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HomeMy WebLinkAboutCA FPPC Conflict of Interest Code 2014cmr °F Agenda Item No: 3.b Meeting Date: September 2, 2014 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: City Attorney Prepared by: Eric Davis, Deputy City Attorney II City Manager Approval:P)11 t -c. 4 File No. 9-4-3 SUBJECT: Resolution Repealing Resolution No. 13402, Re -Adopting the FPPC Model Conflict of Interest Code as the City's Conflict of Interest Code, and Adopting a Revised List of Designated Employee Positions and Disclosure Categories, to be Incorporated Into the City's Conflict of Interest Code (CA) RECOMMENDATION: Adopt Resolution SUMMARY BACKGROUND: FPPC regulations require that, in every even -numbered year, each public agency review and, if necessary, revise that portion of the Conflict of Interest Code containing the agency's lists of designated positions and disclosure categories. These lists have been formulated using the criteria from FPPC regulations requiring that all local officials, who foreseeably may materially affect their private economic interests through the exercise of their public duties, disclose their economic interests by filing a statement of economic interest (Form 700). Some officials are required to file disclosure statements because of their position, and others are required to file because of their duties. In compliance with this FPPC requirement, the City Clerk was requested to advise City departments to review and, if necessary, revise their lists of designated positions and disclosure categories to reflect the City's current organizational structure. These lists have now been revised with that information In addition, the FPPC has interpreted the Political Reform Act (PRA) to apply to members of those City boards and commissions with "decision-making authority," as well as to certain consultants Boards and Commissions are considered to have "decision-making authority" if historically the recommendations of those boards and commissions have been routinely adopted by the Council, Consultants are considered "Public officials" for purposes of the PRA if they either serve in the capacity of a staff member or make recommendations that are routinely adopted by the City. The various City departments have provided updated information regarding the applicability of these regulations to their respective consultants as well as their boards and commissions, and that information has been used to update the Conflict of Interest Code. FOR CITY CLERK ONLY File No.: q —it —3 Council Meeting: C? a -'?-0!4 Disposition: elKi 1349 4 SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pau: 2 A copy of this staff report will be provided to all those who will be required to file for the first time. Copies of all statements of economic interest are kept on file in the City Clerk's office for public review. Finally, it should be noted that the disclosure requirements for Mayor, City Councilmembers, City Manager, City Attorney, City Treasurer, and the Planning Commissioners are set forth in Government Code Sections 87200- 87210, and are not included in the City's Code, These officials are covered under separate regulations and their disclosure statements are filed with the FPPC in Sacramento, with copies kept on file in the City Clerk's office for public review.. FISCAL IMPACT: No fiscal impact is anticipated from adoption of this resolution. ACTION: Adopt Resolution Encls.: Resolution for adoption, including Appendices A and 8 Deputy City Attorney II - Memorandum dated July 28, 2014 with attachments Model FPPC Conflict of Interest Code (2 CCR Section 18730) Resolution No. 13402 to be repealed W ZKy Clerk- Worki'lleWPPCIConflict of Int -700 senesTPPC biennial item 09-14 doe RESOLUTION NO. 13794 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL REPEALING RESOLUTION NO. 13402, RE -ADOPTING THE FPPC MODEL CONFLICT OF INTEREST CODE AS THE CITY'S CONFLICT OF INTEREST CODE, AND ADOPTING A REVISED LIST OF DESIGNATED EMPLOYEE POSITIONS AND DISCLOSURE CATEGORIES, TO BE INCORPORATED INTO THE CITY'S CONFLICT OF INTEREST CODE WHEREAS, pursuant to California Government Code Sections 81000, et seq. (The Political Reform Act, or PRA), the City Council has adopted by Resolution from time to time the Fair Political Practices Commission's model Conflict of Interest Code, contained at Title 2, California Code of Regulations, Section 18730, as the City's Conflict of Interest Code, and adopted therewith designated employee positions and disclosure categories for incorporation into the City's Conflict of Interest Code, most recently by Resolution No. 13402; and WHEREAS, every even -numbered year every state agency and local governmental agency is required to review and, if necessary, revise its Conflict of Interest Code including review and revision of its list of designated employee positions and its list of disclosure categories, so as to incorporate such changes as the new titles of recently hired employees, deleted positions, and other organizational restructuring; and WHEREAS, the Council has determined that the attached Appendices A and B accurately set forth those designated employee positions (Appendix A - Designated Employees) and disclosure categories of financial interest (Appendix B - Disclosure Categories), which should be made reportable under the City's Conflict of Interest Code; and WHEREAS, the City Council desires to continue to use the FPPC's model Conflict of Interest Code, as set forth in Title 2, California Code of Regulations Section 18730, as the City's I Conflict of Interest Code, a copy of which is available for public review in the City Clerk's office; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES AS FOLLOWS: 1. The above -recited facts are true and correct. 2. Resolution 13402 is hereby repealed. 3. The FPPC's model Conflict of Interest Code, as set forth in Title 2, California Code of Regulations Section 18730, is hereby re -adopted as the City's Conflict of Interest Code. 4. The attached list of designated employee positions (Appendix A) and list of disclosure categories (Appendix B) are hereby adopted and incorporated into the City of San Rafael's Conflict of Interest Code. S. The officials and employees holding designated positions shall file statements of economic interests (Form 700) as required by regulations of the FPPC and by Section 4 (C) of the City's Conflict of Interest Code, with the City Clerk, and the City Council hereby delegates the authority of filing officer to the City Clerk, I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the Council of said City on Tuesday, the 2nd day of September, 2014 by the following vote, to wit: AYES: COUNCILMEMBERS: Bushey, Colin, Connolly, McCullough & Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None • 9,vao-e ESTHER C. BEIRNE, City Clerk W' -City Clerk- Workf:i16Agcnda relatcdlFPPC issuestconflict of int reso 09-14 doc 2 APPENDIX A Desianated Emolovees DISCLOSURE DEPARTMENT POSITION CATEGORY City Attorney Assistant City Attorney 11,2 Deputy City Attorney II 1.2 City Clerk City Clerk 3b, 3g Deputy City Clerk 3b, 3g City Manager Assistant City Manager 11,2 Emergency Services Manager 2, 3d, 3e, 3g Economic Development Manager 1,2 Economic Development Program Coordinator 11,2 Events Coordinator 1.2 Community Development Community Development Director 11,2 Planning Manager 1,2 Senior Planner 11,2 Associate Planner 1,2 Code Enforcement Official III 1,2 Code Enforcement Official 11 11,2 Code Enforcement Official 1 11,2 Chief Building Official 11,2 Deputy Building Official 11,2 Plan Checker 1.2 Building Inspector II 3e Building Inspector I 3e Community Services Community Services Director 3f, 3g Senior Recreation Supervisor 3f, 3g Recreation Supervisor 3f. 3g Recreation Coordinator 3f. 3g fire Fire Chief 2, 3d, 3e, 3g Battalion Chief - Operations 2, 3d, 3e, 3g Administrative Fire Captain 2, 3d, 3e, 3g Deputy Fire Marshal 2, 3d, 3e, 3g Fire Prevention Inspector 11 2, 3d, 3e, 3g Fire Prevention Inspector 1 2. 3d, 3e, 3g Environmental Management Coordinator 2. 3d, 3e, 3g Emergency Management coordinator 2, 3d, 3e, 3g Vegetation Management Specialist 2, 3d, 3e, 3g Finance Finance Director 1,2 Accounting Supervisor 1,2 Revenue Supervisor 2, 3 (in entirety) Library Library Director 3d, 3g Assistant Library Director 3d, 3g Management Services Human Resources Director 3a, 3g Information Technology Manager 3d, 3e, 3g Network Analyst 3d, 3g Parking Services Manager 11,2 Parking Operations Supervisor 2, 3d, 3g Administrative Analyst 2, 3d, 3g Police Chief of Police 3d, 3e, 3f, 3g Police Captain 3d, 3e, 3f, 3g DISCLOSURE DEPARTMENT POSITION CATEGORY Police Lieutenant Civilian Supervisor Training Officer Public Works 1 Public Works Director Sanitation District Assistant Public Works Director 1 City Engineer Administrative Manager Associate Civil Engineer Assistant Civil Engineer Sr. Associate Engineer Associate Engineer Assistant Engineer GIS Analyst Engineering Technician I Engineering Technician II Traffic Engineer Traffic Engineering Technician I Traffic Engineering Technician II Streets Superintendent Streets Maintenance Supervisor Parks Superintendent Parks Maintenance Supervisor Garage Shop & Equipment Supervisor District Manager/ District Engineer, Sanitation District Sr. Civil Engineer, Sanitation District Sewers Maintenance Supervisor Sewer Maintenance Superintendent Boards & Commissions Design Review Board Geotechnical Review Board Park & Recreation Commission Consultants " 3d, 3e, 3f, 3g 3d, 3e, 3f, 3g 3f, 3g 11,2 11,2 11,2 11,2 3g 3g 3g 3g 3g 3g 3g 3g 3g 3g 11,2 1,2 3d, 3e 3d, 3e 3d 1.2 11,2 3e 3e 1.2 11,2 1,2 1,2 With respect to Consultants, the relevant department director may determine in writing that a particular consultant is hired to perform a range of duties that are limited in scope and thus is not required to comply with the disclosure requirements described in these categories. Such determination shall include a description of the consultant's duties and, based upon that description, a statement of the extent of disclosure requirements. The department director shall forward a copy of this determination to the City Clerk. Nothing herein excuses any such consultant from any other provision of this Conflict of Interest Code. Designated Employees 2014 APPENDIX B Disclosure Categories Cateaory 1: All investments and sources of income. Cateaory 2: All interests in real property. Cateaory 3: Investments in business entities and sources of income of the type which have or foreseeably could contract with the City to provide services, supplies, materials, machinery, or equipment; or which could be enhanced when a designated employee makes or participates in making a decision. a. Personnel agencies or personnel consultants; b. Municode and Marin County newspapers; c. Financial institutions; d. Department record forms, communications equipment, safety equipment, firefighting or fire detection equipment, automotive or rolling stock sales, automotive parts or equipment, general departmental supplies or equipment; e. Building supplies or building, contractor, or construction firms; Travel agencies, recreation and athletic supplies, building maintenance and cleaning supplies; g. Book, software, and audio-visual publishers and distributors; computer equipment manufacturers and distributors. NOTE: PENALTY FOR LATE FILING: AS REQUIRED UNDER THE POLITICAL REFORM ACT OF 1974, AS AMENDED, SECTION 91013, IF ANY PERSON FILES AN ORIGINAL STATEMENT AFTER ANY DEADLINE, HE SHALL BE LIABLE IN THE AMOUNT OF $10.00 PER DAY AFTER THE DEADLINE UNTIL THE STATEMENT IS FILED. UP TO A MAXIMUM OF $100.00, WHICHEVER IS GREATER. W 'TPPOConllict of int -740 scries\Appcndix 9 -Disclosure Categories 2014.docx DATE: TO: FROM. RE: CITY OF SAN RAFAEL San Rafael, California INTERDEPARTMENTAL MEMORANDUM July 28, 2014 ESTHER BEIRNE, City Clerk ERIC T. DAVIS, Deputy City Attorney 11 Amendment of Conflicts of Interest Code California Government Code §87306.5 requires that the City review and, if necessary, revise its Conflict of Interest Code every two years. The deadline for the current review and revision of the Conflict of Interest Code is September 2, 2014. In 2004, the City of San Rafael adopted a Conflict of Interest Code (SRMC Chapter 2. 10) which incorporated by reference the Fair Political Practice Commission's ("FPPC") model Conflict of Interest Code in 2 Cal. Code Regs. Section 18730. While this Code is automatically amended whenever the model code is changed, the City is required to review and, if necessary, to revise its list of "Designated Employees" (those employees required to file statements of economic interest, Form 700) and its list of "Disclosure Categories" (the economic interests which must be disclosed on the Form 700). The last review and revision was made on September 4, 2012 by City Council Resolution No. 13402, and the current lists of Designated Employees and Disclosure Categories are attached as Appendices "A" and "B" to that Resolution. Because of new positions, changed circumstances and structural reorganization within City Departments, the list of "Designated Employees" and the list of applicable "Disclosure Categories" may need to be revised. Please forward copies of those Appendices to all Department Directors. Department Directors should review their department employee positions, the disclosure categories applicable to those positions and, if appropriate, revise both lists. Revised lists should be forwarded to you in sufficient time for City Council adoption of any changes by its September 2, 2014 meeting. WHO IS COVERED Under the Political Reform Act (PRA), all local public officials, who foreseeably may materially affect their own economic interests through their decisions or participation in decisions in their official capacity, must disclose their economic interests by completing and filing with the City Clerk Form 700. Persons required to disclose such economic interests fall into two general classifications: Conflict of Interest Code Page 2 July 28, 2014 Those required to file disclosures because of their position (state constitutional officers, legislators, county supervisors, mayors, council members, etc.). Government Code §§87200-87210. Because the Government Code specifically covers these individuals, they are not covered under the City's Conflict of Interest Code. These positions include members of the City Council, the Mayor, members of the Planning Commission, the City Manager, the Finance Director, and the City Attorney. 