PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.H
Meeting Date: January 16, 2024
TITLE:
Digital Signature and Electronic Document Authorization RECOMMENDATION:
Adopt a Resolution authorizing the use and acceptance of digital signatures and electronic documents to the greatest extent allowed by law.
DISCUSSION:
The use of digital signatures in lieu of wet (ink) signatures, and the use of electronic documents in lieu of paper documents, has become increasingly mainstream business practice in recent history. The use of digital signatures and documents has been widespread in the private sector, including real estate, for some time, and the practice has become more common in the public sector, spurred in particular by the constraints of the COVID-19 pandemic. It has therefore been essential for the City’s business practices to become increasingly electronic over time. Further, the federal and state legislative environments have become more hospitable to digital business practices with the enactment of the Federal Electronic Signatures in Global and National Commerce (ESIGN) and California Uniform Electronic Transactions (UETA) Acts of 2000, and Assembly Bill 2296 (Digital Signatures) of 2016.
The use of digital signatures and documents also provides significant benefits in the following areas:
Expediency and reduced cost of document review, signing, and transmittal (no need to pay for postage or fuel to circulate documents by mail or in person; little to no wait time)
The ability to ensure all stakeholders receive concurrent, identical copies of a record
Reduced cost in hard materials (archival and standard paper, archival binders and clips, printer toner, pens)
Environmental sustainability (through elimination of the need for tree cultivation and harvesting, emissions relating to paper manufacture and shipping, and resulting waste at the end of document life)
Reduced need for physical space required to maintain paper records (conserving City facility space for staff or critical equipment)
The ability to obtain validated signatures in contexts not requiring notarization (providing an extra measure of security)
Higher quality of archived permanent records (due to the elimination of scanning paper)
Reduced transmission of disease during flu seasons
9.H-1Council Agenda 1-16-2024
While the City’s business processes and records management policies and practices have become incrementally more digital in nature, and the City has become an area leader in its adoption of digital practices, the City has so far lacked a formal policy position substantiating its use of digital signatures and documents in lieu of wet signatures and paper records. While digital signatures and electronic documents have been deployed by staff in accordance with applicable laws, certain ambiguities remain about the sufficiency of digital signatures and documents in some contexts.
Staff therefore recommends that the City Council adopt a resolution (Attachment 1) formally authorizing the use of digital signatures and electronic documents where deemed appropriate or beneficial by staff, and to the greatest extent allowed by law.
Use Cases
In recent years, the City has transitioned to wide variety of paperless processes via the deployment of digital signatures and electronic documents. One key initiative was the elimination of paper from the entire agreements process from beginning (receipt of proposals) to end (execution of the agreement and issuance of a purchase order), resulting in a drastically faster and more sustainable business practice, compared to the prior practice that included, among other things, the circulation of three identical hard copies of an agreement and its exhibits for wet signature.
Other processes that have been transitioned to paperless include utility service applications, business license applications, TOT reporting, parking citations, development project applications, issuance of building permits and transmittal of approved plans, Junior Lifeguard program registration, Fire Prevention Bureau site inspections, Recreation program registration, vendor applications for special events, and advisory body service applications.
In the next year or two, staff intends to transition to completely paperless timesheets and leave requests, Special Event Permit applications, event funding applications, and travel authorizations, among other initiatives.
The Importance of Digital Signatures
A common barrier to the creation of paperless business processes is the signature component—either because law or policy is ambiguous as to what kind of signature is sufficient, or because a certain level of validation of the signer’s identity is required. Once it is determined that a digital signature is sufficient for a particular purpose, the entire process can typically be made digital, staff time permitting. If the City Council clearly establishes that the City deems digital signatures to be valid signatures to the greatest extent legally permissible, it will help staff overcome some of these ambiguities and, further, insulate the City in the event the sufficiency of a signature is challenged.
The City has the tools in place (e.g. Laserfiche, Springbrook, CitizenServe, PDFs received via email) for nearly any paperless business process that can be conceived, but the acceptance of digital signatures is a “key” needed to unlock the viability of many processes.
