Reports to be Issued
Independent auditor's report on basic financial statements Report on internal control over financial reporting and on compliance in accordance with Government Auditing Standards
Communication to those in charge of governance
Agreed upon procedures report on GANN Appropriation Limit • Agreed upon procedures on check sequence
• Agreed upon procedures on wire transfers
C
6 ©2023 CliftonLarsonAllen LLP
3 Independent Auditors Report
Opinions - Unmodified
Basis for Opinions
Change in Accounting Principle
Responsibilities of Management for the Financial Statements Auditors' Responsibilities for the Audit of the Financial Statements Required Supplementary Information
Supplementary Information
Other Information
Other Reporting Required by Government Auditing Standards C
6 ©2023 CliftonLarsonAllen LLP
4 Communication to Those in Charge of Governance
Accounting Policies
Implementation of GASB 87, Leases
Accounting Estimates
• CaIPERS defined benefit plans
Other Post -Employment Benefit (OPEB) plan
Financial Statement Disclosures Most Sensitive to Financial Statements Note 8 regarding the CaIPERS defined benefit plans.
Note 9 regarding the OPEB plan
Difficulties in Performing the Audit
None
Uncorrected Misstatements
California Highway Users Tax revenue on a cash basis rather than accrual basis C
6 ©2023 CliftonLarsonAllen LLP
5 Communication to Those in Charge of Governance
(Continued)
Corrected Misstatements
• Firefighter unfunded pension accrued liability
• Liability for compensated absences
• Redevelopment Property Tax Trust Fund (RPTTF) recorded as unearned • Bond payable for governmental fund not recorded on modified accrual basis Disagreements with Management
None
Management Representations
Received as of May 4, 2023
Management Consultations with Other Independent Accountants None known
C
6 ©2023 CliftonLarsonAllen LLP 6
TO:
VIA:
FROM:
DATE:
SUBJECT:
FISCAL
IMPACT:
SUMMARY:
Placentia Cit Council
AGENDA REPORT
CITY COUNCIL
CITY ADMINISTRATOR
DEPUTY CITY ADMINISTRATOR
JUNE 6, 2023
INTRODUCTION AND FIRST READING OF ORDINANCE NO. O-2023-02 OF THE
CITY COUNCIL OF THE CITY OF PLACENTIA, CALIFORNIA, ADDING CHAPTER 2.54 ENTITLED "ELECTRONIC AND PAPERLESS FILING OF
CAMPAIGN DISCLOSURE STATEMENTS AND STATEMENT OF ECONOMIC INTEREST," RELATING TO ELECTRONIC AND PAPERLESS FILING OF FAIR
POLITICAL PRACTICES COMMISSION CAMPAIGN DISCLOSURE AND
ECONOMIC INTEREST STATEMENTS
EXPENSE: $6,800/year (101523-6299)
BUDGETED: $6,800/year (101523-6299)
The proposed ordinance will add Chapter 2.54 entitled "Electronic and Paperless Filing of Campaign Disclosure Statements and Statement of Economic Interest," Relating to Electronic and Paperless Filing of Fair Political Practices Commission Campaign Disclosure and Economic Interest Statements
RECOMMENDATION
It is recommended that the City Council take the following actions:
1. Receive the staff report and introduce, and read by title only, Ordinance No. 0-2023-02, an Ordinance of the City Council of the City of Placentia, California, adding Chapter 2.54 Entitled "Electronic And Paperless Filing of Campaign Disclosure Statements and Statement of Economic Interest," Relating to Electronic and Paperless Filing of Fair Political Practices Commission Campaign Disclosure and Economic Interest Statements.
STRATEGIC PLANNING STATEMENT:
There is no specific strategic planning goal or objective associated with this agenda item.
3.c.
June 6, 2023
City Council Agenda
June 6, 2023
DISCUSSION:
California Government Code Section 84615 allows local government agencies to adopt an ordinance that requires an elected officer, candidate, committee, or other person required to file statements to file these statements online or electronically with the local filing officer. The City Clerk or Deputy City Clerk is the local filing officer for the City of Placentia.
