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HomeMy WebLinkAboutS1-City Attorney CITY OFBAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: James F. Penman Subject: Conflicts of Interest and Advice from City Attorney Dept: CITY ATTORNEY Date: March 12,1997 O.QIGINAL Synopsis of Previous Council action: Recommended motion: Information only. , ~7~ Signature Contact person: James F. Penman Supporting data attached: FUNDING REQUIREMENTS: Amount: Phone: Ward: 5255 All Source: Finance: Council Notes: 75-0262 Agenda Item No. 5-/ -Pi,7 , ./ J,," 8T AFF REPORT Council Meeting Date: March 17, 1997 TO: FROM: DATE: AGENDA: Mayor and Common Council James F. Penman, City Attorney March 12, 1997 CONFLICTS OF INTEREST AND ADVICE FROM CITY ATTORNEY A recent case highlights the individual responsibility placed on the Mayor, Council Members and members of city boards and commissions. The City Attorney will be discussing these responsibilities with the Mayor and Common Council and all city boards and commissions during the next several weeks. This municipal law mental equivalent to being "flogged through the fleet" will give the 170 members of commissions and boards, as well as the Mayor and City Council, the opportunity to ask questions on their responsibilities under a variety of laws. (g@[P))f C I T Y 0 F SAN B ERN A R DIN 0 INTEROFFICE MEMORANDUM TO: Mayor Councilmembers All Members of City Boards and Commissions FROM: Henry Empefio, Jr., Deputy City Attorney DATE: March 13, 1997 RE: Potential Conflicts of Interest This memo is transmitted to remind the Mayor, Councilmembers, and all members of the City's Boards and commissions of certain legal requirements in state law relating to potential conflicts of interest. Attached please find a copy of the chapter entitled "Rules of Official Conduct" taken from the League of California Cities Plannina commission Handbook, which the Planning and Building Services Department has previously sent to all Planning Commissioners at the beginning of their term of office. We encourage the Mayor, every Councilmember, and every Commissioner or Boardmember to read this chapter; and pay particular attention to the section on Conflicts of Interest which applies not only to Planning Commissioners, but also applies to the Mayor, all Councilmembers, and all Commissioners and Boardmembers. This memo also discusses the conflict of interest laws which prohibit the Mayor, any Councilmember, any Commissioner or any Boardmember from personally contacting any City officer or employee on behalf of a business client regarding a project in the City of San Bernardino. Any of the above-named City officials with business activities related to real estate, land use, development, or construction, should be particularly cognizant of these state laws regarding conflicts of interest. We also advise the Mayor, Councilmembers, and all members of City Boards and Commissions that under the provisions of Government Code Section 83114, any person may request an opinion of, or seek advice from, the California Fair political Practices Commission (FPPC) concerning his or her duties under the Political Reform Act. Such an opinion may be relied upon so long as the FPPC was provided with all of the material facts, and will constitute a complete defense to civil or criminal penalties under the Political Reform HE ~o[Planning,Mell'll -ItS/ */tl To: Re: Date: Mayor, Councilmembers, Potential Conflicts of March 13, 1997 Boardmembers and Commissioners Interest Page 2 Act. You can call the Fair Political Practices Commission at (916) 322-5660; or write to them at P.O. Box 807, Sacramento, CA 95812. We encourage all of the above-named City officials to contact the City Attorney's Office or the FPPC or the official's private attorney for information regarding conflicts of interest as soon as a question arises and well before that official's meeting, so that any potential conflicts of interest can be avoided. Any communication between the City official and the City Attorney's Office or the FPPC is llQt a confidential communication as there is no attorney-client relationship between the City official and the City Attorney's Office or the FPPC regarding that official's conflicts of interest. The conflict of interest provisions of the Political Reform Act of 1974 (Government Code Section 81000 et seq.) are found in Sections 87100 to 87103 of the Government Code. Section 87100 contains the basic prohibition of the Act. It states: "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 ~e knows or has reason to know he has a financial interest." For the purposes of the Act, "public official" is defined as: ".. . every member, officer, employee or consultant of a state or local government agency...." (Government Code Section 82048) . Government Code Section 82041 defines a "local government agency" : "'Local government agency' means a county, city or district of any kind including school district, or any other local or regional political subdivision, or any department, division, bureau, office, board, commission or other agency of the foregoing." HZ: aO[Planmng,Mem] To: Re: Date: Mayor, Councilmembers, Potential Conflicts of March 13, 1997 Boardmembers and Commissioners Interest Page 3 Thus, the Mayor, every Councilmember, and every member of any City Board or Commission of