Attachment 1 - City Council Orientation Handbook_Final.pdf — Richmond City Council, January 17, 2023 (part 1 of 3)

DRAFT City Council Orientation
January 17, 2022, at 2:00 PM

Page 1 of 3 ends

Agenda and Table of Contents
Tab Document Title Department Contacts
City of Richmond Overview and Contacts
1 Introductions City Manager’s Office – Shasa Curl
City Clerk’s Office – Pamela Christian
City Attorney’s Office – Dave Aleshire
2 City of Richmond Charter City Attorney’s Office – Dave Aleshire 3 Information on Council-Manager
Form of Government
City Manager’s Office – Shasa Curl
4 City of Richmond Organizational
Chart
City Manager’s Office – Shasa Curl
5 City of Richmond Key Staff and
Emergency Operations Center
(EOC) Contact Information
City Manager’s Office – Shasa Curl
6 Administrative Calendar City Manager’s Office – Patrick Seals

City Council Agenda Process & Administrative Support
7 City Council References and
Support, Council Meeting
Technical Guidelines
City Clerk’s Office/Council Liaison – Pamela
Christian/Trina Jackson-Lincoln
8 Appointments to City and
Regional Boards, Commissions,
Committees, etc.

City Clerk’s Office – Pamela Christian

9 Agenda Item Process for
Councilmembers (Agenda
Report and Resolution
Template)
City Clerk’s Office/Council Liaison – Pamela
Christian/Trina Jackson-Lincoln
10 Travel and Training
Reimbursement Requests
Finance/Council Liaison –
Nickie Mastay/Trina Jackson-Lincoln
11 Councilmember Benefits
Summary
Human Resources – Sharrone Taylor
Meeting Procedures and Mandatory Council Trainings
12 City Council Rules of Procedure
and Order
City Clerk’s Office – Pamela Christian
DRAFT City Council Orientation
January 17, 2022, at 2:00 PM

Page 2 of 3 ends

13 City Attorney’s Office Overview City Attorney’s Office – Dave Aleshire/Shannon Moore

Municipal Finance and Budgeting
14 Readings on Understanding
Municipal Financing
Internal Services/Finance – Nickie Mastay
15 Adopted FY 2022-2023
Operating Budget & 5 – Year
Capital Improvement Plan
Internal Services/Finance – Nickie Mastay
16 State Audit Corrective Action
Plan
City Manager’s Office/Internal
Services/Internal Services – Shasa
Curl/Nickie Mastay
17 Budget Calendar Internal Services/Finance – Nickie Mastay 18 Guiding Fiscal Policy Internal Services/Finance – Nickie Mastay City-Wide Guiding Documents
19 General Plan 2030 Community Development Department – Hector Rojas
20 Richmond Race and Equity
Initiative (GARE)
Council Liaison - Trina Jackson-Lincoln
21 Health in All Policies (HiAP) City Manager’s Office/Economic Development – Gabino Arredondo
22 Climate Action Plan City Manager’s Office/Economic
Development/Environmental Initiatives –
Samantha Carr
23 Richmond Community Survey City Manager’s Office – LaShonda White 24 Fee Waiver & Partnership Policy City Manager’s Office – LaShonda White DRAFT City Council Orientation
January 17, 2022, at 2:00 PM

Page 3 of 3 ends

Key Dates & Next Steps

Event Date Location Department & Contact Person
Human Resources
Onboarding
01/10/2023 -
01/13/2023
City Hall, Human
Resources, 3rd
Floor
To schedule or for inquiries, contact:

Human Resources – Sharrone
Taylor,
[email protected],
(510) 620-6803
IT Equipment 01/10/2023 -
01/13/2023
City Hall, Human
Resources, 1st
Floor
To schedule or for inquiries, contact:

Information Technology – Sue
Hartman,
[email protected]
(510) 620-6874
Mid-Year Presentations,
Departmental Overviews
01/17/2023
01/24/2023
02/07/2023
2/21/2023
2/28/2023
Council
Chamber
City Manager’s Office – Shasa Curl,
[email protected],
(510) 620-6512
Internal Services – Nickie Mastay,
[email protected],
(510) 620-6609
League of CA Cities City
Council Training
01/18/2023 -
01/20/2023
Sacramento, CA To schedule or for inquiries, contact:

Council Liaison – Trina Jackson-
Lincoln,
[email protected],
(510) 620-6581
City Council Strategic
Planning Process
Pending Pending City Manager’s Office – Shasa Curl,
[email protected],
(510) 620-6512

Tab 1

Introductions

450 Civic Center Plaza, Richmond, CA 94804-1630
Telephone: (510) 620-6512 Fax: (510) 620-6542 www.ci.richmond.ca.us

Tab 2

City of Richmond
Charter

Tab 3

Information on
Council-Manager
Form of
Government

What it is, how it works, and
the benefits to your community
Council-Manager
Form of Government

INTERNATIONAL CITY/COUNTY MANAGEMENT ASSOCIATION
777 N. Capitol St NE, Ste. 500, Washington, DC 20002
202.962.3680 | 202.962.3500 (f) | icma.org

THE ROLE OF THE MAYOR OR CHIEF ELECTED

OFFICIAL
Typically, the mayor or board chairperson in a council- manager community is a voting member of the governing
body who may be either directly elected, as in 69 percent of council-manager communities, or who is selected by and from among their colleagues on the governing body. The mayor or chairperson is the public face of the community who presides at meetings, assigns agenda items to committees, facilitates communication and understanding between elected and
appointed officials, and assists the governing body in setting goals and advocating policy decisions.

THE ROLE OF ELECTED OFFICIALS
Under the council-manager form, the elected officials (e.g. the council or board) are the legislative body and the community’s policy makers. Power is centralized in this body, which approves the budget and adopts local laws and regulations, for example.

The elected officials also focus on the community’s big-picture goals, such as community growth and sustainability.

The elected officials hire a professional city, town, or county manager based on that person’s education, experience, skills, and abilities and NOT on their political allegiances. The elected officials supervise the manager’s performance, and if that person is not responsive and effective in their role, the elected officials have the authority to remove her or him at any time.

THE MANAGER’S ROLE
The manager is an at-will employee who can be fired by a majority of the elected officials, consistent with local laws or any employment agreements. This person
• • Prepares a budget for the governing body’s consideration. • • Recruits, hires, supervises, and terminates government staff. • • Serves as the governing body’s chief advisor by providing complete and objective information about local
operations, discussing options, offering an assessment
of the long-term consequences of decisions, and making
policy recommendations.
• • Carries out the policies established by the governing body.

WHAT ROLE DO RESIDENTS PLAY?
Under council-manager government, local governments often actively engage and involve their residents in community decision making. Residents can guide their community by serving on boards and commissions, participating in visioning and strategic planning sessions, and designing community- oriented local government services.

Key Roles in Council-Manager Government
For more information, contact
icma.org/contactus
@ICMA ICMAorg
T o lean more about professional
local government management, visit
icma.org/professional-local-government-management
City of Tampa, Florida
City of Cedar Park, T exas
What is the council-manager form of government?
The council-manager form is the most popular structure of government in the United States among municipalities with populations of 2,500 or more. It is one of several ways in which U.S. municipalities and counties can organize.

Under this form, residents elect a governing body—
including a chief elected official, such as a mayor or board chairperson—to adopt legislation and set policy. The
governing body then hires a manager or administrator with broad executive authority to carry out those policies and oversee the local government’s day-to-day operations.

What’s so special about the council-manager form
of government?
Born out of the U.S. progressive reform movement at the turn of the 20th century, the council-manager form was
created to combat corruption and unethical activity within local government by promoting nonpolitical management
that is effective, transparent, responsive, and accountable.

The council-manager form of government recognizes
the critical role of elected officials as policy makers, who focus on mapping out a collective vision for the community and establishing the policies that govern it. The form also recognizes the need for a highly-qualified individual who is devoted exclusively to the delivery of services to residents.

Think about the structure used by many corporations, in which the board of directors hires an experienced CEO, who is granted broad, executive authority to run the organization.

While these boards establish the company’s overall policy direction, the CEO oversees implementation of that policy.

What types of communities use the council-manager
form of government?
Today more than 120 million people in the U.S. live in
municipalities that operate under the council-manager form.

Fifty-four percent of the more than 4,300 U.S. municipalities with populations of 10,000 or more use the form, as do
59 percent of the 347 municipalities with populations greater than 100,000. More than 800 counties also employ a
similar system.

How can council-manager government benefit
my community?
• • Flexibility—The council-manager form can adapt to local needs and demands. While governing bodies in some
council-manager communities are elected at large, for
example, others are elected by district or by a combination of an at-large-and-by-district system to respond to local needs. • • Clearly Defined Roles—Under the council-manager form, there is a clear distinction between the administrative role of the manager and the political and policy roles of the governing body, lead by the mayor. The day-to-day
operations of the local government organization reside
with the appointed manager, allowing elected officials
to devote their time and energy to policy development
and the assessment of the effectiveness of those policies within the community.
• • A Roadmap for Success—The council-manager form is
the system of local government under which professional management is most likely to succeed. Under this system, professional managers can focus on service delivery, policy implementation, and performance management and can
align the local government’s services with the values,
mission, and policy goals defined by the community and
elected officials.

How do we know that council-manager
government works?
• • The Equipt to Innovate Initiative—a framework of
seven essential elements that define high-performance
government and empower innovation—found in 2017 that
top-performing cities in all but one element employed the council-manager form of government. In 2018, the study’s overall top performer was also council-manager.

VOTERS

GOVERNING BODY

MANAGER

DEPARTMENT HEADS
The Council-Manager Form
• • Two-thirds of Moody’s Aaa-bond-rated communities are run by professional local government managers, and many operate under the council-manager form of government.
• • An IBM Global Business Services report titled “Smarter, Faster, Cheaper” found that cities that operate under
the council-manager form of government are nearly 10
percent more efficient than those that operate under the mayor-council form.
• • The National Civic League, America's oldest advocate for community democracy, has endorsed council-manager
government through its Model City Charter since 1915.
• • The majority of communities recognized since 2013 with the National Civic League’s coveted All-America City Award have been council-manager.

Does it cost more for a community to adopt the
council-manager form and hire a professional
manager?
Many local governments have reduced their overall costs after hiring a professional manager. Savings can come
from decreased operating costs, increased efficiency and productivity, improved revenue collection, and effective use of technology. The economic health of the community may also benefit from the implementation of improved business development and retention strategies.

How can my community adopt the council-manager
form of government?
Methods vary from state to state, but most communities
can adopt council-manager government through a charter, local ordinance, state enabling law, or by voter referendum.

For information on how your community can adopt council- manager government, contact your state municipal league, state and local government association, or association
of counties. You can find contact information for these organizations at icma.org/state-localgovassns or ncl.org/ state-municipal-leagues.

Once my community adopts council-manager
government, how do we hire a professional manager?
The vacancy is often announced in Leadership Matters,
ICMA’s weekly e-newsletter; through the ICMA Job Center at icma.org/job-center; and through state league publications, and qualified candidates are invited to apply. Elected officials may also hire an executive recruitment firm to assist them with the selection process. Interested parties may apply directly to the governing body or to the recruitment firm, which reviews the applications and interviews qualified candidates. ICMA makes no recommendations regarding
candidates. Additional information on hiring a professional local government manager is available in ICMA’s Recruitment Guidelines Handbook. Visit icma.org/documents/recruitment- guidelines to download a copy.

What kind of educational and on-the-job experience do
professional local government managers generally have?
Sixty-five percent of managers surveyed by ICMA
indicated that they had earned a master’s (usually in public administration, business, or public policy), or other advanced degree. Survey respondents also said that they had spent an average of more than 20 years working in the local
government management profession.

What is ICMA and why is membership in that
organization important?
ICMA, the International City/County Management Association, is the professional and educational “home” for more than 12,000 appointed managers and administrators serving cities, towns, counties, other local governments, and regional entities in 40 countries throughout the world.

In addition to gaining access to valuable resources and lifelong professional development opportunities, appointed local government managers who are members of ICMA are
bound by its Code of Ethics, which commits members to a set of ethical standards of honesty and integrity that go beyond those required by the law. This stringently enforced code specifies 12 ethical principles of personal and professional conduct, including dedication to good government. For more information, visit icma.org/ethics.

Finally, through its Voluntary Credentialing Program,
ICMA recognizes individual members who are qualified by a combination of education and experience, adherence to high standards of integrity, and an assessed commitment to lifelong learning and professional development. ICMA members who meet these requirements may earn designation as an ICMA Credentialed Manager. For more information
on ICMA’s Voluntary Credentialing Program, visit icma.org/ voluntary-credentialing-program-overview.

Tab 4

City of Richmond
Organizational
Chart

People of Richmond

Mayor and City Council

City Manager

Director of Public Works

Richmond Rent Board

Confidential
Investigative Appeals
Officer
(Police Commission)
Confidential
Investigative Appeals
Officer
(Police Commission)
City Clerk

City Clerk

City Attorney

Executive
Assistant

Deputy City Manager
Community Services

Director of Economic
Development

Deputy City Manager
Internal Services
Deputy City Manager
Internal Services
Business
Development

Business
Development

Richmond Housing
Authority

Environmental &
Health Initiatives

Real Estate

Library

Recreation

Employment &
Training

Engineering and
Capital Improvement
Program (CIP)
Engineering and
Capital Improvement
Program (CIP)
Building Maintenance

Building Maintenance

Water Resource
Recovery

Fleet

Maintenance and
Abatement

Parks Maintenance

Finance

Human Resources

Information
Technology
Information
Technology
Office of
Neighborhood Safety

Office of
Neighborhood Safety

ECIA Grant
Administration

Rent Program

Rev. 1.3.2023
Arts & Culture

Arts & Culture

Port

Chief of Police

Patrol

Traffic

Investigations

Administration and
Support

Director of Community
Development

Planning

Building

Code Enforcement

Housing Policy

RDA Successor
Agency

Chief of Fire

Fire Prevention

Emergency Services

Emergency
Operations

Training

Administration and
Support

Transportation

Department of
Children and Youth

Special Projects

Tab 5

Key Staff and Emergency
Operations Center Contact
Information

1.6.23 TITLE / DEPARTMENT NAME EMAIL ADDRESS PHONE ADDRESS City Attorney Dave Aleshire [email protected] 620-6509 450 Civic Center Plaza City Clerk Pamela Christian [email protected] 620-6513 450 Civic Center Plaza City Manager Shasa Curl [email protected] 620-6512 450 Civic Center Plaza Chief of Fire Angel Montoya [email protected] 307-8031 440 Civic Center Plaza Chief of Police Bisa French [email protected] 621-1802 1701 Regatta Boulevard Deputy City Manager, Internal
Services Nickie Mastay [email protected] 620-6602 450 Civic Center Plaza Deputy City Manager,
Community Services LaShonda White [email protected] 620-6512 450 Civic Center Plaza Director of Community
Development Lina Velasco [email protected] 620-6706 450 Civic Center Plaza Director of Economic
Development Nannette Beacham [email protected] 621-1306 450 Civic Center Plaza Director of Finance Delmy Cuellar [email protected] 620-6790 450 Civic Center Plaza Director of Information
Technology Sue Hartman [email protected] 620-6970 450 Civic Center Plaza Director of Public Works Daniel Chavarria [email protected] 620-5478 450 Civic Center Plaza

CITY OF RICHMOND
RICHMOND, CA 94804

E OC Director *
E S F #5 Management
E S F #14-L /T R ec overy

1. C ity Manager S hasa C url

2. F ire C hief Angel Montoya (R F D)

3. P olice C hief Bisa F rench (R P D)

P lanning & Intelligence S ection C hief*

1. L ina V elasco

2. C hris C astanchoa (Deputy S ection C hief)

3. E va Mann
L ogistics S ection C hief*
E S F #7-R es ourc es
E S F #17-V olunteer Mgmt.

1. R anjana Maharaj

2. S harrone T aylor

3. S ue Hartman
Operations S ection C hief*

1. Dept. F ire C hief Aaron Osorio (R F D)

2. C apt. Albert Walle; TBD (R P D)

3. Daniel C havarria (P W Dir.) ; R obert Armijo (Dept. P W Dir.) F inance & Administration S ection C hief*
E S F #7-R es ourc es
E S F #17-Donations Mgmt.

1. Delmy C uellar

2. Antonio Banuelos

3. Mubeen Qader
S afety Officer*

1. Nickie Mastay

2. L t. J ohn L opez (R P D)

3. F ire E xecutive T eam
L egal Officer*

1. S hannon Moore

2. Alan C ohen

3. J ames Atencio
P ublic Information Officer*
E S F #15 P ublic Information

1. C apt. M. S tonebraker, P olice P IO

2. Battalion C hief R ico R incon

3. F ire E xecutive T eam**
E OC C oordinator
(OE S Manager)*

1. F ire OE S Manager

2. F ire E xecutive T eam**

3. F ire E xecutive T eam
L iaison Officer*

1. L aS honda White

2. G . Arredondo

3. I. L ozano
L aw E nforcement Branch Dir.

E S F #13-L aw E nforcement
E S F #16 E vacuation

1. C apt. A. Walle

2. L t. E . Bashan

3. L t. D. Decious
F ire Branch Director
E S F #4-F irefighting
E S F #9-S A R
E S F #10-HazMat

1. T raining BC

2. On-Duty BC

3. F ire E xecutive T eam
P ublic Works (DIMO) Branch
Director
E S F #3-P ublic Works & E ng.

1. D. C havarria (P W Dir.)

2. R . Armijo (Dept. P W Dir.)

3.R . C helemedos
C oroner: C apt. M. S tonebraker
E vacuation/ Warning: On Duty
Dist. L t.

Investigations: L t. .E . Barragan
L E Mutual Aid: L t. C . Dean; OD
C apt/L t.

F ire S uppression:

Battalion C hief
Medical/Health: F ire C apt.;
Battalion C hief
S earch & R escue: R escue F ire
C aptain
F ire Investigations: F ire
Marshal/F ire P revention
C onstruction: TBD
S treets & R oadways: Hugo Mendoza; R ob C helemedos
Wastewater: M.P helps; B. Harms
Utilities: C . Hughes (E S F #12-Utilities )
C are & S helter: R . Maharaj; H. L attell; T . P orter; T . K isseh (E S F #6-MC S )
AF N C oordination: L aura Marquez, (TBD)
P arks: G . Hardesty; T . Nesbit, J . Moreno, M. Maltagliati P ort: L . Z hou
S ituation S tatus Unit*

1. C hristopher L arsen

2. Hector L opez

3. Hector R ojas
Documentation Unit*

1. I K uan C hoi

2. S oco Montore

3. P amela
C hristian/Ursula
DeL oa/J asuara
C astaneda
Damage Assessment
Unit

1. L eonard Williams

2. Dewayne T aylor

3. G autam Manandhar
Advance P lanning
Unit

1. R oberta F eliciano

2. Andrea Villarroel

3. L ydia E lias
R ecovery Unit

1. Maggie C hoi

2. K evin Tisdell

3. Brenda McNeil
Demobilization Unit

1. Wylendia E astman

2. J amie J enkins

3. C harice Duckworth
T echnical S pecialists

1. G eorge K abaivanov

2. R oberta F eliciano

3. R andall Narron
T ransportation Unit
E S F #1-T rans portation

1. L ori R eese-Brown

2. Denee E vans
T echnology S ystems
Unit L eader*
E S F #2 C ommunic ations

1. S ue Hartman

2. Henry L ei

3. S andi Wong
R esources Unit*

1. R ob C helemedos

2. Dee K arnes

3. TBD
Information: H. L ei
C ommunications (P ublic)*: R . L ee; C . Wimmer
C ommunications (Internal)*: M. Harrison, J . Hill,
A. Vitangcol
C omputers*: H. L ei; E . T am, J . Hill
P ersonnel Unit

1. C atherine S elkirk

2. K risti F lorence

3. J essica S omera
F acilities Unit*

1. K hary C lyburn

2. R HA

3. David Batiste
C ost R ecovery
Unit

1. A. Banuelos

2. L . Dela C ruz

3. A. Delgado
C ompensation/
C laims Unit

1. L . Marquez

2. E . C arty

3. L . Melgarejo
Time Unit

1. J . C hak

2. S . Williams

3. R . Navarro
C ost Analysis Unit

1. Vrenesia Ward

2. Bert J ones

3. R honda J ackson
P urchasing Unit*

1. Ofelia Alvarez

2. P . McK enzie

3. A. Banuelos
C ity of R ichmond ? E OC Organization
01/12/2023
Mayor
C ouncil Members
P rocurement Unit

1. O. Alvarez

2. P . McK enzie

3. TBD
* E OC P artial Activation P ositions. When a single incident requires centralized coordination of resources, staff fulfilling the positions with an * may be called in to staff the E OC via "One C all Now" and/or Nixle.

E xternal Agencies:

American R ed C ross,
E BMUD , P G E , V eolia
WC C US D , Other
Agency P artners
Management S ection
(C ommand
S taff)
V eronica Duarte de C astro
G eneral S taff
G eneral S taff
** F ire E xecutive T eam: F ire C hief,
Deputy F ire C hief, Battalion C hiefs

Tab 6

Administrative
Calendar

City of Richmond, CA ADMINISTRATIVE CALENDAR
Month Title Department/Division Lead

JANUARY
Mid-Year Budget Entry City of Richmond (CoR) City Manager's Office Mid-Year Budget Richmond Housing Authority (RHA) Finance Cost Allocation Plan Finance
AB 1234 (Ethics Training) City Attorney's Office
Fee Waivers and Partnership Report (Recreation) CSD - Recreation Department of Finance (DoF) Housing Unit Change Form Survey Community Services 6th Cycle Housing Element Update Adoption Hearing Community Development Fire Permit Fees Schedule Fire

FEBRUARY
Mid-Year Budget Adoption (CoR) Finance
Mid-Year Budget Adoption (RHA) Finance
Annual Budget Entry
PG & E Quarterly Update City Manager's Office
Green-Blue New Deal Update City Manager's Office
Annual Recognized Obligation Payment Schedule (ROPS) (Oversight Board approved) submission due Community Development
MARCH
Annual Budget Entry Finance
Mid-Term Financial Audit Finance
Master Fees Schedule Finance
Impact Fees Finance
Sanctuary City Ordinance Finance
Office of Neighborhood Safety - Annual Report CSD - ONS General Plan Annual Progress Report Approval Community Development Housing Element Annual Progress Report Community Development New Environmental Justice Element and Safety Element
Amendments Adoption Hearing Community Development
1 of 4
City of Richmond, CA ADMINISTRATIVE CALENDAR
Month Title Department/Division Lead
APRIL
Annual Budget Adoption City Manager's Office
Mid-Term Financial Audit Finance
Master Fee Schedule Finance
Impact Fees Finance
Sanctuary City Ordinance Finance
Form 700 - Statement of Economic Interest (FPPC) Filings Due City Clerk's Office General Plan Annual Progress Report Due Community Development Housing Element Annual Progress Report Due Community Development DOF Approval of FY Year ROPS for incorporation into City FY Budget Community Development Payments Received by City of Levied Special Assessments (40%) Community Development MAY
Annual Budget Adoption City Manager's Office
Mid-Term Financial Audit Finance
Master Fees Schedule Finance
Impact Fees Finance
Sanctuary City Ordinance Finance
Pension Tax Override Finance
Payments Received by City of Levied Special Assessments (5%) Community Development Emergency Operations Center (EOC) Readiness Training Fire JUNE
Annual Budget Adoption City Manager's Office
Pension Tax Override Finance
Design Review Board and Planning Commission Officer Elections Community Development JULY
Port Tariff Renewal Port Operations
Levy of Property & Business Improvement District (PBID) City Manager's Office 2 of 4
City of Richmond, CA ADMINISTRATIVE CALENDAR
Month Title Department/Division Lead
AUGUST
Fee Waivers and Partnership Report (Recreation) CSD - Recreation IT Inventory of Equipment (Network, Desktop, and Mobile Devices Information Technology County records Assessment/Levy on properties, adding amount to the upcoming year's tax roll Community Development

SEPTEMBER
Conflict of Interest Code Adoption City Attorney's Office

OCTOBER
Year-End Annual Financial Audit Finance
Single Audit (Grants) Finance
RFCY Baseline Report City Manager's Office
ECIA Annual Report Community Services
Open Enrolment - Medical/FSA/Transit Benefits Human Resources Deadline to submit prior period adjustment to ROPS

NOVEMBER
Year-End Annual Financial Audit Finance
Single Audit (Grants) Finance
Conflict-of-Interest Code Adoption City Attorney's Office RFCY Baseline Report City Manager's Office
ECIA Annual Report Community Services
Giving Tuesday (Tuesday After Thanksgiving) and Annual Charitable Giving Launch Human Resources
California State Library Report CSD - Library
Triennial California Building Standards Code Adoption (next cycle will be 2025)
Triennial California Fire Code Adoption (Next 2025) Fire 3 of 4
City of Richmond, CA ADMINISTRATIVE CALENDAR
Month Title Department/Division Lead

DECEMBER
Year-End Annual Financial Audit Finance
Single Audit Grants Finance
Mid-Year (RHA) Housing Authority
Levy of Special Assessments for Fines and Cost Related to Unpaid Administrative Citations, Nuisance Abatements and Foreclosure Ordinance Fines Community Development
Annual ROPS budget submitted to Council for approval for submittal Oversight Board Community Development
Payments Received by City of Levied Special Assessments (55%) Community Development Solid Waste Rate Update City Manager's Office
Hazardous/Material, EMT/Paramedic, and Rescue Certification (Yearly) Fire
Incident Command System (ICS) and National Incident Management System (NIMS) Courses Certification/Recertification (Biannual) Fire 4 of 4

Tab 7

City Council
References and
Support, Council
Meeting Technical
Guidelines

City Council References and Support
Working Onsite
The Vice Mayor and City Councilmembers are provided individual offices located at 440 Civic Center Plaza #110. The offices are fully equipped with a desktop computer, office landline, desk and file cabinet.

Access ID Badges will be provided by Information Technology. The badge will provide access to the City Council Suite, Council Chambers 24/7 and other City Offices during regular business hours.

Working Offsite
• Outlook Remote Access Link:
https://www.office.com/
Note: Use your city Outlook login and password to access your email account • Accessing voicemails
• Dial 510-620-6500
• Press #
• Enter your extension number (xxxx)
• Dial your password (xxxx) followed by #
Hard Copy Mail
Mail received via the US Postal Service and interoffice mail will be placed in your office inbox.

City Council Conference Room
To reserve the conference room, please contact Janice Featherstone, Office Aide or Trina Jackson-Lincoln.

Administrative Support:

Trina Jackson-Lincoln, City Council Liaison, is available to provide administrative support to the Richmond City Council. Ms. Jackson-Lincoln manages the City Council Office and supervises City Council staff.

Please contact Ms. Jackson-Lincoln regarding office supplies, assistance with scheduling meetings, and preparing documents for the City Council meeting agenda.

Additional information will be provided regarding available administrative support.

The vice mayor serves as the department head and approving official for the City Council Office. Responsibilities of the vice mayor will be provided upon appointment by the City Council.

Conference, Training and Meetings Allocation:

Each councilmember was allocated up to $2,500 for the 2022-2023 FY for expenses related to travel and city business related meetings.

Please contact staff in the City Council Office regarding conference attendance. The allocation for the fiscal year will be used to cover conference expenses and reimbursements. City Council Staff will provide the appropriate form for reimbursement requests.

Newly elected mayors and councilmembers are advised to attend the League of California Cities academy for newly elected officials in Sacramento from January 18-20, 2023.
https://www.calcities.org/education-and-events/event/2023/01/18/default-calendar/new-mayors-and- council-members-academy-2023

City Council Technical Support
The Information Technology Department provides technical assistance for the City Council and departments. Emails can be sent to [email protected] directly.

City Council Meeting Technical Support
Prior to each agenda, a calendar invitation will be sent with instructions on how to logon to the Closed and Open Sessions.

The City Clerk compiles and posts the City Council agenda on the Thursday prior to the scheduled meeting. An email similar to the snapshot below is sent to the City Council and staff once the agenda has been posted to the City of Richmond website.

Sample City Council Meeting Agenda Notification Email
Mayor and Council blind copied.

The agenda/packet for the Tuesday, November 15, 2022, Regular City Council Meeting is available on the web. Follow the link below to view. A copy of the agenda is attached for your convenience.

http://www.ci.richmond.ca.us/4157/City-of-Richmond-Council-Meetings

*CLOSED SESSION BEGINS AT 2:00 P.M.
*SPECIAL RICHMOND HOUSING AUTHORITY BEGINS AT 6:25 P.M. *RICHMOND CITY COUNCIL BEGINS AT 6:30 P.M.

Pamela Christian, City Clerk
City of Richmond
450 Civic Center Plaza, Richmond, CA 94804
Office: (510) 620-6513, Ext. 9
Website: www.ci.richmond.ca.us/cityclerk

ZOOM GUIDELINES FOR CITY COUNCIL MEETINGS
• Internet bandwidth is most important for zoom meetings. Please make sure to have sufficient internet access from your remote location. If internet access is not sufficient, you may consider participating from your City Council Offices. • Please check your remote professional settings including lighting and background. This will improve the zoom meeting from looking too grainy or blurred. It is preferred that you not use a virtual background image.
• Your image may improve by having a comfortable seat so the camera can focus on your face in a stable position focusing on the headshot (upper body) in the middle of the screen.
• Your background during the virtual meeting is important. Having a bookshelf and or picture on the wall can make the Council Members image look more professional. Clutter in the background can make the image distracting.
• Wearing business attire is important. A business suit is preferred. • If needed you may want to consider a new webcam, speaker, supplemental lighting, and or headset. (The City can help you with this).

Zoom Guidelines:

Please make sure you are in an area near your internet connection and your Zoom app has been downloaded.

Make sure you are in a professional setting and turn off any background sound.

Once you have joined on a computer or mobile device, the following will help you navigate in Zoom:

Microphone: is Muted, is Un-Muted
Please mute your microphone and keep it muted anytime you are not speaking. Turn off the TV and radio, put your cell phone on silence, and close the door to the room while you are in the meeting.

Video setting should be turned on. Please make sure you are in a professional setting while the video camera is on.

Sharing and Chat features should not be used.

Tab 8

Appointments to City
and Regional Boards,
Commissions, and
Committees, etc.

2021 Appointments to Regional Committees, Ad Hoc Committees and Liaison Positions
Council Appointments 6/29/2021, City Council Meeting – Item H-1

Mayor: Tom Butt
Vice Mayor: Demnlus Johnson
Councilmembers: Nathaniel Bates, Melvin Willis, Eduardo Martinez, Gayle McLaughlin, Demnlus Johnson, Claudia Jimenez

Boards, Commissions and Committee Liaisons:

Arts and Culture Commission: Willis

Citizens Police Review Commission:

Jimenez

Commission on Aging: McLaughlin

Design Review Board: Butt

Economic Development Commission:

Johnson

Historic Preservation Commission: Butt

Housing Advisory Commission: McLaughlin

Human Rights and Human Relations
Commission: McLaughlin

Library Commission: Martinez

Personnel Board: Johnson
Planning Commission: Butt

Public Art Advisory Committee: Willis

Recreation and Parks Commission: Willis

Richmond-Shimada Friendship
Commission: Bates

Richmond-Zhoushan Friendship
Commission: Johnson

Richmond-Regla Friendship Committee:

Martinez

Richmond Youth Council: Johnson

Urban Forest Advisory Committee:

Martinez

Workforce Development Board: Bates

Liaison positions DO NOT necessitate attending any or all the meetings.

