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HomeMy WebLinkAboutItem 5c. Biennial Update to City's Conflict of Interest Code and Ethics Update Item 5c Department: Administration Cost Center: 1021 For Agenda of: 9/3/2024 Placement: Consent Estimated Time: N/A FROM: Greg Hermann, Deputy City Manager Prepared By: Kevin Christian, Deputy City Clerk SUBJECT: CITY’S ETHICS TRAINING LIST UPDATE AND BIENNIAL REVIEW AND AMENDMENTS TO THE CITY’S CONFLICT OF INTEREST CODE RECOMMENDATION Adopt two Draft Resolutions rescinding and replacing their current versions, entitled: 1. “A Resolution of the City of San Luis Obispo, Designating Local Agency Officials for the Purposes of California Government Code Section 53234, Listing the Officials and Advisory Bodies that Must Comply with Ethics Training Required Under Assembly Bill 1234” and 2. “A Resolution of the City Council of the City of San Luis Obispo, California, amending the City’s Conflict of Interest Code.” POLICY CONTEXT Ethics Update: Assembly Bill No. 1234, October, 2005, (AB1234) identifies certain elected officials, appointed Advisory Body members, and agency staff required to receive Ethics training on a biennial basis. Conflict of Interest Update: A Statement of Economic Interest or “Conflict of Interest” filing is governed by the Political Reform Act (Government Code Sections 81000) and requires every local government agency to review and evaluate its Conflict-of-Interest Code biennially by October 1st. DISCUSSION Two of the major tools for maintaining the City’s culture of high ethical standards are transparency and education. Transparency is achieved with public filing of personal financial disclosures by City decision makers via a “Statement of Economic Interest ,” as governed by the City’s “Conflict of Interest” code. Currently, the City requires over 100 positions to file, corresponding to over 140 staff, Advisory Body members, and elected officials. For the second piece, education, the City requires ethics training on an on-going basis every other year. Currently, this training is required for all elected officials, Department Directors, and several of Advisory Bodies, representing just under 20 unique positions for a total of approximately 50 staff, Advisory Body members, and elected officials. Page 21 of 229 Item 5c Ethics In 2005, AB1234 imposed the mandate for two-hours of ethics training biennially for Local Agency (Agency) elected or appointed officials who are compensated for their service or are reimbursed for their expenses. It also provided the Agency the option of requiring certain employees to receive this training as well. Additionally, it requires that training courses meet specific requirements and to consult with the Fair Political Practices Commission (FPPC) and the Attorney General regarding any proposed ethics training course content. Between 2006, when AB1234 became effective and was codified in Government Code 53234, and April of 2013, the City Attorney provided comprehensive two-hour ethics training for certain elected and appointed City Officials, with the City Clerk maintaining those records as required by AB 1234. In 2013 Council adopted Resolution 10432 formalizing that certain City officials and Advisory Body members must participate in Ethics training, detailed in the staff report (4/2/2013 Item C9). Due to the interconnectedness of ethics and financial interests, which are governed by the City’s Conflict of Interest code (COI - discussed below), it is recommended that all positions catalogued in the “Designated Filers” list of the COI, shall also be required to take ethics training biennially. It should be noted that the 2013 Staff Report recognized the confluence of Ethics and COI disclosure but ultimately did not include them at that time. It is essential to point out that certain City Officials and Advisory Body members are either not named on the Designated Filers list or not required to file a COI Statement but are otherwise required to receive ethics training (see “Other Considerations” below). Therefore, the proposed recommended Ethics Training resolution (Attachment A) lists these positions specifically, while referring to the COI “Designated Filers” list for all remaining required positions. Along with the above noted listing modification, changes in the proposed resolution reflect the described reasoning for those changes. Conflict-of-Interest The Political Reform Act (PRA) of 1974 contains a general prohibition