HomeMy WebLinkAbout9/17/2019 Item 5, Davis
M c C racken, stemerman & hols berry, llp
Counselors and Attorneys at Law
September 13,2019
Mayor HeidiHarmon, hharmon@slocity.org
Vice MayorAndreaPease, apease@slocity.org
Council Member Carlyn Christianson, cchristianson@slocity.org
SanFrancisco
Council Member Aaron Gomez, agomez@slocity.org
Council Member Erica Stewart, estewart@slocity.org
595 Market Street, Suite800
San Francisco, California 94105
415.597.7200
Re: Clean Energy Policy and Related Ordinances
Fax 415.597.7201
Vice Mayor Pease’s Disqualifying Conflict of Interest
steven l. stemerman(ca, nv) Dear Mayor Harmon and City Council Members:
Richard G. McCracken (CA, NV) I
W. David Holsberry (CA, NV)
We represent Utility Workers Union of AmericaLocal 132.We write to
John J. Davis, Jr. (CA)
point out that under the CaliforniaPolitical Reform Act of 1974 andtheFair
Kristin L. Martin (CA, NV, HI)
Eric B. Myers (CA,NV)
Political Practices Commission’s conflict-of-interest regulations, Vice Mayor
Paul L. More (CA, NV, MA)
Andrea Pease is and has beendisqualified from voting upon, deliberatingor even
Sarah Varela (CA, AZ, NV)
being present fortheCouncil’s considerationof the “Clean Energy Policy”
Sarah Grossman-Swenson (CA, NV)
Resolution and relatedOrdinances that were considered and voted upon on
Kimberly Hancock (CA)
September 3, 2019 and will bebefore the Council again on September 17,2019.
Yuval Miller (CA, NV)
David L. Barber (CA, NV)
Kimberley C. Weber (CA, NV)
Vice MayorPease’s business interests that create the conflict.
A. Mirella Nieto (CA)
Andrea Pease is a licensed architect and a partner in afirmcalled In Balance
Green Consulting.According toits web site, In Balance provides professional
Robert R Cowell (1931-1980)
consulting on “green” and renewable energy, working “closely with entire
building teams ... touncover and develop the most effective methods of energy
efficiency based on thespecificproject's design.”
Philip Paul Bowe (CA) (Ret.)
Barry S. Jellison (CA) (Ret.)
In describing its services, In Balance sayson its web site:
• “You can expect thorough andtimelydocumentation,administration, and
team coordination services as we certify your project for ... local green
Las Vegas
building programs
1630 S. Commerce Street, Suite A-1
Las Vegas, Nevada 89102
• “We’ll create diverse and detailed solutionsforyour project,reducing
702.386.5107
energyuse and increasing comfort in cost-effective ways.”
Fax 702.386.9848
• “Our in-house experts look at allthe variables: energy modeling and
optimization, passive solar design, renewable energy analysis, and
measurement and verification services.”
M c C racken, stemerman & holsberry, llp
San Luis Obispo Mayor and City Council
September 13, 2019
Page 2
• “Through our green consulting services, we’ll create a path for you to achieve a
sustainable project. Our thorough analysis of sustainable measures, coupled with
insightful strategies, delivers diverse and detailed solutions.”
• The web site also promotes In Balance’s “value-added services” in “Local Green
Building programs.”
On the U.S. Green Building Council web site, Ms. Pease describes herself as follows:
• “Bringing together integrated design, daylight and water use analysis, low impact
development, energy efficiency, materials selections and other strategies, \[Ms. Pease\]
has helped scores of clients through a green building process.”
Ms. Pease’s California Form 700 for 2018 states that her ownership interest in In Balance
in 2018 was between $10,001 and $100,000. Her Form 700 states that her 2018 income from
In Balance was between $ 10,001 and $ 100,000.
Relevant aspects of the Clean Energy Policy Resolution and Related Ordinances.
The Clean Energy Policy Resolution and the two accompanying Ordinances are set forth
in Agenda Item 18 of the Agenda Packet for the September 3, 2019 City Council meeting.