The City will enter into an agreement with NetFile, a vendor approved by the Secretary of State to provide an online electronic filing system for Campaign Disclosure Statements and Statement of Economic Interests (Forms 700s). Staff conducted a reference check on NetFile and received favorable reviews from neighboring cities (Yorba Linda, Fullerton, Orange) and one utility agency, the Yorba Linda Water District. In addition, an endorsement letter from the California Political Treasurer's Association is attached to this Staff report.
In order for the City of Placentia to accept electronically filed statements, the City Council must adopt an ordinance permitting the use of an online filings system for filing and designating the filings received electronically by the City Clerk's Office as the filings of record for the City. In addition, the system must operate securely and effectively, be no cost to the filers, be available to the public to view filings, not place an unduly burden on filers, and include procedures for filers to comply with the requirement that they sign statements and reports under penalty of perjury.
Adoption of the proposed ordinance is required to implement electronic filings of FPPC Form 700 "Statement of Economic Interest" and the campaign finance component of the NetFile system. It should be noted that the NetFile system is able to accommodate the online filing of several types of required forms by the FPPC, including Forms 460, 470, 496, and 497, which are the most commonly used in the City of Placentia's local election campaigns.
The NetFile system is created specifically for cities and counties responsible for administering campaign finance filings and Form 700 Statements of Economic Interest. It meets the requirements of the Secretary of State and allows for electronic and paperless filing of campaign statements. Effective January 1, 2021, AB 2151 requires local government agencies to post on the internet within 72 hours a redacted copy of any campaign filing made (both paper and electronic). Any electronic filing through NetFile, is posted within 72 hours in a public portal and includes all redactions required by law.
To ensure a smooth transition, and as part of the agreement and acquisition of the system, NetFile and the City Clerk's Office can offer extensive training to filers and committees. Staff can schedule one-on-one training with NetFile staff and individual filers and treasurers that will cover the entire electronic filing process. This can include the set-up of filer accounts, explaining the online filing process, showing how to input data and save reports, preparing statements for e -signature, and finalizing statements for electronic filing.
In terms of security, the NetFile system is a web -based, vendor -hosted application that utilizes "industry best practices" for securing data, using the same data encryption for online filings that is used by banks for online banking. NetFile stores and backs up data at three separate locations, creating the essential safety measures and redundancy that will allow for recovery of information in the event of an emergency or disaster. The City's data will be retained for the required minimum ten (10) year period. For professional treasurers that have already purchased campaign software,
City Council Agenda
June 6, 2023
NetFile is able to receive uploaded data from certain types of third -party applications for electronic filing purposes.
Implementation of the NetFile system will promote transparency and make it more convenient for committees, individuals, and the public. It provides 24 -hour filing and viewing accessibility of campaign finance information from any computer, anywhere. In certain instances, the NetFile program will also increase the accuracy of filed campaign statements by prohibiting any filings that may have inadvertently omitted required information under the Act (e.g. missing addresses or the stated occupation of individual donors).
NetFile is contracted by 265 local agencies throughout California. The transition to a paperless system will create notable efficiencies for filers, as well as City staff.
Statement of Economic Interest (Form 700)
Staff recommends all future reports and other documents filed on behalf of Statement of Economic Interest filers be filed electronically. The Office of the City Clerk is currently responsible for the annual filing of all Form 700s, which includes the City Council, Planning Commission, City Manager, City Attorney, City Clerk, Treasurer, designated City employees, Board, Commissions, and Committee members, and consultants. The current paper -based process is labor intensive and inefficient. In addition, Form 700s occasionally need amendments or are submitted incomplete or without marked schedules attached. The Form 700 electronic filing incorporates an initial review process and alerts the filer of errors at the time he or she is entering information, thereby minimizing the need for the Office of the City Clerk to request amendments.