that no public official or employee at any level of state or local government shall make, part icipate in making, or in any way attempt to use their official position to influence a governmental decision in which they know or have reason to know they have a financial interest. A COI Code requires certain employees, who are most likely to be involved in government decision-making and where potential conflicts may be present, to file an annual disclosure form. The purpose of this form is to inform the employee and the public of potenti al conflicts of interest and situations where disqualification is mandated. The PRA requires that local agencies adopt a formal Conflict of Interest Code, review its Code biennially by October 1st in even numbered years, and make amendments if needed. The three major components to the COI are: 1) Incorporation by reference of the terms of Government Code Section 18730 (Terms of the Code), 2) The positions that are required to file a Statement of Economic Interest “SEI”, Form 700, (List of Designated Positions), and 3) Specific Interests to be reported in a SEI (Disclosure Categories). Page 22 of 229 Item 5c Terms of the Code: The Fair Political Practices Commission (FPPC) advises that agencies are required to incorporate the provisions of California Code of Regulation §18730 by reference, along with appendices providing disclosure categories and listing of designated positions, to constitute the formation and promulgation of a Conflict -of- Interest Code. Regulation §18730 outlines the references to statutes and regulations that govern designated positions, disclosure categories, time of filing, contents of, period covered, manner of reporting, how interests are to be reported, definition of terms, disqualification as well as prohibition on receipt of honoraria, gifts, loans, and travel payments. The incorporation of Regulation §18730 provides the legal basis for the code to be a document that has force and effect. By incorporating the California Code of Regulation into the City’s Conflict of Interest Code, any amendment to the California Code adopted by the FPPC will automatically apply to the City Code. (Attachment B) List of Designated Positions: Following Council Action, June 4, 2024 – Item 5c, directing a review of the City’s Conflict of Interest Code, the City Clerk and all City Department Directors reviewed the current list of Designated Positions against the proposed updated list (Attachment C – legislative draft format) for their respective departments. The Designated Filer List of positions was examined for inclusion of new positions, possible title changes to existing positions, job responsibility modifications, and to remove titles of positions that may have been abolished (since the 2022 Code adoption). Multiple changes were found in several departments and have therefore been modified accordingly on the list. Proposed Disclosure Categories: The FPPC advises that local codes should enumerate positions that “make or participate in the m aking” of government decisions, acting within the authority of their position, votes on a matter, obligates, or commits the agency to any course of action which may foreseeably have a material financial effect on any financial interest. Additionally, it further defines those employees “participate in governmental decisions” when - acting within the authority of their position and without significant and substantive or intervening review - the official negotiates, advises, or makes recommendations to the decision-maker regarding the governmental decision. 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 Commission notes that the most common problem in local codes is the requirement that employees disclose financial interests that are not related to the employee’s duties and area of authority. The review of the Categories has determined that no modifications are necessary since the last review, completed in September 2022. Other Considerations Positions Statutorily Required to File Conflict of Interest Disclosure: Council Members and appointed officials (including the City Manager, City Attorney and members of the Planning Commission) are not designated under this conflict-of-interest code because they are statutorily required to file conflict disclosures by Government Code Section 87200 (known as “87200 filers”). Page 23 of 229 Item 5c The conflicts of interest code supplements those statutory requirements as to employees and members