2. Those required to file disclosures because of their duties (public officials and employees who make or participate in the making of governmental decisions). These include "Designated Employees", those members of City Boards and Commissions with decision-making authority and certain consultants. These positions are covered under the City's Conflict of Interest Code, adopted pursuant to Government Code §§87300-87313, and accordingly, are the focus of this review and revision. A. Boards & Commissions: The Fair Political Practices Commission has interpreted the PRA to apply to members of all City boards, committees and commissions with decision-making authority. (2 Cal. Code Regs. § 18700(a) (1)). A board, committee or commission has decision-making authority if. 1. It may make a final governmental decision; or 2. It may compel or prevent the making of a governmental decision by its action or inaction. or 3. Its recommendations are, and historically have been, routinely and regularly followed (2 Cal. Code Regs. § 18700(a)(b) & (c)). Accordingly, if historically, the recommendations of an advisory board (e.g. Design Review Board) have been consistently adopted by the Planning Conunission or the City Council, the members of such board, committee or commission must file disclosure statements of their economic interests. Because a board or commission is titled "advisory" is not determinative of whether it has "decision-making authority"; only an historical analysis of a board or commission's "actions" can determine its status. B. Desienated Employees: The PRA's requirements apply to those officials, employees or consultants who either make decisions or who participate in the decision-making process. The FPPC has determined that officials, employees or consultants who negotiate for, or provide advice to the decision -maker by Conflict or Interest Code Page 3 July 28, 2014 way of research, reports or analysis, are "participating in the decision-making process." As such, these officials, employees and consultants must be included in the list of "Designated Employees" and must file disclosure statements in the manner detailed in the City's Conflict of Interest Code. WHAT MUST BE DONE In order to comply with the PRA's requirement of updating the Conflict of Interest Code, each City Department Director should do the following: 1. Review his/her duties and the duties of the department/agency employees to determine whether particular uositions should be added or deleted to the list of "Designated Employees." Delete positions which no longer exist or no longer are involved in the decision malting process and add those new positions which are involved in the decision making process. 2. Review the functions and duties of any boards. committees or commissions with which the departmentlagency interacts to determine whether they meet the criteria to file disclosure statements of economic interest. 3. Review the functions and duties of any department -retained consultants to determine whether they meet the criteria to file disclosure statements. After determining what positions must be designated, the Department Directors should next determine which categories shall apply to each position. This determination is fact -driven by the job -functions of a particular position and their relationship to potential financial interests over which that position might have some control. In performing this review, department managers should keep in mind that the City's Conflict of interest Code and its listed "Designated Employees" and "'Disclosure Categories" must: I. Provide reasonable assurance that all foreseeable conflict-of-interest situations will be disclosed. 2. Provide each affected person a clear and specific statement of his/her duties under the Code. 3. Provide adequate differentiation between "Designated Employees" with different powers and responsibilities. (Government Code §87309). After making the revisions to their lists of designated employees and disclosure categories, Department Directors should forward their revisions to your office. Contlict oflnterest Code Page t Duty 28, 2014 e 10In er ° com ee or co onstlitassist DirectorsE 1tlPLE suchPaters ant who i ("In es m emPl yeel o be de/a eotiat s, �e�p �vieu.� the to disclo eats in & r consult d on the /- rnrnends follo4vin of the Pse real pro usiness int. t would be of Desi or °theta,/se example n1a co RA w. Pert. int es and required �riated F Partici Y be Auters The ld be ac erects. ,9s S°urcac,es o f ed t° disc/ Pail in th help�l. ,417 Participate in the pr e type of by hay. 'It°�cia/ lwha e�) but w 'Y intereder the abo ecurernent curenlent analysis g this otrl has autho uld 1710 s under cnterla. Employ eS an additi0n� of o race suppl°esld' be a pld���ose inter eco Purchas Yonot he Y 3 rater s1g/late have aid in d braly bo 1 e t° e t n busi g °ds� the red isclo ons, ,d 117 a Cont7; shed the fitting who to , books, e9uip er t°Pees or cans s which Ob disclos and Fpp ct of ppC S incl mate ultan ll staternents,C advice let e, o t Codect sheets °� and i e`�I a Departow t /" pals 0rserts vic s.Who If y°u havey n how to d e�tentlic of Int Determine 1st 0 f ��Desi questions, p/eye Which nsu/ttant Who gnated co estCodes _ � Should 9e A�c�ents Contact fie s are re9uired Qating cc: ale Mayor & ll Rob1VZWE u Ma k e . Nlelnbe Pstem 1 ty City Attorney er Now to Determine Sho Should be DesignaA In a Conflict of Interest Code' Determining Who Makes Making a governmental decision, means the person: or Participates In the (1) Votes on a matter; Making of Governmental Decisions: (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* 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. Who Is a Designated A designated employee Is an officer, employee, member or consultant of an agency Employee? whose position Is designated in the code because the position entafls the making o Participation h3 the making of goveMmenial deplEIgns 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 pariiclpates in the making of governmental decisions. (FPPC Regulation 2 Cal. Code of Regs. Section 1870 1-18702.4, ) Who Should Not be The term "designated employee" does not Include: Designated? 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 • Members of boards or commissions which are solely advisory and do not stake substantive recommendations Checking Duty Statement You can determine who should be designated in the code by first eliminating those and Job Description: 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. Look at each position to determine if it makes or participates in the f making of governmental decisions. One way to accomplish this Is by reviewing duty j statements or job descriptions. 'This fact sheet should not be used to determine whether your agency is required to adopt a conflict of interest code Contact the FPPC for assistance in making that determination. Fair Pailticdi Practices Commission 428 J Street, Ste 620 Sacramerge, CA 95814 1866; ASK+PPC;wwwAppc ca gnv CFS1 June 2002 Consultants D in a Conflict ofifterest Code Who is a Consultant? 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 has 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.) 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." (Gov. Code Section 82048) Wgulation 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; (vil) Adopt, or grant agency approval of, policies, standards, or guidelines for the agency, or for any subdivision thereof; -OR- (8) Serves in a staff capacity with the agency and in that capacity participates in making a governmental decision (Regulation 18702.2) or 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 rile 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 either "participate in making" Capacity governmental decisions or are performing substantially all the same tasks that normaily 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. (Memorandum to the Commission dated March 28, 1994 ) 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 to a staff capacity If, however, a firm's Fair PoiitiCai Practices Commission 428 J St.. Ste 620. Sacramento. CA 95614 6661ASK-FPPGwww fppe.ca.gov C1FS - December 2001 Consultants �. 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. An Individual who makes a govemmental decislon listed above or serves in staff capacity with the agency is considered a public official who must file a statement of economic Interests. This applies even If an agency falls to properly designate a consultant in a conflict of Interest code because the disqualification provisions of the Political Reform Act operate as soon as an Individual becomes a public official. The Individual Is subject to the Act's gift limits and conflict of interest provisions. F_xampfes An attorney hired to perform ongoing legal services for an agency would usually be considered a consultant. Attorneys generally have broad powers to affect decisions which could foreseeably and materially affect their financial interests. These powers Include the authority to represent and bind the agency to a course of action in litigation and contract matters. Attorneys often make governmental decisions listed in Regulation 18701(a)(2)(A) andtor serve in a staff capacity with the agency. However, an attorney hired to work on one discrete litigation matter, who was not making any governmental decisions listed above, would not be considered to be working in a "staff capacity" and, therefore, would not be a consultant. (Memorandum to the Commission, March 28, 1994.) An investment firm provides consulting services to a county employee's retirement association. Pursuant to a contract, employees of the investment firm attend all board meetings and subcommittee meetings where investment issues are discussed. Employees of the investment firm are required to perform other services and provide reports on Investment issues as requested by the retirement board or staff. Because the employees of the investment advisor serve on an ongoing basis as staff for the retirement board, and in that capacity participate in the making of all investment decisions, they are considered consultants under the Act. (Randolph Advice tetter, No. 1-95-045.) Individual members of a consulting fine who prepare an EIS/EIR report for the Sacramento Regional Transit District's ("RT') Folsom light rail extension are consultants and should be designated in a conflict of interest code. RT hires environmental consultants on an as -needed basis to prepare extensive or technical environmental studies which cannot be completed by its staff. RT hires environmental consultants for each project. The consulting firm will be under contract with RT to provide environmental services for three projects extending over at least three years. The consultant conducts research and makes investigations that require exercise of Its expertise and jpdgment, and prepares the report. The consultant's role also encompasses recommending to RT's board of directors approval of agreements and permits it negotiates and approval of the environmental report. Although the RT board reviews the report and related documents, because of the technical nature of the study, the consultant's conclusions and recommendations are accepted without significant intervening substantive review. In addition, members of the consulting firm have authority to negotiate contracts and recommend RT's approval without significant independent review by RT (Patterson Advice tetter, No. A-97-570.) The Commission realizes that not all consultants participate n making decisions on behalf of public agencies. Rather than amend your code each time you retain a consultant who is in a decision-making capacity, you may use a specialized disclosure category which provides that the disclosure required of consultants shall be determined on a case-by-case basis by the chief executive officer The chief executive officer may make a determ-nation as to what disclosure, !f any, is required by any particular consultant This . posit o� wsvltant d/sc! C ootnote as s� Wwa )j s ordeal eg Sigori' should Consul t� °nsvltant• he follow sled positi be Part of a tS cyCensuffen! ng example�n rn the app ndiS oft ou should fo!/oIO wing 041.r / �� nt 1, thec/vdedin 1 he code �yith ad the Ist Aarr/� e'�ecvtiv$�tloq. broadest he c/ s� @d�signaled e A. Of disc 0"e'T that /4nt, a/thMector o� X°cwive o� at a9o�y;n hel I - S�bd Shal! st descrlp! o�9uir8j�en S/n sc �e a� es/gn8'�eop aY deter /ec! to the exatenept ofth ofthe cons desciided d thus is np °sition . sfne in oyryti insecutive p cee,extent �yf dant S cyutis IhIS seclip required to Med lo,oe9 tha! a 'oec(iorr in the s) p,Ble�rnc7li/�su� an - h`�Sed Svch poet ��'%%' fv/ rte `� ran ree Upon th'st nobs fact She same manner nd,0 a b//c,eca� rhe (xe de c Alio shagll?atlof; "M; c/ 9e cam ! nS On the S act She�� provisi r, on as this o17,%7; / n� t/el nirisCtD s or ude Act rmisslon at uit the gclalone to en °j the Act ct f r @fest Ude r,Ouh/ic C°MrMs$ienls 3, ac65he�-SBs0ro8`oations te o° COAIIance ni h cOnsultan bsrte ,ti,i,tik; and other free at (96 fact the the qct /f s yov sh fppc ca 9ov, p°nanl /Inform fo m 8ti07Z air p �ti � YOU c ical s an, are avaitadle Rhfeorm California 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 statutory' 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-ofi-interest code requires financial disclosure only from employees required to be designated by Section 87302(a) and, second, that a code ' 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 California 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 Cal3d 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 California 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 September 10, 2013 Dianna Marie Valdez, Senior Paralegal Conflicts of Interest & Ethics Coordinator Public Policy & Ethics Group Best Best & Krieger LLP P O Box 1028 Riverside, CA 92501-1028 Re: Your Request for Informal Assistance Our File No. I-13-100 Dear Ms. Valdez: This letter responds to your request for advice regarding financial reporting and the conflict-of-interest provisions of the Political Reform Act (the "Act").' Because you seek general guidance, we are treating your request as one for informal assistance.2 QUESTION Many local agencies are contracting out a portion of their human resources administration to private Firms. What standards apply to determine whether individuals providing such administrative services are "consultants" under the Act, subject to its conflict of interest and economic disclosure provisions? CONCLUSION Under the Act, an individual consulting to a government agency is required to file a statement of economic interests and is covered by the conflict-of-interest rules if the consultant makes governmental decisions as defined in Regulation 18701(a)(2) or serves a staff capacity ' The Political Reform Act is contained in Government Code Sections 81 QUO through 9101.1. All statutory references are to the Government Code, unless otherwise indicated. The regulations of the Fair Political Practices Commission are contained in Sections 18110 through 18997 of Title 2 of the California Code of Regulations. All regulatory references are to Title 2, Division 6 of the California Code of Regulations, unless otherwise indLeated. Informal assistance docs not provide the requestor with the immunity provided by an opinion or formal written advice. (Section 831 14; regulation 18329(c)(3).) File No. 1-13-100 Page No. 2 and participates in governmental decisions or performs the duties of an individual in the agency's conflict-of-interest code. (Regulation 18701(a)(2) and 18702.2.) Based on the sample facts you provided, individuals in the human resources firm Paychex providing HR services to the local agency will not be considered consultants where the services they are providing consist of