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02-06-2001 - Conflict of Interest Code Follow-Up• City of West Covina Memorandum TO: Daniel Hobbs, City Manager and City Council FROM: Janet Berry, City Clerk AGENDA ITEM NO.. J-1 SUBJECT: CONFLICT OF INTEREST DATE 2-6-01 CODE FOLLOW-UP SUMMARY: The City Council requested staff to research the possibility of including the Executive Director and the Board of Directors of the Chamber of Commerce into the City's Conflict of Interest Code. BACKGROUND: At the Council meeting of December 12, 2000, the City Council amended the City's Conflict of Interest during its biennial review to require all commissioners and designated employees to file Statements of Economic under the broadest disclosure category, Disclosure Category No. 1. At that same meeting, staff was directed to research the possibility of including the Executive Director and the Board of Directors of the West Covina Chamber of Commerce into the Conflict of Interest Code, as the Chamber of Commerce is the recipient of approximately $500,000 in BIT funds and makes recommendations to Council as to how that money should be spent. DISCUSSION: The City Clerk discussed Council's concerns with the FPPC, explaining the purpose of the BIT, how the funds are derived, the Chamber's annual presentation of their Budget and Program of Work to the Council for approval, and that the Chamber Executive Director attends Planning Commission and City Council meetings making recommendations on various projects or programs effecting the community. The FPPC was also told that the Chamber and the City's Redevelopment Agency have joint economic development programs and confer on the hiring of marketing consultants. The City Clerk also conferred with the City Attorney. The FPPC concurred with the City Attorney's assessment as to persons covered by the Political Reform Act (PRA): • "Public officials", elected and appointed, in the ordinary sense of the word, and • 'Member" of a state or local government agency • "Officer" of a state or local government agency • "Employee" of a state or local government agency • "Consultant" of a state or local government agency. In addition to the categories of officials mentioned above, the PRA requires other public officials to also file economic disclosure forms. While the Executive Director and the Chamber of Commerce Board are not "public officials," since the City Council does not appoint the individuals who serve in those positions, the determining issue is whether by serving in an advisory capacity to the City Council for BIT expenditures are the Chamber Board members then required to file economic disclosure forms as "consultants" to the City? The Chamber Executive Director and the Chamber Board of Directors are not hired by the City as employees nor are they hired to make or participate in the making of a governmental decision and therefore not subject to FPPC guidelines requiring the individual to file Statements of Economic Interests. They do, however, serve in an advisory capacity to the City by the language of the Municipal Code. Yet, the FPPC indicates that they would not recognize the Chamber Board as consultants under their regulations. Conflict of Interest Code/Chambeeommerce Page Two In order to require the Chamber Board to file Statement of Economic Interest forms, the City Council could accomplish this directive through a variety of options: • Amend the Municipal Code to require that all members who serve in an advisory capacity on BIT expenditures also file Statements of Economic Interest. • Include in any contractual agreement between the City and the Chamber to require that the Chamber Board file Statement of Economic Interest forms as a result of their advisory duties, to the City Council relating to the BIT. • Establish an alternative and parallel Conflict of Interest Code wherein the City could include anyone it deemed appropriate. This "City" conflict of interest code would not replace the State regulations or filling obligations placed upon the City Council, Commissioners or other designated employees, but would serve as an additional city requirement. The FPPC indicated that there is no prohibition from the City Council taking such action, but they have no knowledge of any other City adopting such a secondary conflict of interest guideline. In order to implement the previous City Council's direction, the Council would need to define which of the above alternatives would be the most appropriate to accomplish the stated objective. RECOMMENDATION: It is recommended that the City Council provide direction on this item and receive and file the report. City Clerk Janet Berry Attachment: * FPPC Fact Sheet * WCMC § 14.88 2 • 0 How to Determine Who Should be Designated In a Conflict of Interest Code Determining Who Makes or Participates in the Making of Governmental Decisions: Who