of City advisory bodies who are not 87200 filers. It is important to note that the list of filers includes members of the San Luis Obispo Parking Authority and the San Luis Obispo Public Financing Authority. Because the City Council also serves as both authorities, members of the Council are reminded to include these positions on their Assuming Office, Annual and Leaving Office, Statements of Economic Interest. New Positions: With respect to newly created and temporary positions, the department director shall determine if a newly created position will make or participate in making governmental decisions on behalf of the City and if so, assign a disclosure category conforming to the position’s range of duties. Determinations shall be made in writing and provided to the City Clerk and the Human Resources Department. Such written determination shall include a description of the newly created position's duties and based upon that description, a statement of the extent of disclosure requirements given the range of duties. All such determinations are public records and shall be retained for public inspection in the same manner and location as this conflict -of-interest code. (Gov. Code§ 81008.) The City Clerk's office shall promptly enter the actual position title of the newly created position into its electronic SEI (Form 700) record management system and ensure that the name of any individual holding the newly created position is ente red under that position title in the record management system. Additionally, within 90 days of the creation of a newly created position that must file statements of economic interests, the City shall update this conflict-of-interest code to add the actual position title in its list of designated positions. (Gov. Code§ 87306.) The required review of the City’s Conflict-of-Interest Code has now been completed, determining that an amendment is required to update the gift value limitation to match the currently set valuation of the PRA ($590), to include new designated filer positions, to revise certain titles of existing positions, and to delete titles of positions that have been abolished. Attachment B contains text of the proposed resolution update for the Conflict- of-Interest Code and Attachment C provides a legislative draft of the proposed “Designated Filers” listing. Upon approval, the listing will then be incorporated in full as Exhibit A to the proposed Resolution. Previous Council or Advisory Body Action The current ethics training requirement listing was adopted by City Council on April 2, 2013 by Resolution No. 10432 (2013 Series). The current City Conflict of Interest code was adopted by City Council on September 20, 2022, by Resolution No. 11359 (2022 Series). As required by The PRA, the code reviewing body (City Council) directed the biennial review of the City’s Conflict of Interest Code be conducted at their June 4, 2024 meeting. Public Engagement Being on the agenda for the September 3, 2024 City Council meeting, all required postings and notifications for City Council Agendas have been followed. The public may comment on this item at or before the meeting. Page 24 of 229 Item 5c CONCURRENCE All City Department Directors have concurred with expanding the list of Ethics Training requirement to all those listed on the current Conflict-of-Interest designated filers lists. They have also provided input/confirmation on the revised listing of designated filers which, accordingly, have been incorporated into the proposed revised list of designated positions and the City Attorney has reviewed and approved the code as presented. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines sec. 15378. FISCAL IMPACT Budgeted: N/A Budget Year: 2024-25 Funding Identified: N/A Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ $ $ $ N/A State Federal Fees Other: Total $ $ $ $ N/A At this time there is no fiscal impact for the update of the Ethics Filers training requirement, as free training is available via the FPPC. Unfortunately, there is uncertainty on the future possible costs as funding for this training has been cut from the California State budget. However, there is a pending legislation to continue funding. With this uncertainty, staff have researched alternatives and found that the City’s current Conflict-of-Interest vendor, Netfile, may be used for ethics training and records maintenance. The cost to add these services to the City’s current contract with the additional staff