payroll, administrative and educational services, administering health benefits insurance, and implementing hiring, overtime and other decisions made by employees of the government agency_ In these instances, the individuals in the human resources Firm will not be making a governmental decision, or serving in a staff capacity and participating in a governmental decision or performing substantially all the same duties as someone in the agency's code, which would require their designation as a consultant. FACTS In your work as a Senior Paralegal, you review conflict of interest codes on behalf of local agencies, many of which contract out some portion of their human resources administration. You are requesting general guidance about whether individuals in the private firms providing human resources services to certain local agencies should be considered consultants under the Act subject to its conflict of interest provisions and required to file annual statements of economic interests_ For example, you have a client that has outsourced the bulk of its human resources duties to the firm Paychex. You have sent us a copy of the services agreement between the Lake Arrowhead Community Services District (the "district") and Paychex, and the overview and the objectives of this agreement. You also provided summaries from each of these documents as to what prompted you to believe certain individuals working under this contract may be considered consultants and required to file Form 700s narrowed to interests based on their duties. You spoke with a company representative and attorneys working on this matter and from what they tell you, the individuals that have ongoing contact with the district only provide payroll, administrative and educational services. They state that no one person has any responsibility for representing the district in dealing with any claims, insurance, negotiations, etc. There are a couple of employees at Paychex who administer this client, but they only deal with the human resources duties and health benefits insurance, which appear to be just a process based upon the information you obtained. Paychex also develops and provides all policy documents and handbooks but retains ownership. These are developed based on Paychex's review of applicable federal and state statutes and regulations then in effect. ANALYSIS The Act's conflict-of-interest rules prohibit a public official from making, participating in making, or using his or her official position in any way to influence a governmental decision in which the official knows, or has reason to know, that he or she has a "financial interest." (Section 87100_) Section 87103 provides that a public official has a "financial interest" in a File No. I-13-100 Page No. 3 governmental decision "if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family, or on any" of the official's economic interests. in addition, certain state and local public officials must file periodic statements of economic interests (Form 700) disclosing those personal assets and interests that may be affected during the performance of their official duties. (Sections 87200 - 87350.) A. Consultant. The Act defines "public official" to include "every member, officer, employee or consultant of state or local government agency." (Section 82048, emphasis added.) In addition, the Act defines the term "designated employee" to include "any officer, employee, member, or consultant" of any agency who meets specified criteria. (Section 82019, emphasis added.) Under the Act, each agency is required to adopt a conflict-of-interest code. (Section 87300.) Typically an agency's conflict -o€ -interest code includes designations for consultants to the agency. The term "consultant" is defined in Regulation 18701(a)(2) as an individual who, pursuant to a contract with a state or local government agency: "(A) Makes a government decision whether to: "(i) Approve a rate, rule, or regulation; "(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 that requires agency approval; "(v) Grant agency approval to a contract that requires agency approval and to 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 for the agency, or for any subdivision thereof; or "(13) Serves in a staff capacity with the agency and in that capacity participates in making a government decision as defined in regulation 18702.2 or performs the same or substantially all the same duties for the agency that would otherwise be performed by an individual holding a File No. 1-13-100 Page No. 4 position specified in the agency's Conflict of Interest Code under Government Code section 87302." Thus, there are two ways that an individual can become a "consultant."3 First, an individual may be a "consultant" if he or she, pursuant to a contract with a government agency, makes government decisions or enters into contracts for the agency as described in Regulation 18701(a)(2)(A). Alternatively, an individual may be a "consultant" if he or she serves in a staff capacity and either participates in governmental decisions (as defined) or performs the same or substantially all the same duties that would otherwise be performed by an individual in a position listed in the agency's conflict-of-interest code_ 1. Makes government decisions. As described in Regulation 18701(a)(2)(A) above, if an individual is performing services under a contract with a government agency and "makes a government decision" for the agency as listed in that provision, he or she is a consultant. We note that you are taking the right approach in looking at the actual duties an individual at the human resources firm performs on behalf of the government agency. The sample contract you submitted between Paychex and the district seems to be a general, form contract that lists all possible human resources services that Paychex may provide for the district or for other clients. In determining whether an individual needs to be designated as a consultant, you are correct to focus on the actual duties performed by an individual in the human resources firm for a government agency, rather than the possible services listed in a form contract. For example, Paychex advised you that the individuals who will have ongoing contact with the district will only provide payroll, administrative and educational services. They stated that no one person has any responsibility for representing the district in dealing with any claims, insurance, negotiations, etc. There are a couple of employees at Paychex who administer the district as a client but this is only dealing with the human resources duties and health benefits insurance processing. The facts in your example indicate that the individuals at Paychex will not be making government decisions, entering into contracts or performing other actions listed in Regulation 18701(a)(2)(A) for the district. Accordingly, we next examine whether the individuals serve in a staff capacity under subdivision (B). ,A business entity cannot be a "consultant- under Regulation 18701(a)(2), because the term is applied only to an "individual," that is, a natural person, It is the employee of the firm, who actually performs the duties tender the contract, who may be a consultant if his or iter activities meet the definition of "consultant." (Herecher Advice Letter, No. A-92-278.) File No. I-13-100 Page No. 5 2. Serves in a staff capacity. The phrase "serves in a staff capacity" in subdivision (B) has been construed by the Commission to include only those individuals who are performing substantially all the same tasks that normally would be performed by one or more staff members of governmental agency. Implicit in the notion of service in a staff capacity is an ongoing relationship between the contractor and the public agency. We have advised that a contractor serves in a staff capacity where the contract calls for work to be performed "over more than one year" on "high level" projects (Ferber Advice Letter, No. A-98-118). We have advised that a contractor does not act in a staff capacity where the work is to be performed on one project or a limited number of projects over a limited period of time (Sanchez Advice Letter, No. A-97-438), where the relationship between the contractor and the agency would last only 12 16 months with no ongoing relationship contemplated (Harris Advice Letter, No. A-02-239) and where, under a multi-year contract, the contractor would perform only on a sporadic basis. (Maze Advice Letter, No. 1-95-296; Parry Advice Letter, No. 1-95-064.) The services you are inquiring about will be performed by the human resources firm for the local government agency on a continuing, ongoing basis. The agreement between Paychex and the district for human resources services will continue until terminated and involves a variety of duties that would otherwise be performed by district employees. Under these circumstances, the individuals at the human resources firm will be working in a staff capacity. The next step in the analysis is to determine whether the consultant will either participate in making a governmental decision or will perform "the same or substantially all the same duties ... that would otherwise be performed by an individual holding a position specified in the agency's Conflict of Interest Code . _ .." Participates in making a governmental decision or performs the same or similar job duties normally performed by an individual in a position listed in the agency's conflict-of- interest code. Regulation 18702.2 states that an official participates in making a governmental decision when, acting within the scope of the official's position, the official: "(a) Negotiates, without significant substantive review, with a government entity or private person regarding a governmental decision referenced in [Regulation 18701(a)(2)(A)]; "(b) Advises or makes recommendations to the decisionmaker either directly or without significant intervening substantive review, by: "(1) Conducting research or making any investigation which requires the exercise of judgment on the part of the official and the purpose of which is File No. I-13-100 Page No. 6 to influence a governmental decision referenced in [Regulation 18701(a)(2)(A)]; or "(2) Preparing or presenting any report, analysis, or opinion, orally, or in writing, which requires the exercise of judgment on the part of the official and the purpose of which is to influence a governmental decision referenced in [Regulation 18701(a)(2)(A)]." Under the contract between Paychex and the district, it appears that the individuals providing human resources services to the agency will be implementing decisions already made by the government agency, rather than be participating in governmental decisions or performing duties of an individual in a position listed in the agency's conflict of interest code, and thus would not be considered consultants under the Act. This is true where the individuals are providing administrative services, handling payroll, providing educational services, and processing health benefits insurance. This is also true where the individuals at the private human resources firm are implementing decisions made by employees of the local agency with respect to new hires, separations and overtime authorization. However, if individuals in the private human resources firm are making executive decisions concerning human resources matters on behalf of the agency, such as making hiring decisions, deciding what health benefits to offer (that have not already been pre -approved), or approving contracts on behalf of the agency, then you are correct that they would need to be designated as consultants under the Act. For example, outside human resources personnel will not require being designated as a consultant in an agency's conflict-of-interest code if they undertake the following activities: - payroll administration; - administration of employee benefits; - processing new agency hires or separation of employees; - implementing authorized employee overtime; - prepare salary or benefits surveys for consideration by the government agency. On the other hand, outside human resources personnel will need to be designated as a consultant in an agency's conflict-of-interest code if they undertake the following activities: - hire an outside attorney to represent the agency in personnel issues; - select and purchase software for the agency for use payroll and human resources administration; - select benefits packages offered to agency employees. including determining what kind of benefits to provide or which providers to utilize; - participate as part of the agency's executive management team; - approve health benefit claims. File No. I-13-100 Page No. 7 In addition to someone who "serves in a staff capacity" and "participates in making a government decision," the regulation also includes as a consultant an individual who "serves in a staff capacity" and "performs the same or substantially all the same duties for the agency that would otherwise be performed by an individual holding in a position specified in the agency's conflict-of-interest code." Of course, an agency's conflict of interest code specifically lists positions that make or participate in government decisions.; You will want to review a local government agency's conflict of interest code carefully, to make sure that the code is not overbroad in designating agency employees who have human resources responsibilities that do not involve making or participating in a governmental decision. This will ensure that individuals at an outside HR firm will not be inadvertently pulled in as consultants under this provision. We hope this provides you general guidance as you review the contracts for human resources services entered into by local agencies. If you have other questions on this matter, please contact me at (916) 322-5660. Sincerely, Zackery P. Morazzini General Counsel By: Hyla P. Wagner Senior Counsel, Legal Division HPW.jgl The definition of" designated employee" under Section 82019 includes those whose position entails making or participating in making go%ernment decisions, exempt employees, elected positions, and those employees in%olted in contracting or procurement FAIR POLITICAL PRACTICES COMMISSION 428 J Street • Suite 620 • Sacramento, CA 958142329 (916) 322-5660 • Fax (916) 322-0886 April 15, 2008 Jennifer Fint Administrative Assistant ERMA 1831 K Street Sacramento, CA 95811 Re: Your Request for Advice Our File No. A-08-038 Dear Ms. Fint: This letter responds to your request for advice on behalf of the Employment Risk Management Authority 'ERMA") regarding the "consultant" provisions of the Political Reform Act (the "Act"). QUES'T'ION Are the brokers who work for A1liant Insurance Services, Inc. (the "brokers") and provide excess insurance quotes to the ERMA Board of Directors (the "Directors") "consultants" under the Act such that they should be designated in the conflict of interest code and file Statements of Economic Interests ("SEC')? CONCLUSION Based on the information you provided, the brokers are not considered "consultants" under the Act, and thus will not file SEI's. FACTS You are writing on behalf of ERMA, a Joint Powers