9.H-2Council Agenda 1-16-2024
A “digital signature” can take a variety of forms. In contexts not requiring validation of a signer’s identity, a scan of a wet-signed document can be accepted from a third party by email. In contexts requiring some validation, a secured digital signature most commonly consists of a DocuSign signature, but can also take the form of a verified Adobe signature.
For many processes, particularly internally, the “signature” takes the form of an electronic stamp or facsimile signature recorded as having been affixed by a particular credentialed user at a particular time and date. Under the attached policy, staff would reserve the right to determine whether, and in what form or via what platform, to use or accept a digital signature for a particular type of application or business process.
Specific 2024 Initiatives
At the outset of 2024, staff intends to transition to the use of digital signatures (thus making the process paperless) for two key functions: legislative records and campaign finance filings, both of which will benefit from endorsement by the City Council due to the critical, long-lasting, and highly public nature of the records involved.
The transition of legislative documents (resolutions, ordinances, and minutes) to paperless will greatly expedite the process of executing the legislation for reference by staff and the public, and will realize a significant cost benefit in that archival paper costs approximately $0.25 per page, archival binders cost more than $100 each, and if executed in paper form, the legislative records must be permanently retained in a physical storage area, which is contraindicated for a small city with finite facility space. It will also lead to higher-quality permanent records in that the digitally stored originals will not be scanned from a paper copy.
The acceptance of digital signatures on campaign finance filings (i.e. Fair Political Practices Commission Forms 501, 460, 470, and related forms) will greatly expedite the transmittal, review, and acceptance of the critical filings that otherwise must be mailed or personally delivered by the candidate before the state-mandated deadline. Acceptance of these filings by email will also help staff to make them available to the public online more readily, increase the quality of the archival documents (again due to elimination of scanning paper), and limit the volume of permanent records that must be stored in physical form. California Code of Regulations, Title 2, Section 18104 specifically allows for electronic submittal, with a secured electronic signature, “if permitted by the agency,” though the intended manner of permission is not clear.
The attached policy resolution would enable the transition of both processes to paperless and clearly articulate the City’s position under 2 CA CCR 18104.
Submittal Deadlines
As opposed to paper-oriented business processes, where submittals can necessarily only be received during business hours, the acceptance of digital filings via email, Laserfiche Forms, or other electronic platforms, can create ambiguity as to the date of receipt, per se, because submittals may be sent by third parties at any time, including on evenings and weekends when staff cannot functionally receive, acknowledge, or act on the submittals until the next business morning.
9.H-3Council Agenda 1-16-2024
While the distinction of exact submittal date is less of an issue for processes such as utility service applications, the distinction is of critical importance for deadline-oriented processes such as liability claims, advisory body service applications, and campaign finance filings. In order to help eliminate this ambiguity, staff recommends the adoption of a policy that electronic submittals made outside of business hours will be considered received as of the next business day, unless otherwise specified when the deadline for a particular process or filing is advertised. This way, staff retains the ability to impose a different deadline if needed.
Exceptions
The use of hard copy documents and wet signatures will remain mandated in some cases.
In the event a document must be prepared or transmitted in paper form, it is nearly always because a wet signature is mandated, and that in turn is nearly always because notarization and/or recording is required. In other cases, state law may require the paper transmittal of some documents simply because the statutes were drafted before digital business practices were prevalent. In these cases, staff will continue to utilize wet signatures and paper documents to the extent legally required.
Conclusion and Recommendation
Staff recommends that the City Council adopt a resolution (Attachment 1) authorizing the use of digital signatures and electronic documents to the greatest extent allowed by law. This action does not necessarily mandate the use of digital signatures or electronic documents, but allows staff to implement the same to the greatest extent feasible within available technology and legal frameworks. This policy will also clarify the City’s position that deadline-oriented filings submitted outside of business hours will be considered received as of the next business day, unless otherwise specified.