City of Richmond Ad Hoc Committees
NURVE Policy Ad Hoc Committee
Members: Martinez
Alternate: Bates

ECIA Environmental and Community Investment Ad Hoc Committee Members: Jimenez, Willis
Alternate: Johnson

Regional Committees

West Contra Costa Integrated Waste Management Authority (RecycleMore) Members: Bates, McLaughlin, Willis
Alternate: Martinez

West County Agency
(JPA between the City of Richmond and the West County Wastewater District) Members: Martinez, Bates
Alternate: Jimenez

Association of Bay Area Governments (ABAG) Representative Members: Butt
Alternate: Martinez

East Bay Regional Parks
Members: Martinez and Butt
Alternate: Johnson

Gilman Street Sport Complex
Members: Martinez
Alternate: Willis

League of CA Cities East Bay Division
Members: Johnson
Alternate: Martinez

League of CA Cities Voting Representative
Members: Butt
Alternate: Martinez

MCE Clean Energy Representative
Members: Butt
Alternate: Johnson

North Richmond Mitigation Fee Joint Committee
Members: Martinez, Johnson, and Bates
Alternate: Willis

West Contra Costa Transportation Advisory Committee (WCCTAC) Members: Butt, Johnson and Martinez
Alternate: Willis

West Contra Costa Unified School District Liaison (WCCUSD) Members: Martinez

Tab 9

Agenda Item Process
for Councilmembers
(Agenda Report and
Resolution Template)

City Council Agenda Items:

Please use the attached template to complete an Agenda Report for agenda items. The deadline for councilmembers to submit agenda items is by noon on the Wednesday before the desired City Council meeting. If the completed agenda report and supporting documentation are not submitted by the deadline, the item may be pushed to the next City Council meeting. It is strongly recommended that placeholders are submitted with as much lead time as possible. This provides an opportunity for staff to review, prepare and ask questions of the item sponsor(s), if necessary.

Page 1 of 2 ends

(insert date of meeting)

Department
(Use the draw down menu by clicking on the word Department and select City Council or the appropriate department)

DATE: [Enter the date of the meeting. Not the date the report was created.]
TO: Mayor0DUWLQH] and Members of the City Council
FROM:
(List all relevant/responsive staff
persons - Sponsors)
Name, Title and Department

Subject:
(This will appear on the agenda)
[Should be a short sentence or phrase for filing purposes if you want similar subjects filed together].

FINANCIAL IMPACT: SPELL OUT HOW MUCH THIS ACTION WILL COST AND WHETHER THE COST IS INCLUDED IN THE BUDGET. IF IT IS

NOT IN THE APPROVED BUDGET, A BUDGET ADJUSTMENT

MUST BE PART OF THIS SECTION, INCLUDING THE SOURCE
OF FUNDS… EXAMPLE:
“This action extends the term of the contract from January 30, 2006 to December 31, 2006 and increases the contract amount by $10,000, from $20,000 to $30,000. This expenditure is included within the approved fiscal year 2004 – 2005 budget, XYZ project/program”.

If there is no financial impact related to the item, indicate there is no financial impact in this section. Do not leave the yellow highlight on the report in any of the sections. It will show on the action agenda.

PREVIOUS COUNCIL
ACTION:
(List all dates items were heard or
council action took place)
[INDICATE WHETHER OR NOT THIS ITEM HAS BEEN BEFORE A

SUBCOMMITTEE OF THE COUNCIL OR THE CITY COUNCIL

AND, IF SO, WHEN, AND WHAT THE RECOMMENDATION OR
ACTION WAS. IF THERE WAS NO PREVIOUS ACTION, THEN
STATE NONE OR LEAVE BLANK]

AGENDA REPORT
*Instructions*
REPORT

Page 2 of 2 ends

(insert date of meeting)

STATEMENT OF THE
ISSUE:
[A concise sentence or brief paragraph , explaining the purpose of the item]

RECOMMENDED ACTION:
(This will appear on the agenda)
This should state what the sponsor is requesting of the City Council.
[Action word] Accept, Adopt, Amend, Approve, Authorize, Commend, Consider, Direct, Discuss, Review…

DISCUSSION:

ANALYZE THE SITUATION; GIVE REASONS FOR RECOMMENDATIONS; INCLUDE OTHER ALTERNATIVES AND WHY THEY WERE NOT RECOMMENDED. IF

APPLICABLE,

PROVIDE CONCISE HISTORICAL NARRATIVE ON HOW WE GOT TO THIS POINT,

INCLUDING COUNCIL ACTIONS AND DIRECTIVES
DOCUMENTS ATTACHED:
(Resolutions, Reports, Maps, etc. or state None)
Attachment 1 –
Attachment 2 –

Page 1 of 2 ends

(insert date of meeting)

Department

DATE: Click or tap to enter a date.

TO: Mayor _______ and Members of the City Council
FROM:
(List all relevant/responsive staff
persons)
Name, Title and Department

Subject:
(This will appear on the agenda)
Click here for Subject
FINANCIAL IMPACT: Click or tap here to enter text.

PREVIOUS COUNCIL
ACTION:
(List all dates items were heard or
council action took place)
Click or tap here to enter text.

STATEMENT OF THE
ISSUE:

Click or tap here to enter text.

RECOMMENDED ACTION:
(This will appear on the agenda)
APPROVE.

DISCUSSION:

AGENDA
REPORT

Page 2 of 2 ends

(insert date of meeting)
DOCUMENTS ATTACHED:

Attachment 1 – Original Contract
Attachment 2 – Amendment to the Contract
Reso. No. XX-20

Page 1 of 1 ends

RESOLUTION NO. XX- 20

RESOLUTION OF THE COUNCIL OF THE CITY OF RICHMOND, CALIFORNIA, AUTHORIZING, APPROVING ETC.…

WHEREAS, xxx, and
WH
EREAS, xxx.

NOW, THEREFORE, BE IT RESOLVED that …..

**********************

I certify that the foregoing resolution was passed and adopted by the Council of the City of Richmond at a regular meeting thereof held Month DD, 2020, by the following vote:

AYES:

NOES:

ABSTENTIONS:

ABSENT:

PAMELA CHRISTIAN

CLERK OF THE CITY OF RICHMOND
(SEAL)
Approved:

THOMAS K. BUTT
Mayor

Approved as to form:

TERESA STRICKER
City Attorney

State of California }
Count
y of Contra Costa : ss.

City of Richmond }

I
certify that the foregoing is a true copy of Resolution No. XX-20, finally passed and adopted b
y the City Council of the City of Richmond at a regular meeting held on Month DD, 2020.

Pamela Christian, Clerk of the City of Richmond

Tab 10

Reimbursement
Requests

City of Richmond
Administrative Policy (AP) Manual

TRAVEL/TRAINING

EXPENSE REPORT FOR REIMBURSEMENT
Exhibit AP 508-1 6/11/2021
www.irs.gov
Date of
Payment
Day of Trip
(please
choose or
enter)
Account String Description
Method of
Payment (please
choose or enter)
# of Miles
(attach roundtrip
internet map &
receipts)
Expense Type
(please choose
or enter)
Receipt Amount
(do not include mileage
here)
TOTAL # OF
MILES

RECEIPT

SUBTOTAL
MILEAGE $
(calculated)

GRAND TOTAL
DATE:

DATE:Department Director Signature:

The above is approved for payment.

Employee Signature:

All expenses, including meals, must be within the guidelines described in the City of Richmond AP Manual.

Expenses without attachments will not be reimbursed.

All City of Richmond required documentation, which includes original itemized receipts for reimbursable expenses, must be attached to this Travel/Training Expense Report for Reimbursement and submitted within ten (10) business days of return from travel/training.

I certify this Travel/Training Expense Report for Reimbursement as true and correct to the best of my knowledge and belief, and I have not previously received payment and/or credit for the items described on this form.

Return Travel Date (flight, drive, etc.): COR assigned location (address):

Current Mileage Rate available at: Travel/Training number of days:

Beginning date (personal travel): End date (personal travel):

Department:

To (Date): Location of Trip:

Travel Date to Event (flight, drive, etc.): Purpose of Trip:

Portion of travel extended for personal reasons must be paid with personal funds separately from CalCard (rental car on separate contract, hotel, meals, etc.) and is not reimbursable. Please enter below the beginning date and end date for the portion of this travel that was for personal reasons.

Employee Vendor #: Employee Name:

Office Phone: Title:

Dates of Event - From (Date):

City of Richmond
Administrative Policy (AP) Manual

INTERNATIONAL TRAVEL/TRAINING

EXPENSE REPORT FOR REIMBURSEMENT
Exhibit AP 508-4 7/1/15
www.fiscal.treasury.gov
Date of
Payment
Day of Trip
(please
choose or
enter)
Account String Description
Method of
Payment (please
choose or enter)
Expense
Type (please
choose or
enter)
Country
Receipt
Amount
Foreign
exchange rate
for date of
receipt
US Dollar
Amount

SUBTOTALS
GRAND
TOTAL
DATE:

DATE:

Employee Vendor #: Employee Name:

Office Phone: Title:

COR assigned location (address):

Dates of Event -From (Date): Department:

To (Date): Location of Trip:

Department Director Signature:

I certify this International Travel/Training Expense Report for Reimbursement as true and correct to the best of my knowledge and belief
, and I have not previously received payment and/or credit for the items described on this form.

All expenses, including meals, must be within the guidelines described in the City of Richmond AP Manual.

All City of Richmond required documentation, which includes original itemized receipts for reimbursable expenses, must be attached to this International Travel/Training Expense Report for Reimbursement and submitted within ten (10) business days of return from travel/training.

Expenses without attachments will not be reimbursed.

Employee Signature:

The above is approved for payment.

Foreign Exchange Rate available at: Travel/Training number of days:

Beginning date (personal travel): End date (personal travel):

Travel Date to Event (flight, train, etc.) Purpose of Trip:

Return Travel Date (flight, train, etc.):

Tab 11

Councilmember
Benefits Summary

6/26/2020 1 | P a g e
City of Richmond,
California
Mayor and City Council

SALARY
Mayor Salary 3,875.00/month
Council Member Salary 1,402.50/month

STIPEND
Each Council member shall receive a stipend of $30.00 for attendance at the following meetings:

Richmond Housing Authority meeting $30.00/meeting
Richmond Redevelopment Agency meeting $30.00/meeting

CAR ALLOWANCE
Mayor and Vice Mayor $350.00 per month
Council Member $300.00 per month
TRAVEL
To conserve City of Richmond resources and keep expenses within community standards for public officials, expenditures shall adhere to the guidelines of Resolution 127 -17. In the event that expenses are incurred which exceed these guidelines, the cost borne or reimbursed by the City of Richmond will be limited to the costs that fall within the guidelines.

When considering the annual budget, the City Council shall consider appropriating sufficient funds to cover estimated expenses covered by the Richmond City Council Expense and Expenditure Policy.

BENEFITS
Employee Benefits Provided by the City of Richmond
California Public Retirement System (CalPERS)
Each retired member of the City Council shall receive the same retiree medical benefits as those provided to Executive Management, with the exception that each member of the City Counci l may elect enrollment in a non -CalPERS medical plan and receive reimbursement for medical payments made to such plan. The benefit provided herein shall apply to all medical premiums made on or after January 1, 2007.

MEDICAL
Each member of the City Council shall have the option of joining the C alPERS. The employee portion of the CalPERS contribution shall b e paid by the Council Member. If the Council Member elects to join CalPERS, they become eligible to enroll in the City’s CalPERS Medical Insurance Plan.

DENTAL/VISION
City contributes total cost of vision premium for member and eligible family member(s).

For further information, please refer to the following City of Richmond Ordinances Ordinance 14-07
Ordinance 24-07
Ordinance 32-07

Tab 12

City Council Rules of
Procedure and Order

1 CITY OF RICHMOND

City Council Rules
of
Procedure and Order
Adopted by City Council Resolution No. 61-13
Effective: June 18, 2013
Amended April 22, 2014
Amended October 21, 2014
Amended July 27, 2021
Amended November 23, 2021
Amended January 18, 2022

NOW THEREFORE, BE IT RESOLVED by the Council of the City of Richmond that the following rules of the City Council shall govern all proceedings of the City Council therein described, subject to the exception and deviations provided for in such rules.

BE IT FURTHER RESOLVED, that the Council shall review its Rules of Procedure in March of each even numbered year.
2 Table of Contents

SECTION PAGE

I. Officers’ Responsibilities 4

II. Meetings 4

III. Conducting Meetings 5

IV. Order of Business 8

V. Agenda Preparation 11

VI. Procedural Matters 13
3 DEFINITIONS

Councilmembers: All elected members of the City Council including the mayor.
4 I. Officers’ Responsibilities

A. Duties of Mayor At City Council Meetings

The mayor shall preside at the meetings of the Council and shall preserve strict order and decorum at all regular and special meetings of the Council. The mayor shall state every question coming before the Council and announce the decision of the Council on all subjects, and decide all questions of order. The mayor has final say on all rules, subject to being overturned by a majority of the City Council.

B. Duties of Councilmembers at City Council Meetings

Promptly at the hour on the date of each regular and special meeting, the members of the Council shall take their regular stations in the Council Chambers and the business of the Council shall be taken up for consideration and disposition pursuant to Article III of the City Charter.

II. Meetings

A. Regular Meetings

(1) Regular meetings of the Council of the City of Richmond shall be held on the first and third Tuesdays of the month provided that, if any Tuesday falls on a legal holiday, the meeting shall be held on the following Tuesday at the same hour. Any future regular or special meeting may be canceled by a vote of a majority of the members of the City Council during a regular or special meeting. (2) Regular meetings held on the first and third Tuesdays of the month should be reserved for items requiring Council action.

(3) The evening session of regular City Council meetings shall begin at 6:30 p.m or as otherwise posted.

(4) Regular meetings of the City Council shall adjourn by 11:00 p.m. unless the time of adjournment is extended by the consent of a majority of the City Council. Any motion to extend the meeting beyond 11:00 p.m. shall include a list of specific agenda items to be discussed or approved and shall specify the order these items shall be handled. If a meeting continues past 11:00 p.m., it shall end at 11:30 p.m. 11:30 shall be the firm end-time of the meeting, unless by a 2/3 vote the City Council suspends the rules and then votes affirmatively to extend past 11:30

B. Fourth Tuesday Meetings As Needed

The Council may hold regular meetings on the fourth Tuesday of the month as needed.

Study sessions, presentations, proclamations, commendations, time-sensitive items, and items expected to take more than an hour will be scheduled at that meeting. If possible, agenda items anticipated to be lengthy should appear as the first item on the agenda.

Study for Action sessions may result in a City Council motion that provides policy direction to staff.

C. Closed Sessions

A closed session may be held at any regular or special meeting for any purpose authorized by the Brown Act. Council actions shall be governed by the Brown Act.

Public comment shall be received in open session prior to a closed session. To ensure strict compliance with the Brown Act, the City Attorney, or the City Attorney’s designee, shall be the individual who reports out in public session any reportable action taken during closed session, and any other information from closed session authorized to be disclosed by a majority vote of the City Council.

D. Special Meetings

Special meetings may be called at any time by the mayor or by a majority of the City 5 Council in accordance with Government Code Section 54956. The call and notice of such special meeting shall specify the time and place of the special meeting and the business to be transacted. No other business shall be considered at such special meeting by the City Council.

E. City Council Recess Periods

The City Council recess period shall begin the first Tuesday in August, and reconvene the first Tuesday following the week of Labor Day.

During any recess period, the city manager is authorized to take such ministerial actions for matters of operational urgency including such emergency actions as are necessary for the immediate preservation of the public peace, health or safety, as would normally be taken by the City Council during the period of recess, except for those duties specifically reserved to the Council by the Charter. This authority extends throughout the period of recess established by the City Council.

The city manager shall make a full and complete report to the City Council at its first regularly scheduled meeting, following the period of recess, of actions taken by the city manager pursuant to this section, at which time the City Council may make such findings as may be required and confirm said actions of the city manager.

III. Conducting Meetings

A. Rosenberg Rules of Order

Rosenberg's Rules of Order, as published by the League of California Cities, shall be the parliamentarian rules of order for City Council meetings except for the exceptions described in Section VI, B Procedural Matters 5-7.

B. Quorum Call

During the course of the meeting, should the Chair note a Council quorum is lacking, the Chair shall call this fact to the attention of the city clerk. The city clerk shall issue a quorum call. If a quorum has not been restored within three minutes of a quorum call, the mayor may call for a recess of up to 30 minutes in order to establish a quorum or he/she may adjourn the meeting.

C. Decorum and Discussion by Council members

While the Council is in session, the members must preserve order and decorum. A Councilmember shall not, by conversation or other actions, delay, interrupt the proceedings or the peace of the Council nor disturb any member while speaking, nor refuse to obey the orders of the Council, or the presiding officer, except as otherwise herein provided. Councilmembers shall use discretion and leave the Chamber to discuss items before the City Council with members of the audience.

Councilmembers are prohibited from using a cell phone or pager during a meeting, except for urgent matters, to avoid disruption and also to avoid a perception of a Brown Act violation.

All Councilmembers shall maintain a professional decorum during business meetings of the City Council. All members should adhere to the City of Richmond’s Code of Ethics.

Councilmembers shall limit their questions to staff and other presenters to actual questions, rather than statements.

Councilmember’s comments and questions will be limited to 5 minutes per item.

After each Councilmember has had a turn, the Council may vote on a non- debatable motion to have additional rounds of discussion also limited to 5 minutes 6 per Councilmember. For important issues, each Councilmember will be allowed two “special considerations” per meeting. Each “special consideration” will allow a Councilmember an additional 5 minutes on a topic.

D. Manner of Addressing the City Council in-person - Time Limit

(1) Anyone who desires to address the City Council on items appearing on the agenda must complete and file a pink speaker’s card with the city clerk prior to the City Council’s consideration of the item. Once the city clerk has announced the item and discussion has commenced, no person shall be permitted to speak on the item other than those persons who have submitted their names to the city clerk. Speakers will be called when the item is announced for discussion. Each speaker will be allowed two (2) minutes to address the City Council on items listed on the agenda.

(2) Unless otherwise permitted by a majority of the City Council, once the discussion of the agenda item has commenced, no person shall be permitted to speak on the item other than those persons who have submitted their names to the City Clerk. Unless otherwise waived by a majority of the City Council any person addressing the City Council on any item on the agenda shall be limited to a maximum of two (2) minutes.

(3)The city clerk shall call the speakers in groups of seven to sit directly behind the speaker podium. The person shall approach the microphone, state his/her name and city of residence in an audible tone of voice for the records. All remarks shall be addressed to the City Council as a body and not to any member thereof.

Manner of Addressing the City Council – Virtual or by phone

(4) To comment by video conference, click on the Participants button at the bottom of your screen and select the “Raise Your Hand” button to request to speak when Public Comment is being asked for. Speakers will be called upon in the order they select the “Raise Your Hand” feature. When called upon, press the unmute button. After the allotted time, you will then be re-muted.

(5) To comment by phone, you will be prompted to “Raise Your Hand” by pressing “*9” to request to speak when Public Comment is asked for. When called upon, you will be asked to unmuted by pressing *6. After the allotted time, you will then be re-muted.

E. Decorum by Public

No person shall engage in disorderly behavior that actually disrupts, disturbs or otherwise impedes the orderly conduct of the Council meeting. Such behavior may include but is not limited to shouting, making disruptive noises, such as boos or hisses, creating or participating in a physical disturbance, calling out or speaking out of turn or in violation of applicable rules, refusing to modify conduct after being advised by the presiding officer that the conduct is disrupting the meeting or disobeying any other lawful order of the presiding officer, speaking on an issue that is not within the jurisdiction of the City Council, speaking on an item at a time not designated for discussion by the public of that item, continuing to speak after the allotted speaker time has expired, causing an immediate threat to public safety, preventing or attempting to prevent others who have the floor from speaking, preventing others from observing the meeting, entering into or remaining in an area of the meeting room that is not open to the public, or approaching the Council table without consent. Any message to or contact with any member of the Council while the Council is in session shall be through the City Clerk.

F. Enforcement of Decorum

Any law enforcement officer on duty or whose service is commanded by the presiding officer shall be Sergeant-at-Arms of the Council meetings. He/she, or they, shall carry out all orders and instructions given by the presiding officer for the purpose of maintaining order and decorum at the Council meetings.
7 The rules of conduct shall be enforced in the following manner:

a) Call to order and warning to desist. Whenever practicable, the presiding officer shall give a warning to the person who is breaching the rules of conduct to be orderly and to comply with the rules of conduct. A second warning shall also be given when practicable. A warning need not be given when it would not be effective under the circumstances, including when, for example, the disturbance is such that the warning cannot be heard above the noise, or the person’s conduct immediately threatens public safety (such as throwing of objects or specific threats of harm and the apparent, present ability to carry out such threats). b) Order barring person from that same meeting. A person who engages in disorderly behavior shall be barred from the remainder of that same council meeting by the presiding officer when that person continues the disorderly behavior after receiving a warning at that meeting (and a second warning when practicable) to desist. Such behavior is willful disruption that actually disrupts the orderly conduct of the meeting.

G. Brown Act Requirements for Council Action

The Council shall not take action on any item that has not been published on the agenda of the meeting and posted in accordance with Chapter 4 of the Brown Act. Any item not on the agenda shall not be considered unless the item can be considered by the City Council pursuant to Government Code Section 54954.2(b), The Ralph M. Brown Act (Attached as Section B, Government Code Section 54950-54963, in the Index of this Policy).

H. Requests for Technical Assistance and/or Reports

During Council consideration of an item any member can request staff to provide technical assistance, develop a report, initiate staff research, or respond to requests for information or service. All such responses to these requests become a matter of Public Record.

A Councilmember may request research on any item being considered. Any Councilmember may ask staff to provide information when such a request would only require a reasonable amount of time to accomplish, as determined by the city manager. A request for information being considered that requires an extensive amount of staff time must be approved by the majority of the Councilmembers. Staff shall not spend any time or money pursuing initiatives that are contrary to existing public policy without first requesting and receiving direction from a majority of the City Council.

City staff has the same obligation to respond to Councilmembers’ requests for information as requests from the public pursuant to Chapter 2.40 of the Richmond Municipal Code (RMC).

I. Recordings of Meetings

All meetings of the City Council (except closed sessions) shall be open to the media and may be recorded by tape, radio, television, or photography by a member of the public, provided such recordings do not interfere with the orderly conduct of the meetings and do not (because of noise, illumination, or obstruction of view) constitute a persistent disruption of the proceedings.

J. Campaigning at Meetings

City Council chambers during City Council meetings are a campaign-free zone. Election of individuals to the Council or other office is not within the Council’s subject matter jurisdiction, and speakers may not campaign for or against candidates for office at Council meetings. Ballot measures, on the other hand, are within the jurisdiction of the Council and may be discussed; and speakers may criticize the City’s policies, programs, services or acts or omissions of the Council or its members. The following are examples of permissible comments: “Vote for Measure A”, “Vote against Measure D”, “The streets are filled with potholes”, “The Council is doing a poor job”, “Councilmember Smith is a lousy councilmember.” The following comments are examples of impermissible comments outside of the City’s subject matter jurisdiction: “Vote for Smith”, “Vote against Smith”.

8 IV. ORDER OF BUSINESS

A. Pledge of Allegiance to the Flag – in person meeting

At the beginning of each Richmond City Council meeting, the Pledge of Allegiance will be recited by the City Council and the audience.

B. Call to Order - Presiding Officer

The mayor, or in the mayor’s absence, the vice mayor, shall take the chair precisely at the hour appointed by the meeting and shall immediately call the Council to order.

Upon the arrival of the mayor, the vice mayor shall immediately relinquish the chair at the conclusion of the business presently before the Council. In the absence of the two officers specified in this section, the Councilmember present with the longest consecutive period of Council service shall preside.

C. Roll Call

Before proceeding with the business of the City Council, the city clerk shall call the roll of the members of the City Council and the names of those present and absent shall be entered in the minutes.

D. Scheduling of Items

As a courtesy to the public, to the extent possible, the City Council agenda will include estimated times for agenda items to be heard for items that are of considerable public interest. If a time certain appears on the Council agenda, in no event will the agenda item be heard or discussed before its estimated time. The business of the City Council at its regular meetings on the first and third Tuesdays of the month shall be taken up for consideration and disposition in the order set forth below and as published by the city clerk, except that with the concurrence of a majority of the City Council matters may be taken up out of order:

a. Roll Call

b. Statement of Conflict of Interest
9 c. Agenda Review
d. Presentation, Proclamations and Commendations (if required for timeliness) Presentations, proclamations and commendations shall be limited to three (3) items per meeting and a maximum of five (5) minutes for each item, unless otherwise permitted by the mayor. Unless items are deemed to be time sensitive by the mayor, presentations proclamations and commendations should be limited to the City Council meeting on the fourth Tuesday. Each Councilmember shall be limited to thirty (30) minutes of Presentations and Proclamations each ½ year, with sixty (60) minutes allocated for the mayor for each ½ year/.

e. Report from City Attorney for final decision made, and non-confidential discussions held, during Closed session

f. Report from the City Manager

g. Abatement Report from the Public Works Director – First Tuesday meeting h. Report from Implementation Sub-Committee for Reimagining Task Force – Third Tuesday meeting
i. Recent Crime Report by the Police Chief – Fourth Tuesday meeting j. Open Forum for Public Comments (public comment for items that remain on the Consent Calendar and Items f, g, h, and i, listed above, may be heard under Open Forum).

k. Consent Calendar (including approval of minutes, resolutions that are non- controversial, and second reading of ordinances).

l. Public Hearings
m. Budget Session
n. New Business – (including Council as a Whole items, resolutions that require discussion, and ordinances that do not require a public hearing)

o. Reports of Officers: Standing Committee Reports, Reports from Mayor/Council members/Staff, and Referrals to Staff

p. Adjournment

E. Open Forum for Public Comments – in person

Individuals who would like to address the City Council on matters not listed on the agenda may do so under Open Forum. All speakers must complete and file a pink speaker’s card with the City Clerk prior to the commencement of Open Forum. The amount of time allotted to individual speakers shall be determined based on the number of persons requesting to speak during this item. The time allocation for each speaker will be as follows: 15 or fewer speakers, a maximum of 2 minutes; 16 to 24 speakers, a maximum of 1 and one-half minutes; and 25 or more speakers, a maximum of 1 minute.

Speakers are asked to give their name and city of residency prior to making their public comment. To expedite the public comment period, the City Clerk will announce the name of the speakers in groups of seven and state the procedure for speakers.

The mayor or meeting chair may refer a subject to staff or other resources for factual information or for action, if appropriate.

10 F. Reading of Minutes

Unless the reading of the minutes of the City Council meeting is requested by a majority of the City Council, such minutes may be approved without reading if the city clerk has previously furnished each member of the City Council with a copy thereof. Minutes of previous City Council meetings shall be distributed to the Councilmembers and posted on the City’s website 72 hours prior to the next City Council meeting.

G. Consent Calendar
The mayor, any member of the City Council, the city manager, the city attorney or the city clerk may recommend that items appearing on the agenda be placed on the consent calendar for action by the City Council. All items placed on the consent calendar shall appear together on the agenda with the recommendation as to the action to be taken by the City Council with respect to such item. All items placed on the consent calendar that have been approved by a Standing Committee shall appear together on the agenda with the recommendation and the vote of the Standing Committee. Upon the motion of any member of the City Council, all items placed upon the consent calendar may be acted upon together, and each shall be deemed to have received the action recommended.

H. Removal of Item From Consent

Procedures for Removing Items from the Consent Calendar: Members of the public who request to remove an item from the consent calendar must first discuss the item with a staff member by phone or a back-and-forth email discussion, and state the name of the staff member when requesting removal of the item from the consent calendar.

Any member of the City Council who would like to remove an item from the consent calendar must notify the appropriate staff person and the City Clerk’s Office prior to the meeting. Although members of the City Council are encouraged to ask questions and share concerns with staff ahead of the meeting, they are not required to do so.

The Clerk’s Office must be informed of any requests to remove items from the Consent Calendar.

Items removed from the Consent Calendar shall be placed at the end of the agenda for consideration.

I. Public Hearings

The order of proceeding where there is a public hearing (non-appeal items) item before the City Council shall be as follows:

(1) Staff Report

(2) Questions from the Council

(3) Open Public Hearing

(4) Public Speakers, alternating from a speaker in favor and a speaker opposing

(5) Close Public Hearing

(6) Clarification questions to staff

(7) City Council discussion and vote (discussion may include questions by Council)

11 Where the public hearing involves (an appeal) of an item to the City Council, the order of proceeding shall be as follows:

(1) Staff Report

(2) Questions from the Council

(3) Open Public Hearing

(4) Appellant's statement *

(5) Principal opponent’s statement *

(6) Public Speakers, alternating from a speaker in favor and a speaker opposing*

(7) Appellant’s rebuttal (two minutes)
(8) Opponent’s rebuttal (two minutes)
(9) Close Public Hearing
(10) Clarification questions to staff or technical questions to applicants.

(11) City Council discussion and vote (discussion may include questions by Council)

* Note: The appellant and the principal opponent addressing the City Council shall be limited to a maximum of eight (8) minutes each and all other persons addressing the City Council shall be limited to a maximum of three (3) minutes.

The City Council by an affirmative vote of a majority of its members may make appropriate adjustments in the amount of time given to make presentations during public hearings depending upon the unique circumstances of a given public hearing.

*Note: Public speakers, alternating from a speaker in favor of the appeal to a speaker opposed to the appeal, to a speaker taking no position. Speakers shall have three minutes to address the City Council.

J. Reports of Officers

Members of the City Council and City staff shall limit their reports to matters concerning attendance at a meeting, conference, event or activity, reminder of upcoming events, m eetings or other activities, or update on p reviously reported information. Service complaints or requests for services by the City Council shall not be reported but shall be directed to the City Manager prior to or following the City Council meeting for appropriate action.

K. Items Not Completed

Any items not completed at a regularly scheduled Council meeting shall be continued to the next regular business meeting or study session meeting (respectively), or by a majority (quorum) vote of the Council to an adjourned regular meeting. Items carried over from a previous meeting shall be scheduled as the first order of business within the appropriate category if possible.

V. Agenda Preparation

For purposes of this section, the terms listed herein shall be defined as follows:

A. Definitions

1. Agenda Item means an item placed on the agenda for a vote of the Council by a 12 Councilmember, the city manager, city attorney, and city clerk.

Agenda items shall have a staff report, including the following:

(a) The name of the legislative body that will take action on the item;

(b) A Statement of the Issue that adequately informs the public of the subject matter and general nature of the item or report and action requested;

(e) A description of the current situation and its effects; (f) Background information as needed;
(g) Explanation for the recommendation;

(h) Person or persons to contact for further information, with telephone number;

(i) If the author of any report believes additional background information, beyond the basic report, is necessary to Council understanding of the subject, the staff report will describe the attachments included. The staff report and its attachments will be included in the published agenda packet and available for City Council and public review on the City Clerk’s Office webpage.

2. “Agenda” means the compilation of the descriptive titles of agenda items with the required action stated submitted to the City Clerk.

3. “Packet” means the agenda and all the staff reports.

B. Submission of Agenda Items

The placement of any item on any regular or special meeting agenda shall be limited to the following: (1) the mayor or any member of the City Council; (2) the city manager; (3) the city attorney; and (4) the city clerk. To place an item on the agenda, a member of the City Council must submit the item to the City Council staff liaison or to the city clerk, in the absence of the Council liaison, no later than 12 noon on Wednesday, one week prior to the Tuesday regular meeting. The Council will endeavor to submit agenda items that require staff work earlier than the deadline stated above. The Mayor’s Office staff is responsible to submitting mayor-sponsored items to the agenda by 12 noon on Wednesday, one week prior to the Tuesday regular meeting.

Items placed on the agenda by the City Council shall remain on the agenda and will not be removed without the approval of the Councilmember requesting the item be placed on the agenda.

The mayor, city manager, city clerk, and city attorney shall meet to review the draft agenda as compiled by the city clerk and set the final agenda.