Authority ("JPA') with state jurisdiction. ERMA engages an insurance brokerage firm to collect information and obtain quotes for excess insurance (insurance over the ERMA pooled limit). The brokers ` The Political Reform Act is contained in Government Code Sections 91000 through 91014. All statutory references are to the Government Code, unless otherwise indicated. The regulations of the Fair Political Practices Commission are contained in Sections 18110 through 18997 of Title 2 of the California Code of Regulations. All regulatory references are to Title 2, Division 6 of the California Code of Regulations, unless otherwise indicated. Am File No. A-08-038 Page No. 2 provide insurance quotes annually, and the board decides whether or not ERMA will purchase excess insurance. ERMA is not currently buying excess insurance. The brokers do not invest or manage any ERMA Funds, and do not make the decision whether or not ERMA will purchase excess insurance. Per the contract between the brokers and ERMA, the brokers are responsible for, among other things, evaluating ERMA's current and potential excess insurance needs. The brokers must also inform the ERMA board of any problems or issues related to coverage, and will monitor the program to ensure its continued efficacy. The brokers also agree that then the ERMA board requests their presence at the board meetings, they will attend and present the pertinent information. ANALYSIS The Act's conflict-of-interest rules prohibit a public official from making, participating in making, or using his or her official position in any way to influence a governmental decision in which the official knows, or has reason to know, that he or she has a "financial interest." (Section 87100.) Section 87103 provides that a public official has a "financial interest" in a governmental decision "if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family," or on any of the official's economic interests. In addition, state and local public officials must file periodic statements of economic interests (Form 700) disclosing those personal assets and interests that may be affected during the performance of their official duties. (Sections 87200 - 87350.) Your request for advice on behalf ERMA relates to the interpretation of the city's conflict of interest code. The Fair Political Practices Commission (the Commission") is the code -reviewing body for ERMA, a JPA. For this reason we are able to provide advice regarding ERMA's code. The Act defines -public official" to include "every- member, officer, employee or consultant of state or local government agency." (Section 82048.) ERMA is a state agency by virtue of its being a JPA. Regulation 18701(a) defines, for purposes of Section 82048 (and Section 82019 which defines "designated employee") a consultant: (2) "Consultant" means an individual who, pursuant to a contract with a state or local government agency: (A) Makes a governmental decision whether to: 1. Approve a rate, rule, or regulation; 2. Adopt or enforce a law; 3. Issue, deny, suspend, or revoke any permit. license, application, certificate, approval, order, or similar authorization or entitlement; 4. Authorize the agency to enter into, modify. or renew a contract provided it is the type of contract that requires agency approval; " File No. A-08-038 Page No. 3 5. Grant agency approval to a contract that requires agency approval and to which the agency is a party, or to the specifications for such a contract; 6. Grant agency approval to a plan, design, report, study, or similar item; 7. Adopt, or grant agency approval of, policies, standards, or guidelines for the agency, or for aay subdivision thereof; or (B) Serves in a staff capacity with the agency and in that capacity participates in making a governmental decision as defined in Regulation 18702.2 or 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 under Government Code Section 87302. (Regulation 18701(a)(2). copy enclosed.) The Act qualifies a "consultant" as being an individual who has a contract with a state or local government agency. You have provided a copy of the contract. The contract you provided is between ERMA and the brokerage firm of Alliant Insurance Services, Inc. The people who perform the duties under the contract would be the focus of our inquiry. (,See Wasko Advice Letter, A-04-270, copy enclosed.) To further determine whether the brokers are "consultants" under the Act, you must determine whether the brokers are "making governmental decisions." If the brokers engage in any of seven criteria listed above, they qualify as consultants. (See Regulation 18701(a)(2).) From the information you provided, and a careful reading of the contract between the brokers and ERMA, we find nothing to establish that the brokers have the authority to make any decisions, or take any actions listed in Regulation 18701(a)(2)(A). Therefore, the brokers do not qualify as consultants under this Regulation. Additionally, under Regulation 18701(a)(2)(B), the brokers could be considered consultants if they serve "in a staff capacity with the agency and in that capacity participate[] in making a governmental decision as defined in Regulation 18702.2 or performs the same or substantially 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 under Government Code Section 87302." This provisions applies two separate tests: fust, whether the individual serves in a staff capacity and in that capacity participates in making governmental decisions and second, whether the individual serves in a staff capacity with the agency and in that capacity perforins all or substantially all the same duties of an individual holding a position specified in the agency's conflict of interest code. The Randolph Advice Letter (No. I-95-045) illustrates how one decides whether a person serves in an agency staff capacity within the meaning of Regulation 18701(a)(2)(B). This advice letter notes that the "staff capacity" language generally File No. A-08-038 Page No. 4 excludes individuals who work on one project or a limited range of projects. Generally, "serving in a stag capacity" involves an on-going relationship between the agency and the contractor. (.See Wasko Advice letter, supra; see also, Travis Advice Letter, No. A- 96-053.) The Commission has previously found that a tern of more than one year is significant enough to meet this temporal qualifier, whereas nine months of regular and continuous work is not normally enough to qualify. (Ferber Advice letter, No. A-98-118 and Smith Advice Letter, No. 1-99-316.) The brokers' duties, as described in the contract you provided are unique to the excess insurance market, and it seems as though ERMA's staff would not otherwise perform these duties. While the term of the contract does extend for one year with the option to renew, the brokers are not engaging in "regular and continuous" work for the agency. Rather, they have specified duties that they perform at necessary intervals, and when called upon to do so, report to the agency. The brokers are not serving in a staff capacity, as their duties are limited to those specified in the contract and are specialized in the area of excess insurance. A person "participates in making a governmental decision" when he or she. acting within the authority of his or her position: (a) Negotiates, without significant substantive review, with a governmental entity or private person regarding a governmental decision referred to in Regulation 18701(a)(2)(A); (b) Advises or makes recommendations to the decisionmaker either directly or without significant intervening substantive review, by: (1) Conducting research or making any investigation which requires the exercise of judgment on the part of the official and the purpose of which is to influence a governmental decision referred to in Regulation 18701(a)(2)(A); or (2) Preparing or presenting any report, analysis, or opinion, orally, or in writing, that requires the exercise of judgment on the part of the official and the purpose of which is to influence a governmental decision referred to in Regulation 18701(a)(2)(A). (Regulation 18702.2.) On reading the contract between the brokers and ERMA. and after reviewing your facts, we see no evidence that the brokers are participating in or making governmental decisions. Rather, the brokers advise the ERMA board on an occasional basis. They obtain excess insurance quotes and present them to the board. The board then decides whether to purchase the excess insurance, Currently, ERMA is not purchasing excess insurance. Based on the limited facts you have provided, the brokers do not seem to fit under the definition of "consultant" and therefore would not file SEI's. File No. A-08-038 Page No. 5 If you have other questions on this matter, please contact me at (916) 322-5660. Sincerely, Scott Hallabrin General Counsel By: Heather M. Rowan Counsel, legal Division HMR: jgl Enclosures August 19, 2004 Leslie E. Murad, 11 Office of the City Attorney City of Redlands Post Office Box 3005 Redlands, CA 92373-1505 Re: Your Request for Advice Our File No. A-04-070 Dear Mr. Murad: This letter is in response to your request on behalf of the city council for the City of Redlands regarding Wildan, a professional engineering consulting firm, for advice regarding the conflict-of-interest and filing provisions of the Political Reform Act (the "Act").' QUESTION For the purposes of qualification as a consultant under the city's conflict of interest code, does the Wildan professional engineering consulting firm, or the individuals of Wildan performing duties under the contract with the City of Redlands, qualify as "consultants" for the City of Redlands under the Act, such that they must file a Form 7007 CONCLUSION Yes. Based on the information you have provided, the inclividuals performing the services specified in the contract between the City of Redlands and Wildan are considered "consultants" to the City of Redlands under the Act and are therefore obligated to file a Form 700. Please note that Wildan, the company, cannot be considered to be a consultant under the Act since consultants are individuals, as discussed below. However, in accordance with the city's conflict of interest code, this determination should be made by the city council regarding whether the employees of Wildan are consultants under the city's conflict of interest code. Government Code sections 81000 — 91014. Cornnnission regulations appear at Title 2, sections 18I09-18997, of the California Code of Regulations File No. A-04070 Page No. 2 FACTS The City of Redlands Public Works and Community Development Departments (the "city") retain consultants for the purpose of assisting with the workload when the city does not have sufficient employees to handle assignments. Both departments have retained Wildan, a professional engineering consulting Finn, to review engineering plans, maps and documents relative to proposed development. Wildan also examines building plans for compliance with state building codes as well as performing field inspections as a building inspector. Wildan performs this work as if the consulting firm was an employee of the city. Wildan submits its reports and findings to the city's departments for review, ratification and concurrence by the public works director and the city's chief building official. The public works director is a designated position within the city conflict of interest code. The chief building official is not. The chief building official does report, however, to the community development director, a designated position within the city's conflict of interest code. The position of"consultant" is listed as a designated position within the conflict of interest code with the city council making the determination of who qualifies as a consultant under the conflict of interest code.2 Additional facts were provided by you. on April 2, 2004, stating that Wildan only has the power to recommend a correction be done but is capable of temporarily stopping work on a project in order for a correction to be made. You also provided that this relationship is ongoing with the same type of work being performed by Wildan continually. ANALYSIS The Act's conflict-of-interest rules prohibit a public official from making, participating in making, or using his or her official position in any way to influence a governmental decision in which the official knows, or has reason to know, that he or she has a "financial interest." (Section 87100.) Section 87103 provides that a public official has a "financial interest" in a governmental decision "if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family," or on any of the official's economic interests. In addition, state and local public officials must file periodic statements of economic interests (Form 700) disclosing those personal assets and interests which may be affected during the performance of their official duties, (Sections 87200 — 87350.) Your request for advice on behalf of the Redlands City Council relates to the interpretation of the city's conflict of interest code. The city council determines who qualifies as a consultant under that code and is. the code reviewing body as well. Where the Commission is not the code reviewing body for the conflict of interest code of the 2 This information was provided by you in a telephone discussion on August 18, 2004. a File No. A-04-070 Page No. 3 agency or individual questioning the conflict of interest code interpretation, the Commission provides advice only in situations where the individual or agency has already requested an interpretation from the code reviewing body. (Regulation 18329.5(x)(3).) In this case, the code reviewing body is requesting the Commission's interpretation in coordination with the agency and individuals in qucstion, so the Commission is able to provide advice. The Act defines "public official" to include "every member, officer, employee or consultant of a state or local government agency." (Section 82048, emphasis added.) The local agency sponsors referred to in this advice request are by definition "local government agencies" under section 82041. Regulation 18701 provides for purposes of section 82048 (and section 82019 which defines "designated employee"), the definition of a "consultant": "(2) `Consultant' means an individual who, pursuant to a contract with a state or local government agency: (A) Makes a governmental decision whether to; 1. Approve a rate, rule, or regulation; 2. Adopt or enforce a law; 3. Issue, deny, suspend, or revolve any permit, license, application, certificate, approval, order, or similar authorization or entitlement; 4. Authorize the agency to enter into, modify, or renew a contract provided it is the type of contract that requires agency approval; 5. Grant agency approval to a contract that requires agency approval and to which the agency is a party, or to the specifications for such a contract; 6. Grant agency approval to a plan, design, report, study, or similar item; 7. Adopt, or grant agency approval of, policies, standards, or guidelines for the agency, or for any subdivision thereof; or (B) Serves in a staff capacity kith the agency and in that capacity