Following City Council's approval, Staff will enter into an agreement with NetFile for the Form 700 and campaign paperless e -filing and public viewing portal which will be accessible through the City's website.
FISCAL IMPACT:
The annual fee to use the NetFile system to go paperless for FPPC Form 700 and campaign filings is $6,800. The rate is guaranteed for up to 5 years and sufficient funds exist for the recommended actions.
Prepared by:
Carole M. Wayman
Deputy City Clerk
Reviewed and approved:
AD _
Rosanna Ramirez
Deputy City Administrator
City Council Agenda
June 6, 2023
Reviewed and approved:
Reviewed and approved:
Christian L. Bettenhausen— Damien . Arrula
City Attorney
City Administrator
Attachments:
1. Ordinance O-2023-02 amending Placentia Municipal Code
2. List of NetFile Contracted Cities in Orange County
3. California Political Treasurer's Association endorsement letter of NetFile
4. PowerPoint Presentation
ORDINANCE NO. O-2023-02
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PLACENTIA, CALIFORNIA ADDING CHAPTER 2.54
"ELECTRONIC AND PAPERLESS FILING OF CAMPAIGN
DISCLOSURE STATEMENTS AND STATEMENT OF
ECONOMIC INTEREST," RELATING TO ELECTRONIC
AND PAPERLESS FILING OF FAIR POLITICAL
PRACTICES COMMISSION CAMPAIGN DISCLOSURE
AND ECONOMIC INTEREST STATEMENTS
City Attorney Summary
This Ordinance would add Chapter 2.54 to the City of Placentia Municipal Code and require the electronic submission of campaign disclosure statements.
WHEREAS, California Government Code Section 84615 provides that a legislative body of a local government agency may adopt an ordinance that requires an elected officer, candidate, committee, or other person required to file statements,reports, or other documents required by Chapter 4 of the Political Reform Act to file such statements, reports, or other documents online or electronically with the Office of the City Clerk.
NOW, THEREFORE, the City Council of the City of Placentia does hereby find, determine and ordain as follows:
SECTION 1. There is no possibility that the adoption of this ordinance will have a significant impact on the environment, and therefore, the adoption of this ordinance is exempt from the California Environmental Quality Act ("CEQA"), pursuant to Section 15061(b)(3) of the CEQA Guidelines (Title 14, Chapter 3 of the California Code of Regulations).
SECTION 2. The purpose of this Ordinance is to require the filing of Campaign Disclosure Statements by elected officials, candidates, or committees and Statements of Economic Interest electronically pursuant to Government Code 84615. This Ordinance is intended to supplement, and not conflict with, the Political Reform Act.
SECTION 3. The City Council of the City of Placentia finds and determines as follows:
A. California Government Code Section 84615 provides that a legislative body of a local government agency may adopt an ordinance that requires an elected officer, candidate, or committee to file statements, reports or other documents required by Chapter 4 of the Political Reform Act online or electronically with the City Clerk;
Ordinance O-2023-02
B. In any instance in which the original statement is required to be filed with the Secretary of State and a copy of that statement is required to be filed with the local government agency, the Ordinance may permit, but shall not require, that the copy be filed online or electronically; C. The City Clerk should operate the City's electronic filing system in compliance with the requirements of California Government Code Section 84615 and any other applicable laws.
SECTION 4. Chapter 2.54 ("Electronic filing of campaign disclosure statements and statement of economic interest") is hereby added to Title 2 ("Administration and Personnel") of the Placentia Municpal Code as follows:
Chapter 2.54 ELECTRONIC FILING OF CAMPAIGN DISCLOSURE STATEMENTS
AND STATEMENT OF ECONOMIC INTEREST
2.54.010 - General.