is a Designated Employee? Who Should Not be Designated? %4 Checking Duty Statement and Job Description: Making a governmental decision, means the person: (1) Votes on a matter; (2) Appoints a person; (3) Obligates or commits his or her agency to any course of action; or (4) Enters into any contractual agreement on behalf of his or her agency. } Participating in the making of a decision, means the person: (1) Negotiates, without significant substantive review, with a governmental entity or private person regarding the decision; or (2) Advises or makes recommendations to the decision -maker by conducting research or an investigation, preparing or presenting a report, analysis or opinion which requires the exercise of judgment on the part of the employee and the employee is attempting to influence the decision. A designated employee is an officer, employee, member or consultant of an agency whose position is designated in the code because the position entails the making or participation in the making of governmental decisions which may foreseeably have a material effect on any financial interest. (Government Code Section 82019.) To determine who should be designated in the code, you need to know who within the agency makes or participates in the making of governmental decisions. (Commission Regulation 2 Cal. Code of Regs. Section 18701.) The term "designated employee" does not include: Public officials specified in Government Code Section 87200 • board of supervisors mayors • chief administrative officers city managers • district attorneys city attorneys • county counsels city treasurers county treasurers other city, county and local agency public • planning commissioners officials who manage public investments • city councilmembers • . Solely clerical, ministerial or manual positions Unsalaried members of boards or commissions which are solely advisory You can determine who should be designated in the code by first eliminating those positions outlined above that are not designated employees. Next, evaluate the remaining employees, members, officers or consultants of your agency. Top level management personnel are normally broad policy makers and should be designated. Beyond that you need to look at each position to determine if it makes or participates in the making of governmental decisions. One way to accomplish this is by reviewing duty statements orjob descriptions. Some agencies rely on department supervisors to determine who within their department makes or participates in making decisions. This would be acceptable provided you set out for the supervisor what it means to make or participate in the making of decisions as set forth above. Fair Political Practices Commission P.O. Box 807, Sacramento, CA 95812-0807 (916) 322-5660/www.fppc.ca.gov CFS1 - June 2000 Consultants in a Conflict of Interest Code Who is a Consultant? I The Political Reform Act (Gov. Code Sections 81000-91015) provides that "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 teas a financial interest." (Section 87100.) In addition, the Act requires every public official to disclose those economic interests that could foreseeably be affected by the exercise of his or her duties. (Sections 87200-87313.) x The term "public official" includes consultants: "'Public official at any level of state or local government' means a member, officer, employee, or consultant of a state or -local government agency." (2 Cal. Code of Regs. Section 18701(a).) Regulation 18701(a)(2) defines "consultant" as an individual who, pursuant to a contract with a state or local government agency: (A) Makes a governmental decision whether to: (i) Approve -a rate, rule, or regulation; (ii) Adopt or enforce a law; (iii) Issue, deny, suspend, or revoke any permit, license, application, certificate, approval, order, or similar authorization or entitlement; (iv) Authorize the agency to enter into, modify, or renew a contract provided it is the type of contract which requires agency approval; (v) Grant agency approval to a contract which requires agency approval and in which the agency is a party or to the specifications for such a contract; (vi) Grant agency approval to a plan, design, report, study, or similar item; (vii) Adopt, or grant agency approval of, policies, standards, or guidelines ..A for the agency, or for any subdivision thereof; -OR- (B) Serves in a staff capacity with the agency and in that capacity performs the -- same or substantially all the same duties for the agency that would otherwise be performed by -an individual holding a position specified in the agency's Conflict of Interest Code. Consultants are It is not the business or firm providing services to your agency that is considered the Individuals consultant. The individual(s) working for the firm who provide the services are considered the consultants. These individuals must file statements of