FISCAL IMPACT:
There is no immediate fiscal impact from approval of staff’s recommended action. In the future, increased use of digital signatures and electronic documents may represent increased costs incurred in maintaining high-volume user accounts for DocuSign or an equivalent service, but those costs are expected to be considerably less than the cost of purchasing the hard supplies necessary for paper processing and storage. It is anticipated that the increased use of fully-integrated paperless processes to replace paper-oriented processes will not result in greater cloud file storage costs, because the records resulting from paper-oriented processes already end their life cycle by being scanned and stored in digital file environments.
ATTACHMENTS:
1. Resolution
Submitted by:
Erica Inderlied, City Clerk
City Manager Approval:
9.H-4Council Agenda 1-16-2024
RESOLUTION NO. R-2024-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA AUTHORIZING THE USE AND ACCEPTANCE OF DIGITAL
SIGNATURES AND ELECTRONIC DOCUMENTS TO THE GREATEST EXTENT
ALLOWED BY LAW
WHEREAS, the use of digital signatures in lieu of wet signatures, and the use of electronic documents in lieu of paper documents, has become an increasingly mainstream and prevalent business practice, spurred in the public sector in particular by the constraints of the COVID-19 pandemic; and
WHEREAS, it has therefore been essential for the City’s business practices to become increasingly electronic over time; and
WHEREAS, digital signatures and electronic documents provide other significant benefits including expediency, cost reduction, quality of archival records, environmental sustainability, and preservation of physical facility space; and WHEREAS, the City has so far lacked a formal policy position substantiating its use of digital signatures and documents in lieu of wet signatures and paper records, and staff recommends that the City’s position be formally established in order to eliminate any remaining ambiguity about the sufficiency of digital signatures or electronic documents in certain contexts; and
WHEREAS, this policy position is compatible with the provisions of the Federal Electronic Signatures in Global and National Commerce (ESIGN) and California Uniform Electronic Transactions (UETA) Acts of 2000, and California Assembly Bill 2296 (Digital Signatures) of 2016; and
WHEREAS, the adoption of this policy position will not mandate the use of digital signatures or electronic documents, but allows staff to implement the same to the greatest extent feasible within available technology and legal frameworks, and staff will reserve the right to determine whether, and in what form or via what platform, to use or accept a digital signature for a particular type of application or business process; and WHEREAS, this policy will also clarify the City’s position with respect to the date of receipt, per se, for deadline-oriented electronic filings submitted outside of business hours.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach as follows:
1. Findings. The foregoing recitals are hereby adopted as findings of fact in support of this policy resolution.
9.H-5Council Agenda 1-16-2024
Attachment 1
2.Digital signatures. To the greatest extent allowed by federal, state, and local law, digital signatures shall generally be deemed by the City to have the same force and effect as manually-affixed ink signatures. The exact nature of digital signature format or submittal mechanism accepted or required for a particular application, license, permit, or other filing or business process may be further specified by departmental policies and procedures or by resolution or ordinance of the City Council.
3.Electronic documents. To the greatest extent allowed by federal, state, and local law, electronic documents shall generally be deemed by the City to have the same force and effect as paper documents. The exact nature of electronic document format or submittal mechanism required for a particular application, license, permit, or other filing or business process may be further specified by departmental policies and procedures or by resolution or ordinance of the City Council.
4.Date of receipt of electronic submittals. Where a process requires or allows the electronic submittal of a form, application, or some other documentation to the City by a third party, and a deadline is imposed upon such submittal in the form of a particular date, or a period of time that has elapsed since a triggering event, any such submittal made by email or other electronic platform outside City business hours, including on evenings, weekends, and holidays, shall be deemed received at the start of business on the next business day, unless otherwise provided by federal or state law, or local law or policy, or unless otherwise specified at the time the deadline is announced.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 16th day of January 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Pismo Beach, California, on _______________________. ________________________
Erica Inderlied, City Clerk
9.H-6Council Agenda 1-16-2024
Attachment 1