participates in malting a governmental decision as defined in Regulation 18702.2 or performs the same or substantially all the sante duties for the agency that would otherwise be performed by an individual holding a position File No. A-04-070 Page No. 4 specified in the agency's Conflict of Interest Code under Government Code Section 87302." (Regulation 18701(a)(2).) We note at the outset that a business (such as Wildan) or governmental entity cannot be a "consultant" under regulation 18701(a)(2), since the term is applied only to an "individual," that is, to a natural person. You must look to the person performing the duties under the contract to determine who, if anyone, is acting as a consultant. (Sanchez Advice Letter, No. I-03-173.) In addition, if individuals within Wildan do not have duties under the contract, or those duties do not meet the definition of "consultant," as stated above, then those individuals are not consultants under the contract. (Del Guercio Advice Letter, No. I-01-116.) Therefore, in order to apply this analysis, the city council must determine which individuals working for Wildan are performing the duties pursuant to the contract and then apply this analysis to determine who is designated a consultant. Regulation 18701(a)(2) establishes two standards for qualification as a consultant. An individual who satisfies either standard is a consultant for the purposes of the Act. First, an individual may be a "consultant" if he or she performs, pursuant to contract, any of the actions described in subdivisions (a)(2)(A)(l)-(7) of regulation 18701. Alternatively, an individual may be a consultant if he or she "serves in staff capacity with the agency" under subdivision (a)(2)(B). Based on the facts provided, the duties performed under the contract by the personnel of Wildan include reviewing engineering plans, maps and documents relative to proposed development as well as examining building plans for compliance with state building codes and performing field inspections as a building inspector. You state that the personnel will submit the reports and findings to the city's departments for review, ratification and concurrence by the public works director and the city's chief building official. However, you also state that the Wildan personnel are capable of temporarily stopping work on a project in order for a correction to be made. Under the first test, where the contract expressly provides for a significant amount of control and direction by the city, which also retains the ultimate decision-making authority, the personnel of the contracting entity do not fulfill the qualifications of a consultant. (Del Guercio Advice Letter, supra.) 4n the other hand, in the situations described by your facts where the consultants have the authority to "suspend" an activity, the criteria identified in regulation 1870I(a)(2)(A)(3) and (6) -- i.e. the authority to issue, deny, suspend, etc. any permit, license, approval, order, or similar authorization, and the ability to grant agency approval to a plan, design, report, study, or similar item - appear to be met_ (See Toschi Advice Letter, No. I-94497 [engineer is a consultant to the city because he has the power to grant agency approval to a plan or similar item] and .1lciuti Advice Letter, No. I-94-205 [city geologist is a consultant to the city because he has the power to accept or reject a project even though the decision is appealable to the city council].) E, 31 File No. A-04-070 Page No. 5 To assist in determining if an individual is a consultant under the second test, whether he or she "serves in a staff capacity," the Commission has explained that the test for serving in a staff capacity is two-pronged. Both prongs of the test must be satisfied to qualify an individual as a consultant. The first prong is used `o identify only individuals who are performing substantially all the same tasks as would usually be performed by staff' members of the governmental agency. This eliminates the inclusion of individuals who work only on a discrete project and includes the quasi -staff member. Also included in the elements of this prong is the requirement that the individual participate in making a governmental decision as defined in regulation 18702.2. You provided in your facts that Wildan is performing substantially the same duties as a building inspector would provide the city acting as an employee of the city. The city does not designate building inspectors in its conflict of interest code, but the duties of Wildan go beyond the duties of that position. if the positions Wildan individuals are filling should be designated in the agency's conflict of interest code because the position is one in which the person makes or participates in the making of decisions, then this first prong of the test is met for those individuals performing the same duties under contract. (Ferber Advice Letter, No. A-98-118.) According to your facts, the duties included involve participation in the making of governmental decisions as defined in regulation 18702.2, if not making a governmental decision, as discussed above, and should be designated in the conflict of interest code. The second prong is a temporal qualifier. This is used to limit the individuals included as consultants under the "staff capacity" test to those who work for the agency for a significant amount of time. Implicit in the notion of "serves in a staff capacity" is that there is an ongoing relationship between the contractor and the public agency. The standard does not include individuals who work on one project or a limited range of projects for the agency unless those projects extend over a long period of time. (Travis Advice Letter, No. A-96-053; Randolph Advice Lettcr, No. A-95-045.) According to your facts, this is an ongoing project. Previous Commission advice has found that a term of more than one year is significant enough to meet this temporal qualifier, whereas nine months of regular and continuous work is not enough to qualify. (Ferber, supra, and Sinith Advice Letter, No. I-99-316.) This, of course, qualifies as an ongoing relationship; therefore, the temporal qualifier has been met. The individuals who perform either of the tasks described, such as examining building plans for compliance with state building codes or performing field inspections as a building inspector under the first test, while having the ability to suspend work on projects pending changes being implemented qualify as consultants under the Act. In addition, those who qualify as serving in a staff capacity under the second test, also qualify as consultants under the Act and both are therefore obligated to file a Form 700. Your request for advice does not identify the duties of the individuals of Wildan, so the city council will have to determine, based on the guidelines provided above, who is performing the duties specified under the contract to identify the consultants to the city. File No. A-04-070 ' Page No. 6 If you have any other questions regarding this matter, please contact me at (916) 322-5660. Sincerely, Luisa Menchaca General Counsel LO GW.jg I;1AdviceLtrs\A-04070 Galena West Counsel, Legal Division July 7, 1998 Phillip S. Cronin County Counsel County of Fresno 2220 Tulare Street, Fifth Floor Post Office Box 1549 Fresno, California 93716 Re: Your Request for Advice Our File No. I-98-155 Dear Mr. Cronin: This letter responds to your request for advice on behalf of the Fresno County Public Works and Development Services Department, and a Iocal school district, regarding provisions of the Political Reform Act (the "Act").' Because your question is general in nature, we provide you with informal assistance as required by Regulation 18329. QUESTION Must a consultant be designated as such in a government agency's conflict of interest code when he or she "participates in making" a governmental decision, but does not actually "make" such decisions or serve as de facto agency staff ? CONCLUSION If an individual is properly classified as a "consultant" under Regulation 18700(a)(2), he or she is a "public official" within the meaning of Section 87100, and must be designated in the agency's conflict of interest code, even if the consultant's role is limited to "participation" in governmental decisions. But not all persons advising government agencies are "consultants" within the meaning of the Act. Persons who do not actually make governmental decisions, or function as de facto agency staff, may not be "consultants" under the Act even if they do ' Government Code sections 81000 - 91014. Cotn:nission regulations appear at title 2, sections 18109 - 18995, of the California Code of Regulations. File No. 1-98-155 Page 2 occasionally advise government agencies. Persons who are not "consultants," and who are not otherwise public officials, should not be designated in an agency's conflict of 'interest code. FACTS The Fresno County Counsel has been asked by two county agencies for advice regarding their obligations under the Act, and specifically whether they may be required to list certain persons as "consultants" in their conflict of interest codes. The county counsel's office does not feel that it can provide a definitive answer to these agencies and, since the potential reporting burdens are substantial, county counsel seeks informal advice to resolve uncertainties growing out of the following fact patterns. The Public Works and Development Services Department is responsible for contracts between the County of Fresno (the "county") and various engineering firms, architects, and other consultants. The county needs a feasibility analysis for a sewer or water treatment plan. An engineering firm, under contract, would famish qualified individuals to analyze various siting, equipment, processing, and construction options, and the resulting report would be presented directly to the board of supervisors (the "board"). The board would decide whether to proceed at a particular site, and in a particular manner, based on the report. For purposes of this letter, it is presumed that neither the engineering firm nor the individuals working on the project would "make" a governmental decision, but that individuals employed by the engineering firm would "participate in making" the decision through the influence of their reports. In addition, individuals on the firm's staff might be working on other projects for the county concurrently, or they might have previously worked on other county projects. Individuals employed by this firm tend to provide a significant amount of advice to the county. The school district uses consultants in insurance, legal matters, collective bargaining, environmental assessments, school design and construction, independent audits, and a variety of special studies. Each of these consultants provide advice within his or her area of expertise directly to the decisionmaker in the district but, again by hypothesis, they do not "make" governmental decisions or stand in the shoes of a district employee. ANALYSIS Chapter 7 of the Act (Sections 87100-87500) governs conflicts of interest. Article 3 of Chapter 7 (at Sections 87300-87313) requires that every government agency adopt a conflict of interest code identifying all persons who, in the course of their duties with the agency, might E 3 File No. I-98-155 Page 3 affect the outcome of governmental decisions.Z Persons designated by a conflict of interest code are required to disclose economic interests that could foreseeably be affected by agency decisions. (See generally Section 87302; Marks Advice Letter, No. A-98-073.) The conflict of interest codes required of governmental agencies support the Act's general prohibition against decisionmaking on matters that might pose conflicts of interest, stated at Section 87100: "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." Section 82048 and Regulation 18700(a) provide definitions of the term "public official," as used Chapter 7, to mean a "member, officer, employee, or consultant of a state or local government agency." (Emphasis added.) Regulation 18700(a)(2) defines "consultant" as: "[A]n individual who, pursuant to a contract with a state or local government agency: (A) Makes a governmental decision whether to: 1. Approve a rate, rule, or regulation; 2. Adopt or enforce a law; 3. Issue, deny, suspend, or revoke any permit, license, application, certificate, approval, order, or similar authorization or entitlement; 4. Authorize the agency to enter into, modify, or renew a contract provided it is the type of contract which requires agency approval; 5. 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; 6. Grant agency approval to a plan, design, report, study, or similar item; 7. Adopt, or grant agency approval of, policies, standards, or guidelines 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." 2 With the exception of a few officials not pertinent to this letter. J File No. I-98-155 Page 4 As statute and regulation make clear, one who qualifies as a consultant under the foregoing criteria is a public official governed by, among other provisions, Section 87100. Section 87100 prohibits all public officials from making, or participating in, or using their positions to influence, governmental decisions in which they have a financial interest. Regulation 18730 provides guidance as to those persons (or "positions") that must be designated in an agency's conflict of interest code. Subdivision (b)(2) provides that persons to he designated include those who make or participate in making governmental decisions which may foreseeably have a material effect on their financial interests. This subdivision has also been construed by the Commission to include persons who use their official position to influence a governmental decision. (Brewton Advice Letter, No. I-96-126,) Thus public officials who "participate" in goverrimental decisions, including consultants, must be designated in conflict of interest codes along with those who actually "make" the decisions. You refer in your letter to the 1994 amendment to the regulatory definition of "consultant," observing that the regulation, in its present form "no longer clearly excludes" consultants who do nol actually make governmental decisions or act in an agency staff capacity "on an ongoing basis." Your ultimate concern is that any engineer or attorney who provides a single item of advice to an agency thereby participates in a governmental decision (assuming a decision related to the advice) and that large numbers of occasional advisors would accordingly have to be listed in local agency conflict of interest codes. Such a conclusion is unwarranted. The analytical problem you present does not grow out of the 1994 amendment to Regulation 18700. A consultant, properly so called, has always been regarded as a public official subject to the restrictions of Section 87100, which prohibits all public officials, among other things, from participating in a governmental decision foreseeably affecting their financial interests. The problem you raise is one of classification. An individua13 under contract to make even a single governmental decision may be a consultant by virtue