economic interests based on their personal financial interests and are subject to disqualification and other laws affecting public officials. Serving in a Staff The regulation includes only those individuals who are performing substantially all the Capacity same tasks that normally would be performed by staff members of a governmental entity. In most cases, individuals who work on just one project or a limited range of projects for an agency are not considered to be working in a "staff capacity." The length of the individual's service to the agency is relevant. For example, suppose an individual contracted with a city to study noise at a specified intersection. If the individual took the noise measurements in one day, and issued a report to the planning commission before its next meeting, the individual normally would not be serving in a staff capacity. If, however, a firm's contract provided that it would provide all plan checking services for a city for five years, it is much more likely that individuals performing these services would be in a quasi -staff capacity. In addition, the tasks of the quasi -staff member over this period of time must be substantially the same as a position that is, or should be, specified in the agency's conflict of interest code. (Memorandum to the Commission, dated March 28, 1994, regarding Regulation 18700, pp..3-4.) (Ka/land Advice Letter, No.1-96-078.) LICENSES AND BUSINESS REGULATIONS receipts basis which are specified in sec- tion 14-68, Category Code S, of the Munic- ipal Code: Seventy-five (75) per cent of the business license tax otherwise payable. (f) Category Code Z, consisting of those busi- nesses taxed on a gross receipt basis which are specified in section 14-68, Category Code Z, of the Municipal Code: Sixty (60) per cent of the business license tax otherwise pay- able. (Ord. No. 1960, § 6263; Ord. No. 1860, § 1, 10- 1-90) Sec. 14-85. Payment; when due. (a) Any business license issued pursuant to ar- ticle H of this chapter shall cease to be effective for any purpose if the licensee fails to pay, when due, the full amount of the additional business license tax levied by this article. (b) The additional business license tax levied by this article shall be due and payable and shall be collected at the same time and in the same manner as the ordinary business license tax of the city. (Code 1960, § 6264) Sec. 14-86. Exemptions and voluntary contri- butions. Any person carrying on a business, within the area established by this article, which is exempt from the payment of the ordinary business license tax of the city by any provision of the Constitution of the United States or of this state is also exempt from the payment of the additional license tax imposed by this article, but may make a voluntary contribution to the city. Any such contribu- tion shall be used exclusively for the purposes provided for herein. (Code 1960, § 6265) Sec. 14-87. Proposed uses. The proceeds of the additional business license taxes imposed by this article shall be used for the general promotion of retail trade activities in the area established by this article. (Code 1960, § 6266) Supp. No. 36 Sec. 14-88. Advisory board. § 14-102 For the purpose of advising the city council and making recommendations as to how the rei,enue derived from the additional levy of license taxes imposed by this article shall be used within the scope of the purposes set forth in section 14-87, an advisory board consisting of the executive committee of the chamber of commerce is hereby created. (Code 1960, § 6267) Secs. 14-89-14-100. Reserved. ARTICLE IV. GARAGE SALES Sec. 14-101., Definitions. The term "garage sale," as used in this article includes lawn or yard sale, attic sale, rummage sale, moving sale, patio sale, or other similar sale, and means any sale held for the purpose of sell- ing, trading, bargaining, exchanging or otherwise disposing of unwanted or surplus household fur- nishings, personal goods or other tangible prop- erty of the person or individual, household, group, family or organization holding such sale and con- ducted on the premises of a private single-family or multiple -family residence(s). (Code 1960, § 6390; Ord. No. 1349, § 1, 7-25-77; Ord. No. 1820, § 1, 8-28-89) Cross reference —Definitions for code generally, §§ 1-8-1-26. Sec. 14-102. Restrictions. (a) No more than three (3) garage sales shall be conducted in any one calendar year by any one individual, household, group, family or organization. (b) Any such permitted sale .shall be field be- tween the hours of 9:00 a.m. and 8:00 p.m. and for not more than two (2) consecutive days. If a holi- day is concurrent with a weekend, the sale days may include the two (2) day weekend and the holiday. (c) No sign advertising the event or items for sale may be placed in or on any public right-of- way. It shall be the responsibility of the persons 930.1