C. Committee Review of Certain Items

If it is determined either after or prior to Council consideration of an issue, that the issue requires an in-depth review, a detailed analysis, further debate, discussion or other consideration, this agenda item may be referred to a City Council standing committee or to the full City Council as a study session. Following the committee meeting or study session, the recommendations regarding the items may be placed on a regular or special meeting agenda for consideration by the City Council or placed on a future committee meeting agenda for additional discussion. In order for the full City Council to be engaged in policy issues, an item may not be retained by the committee for more than two (2) months without concurrence of a majority of the City Council. Committees should eventually refer all items to the Council for consideration whether or not a committee recommendation has been reached. 13 D. Scheduling Public Hearings Mandated by State, Federal, or Local Statute

The City Clerk may schedule a public hearing at an available time and date in those cases where State, Federal or Local statute mandates the City Council hold a public hearing.

E. Packet Preparation and Posting

1. Preparation of the Packet

The city clerk shall prepare the packet, which shall include the agenda plus all its corresponding duplicated agenda items. No item shall be considered if not included in the packet, with the exception of a correction or supplement to an item already included in the packet or an item deemed an urgency by the city attorney because of the following circumstances:

a. The subject meets the criteria of “Emergency.”

b. There is a need to take immediate action and that the need for action came to the attention of the City subsequent to the posting of the agenda as required by law.

2. Distribution and Posting of Agenda

The city clerk shall post each agenda of the City Council regular meeting at least72 hours in advance of the meeting and shall post each agenda of a special meeting at least 24 hours in advance of the meeting on the official outside enclosed bulletin board of City Hall, at the website, on KCRT (City channel station), and at a location that is available to the public 24 hours a day. The city clerk shall maintain proof of posting each agenda.

The City Clerk shall also post agendas of all City Council and Standing Committee meetings on the City’s website.

Copies shall also be available free of charge in the lobby of City Hall.

F. Distribution of the Packet

1. 72 or 24 hours prior to said meeting, the City Council agenda/packet shall be available on the City’s webpage.

2. Matters listed on the printed agenda but for which supporting documentation is not received by the City Council prior to said meeting as part of the agenda packet, shall not be discussed or acted upon. In cases where the good of the City outweighs the lack of time for citizen review or Councilmember evaluation of an item, the Council by a vote of a quorum of the members may waive this rule.

VI. Procedural Matters

A. Motions to Be Stated By Chair

When a motion is made, it shall be stated by the Chairperson or the City Clerk before debate or discussion.

B. Motions Not Open To Debate

Rosenberg’s Rules of Order states that when the following motions are made, the Chair must call for an immediate vote without debate:
14 1. Motion to Adjourn
2 Motion to Recess

3. Motion to fix adjournment

4. Motion to table

5. Motion to limit debate a.k.a “Call the question” requires a majority vote.

6. Motion to close nominations requires a majority vote

7. Motion to object to consideration; this prevents debate on an item and requires a majority vote

C. Rules of Debate

(1) Presiding Officer May Debate. The presiding officer may debate from the chair, subject only to such limitations of debate as are by these rules imposed on all members, and shall not be deprived of any of the rights and privileges as a member of the Council by reason of his/her acting as the presiding officer.

2) Getting the Floor - Improper References to be Avoided. Every member desiring to speak shall address the Chair, and upon recognition by the presiding officer, shall confine himself/herself to the question under debate.

3) Interruptions. A member, once recognized, shall not be interrupted when speaking unless it is to call him/her to order, or as herein otherwise provided. If a member, while speaking, be called to order, he/she shall cease speaking until the question of order be determined, and, if in order, he/she shall be permitted to proceed.

4) Privilege of Closing Debate. The Councilmember moving the adoption of an ordinance or resolution shall have the privilege of closing the debate. When a motion to call a question is passed, the Councilmember moving adoption of an ordinance, resolution or other action shall have three minutes to conclude the debate.

5) Suspension of the Rules (as per Rosenberg’s Rules) requires a 2/3 vote of the Council.

6) Repeal or Amendment of Action Requiring a Vote of a Quorum, Two-Thirds, or Greater of Council. Any ordinance or resolution which is passed and which, as part of its terms, requires a vote of a quorum, two-thirds or more of the Council in order to pass a motion pursuant to such an
ordinance or resolution, shall require the vote of the same percent of the Council to repeal or amend the ordinance or resolution.

D. Motion to Table

A motion to table shall preclude all amendments or debate of the subject under consideration. If the motion shall prevail, the consideration of the subject may be resumed only upon a motion of a member voting with the majority and with consent a majority of the members present.

E. Addressing the Council After Motion Made

When a motion is pending before the Council, no person other than a Councilmember shall address the Council without first securing the permission of the Mayor or Meeting Chair to do so.

F. Continuance of Items

At the Mayor’s sole discretion, the mayor may continue any item placed on a regular meeting agenda for a period of up to two weeks. The Council may override an action taken by the mayor to continue an item by the affirmative vote of a majority of the Council (Article III-A, Section 1 (e), Charter of the City of Richmond).

Tab 13

City Attorney’s Office
Overview

Councilmember
Orientation Guide

CITY ATTORNEY’S OFFICE

2 NEW COUNCILMEMBER

ORIENTATION GUIDE

TABLE OF CONTENTS

1. INTRODUCTION TO THE CITY ATTORNEY’S OFFICE

2. SUMMARY OF BROWN ACT AND COMMON LEGAL ISSUES FOR

COUNCILMEMBERS
❖ Brown Act
❖ Agendas
❖ Action Taken by a Legislative Body
❖ Meetings
❖ Public Participation
❖ Closed Sessions
❖ Penalties for Failing to Comply with the Brown Act
❖ Conflicts of Interest Under Political Reform Act of 1974 ❖ Conflicts of Interest in the Making of Contracts
❖ Incompatible Offices
❖ Parliamentary Procedures

3. PERSONAL LIABILITY FOR ACTS OF OFFICERS AND EMPLOYEES OF THE CITY

4. CONFLICTS OF INTEREST LAWS

5. ETHICS LAW PRINCIPLES FOR PUBLIC SERVANTS:

KEY THINGS TO KNOW

6. FINANCIAL MANAGEMENT FOR ELECTED OFFICES:

QUESTIONS TO ASK

7. UNDERSTANDING THE BASICS OF PUBLIC SERVICE ETHICS

8. ROSENBURG’S RULES OF ORDER
3 CONTACT US:

City Attorney
David J. Aleshire, City Attorney
Office: (510) 620-6509
Email: [email protected]

Secretary: Karen R. Becker
Email: [email protected]

Shannon Moore, Chief Assistant City Attorney
450 Civic Center Plaza
Richmond, CA 94804
Office: (510) 620-6505
Email: [email protected]

James Atencio, Senior Assistant City Attorney
450 Civic Center Plaza
Richmond, CA 94804
Office: (510) 620-6504
Email: [email protected]

Alan Cohen, Senior Assistant City Attorney
450 Civic Center Plaza
Richmond, CA 94804
Office: (510) 620-6709
Email: Alan_cohen@ci. richmond.ca.us

Stephanie Vollmer, Deputy City Attorney
450 Civic Center Plaza
Richmond, CA 94804
Office: (510) 620-6506
Email: [email protected]

Administrative Support: Crystal Shanklin
Direct: (510) 620-6510
Email:Crystal_Shanklin@ci. richmond.ca.us

Zena Battle
Direct: (510) 620-5501
Email: [email protected]

SUMMARY OF BROWN ACT AND COMMON

LEGAL ISSUES FOR COUNCILMEMBERS

OVERVIEW OF BROWN ACT, CONFLICTS OF INTERESTS,

INCOMPTABILE OFFICES AND PARLIAMENTARY PROCEDURES

City of Richmond
David J. Aleshire, City Attorney
October 2022
This overview memorandum provides a summary of the Brown Act ( “Open Meeting Law” ), conflicts of i nterest under the Political Reform Act and in contracts, incompatible o ffices, and parliamentary procedures. Many of the issues discussed (especially conflicts of interest) can be potentially complex. Specific situations may be unique and require individualized analysis. Please refer to detailed memorandum entitled “Conflict of Interest Laws” from City Attorney’s Office for further details on, and a more robust discussion of, conflicts of interest laws discussed in this summary. Your city attorney is available to answer any legal questions or concerns you may have.

A. BROWN ACT - “OPEN MEETING LAW” (Government Code § 54950 et seq.)

1. The Brown Act requires all meetings of legislative bodies and advisory bodies to be open and public, including meetings of:
a. City Council.
b. Commission and committee bodies.
c. Bodies created by formal action to provide an advisory role and/or exercise authority delegated by the legislative body.
d. Note: Also applies to elected officials before they actually assume office. e. Note: Does not apply to (i) bodies of less than a quorum of the legislative body intended to play an advisory role or (ii) meetings of individual members of a legislative body with staff or meetings of staff generally.

2. Agendas:
a. An agenda must include all matters to be transacted or discussed, including topics to be discussed in closed session.
b. No action may be taken if an item is not on the agenda (unless it i s an emergency item).
c. Each item on the agenda must include a brief description, sufficient to inform the public of the nature of each item of business, which allows the Summary of Brown Act and
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public to determine whether to participate. Closed session item descriptions have specified formats. (See #6 below for more on closed session items.) d. Each agenda must be conspicuously posted 72 hours prior to the meeting in a place readily accessible to public. Special or emergency meetings agendas do not require 72-hour notice. (See #4(h-i) below.)
e. Each agenda must include a reasonable period of time for public comment before or during consideration of an agenda item, although there is no requirement to allow separate public comment immediately before each specific item. Comments can also be made on items of interest to the public and within the subject matter jurisdiction of the agency. f. The legislative body may add an item to the agenda when the immediate need to act arose subsequent to the posting of the agenda and if there is a 2/3 vote of the body or a unanimous vote if less than 2/3 of the body are present.
g. No discussion may be had of any item not on agenda except: a brief response to statements or questions from members of public; asking questions for clarification; providing refer ence to staff or other resources for factual information; requesting staff to report at subsequent meeting on any matter; or directing staff to place a matter on a future agenda.

3. Action taken by a legislative body:
a. Includes a collective decision, or a promise to make one, by a quorum. b. Includes an actual vote by a quorum upon a motion, proposal, resolution, ordinance, or order.
c. No preliminary or final action may be taken by secret ballot on public agenda items.

4. Meetings:
a. A meeting takes place if a quorum of the legislative body receives information on, discusses, or deliberates on any item on which the body may legally act.
b. Includes communication by email, phone, texting, fax, or similar means to develop a collective concurrence as to action to be taken. c. Serial and rotating meetings or polling are prohibited, but social gatherings are permitted if the business of the legislative body is not discussed. d. Does not include (with conditions) a quorum in attendance at a conference open to public or at public meetings organized by a person or agency other than the local agency to address a topic of local concern. e. Must generally be held within the boundaries of the agency, i.e., “retreats” not permitted.

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f. A regular meeting may be adjourned to a specified new date, place, and time. If the new meeting date is within 5 days, no new agenda posting is required.
g. Regular meetings with place and time must be provided by ordinance, resolution, or bylaws.
h. A special meeting must be called by the presiding officer or a majority of members with 24-hour notice to all media requesting such notice, written notice to each member and notice to the public.
i. Emergency meetings may be called when a quorum determines that an emergency severely impairs pu blic health and safety. One-hour notice of the meeting must be given to media.
j. Remote attendance at meetings is allowed only under one of the following circumstances (and certain procedural details apply):
(1) During a declared state of emergency, where the Council has approved by a majority vote that meeting in person would be a threat to public safety. Must be renewed every 30 days (sunsets January 1, 2024); or, (2) One or more members of the Council (but less than a quorum) have “just cause” for not attending the mee ting in person (childcare or family caregiving need, contagious illness, physical or mental disability need, or travel while on official public business) and such absence is limited to no more than 2 meetings per year (effective January 1, 2023); or, (3) One o r more members of the Council (but less than a quorum) experience an emergency circumstance (a physical or family medical emergency that prevents in -person attendance) and such absence is limited to less than 3 consecutive months or 20% of regular meetings (effective January 1, 2023); or,
(4) One or more members of the Council may appear remotely if properly noticed on the agenda and the remote location is open and accessible to the public. At least a quorum shall participate within the boundaries of the City.

5. Public Participation:
a. Any member of the public may attend an open meeting. The legislative body cannot require an attendee to provide his name or address or impose other conditions on attendance or public comment.
b. The agency may not prohibit public critici sm of policies, procedures, programs, services, acts, or omissions of the agency.
c. The public may record the proceedings by video, film, or audiotape, unless the body finds that the recording constitutes a persistent disruption through noise, illumination, obstruction of view, etc.

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d. An individual or group may be removed from a meeting only if a warning has been given and the disruption is such that it impedes the orderly conduct of the meeting.

6. Closed Sessions:
a. Closed sessions are meetin gs conducted in private without the attendance of the public or press.
b. Closed sessions may only be conducted when authorized by law. c. Most common reasons for closed session meetings:
• Pending Litigation:
o Adjudicatory proceeding.
o Initiation of litigation - when a case has been filed against the agency, or when the agency has decided or is deciding to initiate a lawsuit , or when litigation has been formally initiated.
o Exposure to litigation - applies only under specified circumstances.
• Real property negotiations - the agenda description must identify the property involved, the parties negotiating, and the general issues. • Labor negotiations.
• Personnel matters.
d. The agency’s available funds, funding priorities, or budget may not be discussed in closed session.
e. Requirements for closed session meetings:
• 72-hour notice should be provided for regular closed sessions. • The agenda description must be in a specific format and the item must be announced in open session, in advance of the closed session. • Immediately after the closed session, the legislative body must reconvene in open session and make any required disclosure. • The legislative body may designate someone to keep minutes during a closed session meeting.

7. Penalties for failing to comply with the Brown Act:
a. It is a misdemeanor to take action on an item with the intent to deprive the public of information.
b. Injunction, mandamus, and declaratory relief are available to cure Brown Act violations.
c. A decision made in violation of the Brown Act may be voided.

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d. A person alleging a Brown Act violation must demand corrective action within 90 days from the date that the action was taken, or within 30 days if the action was taken in open session but in violation of agenda requirements. e. A challenged action will not be upheld if a person challenging notice provisions had actual notice at the appropriate time.

8. Note: Emails or other writings containing information relating to the conduct of the public’s business are public records. Other types of public records generally include:
a. All writings distributed to the legislative body by any person in connection with matter subject to discussion or action at a public meeting. b. Final documents approved in closed session.
c. Any tape or film record of an open meeting made by or at the direction of the legislative body.

B. CONFLICTS OF INTEREST UNDER POLITICAL REFORM ACT OF 1974 (Government Code § 81000 et seq.)

1. Each agency must adopt Conflict of Interest Code.
a. The code must list all officers who must report (those making or influencing decisions).
b. The code must include the following disclosure categories:
• Real property income, investments, and business interests.

2. Statements of economic interest must be filed pursuant to Code: file when you enter office, annually, and when leaving office.

3. Generally, the Political Reform Act prohibits a public official from participating in or attempting to use influence to affect decisions which affect financial interests. a. Procedure. If a public official has a disqualifying interest, then she or he must, immediately prior to the consideration of the matter:
i. publicly identify the financial interest that gives rise to the conflict; ii. recuse herself or himself from discussing and/or voting on the matter; and
iii. leave the room until after the discussion, vote, or other disposition of the matter.
* If an official leaves a meeting in advance of the agenda item in which the official is disqualified, the official must publicly identify the agenda item and the financial interest prior to leaving the meeting. * An official first joining a meeting after the consideration of an agency item in which the official is disqualified must publicly identify the agenda item and the financial interest immediately upon joining the meeting.

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b. Acting as Member of the General Public. The official may, however, make a public appearance before the body or board as a member of the general public, but only to represent herself or himself on matters related solely to the official’s personal interests.
c. “Legally Required” Exception. There is an exception to the general rule that allows a public official to participate if her or his participation is “legally required.” This exception is narrowly construed and applies only if there is no alternative source of decision. This exception may not be used simply to break a tie amongst non -conflicted members and may not be used if a quorum of non-conflicted members may be convened. The FPPC provides detailed procedures that must be followed for the “legally required” exception to apply, and it is advised that you should seek counsel from your city attorney before application of this procedure.

4. A conflict of interest will exist if the official has an economic interest in the decision and all the following occur:
a. It is reasonably foreseeable that the decision will affect the Councilmember’s economic interest.
b. The effect of the decision on the Councilmember’s economic interest will be material.
c. The effect of the decision on the Councilmember’s economic interest will be distinguishable from its effect on the public generally. * There are extensive rules and statutes that govern application of above rules.

Councilmembers are encouraged to confer with city attorney when reviewing a potential conflict of interest in a decision.

5. Five basic types of economic interests (includes personal and immediate family):
a. Business Entity. A public official has an economic interest in a business entity in which he or she has a direct or indirect investment worth $2,000 or more; and, a public official has an economic interest in a business entity in which he or she is a director, officer, partner, trustee, employee, or holds any position of management.
b. Real Property. A public official has an economic interest in real property in which he or she has a direct or indirect interest of $2,000 or more. • An interest in property , within 500 feet or less of the property which is the subject of the decision , is considered to be materially affected, unless there is clear and convincing evidence the decision will not have any measurable impact on the official's property. • An interest in property, located more than 500 feet but less than 1,000 feet from the property which is the subject of the decision , is considered to be materially affected if the decision impacts the Summary of Brown Act and
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property’s development potential, income producing potential, and a list of other factors.
• An interest in property, located 1,000 feet or more from the property which is the subject of the decision, is presumed not to be material. Presumption may be rebutted with clear and convincing evidence decision would have a substantial effect on the official's property.
c. Income. A public official has an economic interest in any source of income which aggregates to $500 or more within 12 months prior to the decision. d. Gifts. A public official has an economic interest in any source of gifts to him or her if the gifts aggregate to $520 or more within 12 months prior to the decision.
e. Personal Finances. A public official has an economic interest in a personal measurable financial benefit or loss for him or her (including expenses, income, assets, or liabilities), as well as those of immediate family.

6. Campaign Contributions (effective January 1, 2023 ; for further analysis and discussion - and potential immediate applicability of these new laws to Councilmembers - please see more detailed memorandum from City Attorney’s Office entitled “Conflict of Interest Laws”).
a. Campaign Contributions When Council Decision Pending and Afterwards.

A councilmember cannot accept a campaign contribution of more than $250 from any party or participant (or agent) with a financial interest in City proceeding involving a license, permit, or other entitlement, while proceeding is pending before City Council for decision, and for 12 months after the decision. A violation , after a Council decision is made , can be cured under certain conditions, if contribution returned within 14 days. b. Campaign Contributions 12 Months Before Council Decision . If a councilmember has received a campaign contribution in an amount greater than $250 in the 12 months prior to a decision involving a license, permit, or other entitlement, from a party or participant (or agent) with a financial interest in the decision, then that councilmember cannot participate in the decision. Disclosure at the council meeting required. Participation permitted if contribution returned within 30 days from when the councilmember knows, or should have known, about the contribution and the proceeding.

7. Penalties for violation:
a. Misdemeanor.
b. Removal from office.
c. Decision voidable.

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October 2022
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8. If it is unclear whether a conflict exists, the FPPC will provide a letter opinion.

9. Advise the city attorney of potential conflict early enough to allow the city attorney to provide adequate advice.

C. CONFLICTS OF INTEREST IN THE MAKING OF CONTRACTS (Government Code § 1090)

1. Prohibits a government officer or employee acting in his or her official capacity, from making a contract, or participating in the making of a contract, in which he or she is financially interested. Virtually any involvement in the contract -making process is considered participation in the making of a contract.

2. Financial interests presumptively include:
• Landlord or tenant of contracting party
• Attorney or agent of contracting party
• Supplier of goods or services to the contracting party • Note: A public official has not only his or her own financial interests in a contract but also that of a spouse where he or she stands in the shoes of the spouse for purposes of Section 1090.

3. An officer or employee shall not be a purchaser at any sale or a vendor in any purchase made in his or her official capacity.

4. No conflict of interes t for “remote interests” and “non -interests.” However, the officer or employee must still disclose the financial interest, abstain from influencing the contract -making process, and note the interest in the legislative body’s official records.

5. A disclosure of the conflict does not cure the conflict.

6. The contract will be void and unenforceable and the official will be subject to:
• Criminal and civil penalties
• Potential disgorgement of any consideration received or property acquired in the transaction (Example: Thompson v. Call (1985) 38 Cal.3d 633 [City able to retain title to parcel of land sold and councilmember liable to city for the amount of the purchase price from the sale ($258,000) plus interest]).
• Willful violation of Section 1090 may be punished as a felony.

D. INCOMPATIBLE OFFICES (Common Law Doctrine & Government Code § 1099)

1. Common law doctrine prohibits a single official from holding two public offices with potential overlap in the functions and responsibilities of the two offices.

2. Offices include elected and appointed offices as established by municipal code.

Summary of Brown Act and
Common Legal Issues for Councilmembers
City of Richmond
David J. Aleshire, City Attorney
October 2022
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3. Under Government Code § 1099, incompatibility includes:
• Conflicting supervisory authority.
• Possibility of a significant clash of duties or loyalties between the offices.

4. Remedy: Removal from the first office, of the two offices, assumed.

E. PARLIAMENTARY PROCEDURES
Rosenberg’s Rules of Order (Attached)

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Personal Liability for Acts of Officers and Employees of the City I. INTRODUCTION
As a new member of the City Council , you may be concerned about the extent of your personal liability, as a councilmember, for acts taken by the council or by advisory committee s and City employees. Therefore, we are providing you with a general overview of both state and federal law without reference to any particular set of circumstances.

II. CALIFORNIA GOVERNMENT TORT CLAIMS ACT
From the earliest days of California ’s legal history, public officers and employees have been held personally liable in damages for injuries suffered through malfeasance, omission, or neglect in the performance of their duties. 1 A broad exception to the rule of official liability is the doctrine of offici al immunity for discretionary action. In Lipman v. Brisbane Elementary School District (1961) 55 Cal.2d 224, the Court stated that:
“Because of important policy considerations, the rule has become established that government officials are not personally l iable for their discretionary acts within the scope of their authority even though it is alleged that their conduct was malicious.”2
This statement is an accurate representation of California law as it existed at the time of the Lipman decision. The policy consideration for this immunity is said to be that:
“The subjection of officials, the innocent as well as the guilty, to the burden of a trial and to the danger of its outcome would impair their zeal in the performance of their functions, and it is bett er to leave the injury unredressed than to subject honest officials to the constant dread of retaliation.”3 To paraphrase Judge Learned Hand, it is impossible to know whether the claim is well - founded until the case has been tried. Thus, to require publi c officials to incur the risk of trial would dampen the ardor of all but the most resolute, or the most irresponsible, in the unflinching discharge of their duties.4

1 See, e.g., Lick v. Maddin (1868) 36 Cal. 208.
2 35 Cal.2d at 229.
3 Id
4 Gregories v. Biddle (2d Cir. 1949) 177 F.2d 579, 581.

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In 1963, the California legislature enacted the California Tort Claims Act in response t o the decision of Muskopf v. Corning Hospital District (1961) 55 Cal.2d 211, which is the companion case of the Lipman decision. The effect of the Tort Claims Act was to abolish all common law actions against governments and government officials and emplo yees as they existed prior to the date of enactment and to establish an entirely statutory procedure for claims against public entities, officials and employees. Government Code Section 820 provides that, except as otherwise provided by statute, a public employee is liable for injury caused by his act or omission to the same extent as a private person. The most significant portion of this statement is the “except as otherwise provided by statute. ” The legislature has substantially adopted the discretionary immunity doctrine as set forth in the Lipman case, as well as various other grounds of immunity for governmental officials and employees.

The following is a review of the provisions of the California Tort Claims Act as they pertain to the acts of officers and employees of governmental entities.

1. Execution or Enforcement of Laws.

Government Code Section 820.4 states that a public employee is not liable for his acts or omissions when exercising due care in the execution or enforcement of any law. Nothin g in this section exonerates a public employee from liability for a false arrest or false imprisonment. Note that the exclusion of false arrest or imprisonment does not preclude the application of other immunity statutes which may be applicable.

2. Acting Under Authority of Law.

Government Code Section 820.6 states that if a public employee acts in good faith, without malice, and under the apparent authority of an enactment that is found to be unconstitutional, invalid or inapplicable, he is not liable for an injury caused thereby except to the extent that he would have been liable had the enactment been constitutional, valid and applicable. Due care is not required for the application of this immunity ; “good faith, without malice” is required. This immun ity is somewhat broader than that previously contained in Government Code Section 1955 which applied only to actions pursuant to unconstitutional statutes.

3. Vicarious Liability.

Government Code Section 820.9 states that councilmembers are not vicariously liable for injuries caused by the act or omission of the public entity or advisory body. However, nothing in this section exonerates an official from liability for injury caused by that individual ’s own wrongful conduct.5 Vicarious liability is a device a court may use to impute liability upon one

5 For example, although an elected or appointed official has the same right anyone else has to alert City code enforcement staff about possible code violations, if complaints from a public offici al can be deemed to have produced a legal action of “singling out ” one business or property owner without reasonable justification, the City can be sued for selective enforcement of its laws.

In McClure v. City of Long Beach (2004), a jury awarded a busine ss owner $22.5 million as a result of selective enforcement of municipal codes which resulted in the closing of the business. In the McClure case, Personal Liability for Acts of Officers and Employees of the City

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for the wrongful conduct of another. For example, an employer can be held vicariously liable for the action of his employees in certain circumstances. This section does not allow liability to be imputed to a councilmember for the acts or omissions of the council or other advisory bodies.

4. Adoption of or Failure to Adopt an Enactment.

Government Code Section 821 states that a public employee is not liable for an injury caused by his adoption of or failure to adopt an enactment or by his failure to enforce an enactment. This section is a continuation of a common law doctrine of immunity as set forth in Martelli v. Pollock (1958) 162 Cal.A pp.2d 655; city c ouncilmember immu ne from action as councilmember.

5. Actions, re: Permits, Licenses, Etc.

Government Code Section 821.2 states that a public employee is not liable for an injury caused by his issuance, denial, suspension or revocation of or by his failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order, or similar authorization where he is authorized by enactment to determine whether or not such authorization should be issued, denied, suspended or revoked.

6. Inspections.

Government Code Section 821.4 states that a public employee is not liable for injury caused by his failure to make an inspection or by reason of making an inadequate or negligent inspection of any property other than the property of the public entity employing the public employee, for the purpose of determining whether the property complies with or violates any enactment or contains or constitutes a hazard to health or safety.

7. Malicious Prosecution.

Government Code Section 821.6 states that a public employee is not liable for injury caused by his instituting or prosecuting any judicial or administrative proceeding within the scope of his employment, even if he acts maliciously and without probable cause.

councilmembers, in response to complaints from neighbors, urged code enforcement staff to issue citations an d correction notices to Ms. McClure, who was engaged in the business of operating 6 -bed homes for Alzheimer ’s patients. When Ms. McClure went out of business she filed a lawsuit alleging her civil rights were violated due to selective enforcement.

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8. Entry on Property.

Government Code Section 821.8 states that a public employee is not liabl e for an injury arising out of his entry upon any property where such entry is expressly or impliedly authorized by law. Nothing in this section exonerates a public employee from liability for an injury proximately caused by his own negligent or wrongful act or omission.

9. Money Stolen from Custody.

Government Code Section 822 states that a public employee is not liable for money stolen from his official custody. Nothing in this section exonerates a public employee from liability if the loss was sustained as a result of his own negligent or wrongful act or omission.

10. Misrepresentation.

Government Code Section 822.2 states that a public employee acting in the scope of his employment is not liable for an injury caused by his misrepresentation, whether or not such misrepresentation is negligent or intentional, unless he is guilty of actual fraud, corruption or actual malice.

11. Discretionary Acts.

Government Code Section 820.2 states that except as otherwise provided by statute, a public employee is not l iable for an injury resulting from his act or omission where the act or omission was the result of the exercise of the discretion vested in him, whether or not such discretion is abused. This is basically a restatement of pre -existing California law, as n oted above. Examples of statutes providing for liability, even though discretionary authority may be exercised, are as follows:
a. Dangerous conditions of public property. (Government Code §840.2); b. Willful acts of disaster workers and owners of shelter s or aid stations. (Civil Code §1714.5); and
c. Misrepresentation involving actual fraud or actual malice. (Government Code §822.2).

Government Code Section 820.2 ’s grant of immunity is perhaps the most significant grant of immunity in the Tort Claims Ac t. The most authoritative statement on the distinction between discretionary and ministerial acts is contained in the California Supreme Court case Johnson v. State (1968) 69 Cal.2d 782. The Johnson court made clear that the distinction is controlled principally by the concept of separation of power. The basic purpose of immunity is the assurance of judicial abstention in areas where the responsibility for basic policy decisions has been committed to coordinate branches of government. The Court believed that any wider judicial review would place the Court in the unseemly position of determining the propriety of decisions expressly entrusted to a branch of government and, moreover, the potential that such review might affect the body’s decision-making process.

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The mere classification of an act as discretionary will not provide immunity, however, if the injury results from the negligence of the employee in performing the act rather than from the exercise of the discretion vested in him. 6 For example, in Johnson, the Court held certain state employees liable for their failure to warn a foster mother of a youth ’s propensity for vicious and homicidal behavior when the youth was placed with the foster mother for foster care by the California Youth Authority. T he Court found that the basic policy decision to parole the boy was a discretionary policy consideration entrusted by statute to the California Youth Authority and that the Youth Authority could not be held liable for this decision. The Court further held, however, that in implementing this policy, the state employees acted in such a manner as to constitute a classic case for the imposition of tort liability and that , in view of their negligent performance of the policy as established, the employees were s ubject to liability to the foster mother.

Concurrent with all of the above -listed immunities is the right to be defended and indemnified by the public entity for judgments, compromises, or settlements arising out of an act or omission occurring in the scop e of employment as an employee of the public entity. 7 While this indemnification provision specifically excludes that part of a claim or judgment for punitive or exemplary damages, a 1985 amendment provides for some relief by authorizing a public entity to pay the punitive or exemplary damages part of a judgment if the governing body finds all of the following:
a. The judgment is based on an act or omission of an employee or former employee acting within the course and scope of his or her employment as an employee of the public entity.
b. At the time of the act giving rise to the liability, the employee or former employee acted, or failed to act, in good faith, without actual malice and in the apparent best interests of the public entity.
c. Payment of the claim or judgment would be in the best interests of the public entity.

6 Accord, McCorkle v. City of Los Angeles (1969) 70 Cal.2d 252. 7 Gov. Code § 825.

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III. LEGISLATIVE ACT IMMUNITY
Members of local legislative bodies have complete immunity from liability based on their legislative acts.8 In Kuzinich, an adult entertainment operator sued the county and its board of supervisors claiming violations of his constitutional rights. After the adult entertainment operator’s use permit had expired the county board of supervisors directed their county counsel to file an action to enjoin the operati on of the adult entertainment businesses and adopted , as an emergency measure , an amendment to the zoning ordinances which made the adult business unlawful in the areas they were operating. The federal court of appeals found that immunity existed in regar ds to the passing of the zoning amendment, as a legislative act. The court also considered the board ’s direction to county counsel to initiate a lawsuit an executive act, rather than legislative, giving the board qualified, rather than absolute, immunity.9 The Court in Shoultes v. Laidlaw (6th Cir. 1989) 886 F.2d 114, 117 -118 provides an explanation of the policy basis for this immunity. In Shoultes, a council adopted a zoning ordinance restricting the location of “adult” bookstores and entertainment. T he adult bookstore operator was cited for code violations and fined for violating the ordinance. On appeal, a state court held the ordinance invalid because it had been adopted without following the applicable statutory procedures. The adult bookstore op erator sued the council and mayor under 42 U.S.C.

Section 1983.

The Shoultes court adopted the Supreme Court’s view in Tenney v. Brandlove (1951) 341 U.S. 367, that legislators should not be deterred from “uninhibited discharge of their legislative duty,” especially at the local lawmaker level. 10 The Shoultes court reasoned that the threat of liability might be an even greater deterrent to service at the local level, where the rewards of pay and prestige are generally less than at the federal or state level.11 In sum, councilmembers are completely immune for those actions considered to be legislative acts.