of Regulation 18700(a)(2)(A). Persons who do not make, but who participate in governmental decisions under contract, may be classified as consultants only under Regulation i 8700(a)(2)(B), that is, if they serve in an agency staff capacity. The Randolph Advice Letter (No. 1-95-045), to which you allude, sets out the criteria for determining whether a person serves in an agency staff position for purposes of Regulation 18700(a)(2)(B). This advice letter notes that the staff capacity language generally excludes from the scope of the regulation those individuals who work on one project or a limited range of projects for an agency. We ha,,e provided the same advice in subsequent letters. (See, e.g., 3 A public official must be a natural person. (Section 82048 ) File No. 1-98-155 Page 5 Under Regulation 18700(a)(2)(B), a person who provides advisory services related to a single project, or to a limited range of projects, may not be classifiable as a consultant. This is true even if his or her services amount to participation in one or a few related governmental decisions. If such a person is not otherwise a public official, he or she need not be designated in an agency's conflict of interest code. To summarize, your inquiry presumed a distinction -- for purposes of designation on conflict of interest codes — between consultants who "make," and consultants who merely "participate in," governmental decisions. The significant distinction, however, is between those persons whose "participation" defines them as consultants, and those persons who are not classifiable as consultants, even though they may participate in governmental decisions. All consultants, as defined by Regulation 18700, must be designated in agency conflict of interest codes. But not all persons under contract to public agencies are "consultants," even if they do on occasion "participate in" governmental decisions. The dispositive question, for persons who "participate in" but do not "make" governmental decisions, is the extent of the services provided to the agency. If you need assistance in determining the proper legal classification of particular persons "participating in'' decisions of county agencies, or if you have other questions on this matter, please contact me at (916) 322-5660. Sincerely, Steven G. Churchwell General Counsel By: Lawrence T. Woodlock Staff Counsel, Legal Division SGC:LTIN:tls I IL -� �'; FAIR POLITICAL PRACTICES COtiI.1lSSiO` 42$ J Street • Suite hlti • Sj xanwnas, CN VN14-2z_'u May 26, 1998 Harold Ferber Chief Counsel Health and Welfare Agency Data Center 1651 Alhambra Boulevard Sacramento, California 95816 Re: Your Request for Advice Our File No. A-98-1 IS Dear Mr. Ferber: This letter is in response to your request for advice regarding the provisions of the Political Reform Act (the "Acf1.1 QUESTION Are HWDC's "high-level" contractors exempt from the definition of "consultant" in regulation 1870€1(a)(2)? CONCLUSION No, the high-level contractors are not exempt from the definition of "consultant." FACTS HWDC has two main lines of business. It is the data center for the departments within the Health and Welfare Agency, As a data center, it performs normal data center functions including procuring, installing and operating hardware and software necessary to run major applications for customer departments. HWDC also maintains one of the largest telecommunication networks in the state. Goverrimcrit Code sections 9 1000 - 91014 Commission regulations appear at title 2, sections 15109 - 13995, of the California Code of Regulations File No. A-98-118 Page 2 HWDC's second line of business involves managing complex system integration projects. The projects include the statewide automation of child support enforcement, the statewide automation of welfare, and the statewide fingerprint imaging system and others. Each of these projects includes contractors who work on only one of these specific projects. The nature of the involvement in these projects ranges from relatively narrow short term functions such as reviewing specifications for a solicitation document to broader project roles of a duration that may extend over more than one year. Some projects are quite large. For example, HWDC manages multi-year contracts that can involve more than $100 million and involve the employment of scores of state staff supplemented by a variety of county and private contractors. The contractors do not engage in the type of activities listed in regulation 18700(a)(2)(A).2 However, some contractors have broad project roles of a duration of more than one year. These "high-level" contractors work closely with managers in dealing with the most significant issues confronting the projects. Although these contractors work closely with executive staff, they do not perform all of the functions that staff managers perform. That is, they do not hire staff, prepare budgets, deal with personnel or supervision issues or engage in other tasks associated with a state manager. You believe these high-level contractors are most analogous to the highest level of state managers who are designated in the agency's conflict of interest code. 0011 %W 61 The Act's conflict-of-interest provisions apply only to "public officials." "Public official," for purposes of the Act. is defined to include every member, officer, employee, or consultant of a state or local agency, with certain exceptions. (Section 82048.) The term .&consultant" means an individual who, pursuant to a contract with a state or local go%ernment agency: ``(A) Makes a governmental decision whether to: 1. Approve a rate, rule, or regulation; 2. Adopt or enforce a law; 3. [ssue, deny, suspend, or revoke any permit, license, application, certificate, approval. order, or similar authorization or entitlement; 4. Authorize the agency to enter into. modify, or renew a - Whether the contractors engage in the type of activities listed in regulation 18700(a)(?)(A) is a question that involves legal analysis. For purposes of this tetter, we are treating this legal conclusion as a statement of Fact. As such, we are not opining as to whether the contractors engage in the activities listed in the regulation. File No. A-98-118 Page 3 3. Issue, deny, suspend, or revolve any permit, license, application, certificate, approval, order, or similar authorization or entitlement; 4. Authorize the agency to enter into, modify, or renew a contract provided it is the type of contract which requires agency approval; 5. 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; 6. Grant agency approval to a plan, design, report, study, or similar item; 7. Adopt, or grant agency approval of, policies, standards, or guidelines 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." (Regulation 187OO(a)(2), copy enclosed.) Regulation 18700(a)(2) establishes two criteria for qualification as a consultant; an individual who satisfies either criterion is a consultant for purposes of the Act. Finst, an individual may be a "consultant" if he or she performs, pursuant to a contract, any of the actions described in regulation 18700(a)(2)(A). Your facts state that the project consultants do not engage in the type of activities listed in regulation 18700(a)(2)(A). Alternatively, an individual may be a consultant if he or she "serves in a staff capacity with the agency" under regulation 1870O(a)(2)(B). The test established in regulation 1870O(a)(2)(B) is a twofold test. (Randolph Advice Letter, No. 1-95-045; Memorandum to Commission, Regulation 18700, dated March 28, 1994.) First, the contractor must work on more than a single project or a limited range of projects for an agency. Implicit in the notion of service in a staff capacity is an ongoing relationship between the contractor and the public agency. (Sanchez Advice Letter, No. A-97-438, Afaze Advice Letter, No. I-95-296, Parry Advice Letter, No. I-95-064.) Second, even if a contractor worked on more than a single project or a limited range of projects for an agency, the contractor's duties must also be those of a quasi -staff member and must be substantially the same as tasks performed by individuals whose position at the agency is described in the agency's conflict of interest code. The first prong of the regulatory test, the "staff capacity" language, eliminates, in most cases, those individuals who work on one project or a limited range of projects from the scope of the regulation. However, this qualifier also includes a temporal element. Consequently, even if a contractor only works on a single project, the length of the individual's service to the agency is a relevant factor that must be considered. In the Sanchez Advice Letter, No. A-97-438, we advised File No. A-98-118 Page 4 "Our only concern in reaching this conclusion is the duration of the contractual relationship, which will be over two years. However, in context, this duration is not indicative of an on-going relationship which might otherwise lead to the conclusion that there is a staff relationship ... although the term of the contract is over two years, this duration is attributable to the need for periodic monitoring, not to perform continuous work during that time. Under these circumstances, the duration of the contractual relationship does not preclude the conclusion reached above." In the _faze Advice Letter, No. 1-95-296, we advised the employees of an accounting firm, who performed annual independent audits of municipal governmental entities pursuant to multi-year contracts, that they were not consultants under the Act. However, in that letter, we further advised the employees that if they provided other accounting services to the agencies, they may become consultants under the Act. Similarly, in the Parry Advice Letter. No. I-95-064, we concluded that employees of an engineering firm, who reviewed hydrological studies on a sporadic basis, were not consultants under the Act. However, in the Parry letter, we further advised that if the engineering firm provided consulting services on a regular basis, then the employees would be considered consultants. In applying the first prong of the regulation. previous advice letters reveal that the length of a contractor's services to an agency is a significant factor where the contract is for a term of more than one year and the services are rendered on a regular and continuous basis for the duration of the contract. Your inquiry concerns high-level contractors who have broad project roles of a duration of more than one year. Under these facts, the first prong of regulation 18700(a)(2)( B) is met. The second prong of the regulator} test provides an additional condition—the tasks of the contractor must be substantially the same as one of the individuals whose position at the agency is described, or should be described, in the agency's conflict of interest code. (Kalland Advice Letter. No. 1-96-078.) You indicate that the duties of the high-level contractors are most analogous to the tasks performed by the highest level of state managers who are designated in the agency's conflict of interest code. However, the high-level contractors do not perform all of the functions that state managers perform. To illustrate, high-level contractors do not hire staff, prepare budgets. deal with personnel or supervision issues. Based on your facts, it does not appear that the high-level contractors perform substantially all the same tasks performed by state managers. But, the inquiry does not end here. The next step is to inquire whether the position of an agency employee with the same duties as the contractor should be designated in the agency's conflict of interest code. An agency's conflict of interest code must list the positions within the agency that make or participate in the making of governmental decisions. (Section 87302.) a 0 File No. A-98-118 Page S The next step is to inquire whether the position of an agency employee with the same duties as the contractor should be designated in the agency's conflict of interest code. An agency's conflict of interest code must list the positions within the agency that make or participate in the making of governmental decisions. (Section 87302.) A public official "participates in making a goverumental decision" when he or she negotiates (without significant substantive review) with a governmental entity or private person regarding a governmental decision, or when he or she advises or makes recommendations to the decisionmaker (either directly or without significant substantive review) by: 1) conducting research or making any investigation which requires the exercise of Judgment on the part of the official and the purpose of which is to influence a governmental decision, or 2) preparing or presenting any report, analysis, or opinion, orally, or in writing which requires the exercise of judgment on the part of the official and the purpose of which is to influence a governmental decision. (Regulation 18700(c).) You indicate that high-level contractors work closely with managers in dealing with the most significant issues confronting the projects. This activity appears to fall within the definition of "participating in snaking a governmental decision." Therefore, an agency employee with the same duties as a high-level contractor should be designated in the agency's conflict of interest code. Accordingly, the second prong of the regulatory test is met. Since both prongs of the regulatory test are met, the high-level contractors are considered "consultants" for purposes of the Act. If you have any other questions regarding this matter, please contact me at (916) 322 - 5660. Sincerely, Steven G. Churchwell General Counsel By: Julia Butcher Staff Counsel. Legal Division SGC -JB tis (Regulations of the Fair Political Practices Commission, Title 2, Division 6, California Code of Regulations) § 18730. Provisions of Conflict of Interest Codes. (a) Incorporation by reference of the terms of this regulation along with the designation of employees and the formulation of disclosure categories in the Appendix referred to below constitute the adoption and promulgation of a conflict of interest code within the meaning of Section 87300 or the amendment of a conflict of interest code within the meaning of Section 87306 if the terms of this regulation are substituted for terms of a conflict of interest code already in effect. A code so amended or adopted and promulgated requires the reporting of reportable items in a manner substantially equivalent to the requirements of article 2 of chapter 7 of the Political Reform Act, Sections 81000, et seq . The requirements of a conflict of interest code are in addition to other requirements of the Political Reform Act, such as the general prohibition against conflicts of interest contained in Section 87100, and to other state or local laws pertaining to conflicts of interest. (b) The terms of a conflict of interest code amended or adopted and promulgated pursuant to this regulation are as follows: (1) Section 1. Definitions. The definitions contained in the Political Reform Act of 1974, regulations of the Fair Political Practices Commission (Regulations 18110, et seq.), and any amendments to the Act or regulations, are