the City of San Bernardino is a public official governed by the conflict of interest provisions in the political Reform Act. For the purposes of this discussion, "financial interest" is defined in Government Code Section 87103 as follows: "A public official has a financial interest in a decision within the meaning of Section 87100 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 or a member of his or her immediate family or on any of the following: "(a) Any business entity in which the public official has a direct or indirect investment worth one thousand dollars ($1,000) or more. "(b) Any real property in which the public official has a direct or indirect interest worth one thousand dollars ($l,OOO) or more. "(c) Any source of income.. . aggregating two hundred fifty dollars ($250) or more in value provided to, received by or promised to the public official within twel ve months prior to the time when the decision is made. "(d) Any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management. " Government Code Section 82032 provides: "'Influencing legislative or administrative action' means promoting, supporting, influencing, modifying, opposing or delaying any legislative or administrative Iii: ao{Plilrulin9'_Mem) To: Re: Date: Mayor, Councilmembers, Potential Conflicts of March 13, 1997 Boardmembers and Commissioners Interest Page 4 action by any means, including but not limited to the provision or use of information, statistics, studies or analysis." Title 2 California Code of Regulations Section 18700.1 (a) describes acts which constitute "the use of official position to infl uence" : "With r~gard to a governmental decision which is within or before an official's agency or an agency appointed by or subject to the budgetary control of his or her agency, the official is attempting to use his or her official position to influence the decision if, for the purpose of influencing the decision, the official contacts, or appears before, or otherwise attempts to influence, any member, officer, employee or consultant of the agency. AttemDts to influence include. but are not limited to. aDgearances or contacts by the official on behalf of a business entitv. client. or customer." (emphasis added) By the terms of the Political Reform Act, it is a conflict of interest if the Mayor, any Councilmember, or any Boardmember or Commissioner contacts any City officer or employee on behalf of a business client to influence any City governmental decision if it is reasonably foreseeable that the decision will have a material financial effect on that official or that official's immediate family or a specified business entity, real property or source of income. A violation of the fine of up to $10,000. Act is a misdemeanor and may result in a (Government Code Section 91000) Please contact me if I can be of further assistance in this matter. ~~ Attachment cc: James F. Penman, City Attorney HE ilo[Planning.!'lemJ THE PLANNING COMMISSIONER'S HANDBOOK COPYright 1995. by the League of California Cities, Sacramento, California All rights reserved. This publication, or parts thereof. may not be reproduced In any form without the Leagues permission For information, contact the League of California Cities. 1400 K Street Sacramento, CA 95814. I Reprinted With Permission Granted by The League of California Cities, March 13, 19971 " , ',j .:i ; It';' <!) i !i III. Rules of Official Conduct THE PLANNING COMMISSIONER'S HANDBOOK League of Cahfomia Cities I." Legal Liability of Public Officials Tee law imposes a wide variety of mandatory duties on city officials. whether cI,y council members, planning commission memcers. or city staff. Failure to comply with legal requirements can cause the city to be liable for damages and for attorney fees. Generally speaking, however, individual cily offiCials are not personally liable. Where state law imposes public liability for actions resulting in damage, the city must provide its officials with a defense if they are sued and pay any judgment which might be entered against them. Tnere are some exceptions to this general rule: When one acts out of fraud, corruption or malce; When one violates the conflict of interest rules: or . When one is not acting within the scope of official authority. In addition to state law. a possible source of publiC liability exists for Violation of ccnstitutional rights under 42 U.S.C. section 1983. a federal civil rights statute. T"ere are two possible defenses available to an Ir.c",idual under this statute: Absolute Immunity where one is taking a legslalive action. Kuzmich v. Santa Clara. 