IV. FEDERAL -- CIVIL RIGHTS ACT PROCEEDINGS
The Federal Civil Rights Act, 42 U.S.C. Section 1983, is a powerful legislative remedy (which provides for injun ctive relief as well as compensatory and punitive damages) enacted by Congress for the protection of certain rights “secured by the Constitution and laws ” against infringement by the States.

8 Kuzinich v. County of Santa Clara (9th Cir. 1983) 689 F.2d 1345. 9 Id at 1350.
10 Shoultes, supra, 866 F.2d at p.117.
11 Ibid.

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Section 1983 states:
“Every person who, under color of any sta tue, ordinance, regulation, custom or usage, of any State or Territory, subjects or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.”
Prior to the United States Supreme Court decision in Monell v. New York City Dept. of Soc. Serv. (1978) 436 U. S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611, municipalities were not subject to suit in a 42 U.S.C. Section 1983 Civil Rights action.12 However, the Supreme Court in Monell held:
“Local governing bodies . . . can be sued directly under Section 1983 for monetary, declaratory, or injunctive relief where [the] action that is alleged to be unconstitutional implements or executes a policy statement, ordinance, regulation, or decision officially adopted and promulgated by that body’s officers. Moreover, although the touchstone of the Section 1983 action against a government body is an allegation that official policy is responsible for a deprivation of rights protected by the Constitution, local governments, like every other Section 1983 `person, ’ by the very terms of t he statute, may be sued for constitutional deprivations visited pursuant to governmental `custom ’ even though such a custom has not received formal approval through the body’s official decision-making channels.”13 The question of immunity was addressed in Owen v. City of Independence (1980) 445 U.S. 622, where the United States Supreme Court held that municipalities have no immunity from damages liability resulting from constitutional violations.14 However, at the same time, the Owen court emphasized the ma intenance of a qualified good faith immunity for public officials to avoid an undue chilling effect on the exercise of their decision-making responsibilities.15 As more case decisions are rendered, the contours of liability and immunity under Section 1983 continue to be defined. For example, the landmark decision of Parratt v. Taylor (1981) 451 U.S. 527, requires consideration of the adequacy and availability of remedies under state law before deciding whether a deprivation of life, liberty or property violates due process of law. The decisions of the United States Supreme Court also underscore the significance of a considered inquiry into the purpose and history of the Civil Rights Act, as well as presen t public policy considerations.16

12 Monroe v. Pape (1961) 365 U.S. 167.
13 Monell, 436 U.S. at 690, 56 L.Ed.2d at 635.
14 Id at 657.
15 Id at 653-654.
16 See Smith v. Wade (1983) 461 U.S. 30; Briscoe v. Lattue (1983) 460 U.S. 325; Newport v.

Fact Concerts, Inc. (1981) 453 U.S. 247, 258; Imbler v. Pachtman (1976) 424 U.S. 409, 417.

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The good faith immu nity defense as applied to public officials and employees was qualified in Harlow v. Fitzgerald (1982) 457 U.S. 800. In Harlow, the qualified immunity under the good faith defense was judged according to an objective standard viewed in two parts:

1. Whether the applicable law that the defendant public official purportedly violated was clearly established at the time of the incident;

2. If the law was clearly established, the defendant must then prove; a. That he was not aware of such law and therefore of t he impropriety of his actions; and
b. That the average person in his situation would not have known of such law and therefore that such actions were wrong.

If a defendant public agency or employee fails to establish either of these facts, a good faith defense will fail. The import of the Harlow decision is that a defendant does not have to raise the good faith defense unless the court has found that the relevant law was clearly established when the incident occurred.17
Hundreds of cases have utilized the Ha rlow standard since its inception in 1982.

Examples of such decisions are:

1. Whisenant v. Yuam (4th Cir. 1984) 739 F.2d 160 -- Good faith of police officers and prison officials was no defense to claim that they were deliberately indifferent to pretrial detainee’s serious medical needs where law requiring adequate medical attention is clearly established.

2. Alexander v. Polk (E.D. Pa. 1983) 572 F. Supp. 605(aff ’d by 750 F.2d. 250) -- City officials were protected by qualified immunity from liability in their personal capacities for denial of due process and statutory notice to recipients of benefits under a supplemental food program where issues of entitlement and notice requirements under the priority program were issues of first impression.
(See also Mitchell v. Forsyth (1985) 86 L.Ed.2d 411; U.S. v. Leon (1984) 82 L.Ed.2d 677.) Exhaustion of state remedies is not a prerequisite to bringing an action under Section 1983.18 Additionally, in California, a Section 1983 action is cognizable in state court as well as federal court.19 Notably, neither state governmental tort immunities 20 nor state claims statutes 21

17 Heslip v. Lobbs (E.D. Ark. 1982) 554 F.Supp. 694.
18 Patsy v. Board of Regents (1982( 457 U.S. 496.
19 See Martinez v. California (1980) 444 U.S. 277, 283, fn. 7; Kreutzer v. County of San Diego (1984) 153 C.A.3d 62, 69; Novick v. City of Los Angeles (1983) 148 C.A.3d 325, 330; Bach v. County of Butte (1983) 147 C.A.3d 554, 560.
20 Martinez v. California, supra, 444 U.S. at 284, fn. 8; Guillory v. County of Orange (9th Cir. 1984) 731 F.2d 1379, 1382; Fenton v. Groveland Community Servs. Dist. (1982) 135 C.A.3d 797, 808.

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apply to federal civil rights actions. State courts look to federal law to determine whether the conduct in question is actionable under Section 1983.22 V. FEDERAL -- SHERMAN ANTI-TRUST ACT
Anti-competitive acts of a municipality can give rise to liability under the Sherman Anti- Trust Act. In Parker v. Brown (1943) 317 U.S. 341, the United States Supreme Court created a “state action exception. ” “The basis of the State action exception is the free market principles embodied by the Sherman Anti -Trust Act must give way to the countervailing principles rooted in federalism . . . that states must be free to act upon local concerns, even if these actions have anti-competitive results. ”23 This exception was later expanded to protect municipalities in Community Communications Co. v. City of Boulder (1982) 455 U.S. 40, 51 -52. In Boulder, the Supreme Court held that anti-competitive acts of a municipality that wou ld normally give rise to liability under the Sherman Anti -Trust Act are shielded if the municipality acted pursuant to a “clearly articulated and affirmatively expressed ” state policy to displace competition with regulation.

Therefore, a municipality shoul d not take anti -competitive actions unless the California Legislature has both authorized the municipal action and intended to displace competition with regulation.

The Local Government Anti -Trust Act of 1984 (15 U.S.C. § 34) prevents federal anti- trust claimants from recovering compensatory damages, treble damages, or costs of attorney s’ fees from any local government or from any local government official or employee acting in an official capacity who is found guilty of an anti -trust violation, effectively restricting municipal anti-trust liability to declaratory and injunctive relief.

21 May v. Enomoto (9th Cir. 1980) 633 F.2d 164, 167.
22 Bach v. County of Butte, supra, 147 C.A.3d at 561.
23 Boone v. Redevelopment Agency of City of San Jose (9th Cir. 1988) 841 F.2d 886, 890.

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VI. CRIMINAL SANCTIONS
Governmental officials and employees are, of course, not immune from prosecution for criminal acts committed in the course of official duties or otherwise . The following code provisions specifically relate to actions by governmental officials or employees.

Penal Code Section 182 provides that it is the crime of criminal conspiracy to conspire to commit any act injurious to the public health, to public mora ls, or to pervert or obstruct justice, or the due administration of the law.

Government Code Section 3060 authorizes the prosecution of a public officer for willful or corrupt misconduct in office. The penalty on conviction is removal from office.

Government Code Section 91000 provides that it is a misdemeanor for any person to knowingly or willfully violate any provision of the Political Reform Act. 24 The Political Reform Act prohibits participation in decisions in which the decisionmaker has a financ ial interest and requires disclosure of a decision -maker’s financial interests. A permissible penalty for each violation under this provision is a fine of up to the greater of ten thousand dollars ($10,000.00) or three times the amount the person failed t o report properly or unlawfully contributed, expended, gave or received. Among the civil penalties for violation of this Act is rendering void any affected decision and a $2,000 fine.25

24 Gov. Code § 81000, et seq.
25 See Gov. Code § 91005.5.

CONFLICTS OF INTEREST LAWS

Political Reform Act, Campaign Contributions,
Disclosure Statements, Govt. Code § 1090
and AB 1234 Ethics Training

City of Richmond
David J. Aleshire, City Attorney
October 2022

**The Political Reform Act and underlying FPPC regulations are complex, and each situation is unique and requires individualized analysis. This memorandum is meant as an overview of the regulations to help public official s identify potential financial conflic ts of interests. This paper only provides a summary and is not meant to provide legal advice. Specific questions should be directed to your City Attorney or your personal attorney for a determination of the materiality of a potential conflict of interest well in advance of when a decision needs to be made.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

TABLE OF CONTENTS
I. INTRODUCTION…………………………………………………………………….....1
II. THE POLITICAL REFORM ACT………………………………………………...…..2
A. DISQUALIFICATION……………………………………….…………….……3

1. General Rule………………………………………………………………3

2. Analysis……………………………………………………………………3
i. Step One: Is it reasonably foreseeable that the governmental decision will have a financial effect on any of the public official’s financial interests?...........................................................................4 ii. Step Two: Will the reasonably foreseeable financial effect be material?...........................................................................................5 (a) Financial Interest in a Business Entity…………………….6
(b) Financial Interest in Real Property……………...…….…..6
(c) Financial Interest in a Source of Income………...….…….7 (d) Financial Interest in a Source of Gift……………….……..8
(e) Financial Interest in a Personal Financial Effect.…...…….8 iii. Step Three: Can the public official demonstrate that the material financial effect on the public official’s financial interest is indistinguishable from its effect on the public generally?...............9 iv. Step Four: Is the public official making, participating in making, or in any way attempting to use his or her official position to influence a governmental decision? ………………………………………..10
B. WHAT TO DO IF DISQUALIFICATION…………………………………...10

1. Procedure………………………………………………………………...10

2. Acting as Member of the General Public………………………………...11

3. “Legally Required” Exception…………………………………………...11
C. CAMPAIGN CONTRIBUTIONS.…………………………………………….11
D. DISCLOSURE STATEMENTS…………………………………….…………13

1. Who Must File and When………………………………………………..13

2. What Must Be Disclosed…………………………………………....…...13
i. Real Property Investments……………………………………….14
ii. Income, Gifts and Honorarium…………………………………..14
III. CONTRACTUAL CONFLICTS OF INTEREST (GOVERNMENT CODE SECTION 1090)………………………………………………………….……….….....14
IV. AB 1234 TRAINING………………………………………………………………...…15
V. CONCLUSION…………………………………………………………………………16

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022
1 CONFLICT OF INTEREST LAWS
I. INTRODUCTION
California has a number of laws that affect the role of a public official. For example, some laws require a public official to abstain from participating in certain decisions because of a financial interest that official may have in the outcome of that decision. Some laws prohibit a contract between public agencies and businesses in which a public official has an ownership interest. Also, some laws prohibit officials from holding more than one public office.

The purpose of this paper is to give you a broad overview of some of these laws to better prepare officials and future officials when they are confronted with situations that might pose such issues, which can generally be described as conflicts of interest. This paper does not attempt to provide any specific advice for a specific situation. If you believe that you might have a potential conflict of interest, you should immediately contact your City Attorney or private counsel to request an analysis of your specific situation. Also, the Fair Political Practices Commission (“FPPC”) may give you guidance on such issues.

You should also be aware that the opinion of the City Attorney or your personal attorney that no conflict exists and that you may participate in a matter does not immunize you from action by the FPPC or your local district attorney if such agencies determine that a conflict exists.

In some instances – especially those dealing with potential conflicts of interest involving real property interests – a conflict analysis may require a factual as well as a legal analysis. The factual analysis could include an appraisal of property to determine if the proposed decision would have a material impact on your property and would thus preclude you from participating or voting on that decision. The factual analysis could also involve an investigation of the business entity in which you may have an interest and the effect of the decision on that entity.

The detailed analysis necessary in many cases cannot be provided if you disclose a potential conflict immediately before or during a meeting. In such cases you will most likely be advised not to participate until a proper analysis can be comp leted. The FPPC can provide written advice regarding conflicts of interest which, if followed, will provide immunity from prosecution. 1 However, this process typically takes a significant time to complete.

Therefore, it is essential that if you believe you might have a conflict and desire advice, you should advise your City Attorney or private counsel as soon as possible in advance of the time a matter will be considered so that an appropriate investigation and legal analysis can be made.

1 The FPPC also operates a telephone advice line (1-866-ASK-FPPC or 866-275-3772) and can be emailed at [email protected]. While the advice given by FPPC advisors through this service cannot immunize an official from prosecution, the genera l guidance provided may be useful in assessing potential conflicts of interest. The FPPC also maintains a helpful website at www.fppc.ca.gov.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

2 In addition, do not assume that the City Attorney’s office is familiar with all of the specific facts of your personal financial situation, including all of your investments and those of your immediate family, or your relationships with individuals who may be connected with the project or matter that is being considered.

You should disclose all of this information to your counsel at the earliest possible time prior to consideration of the item so that proper advice can be provided for your specific situation.

Conflicts of interest are analyzed under two distinct sets of statutory regulations.

The first is contained in the Political Reform Act of 1974 (Government Code section 87100 and following) referred to herein as the “PRA” or the “Act,” which regulates all of the official actions of a public official.

The second set of statutes is Government Code sections 1090-1097, which regulate public officials whenever they negotiate or make contracts on behalf of the City.

II. THE POLITICAL REFORM ACT
The Politic al Reform Act addresses conflicts of interest through the disclosure of potential conflicts of interest and the prohibition of participation in the making of decisions which are actual conflicts of interest.

In addition to the provisions of the PRA found in the Government Code, the FPPC has adopted detailed regulations implementing the PRA that are set forth in Title 2, Division 6 of the California Code of Regulations at Sections 18110-18998 (the “FPPC Regs.”).2 The California Attorney General, the FPPC, and the local district attorneys are empowered to enforce the PRA through civil liability and civil penalties as well as criminal sanctions.3 Although the penalties for violations of various provisions of the Act vary, civil penalties are generally based upon the amount of money or value of a gift or contribution not reported, and can be as high as $10,000 or three times the amount not reported, whichever is greater. 4 Generally, criminal violations of the Act are prosecuted as misdemeanors. If convicted, an elected official is generally barred from running for office or acting as a lobbyist for a period of four years.5 Because good faith may sometimes be relevant in determining criminal and civil liability, it is particularly important to seek advice whenever a potential problem appears.6

2 References to FPPC Regulations will be indicated by the following: “FPPC Regs. § ___”; all other references are to the Government Code unless otherwise noted. 3 Sections 91000 and 91001.
4 Section 91000.
5 Sections 91000 and 91002.
6 Section 91001(c).

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

3 A. DISQUALIFICATION

1. General Rule
The Political Reform Act provides that:
“No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.”7 A public official has a financial interest in a decision if it is reasonably foreseeable that the decision will have a material financial effect distinguishable from its effect on the public generally on the official, a member of his or her immediate family, or on any economic interest.8

2. Analysis
The Act prohibits any public official from making , participating in making, or in any way attempting to use his or her official position to influence a governmental decision in which he or she knows or has reason to know he or she has a financial interest. 9 The FPPC has adopted extensive regulations to assist with determining whether a public official has a conflict of interest under the Act. The four steps (FPPC Regs. §18700(d)) used by the FPPC for analysis are:

1. Is it reasonably foreseeable that the governmental decision will have a financial effect on any of the public official’s financial interests?

2. Will the reasonably foreseeable financial effect be material?

3. Can the public official demonstrate that the material financial effect on the public official’s financial interest is indistinguishable from it s effect on the public generally?

4. Is the public official making, participating in making, or in any way attempting to use his or her official position to influence a governmental decision? A conflicts analysis under the FPPC regulations answers each of tho se questions in turn, before proceeding to the next step. For example, if it is not reasonably foreseeable the governmental decision will have a financial effect on a public official’s financial interest, then there is no need to proceed to Step Two of the analysis.

Each of those steps is discussed in more detail, but the FPPC regulations provide certain definitions that are required to effectively engage in the four-step analysis. The FPPC regulations “apply only

7 Section 87100.
8 Section 87103.
9 Section 87100.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

4 to public officials and only to governmenta l decisions that have a financial effect.” 10 “Public official” is defined broadly to include “every member, officer, employee, or consultant of a state or local government agency ,” (with a few exception) .11 “Governmental decision” is defined as “any action taken by a government agency that has a financial effect on any person other than the governmental agency.”12 Finally, “financial effect” is defined as “an effect that provides a benefit of monetary value or provides, prevents, or avoids a detriment of monetary value.”13 i. Step One: Is it reasonably foreseeable that the governmental decision will have a financial effect on any of the public official’s financial interests?
Categories of “financial interests” (these include financial interests of any member of his or her immediate family) are: (1) a business entity with a direct or indirect investment worth at least $2,000, or a business entity in which the public official is a director, officer, partner, trustee, employee or holds any position of management; (2) real property with a direct or indirect interest of at least $2,000 ; (3) a source of income amounting to at least $500 within 12 months before a decision is made ; ( 4) a source of gifts amounting to at least $ 520 within 12 months before a decision is made (through December 2022 - the gift amount is proposed by the FPPC to adjust to $590 starting January 1, 2023 ); and, (5) the publi c official’s personal finances (including immediate family) including expenses, income, assets, or liabilities.14 The clearest way for this step to be met is if the financial interest is the subject of a governmental decision that is before the official or the official’s agency. 15 In that case it is clearly reasonably foreseeable that the decision could have a financial effect on the financial interest.

Examples of a financial interest being the subject of a proceeding include the issuance, renewal, approval, denial, or revocation of any license, permit, or other entitlement to, or contract with, the financial interest, and includes any governmental decision affecting an interest in real property. 16 The analysis becomes more complicated if a financial interest is not explicitly involved in the decision.

A financial effect does not need to be likely to be considered reasonably foreseeable. Rather, it must only be a “realistic probability and more than hypothetical or theoretical.” 17 The FPPC regulations include a non -exhaustive list of factors which should be considered in determining whether a financial effect is reasonably foreseeable:

10 FPPC Regs. §18700(b).
11 FPPC Regs. §18700(c)(1).
12 FPPC Regs. §18700(c)(4).
13 FPPC Regs. §18700(c)(5).
14 Section 87100; FPPC Regs. §18700(c)(6)(A-F)
15 FPPC Regs. §18701(a).
16 Ibid.
17 FPPC Regs. §18701(b)
Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

5 (1) The extent to which the occurrence of the financial effect is contingent upon intervening events.
(2) Whether the public official should anticipate a financial effect on his or her financial interest as a potential outcome under normal circumstances when using appropriate due diligence and care.
(3) Whether the public official has a financial interest that is of the type that would typically be affected by the terms of the governmental decision or whether the governmental decision is of the type that would be expected to have a financial effect on businesses and individuals similarly situated to those business es and individuals in which the public official has a financial interest. (4) Whether the financial effect of the governmental decision on the public official’s financial interest might compromise an official’s ability to act in the best interests of the public.
(5) Whether the governmental decision will provide or deny an opportunity, or create an advantage or disadvantage, for one of the official’s financial interests. (6) Whether the public official has the type of financial interest that would cause a similarly sit uated person to weigh the advantages and disadvantages of the governmental decision on their financial interest in formulating a position.18 If the answer to the Step One question is “No,” then there is no disqualifying conflict of interest under the Act. If the answer is “Yes,” then the analysis must proceed to Step Two. ii. Step Two: Will the reasonably foreseeable financial effect be material? Determining whether a reasonably foreseeable financial effect is material is the heart of a conflict of interest analysis under the PRA and is also the most complicated step. The FPPC regulations have a different standard for determining whether a financial effect is “material” for each of the five specified types of financial interests. The five categories of financial interests are financial interests in: (1) a business entity; (2) real property; (3) a source of income; (4) a source of gifts; and (5) the public official’s personal finances, or the personal finances of a member of his or her immediate family.19 These materiality standards are detailed and complex, and this memorandum provides an overview of the various standards. If any of these financial interests are implicated in a decision, whether you believe it to be material or not, we recommend seeking advice fro m the City Attorney or your private counsel.

18 Ibid.
19 FPPC Regs. §18702(a).

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

6 (a) Financial Interest in a Business Entity
A financial interest in a business entity is materially affected if the business entity is subject to proceedings by the official’s agency. This includes when: (1) the bus iness entity initiates the proceeding (by filing an application, claim, appeal, or other request for action concerning the entity with the official's agency) in which the governmental decision will be made; (2) bids on, or enters into, a contract with the agency, or is identified as a subcontractor on a bid or contract with the agency; (3) offers to sell products or services to the agency ; (4) is the named or intended manufacturer or vendor of any products to be purchased by the agency with an aggregate cos t of $1,000 or more in any 12 -month period ; (5) a pplies for a permit, license, grant, tax credit, exception, variance, or other entitlement from the agency ; (6) i s the subject of any inspection, action, or proceeding under the regulatory authority of the a gency; or (7) i s subject to an action taken by the agency that is directed at the entity.20
A financial interest in a business entity is materially affected if the governmental decision may result in an increase or decrease of the entity's annual gross revenues, or the value of the entity's assets or liabilities, in an amount equal to or more than: (1) $1,000,000; or (2) Five percent of the entity's annual gross revenues and the increase or decrease is at least $10,000.21 A financial interest in a business entity is also materially affected if the governmental decision may cause the entity to incur or avoid additional expenses or to reduce or eliminate expenses in an amount equal to or more than: (1) $250,000; or (2) One percent of the entity's annual gross revenues and the change in expenses is at least $2,500.22
Concerning real property, a financial interest in a business entity is materially affected if the official knows or has reason to know that the business entity has an interest in real property and:
(1) there is clear and convincing evidence the decision would have a substantial effe ct on the property; or (2) the property is a named party in, or the subject of, the decision under FPPC Regs. §§18701(a) and 18702.2(a)(1) through (6).23
(b) Financial Interest in Real Property
A financial interest in real property is materially affected when the relevant governmental decision:
(1) involves the adoption of or amendment to a development plan or criteria affecting the property; (2) determines the real property’s zoning or rezoning (other than a zoning decision applicable to all properties designated in that category), annexation or de-annexation, or inclusion or exclusion from a jurisdiction; (3) involves taxes, fees, or assessments that affect the real property; (4) authorizes the sale, purchase, or lease of the property; (5) involves the issuan ce, denial, or revocation of a land use entitlement; or (6) involves construction of, or improvements to, streets, water, sewer, storm drainage or similar facilities, and the parcel will receive new or improved

20 Ibid.; FPPC Regs. §18702.1(a).
21 Ibid.
22 Ibid.
23 Ibid.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

7 services that provide a benefit or detriment disproportionate to other properties receiving the services.24
Concerning the location of real property, a financial interest in real property is materially affected when the relevant governmental decision: (1) involves property located 500 feet or less from the property line of the parcel unless there is clear and convincing evidence that the decision will not have any measurable impact on the official's property; or (2) involves property located more than 500 feet but less than 1,000 f eet from the property line of the parcel, and the decision would change the parcel ’s: (a) development potential; ( b) income producing potential; (c) highest and best use; (d) character by substantially altering traffic levels, intensity of use, parking, vi ew, privacy, noise levels, or air quality; or (e) market value.25 The financial effect of a governmental decision on a parcel of real property in which an official has a financial interest involving property 1,000 feet or more from the property line of the official's property is presumed not to be material. This presumption may be rebutted with clear and convincing evidence the governmental decision would have a substantial effect on the official's property.26
Concerning the leasing of real property, t he r easonably foreseeable financial effects of a governmental decision on any real property in which a governmental official has a leasehold interest as the lessee of the property is material only if the governmental decision will: (1) change the termination date of the lease; (2) increase or decrease the potential rental value of the property; (3) change the official’s actual or legally allowable use of the property; or (4) impact the official's use and enjoyment of the property.27
Exceptions from these regulations include: (1) a governmental decision solely concerning repairs, replacement, or maintenance of existing streets, water, sewer, storm drainage, or other improvements28; or (2) the adoption or amendment of a general plan that is not initiated by the public official, identifies only planning objectives or policies, and requires further implementing action by the public official’s agency.29
(c) Financial Interest in a Source of Income
There are two main tests for a disqualifying financial interest in source of income, both applicable, being identifying the specific source and the “nexus test.” As for specific source 30 of income, the reasonably foreseeable financial effect of a governmental decision on an official's financial interest in a source of income is material if any of the following

24 FPPC Regs. §18702.2(a)
25 Ibid.
26 FPPC Regs. §18702.2(b)
27 FPPC Regs. § 18702.2(c)
28 FPPC Regs. §18702.2(d)(1).
29 FPPC Regs. §18702.2(d)(2).
30 FPPC Regs. §18702.3(a)
Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

8 criteria are met: (1) the source is a named party in, or the subject of, the decision including a claimant, applicant, respondent, or contracting party; or (2) the source is an individual and: (a) The decision may affect the individual's income, investments, or other assets or liabilities (other than an interest in a business entity or real property) by $1,000 or more, or (b) The official knows or has reason to know that the individual has an interest in a business entity that will be financially affected under the materiality standards in FPPC Regs. §18702.1, or (c) The official knows or has reason to know that the individual has an interest in real property and: (i) The property is a named party in, or the subject of, the decision as defined in FPPC Regs. §§18701(a) and 18702.2(a)(1) through (6), or (ii) There is clear and convincing evidence the decision would have a substantial effect on the property; or (3) the source is a nonprofit organization and one of the f ollowing applies: (a) The decision may result in an increase or decrease of the organization's annual gross receipts, or the value of the organization's assets or liabilities, in an amount equal to or more than:
(i) $1,000,000, or (ii) Five percent of the organization's annual gross receipts and the increase or decrease is equal to or greater than $10,000, (b) The decision may cause the organization to incur or avoid additional expenses or to reduce or eliminate expenses in an amount equal to or more than: (i) $250,000, or (ii) One percent of the organization's annual gross receipts and the change in expenses is equal to or greater than $2,500, (c) The official knows or has reason to know that the organization has an interest in real property and: (i) The pr operty is a named party in, or the subject of, the decision under FPPC Regs. §§18701(a) and 18702.2(a)(1) through (6), or (ii) There is clear and convincing evidence the decision would have a substantial effect on the property; or (4) The source is a business entity that will be financially affected under the materiality standards in FPPC Regs. §18702.1.

The “nexus test” 31 is that any reasonably foreseeable financial effect on a source of income to a public official or the official’s spouse is material if the decision will achieve, defeat, aid, or hinder a purpose or goal of the source and the official or the official’s spouse receives or is promised the income for achieving the purpose or goal. There are some limited exception s in FPPC Regs. §18702.3(c-d).
(d) Financial Interest in a Source of Gift
A public official has a financial interest in the sources of gifts he or she receives. This financial interest is materially affected when the source is a named party or otherwise identified as the subject of the gov ernmental proceedings, is a member of the official’s immediate family, is an individual that has an interest in a business entity or real property that will be affected under the regulations for those interests, is a nonprofit that will be financially affected under the materiality standards applied to a nonprofit source of income interest in FPPC Regs. §18702.3 , or the source is a business entity that will be affected under the standards governing business entities.32 (e) Financial Interest in a Personal Financial Effect
A public official has a financial interest in the effects of a governmental decision on his or her personal finances, as well as the personal finances of his or her immediate family. As a general

31 FPPC Regs. §18702.3(b)
32 FPPC Regs. §18702.4.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

9 rule, this financial interest is m aterially affected if the decision may result in the official or the official's immediate family member receiving a financial benefit or loss of $500 or more in any 12-month period due to the decision.33 FPPC Regs. §18702.5(b) has a few exceptions.

If the answer to Step Two is “No”, and the financial effect is not material, then there is not a disqualifying conflict of interest under the Act. If the answer is “Yes,” then the analysis must proceed to Step Three.
iii. Step Three: Can the public official demonstrat e that the material financial effect on the public official’s financial interest is indistinguishable from its effect on the public generally? A reasonably foreseeable material effect on a public official’s financial interests does not create a conflict under the Act if the effect on the official’s interest is indistinguishable from its effect on the public generally.34 The effect is indistinguishable from the effect on the public generally if the official establishes that a significant segment of the public is affected, and the effect on his or her financial interest is not unique.35
“Significant segment of the public” is defined as at least 25 percent of all business or non -profit entities, real property, or individuals within the jurisdiction.36 A unique effect on a public official’s financial interest includes a disproportionate effect on: (1) the development potential or use of the official’s real property or on the income producing potential of the official’s real property or business entity; (2) an official’s business entity or real property resulting from the proximity of a project that is the subject of a decision; (3) an official’s interests in business entities or real properties resulting from the cumulative effect of the official’s multiple interests in similar entities or properties that is substantially greater than the effect on a single interest; (4) an official’s interest in a business entity or real property resulting from the official’s substantially greater business volume or larger real property size when a decision affects all interests by the same or similar rate or percentage; (5) a person’s income , investments, assets or liabilities, or real property if the person is a source of income or gifts to the official; or (6) an official’s personal finances or those of his or her immediate family.37 There are also specific rules for certain circumstances, including public services and utilities, general use or licensing fees, limited neighborhood effects, rental properties, required representative interests, states of emergency, and governmental entities.38

33 FPPC Regs. §18702.5.
34 FPPC Regs. §18703(a).
35 Ibid.
36 FPPC Regs. §18703(b).
37 FPPC Regs. §18703(c).
38 FPPC Regs. §18703(e).

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

10 If the answer to Step Three is “Yes,” and the effect on the public official is indistinguishable from the effect on the general public, then there is no disqualifying conflict of interest under the Act. If the answer is “No,” then the analysis must continue to Step Four. iv. Step Four: Is the public official making, participating in making, or in any way attempting to use his or her official position to influence a governmental decision?
If the analysis has proceeded to this final step, and it is reasonably foreseeable that the governmental decision will have a material effect on a financial interest of the public official, then the official cannot make, participate in making, or attempt to use his or her position to influence the government decision.

A public official “makes” a governmental decision if the official authorizes or directs any action, votes, appoints a person, obligates or commits his or her agency to any course of action, or enters into any contractual agreement on behalf of his or her agency. 39 A public official “participates in making” a govern mental decision if the official provides information, an opinion, or a recommendation for the purpose of affecting the decision without significant intervening substantive review. 40 An official can “influence” a governmental decision by contacting or appearing before any official in his or her own agency, or any other agency under the purview of the agency, for the purpose of affecting a governmental decision, or by purporting to make such contact or appearance on behalf of his or her own agency.41 There are exceptions to this step in the analysis, including for ministerial actions, appearances by the official as a member of the general public if the official is appearing on matters related solely to the official ’s personal interests (including real propert y owned entirely, or a business entity either owned entirely or fully controlled), actions by the official relating to his or her terms and conditions of employment, and comments made by the official to the general public or media.42 If the answer to Step Four is “Yes,” then the public official has a disqualifying interest under the Act.

B. WHAT TO DO IF DISQUALIFICATION

1. Procedure
If a public official has a disqualifying interest, then he or she must, immediately prior to the consideration of the matter: (1) publicly identify the financial interest that gives rise to the conflict,

39 FPPC Regs. §18704(a).
40 FPPC Regs. §18704(b).
41 FPPC Regs. §18704(c).
42 FPPC Regs. §18704(d).

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

11 (2) recuse himself or herself from discussing and/or voting on the matter, and (3) leave the room until after the discussion, vote, or other disposition of the matter.43 If an official leaves a meeting in advance of the agenda item in which the official is disqualified, the official must publicly identify t he agenda item and the financial interest prior to leaving the meeting.44
An official first joining a meeting after the consideration of an agency item in which the official is disqualified must publicly identify the agenda item and the financial interest immediately upon joining the meeting.45

2. Acting as Member of the General Public
The official may, however, make a public appearance before the body or board as a member of the general public, but only to represent himself or herself on matters related solely to the official’s personal interests (including real property owned entirely, or a business entity either owned entirely or fully controlled).46

3. “Legally Required” Exception
There is an exception to this general rule that allows a public official to participate if his or her participation is “legally required.”47 This exception is narrowly construed, and applies only if there is no alternative source of decision.48 This exception may not be used simply to break a tie amongst non-conflicted members49, and may not be used if a quorum of non -conflicted members may be convened.50 The FPPC provides detailed procedures that must be followed for the “ legally required” exception to apply, and we advise that you should seek counsel from your City Attorney before application of these procedures.