incorporated by reference into this conflict of interest code. (2) Section 2. Designated Employees. The persons holding positions listed in the Appendix are designated employees. It has been determined that these persons make or participate in the making of decisions which may foreseeably have a material effect on economic interests. (3) Section 3. Disclosure Categories. This code does not establish any disclosure obligation for those designated employees who are also specified in Section 87200 if they are designated in this code in that same capacity or if the geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction in which those persons must report their economic interests pursuant to article 2 of chapter 7 of the Political Reform Act, Sections 87200, et seq . In addition, this code does not establish any disclosure obligation for any designated employees who are designated in a conflict of interest code for another agency, if all of the following apply - (A) The geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction of the other agency; (B) The disclosure assigned in the code of the other agency is the same as that required under article 2 of chapter 7 of the Political Reform Act, Section 87200; and (C) The filing officer is the same for both agencies.1 Such persons are covered by this code for disqualification purposes only. With respect to all other designated employees, the disclosure categories set forth in the Appendix specify which kinds of economic interests are reportable. Such a designated employee shall disclose in his or her statement of economic interests those economic interests he or she has which are of the kind described in the disclosure categories to which he or she is assigned in the Appendix. It has been determined that the economic interests set forth in a designated employee's disclosure categories are the kinds of economic interests which he or she foreseeably can affect materially through the conduct of his or her office. (4) Section 4. Statements of Economic Interests: Place of Filing. The code reviewing body shall instruct all designated employees within its code to file statements of economic interests with the agency or with the code reviewing body, as provided by the code reviewing body in the agency's conflict of interest code.2 (5) Section 5. Statements of Economic Interests: Time of Filing. (A) Initial Statements. All designated employees employed by the agency on the effective date of this code, as originally adopted, promulgated and approved by the code reviewing body, shall file statements within 30 days after the effective date of this code. Thereafter, each person already in a position when it is designated by an amendment to this code shall file an initial statement within 30 days after the effective date of the amendment. (B) Assuming Office Statements. All persons assuming designated positions after the effective date of this code shall file statements within 30 days after assuming the designated positions, or if subject to State Senate confirmation, 30 days after being nominated or appointed. (C) Annual Statements. All designated employees shall file statements no later than April 1. If a person reports for military service as defined in the Servicemember's Civil Relief Act, the deadline for the annual statement of economic interests is 30 days following his or her return to office, provided the person, or someone authorized to represent the person's interests, notifies the filing officer in writing prior to the applicable filing deadline that he or she is subject to that federal statute and is unable to meet the applicable deadline, and provides the filing officer verification of his or her military status. (D) Leaving Office Statements. All persons who leave designated positions shall file statements within 30 days after leaving office. (5.5) Section 5.5. Statements for Persons Who Resign Prior to Assuming Office. Any person who resigns within 12 months of initial appointment, or within 30 days of the date of notice provided by the filing officer to file an assuming office statement, is not deemed to have assumed office or left office, provided he or she did not make or participate in the making of, or use his or her position to influence any decision and did not receive or become entitled to receive any form of payment as a result of his or her appointment. Such persons shall not file either an assuming or leaving office statement. (A) Any person who resigns a position within 30 days of the date of a notice from the filing officer shall do both of the following: (1) File a written resignation with the appointing power; and (2) File a written statement with the filing officer declaring under penalty of perjury that during the period between appointment and resignation he or she did not make, participate in the making, or use the position to influence any decision of the agency or receive, or become entitled to receive, any form of payment by virtue of being appointed to the position. (6) Section 6. Contents of and Period Covered by Statements of Economic Interests. (A) Contents of Initial Statements. Initial statements shall disclose any reportable investments, interests in real property and business positions held on the effective date of the code and income received during the 12 months prior to the effective date of the code. (B) Contents of Assuming Office Statements. Assuming office statements shall disclose any reportable investments, interests in real property and business positions held on the date of assuming office or, if subject to State Senate confirmation or appointment, on the date of nomination, and income received during the 12 months prior to the date of assuming office or the date of being appointed or nominated, respectively. (C) Contents of Annual Statements. Annual statements shall disclose any reportable investments, interests in real property, income and business positions held or received during the previous calendar year provided, however, that the period covered by an employee's first annual statement shall begin on the effective date of the code or the date of assuming office whichever is later, or for a board or commission member subject to Section 87342.6, the day after the closing date of the most recent statement filed by the member pursuant to Regulation 18754. (D) Contents of Leaving Office Statements. Leaving office statements shall disclose reportable investments, interests in real property, income and business positions held or received during the period between the closing date of the last statement fled and the date of leaving office. (7) Section 7. Manner of Reporting. Statements of economic interests shall be made on forms prescribed by the Fair Political Practices Commission and supplied by the agency, and shall contain the following information: (A) Investment and Real Property Disclosure. When an investment or an interest in real property3 is required to be reported,4 the statement shall contain the following: 1. A statement of the nature of the investment or interest; 2. The name of the business entity in which each investment is held, and a general description of the business activity in which the business entity is engaged; 3. The address or other precise location of the real property; 4. A statement whether the fair market value of the investment or interest in real property equals or exceeds $2,000, exceeds $10,000, exceeds $100,000, or exceeds $1,000,000. (B) Personal Income Disclosure. When personal income is required to be reported,5 the statement shall contain: 1. The name and address of each source of income aggregating $500 or more in value, or $50 or more in value if the income was a gift, and a general description of the business activity, if any, of each source; 2. A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed to each source, was $1,000 or less, greater than $1,000, greater than $10,000, or greater than $100,000; 3_ A description of the consideration, if any, for which the income was received; 4. In the case of a gift, the name, address and business activity of the donor and any intermediary through which the gift was made; a description of the gift; the amount or value of the gift; and the date on which the gift was received; 5. In the case of a loan, the annual interest rate and the security, if any, given for the loan and the term of the loan. (C) Business Entity Income Disclosure. When income of a business entity, including income of a sole proprietorship, is required to be reported,6 the statement shall contain: 1. The name, address, and a general description of the business activity of the business entity; 2. The name of every person from whom the business entity received payments if the filer's pro rata share of gross receipts from such person was equal to or greater than $10,000. (D) Business Position Disclosure. When business positions are required to be reported, a designated employee shall list the name and address of each business entity in which he or she is a director, officer, partner, trustee, employee, or in which he or she holds any position of management, a description of the business activity in which the business entity is engaged, and the designated employee's position with the business entity. (E) Acquisition or Disposal During Reporting Period. In the case of an annual or leaving office statement, if an investment or an interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the statement shall contain the date of acquisition or disposal. (8) Section 8. Prohibition on Receipt of Honoraria. (A) No member of a state board or commission, and no designated employee of a state or local government agency, shall accept any honorarium from any source, if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. This section shall not apply to any part-time member of the governing board of any public institution of higher education, unless the member is also an elected official. Subdivisions (a), (b), and (c) of Section 89501 shall apply to the prohibitions in this section. This section shall not limit or prohibit payments, advances, or reimbursements for travel and related lodging and subsistence authorized by Section 89506. (8.1) Section 8.1. Prohibition on Receipt of Gifts in Excess of $440. (A) No member of a state board or commission, and no designated employee of a state or local government agency, shall accept gifts with a total value of more than $440 in a calendar year from any single source, if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. This section shall not apply to any part-time member of the governing board of any public institution of higher education, unless the member is also an elected official. Subdivisions (e), (f), and (g) of Section 89503 shall apply to the prohibitions in this section. (8.2) Section 8.2_ Loans to Public Officials. (A) No elected officer of a state or local government agency shall, from the Mate of his or her election to office through the date that he or she vacates office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the elected officer holds office or over which the elected officer's agency has direction and control. (B) No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any officer, erriployee, member, or consultant of the state or local government agency in which the public official holds office or over which the public official's agency has direction and control. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. (C) No elected officer of a state or local government agency shall, from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer's agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender's regular course of business on terms available to members of the public without regard to the elected officer's official status. (l7) No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer's agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender's regular course of business on terms available to members of the public without regard to the elected officer's official status. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. (E) This section shall not apply to the following: 1. Loans made to the campaign committee of an elected officer or candidate for elective office. 2. Loans made by a public official's spouse, child, parent, grandparent, grandchild, brother, sister, parent -in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such persons, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans from a person which, in the aggregate, do not exceed five hundred dollars ($500) at any given time. 4. Loans made, or offered in writing, before January 1, 1998. (8.3) Section 8.3. Loan Terms. (A) Except as set forth in subdivision (B), no elected officer of a state or local government agency shatl, from the date of his or her election to office through the date he or she vacates office, receive a personal loan of $500 or more, except when the loan is in writing and clearly states the terms of the loan, including the parties to the loan agreement, date of the loan, amount of the loan, term of the loan, date or dates when payments shall be due on the loan and the amount of the payments, and the rate of interest paid on the loan. (B) This section shall not apply to the following types of loans: 1. Loans made to the campaign committee of the elected officer. 2. Loans made to the elected officer by his or her spouse, child, parent, grandparent, grandchild, brother, sister, parent -in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such person, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans made, or offered in writing, before January 1, 1998. (C) Nothing in this section shall exempt any person from any other provision of Title 9 of the Government Code. (8.4) Section 8.4. Personal Loans. (A) Except as set forth in subdivision (B), a personal loan received by any designated employee shall become a gift to the designated employee for the purposes of this section in the following circumstances: 1. If the loan has a defined date or dates for repayment, when the statute of limitations for filing an action for default has expired. 2. If the loan has no defined date or dates for repayment, when one year has elapsed from the later of the following: a. The date the loan was made. b. The date the last payment of $100 or more was made on the loan. c. The date upon which the debtor has made payments on the loan aggregating to less than $250 during the previous 12 months. (B) This section shall not apply to the following types of loans: 1. A loan made to the campaign committee of an elected officer or a candidate for elective office. 2. A loan that would otherwise not be a gift as defined in this title. 3. A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor has taken reasonable action to collect the balance due. 4. A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor, based on reasonable business considerations, has not undertaken collection action. Except in a criminal action, a creditor who claims that a loan is not a gift on the basis of this paragraph has the burden of proving that the decision for not taking collection action was based on reasonable business considerations. 