HomeMy WebLinkAbout1C OCRCITY COUNCIL STAFF REPORT
DATE: December 10, 2020 CONSENT CALENDAR
SUBJECT: RESOLUTION TO ADOPT THE CITY OF PALM SPRINGS CONFLICT OF
INTEREST CODE PURSUANT TO THE POLITICAL REFORM ACT
FROM: David H. Ready, City Manager
BY: Anthony J. Mejia, City Clerk
John Paul Maier, Chief Deputy City Clerk
SUMMARY
The City Council will consider a Resolution adopting a Conflict of Interest Code,
incorporating disclosure categories and designated positions.
RECOMMENDATION:
Adopt a Resolution, entitled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF PALM SPRINGS, CALIFORNIA, ADOPTING THE CONFLICT OF INTEREST
CODE AND REPEALING RESOLUTION NO. 24527."
STAFF ANALYSIS:
Under the Political Reform Act (PRA), Government Code Section 81000 et seq., all
public agencies must adopt a Conflict of Interest Code. The Code must designate
employees and public officials that are most likely to be involved in government
decision-making to file an annual Statement of Economic Interest, Form 700. The
purpose of this form is to notify the employee or public official and the public of potential
conflicts of interest and situations where disqualification is mandated.
The PRA requires local agencies to review its Code biennially each even-numbered
year and adopt any amendments by December 30. On June 11, 2020, the City Council
adopted Resolution No. 24763, directing staff to review the City's Code. Staff reviewed
the existing Code and noted areas requiring amendments due to changes in the City
organization and subsequently filed the 2020 Local Agency Biennial Notice directing
staff to promulgate the necessary amendments.
ITeM NO. 1 .C.
2City Council Staff Report December 10, 2020 -Page 2 Conflict of Interest Code Terms of the Code The Fair Political Practices Commission (FPPC) advises that agencies must incorporate Section 18730 of the California Code of Regulations by reference, along with appendices providing disclosure categories and listing of designated positions, to constitute the formation and promulgation of a Code. The incorporation of Regulation §18730 provides the legal basis for the Code to be a document with force and effect. Disclosure Categories The FPPC has provided advice related to the development of disclosure categories and the need for "striking an appropriate balance between heading off potential conflicts of interest and an individual's right to privacy." The FPPC notes that the most common problem in local codes is the requirement that employees disclose financial interests that are not related to their duties and area of authority. City staff recommends adopting new disclosure categories that narrowly tailor the categories toward an employee's duties and authority area. Designated Positions City staff has completed its review of the current list of designated positions, and a summary of positions to be added, removed, or have substitute titles is identified in Attachment 1. Members of the City Council, Planning Commission, City Manager, City Attorney and Finance Director/Treasurer are not designated employees under this Code because they are statutorily required to file a Form 700 under Government Code Section 87200. The FPPC states that a Code should enumerate positions that "make a government decision," such as voting on a matter, or obligates or commits the agency to any course of action, or enters into contractual agreements which may foreseeably have a material effect on any financial interest. It further defines that employees "participate in governmental decisions" when acting within the authority of his or her position and without significant substantive or intervening review, the official negotiates, advises, or makes recommendations to the decision-maker regarding the governmental decision. The FPPC advises that local Codes are appropriate when agencies narrowly tailor the list of their designated positions. City staff has examined the organizational chart and job descriptions and recommends removing certain positions because they are subject to substantive or intervening review related to permits, contracts, and purchasing or are clerical and ministerial positions. Any actions taken by these positions are in the law's obedience, and any discretionary decisions are reviewed by or made entirely by a higher authority position or the City Council. Whether a position is designated, all employees are mandated to disqualify themselves from participation in a decision; when acting in the position's authority, there would be a financial interest.