C. CAMPAIGN CONTRIBUTIONS
Since 1982, the Levine Act has imposed campaign contribution prohibitions upon certain municipal officials like planning commissioners - but it has not (until now) been applied to councilmembers.

Senate Bill 1439 (signed on September 29, 2022; effective January 1, 2023), through amendment of Section 84308 of the PRA, extends these prohibitions to councilmembers, makes changes to the

43 FPPC Regs. §18707.
44 FPPC Regs. §18707(a)(2).
45 Ibid.
46 FPPC Regs. §18704(d)(2).
47 FPPC Regs. §18705.
48 FPPC Regs. §18705(a).
49 FPPC Regs. §18705(c)(1).
50 FPPC Regs. §18705(c)(2).

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

12 affected contribution window, and adds a circumstance in which a violation may be cured . In summary, SB 1439 provides as follows:

1. If an official knows or has reason to know that a party/participant (or agent thereof) has a financial interest in a proceeding involving a “license, permit, or other entitlement,” then the official cannot accept, solicit, or direct a contribution of more than $250 from any party/participant (or agent thereof) while a proceeding is pending before the agency (e.g., before a city council for decision) and for 12 months (originally 3 months) after the decision. This includes any contribution on the official’s own behalf, or on behalf of any other official, or on behalf of any candidate for office/committee.

2. If an official has willfully/knowingly received a contribution in an amount greater than $250 in the 12 months prior to a decision involving a license , permit, or other entitlement in which they know or have reason to know that the party/participant (or agent thereof) has a financial interest in the decision, then the official cannot participate in the decision. This fact would also have to be disclosed on the record of the proceeding. However, participation may be permitted if the contribution is returned within 30 days from the time the official knows, or should have known, about the contribution and the proceeding.

3. A party to a proceeding involving a license, permit, or other entitlement for use must disclose on the record of the proceeding any contribution in an amount of more than $250 made within the preceding 12 months by the party or the party’s agent.

4. A party (or agent thereof) to a proceeding before an agency involving a license, permit, or other entitlement for use may not contribute more than $250 to an official while the proceeding is pending and for 12 months (originally 3 months) after the decision.51 The term “license, permit, or other entitlement” includes entitlements for land use, business licenses/permits, franchises, and contracts (except competitively bid, labor, or personal employment contracts). A violation of these prohibitions is a misdemeanor. The FPPC has further oversight and may also impose fines.

Additionally, certain violations may be cured. If a local elected official accepts, solicits, or directs a prohibited contribution within 12 months after a decision, then the violation can be cured if the contribution (or portion in excess of $250) is returned within 14 days of accepting, soliciting, or directing the contribution, whichever comes latest, and, further, if the local elected official did not knowingly/willfully accept, solicit, or direct the prohibited contrib ution. Records of this cure action must also be kept.

Since SB 1439 does not come into effect until January 1, 2023, the prohibition on accepting contributions in an amount greater than $250 during or after a proceeding/decision is arguably not currently applicable at least up until December 31, 2022. For example, if an official participated in a proceeding on December 6, 2022, then they will arguably be able to accept contributions in

51 Section 84308.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

13 excess of $250 up until December 31, 2022. However, an official’s ability to participate in proceedings occurring on or after January 1, 2023, may be affected by contributions in excess of $250 made during the prior 12 months. For example, if an official accepted such a contribution on December 6, 2022, then they will arguably not be able to participate in a proceeding on January 1, 2023, and would, further, be required to disclose the contribution on the record.

Nevertheless, given the newness of SB 1439, the impact of these changes during this interim period is unclear. As such, the conservative approach is to treat SB 1439 as currently applicable to ensure continuity until further clarification is provided (e.g., from the FPPC). The FPPC has adopted regulations under pre-SB 1439 law, but they will likely update these regulations in order to provide further guidance.

D. DISCLOSURE STATEMENTS

1. Who Must File and When
City councilmembers, candidates for the city council, planning commissioners, the city man ager, the city treasurer, the city attorney, public officials who manage public investments and anyone else so required by the City’s Conflict of Interest Code must file conflict of interest disclosure statements, known officially as a “Statement of Economic Interests.”52 Elected officials and most appointed officials must file an “assuming office statement” within thirty (30) days after assuming office. 53 Thereafter, an annual Statement of Economic Interests must be filed no later than April 1 of each year.

The time period covered by each annual statement is January 1 through December 31. If an office is assumed between October 1 and December 31, and an assuming office statement is filed, then the annual Statement of Economic Interests need not be filed until one year later than would otherwise be required.54 Officials must file a final disclosure statement covering the period since the official’s prior statement within 30 days after leaving office.55 The purpose of these filings is to alert public of ficials about their own economic interests and potential areas of conflict in relation to their duties. The filings also provide information to members of the public who may desire to monitor official actions for any conflicts.

2. What Must Be Disclosed
The FPPC provides all forms required for disclosing economic interests. These forms include detailed instructions on filling out the form and on the types of interests which must be disclosed.

Generally, the statements require two types of information:

52 Section 87200.
53 Section 87202.
54 FPPC Regs. Section 18723.
55 Section 87204.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

14 i. Real Property and Investments
All statements must disclose direct and indirect interests in real property located in the City worth over $2,000, excepting the family residence.56 If a property interest is worth more than $2,000, the filer must disclose the name, address and general description or nature of the investment or interest in the real property.57
ii. Income, Gifts and Honorarium
All sources of income aggregating at least $500 (or $50 or more of value if the income was a gift) must be disclosed on the annual and leaving office statements, regardless of whether the money was earned inside or outside the City.

All gift income exceeding $50 must be disclosed by amount and d ate of receipt. 58 If the gift is made from the donor through a middleman to the official, then the donor must disclose his or her identity to the official and the official must name both the donor and intermediary on his or her statement.59
Under Governme nt Code sections 89501 and 89502, all officials subject to the disclosure requirements are prohibited from accepting any honorarium (e.g., the payment for speeches or attendance at public or private events) unless the income is for services which are custo marily provided in connection with the practice of a bona fide business or profession.

NOTE: The rules and regulations relating to disclosure statements are governed by the Government Code and FPPC Regulations. This paper is only meant to provide basic information and your City Attorney or your personal attorney should be consulted if you have any specific questions regarding such disclosure statements.

III. CONTRACTUAL CONFLICTS OF INTEREST (GOVERNMENT CODE SECTION 1090)
Government Code section 1090 prohibits City officers and employees from having financial interests in contracts made by them or by any board or body of which they are members. The term “contract” is used very broadly, however, and applies to any agreement between the City and another party whether written or oral and whether formal or informal.60 Although Section 1090 is otherwise much narrower than the PRA, it does cover some different interests than the PRA and,

56 Sections 87206 and 87103; FPPC Regs. Section 18730.
57 Section 87206.
58 Section 87207(4).
59 Section 87210.
60 In 2002, Attorney General made a broad application of 1090. It found 1090 to apply where a staff member was negotiating a development agreement and the staff member’s spouse was an independent contractor on retainer with the developer (doing community out reach) even though the spouse would not work on the particular project. See Attorney General Opinion No. 01 -601 (March 6, 2002).

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

15 in any situation, a person must act in a manner that satisfies the requirements of both the PRA and Section 1090.

For example, if a member of an agency that authorizes a contract has a financial interest in the contract, the member may avoid a violation of the PRA by abstaining from participation in the decision, but such a bstention will not avoid a violation of Section 1090 unless there is an authorized exception to the statute.

Section 1090 applies in two basic situations. First, if the financially interested City officer or City employee is a member of a board or other bo dy that actually approves the contract (e.g., the city council), the potential conflict prohibits the City from entering into the proposed contract, regardless of whether or not the officer participates in or abstains from the actual decision. Second, if a staff member has a financial interest in a contract with the City, there is a conflict only if that staff member actually participates in the making of the contract. In either case, if such a contract is made, the City (or the other party to the contract) may void it.61 An exception to Section 1090, set forth in Section 1091, provides that “remote” interests in a contract do not create a conflict if the officer or employee (1) discloses his or her financial interest, (2) abstains from any participation in the making of the contract, and (3) the legislative body authorizes the contract in good faith by a sufficient vote without counting the vote of the party with a remote interest. Section 1091 is essentially a laundry list of what constitutes a “remote” interest and such list should be consulted on a case by case basis. Similarly, Section 1091.5 sets forth a number of additional situations where an officer or employee is “deemed” not to have a prohibited interest in a contract.

IV. AB 1234 TRAINING
As a loca l elected official who will be compensated and reimbursed for your service, you are required to take two hours of training in ethics - better known as AB 1234 training (named after Assembly Bill 1234). AB 1234 training will cover general ethics principles relating to pu blic service and ethics laws.
“Ethics laws” are defined as including:

Laws relating to personal financial gain by public officials (including bribery and conflict of interest laws);
Laws relating to office -holder perks, including gifts and travel restrictions, personal and political use of public resources and prohibitions against gifts of public funds; Governmental transparency laws, including financial disclosure requirements and open government laws (the Brown Act and Public records Act); and

61 Section 1092.

Conflicts of Interest Laws
City of Richmond
David J. Aleshire, City Attorney
October 2022

16 Law relating to fair processes including fair contracting requirements, common law bias requirements and due process.

AB 1234 mandates that you receive this training within one year of starting your service and then receive the training every two years after that. Upon completion of your training, you will receive proof of participation. The City Clerk's office will keep your proof of participation on file as a public record subject to disclosure for at least five years.

V. CONCLUSION
The four-step checklist for conflict analysis (on page three of this paper) is very general in nature but should provide a guideline for all public officials to use in determining the basic issues involved as to whether or not a disqualification is required under the Political Reform Act and/or FPPC regulations. Each item on the checklist, however, has numerous issues which need to be addressed in order to make a thorough analysis of any given fact situation.

We hope the above discussion provides a helpful guide to the general requirements of California’s conflict of interest laws. It should again be stressed that this paper is not intended to answer any specific questions with regard to such laws for a specific situation. Therefore, should any specific questions arise, or should you have any questions regarding any issues discussed in this paper, please do not hesitate to contact your City Attorney or personal attorney.

INSTITUTE FOR LOCAL GOVERNMENT 1400 K STREET, SUITE 205, SACRAMENTO, CA 95814 WWW.CA-ILG.ORG Note that the following are not statements of law, but rather principles the law is designed to achieve. The goal in providing this list is to identify the kinds of issues addressed by public service ethics laws. If an issue arises for you under these principles, public officials should consult agency counsel.

ETHICS LAW PRINCIPLES

PERSONAL FINANCIAL GAIN
Generally speaking, public officials:
Cannot request, receive or agree to receive
anything of value or other advantages in exchange
for a decision.
Must disclose their financial interests to the public. Must disqualify themselves from participating in
decisions that may affect (positively or negatively)
their financial interests in a material way.
Cannot have a financial interest in a contract made
by their agency.
Cannot be involved in agency decisions affecting
a potential future employer once the official and
employer each have expressed an interest in a
professional relationship.
Cannot receive compensation to lobby their
agency for one year following their departure from
the agency.

PERK ISSUES: INCLUDING COMPENSATION,

USE OF PUBLIC RESOURCES AND GIFTS
Generally speaking, public officials:
Receive limited compensation for their service to
the public.
Cannot receive compensation for speaking, writing
an article or attending a conference.
May be reimbursed for only those activities and
necessary expenses allowed in the agency’s
expense reimbursement policies.
Cannot use public agency resources (money, travel
expenses, staff time and agency equipment) for
personal or political supplies or purposes.
Cannot send or be featured in mass mailings at
public expense.
Cannot make gifts of public resources or funds.
Must disclose gifts they receive from each
single source that has given gifts worth $50 or
more in a single calendar year through the Form
700 process.
May not receive gifts worth a total of $520
(2021-22 amount) from a single source in a single
calendar year. Note: this amount changes every
two years.
May only accept free trips and travel expenses
under limited circumstances.
May not accept free or discounted transportation
from transportation companies.
May not use campaign funds for personal benefits
not directly related to a political, legislative or
governmental purpose.

Ethics Law Principles for Public Servants:
 KEY THINGS TO KNOW
INSTITUTE FOR LOCAL GOVERNMENT 1400 K STREET, SUITE 205, SACRAMENTO, CA 95814 WWW.CA-ILG.ORG

TRANSPARENCY
Generally speaking, public officials must:
Disclose their economic interests when they take
office, annually while they are in office and when they leave office. These economic interests can include:
sources of income, property owner ship, investments,
certain family mem
bers’ interests, business interests,
loans, contracts and gifts received.
Disclose information about who has agreed to donate
significant resources ($5,000 or more) to legislative,
governmental or c
haritable purposes at an elected
official’s request.
Disclose campaign contributions and abide by
applicable limits.
Conduct the public’
s business in open and publicized
meetings, except for the limited circumstances when
the law allows closed sessions.
Allow the public
to participate in meetings and listen
to the public’s views before making decisions.
Allow public inspection of documents and records
generated, owned, used or retained by public
agencies, except when non-disclosure is specifically
authorized by law.
Disclose gifts given to the public agency and how
they are ultimately used.

FAIR PROCESS AND MERIT-BASED

DECISION-MAKING
Generally speaking, public officials:
Cannot receive loans from other staff, officials or
contractors, and must disclose and comply with
certain requirements for loans from others.
Cannot engage in vote-trading.
Have a responsibility to ensure fair and competitive
agency contracting processes.
Cannot participate in quasi-judicial proceedings in
which they have a bias with respect to the parties
or facts.
Must conduct public hearings in accordance with fair
process principles.
Cannot participate in decisions that will benefit their immediate family (spouse/domestic partner and
dependent children).
Cannot simultaneously hold certain other public
offices or engage in other outside activities that
would subject them to conflicting loyalties.
Cannot participate in entitlement proceedings—such
as those regarding land use permits—involving
campaign contributors (does not apply to elected
bodies).
Cannot solicit campaign contributions of more than
$250 from permit applicants while an application
is pending and for three months after a decision (if
sitting on an appointed body).
Cannot directly solicit agency employees for political support or donations for their political causes.
Cannot retaliate against whistleblowers who report
improper government activities.

KEY CONCEPTS
A public agency’s decision should be based solely on what best serves the public’s interests.

The law is aimed at the perception, as well as the reality, that a public official’s personal interests may influence a decision. Even the temptation to act in one’s own interest could lead to disqualification, or worse.

Having a conflict of interest does not imply that a public official has done anything wrong; it just means that the official has financial or other disqualifying interests.

Violating the conflict of interest laws could lead to
monetary fines and criminal penalties for public officials, and may lead to proceedings to remove the official from office. Don’t take that risk.

ETHICS LAW PRINCIPLES
INSTITUTE FOR LOCAL GOVERNMENT 1400 K STREET, SUITE 205, SACRAMENTO, CA 95814 WWW.CA-ILG.ORG

BASIC RULE
A public official may not participate in a decision —
including trying to influence a decision — if the official has financial or, in some cases, other strong personal interests in that decision. When an official has an interest in a contract, the official’s agency may be prevented from even making the contract.

WHEN TO SEEK ADVICE FROM

AGENCY COUNSEL
The rules are very complex. A public official should talk with agency counsel early and often and when an action
by the public agency may affect (positively or negatively) any of the following:

Income. Any source of income of $500 or more (including promised income) during the prior 12 months to the official or official’s spouse/domestic partner.

Immediate Family. The official’s spouse/domestic partner and dependent children.

Business Management or Employment. An entity for
which the official serves as a director, officer, partner, trustee, employee or manager.

Real Property. A direct or indirect interest in real property of $2,000 or more that the official or official’s immediate family has, including such interests as ownership,
leaseholds (but not month-to-month tenancies) and options to purchase.

Gift Giver. A giver of one or more gifts worth a total of $520 (2021-22) or more to the official in the prior 12
months, including promised gifts.

Lender/Guarantor. A source or guarantor of a loan to the official.

Personal Finances. The official or official’s immediate family’s personal expenses, income, assets or liabilities.

Contract. A contract that the agency is considering entering into, in which the official or a member of the official’s immediate family may have an interest (direct or indirect).

Business Investment. An interest in a business that the official or the official’s immediate family have a direct or indirect investment worth $2,000 or more.

Related Business Entity. An interest in a business that is the parent, subsidiary, or is otherwise related to a business in which the official:
Has a direct or indirect investment worth $2,000 or
more; or
Is a director, officer, partner, trustee, employee or manager.

Business Entity Owning Property. Real property owned
by a business entity or trust of the official.

Campaign Contributor. A campaign contributor of the
official (applies to appointed decision-making bodies only).

Other Personal Interests and Biases. The official has
important, but non-financial, personal interests or biases (positive or negative) about the facts or the parties that could cast doubt on the official’s ability to make a fair decision.

WHAT WILL HAPPEN NEXT?
Agency counsel will advise the official whether 1) the
official may participate in the decision and, 2) if a contract is involved, whether the agency can enter into the contract at all. Counsel may suggest asking either the Fair Political Practices Commission or the California Attorney General’s Office regarding their opinion about the potential conflict.

EVEN IF IT’S LEGAL, IS IT ETHICAL?
The law sets only minimum standards. Officials should
ask themselves whether members of the public will
question whether the officials are acting solely in the public’s interest. If even a perceived conflict exists, officials should consider excusing themselves voluntarily from that particular decision-making process.

ETHICS LAW PRINCIPLES
The Institute for Local Government is the nonprofit
education affiliate of the League of California
Cities, the California State Association of Counties
and the California Special Districts Association.

Its mission is to promote good government at the
local level.

ILG
’s current program areas include:
Leadership and Governance
Public Engagement
Sustainable and Resilient Communities
Workforce and Civics Education
© 2022 by The Institute for Local Government All
rights reserved.

CONTACT US:
1400 K Street, Suite 205
Sacramento, CA 95814
www.ca-ilg.orgINSTITUTE FOR LOCAL GOVERNMENT 1400 K STREET, SUITE 205, SACRAMENTO, CA 95814 WWW.CA-ILG.ORG BEYOND THE LAW:

Ethics and Values
Ethics is what one ought to do in a given situation.

It’s the kind of conduct that would make the world a
better place if everyone engaged in it.
The law provides only minimum standards for
ethical conduct. Just because a course of action is
legal doesn’t mean it is right.
What one ought to do is typically tied to a series of values:
» Trustworthiness
» Respect
» Responsibility
» Compassion
» Loyalty
» Fairness
ILG developed a Good Governance Checklist to help local officials identify ways they can go above and beyond legal requirements to promote public trust and confidence. To access the checklist visit: www.ca-ilg.org/goodgovernance.

AB 1234 TRAININGS
California law requires local officials to periodically receive training on public service ethics laws and principles (AB 1234). ILG offers trainings and self-test options to help local officials comply with this law.

ILG offers two, one-hour self-study exercises as an option for local officials to satisfy AB 1234 requirements. Find out more at: www.ca-ilg.org/ab1234selfstudy.

ILG can also come to your community to train your local officials and staff. Contact ILG at [email protected] for more information on how to schedule an ethics
workshop.

ILG is grateful to the following firms for making this
document possible in 2022:
Best Best & Krieger
Burke Williams & Sorensen, LLP
Colantuono Highsmith & Whatley, PC
Hanson Bridgett LLP
Kronick Moskovitz Tiedmann & Girard
Liebert Cassidy Whitmore
Renne Public Law Group
Richards, Watson & Gershon

ETHICS LAW PRINCIPLES

LOCAL GOVERNMENT 101

Financial Management for Elected Officials:

Questions to Ask

Inside: Key Things to Know About
• Local Agency Financial Policies
• Budget Creation and Monitoring
• Financial Reporting
• Long-Term Financial Planning
• Cash Management and Investments
• Capital Financing & Debt Management
• Purchasing and Contracting Practices
• Finance Terminology (Glossary)

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Introduction

One of an elected official’s most important responsibilities is oversight of agency finances.

Local agency finance can be complex. In addition, local agencies face significant financial constraints in California; this includes revenue instability due to state budget decisions and economic factors, state-mandated activities and procedural restrictions on raising new revenues.

What can elected officials do to exercise the kind of careful fiscal stewardship over taxpayer resources that the community expects?

This guide provides a series of tips and questions to assist elected officials in performing this important function. In reviewing these ideas, it is important to keep in mind that local agencies vary by size, complexity of operation, and scope of activities. As a result, some of the questions and practices described may not make sense for every local agency. For example, as a budget and accounting matter, some agencies perform one function and may therefore have one “fund.” Others may have multiple funds.

This guide is a starting point for conversations between local elected officials and staff. The ultimate goal is to help make sure that everyone is playing their necessary and proper roles as informed and responsible stewards of scarce public agency resources.

Where to Find What

Introduction ................................................................................................. 2 Local Agency Financial Policies and Practices ........................................... 3 Budget Creation and Monitoring ................................................................. 7 Financial Reporting and Accounting.......................................................... 12 Looking Ahead: Long-Term Financial Planning ......................................... 14 Cash Management and Investments ......................................................... 15 Capital Financing and Debt Management ................................................. 17 Purchasing and Contracting Practices ...................................................... 19 Brief Glossary of Financial Management Terms ....................................... 21 Endnotes .................................................................................................. 29

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Local Agency Financial Policies and Practices

Financial policies can provide a solid foundation for sound public agency fiscal practices.

Adopted by the governing body, such policies provide:

• A means through which the governing body can communicate its collective policy judgments and goals to staff, the public and others.

• Direction to staff and standards against which current practices can be measured, and proposals for changes in practices can be evaluated.

Ratings agencies (who assess local agencies’ credit for borrowing) also look at local agencies’ financial policies; well-crafted polices can mean higher rating grades which can translate into lower borrowing costs.

Questions to Ask

Financial Policies

• Does the agency have written financial policies?

• If so, what do they cover? See sidebar on next page for a checklist of possible topics.

• How often does the governing body review them?

• With respect to each policy, is it clear who is responsible for implementing that policy?

• What procedures does management use to make staff aware of such policies? What training does staff receive to allow them to competently implement such policies?

• How does the agency monitor compliance with such policies?

Financial Practices

• Are agency accounting policies and procedures documented in writing?

• What kinds of practices does the agency use (sometimes referred to as “internal controls”) to make sure that the agency has systems for cross checks to minimize the risk of mistakes or maximize the likelihood that misconduct is detected?

• Does agency financial staff participate in relevant professional organizations to keep abreast of developments in the field and best practices?

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• Are agency financial staff familiar with and do they adhere to the codes of ethics applicable to their professions? For example, both the California Society of Municipal Finance Officials1 and the California Municipal Treasurers Association2 have codes of ethics.

Financial Planning Policies.3

• Budget Policy. Such a policy commits to a
balanced operating budget (and defines what
that is) and requires that decision-makers be
alerted when deviations are either planned or
otherwise occur.

• Long-Range Planning. Such a policy
supports financial analysis and strategies to
assess the long- term implications of current
and proposed capital improvement needs,
cost of services, operating budgets, budget
policies, cash management and investment
policies, program and assumptions. For
example, a capital improvement plan enables
the agency details the agency’s plans and
relative priorities for making improvements
to and replacing capital facilities (a process
that normally takes years to complete).
4 Checklist of
Financial Policy Topics5

Local agencies have various—and various
levels—of financial policies. Some policies
relate to big picture, strategic topics (for
example, budget policy, long-range planning
and debt policy); others are very specific and
practical policies (for example, credit card
policies and expense reimbursement).

Having a range of policies (from big picture to
practical and operational) helps an agency to
chart a wise course financially and avoid
operational missteps. Whether a specific
policy makes sense given the nature and scope
of an agency’s operations will vary.

• Asset Inventory. Such a policy requires an up-to-date listing of all major capital assets including. The policy can also require an assessment of asset condition and a plan for replacing assets (sometimes referred to as a “capital plan”). The definition of what constitutes a “major” asset is established by local policy, as is the determination of how often the inventory is to be updated.

• Long-Range Planning for Pension and Other Post-Employment Benefit Costs. Such a policy analyzes how the agency will meet the future costs of agency employee pensions and other employee benefit obligations.

• Reserve and Other Fund Balances. Such a policy enables decision-makers to maintain a prudent level of resources to protect against a need to reduce service levels or increase revenues due to revenue shortfalls or unpredicted one-time expenses. Specific kinds of reserves can also enable an agency to set aside moneys to replace assets (for example, fleet replacement reserves).

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Revenue Policies.6 These policies help decision-makers understand and manage revenue flows.

• Revenue Diversification. Such a policy encourages a diversity of revenue sources to protect the agency against fluctuations in individual sources, such as sales taxes, which can rise and fall dramatically with the general economy.

• User Fees and Charges. Such policies establish the extent to which users of agency services are expected to cover the cost of providing the service and how those costs are determined. Note that most fees may only be used for the purposes for which they were collected and may not exceed the cost of providing the service for which the fee is charged.
7 Such policies also can provide for regular review of fee levels and calculation methods to assure that the agency meets its objectives relating to cost-recovery on an ongoing basis.

• One-Time and Unpredictable Revenues. A goal of such a policy is to encourage the use of one-time or unplanned revenues for one-time needs or reserve replenishment rather than for ongoing expenses.

• Limited Purpose Revenues. By law or policy, certain revenues must be spent for specific purposes (for example, proceeds from special taxes). This policy explains which funds are restricted and why, limits their use to those purposes, and explains how the agency tracks their use to ensure the funds are spent only on permissible expenses.

Expense Policies.
8 These policies enable decision-makers to manage and monitor how the agency incurs expenses.

• Financial Reporting. Financial reports compare actual expense levels (and revenue levels) to those predicted in the agency’s budget. This policy specifies the content and frequency (for example, quarterly) of these reports to decision-makers and the public.

• Debt Financing. This kind of policy allows an agency to specify when it can use debt for either short- or long-term needs. The policy also establishes what levels of debt and debt service payments are appropriate for the agency. It can also be a tool for complying with ongoing disclosure requirements associated with the agency’s debt and monitoring compliance with those requirements.

• Expense Reimbursement. Such policies determine the circumstances under which elected officials and staff may be reimbursed for expenses incurred in the course of their service to the agency. This includes setting limits on certain kinds of expense levels (for example, meals and hotel rates) according to community standards. Policies also specify the kind of documentation that must be provided to demonstrate that the expense was incurred in compliance with the policy before an expense will be reimbursed. Agency counsel should review the policy for compliance with AB 1234 and other state laws. 9 Financial Management for Elected Officials January 2013

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• Credit and Purchase Card Use Policies. The practice of issuing credit cards to agency officials and staff is increasingly rare because of the potential for misuse, either accidentally or intentionally. It can however, be useful to have one or more agency credit cards to make travel arrangements and the like. Some agencies also use purchase cards.

A policy specifies controls to prevent misuse of such cards. 10 • Petty Cash Policies. Such a policy provides guidelines and accountability mechanisms for day-to-day cash handling by the agency and its departments.

Cash Management and Investments. State law requires agencies to adopt an investment policy specifying how the agency may invest funds not needed for the agency’s immediate and short- term needs.
11 Such a policy allows the governing body to establish and keep current the agency’s investment philosophy and risk tolerance. Although well-defined policies are more than a list of allowed investments,12 such policies should be reviewed by agency counsel to make sure that the agency’s investments and practices conform with state law.13

Purchasing/Procurement. These policies determine the processes the agency uses in determining with whom it does business (including under what circumstances contracts are competitively bid) and which staff have decision-making responsibility in that area. Such policies also typically specify how the opportunity to do business with the agency is to be announced, with the goal being to reach

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Budget Creation and Monitoring

Budgets are an agency’s tool for linking near-term goals with the resources available to achieve them, while keeping in mind long-term goals and resources and how the agency’s annual budget fits into its capital plan. Budgeting typically involves:

1. Establishing goals and priorities for the agency;

2. Allocating resources according to those goals and priorities; and

3. Comparing actual expenses and revenues to those estimated in the current budgeted expenses, making adjustments during the course of the budget year as necessary.

As important of a function as budgeting is, decision-makers may find that their options are limited in determining how the agency’s monies are actually spent. The limitations may result from legal restrictions on how funds may be used, matching funds issues (that will result in loss of revenues if the agency does not spend a certain amount), and state mandates.

Budgets play the following roles:

• Financial Plan. The budget document shows where agency revenues come from and how they are used. It demonstrates an agency's ability to meet recurring expenses with recurring revenues. As the fiscal year proceeds, there may need to be adjustments in the agency’s financial plan—the role of el ected officials is to understand why such adjustments were necessary and what steps were taken to avoid having to make these adjustments.

• Communications Tool. The document also is an opportunity to explain to decision-makers, the news media, staff and the public:

 What the agency does and why;

 How the agency is organized to deliver programs and services;

 The kinds of programs, services and activities planned for the budget period and what kinds of costs are involved;

 Key fiscal issues facing the agency; and

 How the agency assesses the efficiency and effectiveness of agency efforts (see also note on performance measurement on page 11).

• Yardstick. Once adopted, local officials and others can use budget numbers as a reference against which to compare expenditures and revenues throughout the year. As such, the budget provides an ongoing financial management tool to make sure the agency spends within its means and balances expenses against revenues.

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The budget document should be easily understood by the average member of the community. To help make this happen, financial information can be presented a variety of ways (including text, tables and charts). Including performance measures in the budget document can help the public see the relationship between costs and benefits.

Because of the public information role the budget document serves, the Government Finance Officers Association recommends that budget documents be shared via the agency’s website. 14 Questions to Ask

Role of Governing Body Members

• Do governing body members have a clear understanding of their role in the budget process?

• Do governing body members have a meaningful opportunity to shape major goals and objectives before the preliminary budget is prepared (for example, in budget workshops conducted sufficiently in advance of the preliminary budget’s preparation)?

• Do governing body members feel like they
have been given an opportunity to understand
and react to key decision points within a
preliminary budget (versus being subjected to
a long, random presentation about numbers)?

General Questions about the
Numbers in the Budget

• What are the budget’s underlying
assumptions (examples of key assumptions
include population changes, projected case
loads or service demands, state and federal
funding, construction activity, utilities costs,
service demands, inflation, and interest
rates)? Are these assumptions realistic?
What are the potential sources of uncertainty
and risks regarding these assumptions?

• Does the budget explain the projections for
the most significant general fund revenue
sources? (These probably account for close
to a large percentage of total general fund
revenues.)

• For agencies providing social services, how
are caseload and benefit costs forecast and
managed?

Budgets Don’t Tell
the Whole Story

Operating budgets and financial reports do
not address many important issues that
decision-makers must consider. For
example, they do not:

• Show postponed or avoided costs (for
example, deferred maintenance on
facilities or infrastructure)
• Use of one-time or expiring revenue
sources.
• Indicate changes in purchasing power
due to inflation or deflation.
• Measure the decline or depreciation of
infrastructure (like roads, bridges and
sewer lines) and public facilities (like
buildings and parks).

Local officials may wish to ask staff to
provide an analysis of how these variables
affect the agency’s ability to deliver
services and facilities.

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• Does the budget summarize major expenses:

o By function or program tied to areas of public service(s) or facilities the agency provides?

o By category? (Examples include capital expenses, debt service, and operating expenses like staffing, contract services, and supplies).

o By fund type? (Examples include the general fund and various enterprise funds, if the agency has special funds).

• Is the budget balanced by one-time fixes or is there a sustainable long-term funding strategy (this is also an issue to be addressed in the agency’s long-term financial planning documents, see page 14)?