689 F.2:l 1345 (9th Gir. 1982) acd Qualified Immunity fcr good faith actions, thai IS. those taken on the baSIS of a Sincere and reasonable Delief the cond~ct IS constitutional. A:eough an Individual city official may be immune hm liability in section 1983 actions. the city IS not. Conflicts of Interest -:-";' goal of tne ccnfl,ct of Interest laws is to req~lCe cubllc officla:s to make C;'ClSlons Wlt".O~t being Influenced oy personal flna"cial interests. Toward this gc;,. the laws require diSClosure of certain private' cancial interests and cscualificatlon from declslon.maklng under certain circumstances. Ccr.fllct of Interest laws balance two competing Ir.terests. On the cne hand, deCISions must be made to benefit the publiC, not private financial interests. At the same time. conflict of Interest laws are not deSigned to insulate officials frcm difficult deCisions. Ma<mg difficult deCisions IS. after all. one of the primary duties of a public c~clal. If offiCials fail to pactlclpate when they do ec: have a genuine conflict of Ir:eces!. they are not carrying out me responsibilities for which tney were elected or appomted. POLITICAL REFORM ACT Tnere are a number of laws which define conflict of Interest standards. The Pclltlcal Reform Act (Government Code section 81000 and following) is the ITes' comprehensive. It says "no pubiic offiCial at any level cf state or local government shall make, participate in making. or in any way attempt to use his official position to III. Rules of Official Conduct 1 THE PLANNING COMMISSIONER'S HANDBOOK League of Caf:fornia Cities '2 III. Rules of Official Conduct influence a governmental decision in which he knows or has reason to know he has a financial interest" See Government Code 9 87100. The Fair Political Practices Commission. The state Fair Political Practices Commission (FPPC)is charged with enforcing the Political Reform Act. The FPPC provides advice and opinions to oHicials concerning potential conflicts of interest arising under the Political Reform Act. The FPPC's telephone number IS 916/322-5660. Be aware the FPPC staH accepts telephone inquiries at specified times only and written advice can take weeks, if not months. Disclosure. The Political Reform Act requires public oHicials to file periodic statements disclosing their financial interests. Disclosure is made on forms called "statements of economic interests." The city clerk usually administers lhese requirements and should be consulted when preparing the forms. Disqualification. The Political Reform Act also requires public oHicials to disqualify themselves on a particular issue if they have a conflict of interest. A public oHicial or employee has a conflict of interest when all of the following occur: . The oHicial makes, participates in, or uses his official position to influence a governmental decision; . It IS foreseeable the decision will aHect a financial interest of the oHicial; . Tre eHect of the decision on the oHicial's financial interest will be mate- ria:; and . The eHect of the decision on the oHicial's financial interest will be distin- gUishable from its eHect on the public generally; Financial interests which may require disqualification include: . A business entity In which the official has an investment of $1,000 or more: Real property in which the official has an interest of $1,000 or more. . A cerson or business entity from which the oHicial has received. In the past 12 months, the sum of $250 or more, or the oHicial's spouse has received the sum of $500 or more in the past 12 months. . A business entity in which the official is a director, oHicer, partner or trustee, employee or holds a position of management; and . A donor, or an agent or intermediary for a donor of gifts worth $250 or more and which were received by the oHicial within 12 months pror to the decision. These provisions apply to financial interests owned by the spouse or depen- dent chileren of public oHlclals, or by business entities or trusts in which the oHicial, oHlcial's spouse or dependent children own a 10 percent or greater interest. Government Code 9 87103. When In Doubt. . . The Polrtical Reform Act is quite complex. In prnctical terms, when oHicials have an interest in a business, a piece of real property, a source of Income. or have recently received a contribution of $250 or more relating tc a matter coming before the commission, they should consult with the city attorney or with the FPPC before acting so any potential conflicts can be THE PLANNING COMMISSIONER'S HANDBOOK League 01 California Cities III. Rules of Official. Conduct 3 avoided. Moreover, such consultation should occur as early as possible (in other words, not five minutes befcre the vote on the matter in questlcn). Effect of Disqualification. When an official has a ccnflict, the officia~ must not cnly disqualify himself from votln; but must also refrain from participating in any debate on the matter. The disqualification must be made on the record. P~anning commissioners participate in the making of governmental decisions when they make recommendations, prepare reports or letters, or otherwise give advice to the city councilor other decision-makers. Public officials illegally use their position to influence a governmental decision if they appear before their own agency, or contact any member or employee of the agency. Thus, a member of a planning commission who also is an architect or attorney is prohibited from representing a client before the commission. A commission member may prepare architectural or 8ngineering draY/'ngs, but only if the member does not have direct. oral or written contact with the agency, except staff contact necessary to review the drawings. The FPPC has adopted regulations which allow commission members who are sole practitioners to present architectural drawings in certain limited circumstances. 