3City Council Staff Report December 10, 2020 -Page 3 Conflict of Interest Code FISCAL IMPACT: There is no fiscal impact associated with adopting the Code. There is a substantial amount of staff time associated with collecting, reviewing, logging, and retaining statements and responding to requests for inspection or duplication of said statements. ~~~ David H. Ready, ~ City Manager Attachments: 1. Summary of Additions, Deletions, and Title Substitutions 2. Proposed Resolution 3. Resolution No. 24527 (Current Code) 4. FPPC Advice on Designating Positions and Disclosure Categories
4ATTACHMENT 1
5Position Title Substitutions Current Position Title Revised Position Title Economic Development/Downtown Administrator Central Business District Administrator Director of Planning Services Director of Development Services Director of Building and Safety Building Official Director of EngineerinQ City EnQineer Vacation Rental Compliance Official Director of Special ProQram Compliance Maintenance Supervisor Maintenance Supervisor (Airport, Downtown, Facilities, Parks) Positions Recommended for Addition Administration Deputy City Manager Aviation Department Deputy Director of Aviation Airport Operations Manager Airport Security Coordinator Information Technology Department Assistant Director of Information Technology Maintenance and Facilities Department Assistant Director of Maintenance & Facilities Planning Services Assistant Director of Planning Police Department Code Compliance Supervisor Position Recommended for Removal Community and Economic Development Administrative Coordinator (formerly Public Arts Coordinator) Maintenance and Facilities Department Fleet Maintenance Parts Specialist Parts & Office Assistant (formerly Fleet Maintenance Parts Specialist II) Development Services Department Permit Center Technician Police Department Code Compliance Officer Position Deleted from the Allocated Positions List Police Department Senior Code Compliance Officer Special Program Compliance Officer
6ATTACHMENT 2
7RESOLUTION NO. --A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADOPTING THE CITY'S CONFLICT OF INTEREST CODE AND REPEALING RESOLUTION NO. 24527 WHEREAS, the Political Reform Act (Government Code Section 81000 et seq.) requires local government agencies to promulgate and adopt a Conflict of Interest Code; and WHEREAS, on December 18, 2018, the City Council adopted Resolution No. 24527, adopting a Conflict of Interest Code for the City of Palm Springs; and WHEREAS, the Political Reform Act requires that the City Council review its Conflict of Interest Code biennially to determine whether amendments are required; and WHEREAS, on June 11, 2020, the City Council adopted Resolution No. 24763 directing staff to review the City's Conflict of Interest Code; and WHEREAS, a staff-level review of the City's Disclosure Categories and the List of Designated Positions reveals that amendments are necessary; and WHEREAS, on September 10, 2020, the City Council received and filed the 2020 Local Agency Biennial Notice and directed staff to promulgate the necessary amendments to the City's Conflict of Interest Code. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Resolution No. 24527 is hereby rescinded and replaced. SECTION 2. The City Council adopts the Conflict of Interest Code promulgated by the Fair Political Practices Commission as set forth in Section 18730 of the California Code of Regulations by reference, and which, together with the City's Disclosure Categories and List of Designated Positions collectively constitutes the City of Palm Springs' Conflict of Interest Code, a copy of which is attached hereto and shall be on file with the City Clerk, and available to the public for inspection and copying, during regular business hours. SECTION 3. The amended Conflict of Interest Code shall become effective 30 days upon the date of its adoption and approval.
8Resolution No. Page2 PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS DAY OF ___ , 2020. ATTEST: Anthony J. Mejia, MMC City Clerk David H. Ready, Esq., Ph.D. City Manager I, ANTHONY J. MEJIA, City Clerk of the City of Palm Springs, hereby certify that Resolution No. ___ is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on ____ , 2020, by the following vote: AYES: NOES: ABSENT: ABSTAIN: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this __ day of _______ _ Anthony J. Mejia, MMC City Clerk
9Resolution No. Page 3 CONFLICT OF INTEREST CODE OF THE CITY OF PALM SPRINGS, CALIFORNIA The Political Reform Act (Government Code§ 81000, et seq.) requires state and local government agencies to adopt and promulgate Conflict of Interest Codes. The Fair Political Practices Commission has adopted a regulation (2 California Code of Regulations Section 18730) that contains the terms of a standard Conflict of Interest Code, which can be incorporated by reference in an agency's Code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This incorporation page, regulation 18730, and the attached Appendix designating positions and establishing disclosure categories, shall constitute the Conflict of Interest Code of the City of Palm Springs (City). The Mayor, Members of the City Council and Planning Commission, the City Manager, the City Attorney and the City Treasurer, may electronically file their annual statements of economic interests directly with the Fair Political Practices Commission. All other officials and designated positions required to submit a statement of economic interests shall file their statements with the City Clerk as the City's Filing Officer. The City Clerk shall retain the original statements filed by all other officials and designated positions and will make all retained statements available for public inspection and reproduction during regular business hours. (Gov. Code § 81008.) Editor's Note: The Palm Springs City Council adopted additional disclosure requirements for elected and appointed officials related to service on non-profit Boards and rental/leased real property. Please see Palm Springs Municipal Code Chapter 2. 60.
