$a`»! -2 `a 7§!% 2& ;! _ \i }(( `�7k2` I- i -ll 7) \7) i§ k�� ( \ a o31 k /\ \� e \(�\ l2II epuado p.mne »2.100!3a Aw -n ©t ( \/ ki((\ } §( \ {k(} �k \(\ l2II epuado p.mne »2.100!3a Aw -n ©t BROWN .ACT TAKE -HOME QUU Uague of California Cities City Attorneys' Conference Squaw Valley May 20, 1999 If you enjoyed today's session on the Brown Act, test your knowledge of the Act by taking the following quiz. Suggested answers are on the back of the page. 1. The city council agenda always includes a "City Manager's Report," during which time the manager provides a brief report on notable topics of interest, none of which are listed on the agenda. Is this permissible? 2. A newspaper reporter calls all five councilmembers to ask how they intend to vote on a controversial project agendized for the next council meeting. Three councilmembers indicate how they intend to vote. The article is published during the weekend before the council meeting. All five councilmembers read the article. Has the Brown Act been violated ?, 3. The city's web -site includes a chat room where city employees and officials participate anonymously and often discuss issues of city business. Councilrnembers participate regularly. Does this scenario present a potential for violation of the Act? 4. A councilmember contacts two other councilmembers on a five member council relative to scheduling a special meeting. Is this an illegal seriatim meeting? S. As part of his recruitment of a new community development director, the city manager assembles a committee of local developers and community activists to comment on the qualifications of the applicants. Is this body subject to the Brown Act? 6. The local chamber of commerce sponsors a candidate debate during aj council election campaign. Three of the five councilmembers are up for re- election and all three participate. All of the candidates ar asked their views of a controversial project scheduled for a council agenda just aft election. May the three incumbents answer the question? 7. A,city councilmember. establishes an advisory committee of five residents to advise her on issues as they arise. Is this committee covered by the Act? �)? S 18 999IN-99999 sas o566'z7 1 r t) k�7, 8. Must the city council allow members of the public to.. snow videos. during the "audience participation" part of the agenda, as long as the subject matter is relevant to the city and is within the established time limit? 9, The entire city council intends to travel to Sacramento to testify against ' a bill before the Senate Local Government Committee. Must this activity be noticed as a council meeting? 10. The councilmembers in-question #9 then proceed upstairs to the office of their local assemblyperson to discuss issues of local interest. Must this session be noticed as a meeting and be open to the public? ion desires to participate in a council 11. A counciimember on vacat meeting and vote by cellular phone from her car while driving from Washington, D.C. to New York. May she? f �` d 6 _ _ 7 99()519 99999 -9`r�4N sas 0566271 ?!) `