2 Cal. Code of Regulations 9 18700.1(b)(5). Gift Limits. Planning commissioners should also be aware the Polrtical Reform Ac; creates a strict gift limit. With certain limited exceptions, officials may not aocept gifts from a single source Ir. a given year when the value of secn gifts exoaeds 5280. Campaign Contributions Issues. One section of the Political Reform Act See GC'Jernment Code 9 84308) IS of particular Importance to members of planning co!":',missions who are running for office or active in political campaigns. It pronibits elected or appointed officers, alternates, or candidates who sarve on quasi-judicial boards or commissions, from receiving. soliciting, or directing campaign contributions of 5250 or more coming from applicants or otners with a financial interest In a pending maner. T-e crohlbltlon IS In effect w.oile the application is perc','g and for thrae months atie' the deCISion IS rence'a:. The officers of suCh a;accles must disc'cse any SeC- contributions recelve.~ Within 12 months precedln; the date of the applica- Ilcr. City councils, howeve'. while acting as a body. are exempt from section 8~308. If members of a planning commission have been involved in any way in solicit- ing cr receiving campaign contributions, or have run for office and received contributions from an applicant, they should check with the FPPC or City attorney. Penalties. The Political Reform Act provides both civil and criminal penalties, Wlt- the district attorney resaonsibie for enforcing loca~ VIOlations. The FPPC alsc anforces proVISions of Ihe Act tnrough administrative proceedings. and recently has expanded its enforcement staff to substantially increase rts aCllv:t:es at the local level. In addition, any person reSiding in the jurisd,ctlon may 'i1e a citizen's action. Persons who violate the conflict of interest laws may be liable for fines of up to three times the value of an economic benefit realized as a result of the vlclation. In addition, any person convicted of a Criminal violation is prohib- Ite~ from running for office for four years following the date of conviction. The court also has authOrity to set aside an official aotlon in which a cor"iCI of interest occurrec. THE PLANNING COMMISSIONER'S HANDBOOK League of California Cities . 4 III. Rules of Official Conduct ILLEGAL CONTRACTS Proolems also may arise when a Iccal government contracts for goods. ser- vices. Dublic works pro:ects or otner activities involving expenditures of public funds. Government Code section 1090 prohibits city officers or employees from holding a financial interest in any contract made by them in their official capac- ity. or made by any body or board of which they are members. Specifically, section 1090 says neither city officers nor employees may be "purchasers at any sale or vendors at any purchase made by them in their official capacity." In the case of City contracts, it is not enough for officials to disqualify themselves from the decision-making process. The law forbids the local government body from even entering into a contract with a firm in which a member of that body has a financial interest. INCOMPATIBLE ACTIVITIES local agencies, officers and employees may not engage in any employment activity. or enterprise for compensation, which is inconsistent or incompatible with their official duties. See Government Code 9 1126. Officers and employ- ees are prohibited from performing work for compensation if the decision to contract for such work IS subject to approval by any other officer, employee, board or commiSSion of the public entity-unless specifically approved. The apDointing power or agency r--ay determine which outside activities conflict with acoolnted o'ct,es acd adopt .c es regarding the provision of notice to employees for engaging In prohlclte: activities, disciplinary action and appeals regarolng determinations of conflict. See Mazzola v. City and County of San FranC/sea, 112 Cal. Apo. 3d 141 (1980). There IS also a common law procrc:tlon against incompatible activities which prevents a public officia' from hololng another official position that is incompat- ible With the first office. lOCAL REGULATIONS Some olty charters anc ordinances also contain conflict of Interest prOVISions. Sometimes these prOVISions are r--.cre comprehenSive or more rigid than state law and they should be t10rougr.ly understood. To aVOid the pitfalls of conflict of Interest law, officials should be mindful of . circumstances in which private Interests are affected by public decisions. Whenever an offiCial suspects he cr she may have a conflict of interest. the offiCial should consult the city attcrney. It is important to remember public offiCials can be removec from oN.ce for misconduct. See Government Code 99 3060 and 3074. The Brown Act and Planning Commissioners All meetings and deliberations of Iccallegislative bodies, including planning commissions, must be acen and public. This open meeting law is commonly referred to as the Brown Act. See Government Code 9 54950 and fOllowing. The courts have consistently interpreted the Brown Act broadly to ensure open deliberation and open ceCISlon maKing so the public can be fully informed and retain control over the" governmectal representatives. THE PLANNING COMMISSIONER'S HANDBOOK League of California Cities The following are provisions of the Brown Act which are particularly important for planning commissioners. MEMBERS The term "member of a legislative body" ircludes any person elected to serve as a member but