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Date: To: From: Subject: October 2, 2012 El Cerrito City Council Cheryl Morse, City Clerk Conflict of Interest Code Update ACTION REQUESTED AGENDA BILL Agenda Item No. 5(C) Adopt a resolution approving a revised Conflict of Interest Code for the City of El Cerrito, including filing requirements for related agencies, including the Public Financing Authority, the Employee Pension Board, and the Successor Agency to the former Redevelopment Agency and rescinding Resolution No. 2011-54. BACKGROUND The Political Reform Act of 1974 ("Act") (codified in Government Code Sections 8100 et seq.) requires the City to adopt and promulgate a Conflict of Interest Code ("Code") applicable to designated City employees and public officials. The City first adopted its Conflict of Interest Code in 1977. In 1983, the City Council enacted Resolution No. 83-14 to adopt the model Conflict of Interest Code drafted by the Fair Political Practices Commission. The Conflict of Interest Code covers matters such as the manner of reporting financial interests, the procedures to be utilized in filing conflict of interest statements, the contents of such statements, and the time within which such statements must be filed. On July 19, 2011, the City Council amended its Conflict of Interest Code, to include the filing of related agency positions, including the Municipal Services Corporation (MSC), . by Resolution No. 2011-54. However, since the MSC is not a public agency, but rather a non-profit, public benefit corporation, it is subject instead to the California Corporations Code. The MSC Board instead adopted its own Conflict of Interest Policy on October 17, 2011 by MSC Resolution No. 2011-11, following the model IRS Conflict of Interest Policy by which a charitable organization should implement decisions regarding transactions or arrangements between the charitable organization and members of the charitable organization's board of directors and other individuals. As such, the City's Conflict of Interest Code is now being amended to remove the MSC as a related agency position. MSC Directors and Officers do not file a Statement of Economic Interests- Form 700 pertaining to the MSC, but rather, will file a separate annual declaration as required under the MSC's existing Conflict of Interest Policy. ---PAGE BREAK--- Agenda Item No. S(C) The City Council is the code-reviewing body, and has regularly amended the Conflict of Interest Code to correspond to changes in the City. The last revision was completed in 2011, by Resolution No. 2010-54. ANALYSIS The proposed resolution requires minor revision to delete references to the Municipal Services Corporation and the Redevelopment Agency and also reflects changes in employee classifications and organizational structure. Attachment 1 presents the entire Code for adoption with all changes incorporated. The proposed resolution clearly illustrates those portions of the Code which require revision. Text which is underlined has been added and text proposed for deletion contains strikethrough. Appendix A indentifies designated positions and commissions and establishes their respective levels of disclosure. Appendix B outlines the specific requirements of each disclosure category. Appendix A has been updated to reflect changes in department organization, including the addition of newly established classifications and the deletion of classifications which are no longer relevant. Updates to Appendix A include the following minor changes in position classifications: 1. Assistant City Attorney - Added 2. Environmental Programs Manager- Added 3. Maintenance and Engineering Services Manager retitled Maintenance Superintendent 4. Redevelopment Program Manager retitled as Economic Program Manager Updates to Appendix B reflect the dissolution of the Redevelopment Agency and deletion of language relating to redevelopment from the Code. Disclosure language in Category 3: Investments was also modified to clarify disclosure for board and commission members. · The following commissions are not included in the proposed amendment because they do not meet the State's criteria for disclosure at this time: Citizens Street Oversight Committee, Civil Service Commission, Committee on Aging, Crime Prevention Committee, Environmental Quality Committee, Economic Development Board, Human Relations Commission, Parks and Recreation Commission and the Tree Committee. Appendix B outlines specific disclosure criteria for the designated employment classifications and the boards and commissions. The Conflict of Interest Code has also been revised to add filing requirements for a related agency position, the Successor Agency to the Former El Cerrito Redevelopment Agency and delete all references to the former Redevelopment Agency and Municipal Services Corporation. Page2 ---PAGE BREAK--- Agenda Item No. 5(C) The Code as presented accurately designates all positions that make or participate in the making of governmental decisions. The disclosure