• Does the budget clearly show the beginning and ending balances in each fund (fund balances)?

• Is the general fund budget balanced (in other words, are there enough projected revenues to fund estimated expenses)?

• Does the budget use one-time revenues only for one-time expenses (rather than ongoing expenses)?

• Does any fund have a deficit (in other words, is it projected to spend more than it brings in)? Why? Is it the deficit temporary or permanent?

• What are the most significant changes since last year’s adopted budget?

• With respect to the agency’s general fund, how is the fund balance projected to change?

o How are other funds’ fund balances projected to change?

o How will any resulting changes affect the agency’s compliance with its reserve policies?

• Does the budget compare actual expenses and revenues from past years so decision-makers and the public can understand how the agency’s budgeted numbers compared to reality?

• Does the budget show changes in the agency's overall financial condition? What measures of financial condition does it use?

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Local Agency Budgeting:

Resources for Further
Information

Government Finance Officers
Association, Recommended Budget
Practices: A Framework for
Improved State and Local
Budgeting (1998), available at
www.gfoa.org/services/dfl/budget/
RecommendedBudgetPractices.pdf

Institute for Local Government, A
Local Official's Guide to Public
Engagement in Budgeting (2010),
available at
www.ca-ilg.org/public-
engagement-best-
practices/engaging-public-
budgeting.
• How does the agency’s budget compare with other
agencies in the geographic area (both for the next
fiscal year and the trend over the past five years)?

o If there are differences, what are they and what
factors account for the differences? (For
example, are other agencies using different
assumptions and why?)

o Is the agency’s budget dependent on any other
agencies, in terms of revenues (or
expenditures)?

o Are the other agencies planning changes that
should affect the agency’s assumptions?

• Where is the agency in terms of constitutional
limits on state and local spending? (In 1979 the
California voters in 1979 approved a ballot
measure
15 that limited the growth in state and local
spending to a formula tied to increases in
population and inflation. Finance professionals
sometimes refer to this as the “Gann Limit” named after the ballot measure’s sponsor. Local voters can approve an increase in the formula, for a period of up to years. 16)

• If changes to the budget prove necessary during the fiscal year, why are those adjustments necessary? What steps were taken to avoid having to make mid-year changes? What steps can be taken to avoid such changes in the future?

Personnel-Related Questions

• What procedures does the agency use to forecast and manage projected personnel expenses?17 When do labor agreements expire?

• How does the agency set its salary and benefit levels or ranges?

o Are there salary-setting guidelines available for positions within the agency? Has the agency considered and followed them?18

o Does the agency research and consider salaries and benefits other agencies provide for positions with similar responsibilities in the agency’s geographic area?

o How are changes in compensation determined? For unrepresented employees not subject to a memorandum of understanding, are changes based on an annual goal-setting and performance review process? What other variables does the agency consider (overall agency fiscal health, public perception, relationship to other agencies’ practices, etc.)? Financial Management for Elected Officials January 2013

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o Note: If the agency uses employment contracts, carefully consider the potential future fiscal impacts of automatic contract renewals, automatic increases in compensation, and provisions linking compensation increases to third-party contracts. These may hamper the agency’s abilities to control its costs in the future.

• Are position vacancies monitored (including length of each vacancy), to determine if salary savings can be achieved, if position actually required, or if service levels are suffering?

• What is the status of the agency’s funding for pension and other post employment benefits liabilities?

Public Information and Transparency

• What processes will the agency use to inform the public about budget issues? What mechanisms will there opportunities will be provided for public input on budget challenges and priorities?

Are the agency’s budget and supporting documents made available on the agency’s website?19

Note about Performance Measurement
“Performance measurement” (which is sometimes known by other names) enables an organization to assess its performance against organizational goals. This can occur as part of the budgeting process or as part of general management practices involving assessing the degree to which an organization’s activities and priorities are aligned with pursuit of an organization’s mission and strategy. Under either approach, the Government Finance Officers’ Association recommends that performance measurement be linked to budget decision-making. See http://www.gfoa.org/downloads/budgetperfmanagement.pdf

More specifically, performance measurement is a management tool for systematically collecting clearly defined data regarding the effectiveness and efficiency of service delivery. The initial questions for elected officials to ask are:
1) Whether and how the agency uses performance measurement to assess its activities, 2) If the organization uses performance measurement, how is the resulting data analyzed and used in management decision-making (including decisions on allocating resources), and 3) How are those results communicated to elected officials and the community? There are a number of good sources on performance measurement for public agencies, including the International County-City Management Association (ICMA— icma.org/en/results/center_for_performance_measurement/home and the Government Finance Officers
Association (GFOA –
www.gfoa.org/index.php?Itemid=250&id=479&option=com_content&task=view).

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Some Financial Warning Signs

• Operating expenses exceeding revenues
by more than five percent during the year
• Large mid-year variances in budgeted
revenues and expenditures versus actual
• Inadequate or late financial reports
• Depletion of reserves to balance budget,
for example if the reserves fall below ten
percent of operating costs.
• Outstanding loans between funds at the
end of the fiscal year
• Expenses exceeding revenues for two
consecutive years, with the second year’s
deficit being larger than the first year’s
• Debt service exceeds 10 percent of
current revenues
• Increase in debt service as percentage of
operating budget each year
• Qualified auditor’s opinions
• Reports of internal control weaknesses
from the agency’s auditors with no
corresponding plan to address (or
repeated reports of such weaknesses
from year to year)
• Large turnover in staff responsible for
monitoring financial status
Financial Reporting and Accounting

Financial reports are an essential oversight tool. There are two basic kinds of financial reports:

• Interim Reports. These include monthly reports, quarterly reports and mid-year budget reviews.

• Annual Reports. Well-managed public agencies typically prepare a report at the end of the year explaining revenues and expenditures levels.

In addition, local agencies that receive federal or
other grant moneys may be subject to specific
funder financial reporting requirements.
20 Good interim reporting identifies important trends
in time for local officials to act on them before
serious problems arise. Audited financial reports
alert governing body members if there are
irregularities in financial practices and financial
reporting. Both kinds of reports require a solid
financial information system to track revenues and
expenditures and provide that information to
decision-makers.

Questions to Ask

Interim Reporting

• What kind of reports do agency managers
receive? What do they do with them?

• How often do elected officials receive interim
financial reports? Does staff review the
information in these reports with local
officials?

• Do the reports provide meaningful information
that gives local officials an accurate portrayal
of the agency’s current financial picture to
date?

• Do the reports compare expectations with
actual results? Do they discuss key variances
between the two?

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• Are there adverse patterns?

• Does staff have a plan to address problem areas?

• Are there inconsistencies or conflicting trends?

• Do the reports identify areas of uncertainty or risk in any forecasts contained in the reports?

• Do the reports frequently contain surprises (unexpected developments)?

Annual Reporting

• Are the annual financial reports prepared by a certified public accountant, in accordance with generally accepted accounting principles? Are these reports audited by an outside or independent auditor?

• Have all the required disclosures, for example, those required by the Governmental Accounting Standards Board (GASB—sometimes pronounced “gaz -bee”) been made?

• How long has the outside or independent auditor been auditing the agency? Does the agency periodically change auditors every few years to provide a fresh view of the agency’s financial practices and reports?

• What is the relationship between the auditor and both the agency staff and the governing body? Is the auditor getting the information he or she needs in a timely manner? Is communication open and encouraged?

• Are the audited annual financial reports timely—within six months after year -end?

• Should the agency have an audit committee to select and supervise the work of the outside or independent auditor?21

• Are the auditors' opinions “unqualified?” (An “unqualified” opinion means that the auditor concludes the agency followed all accounting rules and that its financial reports present an accurate picture of the agency's financial condition. A qualified opinion is a significant warning sign that demands attention from the governing body.)

• Does the auditor prepare a transmittal letter that clearly and concisely describes the agency's fiscal status?

• Does the auditor issue a letter to the governing body reporting on the agency’ internal controls?

• Does the agency follow the “Award for Excellence in Financial Reporting” guidelines of the Government Finance Officers Association?
22 If not, why not?
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Looking Ahead: Long-Term Financial Planning

• Why Do Fiscal Forecasts? Forecasting helps the agency think about the factors affecting the agency's fiscal health (and what can and cannot be done about them). Forecasting also helps elected officials, staff and the community understand the long- term fiscal challenges and opportunities they face, as well as possible advance warning of future uncertainties (for example, voter initiatives and state budget decisions).

• Recognize Limitations. Circumstances change and assumptions become outdated. Clearly stating the agency’s assumptions in making a forecast encourages the review, and re- evaluation of those assumptions, when necessary.

Questions to Ask

• Does the agency periodically prepare and / or update a long-term fiscal forecast?

• If so, does the forecast take into account key variables relating to revenues and expenses? Variables include demographic factors like changes in population and case loads. They can include economic factors like inflation, new construction, property values and the overall business climate (which can affect sales taxes). Other external factors can include legislative developments and court decisions. Projected costs related to pension obligations and labor agreements are another potential variable.

• Does the forecast reach clear conclusions about what these variables mean for the agency’s future revenues and expenses?

• Does the forecast also identify areas of risk and uncertainty that may limit the degree to which the agency can rely on the forecast?

• To what extent are the results of the forecast shared with decision-makers, the news media and the public?

• What level of detail do decision-makers want to receive regarding the agency’s long-term financial planning? (Some governing bodies will want fairly detailed information whereas others will want bigger picture information. There is not a right level of detail – the goal is to give governing body members the level of detail that makes them comfortable.) Financial Management for Elected Officials January 2013

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Cash Management and Investments

Sometimes, public agencies have funds on hand that are being held for longer-term needs. These may be invested in a variety of bonds (but not stocks), notes and other instruments allowed by state law.

The governing body’s role is to be a wise steward of the public’s resources. The objectives in managing public funds are, in priority order:

1. Safety (the likelihood that the agency will get all its money back)

2. Liquidity (the agency’s ability to withdraw funds on short notice)

3. Yield (the interest or other return on the investment)

In light of these objectives, prudent public agency investment managers never seek to earn maximum returns on the agency's portfolio at the expense of safety or liquidity. This would expose the agency to an unacceptable level of too much risk.

Instead, they focus on seeking to earn a reasonable rate of return on the agency's investments, while preserving capital in the overall portfolio and meeting the cash flow needs of the agency.

There are funds that specialize in investing public agency funds; the Local Agency Investment Fund (LAIF) of the State Treasurer’s office and CalTrust are examples.

Questions to Ask

• What oversight procedures does the agency use for its investments? Who is responsible for the day-to-day supervision of the agency’s investment activities? If that authority has been delegated to the agency’s treasurer, has that authority been delegated annually as required by law?23

• If that authority has been contracted out, who is responsible for oversight?

• What is the agency's investment policy? Is it understandable? Does the governing body review it annually as the law requires?
24 • Do governing body members receive and review periodic investment reports? 25 Do these
reports include an analysis of cash flow needs?

• Are the investment reports clear and understandable? (A lack of clarity can be a sign of problems or undue investment complexity.)

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• Do the reports show numerous investments and transactions? Why? (Many public agencies do not have portfolios that justify “active” management with lots of sales, purchases and trades.)

• Are the agency’s investments diverse or are the agency’s assets invested in just a few places?

• Do the agency’s policies allow investments in derivatives or other potentially high-risk instruments? Does that agency have any such high risk investments?

• Are any bank holdings over the FDIC insurance limit (which may vary from bank to bank) and do such depositories otherwise comply with state and federal standards to provide security for public agency deposits?
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Capital Financing and Debt Management

Debt financing is neither a “bad” nor a “good”—it is simply a tool for achieving community goals. However, debt does come at the price of costs of issuance and interest charges, as well as the obligation to make regular loan payments and conform to market disclosure and terms of the debt instruments on an ongoing basis.
27 Allowing these payments to become a dominant part of the agency’s budget limits the agency’s ability to respond to unplanned expenses.

Debt financing is usually appropriate for:

• Temporary Short-Term Cash Flow Issues. An agency may need to bridge cash flow gaps while waiting to receive key revenues (like property taxes in December and franchise fees in April). The agency may cover these gaps by issuing “tax” or “revenue” anticipation notes (sometimes known by the acronym “TRANs”). In this case, any amount borrowed must generally be paid back within a year.

• Long-Term Improvements. Debt financing is also appropriate for truly high-priority, one- time improvements – when it makes sense for current taxpayers to share the cost with those who will benefit 20 or 30 years in the future. By contrast, borrowing for ongoing operational expenses or short-term capital needs is inadvisable. The length of the debt should never exceed the useful life of the debt-financed asset.

Any agency’s ability to borrow and repay debt capacity is limited. Amounts borrowed for today’s project are funds that cannot be borrowed tomorrow. Amounts required for debt repayment in the future are funds that will not be available for other programs and services.

Recognizing the significance of the decision to incur long-term debt for a public agency, California’s constitution requires the public voters to approve debt 28 that would be repaid from
future general fund revenues.29 While there are a number of exceptions to this requirement (including the special fund doctrine for revenue bonds30 and an exception for financing leases), the constitutional principle is important to keep in mind. Incurring debt obligates the community into the future and reduces financial flexibility. Accordingly, the benefits of doing so should outweigh these costs.
31 Questions to Ask

• Does the agency have a multi-year capital improvement plan? (Having such a plan enables decision-makers to consider key factors like project priorities, debt capacity and what role fees will play in financing).

o If the agency has such a plan, is it realistic? If not, what steps are necessary to make it realistic?

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o If an agency has such a plan, what does the plan not include? For example, does it assume that new development will bear the costs of capital improvements necessitated by that development? If so, the plan should so state.

o Does the multi-year capital improvement plan include specific information about how future maintenance costs will be paid for? It’s not wise to build an asset the agency cannot afford to maintain.

• Does the agency have clear capital financing and debt management policies? Who is responsible for implementing and monitoring compliance with these policies?

o Do these policies provide decision criteria for when incurring debt is appropriate?

o Do these policies address what type of debt financing is appropriate (for example, a) variable versus fixed rates, and b) are interest rate swap agreements allowable and under what circumstances?)

o Do these policies address protection of credit quality?

o Do these policies address debt capacity?

o Do these policies address costs/benefits of risk examinations for proposed debt?

o Do these policies address who is on the agency’s financing team and how consultants like bond counsel, financial advisors, trustees, assessment engineers and underwriters are selected? Are the selection criteria being followed?

o Do these policies address disclosure to and relations with debt rating agencies?

o Do these policies address who is responsible for conformance with bond covenants (obligations the agency agrees to as part of bond financing) on an ongoing basis?

• Does the agency have a debt advisory committee? If so, does the membership of the committee include representatives from the local community? Financial Management for Elected Officials January 2013

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Purchasing and Contracting Practices

Procurement policies and practices enable an agency to promote maximum value and economy for the agency’s constituents through fair and competitive processes. The goal underlying such policies is to select vendors and service providers using processes in ways that minimize opportunities for favoritism and that provide for competitive pricing. For service providers, the task also involves assessing whether the provider’s skills best meet the agency’s needs.

Purchasing presents a number of ethical and legal hazards for local officials, despite what can be a relatively small impact on overall agency spending. This is because missteps can undermine the public’s overall confidence in the agency’s financial practices. For more information, see www.ca-ilg.org/post/fair-procurement
.

For public works projects, state law generally defines when local agencies must use competitive bidding.
32 Questions to Ask

• What steps does the agency use to have a fair, open and competitive purchasing process?

• Does the agency’s purchasing process explain the respective roles of staff and elected officials in that process?

• Have employees involved in the purchasing process received training or informational materials on the importance of both the appearance and substance of fairness in the procurement process?

• Are the purchasing rules straightforward enough so that everyone who has a part in implementing them understands the underlying goals and key rules? One element of clarity can be having separate policies depending on the nature of the purchase (for example, one for goods, one for services and another for public works projects).

• If the agency has a decentralized purchasing system (in other words, if purchase are made separately by different departments), does the agency have clear organization-wide standards and guidelines?

• Does the agency take advantage of cooperative purchasing opportunities with other public agencies?

• Does the agency have policies in place to comply with applicable prevailing wage requirements? These are especially common for vehicles and other big-ticket items.

• Would increased reliance on “just-in-time” deliveries that eliminate large inventories and warehouse systems be useful for the agency?

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• Does the agency have policies in place for the proper disposal of surplus property? How has staff been made aware of such policies?

• Is the agency alert to and actively monitor contract terms for cost escalators and automatic renewals that can cause increases that can cause the agency to lose control of costs?

• Are staff responsible for purchasing decisions required to file annual disclosure statements relating to economic interests and gift receipt (known as “Form 700s”)?

Limits on Agency Expenses/
Proper Uses of Public Resources

Invariably, there are more worthy uses for public funds than there are funds available. Deciding how limited public resources will be allocated is a key responsibility of elected officials, although it is important to acknowledge that decision-makers may have less discretion than one might expect in deciding how public monies are spent.

That being said, the law imposes some basic restrictions on how public resources may be used.

For example, any use of public resources must serve the needs of the agency’s constituents.

California’s Constitution expresses this principle by prohibiting “gifts” of public funds by the Legislature, general law cities, and agencies created by state statute;33 some city charters also contain this restriction. Agency counsel can provide guidance on the issue of what constitutes an impermissible gift of public funds. An example, however, is a payment to another public agency for their purposes, with no benefit flowing back to the donor agency’s constituents.34

Along similar lines, personal or political uses of public resources also are not allowed.35 This prohibition applies to not only public money, but also to anything paid for with public money (for example, agency equipment, supplies and staff time). An example of how this prohibition applies is that public resources may not be used for advocacy efforts on ballot measures. (For more information, see www.ca-ilg.org/BallotMeasureLegalIssues). Elected officials should ask how staff and newly elected officials are made aware of these restrictions.

Finally, local agencies must adopt expense reimbursement policies for elected and appointed officials.36 Agency counsel should review the policy for compliance with state law. Most agencies have adopted expense reimbursement policies for staff as a matter of sound practice.

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Brief Glossary of Financial Management Terms

Note: The following glossary is designed to help non-finance experts understand some of the terminology used in public agency financial management. Public agency financial management frequently involves terms that are unfamiliar to non-experts, the definitions of which also involve other unfamiliar terms. The definitions and explanations offered below sometimes sacrifice technical accuracy in order to promote a general understanding of what a term means.

The Institute for Local Government encourages those that wish absolute technical accuracy to consult additional sources.

Accounting Standards Generally accepted accounting principles (sometimes referred to by the acronym GAAP) published by the
Governmental Accounting Standards Board (sometimes
referred to by the acronym GASB) that guide local and
state agencies’ recording and reporting of financial
information. The standards establish such guidelines as when transactions are recognized and annual financial
report content.

Accrual Basis Accounting An accounting method in which revenues (or income) are entered into the accounting system when they are payable (even though the money may not have been received yet), and expenses are recognized when the commitment to pay
is made (even though no payment may have occurred yet).

Compare with Cash Basis Accounting.

Bond An interest-bearing promise to repay a specified sum of money borrowed (known as the principal amount) by a
specified date. See also “General Obligation Bonds.”
CalTRUST A joint powers authority created by public agencies to provide a safe and convenient method for public agencies to pool their assets for investment purposes.

Capital Budget A spending plan for improvements to or acquisition of land, facilities, and infrastructure. The capital budget balances revenues and expenditures, specifies the sources of revenues, and lists each project or acquisition.

Capital Improvement Program (CIP) The section in the agency’s budget for capital improvement projects, such as street or park
improvements, building construction, and various kinds of major facility maintenance.

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Capital Outlay Spending that results in the acquisition of or addition to the agency’s land, buildings, equipment, machinery,
vehicles, and the like to provide services to the community (sometimes these are referred to as “fixed assets”). .

Cash Basis Accounting An accounting method in which revenues are entered into the agency’s accounting system when the cash is received and spending is entered into the system when the agency makes a payment. To comply with generally accepted
accounting principles, local agencies must use accrual
basis accounting, rather than cash basis. Compare with
"Accrual Basis of Accounting."
Construction / Development Tax A tax imposed on development and/or the availability or use of public agency services. See also “Development
Impact Fees.”

Contingency In budgets, an amount that is set aside to meet unforeseen circumstances.

Debt Financing Issuing bonds and other kinds of debt instruments to finance agency activities in service to the public.

Debt Service Annual principal and interest payments an agency owes on money that it has borrowed.

Debt Service Funds One or more funds in an agency accounting system established to track payments made to repay principal and interest on debt.

Development Impact Fees Amounts charged in connection with land development to pay for facilities or services that will be needed to serve the new development that are tied to the proportionate
costs of providing those facilities or services to that development.

Enterprise Fund A separate fund used to account for services supported primarily by service charges. An example would be a
solid waste fund supported by charges solid waste service receivers pay.

Entitlement Program A benefit program in which funding is allocated according to eligibility criteria. All persons or agencies must meet the criteria specified by federal or state laws in order to receive the benefit.

Estimated Revenue The amount of revenue the agency expects receive during a fiscal year.

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Expenditure An amount paid for goods and services associated with the provision of public services, including payments for debt retirement and capital outlays.

Fee A charge for the cost of providing a particular service.

Public agency fees may not exceed the estimated
reasonable cost of providing the particular service or
facility for which the fee is charged, plus overhead.

Fines, Forfeitures and Penalties Revenues received and/or bail monies forfeited upon when an individual is convicted of a misdemeanor or
municipal infraction.

Full Faith and Credit When a local agency uses debt financing, more specifically general obligation bonds, it makes a pledge to bondholders the agency will use all available funds to
meet the agency’s obligation to repay bondholders.

Full-Time Equivalent (FTE)/Staff Year The number of hours per year that a full-time employee is expected to work. If there are two workers, each of whom works half that number of hours per year, the two workers together equal one full-time equivalent or one staff year.

Fund A self-balancing set of accounts. For agencies with more complex budgets, accounting information is organized
into funds, each with separate revenues, expenditures, and fund balances.

Fund Balance Difference between the assets (revenues and other resources) and liabilities (amounts spent or committed to) of a particular fund.

General Fund Fund used to account for all financial resources except those accounted for in another fund (for example,
enterprise or grant funds). Usually, the general fund is the largest fund in a local agency.

General Obligation (G.O.) Bonds A form of debt in which the agency pledges its “full faith and credit” to collect enough money each year to repay the amount borrowed plus interest.

General Tax A tax imposed for general governmental purposes, the proceeds of which are deposited into the general fund. An agency must comply with certain procedural requirements to impose, increase or extend a general tax, including
securing approval of the tax by majority vote of the
electorate. See also “special tax.”

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Generally Accepted Accounting Principles
(GAAP)
Uniform minimum standards used by state and local
agencies for financial recording and reporting which have been established by the Governmental Accounting
Standards Board (sometimes referred to by the acronym
GASB).

Governmental Accounting Standards
Board (GASB) –
The body that sets accounting standards for governmental entities at the state and local levels.

Grant A payment of money from one entity to another for a specified purpose, activity or facility. Generally, grants do not have to be repaid by the recipient, as long as the
recipient uses the funds for the promised purposes,
activities or facilities.

Intergovernmental Revenue Revenues from other public agencies in the form of grants, entitlements, shared revenues or payments in lieu of taxes.

Investment Earnings Revenue earned from the investment of public funds.

Licenses and Permits These represent the agency’s permission to engage in certain kinds of activities. Local agencies often charge fees designed to reimburse local agency for costs of
regulating activities being licensed, such as licensing of animals, bicycles, etc.

Lien A claim on assets, especially property, for the payment of taxes or utility service charges.

Liquidity The ability to convert a security into cash promptly with minimum risk of principal.

Local Agency Investment Fund (LAIF) A special investment fund in the state treasury into which local agencies may deposit money for investment.

Maintenance of Effort (MOE) A requirement often imposed as a condition of receiving certain kinds of funding, that the agency maintains a
certain level of spending. The goal of such requirement is to have the funding being provided increase the level of spending on the program (and conversely, avoid having
the extra funding be used to replace existing spending).

Mandate A state of federal requirement that local agencies perform a task in a particular way or perform a task to meet a
particular standard, often without providing the revenues to do so.

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One-Time Expenditures A term used to differentiate routine, ongoing costs within a given budget from non-recurring costs that will not be repeated in future years. A capital expenditure can be a one-time expenditure (although an agency may need to
evaluate whether the agency will incur maintenance or
replacement costs. This category may also include single- year appropriations for special purposes.

Other Post Employment Benefits (OPEB) A pension is a form of “post-employment benefit,” that is, a benefit an employee receives after their service to the agency ends. Other forms of such benefits can include
health insurance and other health-related benefits provided to former employees.

Performance Measures Indicators used in the budget to show items such as 1) the amount of work accomplished, 2) the efficiency with
which tasks were completed, and 3) the effectiveness of a program. Such indicators can help the public understand what public agency spending accomplishes.

Portfolio The collection of investments held by a local agency.

Prevailing Wage The basic hourly rate paid on public works projects to a majority of workers engaged in a particular craft,
classification or type of work within the locality and in the nearest labor market area (if a majority of such workers are paid at a single rate). Prevailing wage laws require all bidders to use the same wage rates when bidding on a
public works project.

Principal The original amount of a bond or debt (sometimes also referred to as “face” or “par value”), not including accrued interest.

Program Revenues Income generated by programs and/or dedicated to offset the program’s costs.

Rating Letters and numbers used by rating agencies to express their assessment of the likelihood of a bond or debt being repaid.

Rating Agencies Firms that evaluate the likelihood bonds or debts will be repaid by assigning ratings to those bonds or debts. A
bond rating is often the single most important factor
affecting the interest cost on bonds. There are three major rating agencies for municipal bonds: Moody's
Investors Service, Standard & Poor's, and Fitch Ratings.

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Realignment Actions taken by the State of California in 1991 and 2011 to restructure the state-county fiscal relationship by
making certain health, social service, criminal justice, and mental health service programs county responsibilities, and providing some funding to help pay for the new
responsibilities.

Rents Revenues received through the rental of public properties to private parties such as convention space and library facilities.

Reserve Amounts set aside to provide a funding source for extraordinary or unforeseen expenses or revenue
shortfalls. Sometimes also referred to as “fund
balance(s)” to reflect multiple agency funds. See also definition of “fund.”

Revenue Income received by the local agency. For more
information on sources of county and city revenues, see Institute for Local Government, Understanding the Basics of County and City Revenues (2008), available at
www.ca-
ilg.org/revenueguide.

Revenue Bonds A form of debt in which the agency pledges the income received from the operation of the facilities being financed with the debt to repay the amounts borrowed plus interest.

Salaries and Benefits Salaries includes the compensation paid to full-time, part- time, temporary, and extra-help employees, including
overtime, vacation pay, sick leave pay and any type of
premium pay. Benefits include the agency's share of the costs for health, dental, life insurance, retirement, Social Security and Workers’ Compensation.

Sales Tax A tax imposed on the total retail price of merchandise sold by a retailer.

Secured Roll A list containing all assessed property secured by land subject to local taxation
Securities Pieces of paper (sometimes referred to as “instruments”) that represent financial value. Examples include bonds and stocks.

Service Charges Amounts charged to cover the cost of providing services to individuals or companies.

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Short-Term Financing Methods Techniques used for many purposes, such as meeting anticipated cash flow deficits, interim financing of a
project, and project implementation. Using these
techniques involves issuance of short-term notes.

Special Revenue Fund Funds used to account for proceeds from specific revenue sources that are legally restricted as to how the revenues may be spent. A special revenue fund must have a
separate budget adopted annually.

Tax and Revenue Anticipation Notes
(TRANS)
A short term loan that local agencies use to even out cash flow during the year. The loans take the form of a debt (“note”) that is secured by anticipated tax and other
revenue collections.

Tax Base The objects or transactions to which a tax is applied (for example parcels of property, retail sales, etc.). State law or local ordinances define the tax base and the objects or transactions exempted from taxation.

Tax Rate The amount of tax applied to the tax base. The rate may flat, incremental or a percentage of the tax base, or any other reasonable method.

Total Appropriations and Total Revenues The consolidation of all revenues and expenditures for all funds. The purpose is to report accurately the full amount of governmental revenues and expenditures for the budget period

Use Tax A tax imposed on the use or storage of tangible personal property when sales tax is not paid. See also “sales tax.” User Fee Fees charged for the use of a public service or program.

An example is fees charged to participants in recreation programs. User fees for property-related services are
referred to as property-related fees.

Utility Rate A category of user fee paid by the user of utility services.

Utility Users Tax Tax imposed on the consumer (residential and/or commercial) of any combination of electric, gas, cable
television, water, and telephone services.

Vehicle License Fee (VLF) Annual registration fee imposed on vehicles.

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Williamson Act and Open Space
Subvention
Officially known as the California Land Conservation Act of 1965, a law that allows local agencies to enter into contracts with private landowners to restrict specific
parcels of land to agricultural or related open space use. In return, landowners receive property tax assessments which are much lower than normal because they are based upon
farming and open space uses as opposed to full market
value. The program contemplates local agencies receive
an annual subvention of forgone property tax revenues
from the state.

Yield The total amount of revenue an agency expects to receive from a tax, determined by multiplying the tax rate by the tax base. Also, the annual rate of return on an investment, expressed as a percentage of the investment.

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Endnotes

1 The California Society of Municipal Finance Official Code of Ethics can be found at:
http://www.csmfo.org/index.cfm?fuseaction=Detail&CID=4&NavID=154 .

2 The California Municipal Treasurers Association Code of Ethics can be found at: http://www.cmta.org/?page=4 . 3 GFOA Recommendations: Adoption of Financial Policies, with cross references to National Advisory Council on State and Local Budgeting (NACSLB), http://www.gfoa.org/downloads/budgetAdoptionofFinancialPolicies.pdf .

4 See GFOA website with long-term financial planning resources:
http://www.gfoa.org/index.php?option=com_content&task=view&id=360&Itemid=186 .

5 GFOA Recommendations: Adoption of Financial Policies, with cross references to National Advisory Council on State and Local Budgeting (NACSLB), http://www.gfoa.org/downloads/budgetAdoptionofFinancialPolicies.pdf .

6 GFOA Recommendations: Adoption of Financial Policies, with cross references to National Advisory Council on State and Local Budgeting (NACSLB), http://www.gfoa.org/downloads/budgetAdoptionofFinancialPolicies.pdf.

7 See, for example, Cal. Gov’t Code § 66016.

8 GFOA Recommendations: Adoption of Financial Policies, with cross references to National Advisory Council on State and Local Budgeting (NACSLB), http://www.gfoa.org/downloads/budgetAdoptionofFinancialPolicies.pdf .

9 See Cal. Gov’t Code § 53232.2(b) (“If a local agency reimburses members of a legislative body for actual and necessary expenses incurred in the performance of official duties, then the governing body shall adopt a written policy, in a public meeting, specifying the types of occurrences that qualify a member of the legislative body to receive reimbursement of expenses relating to travel, meals, lodging, and other actual and necessary expenses.”).

See also http://www.leginfo.ca.gov/calaw.html
for additional information on what such policies must include.

10 See GFOA Best Practices: Purchasing Cards, http://www.gfoa.org/downloads/PurchasingCardFINAL.pdf for suggested practices for preventing and detecting abuse.

11 See Best Practices for Treasury Management, Government Finance Review (April 2000), available at http://www.gfoa.org/downloads/CASHTreasuryapr00.pdf. The California Municipal Treasurers’ Association offers sample investment policies at http://www.cmta.org/?page=39.

12 Back to Basics: Making the Case for Investment Policies, Government Finance Review (August 2002) available at http://www.gfoa.org/downloads/CASHInvestPol0802.pdf.

13 See Cal. Gov’t Code §53600 and following (note that an agency is not required to authorize the full range of all investments allowed by state law). See also http://www.leginfo.ca.gov/calaw.html for specific statutory language.

14 GFOA Recommended Best Practice: Using Websites to Improve Access to Budget Documents and Financial Reports (2003), http://www.gfoa.org/downloads/caafr-budgets-to-websites.pdf . See also http://www.gfoa.org/downloads/websitepresentation.pdf.