who has not yet assumed the duties of the position, and such a person must comply with the Brown Act as though he/she had already been sworn into office. See Government Code S 54952.1. MEETINGS The following are defined as "meetings" ard subject to the Brown Act require- ments: . Any congregation of a majority of members of the commission in the same time and place to hear, discuss. or deliberate on any matter within the commission's jurisdiction. See Government Code S 54952.2(a)(1); and . Use of direct communication, personnel intermediaries, or technologi- cal devices (such as telephone and FAX machines) by a majority of the commissioners to develop a collective concurrence or action to be taken. See Government Code S 54952.2I,a.:(2). (Also known as "seriatim" or rotating meetings). ine following are NOT meetings: . Individual contacts or conversations of a commiSSioner with any other person; . Attendance of a majority of members of the commiSSion at a conference or similar gathering open to the public involving a discussion of public issues. or issues of interest to public agencies of the type represented by the commission, provided a majority 01 the commission do not discuss among themselves. other than as ea ~ of the scheduled program, specific business within the commission's Jvsdictlon. A meeting is "open to the public" even If the conference orgarzers charge a fee for attendance; . Attendance of a majority of the corc""ssion at an open and publicized meeting organized to address a topic of local community concern by a person or organization other than the local agency. provided a majority of the commission do not discuss among themselves, other than as part of the scheduled meeting, specific business within the commission's jurisdiction: and . Attendance of a majority of the CO",,-,,SSlon at a purely social or cer- emonial event. provided the majort; of the commiSSion does not discuss among its members specific business within the commission's jurisdiction. See Government Code S 54952(2)(b) What constitutes a "meeting" sometimes may present a difficult question. Of course, all special and regular meetings of a legislative body. including a planning commission, are "meetings" anc thus must be noticed In advance and coen to the publiC. Sometimes questions arise concerning Informal meetings of a majority of the members of a board. However. a meeting IS any gathering of a III. Rules of Official Conduct 5 THE PLANNING COMMISSIONER'S HANDBOOK League of CaMemia Cr/Jes .6 III. Rules of Official Conduct quorum of a legislative body where business is transacted or discussed. no matter how informal. In addition, a series of meetings or conversations, each of which technically Involves less than a quorum of the agency's membership, but which taken as a whole Involves a majority of the agency's members, is a "meeting." For ex- ample, a series of telephone conversations, each between a member of the governing body of the local agency and its attorney, for the commonly agreed purpose of obtaining a collective commitment by the majority of that body concerning public business, constitutes a "meeting" within the purview of the Brown Act. Stockton Newspapers, Inc. v. Redevelopment Agency of the City of Stockton, 171 Cal. App. 3d 95 (1985). MEETING TIMES AND NOTICE The time for regular meetings is established by the planning commission. The agenda for each regular meeting must be publicly posted at least 72 hours prior to the meeting, and the planning commission may not act on items not included in the posted agenda. Items may be added to the agenda only if they involve an emergency or the need to take action arose after the agenda was posted. Any property owner within the jurisdiction may request mailed notice of every meeting: the city may establish a fee for the costs of providing such notice. A regular .meeting may be adjourned to a time and place specified in the order of adjournment. The resulting continued meeting is considered a regular meeting for all purposes. SPECIAL MEETINGS The chairperson or a majority of the planning commissioners may call a special meeting. but an agenda must be posted 24 hours in advance and 24-hour written notice must be given to each commissioner and each newspaper, radio or television station requesting notice. Any commissioner may waive the vlrltten notice by filing a written waiver of notice with the clerk or merely by attending tee speCial meeting. The commlss'on can meet in certain defined emergencies Without complYing With the 24-hour notice requirement. CLOSED SESSIONS A legislative body may meet In closed or non-public session under limited CIrcumstances, but it IS important to note the courts have consistently con. strued this authorization for closed sessions narrowly. Most of the exceptions to the open meeting requirement do not apply to a planning commission. However. the planning commission may meet in closed session to confer with, or receive advice from, its legal counsel regarding pending or reasonably anticipated litigation. Prior to holding a closed session to discuss pending litigation. the legislative body must state publicly the reasons for holding the closed session, including tne title of the case if an action has been filed. SECRET BALLOTS Secret ballots may not be used for preliminary or final action. See