10Resolution No. Page4 APPENDIX [The Appendix is the attachment to the incorporation page and is separated into two parts -Part A and Part B] PART A DISCLOSURE CATEGORIES The disclosure categories listed below identify the types of economic interests that the designated position must disclose for each disclosure category to which he or she is assigned. CATEGORY 1: Real Property Interests All interests in real property which is located in whole or in part within, or not more than two (2) miles outside, the jurisdiction of the CITY, including any leasehold, beneficial or ownership interest or option to acquire property. CATEGORY 2: Investments/Sources of Income All investments 1 and business positions in business entities, and sources of income, including gifts2, loans and travel payments, within the jurisdiction of the CITY. CATEGORY 3: Contracting/Procurement All investments 1 and business positions in business entities, and sources of income, including gifts2, loans and travel payments, that provide services, products, materials, machinery, vehicles or equipment of a type purchased or leased by the designated position's department, unit or division. CATEGORY 4: Regulatory/Permits/Licensing Authority All investments 1 and business positions in business entities, and sources of income, including gifts2, loans and travel payments, subject to the regulatory, permit, or licensing authority of the designated position's department, unit or division. CATEGORY 5: Land Development/Construction/Acquisition All investments1 and business positions in business entities, and sources of income, including gifts2, loans and travel payments, that are engaged in land development, construction or the acquisition or sale of real property within the jurisdiction of the CITY. CATEGORY 6: Grants/Service Providers All investments1 and business positions in business entities, and sources of income, including gifts2, loans and travel payments, or income from a nonprofit or other organization, if the source is of the type to receive grants or other monies from or through the CITY. "Investment" means financial interest in any business entity (including a consulting business or other independent contracting business) and are reportable if they are either located in or doing business, are planning to do business, or have done business during the previous two years in the jurisdiction of the CITY. 2. This Conflict of Interest Code does not require the reporting of gifts from outside this City's jurisdiction if the source does not have some connection with or bearing upon the functions or duties of the position. (Reg. 18730.1)
11Resolution No. Page 5 PARTB DESIGNATED POSITIONS Members of the City Council and Planning Commission, the City Manager, the City Attorney, the City Treasurer, and all other City Officials who manage public investments as defined by 2 California Code of Regulations § 18700.3(b), are NOT subject to the City's Code but must file disclosure statements under Government Code section 87200 et seq. [Regs. § 18730(b)(3)] DESIGNATED POSITIONS DISCLOSURE CATEGORIES Members of Boards & Commissions Administrative Appeals Board 1, 4 Airport Commission 1, 2 Architectural Advisory Committee 1, 4, 5 Historic Site Preservation Board 1, 4, 5 Human Rights Commission 6 Librarv Trustees, Board of 3,6 Measure "J" Oversight Commission 1, 2 Parks and Recreation Commission 1, 3, 5 Public Arts Commission 3,4,6 Rent Review Commission 1, 4, 5 Small Hotel Tourism BID Advisory Board, Palm Springs 1, 3 Sustainability Commission 3,6 VillaoeFest Board 3,4,6 Administration Assistant City Attorney 1, 2 Assistant City ManaQer 1, 2 City Clerk 3,4 Deputy City Manager 1, 2 Director of Communications 3 Director of Human Resources 3 Office of Neighborhoods Manager 3, 6 Aviation Department Airport Administration ManaQer 3 Airport Operations Manager 3 Airport Security Coordinator 3 Assistant Airport Director 1, 2 Deputy Director of Aviation 1, 2 Executive Director of Palm Springs International Airport 1, 2 Community & Economic Development Department Central Business District Administrator 1, 3, 4, 5 Community Development Administrator 3,4,6 Director of Community and Economic Development 1, 2 Redevelopment Coordinator 1, 3, 4, 5