15 See Cal. Const. art. XIIIB (added by Proposition 4 on the 1979 ballot and sometimes referred to as the “Gann Limit” after the ballot measure’s leading proponent). See also Cal. Gov’t Code § 7900 and following.

16 Cal. Const. art. XIIIB, § 4.

17 See GFOA Recommended Best Practice: Managing the Salary and Wage Budgeting Process (2010), http://www.gfoa.org/downloads/GFOA_ManagingtheSalaryandWageBudgetingProcessBP.pdf .

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18 See, e.g., League of California Cities City Manager Compensation Guidelines, available at http://www.cacities.org/UploadedFiles/LeagueInternet/91/911307cc-e899-43cb-ba97-7d28bf20640c.pdf

19 GFOA Recommended Best Practice: Using Websites to Improve Access to Budget Documents and Financial Reports (2003), http://www.gfoa.org/downloads/caafr-budgets-to-websites.pdf . See also http://www.gfoa.org/downloads/websitepresentation.pdf.

20 See Single Audit Act Amendments of 1996, OMB Circular A-133, the OMB Circular Compliance Supplement and Government Auditing Standards, http://www.whitehouse.gov/omb/financial_fin_single_audit.

21 GFOA Recommendation: Audit Committees (2008),
http://www.gfoa.org/downloads/caafrAudit_Committee_revised.pdf.

22 Available at http://www.gfoa.org/downloads/GENERALPURPOSECHECKLIST.pdf .

23 See Cal. Gov’t Code § 53607.

24 See Cal. Gov’t Code § 53646(a).

25 See Cal. Gov’t Code §§ 53607, 53646(b).

26 See Cal. Gov’t Code § 53630 and following.

27 GFOA Recommendation: Understanding Your Continuing Disclosure Obligations for Debt (2010), http://www.gfoa.org/downloads/GFOA_understandingcontinuingdisclosureBP.pdf .

28 Cal. Const. art. XVI, § 18(a) (“No county, city, town, township, board of education, or school district, shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters of the public entity voting at an election to be held for that purpose, except that with respect to any such public entity which is authorized to incur indebtedness for public school purposes, any proposition for the incurrence of indebtedness in the form of general obligation bonds for the purpose of repairing, reconstructing or replacing public school buildings determined, in the manner prescribed by law, to be structurally unsafe for school use, shall be adopted upon the approval of a majority of the voters of the public entity voting on the propositi on at such election; nor unless before or at the time of incurring such indebtedness provision shall be made for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and to provide for a sinking fund for the payment of the principal thereof, on or before maturity, which shall not exceed forty years from the time of contracting the indebtedness.”) Note that subdivision (b) goes on to provide for additional details relating to school debt.

29 See Rider v. City of San Diego, 18 Cal.4th 1035, 1045 (1998).

30 See, for example, California Housing Finance Agency v. Elliott, 17 Cal. 3d 575, 587 (1976).

31 See generally, GFOA Recommendation: Debt Management Policy (1995 and 2003), http://www.gfoa.org/downloads/debt-management-policy.pdf .

32 For county projects, the threshold for complying with state law relating to public work contracts and bidding procedures is based on population: counties with populations of 500,000 or more ($6,500); counties with populations of 2 million or more ($50,000); and all other counties ($4,000). See Cal. Pub. Cont. Code §§ 20120- 20123. See also Cal. Pub. Cont. Code § 20390- 20409 (relating to work on county roads). For general law cities, public works projects worth more than $5,000 are subject to the state’s competitive bidding requirements. Cal. Pub Cont. Code §§ 20160-20162. The state’s Public Contract Code also has various competitive bidding requirements for special districts based on the kind of district. See Cal. Pub. Cont. Code §§ 20190- 20381.

Financial Management for Elected Officials January 2013

Institute for Local Government www.ca-ilg.org 31

Note that it is a misdemeanor to split projects to avoid competitive bidding requirements. See, e.g., Cal. Pub. Cont.

Code §§ 20123.5, 20163.

33 Cal. Const. art. XVI, § 6.

34 See, for example, Golden Gate Bridge & Highway Dist. v. Luehring, 4 Cal. App. 3d 204 (1970).

35 See Cal. Gov’t Code § 8314; Cal. Penal Code § 424. See also Cal. Gov’t Code § 54964.

36 See Cal. Gov’t Code § 53232.2(b) (“If a local agency reimburses members of a legislative body for actual and necessary expenses incurred in the performance of official duties, then the governing body shall adopt a written policy, in a public meeting, specifying the types of occurrences that qualify a member of the legislative body to receive reimbursement of expenses relating to travel, meals, lodging, and other actual and necessary expenses.”).

See also http://www.leginfo.ca.gov/calaw.html
for additional information on what such policies must include.

Financial Management for Elected Officials January 2013

Institute for Local Government 32
www.ca-ilg.org

Generous support for this publication
provided by:

Aleshire & Wynder, LLP
Best Best & Krieger
Burke Williams & Sorensen, LLP
Hanson Bridgett LLP
Kronick Moskovitz Tiedemann & Girard
Liebert Cassidy Whitmore
Meyers Nave
Renne Sloan Holtzman Sakai LLP
Richards, Watson & Gershon
San Diego Gas and Electric / The Gas Company
Southern California Edison

Financial Management for Elected Officials January 2013

Institute for Local Government 33
www.ca-ilg.org

Acknowledgments

Special thanks to the following individuals whose expertise contributed to the 2010 version of this publication:

Laura Allen, City Manager, Town of Colma
Bob Clary, Administrative Services Officer,
Community Services, County of Sutter
Michael G. Colantuono, Colantuono &
Levin, PC
Michael Coleman, Fiscal Policy Advisor,
League of California Cities
Diane Dillon, Supervisor, Napa County
James N. Fincher, County Counsel, County
of Merced
Mike Garvey, ICMA Senior Advisor
Rick Haffey, County Administrator, County
of Nevada
Jean Hurst, Legislative Representative,
California State Association of Counties
Peter J. Kampa, SDA, General Manager,
Tuolumne Utilities District
Dan Kaplan, Finance Director, Social
Services Agency, County of Alameda
Marlene Kelleher, Finance Manager, Vista
Irrigation District
James Marta CPA ARM, Principal, James
Marta & Company
Chris Marx, County Debt Officer, County
Executive's Office, County of Sacramento
James Morales, Executive Analyst, County
of San Bernardino
Donna Mooney, Senior Assistant City
Attorney, City of Alameda
Randy Murphy, Deputy Director of
Operations, Department of Planning &
Public Works, County of Glenn
Staff from the City of Newport Beach
Kenneth Rozell, Deputy City Attorney, City
of Merced
Catherine Shaw, Management Analyst,
County Administrative Office, County of
San Benito
Bill Statler, Director of Finance and
Information Technology (retired), City of
San Luis Obispo
Ed Tewes, City Manager, City of Morgan
Hill
Hubert "Hub" Walsh, County Supervisor,
County of Merced
Steve Walsh, Principal Administrative
Analyst, County Administrator’s Office,
County of Alameda
Nancy Watt, Chief Executive Officer,
County of Napa

Len Wood, President, Len Wood and
Associates, Rancho Palos Verdes
All decisions about the final content and formatting of this publication were made by the Institute for Local Government.

Financial Management for Elected Officials November 2012

Institute for Local Government 34

www.ca-ilg.org

About the Institute for Local Government

The Institute for Local Government promotes good government at the local level with practical, impartial and easy-to-use resources
for California communities.

The Institute is the research and education affiliate for the California State Association of Counties and the League of California Cities.

The Institute’s current program areas include:

Local Government 101
Public Engagement
Public Service Ethics
Sustainability

Understanding the Basics of

The Institute’s current program areas include:
» Sustainable Communities
» Public Engag
ement
» Ethics and T ranspar
ency
» Local Gov
ernment Basics
» Collaboration and P
artnerships
The Institute is grateful to the following firms for
their commitment to public service ethics:

Aleshire & Wynder LLP
Best Best & Krieger LLP
Burke Williams & Sorensen, LLP
Hanson Bridgett
Liebert Cassidy Whitmore
Meyers Nave Riback Silver & Wilson, PLC
Murphy Austin Adams Schoenfeld LLP
Richards Watson & Gershon
Renne Sloan Holtzman Sakai LLP
Special thanks to the following individuals whose
time and effort contributed to this publication:

Jeff Ballinger, Partner, Best Best and & Krieger
Ruben Duran, Partner, Best Best & Krieger
Martin Gonzalez, Executive Director,
Institute for Local Government
Amit Katzir, Associate, Liebert Cassidy Whitmore
Michael Martello,
Institute for Local Government Volunteer
Colin Roberts, JD, Institute for Local Government
Alysha Stein-Manes, Associate, Liebert Cassidy Whitmore Scott Tiedemann, Managing Partner,
Liebert Cassidy Whitmore
Gary Winuk, Managing Attorney, Kaufman Legal Group
All final decisions about the content, tone and
formatting of this publication were made by the
Institute for Local Government.

Understanding the Basics of Public Service Ethics
© 2016 by the Institute for Local Government
1400 K Street, Suite 205
Sacramento, CA 95814
(916) 658-8208 www.ca-ilg.org
The Institute for Local Government is the nonprofit research affiliate of the League of California Cities, the California State Association of Counties, and the California Special Districts Association. Its mission is to promote good government at the local level.

Understanding the Basics of
Public Service Ethics Laws

CONTENTS
Chapter 1: Introduction 1
What Is an Ethics Law? ....................................................................................................................................................1 Understanding California Ethics La
ws .........................................................................................................................2 The Ke
y Laws to Know ..................................................................................................................................................... 3 Law
s as Minimum Standards ......................................................................................................................................... 3 The Limits of this Inf
ormation ........................................................................................................................................4 Endnotes ............................................................................................................................................................................4 Chapter 2: Personal Financial Gain Laws 5
Receiving Special Favors or Money for Official Actions ...........................................................................................8 Basic Rules .................................................................................................................................................................8 Penalties .....................................................................................................................................................................8 California La
w Penalties ...................................................................................................................................8 Federal P
enalties ......................................................................................................................................................9 Disqualification Based on Financial Int
erests Under the Political Reform Act ................................................... 11 Basic Rules ................................................................................................................................................................ 11 Political R
eform Act – The Four Step Conflict of Interest T est .............................................................................. 13 Identifying Ec
onomic Issues ......................................................................................................................................... 15 What Kinds of Ec
onomic Interests Are a Concern? ....................................................................................... 15 Real P
roperty Interests ......................................................................................................................................... 16 The “P
ublic Generally” Analysis ......................................................................................................................... 17 What Happens if an Official is Disqualified? ................................................................................................... 18 General Rule ..................................................................................................................................................... 18 Effect of Disqualification ............................................................................................................................... 18 Penalties ................................................................................................................................................................... 19 Political R
eform Act Penalties....................................................................................................................... 19 Effect on Agency and Those Affected by ................................................................................................... 19 Agency’
s Decision ........................................................................................................................................... 19 Interests in Agency Contracts Barred ....................................................................................................................... 20 Basic Rules .............................................................................................................................................................. 20 FPPC Jurisdiction ov
er Section 1090 Questions ............................................................................................. 21 Exc
eptions to Rules ................................................................................................................................................22 Non-Inter
est Exception ..................................................................................................................................22 Remote Int
erest Exception ...........................................................................................................................22 Limited Rule of Nec
essity .....................................................................................................................................23 Penalties ...................................................................................................................................................................23 Criminal Penalties ...........................................................................................................................................23 Effect on Contr
act ...........................................................................................................................................23 Employment-R
elated Restrictions ...............................................................................................................................24 Basic Rules ...............................................................................................................................................................24 Penalties ...................................................................................................................................................................24 Endnotes and A
dditional Information ........................................................................................................................25 Chapter 3: Perk Issues, Including Compensation, 27
Use of Public R
esources, and Gift Laws
Compensation Issues .................................................................................................................................................... 29 Basic Rules .............................................................................................................................................................. 29 Counties .................................................................................................................................................................. 29 Special Districts .................................................................................................................................................... 29 Cities ......................................................................................................................................................................... 31 Chart
er Cities ................................................................................................................................................... 31 General La
w Cities .......................................................................................................................................... 31 Local Agency Chief Ex
ecutives and Staff .........................................................................................................32 Special Issue: Speaking and Other F
ees ............................................................................................................33 Basic No-Honoraria Rule ..............................................................................................................................33 Exceptions t
o No-Honoraria Rules ..............................................................................................................33 Penalties ...................................................................................................................................................................33 Reimbur
sement of Expenses ....................................................................................................................................... 34 Basic Rules .............................................................................................................................................................. 34 When May Expenses Be R
eimbursed? ...................................................................................................... 34 Pr
ocess Requirements ................................................................................................................................... 34 Amounts ........................................................................................................................................................... 34 Penalties ...................................................................................................................................................................35 California La
w Penalties ................................................................................................................................35 Federal La
w Penalties .....................................................................................................................................35 Restrictions on Use of Public Resources ....................................................................................................................36 Basic Rules ...............................................................................................................................................................36 No Per
sonal or Political Use of Public Resources .....................................................................................36 No Use of Public R
esources on Ballot Measure Related Activities .......................................................36 Pr
ohibition Against Mass Mailings at Public Expense ............................................................................36 Penalties ...................................................................................................................................................................37 Gifts t
o Public Officials ..................................................................................................................................................38 Basic Rules ...............................................................................................................................................................38 Questions for P
ublic Officials to Ask About Nice Gestures .........................................................................38 Ex
ceptions/Gifts Subject to Special Rules ........................................................................................................39 Special Rules Relating t
o Who Receives the Gift ......................................................................................39 Gifts Subject t
o Special Valuation Rules ....................................................................................................39 Special Rules for C
ertain Sources of Gifts..................................................................................................39 Gestures that Are Part of An Exchange ......................................................................................................39 Additional Special Rules Based on T
ype of Gift ........................................................................................39 Gifts can be: ......................................................................................................................................................39 What to Do About Un
wanted Gifts? ................................................................................................................40 Penalties ................................................................................................................................................................... 41 California La
w Penalties ................................................................................................................................. 41 Federal La
w Penalties ..................................................................................................................................... 41 Income T ax V
iolations ........................................................................................................................................... 41 Use of Campaign Funds ................................................................................................................................................ 42 Basic Rule ................................................................................................................................................................ 42 Penalties .................................................................................................................................................................. 42 Endnotes and A
dditional Information ....................................................................................................................... 43 Chapter 4: T ransparency Laws 49
Economic Interest Disclosure ...................................................................................................................................... 51 Basic Rules ............................................................................................................................................................... 51 Penalties ...................................................................................................................................................................53 Campaign Contribution Disclosur
e ........................................................................................................................... 54 Basic Rules .............................................................................................................................................................. 54 Penalties ...................................................................................................................................................................55 Charitable Fundr
aising Disclosure ..............................................................................................................................56 Basic Rules ...............................................................................................................................................................56 Penalties ...................................................................................................................................................................57 Penalties f
or Extortion under State and Federal Law ...............................................................................57 Honest Services F
raud ....................................................................................................................................57 The Public’
s Right to Access Records ........................................................................................................................ 58 Basic Rules .............................................................................................................................................................. 58 Penalties ...................................................................................................................................................................59 Conducting the P
ublic’s Business in Public .............................................................................................................. 60 Basic Rules .............................................................................................................................................................. 60 Good Ethics Equals Good P
olitics ....................................................................................................................... 61 T ypical C
losed Session Issues ............................................................................................................................ 62 Penalties ...................................................................................................................................................................63 Nullification of Decision ................................................................................................................................63 Criminal Sanctions ..........................................................................................................................................63 Other Consequences ......................................................................................................................................63 The Public’s Right to Participate in Meetings .......................................................................................................... 64 Basic Rules .............................................................................................................................................................. 64 Posting and F
ollowing the Agenda .............................................................................................................. 64 The P
ublic’s Right to Materials Not Included in the Agenda Packet ................................................... 64 Special Issues ......................................................................................................................................................... 64 Electronic R
ecording of Meetings is Allowed ........................................................................................... 64 Sign-In Must Be Voluntary
............................................................................................................................ 64 The Public’s Right to be Heard.....................................................................................................................64 Penalties .................................................................................................................................................................. 66 Nullification of Decision ............................................................................................................................... 66 Criminal Sanctions ......................................................................................................................................... 66 Other Measures .............................................................................................................................................. 66 Pot
ential Civil Rights Violations .................................................................................................................. 66 Endnotes and A
dditional Information ........................................................................................................................67 Chapter 5: Fair Process Laws and Merit-Based Decision-Making 74 The Right to Fair and Unbiased Decision-Makers ...................................................................................................74 Basic Rules ...............................................................................................................................................................74 Effect of V
iolations .........................................................................................................................................................75 Effect on Decision ..................................................................................................................................................75 Due Pr
ocess Violations .........................................................................................................................................75 Vot
e-T rading ....................................................................................................................................................................75 Basic Rules ...............................................................................................................................................................75 Penalties ...................................................................................................................................................................76 Per
sonal Loans .................................................................................................................................................................76 Basic Rules ...............................................................................................................................................................76 Penalties ...................................................................................................................................................................76 Decisions May Not Benefit F
amily ..............................................................................................................................77 Basic Rules ...............................................................................................................................................................77 Penalties ...................................................................................................................................................................77 Re
strictions and Disqualification Requirements Relating to Campaign Contributions ....................................79 Basic Rules ...................................................................................................................................................................

Aff
ected Officials ........................................................................................................................................... 80 Extortion under Calif
ornia and Federal Law .............................................................................................. 81 Kinds of Pr
oceedings Affected ..................................................................................................................... 81 Actions T
hat Must Be T aken ......................................................................................................................... 81 Penalties .................................................................................................................................................................. 82 Agency Staff and Political Activities ...........................................................................................................................83 Basic Rules ...............................................................................................................................................................83 Employment Decisions, Soliciting Suppor
t and Campaign Contributions ..........................................83 Eng
aging in Political Activities During Work Hours or While in Uniform ...........................................83 P
enalties ...................................................................................................................................................................83 Holding Multiple Public Offic
es ...................................................................................................................................83 Basic Rules ...............................................................................................................................................................83 Special Issues ......................................................................................................................................................... 84 Employ
ees Who Run for the Governing Board of Their Public Agency Employers .......................... 84 Individual Agency Guidelines ...................................................................................................................... 84 Penalties .................................................................................................................................................................. 84 Competitiv
e Bidding Processes for Public Contracts ............................................................................................. 85 Basic Rules .............................................................................................................................................................. 85 Exc
eptions .............................................................................................................................................................. 85 Emergency ....................................................................................................................................................... 85 Pr
ofessional Services ..................................................................................................................................... 85 Special Services .............................................................................................................................................. 85 Design-Build .................................................................................................................................................... 86 Penalties .................................................................................................................................................................. 86 Whistle-Blowing P
rotections........................................................................................................................................87 Basic Rules ...............................................................................................................................................................87 Penalties ...................................................................................................................................................................87 Endnotes and A
dditional Information ....................................................................................................................... 88

Institute for Local Government | 1
What Is an Ethics Law?
The notion that one should enter into public service to benefit the public and not one’s own personal financial interests is almost axiomatic in American politics. News coverage of elected and appointed officials who break
either the written or unwritten rules (or both) against self-interested actions in their official capacities dominate at every level of public discourse, from cable and national network news to the neighborhood newsletter and local
internet blog.

Ethics laws are designed to preserve the public’s trust in its public institutions and those who serve in them by setting a framework to guide conduct and behavior.
1 This guide discusses several types of ethics laws and principles and their important role in public service.

For more information on these principles,
see www.ca-ilg.org/ ethics.

CHAPTER 1:

Introduction

2 | Understanding the Basics of Public Service Ethics Laws | INTRODUCTION

TYPES OF ETHICS LAWS
Prohibitions
Many of these ethics laws are prohibitions: they forbid certain actions that would undermine the public’s trust that decisions are being made to benefit the public’s interests (as opposed to the personal or political interests of the decision-maker). Making decisions in the public’s interest is also a key responsibility of public service. 2 Prohibitions deter betrayals of the public’s trust by creating penalties for such betrayals.

Laws against misusing public resources are a form of prohibitory law, as are laws that prevent a decision-maker from being involved in a decision if the decision-maker has a real or perceived conflict of interest. Laws against bribery or other forms of “pay to play” are another important ethics law prohibition.

Transparency Requirements
Other ethics laws simply require transparency: they provide the public and the media with information on how the public’s business is being conducted, who is receiving campaign contributions and gifts from whom, and what kinds of financial interests a public official has. With transparency laws, the public judges whether a public official or group of public officials is acting in a trustworthy fashion—typically as part of the elections process.

T ransparency laws also encourage trustworthy behavior by reminding public officials that their actions will likely be scrutinized and judged.

Fairness
Other ethics laws require that public agency decision-making processes meet minimum standards of fairness.3 Understanding California
Ethics Laws
California has a complex set of ethics laws to guide local officials in their service to their communities. How does the well-intentioned local official keep track of them all? Keeping four core principles in mind helps:
» Public officials may not use their offices for personal financial gain.
» Holding public office does not entitle one to personal advantages or perks.
» Transparency promotes public trust and confidence.
» Merit-based decision-making based on fair processes
produces the best results for the public.

Each chapter of this guide is organized around one
of these four principles and will discuss a variety of
specific topics and penalties associated with violation of the laws.
»
Chapter 2: Per
sonal Financial Gain Laws.

This chapter covers the prohibitions against receiving
favors or money for official actions, stepping aside
from the decision-making process when there is an
economic interest in the outcome, and restrictions on
employment in certain capacities after leaving public
office.
»
Chapter 3: Gifts and Other P
erks.

This chapter focuses on laws and regulations related to compensation, reimbursement of expenses, restrictions
on the use of public resources, gifts to public officials, and the use of campaign funds.

Institute for Local Government | 3
» Chapter 4: Transparency Laws. This chapter focuses
on various disclosure requirements, including campaign
contributions, economic interests, and charitable
fundraising. Other topics include conducting public
business in a public manner, the public’s right to
participate in meetings, and the right to access public records.
» Chapter 5: Fair Processes and Merit-Based Decision-
Making. This chapter focuses on prohibitions against
vote-trading, restrictions on personal loans, and
disqualifications based on the receipt of campaign
contributions and benefits to the official’s family.

It also covers the competitive bidding process for
public contracts, bias, separating agency staff from
politics, and prohibitions on holding multiple offices.

The chapter concludes with a discussion of the
whistleblower protections available to protect public
employees from retaliation for reporting unlawful
behavior.

A key goal of this guide is to alert local officials on when to ask for legal advice on how ethics laws apply in a particular situation.

The Key Laws to Know
While there are innumerable statutes, regulations,
policies and court decisions that shape California ethics and transparency laws, there are a handful of specific, fundamental laws that embody many of the issues
commonly encountered by local officials and employees,
and that often directly govern their actions. These key laws include:
»
Brown A
ct: Requires the governing bodies of local
agencies to conduct open and public meetings, subject
to limited exceptions, and to post meeting agendas
beforehand. See Chapter 4 for more information.
»
Government C
ode section 1090: Prohibits public
officials and employees from being financially
interested in any contract made by them in their official capacity or by any body or board of which they are
members. See Chapter 2 for more information.
»
Political Ref
orm Act: Governs campaign financing and
prohibits local agency officials and employees from
participating in governmental decisions affecting their financial interests. See Chapter 2 for more information. » California Public Records Act: Subject to specified exemptions, requires public agencies to make writings
created, used or possessed by the agency available
to the public, upon request. See Chapter 4 for more
information.

It is not necessary for local agency officials and
employees to have a thorough understanding of all the
nuances and intricacies of each of these laws but they
should be aware of the purpose and general requirements of each. Along with numerous other bodies of law, each
of these key laws will be comprehensively discussed in
this guide.

Laws as Minimum Standards
Because public trust and confidence is vital to the strength of a democratic system, ethics laws sometimes set very
high standards for public official conduct. Even though public officials may feel at times that some of these high standards of conduct are unduly burdensome or intrusive of their private lives, they must accept that adhering to these standards, including broad financial disclosure rules for gifts and income, is simply part of the process of public service.

Even so, it is important to keep in mind that these
standards are only minimum standards; it is simply not
possible or practical to write laws that prevent all actions that might diminish the public’s trust.

For this reason, the laws should be viewed as a floor for conduct, not a ceiling. Just because a given course of
conduct is legal does not mean that it is ethical (or that the public will perceive it as such).

This means that public officials facing ethical issues are well-advised to engage in a three-step analysis:
»
Step One:

What, if anything, does the law say about a
given course of action?
» Step Tw
o: Is the given course of action consistent with
one’s own values and analysis of what would constitute
“ethical” conduct?
» Step Thr
ee: What will the public’s perception be of the
conduct, given the information the public is likely to
have available?
A helpful tool for analyzing the third question is whether one would like to see the course of conduct reported on the front page of the local newspaper.
4 | Understanding the Basics of Public Service Ethics Laws | INTRODUCTION The Limits of this Information
Although the Institute endeavors to help local officials understand technical and legal concepts that apply to their public service, this publication is not technical nor is it intended to provide legal advice. Officials are encouraged to consult technical experts, attorneys and/ or relevant regulatory authorities for up-to-date information and
advice on specific situations.

Endnotes
1 Rushworth M. Kidder, How Good People Make T ough Choices (Simon and Schust
er, 1995).
2 Id.
3 Id.

FOR MORE INFORMATION
On ethics laws and principles, see:
» www.
ca-ilg.org/ ppoe.
» www.fppc.
ca.gov/learn/ public-officials-and-
employees-rules-/ ethics-training.html.

Institute for Local Government | 5
CHAPTER 2:

Personal Financial
Gain Laws
6 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS Blank Page
Institute for Local Government | 7
Chapter 2: Personal Financial Gain Laws

CONTENTS
Receiving Special Favors or Money for Official Actions ...........................................................................................8 Basic Rules .................................................................................................................................................................8 Penalties .....................................................................................................................................................................8 California La
w Penalties ...................................................................................................................................8 Federal P
enalties ......................................................................................................................................................9 Disqualification Based on Financial Int
erests Under the Political Reform Act ................................................... 11 Basic Rules ................................................................................................................................................................ 11 Political R
eform Act – The Four Step Conflict of Interest T est .............................................................................. 13 Identifying Ec
onomic Issues ......................................................................................................................................... 15 What Kinds of Ec
onomic Interests Are a Concern? ....................................................................................... 15 Real P
roperty Interests ......................................................................................................................................... 16 The “P
ublic Generally” Analysis ......................................................................................................................... 17 What Happens if an Official is Disqualified? ................................................................................................... 18 General Rule ..................................................................................................................................................... 18 Effect of Disqualification ............................................................................................................................... 18 Penalties ................................................................................................................................................................... 19 Political R
eform Act Penalties....................................................................................................................... 19 Effect on Agency and Those Affected by ................................................................................................... 19 Agency’
s Decision ........................................................................................................................................... 19 Interests in Ag
ency Contracts Barred ....................................................................................................................... 20 Basic Rules .............................................................................................................................................................. 20 FPPC Jurisdiction ov
er Section 1090 Questions ............................................................................................. 21 Exc
eptions to Rules ................................................................................................................................................22 Non-Inter
est Exception ..................................................................................................................................22 Remote Int
erest Exception ...........................................................................................................................22 Limited Rule of Nec
essity .....................................................................................................................................23 Penalties ...................................................................................................................................................................23 Criminal Penalties ...........................................................................................................................................23 Effect on Contr
act ...........................................................................................................................................23 Employment-R
elated Restrictions ...............................................................................................................................24 Basic Rules ...............................................................................................................................................................24 Penalties ...................................................................................................................................................................24 Endnotes and A
dditional Information ........................................................................................................................25 8 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS Receiving Special Favors or Money for Official Actions

BASIC RULES
Perhaps the most blatant and extreme form of using one’s public position for financial gain is graft. Graft involves using one’s public position to get money or anything else of value. Examples of graft include bribery and extortion.

A bribe involves conferring a benefit on a public official to influence a person’s vote, opinion, action or in-action. 1 Asking for that bribe is illegal, of course, but so is receiving one or agreeing to receive one.
2 Under California’s criminal
laws, a “bribe” includes anything of value; it also includes receiving “advantages.” The advantage can be a future one and need not involve the payment of money.
3 The federal
law definition of bribery is even broader.4
Extortion involves, among other things, getting something from someone by wrongfully using one’s public position. 5 For example, a public official may not demand money in return for the performance of his or her official duties. 6 This includes demanding campaign contributions in return for action in one’s official capacity.

Public officials are also forbidden from receiving a reward for appointing someone to public office or per- mitting someone to perform the duties of their offices.
7 PENALTIES
California Law Penalties
Bribery
Receiving or agreeing to receive a bribe is a crime,
punishable by a combination of prison time, fines and
forfeiting and being forever disqualified from holding
public office.
8 Fines vary according to whether the bribe was actually received. If it was, the fine is a minimum of $2,000 up to either $10,000 or double the amount of the bribe,
whichever is greater. If a bribe was not actually received, there still is a fine between $2,000 and $10,000. The
specified prison sentence is two to four years in state prison.

Those who offer bribes also face penalties. Those who
bribe a member of a legislative body of a city, county, school district or other special district face two to four years in state prison.
9 Extortion
Extortion by public officials is a misdemeanor.
10 Misde-
meanors are punishable by up to six months in county
jail, a fine of up to $1,000 or both.
11 Extortion can also be
the basis for a grand jury to initiate removal-from-office proceedings (also known as “quo warranto”) for official misconduct.
12 Appointing Someone to Office
An official who receives payment or favors for making an appointment faces the following punishments: forfeiture of office, disqualification from ever holding public office again and a fine of up to $10,000.
13 DON’T COUNT ON A CODE OF SILENCE
Faced with the temptation of receiving a bribe, it
can be easy to underestimate the chances of being
caught, let alone successfully prosecuted. Fortunately, briberyis fairly rare, which may lead one to mistakenly assume prosecutors never find out about bribery.

In some instances, prosecutors learn about illicit
activities from informants from within an agency. In
other instances, those who believe they have been
asked for a bribe will turn the asking officials in.

Sometimes, observers will notice that a public official seems to have more resources than before and start
asking questions.

The media views itself as a key watchdog on such
issues, of course. Unfortunately, some officials
discount the likelihood of getting caught and
prosecuted. They figure that everyone involved in illicit activities will have a strong incentive to keep quiet.

What they don’t realize is that prosecutors can offer
powerful incentives to those involved to testify against others in exchange for reduced penalties, and that the
prospect of successfully prosecuting an elected official provides prosecutors a high-visibility opportunity to
make an example of an offender, perhaps reasoning
that such an example will serve as a deterrent to
others.

Institute for Local Government | 9

IF I GET INTO TROUBLE, CAN THE AGENCY
PAY MY DEFENSE?
Don’t count on it. T o provide a defense in a criminal
action, for example, the agency must find that:

1. The criminal action or proceeding is brought on
account of an act or omission in the official’s
service
to the public entity;

2. Such defense would be in the best interests of
the public entity; and

3. The individual’s actions were in good faith,
without actual malice and in the apparent
interests of the
public entity.
14 If the issue is whether a public official misused his or her office for personal gain, it may be particularly difficult for the agency to make the third finding,
which is that the actions were in the apparent
interests of the public entity. Moreover, even if the
agency could make these findings, it is not required to.

Indeed, there may be strong political pressures not to.

Similarly, an agency may refuse to provide a defense in a civil action if it finds the actions in question related to corruption or fraud.
15 Also, public agencies are not
responsible for damage awards designed to punish or
make an example of someone (known as “punitive” or
“exemplary” damages).
16 Note that, in these situations, the agency’s attorney is not the public official’s personal attorney, with
attendant protections for attorney-client confidences.