The City Council passed them on a 4-to-l vote, with Vice Mayor Pease voting.
The September 3 rd Agenda Item describes a plan that will “include 1) identification of
appropriate in-lieu fee amounts for various building types, 2) community education and
outreach, 3) development of a program making professional consultation and design services
available to property owners, and 4) identification of a series of incentives, such as permit
streamlining and property development standard allowances (for example, parking reductions
and building height allowances) in exchange for all-electric development\[.\]”
The Resolution and Ordinances impose extensive, highly technical clean-energy
requirements on new construction projects. As the staff report points out, “energy code
compliance can be a daunting and expensive task.” The new rules will necessitate builders’
and homeowners’ reliance on professional advice and assistance from architects who can
identify and calculate the needs of a building, design the building to meet the Ordinances and
other applicable law, and represent owners through the building-permitting process.
The Resolution and Ordinances will require advice and assistance from architects like
McCRACKEN, STEMERMAN & HOLSBERRY, LLP
San Luis Obispo Mayor and City Council
September 13, 2019
Page 3
Andrea Pease. Because Ms. Pease is a professional who specializes in clean-energy
consulting, and because she is also a highly placed insider in the City’s political and
administrative structure, the new Clean Energy rules will drive a great deal of business to her
architectural firm. As a consequence:
1. Ms. Pease’s conflict of interest disqualified her from deliberating or voting on the
Clean Energy Resolution and Ordinances, or even being present in the Council
Chamber during the discussion and vote on September 3, 2019.
2. Ms. Pease’s conflict of interest disqualifies her from deliberating or voting on the
Clean Energy Resolution and Ordinances, or even being present in the Council
Chamber during the discussion and vote on September 17, 2019.
3. Ms. Pease’s participation in the September 3rd discussion and vote so thoroughly
infected the process that her colleagues on the Council are likely disqualified from
deliberating or voting on the matter in the future.
California conflict-of-interest law disqualifies Ms. Pease from deliberating or voting
on the Clean Energy Resolution and Ordinances.
The Political Reform Act’s conflict-of-interest provisions are found at Government Code
section 87100, etseq. Section 87100 states the basic rule: “No public official at any level of
state or local government shall make, participate in making or in any way attempt to use his
official position to influence a governmental decision in which he knows or has reason to
know he has a financial interest.”
The Act establishes the Fair Political Practices Commission. (Gov. Code § 83100.) The
Commission adopts regulations that carry out the purposes of the Act. (Gov. Code § 83112.)
Section 18700, subdivision (d)1 of the Commission’s regulations creates a three-part test
for determining whether a public official has a prohibited conflict of interest:
“Step One: Is it reasonably foreseeable that the governmental decision will have a
financial effect on any of the public official's financial interests? To
determine if the financial effect is reasonably foreseeable, apply Regulation
18701.”
i
Title 2, Cal. Code of Regulations, section 18700, subdivision (d). Further references to the
Regulations are to Title 2.
- O
M c C racken, stemerman & holsberry, llp
San Luis Obispo Mayor and City Council
September 13, 2019
Page 4
Regulation 18701, subdivision (b) explains that “if the financial effect can be recognized
as a realistic possibility and more than hypothetical or theoretical, it is reasonably
foreseeable.”
Here, it is far more than a realistic possibility, and it is far more than hypothetical or
theoretical that adoption of the Clean Energy Policy Resolution and Ordinances will drive
business to Ms. Pease’s In Balance Green Consulting firm. Therefore her participation in the
matter meets the first step in determining that she has a prohibited conflict.
“Step Two: Will the reasonably foreseeable financial effect be material? To determine if
the reasonably foreseeable financial effect is material, apply Regulation
18702.”
Under Regulation 18702, where the question involves a public official’s interest in a
business, the test for materiality is in Regulation 18702.1. Regulation 18702.1, subdivision
(b) provides that a financial effect is material for conflict-of-interest purposes if the
governmental decision would “regulate or otherwise establish conditions for an activity in
which the business entity is engaged” or if the decision would “increase or decrease the need
for the products or services that the business entity supplies\[.\]” (Reg. 18702.1, subdivs.