12Resolution No. Page6 DESIGNATED POSITIONS Development Services Department Director of Development Services • Planning Services Assistant Director of Planning Associate Planner Principal Planner Plans Examiner • Building & Safety Building Inspector Supervisor Building Inspector Buildino Official • Engineering Services Associate Civil Engineer City Engineer Enoineering Associate Senior Civil Engineer Senior Public Works Inspector • Office of Sustainability Sustainability Manager Finance & Treasury Department Assistant Finance Director Accounting Manager Fire Department Fire Battalion Chief Fire Chief Fire Deputy Chief Information Technoloav Department Assistant Director of Information Technoloov Information Technoloov Director Information Technology Manager Library Services Department Director of Librarv Services Maintenance & Facilities Department Assistant Director of Maintenance and Facilities Director of Maintenance and Facilities Fleet Maintenance Manager Maintenance Supervisor Street Maintenance Superintendent Parks & Recreation Department Director of Parks and Recreation Police Department Police Chief Police Captain Police Lieutenant Code Compliance Supervisor Procurement & Contracting Division Procurement and Contracting Manager Procurement Specialist DISCLOSURE CATEGORIES 1, 2 1, 2 1, 4, 5 1, 4, 5 1, 4, 5 1, 4, 5 1, 4, 5 1, 3, 4, 5 1, 3,4, 5 1, 3, 4, 5 1, 3, 4, 5 1, 3, 4, 5 1, 4, 5 3,4, 6 2 2 3,4 3,4, 5 3,4, 5 3 3 3 3,6 3,4, 5 3,4, 5 3 3 3,4, 5 3 3,4 3,4 3,4 3,4,5 3 3
13Resolution No. Page 7 DESIGNATED POSITIONS s liance DISCLOSURE CATEGORIES 1, 2 1, 3,4,5
14ATTACHMENT 3
15--------·--.... RESOLUTION NO. 24527 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADOPTING THE CITY'S CONFLICT OF INTEREST CODE WHEREAS, the Political Reform Act (Government Code Section 81000 et seq.) requires local government agencies to promulgate and adopt conflict of interest codes; and WHEREAS, on December 15, 2010, the City Council adopted Resolution No. 22841 adopting a Conflict of Interest Code for the City of Palm Springs, which was amended in 2012 by Resolution No. 23280; in 2014 by Resolution No. 23732; and in 2016 by Resolution No. 24144; and WHEREAS, on June 6, 2018, the City Council adopted Resolution No. 24427 directing staff to review the City's Conflict of Interest Code; and WHEREAS, in September 2018 the City Council received the 2018 Local Agency Biennial Notice, and directed staff to promulgate the necessary amendments to the City's Conflict of Interest Code. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council does hereby adopt the Conflict of Interest Code, a copy of which is attached hereto. SECTION 2. Resolution Nos. 22841, 23280, 23732, and 24144 are hereby rescinded and replaced. SECTION 3. Nothing in this Resolution supersedes the independent applicability of Government Code Section 87200. PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 19th DAY OF DECEMBER, 2018. ~ __;;);?_.?--~ David H. Ready, EsQ:-,-P; City Manager
16Resolution No. 24527 Page2 -. -----------CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS) I, ANTHONY J. MEJIA, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 24527 is a full. true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on the 19th day of December, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Councilmembers Holstege, Middleton, Roberts, Mayor Pro Tern Kors, and Mayor Moon None None None IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this 3 1 ..... day of :;:D:i => j , 2.Pl c, J ~~ tr~ 2) J hony J.jAajia, ........ --~ City Clerk
17Resolution No. 24527 Page3 CONFLICT OF INTEREST CODE OF THE CITY OF PALM SPRINGS, CALIFORNIA (Adopted December 19, 2018) The Political Reform Act (Government Code§ 81000, et seq.) requires state and local government agencies to adopt and promulgate Conflict of Interest Codes. The Fair Political Practices Commission has adopted regulation (2 California Code of Regulations Section 18730), which contains the terms of a standard Conflict of Interest Code, which can be incorporated by reference in an agency's code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation and the attached Appendices, designating positions and establishing disclosure categories, shall constitute the Conflict of Interest Code of the City of Palm Springs. Individuals holding designated positions shall file their statements of economic interests with the City Clerk who will make the statements available for public inspection and reproduction (Government Code§ 81008) during regular business hours, at 3200 E Tahquitz Canyon Way, Palm Springs, California 92262. The City's Code does not establish any disclosure obligation for Members of the City Council and Planning Commission, City Treasurer, City Manager, and City Attorney, as Government Code Section 87200 et seq., requires disclosure for those positions as a matter of state law. An official who holds a position specified in Government Code SecUon 87200 is not required to file statements under this Code for any agency that has the same or a smaller jurisdiction. Editor's Note: The Palm Springs City Council adopted additional disclosure requirements for elected and appointed officials related to service on non-profit Boards and rental/leased real property. Please see Palm Springs Municipal Code Chapter 2.60.