Government Code 9 54953. THE PLANNING COMMISSIONER'S HANDBOOK League of California Ciltes VIDEO AND AUDIO TAPING MEETINGS Anyone attending an open commission meeting may record it with an audio or video tape recorder or still or motion picture camera. unless the commission makes a reasonable finding the nOise, illumination or obstruction of view will persistently disrupt the meeting. If the agency makes a tape or film record of an open session for any purpose, the tape or film becomes a public record which may not be destroyed for 30 days and must be available to the public for viewing or listening on an agency recorder without a charge. See Government Code Ii 54953.5. THE PUBLIC'S RIGHTTO SPEAK Every regular meeting agenda must provide an opportunity for the public to address the commission on items of public interest within the commiSSion's JUrisdiction prior to or during the commission's consideration of the item. However, no action may be taken unless the item is on the agenda. See Government Code Ii 54954.3. The agenda for a special meeting must provide an opportunity for members of the public to directly address the commission concerning any item that has been described In the notice for the meeting prior to or during consideration of that item. See Government Code Ii 59454.3. SIGN IN REQUIREMENTS Members of the public cannot be required to register their name or fulfill any other condition for attendance at a meeting. DISRUPTIVE BEHAVIOR In the event a meeting is willlully interrupted by a grcup and cannot be contin- ued. and order cannot be restored by removal of the Individuals who are willfully interrupting the meeting. the room rcay be cieared and the session ccntlnued. Members of the press may rema:e and tr.e legislative body may only cceslder maners on the agenda. WRJTINGS DISTRIBUTED TO COMMISSIONERS Any writings. Including agendas, distributed to all or a majority of commission members by any person in connection with a matter subject to discussion or consideration at a public meeting of the commission are "public records" under the California Public Records Act and must be made available to the publiC "WithOut delay." The law does not. however. require public access to documents that are exempt from public disclosure by var!ous prOVisions in the Public Records Act. If a dlsclosable public record document is distributed to the commission during a public session of the commission meeting. it must be made available for public inspection at that meeting it prepared by the agency or a commission member; if prepared by some other person. It must be made available for public Inspection after the meeting. See Government Code Ii 54957.5. EFFECT OF BROWN ACT VIOLATION Any member of a commission whO attends a meeting of that body where action IS taken In violation of any provIsion of the Brown Act. with intent to deprive the III. Rules of Official Conduct 7 THE PLANNfNG COMMISSIONER'S HANDBOOK League of California Cities . 8 III. Ru!gs 01 Ollie:. Conduct public of inforrratlon to which the member knows or has reason to know the public is entitle: ~nder the Brown Act, is guilty of a misdemeanor. See Gove,c- ment Code ~ 59~59. For Further Reading on the Brown Act Open and Public: A User's Guide to the Ralph M. Brown Act. 1994 (published by and available from the League of California Cities; call 916/658-8253). THE PLANNING COMMISSIONER'S HANDBOOK Leagl..'e of California Cities Page 3 2 CCR 18702.3 (1997) printed in FULL format. BARCLAYS OFFICI~ CP~~FORNIA CODE OF REGULATIONS Copyright (c) 1997 =1 Barclays Law Publishers All r:.g~ts rese:-',red *** THIS DOCUMENT IS CURRENT T~OUGH REG~STER 97, NO.9, FEBRUARY 28, 1997 *** TITLE 2. .~MINIST~~,ION DIVISION 6. FAIR POL~,ICAL P~CTICES COMMISSION CHA?TER 7. CCtiFLICTS OF INTEREST ARTICLE 1. CONFLICTS OF INTEREST; GENERAL PROHIBITION 2 CCR :3702.3 (1997) , :3702.3. Indirectly Material Financial Effec:: Ownership Interest in Real Property Involved in the Decision (a) The effect of a decision is ~ace~ial as to real property in which an o::icial has a direct, indirect or te~eficia~ c~TIership interest (not including a :easehold interest), if a~y of the :=llowi~g applies: 1) The real property i~ whic~ :~e ~fficia~ ~as an interest, or a~v Dart of t~a: real property, is located wi:hi~ a 300 fee: radius of the bo~~daries (or t~e proposed boundaries) cf the property whict is the subje~t of the decision, l.:...;.-.:e58 the decision .....ill l:ave no fina::::ial ef:ec: upon the official! s real prcperty interest. :2) The decision invol_es cor.s~~~c:~on of, c~ improveme~ts to, streecs, ~::=~, se~er, storm drair.