5. A loan made to a debtor who has filed for bankruptcy and the loan is ultimately discharged in bankruptcy. (C) Nothing in this section shall exempt any person from any other provisions of Title 9 of the Government Code. (9) Section 9. Disqualification. No designated employee shall make, participate in making, or in any way attempt to use his or her official position to influence the making of any governmental decision which he or she knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the official or a member of his or her immediate family or on: (A) Any business entity in which the designated employee has a direct or indirect investment worth $2,000 or more; (B) Any real property in which the designated employee has a direct or indirect interest worth $2,000 or more; (C) Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating $500 or more in value provided to, received by or promised to the designated employee within 12 months prior to the time when the decision is made; (D) Any business entity in which the designated employee is a director, officer, partner, trustee, employee, or holds any position of management; or (E) Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating $440 or more provided to, received by, or promised to the designated employee within 12 months prior to the time when the decision is made. (9.3) Section 9.3. Legally Required Participation. No designated employee shall be prevented from making or participating in the making of any decision to the extent his or her participation is legally required for the decision to be made. The fact that the vote of a designated employee who is on a voting body is needed to break a tie does not make his or her participation legally required for purposes of this section. (9.5) Section 9.5. Disqualification of State Officers and Employees. In addition to the general disqualification provisions of section 9, no state administrative official shall make, participate in making, or use his or her official position to influence any governmental decision directly relating to any contract where the state administrative official knows or has reason to know that any party to the contract is a person with whom the state administrative official, or any member of his or her immediate family has, within 12 months prior to the time when the official action is to be taken: (A) Engaged in a business transaction or transactions on terms not available to members of the public, regarding any investment or interest in real property; or (B) Engaged in a business transaction or transactions on terms not available to members of the public regarding the rendering of goods or services totaling in value $1,000 or more. (10) Section 10. Disclosure of Disqualifying Interest. When a designated employee determines that he or she should not make a governmental decision because he or she has a disqualifying interest in it, the determination not to act may be accompanied by disclosure of the disqualifying interest. (11) Section 11. Assistance of the Commission and Counsel. Any designated employee who is unsure of his or her duties under this code may request assistance from the Fair Political Practices Commission pursuant to Section 83114 and Regulations 18329 and 18329.5 or from the attorney for his or her agency, provided that nothing in this section requires the attorney for the agency to issue any formal or informal opinion. (12) Section 12. Violations. This code has the force and effect of law. Designated employees violating any provision of this code are subject to the administrative, criminal and civil sanctions provided in the Political Reform Act, Sections 81000-91014. In addition, a decision in relation to which a violation of the disqualification provisions of this code or of Section 87100 or 87450 has occurred may be set aside as void pursuant to Section 91003. 1 Designated employees who are required to file statements of economic interests under any other agency's conflict of interest code, or under article 2 for a different jurisdiction, may expand their statement of economic interests to cover reportable interests in both jurisdictions, and file copies of this expanded statement with both entities in lieu of filing separate and distinct statements, provided that each copy of such expanded statement filed in place of an original is signed and verified by the designated employee as if it were an original. See Section 81004. 2 See Section 81010 and Regulation 18115 for the duties of filing officers and persons in agencies who make and retain copies of statements and forward the originals to the filing officer. 3 For the purpose of disclosure only (not disqualification), an interest in real property does not include the principal residence of the filer. 4 Investments and interests in real property which have a fair market value of less than $2,000 are not investments and interests in real property within the meaning of the Political Reform Act. However, investments or interests in real property of an individual include those held by the individual's spouse and dependent children as well as a pro rata share of any investment or interest in real property of any business entity or trust in which the individual, spouse and dependent children own, in the aggregate, a direct, indirect or beneficial interest of 10 percent or greater. 5 A designated employee's income includes his or her community property interest in the income of his or her spouse but does not include salary or reimbursement for expenses received from a state, local or federal government agency. 6 Income of a business entity is reportable if the direct, indirect or beneficial interest of the filer and the filers spouse in the business entity aggregates a 10 percent or greater interest. In addition, the disclosure of persons who are clients or customers of a business entity is required only if the clients or customers are within one of the disclosure categories of the filer. Note: Authority cited: Section 83112, Government Code. Reference: Sections 87103(e), 87300-87302, 89501, 89502 and 89503, Government Code. HISTORY 1. New section filed 4-2-80 as an emergency; effective upon filing (Register 80, No. 14). Certificate of Compliance included_ 2. Editorial correction (Register 80, No. 29). 3. Amendment of subsection (b) filed 1-9-81; effective thirtieth day thereafter (Register 81, No. 2). 4. Amendment of subsection (b)(7)(B)1, filed 1-26-83; effective thirtieth day thereafter (Register 83, No. 5), 5. Amendment of subsection (b)(7)(A) flied 11-10-83; effective thirtieth day thereafter (Register 83, No. 46). 6. Amendment filed 4-13-87; operative 5-13-87 (Register 87, No. 16). 7. Amendment of subsection (b) filed 10-21-88; operative 11-20-88 (Register 88, No. 46). 8. Amendment of subsections (b)(8)(A) and (b)(8)(B) and numerous editorial changes filed 8-28-90; operative 9-27-90 (Reg. 90, No. 42). 9. Amendment of subsections (b)(3), (b)(8) and renumbering of following subsections and amendment of Note filed B-7-92; operative 9-7-92 (Register 92, No. 32). 10. Amendment of subsection (b)(5.5) and new subsections (b)(5.5)(A)-(A)(2) filed 2-4-93; operative 2-4-93 (Register 93, No. 6). 11. Change without regulatory effect adopting Conflict of Interest Code for California Mental Health Planning Council sled 11-22-93 pursuant to title 1, section 100, California Code of Regulations (Register 93, No. 48). Approved by Fair Political Practices Commission 9-21-93. 12. Change without regulatory effect redesignating Conflict of Interest Code for California Mental Health Planning Council as chapter 62, section 55100 filed 1-4-94 pursuant to title 1, section 100, California Code of Regulations (Register 94, No. 1). 13. Editorial correction adding History 11 and 12 and deleting duplicate section number (Register 94, No. 17). 14. Amendment of subsection (b)(8), designation of subsection (b)(8)(A), new subsection (b)(8)(B), and amendment of subsections (b)(8.1 Y(b)(8.1)(B), (b)(9)(E) and Note filed 3-14-95; operative 3-14-95 pursuant to Government Code section 11343.4(d) (Register 95, No. 11). 15. Editorial correction inserting inadvertently omitted language in footnote 4 (Register 96, No. 13). 16. Amendment of subsections (b)(8)(A)-(B) and (b)(8.1)(A), repealer of subsection (b)(8. 1)(B), and amendment of subsection (b)(12) filed 10-23-96; operative 10-23-96 pursuant to Government Code section 11343.4(d) (Register 96, No. 43). 17. Amendment of subsections (b)(8.1) and (9)(E) filed 4-9-97; operative 4-9-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 15). 18. Amendment of subsections (b)(7)(13)5., new subsections (b)(8.2)-(b)(8.4)(C) and amendment of Note filed 8-24-98; operative 8-24-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 35). 19. Editorial correction of subsection (a) (Register 98, No. 47). 20. Amendment of subsections (b)(8.1), (b)(8.1)(A) and (b)(9)(E) filed 5-11-99; operative 5-11-99 pursuant to Government Code section 11343.4(d) (Register 99, No. 20). 21. Amendment of subsections (b)(8.1)-(b)(8.1)(A) and (b)(9)(E) filed 12-6-2000; operative 1-1-2001 pursuant to the 1974 version of Government Code section 11380.2 and Title 2, California Code of Regulations, section 18312(d) and (e) (Register 2000, No. 49). 22. Amendment of subsections (b)(3) and (b)(10) filed 1-10-2001; operative 2-1-2001_ Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2001, No. 2). 23. Amendment of subsections (b)(7)(A)4., (b)(7)(13)1.-2., (b)(8.2)(E)3., (b)(9)(A)-(C) and footnote 4. filed 2-13-2001. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil CO 10924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2001, No. 7). 24. Amendment of subsections (b)(8.1)-(b)(8.1)(A) filed 1-16-2003; operative 1-1-2003. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924. California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2003, No. 3). 25. Editorial correction of History 24 (Register 2003, No. 12). 26. Editorial correction removing extraneous phrase in subsection (b)(9.5)(B) (Register 2004, No. 33). 27. Amendment of subsections (b)(2)-(3), (b)(3)(C), (b)(6)(C), (b)(8.1)-(b)(8.1)(A), (b)(9)(E) and (b)(11)-(12) filed 1-4-2005; operative 1-1-2005 pursuant to Government Code section 11343.4 (Register 2005, No. 1). 28. Amendment of subsection (b)(7)(A)4. filed 10-11-2005; operative 11-10-2005 (Register 2005, No. 41). 29. Amendment of subsections (a), (b)(1), (b)(3), (b)(8.1), (b)(8.1)(A) and (b)(9)(E) filed 12-18-2006; operative 1-1-2007. Submitted to OAL pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2006, No. 51). 30. Amendment of subsections (b)(8.1)-(b)(8.1)(A) and (b)(9)(E) filed 10-31-2008; operative 11-30-2008. Submitted to OAL for filing pursuant to Farr Political Practices Commission v. Office of Administrative Law, 3 Civil COI 0924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2008, No. 44). 31. Amendment of section heading and section filed 11-15-2010; operative 12-15-2010. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2010, No. 47). 32. Amendment of section heading and subsections (a) -(b)(1), (b)(3y(4), (b)(5)(C), (b)(8.1)-(b)(8.1)(A) and (b)(9)(E) and amendment of footnote 1 filed 1-8-2013; operative 2-7-2013. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2013, No. 2). RESOLUTION NO. 13402 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL REPEALING RESOLUTION NO. 13037, RE -ADOPTING THE FPPC MODEL CONFLICT OF INTEREST CODE AS THE CITY'S CONFLICT OF INTEREST CODE, AND ADOPTING A REVISED LIST OF DESIGNATED EMPLOYEE POSITIONS AND DISCLOSURE CATEGORIES, TO BE INCORPORATED INTO THE CITY'S CONFLICT OF INTEREST CODE WHEREAS, pursuant to California Government Code Sections 81000, et seq. (The Political Reform Act, or PRA), the City Council has adopted by Resolution from time to time the Fair Political Practices Commission's model Conflict of Interest Code, contained at Title 2, California Code of Regulations, Section 18730, as the City's Conflict of Interest Code, and adopted therewith designated employee positions and disclosure categories for incorporation into the City's Conflict of Interest Code, most recently by Resolution No. 13037; and WHEREAS, every even -numbered year every state agency and local governmental agency is required to review and, if necessary, revise its Conflict of Interest Code including review and revision of its list of designated employee positions and its list of disclosure categories, so as to incorporate such changes as the new titles of recently hired employees, deleted positions, and other organizational restructuring; and WHEREAS, the Council has determined that the attached Appendices A and B accurately set forth those designated employee positions (Appendix A - Designated Employees) and disclosure categories of financial interest (Appendix B - Disclosure Categories), which should be made reportable under the City's Conflict of Interest Code; and WHEREAS, the City Council desires to continue to use the FPPC's model Conflict of Interest Code, as set forth in Title 2, California Code of Regulations Section 18730, as the City's 1 Conflict of Interest Code, a copy of which is available for public review in the City Clerk's office; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES AS FOLLOWS: 1. The above -recited facts are true and correct. 2. Resolution 13037 is hereby repealed. 3. The FPPC's model Conflict of Interest Code, as set forth in Title 2, California Code of Regulations Section 18730, is hereby re -adopted as the City's Conflict of Interest Code. 4. The attached list of designated employee positions (Appendix A) and list of disclosure categories (Appendix B) are hereby adopted and incorporated into the City of San Rafael's Conflict of Interest Code. 5. The officials and employees holding designated positions shall file statements of economic interests (Form 700) as required by regulations of the FPPC and by Section 4 (C) of the City's Conflict of Interest Code with the City Clerk, and the City Council hereby delegates the authority of filing officer to the City Clerk. I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the Council of said City on Tuesday, the 4th day of September, 2012 by the following vote, to wit: AYES: COUNCILMEMBERS: Connolly, Heller, McCullough & Vice -Mayor Levine NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Mayor Phillips ESTHER C. BEIRNE, City Clerk w.'.City Cleric- WoMile'•Agenda related',MC imestontiict of int meso 10-12 dnc E CITY OF SAN RAFAEL ROUTING SLIP 1 APPROVAL FORM INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL I AGENCY. SRRA 1 SRCC AGENDA ITEM NO. h DATE OF MEETING: 912!2014 FROM: Eric Davis DEPARTMENT: City Attorney DATE: August 25, 2014 TITLE OF DOCUMENT: Resolution Repealing Resolution 13442, Re -Adopting the FPPC Model Conflict of Interest Code as the City's Conflict of Interest Code, and Adopting a Revised List of Designated Employee Positions and Disclosure Categories, to be Incorporated into the City's Conflict of Interest Code Department Director (si ature) (LOWER HALF OF FORM FOR APPROVALS ONLY) APPROVED AS COUNCIL /AGENCY AGENDA ITEM: �f City Manager (signature) NOT APPROVED REMARKS: APPROVED AS TO FORM: t4,) � 6 City Attorney (signature)