18Resolution No. 24527 Page4 CONFLICT OF INTEREST CODE CITY OF PALM SPRINGS, CALIFORNIA APPENDIX A DISCLOSURE CATEGORIES (Adopted December 19, 2018) All designated officials, employees and consultants shall be required to file under all of the following categories of reportable economic interests: Category A Investments (Form 700 Schedules A-1 and A-2) All reportable investments of $2,000 or more, for business entities which are located in, doing business in, planning to do business in, or which has done business during the previous two years in the City of Palm Springs. Category B Real Property (Form 700 Schedule B) All reportable interests in real property of $2,000 or more, located in the City of Palm Springs, or within two miles of the City of Palm Springs; excluding a personal residence as long as the residence is used exclusively as a personal residence. Category C Income, Loans, Business Positions (Form 700 Schedule C) All reportable income, loans and business positions, of $500 or more, if the source is located in, doing business in, planning to do business In, or has done business during the previous two years in the City of Palm Springs. Category D Gifts (Form 700 Schedule D) All reportable gifts fair market value of $50 or more, or multiple gifts totaling $50 or more received during the reporting period. Category E Travel Payments (Form 700 Schedule E) All reportable travel payments including advances and reimbursements for travel and related expenses, including lodging and meals.
19Resolution No. 24527 Pages CONFLICT OF INTEREST CODE CITY OF PALM SPRINGS, CALIFORNIA APPENDIX B DESIGNATED POSITIONS (Adopted December 19, 2018) Designated Positions BOARDS AND COMMISSIONS Airport Commissioner Architectural Advisory Committee Member D. • •----· r•~-~-=~ 11...J •. !----D---...1 a• . -------. -·r-------·-•• -·------· ------J -----Board of Appeals Member Historic Site Preservation Board Member Human Rights Commissioner Library Board Member Measure ••J" Oversight Commissioner Palm Sprinas Small Hotel Tourism BID Advisory Board Parks and Recreation Commissioner Personnel Board Member Public Arts Commissioner Rent Review Commissioner Sustainability Commissioner VillageFest Board Member ADMINISTRATION City Clerk Assistant City Manaaer Director of Human Resources Assistant City Attorney Vacation Rental Compliance Official Director of Communications Office of Neiahborhoods Manaaer Information Technoloov Director Information Technology Manager Office of Sustainabilitv, Manaaer Procurement and Contracting Manager Procurement Specialist II Procurement Specialist I AVIATION DEPARTMENT Executive Director of Palm Springs International Airport Assistant Airport Director Deputy Director of Aviation A ___ ._&" _AJrport Administration Manager . ,. ____ Maintenance Supervisor BUILDING AND SAFETY Director of Building and Safety Building & Safety Supervisor Disclosure Cateaories ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL
20Resolution No. 24527 Page6 Permit Center Technician Plans Examiner I Plans Examiner II Building Inspector ··-··· ... ··-···-··-----COMMUNITY AND ECONOMIC DEVELOPMENT Director of Community and Economic Development Community Development Administrator Economic Development/Downtown Administrator Public Art Coordinator Redevelopment Coordinator FINANCE DEPARTMENT Assistant Director of Finance Deputy City Treasurer FIRE DEPARTMENT Fire Chief Fire Deputy Chief Fire Battalion Chief LIBRARY Director of Library Services MAINTENANCE AND FACILmES Director of Maintenance and Facilities Fleet Manager Street Maintenance Superintendent Downtown Maintenance Supervisor Facilities Maintenance Supervisor Parks Maintenance Supervisor Fleet Maintenance Parts Specialist Fleet Maintenance Parts Soeclallst II PARKS AND RECREATION Director of Parks and Recreation PLANNING SERVICES Director of Planning Services Principal Planner Associate Planner POLICE DEPARTMENT Police Chief Police Captain Police Lieutenant Senior Code Compliance Officer Code Compliance Officer PUBLIC WORKS AND ENGINEERING Director of Engineerina Senior Civil Engineer Associate Civil Engineer Engineering Associate Senior Public Works lnsoector Public Works Inspectors CONSULTANTS ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL All ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL ALL