A. Any elected officer, candidate, committee, or other person required to file statements, reports, or other documents as required by Chapter 4 of the Political Reform Act (California Government Code Section 84100 et seq.) shall file such statements using the City Clerk's online system according to procedures established by the City Clerk. These procedures shall ensure that the online system complies with the requirements set forth in Section 84615 of the Government Code. From and after July 1, 2023, elected officers, candidates, and committees required to file statements must file such statements using the City Clerk's online system, unless exempt from the requirement to file online pursuant to Government Code Section 84615 (a) because the officer, candidate, or committee receives less than $2,000 in contributions and makes less than $2,000 in expenditures in a calendar year.
B. The online filing system shall ensure the integrity of the data transmitted and shall include safeguards against efforts to tamper with, manipulate, alter, or subvert the data.
C. The online filing system shall only accept a filing in the standardized record format that is developed by the California Secretary of State pursuant to Section 84602(a)(2) of the California Government Code and that is compatible with the Secretary of State's system for receiving an online or electronic filing.
D. The online filing system shall include a procedure for filers to comply with the requirement that they sign statements and reports under penalty of perjury pursuant to Section 81004 of the Government Code.
Ordinance O-2023-02
2.54.020 - Procedures for Utilizing Online Filing.
A. During the period commencing with the effective date of this Ordinance and ending June 30, 2023, an elected officer, candidate, or committee may choose to utilize the electronic filing system by electronically filing a Statement that is required to be filed with the City Clerk pursuant to Chapter 4 of the Political Reform Act. Once the elected officer, candidate, or committee has filed electronically, all subsequent Statements shall be filed electronically. From and after July 1, 2023, electronic filing is mandatory unless the officer, candidate, or committee is exempt as described in Government Code 84615.
B.. Any elected officer, candidate, or committee who has electronically filed a statement using the City Clerk's online system is not required to file a copy of that document in paper format with the City Clerk.
C. The City Clerk shall issue an electronic confirmation that notifies the filer that the statement was received, which notification shall include the date and the time that the statement was received and the method by which the filer may view and print the data received by the City Clerk. The date of filing for a statement filed electronically shall be the day that it is received by the City Clerk.
D. If the City Clerk's system is not capable of accepting a statement due to technical difficulties, an elected officer, candidate, or committee shall file that statement in paper format with the City Clerk.
E. The online filing system shall enable electronic filers to complete and submit filings free of charge.
2.54.030 Availability of Statements for Public Review; Record Retention.
A. The City Clerk's system shall make all the data filed available on the City's webpage in an easily understood format that provides the greatest public access. The data shall be made available free of charge and as soon as possible after receipt. Data made available on the City's webpage shall not contain the street name and building number, phone number, and signature block of the persons or entity representatives listed on the electronically filed forms or any bank account number required to be disclosed by the filer. The City Clerk's office shall make a complete, unredacted copy of the statement, including any street names, building numbers, phone numbers, signature block, and bank account numbers disclosed by the filer, available to any person upon request.
Ordinance O-2023-02
B. The City Clerk's Office shall maintain, for a period of at least ten (10) years commencing from the date filed, a secured, official version of each online or electronic statement which shall serve as the official version of that record for purpose of audits and any other legal purpose.
2.54.040 - Severability
A. If any provision, clause, sentence or paragraph of this Chapter or the application thereof to any person or circumstances shall be held invalid, such invalidity shall not affect the other provisions or application of the provisions of this Chapter which can be given effect without the invalid provision or application; accordingly, the provisions of this Chapter are hereby declared to be severable.
SECTION 5: All ordinances and parts of ordinances in conflict herewith are repealed insofar as such conflict may exist.
SECTION 6. This ordinance shall be and the same is hereby declared to be in full force and effect from and after thirty (30) days after the date of its passage. Within fifteen (15) days after the passage of this Ordinance, the City Clerk shall cause a summary of said Ordinance to be published as provided in Government Code §36933, in a newspaper of general circulation published and circulated in the City of Placentia, along with the names of the City Council voting for and against its passage.