categories assigned to these positions accurately require the disclosure of all investments, business positions, interests in real property and sources of income which may foreseeably be affected materially by the decisions made by those designated positions. The Code includes all other provisions required by Ca. Government Code Section 87302 and incorporates by reference FPPC Regulation 2 Cal. Admin. Code Section 18730. The City Council, City Manager, City Attorney, City Treasurer and Planning Commissioners are Ca. Govt. Code Section 87200 filers. The City Conflict of Interest Code does not apply to this group. Although the City Clerk notifies each person in this group of his/her filing obligation, the Fair Political Practices Commission acts as the Filing Officer. The City updates its Conflict of Interest Code biennially to accommodate changes in organizational structure and job classifications. Biennial review of the City's Conflict of Interest Code is mandated by the California Political Reform Act. FINANCIAL CONSIDERATIONS There will be no cost associated with the proposed revisions to the Conflict of Interest Code. LEGAL CONSIDERATIONS The Act requires the City Council to revise the Conflict of Interest Code on a regular basis and when such amendments are necessitated by changed circumstances, pursuant to Government Code Sections 87306 and 87306.5. Council adoption of the proposed Conflict of Interest Code will sustain continued compliance with State law. Scott Hanin City Manager Attachments: 1. Proposed Resolution with revisions illustrated with underline and strikethrough Page 3 ---PAGE BREAK--- ---PAGE BREAK--- RESOLUTION 2012-XX Agenda Item No. 5(C) Attachment RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO ADOPTING A REVISED CONFLICT OF INTEREST CODE FOR THE CITY OF EL CERRITO, INCLUDING THE FILING OF ANY RELATED AGENCY POSITIONS, SUCH AS THE EMPLOYEE PENSION BOARD, THE SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY, AND THE PUBLIC FINANCING AUTHORITY (PFA) l. ND THE ~4UNICIPf_..L SERVICES CORPORA TION (I\48C) AND RESCINDING RESOLUTION NO. 2011-54 WHEREAS, the Political Reform Act of 1974 Government Code Sections 8100 et seq. enacted as part of Proposition 9, requires every local agency to adopt and promulgate a Conflict of Interest Code applicable to en1ployees or consultants holding designated en1ployees positions and public officials within the jurisdiction of the local agency;and · WHEREAS, in 1977, the El Cerrito City Council enacted Resolution No. 3843, adopting a Conflict of Interest Code for the City of El Cerrito ("City"), and WHEREAS, subsequent to the enactment of Resolution No. 3843, the Fair Political Practices Commission enacted 2 Cal.Code of Regs. Section 18730 which contains the terms of a standard model Conflict of Interest Code, which could be adopted by local agencies covering such matters as the manner of reporting financial interests, the procedures to be utilized in filing conflict of interest statements, the contents of such statements, the time within which such statements must be filed, etc; and which may be amended by the Fair Political Practices Commission after public notice and hearings to conform to amendments to the Political Reform act; and WHEREAS, in 1983, the City Council enacted Resolution No. 83-14 which adopted the model Conflict of Interest Code drafted by the Fair Political Practices Commission, including any amendments duly adopted by the Commission to conform to amendments to the Political Reform Act; and WHEREAS, Appendix A of Resolution No. 83-.14 listed the designated employees subject to the model Conflict of Interest Code (listed as "designated tilers"); and Appendix B of Resolution No. 83-14 identified the specific financial-di-sclosures vvhich v;ould be applicable to the designated en1ployeesinterests that would be reportable; and WHEREAS, state law as specified in the Political R~fonn zA_..ct ("Act~ requires the City Council_,_ as the City's code-reviewing body to direct the review of its Conflict of Interest Code; and WHEREAS, the Act additionally requires the submission of a revised ·conflict of interest code for approval by the code-reviewing body or the notification of said body that no changes are necessary pursuant to Government Code Section 87306.5; and WHEREAS, the City Council has regularly amended its Conflict of Interest Code to correspond to changes in the City resulting from reorganization of City departments and ---PAGE BREAK--- Agenda Item No. 5(C) Attachment employees, changes in job classifications, and the addition and deletion of certain boards and commissions and to respond to any changes in State law; and WHEREAS; the Conflict of Interest Code was last amended in 2011 through Resolution 2011-54 and the Code requires revision to reflect the changes in designated positions and the financial interests required to be repo1ied; and WHEREAS, this review has been con1pleted and the City Council has determined that such changes are necessary due to changes in City