(b)(1) and (b)(3).)
Here, it is clear that with respect to Ms. Pease and In Balance Green Consulting, the
Clean Energy Policy Resolution and Ordinances meet both tests for prohibition. They
regulate and establish conditions for In Balance’s clean-energy consulting practice, and they
will increase the need for In Balance’s services. Therefore Ms. Pease’s participation in this
matter meets the second step in establishing that she has a prohibited conflict.
Step Three: Can the public official demonstrate that the material financial effect on the
public official's financial interest is indistinguishable from its effect on the
public generally? To determine if the material financial effect on any of the
public official's financial interest is indistinguishable from its effect on the
public generally, apply Regulation 18703.
Ms. Pease cannot meet the test of Step Three. To do so she would have to prove that the
Resolution and Ordinances would affect at least 25 percent of the businesses in San Luis
Obispo in the same way that they affect In Balance Green Consulting. (Reg. 18703.) There
is no possibility that Ms. Pease can meet this test.
McCRACKEN, STEMERMAN & HOLSBERRY, LLP
San Luis Obispo Mayor and City Council
September 13, 2019
Page 5
The foregoing discussion establishes beyond question that Ms. Pease had and has a
conflict of interest that prohibited and will prohibit her participation in deliberations and
voting on the Resolution and Ordinances. Had she consulted the Commission before
violating the law, that’s exactly what she would have been told. (See, e.g., Goleta Water
Dist., FPPC Advice Letter, File No. A-16-270.)
The next question is, what should she and the Council have done on September 3rd, and
what should they do on September 17th?
Ms. Pease should have announced her business interest that created the conflict of
interest, recused herself from the discussion and vote, and left the room.
Government Code section 87105, subdivision (a) makes crystal clear what Ms. Pease
should have done on September 3rd, and at any other Council or committee meeting at which
the Resolution and Ordinances were or will be discussed. Ms. Pease was required to:
1. Publicly announce the financial interest that gives rise to the conflict of interest or
potential conflict of interest, and do so in detail sufficient to be understood by the
public. (Gov. Code § 87105, subd. (a)(1).)
2. Recuse herself from discussing and voting on the matter, or otherwise acting in
violation of Section 87100. (Gov. Code § 87105, subd. (a)(2).)
3. Leave the room until after the discussion, vote, and any other disposition of the matter
is concluded. (Gov. Code § 87105, subd. (a)(3).)
Public officials are expected to know the fundamental laws that govern their behavior.
And the State makes ample educational guidance available for them. Unfortunately, neither
Ms. Pease nor her colleagues recognized this very serious legal and ethical problem.
Obviously, Ms. Pease violated the Political Reform Act on September 3, 2019. That
violation incurs liability for penalties and other remedial action by the Commission ((Gov.
Code § 83100, etseq.), and to criminal prosecution (Gov. Code § 91000, etseq.).
Further, the failure to follow proper procedures requires vacation of the Council’s action
approving the Resolution and Ordinances. (Woodland Hills Residents Ass ’ v. City Council of
Los Angeles (1980) 26 Cal.3d 938, 948-49; Kunec v. Brea Redevelopment Agency (1997) 55
Cal.App.4th 511, 521-25.)
O
McCRACKEN, STEMERMAN & HOLSBERRY, LLP
San Luis Obispo Mayor and City Council
September 13, 2019
Page 6
Utility Workers Local 132 requests that at its meeting of September 17, 2019, the City
Council vacate its September 3rd approval of the Clean Energy Policy Resolution and
Ordinances, and take no further action on those measures until the Council’s September 3rd
violations have been rectified.
Very truly yours,
JOJ. DAVIS, JR.
Eric Hofmann, President
cc:
Utility Workers Local 132
J. Christine Dietrick, cdietrick@slocitv.org
City Attorney, City of San Luis Obispo
Teresa Purrington, tpurrington@slocitv.org
City Clerk, City of San Luis Obispo