INTRODUCED at a regular meeting of the City Council of the City of Placentia held on June 6, 2023.
PASSED, APPROVED AND ADOPTED this day of , 2023.
Ward L. Smith, Mayor
ATTEST:
Robert S. McKinnell, City Clerk
Ordinance O-2023-02
I, Robert S. McKinnell, City Clerk of the City of Placentia, do hereby certify that the foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Placentia, held on the 6th day of June 2023 and adopted at a regular meeting of the City Council of the City of Placentia, held on the 20th day of June, 2023 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Councilmembers:
Councilmembers:
Councilmembers:
Councilmembers:
Robert S. McKinnell, City Clerk
APPROVED AS TO FORM:
Christian Bettenhausen, City Attorney
Ordinance O-2023-02
OC CITIES CONTRACTED WITH NETFILE
Aliso Viejo
Anaheim
Costa Mesa
Fullerton
Garden Grove
Huntington Beach
Irvine
La Habra
Lake Forest
Newport Beach
Orange
Santa Ana
_I II ,'i'!
California Political Treasurer s Association
1127-11`s Street, Suite 210
Sacramento, CA 95814
January 1, 2020
Tom Diebert
Vice President & COO
NetFile, Inc.
2707-A Aurora Road
Mariposa, CA 95338
Dear Tom:
One of the goals of the California Political Treasurer's Association (CPTA) is to promote the concept of paperless electronic filing for Campaign Disclosure statements in California at all levels.
As such, we would like to acknowledge NetFile, Inc. and their contributions over the years to the local Agency filing community, specifically County and City Agencies in California.
Our members have worked with several of these Agencies and applaud NetFile's efforts in making their Agency system work within the confines of Assembly Bill 2452 which allows local governments to electronically file Campaign Statements in California in a true paperless fashion. We know the first ever paperless filing in CA took place on January 22, 2013 through a CPTA treasurer filing to a NetFile Agency system. Since then we have seen NetFile being adopted by several local government Agencies in CA today.
As such, we recommend that all local government Agencies in CA go to a paperless filing system for their Campaign Disclosure filings. From the prospective of the CPTA, we recommend those Agencies use NetFile as their preferred solution.
NetFile's background in Campaign Disclosure gives them the unique advantage of having expertise nowhere else available for the local government filing community. The fact that NetFile accounts for over 70% of all filings made to the Secretary of State of CA gives them a distinctive advantage in Campaign Disclosure expertise not found anywhere else. All of the treasurers agree that any filings made to local governments that use the NetFile system, makes the process easy and results in the ultimate level of transparency.
We applaud NetFile's efforts in promoting paperless electronic filing in CA and endorse them as the solution of choice for California local government Agencies.
Sincerely,
Laura Ann Stephen
Vice President, Legislative Affairs
Electronic Filing Implementation
June 6, 2023
Background
City Clerk's office is responsible for accepting, maintaining, and retrieving upon a public record request the following legally -required form filings:
FPPC Form 700 - Statement of Economic Interest (Conflict of Interest)
Various FPPC Forms Associated with Candidate/Officeholder Committee and Campaign Activities
Acknowledgement and Compliance with City Ethics Policy
Overview
City Clerk's office has selected NetFile to provide support for electronic filing of required forms
Result is eliminating a cumbersome manual paper filing
process
Improves efficiency with automated notice of deadlines to mandated filers
Automates legally required posting of redacted filings for public access
ImprnvPs pi ihlir� ar�r ss and transnarPnry to filings
Requested Council Action
• Adopt Ordinance O-2023-02 making electronic filing mandatory Ordinance allows manual filing exceptions to be granted by City Clerk • Mandated electronic filing would begin with filings after July 1, 2023 FPPC 460/470 semi-annual officeholder statement of campaign committee activity
• City Clerk Staff and NetFile will provide technical support to filers as needed
Anticipate holding several group sessions for interested FPPC Form 700 filers early in 2024
Questions & Comments