organization and to comply with state law and that Appendix A and B, attached herein, accurately sets forth the designated positions, and their respective categories of financial interests which should be n1ade reportable. and those boards, cotmnissions and cotntnittees which should be designated and the respective categories of financial interests which should be ·made reportable by their n1e1nbers~ and '.VJ:-IEREi\.8, the El Cerrito Municipal Services Corporation ("1\4SC") was created in 1982 for the broad purposes of benefiting the public, but has since then been generally inactive; and '.VI-IEREl\S, on 1\iareh 7, 20 11 the 1\4SC took on nev; responsibility and entered into an A.ssignment i\greetnent v;rhh the City accepting the City's rights and responsibilities for eeono1nie de veloptnent and rede:velopment projects and progran1s on behalf of the El Cerrito Redevelopn1ent i\:gency ("\\gency"), l:lflder the f..n1ended and Restated Public Improvetnents and Cooperation A.greement for the City of El Cerrito Redeveloptnent Proj cot i\..rea by and bet'.veen the City and the i\gency; and WHEREAS, the City T.vould novv' like to amend the Conflict of Interest Code te include~ filing requirements for any-related agency positions, such as the Redevelopment l\genc;r (RDf-')the Successor Agency to the former El CetTito R.edeveloptnent Agency, the Public Financing Authority (PF and the Employee Pension Board~ and the ~4unicipal Services Corporation (1\48C); and~ \VHEREA.S, the City \vould also like to amend the Conflict of Interest Code to include the requiren1ent that each Redevelop1nent z\gency Boardmenlher and officer tile a ·written disclosure of any direct or indirect property interest that he/she possesses in the Redevelopment Project Area (including, \\ithout lin1itation, a personal residence), and retrain fro1n acquiring any additional property in the Project A.rea e*cept as permitted by I-Iealth and Safety Code Section 33130; and WHEREAS, the City of El Cerrito Conflict of Interest Code, attached incorporated herein, requires revision so that it includes a filing requirement for all related agency positions, thereby accurately setting sets forth the designated positions and categories of financial interests which should be made reportable. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of El Cerrito as follows, with additions in underline and strikethrough: Section 1. Incorporation of Recitals. All Recitals above are true and correct and are ---PAGE BREAK--- incorporated herein. Agenda Item No. 5(C) Attachment Section 2. Adoption of Model Conflict of Interest Code. The terms of 2 Cal. Adm. Code Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference and included as part of the Conflict of Interest Code of the City of El Cerrito. Section 3. Statement of Economic Interest Requirement. Persons holding designated positions and persons required to do so by statute shall file Statements of Economic Interests with the City of El Cerrito on Fair Political Practices Commission forms, in conformance with the individual disclosure categories and State guidelines, when requested by the City Clerk. Persons holding designated positions and persons required by statute to file statements of economic interests shall also report interests for any other related agency positions, such as the Employee Pension Board, Redevelopment Agency (RDA:), Successor Agency to the forn1er Redevelopn1ent Agency, and the Public Finance Authority (PF A).!.---afltl · the 1viunicipal Services Corporation (~4SC). The City Clerk will retain custody of the statements and make the statements available for public inspection and reproduction. Section 4. Form 700 Requirement. In accordance with FPPC Regulation 18734, any individual hired for a position not yet covered under this Conflict of Interest Code must file a Form 700 if the individual serves in a position that makes or participates in making governmental decisions. Individuals in this category must file under the broadest disclosure category until the code is amended to include the new position unless the City of El Cerrito provides, in writing, a limited disclosure requirement. Section 5. Late Filings. Late filings and failure Failure to ftl.e-.File state1nents Statements. that any Any violation of any provision of this Code is subject to the administrative, criminal and civil sanctions provided in the Political Reform Act, Government Code Sections 81000 et seq. The following additional regulations shall apply to City of El Cerrito designated employees, designated members of boards and commissions appointed by the City Council, and consultants: City Employees: If a City employee fails to file an Initial, Assuming Office or Annual Statement of Economic Interests within thirty days after the City Clerk has given specific written notice of non-filing, he or she shall undergo steps resulting in a written reprimand in accordance with the provisions of the appropriate Memorandum of Understanding or City of El Cerrito Personnel Policies and