21Resolution No. 24527 Page7 The Code Administrator shaH determine, in writing, those consultants who shall file a Statement of Economic Interest, because they either make governmental decisions or seave In a staff capacity pursuant to the Political Reform Act. ALL
22ATTACHMENT 4
23California Fair Political Practices Commission Conflict-of-Interest Codes -Disclosure Categories Financial Disclosure Must Relate to Governmental Duties Introduction The FPPC is frequently asked why an agency cannot require its employees to disclose on a Form 700, Statement of Economic Interests, all of the employee's investments, real property, income, and gifts. The following discussion outlines the legal cases and statutory requirements that require, whenever possible, the agency to tailor disclosure categories to the governmental decision making performed by the agency official. Discussion One of the most common problems in agency conflict-of-interest codes is the requirement that employees disclose financial interests that are not related to the employee's governmental position. Case law going back to before the Political Reform Act ("Act") was adopted makes it clear that financial disclosure laws must meet certain constitutional standards, and over breath must be avoided. (See City of Carmel-by-the Sea v. Young (1970), 2 Cal.3d 259; County of Nevada v. MacMillan (1974), 11 Cal. 3d 662.) In the Carmel case, the California Supreme Court considered a financial disclosure law that generally required every public official and candidate for state or local office file a statement disclosing the nature and extent of his or her investments in excess of $10,000 (excluding homes used for personal or recreational purposes) as well as those of his or her spouse and minor children. The court held that the attempted regulation undertook an overbroad intrusion into the right of privacy and thereby invalidly restricted the right to seek or hold public office or employment. Four years later, in County of Nevada (supra) the same court addressed a new financial disclosure law and found that it had been "specially tailored to meet and satisfy the primary concerns of our Carmel ruling." The court explained that its "major objection" to the provisions considered in the Carmel case was that "No effort is made to relate the disclosure to financial dealings or assets which might be expected to give rise to a conflict of interest; that is, to those having some rational connection with or bearing upon, or which might be affected by, the functions or jurisdiction of any particular agency, whether statewide or local, or on the functions or jurisdiction of any particular public officer or employee." (County of Nevada, supra, p. 671.) In 1976, the Commission was asked to consider two questions with respect to the Act's conflict-of-interest disclosure provisions: (1) does the Act permit the designation of positions that do not entail the making or participation in the making of governmental decisions; and (2) does the Act permit a code reviewing body to approve a conflict-of-interest code that contains provisions requiring disclosure of financial interests that may not foreseeably be affected www.fppc.ca.gov 1.866.275.3772 or 916.322.5660 FPPC TAD • 039-06.2012 • Page 1 of 2
24California Fair Political Practices Commission Conflict-of-Interest Codes -Disclosure Categories Financial Disclosure Must Relate to Governmental Duties materially by decisions made or participated in by designated employees? (Alperin Opinion, 3 FPPC Ops, 77.) The Commission concluded that not only does the Act not permit such activities but Section 87309(c) specifically prohibits a code reviewing body from approving a conflict-of-interest code that designates positions that do not entail the making or participation in the making of governmental decisions or that requires disclosure of financial interests that may not foreseeably be affected materially by the decisions made or participated in by employees holding any designated position. "The responsibility for determining if a code meets these specifications rests with the ,,code reviewing body.'" (Alperin, supra, p.2.) The Commission went on to consider what this obligation entails, and, under Section 87309(c), what a conflict-of-interest code must contain before it may be approved by a code reviewing body. "This provision is intended to ensure, first, that a conflict-of-interest code requires financial disclosure only from employees required to be designated by Section 87302(a) [the position engages in governmental decisionmaking] and, second, that a code relate disclosure to the