and advisory body members added as proposed in the recommended ethics resolution update would be approximately $3,000 annually. Staff is not requesting additional funding pending the outcome of the legislation. Should the legislation not pass then staff would make the request for funding during the mid-year budget process. Otherwise, costs for maintaining records of the Conflict-of-Interest Code “Designated Filers,” are considered in the City Clerk’s annual budget. Page 25 of 229 Item 5c ALTERNATIVES 1. Ethics Training – The City Council may direct amendments be made to the Ethics Training requirement listing, either to remain as stands in the current 2013 resolution or to expand beyond the suggestion to include all positions listed as “Designated Filers” for the Conflict-of-Interest Code. 2. Conflict-of-Interest Filing - The City Council may direct amendments be made to the proposed update to the City’s Conflict of Interest Code and/or Designated Filers list. If amendments are extensive and prevent the Council from approving the Resolution at the meeting, the amended code must be provided to Council for approval within 90 days. ATTACHMENTS A - 2024 Draft Resolution amending the City’s Ethics Training requirement list. B - 2024 Draft Resolution amending the City’s Conflict of Interest Code C - 2024 List of Designated Positions (Legislative Draft) Page 26 of 229 R ______ RESOLUTION NO. _____ (2024 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, DESIGNATING LOCAL AGENCY OFFICIALS FOR THE PURPOSES OF CALIFORNIA GOVERNMENT CODE SECTION 53234, LISTING THE OFFICIALS AND ADVISORY BODIES THAT MUST COMPLY WITH ETHICS TRAINING REQUIRED UNDER ASSEMBLY BILL 1234 WHEREAS, In California, state laws create a complex set of requirement laws that guide elected officials and agency staff in their service to their communities; and WHEREAS, Promoting understanding of and compliance with the laws governing public service ethics is necessary; and WHEREAS, Assembly Bill 1234 was passed by the State Assembly and State Senate in August of 2005, signed by the Governor in October 2005 and codified, in part, at Government Code Section 53234, et seq.; and WHEREAS, Government Code Section 53234 (c)(1) identifies certain positions that must comply with the required ethics training and defines a Local Agency Official as any member of a local agency "legislative body" or any elected official who receives any type of compensation, salary, or stipend or reimbursement for actual and necessary expenses incurred in the performance of official duties; and WHEREAS, Government Code Section 54952 (a) defines "legislative body" as the governing body of a local agency or any other local body created by state or federal statute and subsection (b) further defines "legislative body" as a commission, committee, board, or other body of a local agency, whether permanent or temporary, decision making or advisory, created by charter, ordinance, resolution or formal action of a legislative body; and WHEREAS, Government Code Section 53234 (c)(2) requires an y employee designated by a local agency legislative body to receive the training WHEREAS, A review of the designated employees required to receive Ethics training has been conducted, with the conclusion being that any employee or consultant listed on the City’s “Designated Filer” listing for the City’s Conflict of Interest Code shall also be required to receive Ethics training. WHEREAS, Certain elected and appointed officials are not designated in the City’s Conflict of Interest Code as they are statutorily required to file conflict disclosures by Government Code Section 87200 (known as “87200 filers”) but they are required to receive Ethics training by AB 1234 and therefore shall be listed herein for this requirement. Page 27 of 229 Resolution No. ______ (2024 Series) Page 2 R ______ NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that: SECTION 1. Resolution No. 10432 (2013 Series) is hereby rescinded. SECTION 2. Pursuant to Assembly Bill 1234, the City Council of the City of San Luis Obispo does hereby designate the Local Agency Officia ls and Advisory Bodies listed in Exhibit A as officials required to participate in Ethics training pursuant to Government Code Section 53234. SECTION 3. The City Council does further designate all employees, Advisory Body members, and consultants not designated by Section 2 but that are listed in the City’s Conflict of Interest Code on the “Designated Filers” list, to participate in Ethics training per Government Code Section 53234 (c)(2). Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _______________ 20 24. ___________________________ Mayor Erica A. Stewart ATTEST: ___________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: ___________________________ J. Christine Dietrick, City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington, City Clerk Page 28 of 229 Resolution No. ______ (2024 Series) Page 3 R ______ EXHIBIT A LOCAL AGENCY OFFICIALS DESIGNATED FOR AB 1234 TRAINING ELECTED OFFICIALS: Mayor Council Members APPOINTED OFFICIALS and DEPARTMENT HEADS: City Manager City Attorney City Treasurer ADVISORY BODIES: Planning Commission Tourism Business Improvement District Board CITY CONFLICT OF INTEREST CODE FILES: All “Designated Filers” as found in the City’s current Conflict of Interest Code. Page 29 of 229 Page 30 of 229 R ______ RESOLUTION NO. _____ (2024 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING THE CITY’S CONFLICT OF INTEREST CODE WHEREAS, the Political Reform Act of 1974, “PRA” (Government Code Section 81000 et seq.) requires local government agencies to promulgate and adopt conflict of interest codes; and WHEREAS, Resolution No. 11359 (2022 Series) adopted on September 20, 2022 amended the City’s Conflict of Interest Code, updating the Gift limit value and amending the List of Designated Positions and Disclosure Categories (Exhibit A); and WHEREAS, on June 4, 2024 the City Council directed the City Manager to conduct a review of the City’s code as required by The PRA which provides that “code-reviewing bodies” (the City Council) shall direct the review of all agency codes under their jurisdiction no later than July 1 of each even-numbered year; and WHEREAS, Council Members and appointed officials are not designated employees under this conflict of interest code because they are statutorily required to file conflicts disclosures by Government Code Section 87200 (known as “87200 filers”) and this conflicts code is intended to supplement those statutory requirements as to employees and members of certain advisory bodies who are not 87200 filers . NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that: SECTION 1. Resolution No. 11359 (2022 Series) is hereby rescinded. Page 31 of 229 Resolution No. ______ (2024 Series) Page 2 R ______ SECTION 2. Pursuant to the Political Reform Act of 1974, Government Code Section 87300 et seq., and Section 18730 of Title 2 of the California Code of Regulations, the City Council adopts the model conflict of interest code promulgated by the Fair Political Practices Commission of the State of California as set forth in Section 18730 of Title 2 of the California Code of Regulations, which model conflict of interest code is incorporated herein by reference, and which, together with the Ci ty’s Disclosure Categories and List of Designated Positions collectively constitutes the City of San Luis Obispo’s Conflict of Interest Code, as set forth in Exhibit A and Appendices 1 and 2 of this Resolution. As the model conflict of interest code set forth in Section 18730 of Title 2 of the California Code of Regulations is amended from time to time by State law, regulatory action of the Fair Political Practices Commission, or judicial determination, the portion of the City’s Conflict of Interest Code comprising the model conflict of interest code shall be deemed automatically amended without further action to incorporate by reference all such amendments to the model conflict of interest code. Upon motion of Council Member ___________, seconded by Counci l Member ___________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _______________ 20 24. ___________________________ Mayor Erica A. Stewart ATTEST: ___________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: ___________________________ J. Christine Dietrick, City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington, City Clerk Page 32 of 229 CONFLICT OF INTEREST CODE CITY OF SAN LUIS OBISPO, CALIFORNIA APPENDIX 2 LIST OF DESIGNATED POSITIONS DESIGNATED POSITIONS DISCLOSURE CATEGORY Committees/Commissions/Authorities: Members of the Architectural Review Commission 3 Members of the Administrative Review Board 1 Members of the Construction Board of Appeals 1 Members of the Cultural Heritage Committee 3 Members of the Housing Authority 1 Members of the Human Relations Committee 4 Members of the Investment Oversight Committee 1 Members of the Parking Authority 