Administrative Regulations. The employee's supervisor shall comply with the provisions of the appropriate Memorandum of Understanding or City of El Cerrito Personnel Rules and Administrative Regulations. In addition, the City Clerk shall impose late filing fees in accordance with Government Code Section 91013 and 91013.5. No person who has left City employment and failed to file the appropriate statement shall resume active employment with the City of El Cerrito if there are outstanding statements or fines. ---PAGE BREAK--- Members of Boards and Commissions: Agenda Item No. 5(C) Attachment If a member of any non-elected board, commission or committee specified in the Code fails to file an Assuming Office, Initial or Annual Statement of Economic Interests within thirty days after the City Clerk has given specific written notice of non-filing, the member's term on the commission shall expire. The City Clerk shall notify the commissioner that his/her term has expired and notify the City Council that a vacancy exists on the commission,-!....in-In addition, the City Clerk shall impose late filing fees in accordance with Government Code Sections 91013 and 91013.5. Prior to being eligible for reappointment to any board, or committee all outstanding filings for all commission appointments must be filed and any outstanding fines, payable under Government Code Section 91013, shall be paid. No person shall be appointed to any commission if there are outstanding statements or finest-.Land no person shall be appointed to any commission for a period of one year if terminated from any commission more than once for failure to file statements. Consultants: If a consultant, as defined in 2 Cal. Code Regs. Section 18701, fails to file any Statement of Economic Interests within thirty days after the City Clerk has given specific written notice of non-filing, he or she shall be advised by the City's project manager that no further payments shall be made by the City of El Cerrito under the contract until such statement has been received by the City Clerk. The City Clerk shall also impose late filing fees in accordance with Government Code Sections 91013 and 91013.5. Section 6. Employees and Officials that Must Disclose Financial Interests. The City Conflict of Interest Code hereby includes Appendix A, which reflects changes in City organization and in the job titles of City management staff and reflects the addition inclusion of staff positions with decision making authority as authorized by the El Cerrito Municipal Code and in compliance with Title 2, Section 18701 of the California Code of Regulations. Designated Employees and Public Officials shall disclose financial interests as set forth in Appendix B. Job Classification APPENDIX A DESIGNATED FILERS Administrative Analyst Assistant City Attorney (Added) Assistant City Manager Associate Engineer (lnactive) Associate Planner Onactive) Battalion Fire Chief Building Offichtl (Inactive) Disclosure Category 1,2,3,4 1,2,3,4 1,2,3,4 1 ,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 ---PAGE BREAK--- City Clerk Community Development Director (Inactive) Economic Development Director (Inactive) Employee Services Manager Environmental Services Manager Environmental Progrruns Mru1ager (Added) Fire Chief Information Systems Manager Planning Manager (Development Services Manager) Public Works Director/City Engineer Maintenance Superintendent and Engineering Services Police Chief Police Captain Project Manager Recreation Director Recreation Program Supervisor II (Inactive) Rede·velopment Economic Program Manager (Retitled) Senior Engineer Senior Planner Senior Project Manager Special Counsel Consultants* Commissioners & Board Members: Arts and Culture Commissioners Design Review Board Members Financial Advisory Board Members Agenda Item No. 5(C) Attachment 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1.2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1 ,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 1,2,3,4 5 1,2,3,4 1,2,3,4 * With respect to consultants, the City Manager or designee may determine in writing that a particular consultant, has been hired to perform a range of duties that is sufficiently limited in scope so as not to require full compliance with the disclosure requirements described in this section. Such written determination shall include a description of the consultant's duties and, based upon that description, a statement of the extent of disclosure requirements, if any. The City Manager's determination is a public record and shall be retained for public inspection in the same manner and location as the disclosure statements filed pursuant to this Resolution. Section 7. Adoption of Disclosure Categories. The City Conflict_ Code hereby includes Appendix B, to achieve consistency with State Law and reflect the required disclosure categories of this Conflict of Interest Code: APPENDIX B DISCLOSURE CATEGORIES Category 1 : Personal Income All sources of income, including investments, gifts, loans and travel