specific duties of such designated employees. Thus, a code reviewing body would fail to fulfill its obligation under Section 87309(c) if it allowed designation of positions in a code which, to quote the language of Section 87309(c), do not entail the ,making or participation in the making' d governmental decisions. It would be equally improper for a code reviewing body to require disclosure of interests which may not foreseeably be affected materially by decisions made or participated in by designated employees." (Alperin, supra, pp. 3-4.) Summary It is important to note that an express purpose of the Act is to ensure that the assets and income of public officials be disclosed so that conflicts of interests may be avoided. However, as discussed in the foregoing paragraphs, only those assets and income that can be affected by the officials' actions are required to be reported on a public form. A form that, in many cases, is posted on an agency's website. Thus the challenge is to ensure the proper level of disclosure that strikes an appropriate balance between heading off potential conflicts of interest and an individual's right to privacy. This can only be done if the agency and code reviewing body take a careful look at the agency's governmental programs and functions as well as the specific duties of those positions being designated in the code. It is only for those positions, generally the highest level positions in an agency because the duties of the position are so broad, that narrow tailoring is simply not possible, that an agency may require full reporting of assets and income. www.fppc.ca.gov 1.866.275.3772 or 916.322.5660 FPPC TAD• 039-06.2012 • Page 2 of 2
25California Fair Political Practices Commission Conflict-of-Interest Codes -Designating Positions Introduction The FPPC is frequently asked why an agency cannot require all of its employees to file a Form 700, Statement of Economic Interests. The following discussion outlines the statutory1 and regulatory requirements that provide the basis for determining which positions should be designated. Discussion One of the most frequent questions to FPPC staff is how does an agency determine which positions should be included in a conflict-of-interest code. The answer is that each agency is unique, and the list of positions is dependent upon several factors. For example, an analyst in one agency may not even be covered in a conflict-of-interest code because that position has no purchasing authority, and its regulatory related duties are substantially reviewed by more than one supervisor and director. In another agency, the analyst may have full authority with little oversight. The following discussion provides background on the statutes, regulations, and guidance provided through advice letters. The Political Reform Act ("Act") requires that "every agency shall adopt and promulgate a conflict-of-interest code." (Section 87300.) Section 87302(a) provides that a conflict-of-interest code shall contain "specific enumeration of the positions within the agency which involve the making or participation in the making of decisions which may foreseeably have a material financial effect on any financial interest." The term "public official" is defined, in part, in Section 82048 as " ... every member, officer, employee or consultant of a state or local government agency, but does not include judges and court commissioners in the judicial branch of government." With respect to each such position, a code is required to list the specific types of investments, interests in real property, and income that must be disclosed. The responsibility for determining if a code meets these specifications rests with the "code reviewing body." (Section 87303.) Section 87309 states what a conflict-of-interest code must contain before it may be approved by the code reviewing body. Paragraph ( c) of that section provides that a code may not be approved if it "fails to adequately differentiate between designated employees with different powers and responsibilities." This provision is intended to ensure, first, that a conflict-of-interest code requires financial disclosure only from employees required to be designated by Section 87302(a) and, second, that a code 1 All statutory references are to the Government Code unless otherwise noted. www.fppc.ca.gov 1.866.275.3772 or 916.322.5660 FPPC TAD • 038-06.2012 • Page 1 of 3