~~e or s:~:::r faci::::es, and the real proper:y in ~~::~ the official ~as an :~~eres: ~::: ~ece:~3 ~ew or substantially i~proved ser'::.ces. 3) The real property :::--. .,..,hic:: '-u_ ::::icia: ::E:.S an interest is loca:ed c~:side a radius of 300 fee: and a~y ;a~t of :::e real property is located within a radius of 2,500 feet of t~e bo~~dar:es (or t::e proposed boundaries) 0: the pr=perty which is the subject of the ~ecision a~d the decision will ha~e a reasonably foreseeable financial effec: of: .A) Ten thousand dollars ($10,CC:' cr more C~ the fair market value of the rea: property in wh~ch the offic:a: ~aE an i~:erest; or ,3) Will a::ect t~e re~:a~ value c: :ne property by $1,000 or more oe~ 12 rr.c:::.::. period. :b) The reasonably foreseeable effect of a decision is not considered material as to real property in whic:: an official has a direct, indirect or be::e:icial interest (not including a leasetold interest), if the real property i:: ~:::ich the official has a:: inceres: :'5 located entirely beyond a 2,50C foot ra~i~s of the boundaries (or the prcpcsed bo~~daries) of t~e property which is tte subject of the decisic~i ~~less: ;:) There are specific ci~cums:a~:es regardi~g the decision, its e:fect, and ,- Page 4 2 CCR 18702.3 (1997) t~e nature of the real ~~~perty in which the official has an interest, which ma%e it reasonably foreseeable t~at the fair market value or the rental value of t~e real property in whi~~ the Qfficial has a~ interest will be affected by the a::-ounts set forth in sucdovisio::s ia) i3) (A) or ia) (3) (B); and (2) Either of the fol:o~ing apply, (A) The effect will nc: be substantially the same as the effect upon at least 23 percent of all the properties which are wi~hin a 2,500 foot radius of the bcundaries of the real p~operty in which the official has an interest; or (B) There are not at :east lC properties ur.der separate ownership within a 2,500 foot radius of the ~roperty in which the official has an interest. (el For decisions wh:=~ may affect an interest in real property but ~hich do ~c: involve a subject property :rom which the distances prescribed in s~divisions (a) and (b; can be determined, t~e monetary standards contained in s"",division (a) (3) (AI a::d (B) sl:all be applied. id) For a decision '.r.:.oh is ccorered by subd:.vision (a) (3) or (bl (1) or (e), factors which shall be co~sidered i~ determini~g whether the decision ~ill have t::e effects set forth ir: subdiv:..sion (a) (3) (A} or (B) include, but are :lot lo::-,oted to, (1) The proximity 0: :>_= prc;:er::.,; ',,;::ich is :>.e subject of the decis.:..on and :~e magnitude of the pro;::sed pr:~ec: or cha~se .:..~ use in relationship :0 the pr:;:erty in w::ich the o::::ial ::as a~ interest; (2) Whether it is reas:~ably :oreseeable that the decision will af:ect the c.e":elopment potentia: or :~come ;:rod-....:.cing poce:::ial of the property; 3) In add.:..:.:..on :: t~e :ore5::::;, :..:: the case 0: residential property, .....:-:e:::er it .:..s reasc::a:::':.-' ::resee=.;:::"e that t::e :.e::..sion wil: result :..:: 3. change :: the character of :::8 ::e.:..ghbcr::::i :::clud.:..::~ ~~: not li~ited to, e::ect on :ra.::ic, V::.. 8'...' , pri'~"a:!', :..:-.:ensi::.-" :: -"':'S8, nc.:..se ::"8';81s, a.:..r emissions, or s:~.:..lar traits of the ::e:..=>~ort:::.. (e) Redeve:opment Dec:..s:..ons: ?or p~rposes 0: this section "the bOw~daries (or pro;:osed boundaries) of :::e pro~erty.~hich is the subject of the decisionl1 are the boundaries (or proposej boundaries) of the redevelopme~t project a=ea w~e::ever the decision is a rede~e:oprr.ent decis:..~:: to designate the sur~ey area, to ~ake findi~gs of bliS~~, to se::"ec~ :he projec: area, to adopt the prelimina=y p::"a::, to form a project a~ea co~~:~tee, to cer:.:..:: the environmental document, ~~ adopt the redeve:cprr.e~: plar., ~: a:.d terr::=r~" to the redevelopme~: area, or to rescind or a~end a::: c: the a;:c~e decisio::s. X:'-;;ORITY, N~-~' Authority cited: Se=:ion 83:12, Governme~t Code. Reference: Section 87103, Gc';ernment Code. H:S-:-ORY, Xe~ sectior. ~iled :J-:--38; c=era::~e 11-:5-33 (Register 88, No. 43. ~ . . Entered intoRecetd.~. ..Elf!' 7 _ Council/CmyOevCms tg. .A<- . by ~ATUR~AY Janua'y28 '989 T'.. '\~I,- re R\lIiIlJu 'I"', Editorials " 5/ City ClerklCOC Se~y City of San BarnardlRo ~.~ V~I1l<ES"'" WE KNOW YDU UNLAWFULLY USED TAX MONEY FOR CUR/SIMAS GREETINGS, 50 THROW rou~ WALLETS OUT AAlP NO ONE WfLL GET HllRT! '1/1 .B. .!/'/ ~OR '.': em COUNCIL I&i :id , h: ! ,. ',Ii Is/ 3)117 " . CITY OF SAN BERNARDINO - MEMORANDUM t To Legislation Review Committee Mayor and Common Council NATURE OF CITY COUNCIL/CITY ATTORNEY RELATIONSHIP; HIRE OF OUTSIDE COUNSEL From JAMES F. PENMAN City Attorney November 17, 1987 Subject Date Approved Date f" '" the attorney does not represent you, he represents the City of San Bernardino, therefore the information you gave him was not confidential. It is for this reason that your complaint file is being closed." May 18, 1987 letter from The State Bar of California to then - Councilman Jack Strickler, (copy attached marked Exhibit A) . In early 1987, Councilman Jack Strickler filed a complaint with the State Bar against Senior Assistant City Attorney Alan Briggs. Attorney Briggs had prepared a legal opinion citing a conflict of interest on the part of Strickler. Brigg's opinion was released to the press. ahe reply from the State Bar to Strickler's complaint correctly states the role of the City Attorney and the unique situation with respect to the relationship between City Council members and the City Attorney and his deputies. In addition, the California State Government Code provides that: "In any case in which a district attorney could act as the civil or criminal prosecutor under the pro- visions of this title, the ELECTED CITY ATTORNEY OF ANY CHARTER CITY may act as the civil or criminal pro- secutor with respect to any violations of this title occurring ,within the city" (emphasis added). Government Code Section 91001.5. This section makes it obvious that client rela i n hi i not present me ers and the ~it Attorney s 0 Lce 0 matters, r LS there any au orLty or the attorneys for Council members or the Council As stated in the attached opinions, however, authority to the contrary. The law on the matter of the Council's ability to retain outside counsel was determined in the 1890's and has continued without change to the present day. HOUSE vs. LOS ANGELES COUNTY (1894) 104 C 73, 78; MERRIAM vs. BARNUM (1897) 116 C 619; ...............,..u,ey- Council flict of interest City to provide in such matters. there is ample 1 . ,::..: ~":_'4.