1 Members of the Promotional Coordinating Committee 2, 4 Members of the Public Financing Authority 1 Administration Department Assistant to the City Manager 2 City Clerk 2 Deputy City Manager 1 Diversity Equity Inclusion Manager 2, 4 Economic Development & Tourism Manager 2, 3, 4 Economic Development Manager 2, 3 Information Technology Manager 2, 3, 4 Information Services Supervisor 2 Network Services Supervisor 2 Policy and Project Manager 2, 3, 4 Public Communications Manager 2 Sustainability and Natural Resources Official 2, 3, 4 Sustainability Manager 2, 3, 4 Tourism and Community Promotions Manager 2, 4 City Attorney’s Office Administrative Citation Hearing Officer 1 Assistant City Attorney 1 Deputy City Attorney 1 Page 33 of 229 DESIGNATED POSITIONS DISCLOSURE CATEGORY COI: Appendix 2, Designated Positions Page 2 Community Development Department Building Permit Services Supervisor 3 Code Enforcement Supervisor 2, 3 Deputy Building Official 2, 3 Deputy Director of Community Development - City Planner 1 Deputy Director of Community Development – Chief Building Official 1 Director of Community Development 1 Housing Policy and Program Manager 2, 4 Housing Coordinator 4 Principal Planner 2, 3 Senior Planner 2, 3 Senior Civil Engineer 2, 3 Special Projects Manager 2, 3 Supervising Building Inspector 2, 3 Supervising Civil Engineer 2, 3 Urban Forestry Program Coordinator / City Arborist 2, 3 Community Services Assistant City Manager 1 Business Services and Administrative Manager 2 CIP Process Improvement Manager 2, 3 Financial Analyst – Infrastructure Financing 3 Finance Department Accounting Manager/Controller 2, 3 Deputy Director of Finance/City Controller 2, 3 Senior Accountant 2 Financial Analyst – Purchasing 2, 3 Financial Analyst – Revenue 3 Financial Analyst – ERP 3 Financial Analyst – Infrastructure Financing 3 Payroll Analyst 3 Principal Budget Analyst 2 Fire Department Deputy Fire Chief 2, 3 Emergency Response Manager 4 Fire Battalion Chief 2, 3 Fire Chief 1 Fire Marshal Chief Building Official 2, 3 Fire Inspector II 2, 3 Fire Inspector III 2, 3 Human Resources Department Director of Human Resources 2 Human Resources Manager 2 Page 34 of 229 DESIGNATED POSITIONS DISCLOSURE CATEGORY COI: Appendix 2, Designated Positions Page 3 Risk and Benefits Manager 2 Parks & Recreation Department Director of Parks and Recreation 1 Recreation Manager (Community Services, Youth Services, and Public Art) 2 Recreation Manager (Aquatics, Facilities, & Golf) 2 Police Department Chief of Police 1 Neighborhood Outreach Manager 2 Police CaptainDeputy Chief 2,3 Senior Business/Budget Analyst 2 Public Works Department Accessibility and Process Improvement Manager 2 Active Transportation Manager 2 Capital Improvement Program Administrative Manager 2 Construction Engineering Manager 2 CIP Process Improvement Manager 2, 3 Deputy Director of Public Works City Engineer 2, 3 Deputy Director of Public Works Maintenance Operations 2, 3 Deputy Director of Public Works Mobility Services 2, 3, 4 Director of Public Works 1 Fleet Maintenance Supervisor 2 Mobility Services Business Manager 2, 3, 4 Parking Program Manager 2, 3 Parks Maintenance Supervisor 2 Senior Civil Engineer 2, 3 Streets Maintenance Supervisor 2 Supervising Civil Engineer 2, 3 Transit Manager 2, 3 Transportation Manager 2, 3 Urban Forest Supervisor/City Arborist 2, 3 Utilities Department Deputy Director of Utilities Engineering and Planning 2, 3 Deputy Director of Utilities Wastewater 2, 3 Deputy Director of Utilities Water 2, 3 Director of Utilities 1 Environmental Programs Manager 2, 3 Laboratory Manager 2 Solid Waste and Recycling ManagerCoordinator 2 Stormwater Manager 2, 3 Utilities Business Manager 2 Financial Analyst 2 Utilities Engineer 2, 3 Utilities Special Projects Manager 2 Wastewater Collection System Supervisor 2 Wastewater Treatment Plant Supervisor 2 Water Distribution Chief Operator 2 Water Distribution System Supervisor 2 Water Resources Program Manager 2 Page 35 of 229 DESIGNATED POSITIONS DISCLOSURE CATEGORY COI: Appendix 2, Designated Positions Page 4 Water Resource Recovery Facility Chief Operator 2 Water Resource Recovery Facility Chief Maintenance Technician 2 Water Resource Recovery Facility Supervisor 2 Water Treatment Plant Chief Operator 2 Water Treatment Plant Chief Maintenance Technician 2 Water Treatment Plant Supervisor 2 Whale Rock Reservoir Supervisor 2 Other Positions: Housing Authority Executive Director 1 Consultants 5 Page 36 of 229