26California Fair Political Practices Commission Conflict-of-Interest Codes -Designating Positions relate disclosure to the specific duties of such designated employees. Thus, a code reviewing body would fail to fulfill its obligation under Section 87309(c) if it allowed designation of positions in a code which, to quote the language of Section 87302(a), do not entail the "making or participation in the making" of governmental decisions. It would be equally improper for a code reviewing body to require disclosure of interests that may not foreseeably be affected materially by decisions made or participated in by designated employees. In City of Carmel-by-the-Sea v. Young, the Supreme Court held, in general, that there must be a balancing of interests between the government's need to expose or minimize possible conflicts of interest on the one hand, and the right to maintain privacy in one's personal financial affairs while seeking or holding public office on the other. (2 Cal.3d 259 (1970).) Required disclosure of economic interests under the Act has been found to be appropriate where it is narrowly tailored to avoid unwarranted intrusion into the privacy of the public officials involved. (See, Hays v. Wood, 25 Cal.3d 770 (1979).) A public official "makes a governmental decision" when the official, acting within the authority of his or her office or position, votes on a matter, obligates or commits his or her agency to any course of action, or enters into any contractual agreement on behalf of his or her agency. (Regulation 18702.1.) Therefore, such positions should be designated in the agency's conflict-of-interest code. A public official "participates in a governmental decision" when, acting within the authority of his or her position and without significant substantive or intervening review, the official negotiates, advises, or makes recommendations to the decisionmaker regarding the governmental decision. (Regulation 18702.2.) If a superior relies on an individual's professional judgment, then the individual is participating in making a governmental decision. In other words, if the individual influences the final decision by supporting a position or suggesting a course of action, he/she is participating in the decision even if he/she is not making the final decision. Therefore, the individual's position must be designated in the conflict-of-interest code. There are several techniques to assist in making the determination of which positions need to be designated in the code. These include reviewing organizational charts -generally, the positions closest to the top must be designated in the code. The larger the agency, the more likely it is that lower level positions have narrower duties and additional, substantive review, and therefore, do not need to be designated. Meeting minutes and annual reports also provide information on the position responsibilities and provide insight as to which positions warrant supplementary review. Additionally, agency websites (such as the contact us page) may provide clues as to whether all positions on an organizational chart are up to date. And lastly, current job duty statements should be requested. www.fppc.ca.gov 1.866.275.3772 or 916.322.5660 FPPC TAD • 038-06.2012 • Page 2 of 3
27California Fair Political Practices Commission Conflict-of-Interest Codes -Designating Positions Summary High level positions that have authority to vote on a matter, appoint a person, obligate or commit his or her agency to a course of action, or enter into any contractual agreement on behalf of his or her agency, mid-level positions that have authority to negotiate decisions on behalf of the agency without significant substantive review, and positions that advise or make recommendations to the decision-maker by conducting research or an investigation, preparing or presenting a report, analysis or opinion that requires the exercise of judgment on the part of the employee and the employee is attempting to influence the decision, should all be designated in the conflict-of-interest code. Positions that are strictly manual, clerical, or ministerial in nature should not be designated in the conflict-of-interest code. It is important to note that an express purpose of the Act is to ensure that the assets and income of public officials be disclosed so that conflicts of interests may be avoided. However, as discussed in the foregoing paragraphs, only those positions that make or participate in making governmental decisions are required to report assets and income on a public form. Thus, the agency and code reviewing body must take a careful look at the agency's governmental programs and functions as well as the specific duties of those positions being designated in the code. www.fppc.ca.gov 1.866.275.3772 or 916.322.5660 FPPC TAD • 038-06.2012 • Page 3 of 3