payments as defined in Government Code Section 82030, as amended. Not included as income in this disclosure category is income received from any source outside the City of El Cerrito if that ---PAGE BREAK--- Agenda Item No. 5(C) Attachment source is not presently doing business within the City of El Cerrito and has not done business within the City of El Cerrito during the two years prior to the time this disclosure statement is made. Category 2: Interests in Real Property All interests in real property in excess of $2,000 held by the designated employee, or commissioner, the employee or commissioner's spouse, domestic partner or dependent children located in whole or in part within the City of El Cerrito or within a two mile radius of the boundaries of the City of El Cerrito. Included within this disclosure category is any leasehold, beneficial or ownership interest or an option to acquire such an interest in real property. Included within this disclosure category is any pro rata share of interests in real property of any business entity or trust in which the designated employee, or commissioner, the employee or commissioner's spouse, don1estic partner or dependent children, owns directly, indirectly or beneficially, a 10 percent interest or greater. An "interest in real property" does not include the principal residence of the employee or commissioner, making the disclosure unless all or part of that residence is used for business purposes and claimed as a business deduction on the designated employee or commissioner's income tax return. RD/\ Boa-rdn1e1nbers. In con1pliance ltVith Health and Safety Code Section 33130(a), each A.gency Boa-rd1nen1ber and officer shall file a v1ritten disclosure of any direct or indirect prope1iy interest that he/she possesses in the Rede:velopn1ent Project Arrea (including, v.rithout limitation, a personal residence), and shall refrain fron1 acquiring any additional property in the Project Area except as permitted by ·Health and Safety Code Section 33130. The City Clerk/A.gency Secretary shall cause such disclosures to be entered in the n1inutes of the J' gency Board and the City Council of the City in fulfillment of the procedtn-es of Health and Safety Code Section 33130(a). Category 3: Investments All financial interests in excess of $2,000 held by the designated employee or commissioner, the employee or commissioner's spouse, domestic partner or dependent children in security issued by a business entity, including but not limited to common stock, preferred stock, options, dept-debt instruments and any partnership or other ownership interest if the business entity or any parent, subsidiary or otherwise related business entity has an interest in real property in the City of El Cerrito, or does business or plans to do business in the City of El Cerrito, or has done business within the City of El Cerrito at any time during the two years prior to the time this disclosure statement is made. The term "investments" does not include a time or demand deposit in a financial institution, shares in a credit union, any insurance policy, interest in a diversified mutual fund registered with the Securities and Exchange Commission or a common trust fund created pursuant to Section 1564 of the Finance Code, or any bond or other debt instrument issued by any government or government agency. The term "investments" does include a pro rata share of investments of any business entity, mutual fund, or trust in which the designated employee or co1runissioner, or the employee's or com1nissioner' s spouse, domestic partner or dependent children own directly, indirectly or beneficially, a 10 percent interest or greater. ---PAGE BREAK--- Category 4: Management Positions Agenda Item No. 5(C) Attachment Management positions held with any business entity located, doing business, planning to do business, or having done business in the past two years within the City of El Cerrito. Category 5: Arts and Culture Commission All members of the Commission shall disclose business entities in which they have an investment, or in which they are a director, officer, partner, employee, or hold any position of management; and income as defined in Government Code Section 82030, as amended, including gifts, loans, and travel payments; if the business entity or source of income: a) has applied for, is receiving, or within the previous two years has received, funds through the City to advance Arts in El Cerrito; b) has profited from the creation, production, sale, or display of any artistic endeavor; or c) has provided services, goods, or equipment to artistic endeavors in the City of El Cerrito. Section 8. Rescission of Previous Conflict of Interest Code. The City Council hereby rescinds Resolution No. 2011-54. I CERTIFY that at a regular meeting on October 2, 2012 the City Council of the City ofEl Cerrito passed this Resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City ofEl Cerrito on October X, 2012. Cheryl Morse, City ·clerk Approved: William C. Jones III, Mayor