- .it "!W'"r-/' t LEGISLATION REVIEW COMMITTEE MAYOR AND COMMON COUNCIL Page 2 . November 17, 1987 MERCED COUNTY vs. COOK, (1898) 120 C 275; DENMAN vs. WEBSTER (1903) 139 C 452; DADMORE vs. CITY OF SAN DIEGO; (1908) 9 Cal. Rptr. 549; RAFAEL vs. BOYLE (1916), 31 C.A. 623; JOYNER vs. STOCKTON (1961) 14 Cal. Rptr. 49, 54; MONTGOMERY vs. SUPERIOR COURT (1975) 46 C.A. 3d 657. In the case of RAFAEL vs. BOYLE (1916) 31 C.A. 623, the City Attorney of the City of San Francisco gave certain legal advice to the City's Civil Service Commission. The Commission ignored the advice. The Commission was then sued because of ~heir actions. The Commission refus epresen on in the case from the City Attorney a HIRED OUTSIDE C . vI~HE COURT HELD THAT THE COMMISSION DID N .. ~E AUTHORITY TO \pIRE OUTSIDE COUNSEL AND ACTED ILLEGALLY IN DOING SO. The basis for the long standing rule is found in HOUSE vs. LOS ANGELES COUNTY (1894) 104 C 73, 78: lJr-"Whatever duties are imposed on officers by law must be . personally discharged by them and the City cannot relieve, ~ its officers from discharging their regular duties by con- tracting with other persons to perform them", and in JOYNER vs. STOCKTON (1961) 14 Cal. Rptr. 49, 54: "The law will not indulge an implication that a public (agency has authority to spend public funds which it does :not need to spend; that it has authority .to pay for services "which it may obtain without payment; OR THAT IT MAY DUPLICATE AN EXPENDITURE FOR SERVICES WHICH THE TAXPAYERS HAVE ALREADY IPROVIDED" (emphasis added). ~ The taxpayers have provided two sources of legal advice to Council members for conflict of interest opinions, the City Attorney's Office (San Bernardino City Charter Section 55(d)), and the Fair Political Practices Commission (California Government Code Section 84ll4(a) and (b)). The fact that these opinions may be made public and the desire of a few Council members to receive secret advice is irrelevant. An exhaustive search of statutes and cases fails to reveal a single statute or case that entitles elected officials to obtain at public expense, secret or confidential advice on conflict of interest issues in a charter city with an elected city attorney. San Be~nardino Municipal Code Section 2.20.070 while prohibiting the hire of outside counsel without the City Attorney first making " LEGISLATION REVIEW COMMITTEE MAYOR AND COMMON COUNCIL Page 3 November 17, 1987 a determination that it is necessary, recognizes that city officers may encounter situations wherein they need legal advice that the taxpayers are not required to provide. To allow for this contin- gency the code states: " ... nothing herein shall preclude any city officer from obtaining outside legal services AT HIS OR H~O n~T EXPENSE concerning the personal or publ~c r~ghts, duties, privireges or benefits of such officer as an individual or as an office holder or from obtaining AT HIS OR HER OWN EXPENSE legal services of a private nature" (emphasis added). Section 2.20.070 San Bernardino Municipal Code Attached are legal opinions 87-59 and 87-36, marked Exhibit B and Exhibit C, respectively, on this subject. These opinions pro- vide greater detail on the cases cited herein as well as additional authority. City officers, including elected officials, are advised that it i~ unlawful to hire outside attorne s unless the City Attorne is er orm a s re uJ.re 0 im _V by the Charte . . city officers are su Ject to court ~~/oraers to personally reimburse the City for public funds paid to attorneys unlawfully hired by, or whose hiring is unlawfully p roved by, said officers. R~pectfully submitted, , /4~...... I / (,~ ( JAMES F. PENMAN . /City Attorney JFP:dd # ,- <: r_ -'S.<niC)il~ A THE STATE BAR OF CALIFORNIA OFFICE OF INVESTIGATIONS l~jO ," F.~T 7HlRO STREET :'OS ',"GEL.r.S. C."LIFO.R.'liI.... '}OI\I;'.!48! , ;! j I ....I. ~.~,. May 13, 19 a 7 Jack Strickler Ci ty Hall 300 ~. "0" S~reet San B~rnardi~o, CA 92~13 Re: SR 86-0206 Dear Mr. Strickler: During our recent telephone conversation, I advised you that the attorney does not represent you, he represents the City of San Bernardino, therefore the information you gave him was not confidential. It is for this reason that your complaint file is being closed. If you are not satisfied with t~e State Bar's decision to close your complaint, YO'_ ::lay request a review of our decision. Your req~:jt, which must be submitted in writing, will be con,~dered by the Complainant's Grievance Panel. Your written request should be directed to the Administrative Compliance Unit, Office of Investiga- tions, State Bar of California 1230 ~~~t Third Street, ~os A~geles, California 90017. ~e:y t:~ly yours, -------- ")a".2.-..0",*i ':L~ Karen Ortolani Special Investigator KO:dr /'