The agency attorney’s legal and ethical obligations
are to the agency itself– not to any one official in that agency.
17 FEDERAL PENALTIES
If an agency receives more than $10,000 in federal
funding, an official of that agency could find him or
herself subject to federal prosecution if the amount
involved in an ethical violation (for example, a bribe) exceeds $5,000.
18 The penalty for bribery under
federal law is a fine of up to twice the amount of the
bribe or $250,000 (whichever is greater), up to 10
years imprisonment, or both.
19 Bribery, extortion, or embezzlement can also be
basis of a federal income tax evasion charge. Federal
prosecutors may treat money that an official receives
through illicit means as income to the official. If the official fails to report this income at tax time (which of course, most don’t), the official becomes subject to an action for income tax evasion.

Income tax evasion carries with it a possible five-year prison term and a fine of up to $100,000.
20 In addition,
prosecutors can require the defendant to pay for
the costs of prosecution (in addition to one’s own
defense costs).
21 The sometimes-related crime of filing a false tax
return is punishable by a maximum three-year prison
term and a fine of up to $100,000 (along with the
costs of prosecution).
22 A court can also order a convicted official to pay
restitution to the agency in the amount of the money
or advantage received (or lost to the agency) as the
result of criminal misuse of the official’s position.
23 FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
10 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS

MAKING A FEDERAL CASE OUT OF CORRUPTION
Honest Services Fraud
Under federal wire and mail fraud laws, the public has the right to the “honest services” of public officials.24 The basic concept is that a public official owes a duty of loyalty and honesty to the public—similar to a trustee or fiduciary.25 That duty is violated when a public official makes a decision that is not motivated by the public’s interests but instead by his or her personal interests.26
A clear example is when an official receives a personal financial gain as the result of his or her public service.

Examples include bribes and kickbacks (for example, receiving money back from proceeds paid to a company that does business with a public entity).
27 Sometimes violation of a state law is the basis of an “honest services” fraud claim (in addition to other charges, like income tax evasion). However, the courts have also held that such claims can also be based on common or judge- made law concepts relating to a public official’s fiduciary duties to his or her constituents.

The potential penalties for federal fraud are steep. The maximum penalty for being guilty of wire and/ or mail fraud includes a jail term of up to 20 years and a $250,000 fine. 28 For more information, see “Making a Federal Case Out of Corruption,” available at www.ca-ilg.org/fedcase.

Institute for Local Government | 11
Disqualification Based on
Financial Interests
Under the Political Reform Act

BASIC RULES
In the statewide general election of 1974, voters passed the Political Reform Act, creating an independent
authority, the Fair Political Practices Commission (FPPC), to, among other things, administer and enforce an
across-the-board, bright line rule: public officials may not participate in governmental decisions affecting their financial interests.

The rule is designed to have public officials avoid
putting themselves in the position of choosing between
advancing the public’s interest or their own financial
interests. That would be a potential conflict of interest.

This does not mean there is anything corrupt or dishonest about having a disqualifying conflict of interest; nor is it against the law to have a disqualifying conflict of interest.

It typically means that a public official has a personal life, with all the financial realities that life can involve.

The key is to be aware when one’s economic interests
are implicated by a public agency decision, so one can
stay clear of and avoid the decision-making process. This way, there is no question about whether one’s personal
interests affected the decision-making process in any way.

The rule is that a public official may not make, participate in, or influence a governmental decision that will have a reasonably foreseeable and material financial effect on the official, the official’s immediate family, or any of the official’s economic interests.
29 Economic interests include real property, sources of income, business entities in which a public official has an investment or holds a management position, and
donors of gifts.

Note the breadth of the disqualification
requirement: one must not only step aside from
voting, but the entire process leading up to a
governmental decision….

Note the breadth of the disqualification requirement:
one must not only step aside from voting, but the entire process leading up to a governmental decision, whether
a vote of a legislative body or an action or decision by an employee vested with the authority to act on behalf of
the agency. This means conversations with fellow officials and staff are also against the law if one has a conflict of interest. Also, there may be even more restrictive local requirements.

Note that disqualified officials do not count toward the establishment of a quorum.
30 Updates to the Political Reform Act Conflict of
Interest Regulations
The FPPC has updated conflict of interest regulations under the Political Reform Act. These changes are significant and have changed several key parts of the conflict of interest analysis, including: material business interests, what is “reasonably foreseeable,” the 500 foot real property rule, the public generally exception and overall streamlining of the 8-step conflict of interest analysis.

For more information on these updates to the conflict of interest regulations, see the FPPC webpage for newly adopted, amended or repealed regulations at: www.fppc.ca.gov/the- law/fppc-regulations/ newly-adopted-amended-or-repealed- regulations.html. Also seek professional guidance when
facing a potential conflict of interest issue as the rules and regulations can be complicated.
12 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS Imprecise T erminology: Abstentions, and Disqualifications The terms “abstention,” and “disqualification” are sometimes used interchangeably when describing an official’s decision to step aside from the decision-making process, and the applicable laws do not necessarily mandate the use of any particular term. The important thing is to be clear on why a decision-maker is stepping aside.

Voluntary Abstention
There are instances in which a public official voluntarily chooses not to participate in a decision by “abstaining” from the vote. The official may know it will be difficult to put personal interests aside and make a decision based solely on the public’s interest. Or, the official may worry the public will perceive the official cannot put personal interests aside even if the official knows the he or she can.

The decision to voluntarily refrain from participating in the decision-making process can involve two conflicting values:

1. One’s responsibility to perform the duties of his or her office; and

2. One’s responsibility to honor one’s own ethical standards or the public’s trust in the decision-making process.

Both responsibilities are important, of course. Because of this, deciding not to participate should not be viewed as a way of avoiding difficult decisions.

Mandatory Disqualification
By contrast, when someone has a disqualifying conflict of interest, there is no choice. The law prohibits that individual from participating in or seeking to influence a decision—even if the official believes he or she can be fair.

The law presumes the public will doubt a person’s ability to be fair. This is an example of avoiding the appearance of impropriety as well as the potential for actual impropriety.

Institute for Local Government | 13
Political Reform Act – The Four
Step Conflict of Interest T est
The process of determining when an official is disqualified from participating in a decision can be a very complex one, depending on the interests involved and the governmental decision contemplated. There are statutes, regulations, and interpretive opinions that flesh out each aspect of the basic prohibition.

T o organize the analysis, the FPPC has adopted a new four- step procedure (trimmed down from an eight-step analysis that had been used for many years) for identifying when one must disqualify oneself from participating in a matter.

Although it is useful to be aware of the general outlines of the process, the analysis is probably best undertaken with the assistance of agency attorneys and/ or the FPPC staff— particularly since the rules are not necessarily logical or intuitive.

1. Is it reasonably for
eseeable that a governmental
decision will have a financial effect on any of the public official’s financial interests?

2. Will the reasonably f
oreseeable financial effect be
material?

3. Can the public official demonstrate that the mat
erial
financial effect on the public official’s financial interest is indistinguishable from its effect on the public
generally?

4. If, aft
er applying the three steps above the public official
determines they have a conflict of interest, he or she
may not make, participate in making, or in any way
attempt to use his or her official position to influence the governmental decision, unless some exception
applies.

Evaluating each of these four steps involves fact-specific inquiries that must be guided by the standards and
definitions laid out in the regulations.
31 FOR MORE INFORMATION

ETHICS CODE VERSUS LOCAL CONFLICT OF

INTEREST CODES
California’s Political Reform Act requires local
agencies to adopt local conflict of interest
codes.
32 These codes supplement state law, by
specifying which positions in the agency are
subject to disclosure under the Act.

For more information, see “About Local Conflict
of Interest Codes” (available at www.ca-ilg.
org/local- conflict-of-interest-codes) and the
FPPC’s materials on adopting local conflict of
interest codes (see http:/ /www.fppc.ca.gov/
learn/ rules-on-conflict-of-interest-codes/local-
government-agencies-adopting-amending-coi.
html).

See the following resources:
» “Deciding When Not to Participate in an Agency
Decision: Abstentions and Disqualifications,”
available at www.ca-ilg.org/ abstentions.
» “Property Ownership in Y our Jurisdiction,”
available at www.ca-ilg.org/ owningproperty.

For specific questions, please contact agency counsel
or the FPPC at 1-866-ASK-FPPC (866-275-3772 *2)
or [email protected].
14 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS

GETTING ADVICE AND STAYING OUT OF TROUBLE ON POLITICAL REFORM ACT ISSUES Public officials should seek advice on how these laws apply as early in the process as possible — as soon as a disqualifying conflict of interest is even a possibility. This means taking an active and attentive role by asking questions when items are placed on an agency agenda or mentioned or discussed as part of an agency’s business.

For example, when a city manager or other executive previews items or programs during a report, or when staff responds to a question from a constituent, if it becomes evident that a governmental decision within the meaning of the law is contemplated, the public official should immediately ask themselves whether any of their financial interests might be affected, and, if so, seek advice about whether they have an actual conflict.

Early consultation allows an attorney to analyze all of the facts involved and the relevant law. Even though the analysis is laid out in four specific steps, each step has various rules and FPPC regulations associated with it, which can be complex. As one seasoned local agency attorney has observed, the later in the process the consultation occurs, the more likely the advice will be that disqualification must occur to make sure the official stays out of trouble.

Does advice from agency counsel protect an official against a FPPC enforcement action? No. Only a formal opinion or formal advice letter from the FPPC will protect a public official if someone argues that a violation of the Political Reform Act has occurred. Receiving such advice from the Commission takes time — another good reason to raise the conflict issue as early as possible.

Institute for Local Government | 15
Identifying Economic Issues

WHAT KINDS OF ECONOMIC INTERESTS
ARE A CONCERN?
There are a number of ways to have a financial interest in a decision:
» Sources of Income. Receiving $500 or more in income
from one source (including any income received
from a business, nonprofit organization, government
agency, or individual) within twelve months prior to
the decision creates an economic interest. “Sources
of income” includes a community property interest
in a spouse or domestic partner’s
33 income, but not
separate property income.34 Additionally, if someone
promises an official $500 or more twelve months prior
to the decision, the person or entity promising the
money is a source of income, even if the income has yet to be received by the official, as long as the official has a legally-enforceable right to the promised income.
35 » Investments. An economic interest is created if the official, the official’s spouse or domestic partner41
(even as separate property), or dependent children
(or anyone acting on their behalf) has an investment
worth $2,000 or more in a business entity (even if the
official does not receive income from the business).
42 Investments include stocks and corporate (though not government) bonds.
» Business Employment or Management. If the
official serves as a director, officer, partner, trustee, employee or otherwise serves in a management
position in a company, an economic interest is
created.
43 Note this does not apply to a member of
the board of a nonprofit entity.
» Related Businesses. The official has an economic
interest in a business that is the parent, subsidiary or is otherwise related to a business where the official:
• Has a direct or indirect investment worth $2000
or more; or
• Is a director, officer, partner, trustee, employee,
or manager.44
» Personal Finances. An official has an economic
interest in their own expenses, income, assets,
or liabilities and those of the official’s immediate
family (spouse or domestic partner
36 and dependent
children).37
» Real Property. An interest in real property worth
$2,000 or more creates an economic interest.38 The
interest may be held by the official, the official’s spouse or domestic partner39 (even as separate property)
and children (or anyone acting on their behalf). Real
property interests can also be created through leases,
loans, mortgage, or security interests in property.
40 » Business-Owned Property. A direct or indirect
ownership interest in a business entity or trust that
owns real property is another form of economic
interest.
45 » Loans. A loan from someone (or guarantee on a loan) can create an economic interest unless the loan is from a commercial institution, made in the regular course of business and is on the same terms as are available to
members of the public.
46 » Gifts. Receiving gifts totaling $460 (2015-16) or more in a twelve-month period prior to the decision
from any one person or organization may create an
economic interest depending on the type of public
official involved and whether the gift-giver is in the
agency’s jurisdiction.
47 Being promised a gift of $460
(2015-16) or more within a twelve- month period
prior to the decision can also create a disqualifying
financial interest.
48 The limit is adjusted every two
years to reflect changes in the cost of living.49 For more discussion of the gift issue, please see Chapter 3, and www.ca-ilg.org/ GiftCenter.

The timeline for determining whether an official has a
potentially disqualifying economic interest is twelve
months before the decision in question—not the calendar year.
50 If a public official thinks he or she has one of the economic interests described above, the next step is to consult
with the agency attorney about the situation and how the FPPC’s four-step conflict of interest analysis applies. One of the key purposes of the disclosure requirements is to enable the public to assess whether an official’s financial interests may affect his or her decision-making. The
disclosure requirements are discussed in further detail in Chapter 4.

16 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS

DISCLOSURE OF CONFIDENTIAL INFORMATION
California law also makes disclosure of certain
kinds of confidential information for personal
financial gain (as defined) a misdemeanor.
51 This
restriction applies to public officers and employees.52 Confidential information means information not
subject to disclosure under the Public Records Act
and information that may not be disclosed by statute,
regulation, or rule.
53 REAL PROPERTY INTERESTS
The previous FPPC regulations analyzed real property
conflicts in a two-step process. The first step was to
determine if the official’s property was “directly” or
“indirectly” involved in the decision and then to determine if the decision would have a “material” effect on the
official’s property. The old regulations described a number of different types of decisions, and provided that if the official’s property was the subject of one of those types of decisions, the property was deemed to be “directly”
involved in the decision. In addition, there was a rule based upon the proximity of the official’s property in relation to other property that was the subject of the decision. If the official’s property was within 500 feet of the subject property, the official’s property was deemed to be
“directly” involved in the decision. If the official’s property did not fall within any of the circumstances described in the old rule, the official’s property was considered to be “indirectly” involved in the decision.

In 2014, the FPPC amended its regulations to simplify
the property interests analysis by dispensing with
the “directly” versus “indirectly involved” dichotomy.

Now, a real property interest is examined in light of its “materiality” only.
54 Before the change, if the official’s property was located within 500 feet of property that was the subject of a
governmental decision, the financial impacts of the
decision on the official’s property were presumed to be material. The presumption could be rebutted, however, by showing that the decision would not have any impact on
the value of the official’s property.

Now, the 500 foot rule is still a part of the new regulation but the presumption of materiality can only be rebutted by written advice from the FPPC finding that the decision will have no measureable impact on the value of the
official’s property.

Institute for Local Government | 17
Additionally, the recent changes to the regulation ushered in a new “Reasonably Prudent Person” standard, which
serves as a sort of “catch-all” exemption. Specifically, even if an official’s property is not the subject of the decision, or is located well beyond 500 feet from the subject property, the official must consider whether “…a reasonably prudent person, using due care and consideration under the
circumstances, [would] believe that the governmental
decision was of such a nature that its reasonably
foreseeable effect would influence the market value of
the official’s property.”
For interests in common areas, such as in a residential condominium complex or an industrial lease that includes areas in common with other tenants, the new regulations redefine “real property in which an official has an interest” to exclude an official’s undivided interest in common area, thus offering another simplification of the real property interest analysis.

For interests in business properties, under the updated regulations, the effects of the decision on the official’s real property interest do not have to be considered when the decision involves the issuance of a permit or entitlement, or when one is considering the impact of the decision on the income producing potential of the property. When
applying those factors, only the impacts on the official’s business entity interest are to be considered.
55 THE “PUBLIC GENERALLY” ANALYSIS
Under the FPPC’s Four-Step T est, if the effect of a decision on the public official’s interests is indistinguishable from the effect on the public generally, the public official may participate in the decision even if the decision would
otherwise materially affect the official’s economic
interests.

In 2015, the FPPC revised the analysis to simplify the
previous general rule and various exceptions; the former nine separate regulations were consolidated into a single regulation,
56 which now provides that an official may
participate in a decision “if the official establishes that a significant segment of the public is affected and the effect on his or her financial interest is not unique compared to the effect on the significant segment.” A “significant segment is defined as at least 25% of:
» All businesses or nonprofit entities in the jurisdiction; » All real property (commercial or residential) in the
jurisdiction; or
» All individuals in the jurisdiction.

The effect of a decision on an official’s interest
is considered unique if it results in a disproportionate effect on:
» The development potential, use, or income-producing
potential of real property or a business entity in which the public official has an interest;
» The official’s business entity or real property because of how close business or the property is to the project that is the subject of the decision;
» The official’s business entity or real property interests as a result of the cumulative effect of the official’s
multiple interests in similar entities or properties that is substantially greater than the effect on a single interest; » The official’s business entity or real property interests as a result of the public official’s substantially greater business volume or larger real property the size when
the decision will affect all interests by the same or
similar rate or percentage;
» A person’s income, investments, assets or liabilities, or real property if the person is a source of income or gifts to the official; or
» The official’s personal finances or those of his or her immediate family.57
18 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS

WHAT HAPPENS IF AN OFFICIAL
IS DISQUALIFIED?
General Rule
If an official is disqualified from participating on a specific agenda item under the conflict of interest rules established by the Political Reform Act, the official must:
» If the decision is being voted on at a public meeting, verbally identify the financial interest or potential
conflict of interest in sufficient detail to be understood by the public; and
» Not attempt to influence the decision in any way, which includes talking with colleagues or staff about the
matter at any time, including before, during, or after
any meeting at which the item may be taken up.

At the meeting, elected and appointed officials, and
top staff members who have conflicts of interest must
leave the room when that matter is up for decision
(unless the matter is on consent, in which case the
official must declare the conflict and have the clerk
record an abstention on that particular item).
58 This
may be a good practice for comparable officials at
other local agencies as well.

Officials subject to the leave-the-room requirement
will also need to explain why they are disqualified
from participating, based on the nature of the
financial interest.
59 For example:
» Investment. If the interest relates to an investment, provide the name of the business in which the
investment is held.
» Business Position. If the interest relates to a business position, give a general description of the activity in which the business is engaged as well as the name of
the business.
» Real Property. If the interest relates to real property, supply the address or another indication of the location of the property (unless the property is the public
official’s principal or personal residence, in which case explain the property is a residence and do not give the address or location).
» Income or Gifts. If the interest relates to the receipt of income or gifts, then describe the source.
» Personal Finances. If the interest relates to a personal financial interest in the decision, then describe the
expense, liability, asset or income affected.

Exceptions to the Leave-the-Room Requirement
There are limited exceptions that allow a disqualified
official to remain in the room and provide input as a
member of the public to represent himself or herself
on matters related solely to the official’s “personal
interests.”
60 These include when the subject of the discussion is:
» Interests in real property wholly owned by the
official or his or her immediate family;61
» Interests in a business entity wholly owned by the
official or his or her immediate family;62 and
» Interests in a business entity over which the official (or the official and his or her spouse or domestic
partner63) exercises sole direction and control.64
Even though the law allows the public official to remain in the room when these interests are at stake, the public official may still wish to balance that option with the potential that the public may nonetheless perceive
the official is improperly trying to influence his or
her colleagues. Many officials balance their rights as
individuals with their responsibility to maintain the public’s trust in both their leadership and the agency that they serve by leaving the room after having provided their input related to their personal interest.

Note on Closed Sessions
If a decision will be made or discussed in a closed session, an official with a conflict may not be present. Nor may the official obtain non-public information about the closed session.
65 Effect of Disqualification
The general rule is a majority of the membership of a
body must be present in order for the decision-making
body to conduct business—a concept known as a
quorum.
66 For some kinds of agencies, a majority of the quorum is necessary for an item to pass, although there are
special rules that apply to certain kinds of actions.

Note, however, the rule is different for county boards
of supervisors, community college boards and school
boards, which generally require a majority vote of the
entire membership of the board to act.
67 Those who are disqualified from participating in the decision are not counted toward the quorum.68
Institute for Local Government | 19
However, those who abstain because of a pending
question concerning a conflict of interest (for example, an elected official is waiting to receive an advice letter from the FPPC) may be counted toward the quorum. This is
because they have not yet been disqualified (typically their agency attorneys will recommend they abstain pending
resolution of the conflict issue).
69 FOR MORE INFORMATION

PENALTIES
Political Reform Act Penalties
A refusal to disqualify oneself is a violation of the Political Reform Act. Violations of these laws are punishable by
a variety of civil, criminal, and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
70 These penalties can include any or all of the following:
» Immediate loss of office;71
» Prohibition from seeking elected office in the future;72 » Fines of up to $10,000 or more depending on the
circumstances;73 and
» Jail time of up to six months.74
Effect on Agency and Those Affected by
Agency’s Decision
When a disqualified official participates in a decision, a court can void the decision.
75 This can have serious
consequences for those affected by the decision as well as the public agency itself. If someone is encouraging an official to participate in spite of a disqualifying interest, consider pointing out the costs that would occur if the agency’s decision has to be undone—not to mention the
legal consequences for the official.

T ypically it is wise to err on the side of caution when there is a question regarding the appropriateness of an official’s participation in a matter. When in doubt, sit a decision out.

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

See the following resources:
» The FPPC has produced “Recognizing Conflicts
of Interest: A Guide to the Conflict of Interest
Rules of the Political Reform Act” (2015),
available at www.fppc.ca.gov/ content/ dam/
fppc/NS-Documents/LegalDiv/Conflicts%20
of%20Interest/Conflicts-Guide-August-2015-
Jan-2016-Edits.pdf.
» “Using Public Office to Promote One’s Business
Interests,” available at www.ca-ilg.org/
publicoffice.
» Conflicts of Interest (2010). Explains California’s
conflict-of-interest laws available at http:/ / ag.ca.
gov/ publications/ coi.pdf.

For specific questions, please contact the Fair
Political Practices Commission or agency counsel.
20 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS Interests in Agency
Contracts Barred

BASIC RULES
California law strictly forbids public officials from having an economic interest in their agencies’ contracts. In
essence, this is a prohibition against self-dealing. Now codified in section 1090 of the Government Code, this
particular law has been traced back to the earliest days of California’s statehood—to 1851.
76 This prohibition applies to elected and appointed officials as well as public agency employees and consultants.
77 This means that, if an official has an interest in a contract being contemplated by their agency, the agency may not
enter into the contract. If a staff member has an interest in the contract, the staff member may not participate
in any way in the contract negotiations or in any part of the development of the contract. Contracts are broadly
defined and include employment and a variety of other
relationships, including independent contractors.
78 Key things to keep in mind include the following.
» Making a Contract. The prohibition applies to
preliminary discussions, negotiations, planning and
solicitation of bids, as well as voting on the contract itself. This means the affected official can’t be involved in those as well.
» Disqualification Doesn’t Fix the Problem. When the
prohibition applies, the agency may not enter into the
contract in question. Members of the governing board
of a local agency (including a board of supervisors,
board of directors, city council or school board
members) are deemed to have made any contract
executed by the board, or any person or agency under
its jurisdiction, even if officials disqualify themselves from participating in the contract.
» Financial Interest. A “financial interest” in a contract includes a direct or indirect financial interest. A
direct financial interest is present when the official
is the party contracting with the agency. An indirect
financial interest involves an official who has a financial relationship with the contracting party or will receive some benefit from the making of the contract with the
contracting party. For example, the Attorney General
has concluded that a trustee of a community college
district cannot become employed in any capacity by
the district because the trustee would have a financial interest in the employment contract. It does not
matter if the official’s financial interest is positively or negatively affected. This provision covers financial relationships that go beyond the official’s immediate
family.

Officials will sometimes hear their agency counsel refer to this issue as a “section 1090 problem,” in reference to the Government Code section containing this prohibition.

These restrictions on contracts are in addition to the
restrictions of the Political Reform Act.

A key question to ask oneself in evaluating an agency’s contracts is: “will this contract affect my economic
interests in any way?” If the answer is “yes,” speak with agency counsel immediately.

A key question to ask in evaluating an
agency’s contracts is: “will this contract affect
my economic interests in any way?” If the
answer is “yes,” speak with agency counsel
immediately.

Institute for Local Government | 21

FPPC JURISDICTION OVER
SECTION 1090 QUESTIONS
The Legislature empowered the FPPC in 2013 to
enforce the provisions of section 1090 through either
administrative proceedings similar to those it uses for violations of the Political Reform Act or civil actions imposing fines. Prior to commencing such an action,
however, the FPPC must obtain permission from the
district attorney of the county in which the alleged
violation occurred, and the FPPC may not issue opinions related to past conduct. Further, before providing advice, the FPPC must send a copy of the request for advice to the Attorney General and the local district attorney.
79 The FPPC has developed a six-step analysis to determine whether a violation of section 1090 might occur based on the facts and circumstances presented to the FPPC prior to the action being taken. Those steps are as follows:

Step 1:

Is the public official in question subject to the
pro
visions of section 1090?
Step 2: Does the decision at issue inv
olve a contract?
Step 3: Is the official making or participating in
making a contr
act?
Step 4: Does the official have a financial int
erest
in the contract?
Step 5: Does either a remote int
erest or a
noninterest exception apply?
Step 6: Does the “Rule of Necessit
y” apply?

WHAT IS THE THEORY OF NOT ALLOWING
DISQUALIFICATION?
When the prohibition against interests in
contracts under section 1090 applies, the agency
may not enter into the contract, even if the
official with the interest recuses or disqualifies
him- or herself. Why? The theory seems to be
decision-makers may be favorably influenced
to award a contract that benefits a colleague—
perhaps with the expectation the favor may
be returned in the future. The courts have
made clear that the law will assume that undue
influence was exerted, and that the risk to the
public from self-dealing by public officials is too
great to allow anything other than a bright-line,
absolute prohibition. The absolute prohibition
guards against such a tendency toward what
might be described as “you-scratch-my-back-I’ll-
scratch-yours” dynamics within the agency.
22 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS

EXCEPTIONS TO RULES
There are limited exceptions to the general prohibition against interests in contracts.

Non-Interest Exception
Some potential interests in a contract are so small
California law classifies them as “non-interests” in a
contract. One is when an official receives public services provided by the official’s agency on the same terms
that the services are provided to the general public. For example, a member of a water district board may receive water service. In such cases, the official and the official’s agency may participate in the contract. California law
provides a full list of exceptions.
80 Remote Interest Exception
A local agency may enter into a contract when an official has a “remote” interest so long as the official does not attempt to influence another member of the board or
council.
81 Government Code section 1091 lists more than a
dozen types of remote interests, including:
» Being an employee of the contracting party, if the
contracting party has ten or more employees, the
employee began his or her employment at least three
years prior to initially assuming office, and certain other requirements are met;
82 or
» Being a supplier of goods or services to the party
contracting with the agency, when those goods or
services have been supplied to the contracting party
by the public official for at least five years prior to assuming office.
83 Moreover, in 2015, the Legislature passed Senate Bill 704 which added a remote interest exception stating that an official is not financially interested in a contract if he or she is an owner or partner of a firm serving on an advisory board to the contracting agency and the owner or partner recuses himself or herself from reviewing a project that results from a contract between the firm and agency.
84 If the decision-maker qualifies as having a remote
interest, the agency must then take these steps to
stay on the right side of the law:
» The board or council member must disclose the
financial interest to the board or council, and disqualify himself or herself from participating in all aspects of the decision;
» The disclosure must be noted in the official records of the board or council; and
» The board or council, after such disclosure, must
approve, ratify or authorize the contract by a good faith vote of the remaining qualified members of the board
or council.
85 It is important to note that this exception applies only to members of multi-member bodies (not to individual
decision-makers and employees).
86 Institute for Local Government | 23

LIMITED RULE OF NECESSITY
Even if there is not an exception from the prohibition, the agency may still enter into a contract if the rule of necessity applies.
87 In general, this allows an agency to
acquire an essential supply or service. The rule also allows a public official to carry out essential duties of his or her office where he or she is the only one who may legally act.

Consult with agency counsel whether the intricacies of
this rule may apply in any given situation.

T ypes of Ethics Laws

SPECIAL RULE FOR SCHOOL DISTRICT
BOARDS
California’s Education Code specifically allows
school board members to vote on collective
bargaining agreements and personnel matters
that affect a class of employees to which a
relative belongs.
88 Whether this rule also applies
to domestic partners is not clear under the
statute.

FOR MORE INFORMATION
See the following resources:
» “How Y our Agency Counsel Should Advise Y ou
When Agency Contracts Represent a Conflict of
Interest,” available at www.ca-ilg.org/ coi.
» “Let’s Make a Deal: Securing Goods and
Services For Y our Agency,” available at
www.ca-ilg.org/ procurement.

For specific questions, please contact
agency counsel.

PENALTIES
The penalties for violating the prohibition against interests in contracts are severe.

Criminal Penalties
Willful violations are a felony and may be punished by
fines of up to $1,000, imprisonment, and being disqualified from ever holding public office again.
91 Effect on Contract
The contract also is “void,” which means the local agency does not have to pay for goods or services received under the contract.
92 The agency may also seek repayment of
amounts already paid.93

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

T ypes of Ethics Laws

GETTING ADVICE AND STAYING OUT OF

TROUBLE ON CONTRACT ISSUES
As with issues under the Political Reform Act,
advice of counsel does not provide a defense or
immunity in a criminal prosecution relating to
unlawful interests in contracts.
89 As discussed above, the FPPC now has authority
to issue advice and opinions on questions
involving contracts under section 1090.

The Attorney General will also provide such
advice, but only certain kinds of officials
are entitled to request an Attorney General
opinion.
90 In addition, the process can take
months.
24 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS Employment-Related
Restrictions

BASIC RULES
Another kind of “personal financial gain” law prohibits elected officials and top-level managers from trading on the relationships developed in public service for their own benefit.

For example, elected officials and chief executives who leave government service must not represent people
for pay before their former agencies for one year after leaving their agency.
94 This is known as a “revolving door”
restriction.

In addition, under California’s conflict of interest
disqualification rules, a public official may not make
or influence agency decisions when the interests of a
prospective employer are at stake.
95 The situation arises
when an official is negotiating or has “any arrangement” concerning prospective employment with someone with
business before the agency.

FOR MORE INFORMATION
On employment restrictions, see “Revolving
Door Restrictions for Local Officials,” available at
www.ca-ilg.org/ revolvingdoor.

For specific questions, please contact the Fair Political Practices Commission or agency counsel.

WHEN AN EMPLOYEE RUNS FOR A SEAT

ON THE GOVERNING BOARD
California law says that, with a few exceptions,
local agency employees must resign their
employment before taking a seat on the governing
board of their local agency.
96 However, running
for an office is not prohibited while employed by a
local agency.

This restriction applies to cities, counties,
special districts, and other public agencies and
corporations.
97 There are parallel restrictions for employees who
run for school boards
98 and community college
district governing boards.99 All of the sections note
that, if an employee refuses to resign, his or her
position will automatically terminate upon being
sworn into office on the governing board.
100
These restrictions prevent the dual role conflicts
associated with being both in the role of employee
and employer.
101

PENALTIES
These employment-related restrictions are part of the
Political Reform Act. As discussed above, violations of the Act are punishable by a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
102
These penalties can include any or all of the following:
» Immediate loss of office;103
» Prohibition from seeking elected office in the future;104 » Fines of up to $10,000 or more depending on the
circumstances;105 and
» Jail time of up to six months.106

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

Institute for Local Government | 25
Endnotes and Additional
Information
Note: The California Codes are accessible at http:/ /leginfo. legislature.ca.gov/. Fair Political Practices Commission regulations are accessible atwww.fppc.ca.gov/the-law/
fppc-regulations/ regulations-index.html. A source for case law information is www.findlaw.com/ cacases/ (requires
registration).
1 Cal. Penal Code §§ 7 (definition number 6), 68(a).
2 See Cal. Penal C
ode §§ 68(a), 86.
3 Id.; See also People v
. Anderson, 75 Cal. App. 365, 242 P.2d 906
(1925).
4 See 18 U.S.C. § 20

1. 5 See Cal. Penal C
ode § 518.
6 In re Shepard
, 161 Cal. 171 (1911) (in the context of removal- from- office proceedings for misconduct).
7 Cal. Penal Code § 7

4. 8 See generally Cal. P
enal Code § 68(a). See also Cal. Elect. Code § 20
(making those convicted of making or receiving a bribe ineligible for public office).
9 See Cal. Penal C
ode § 85.
10 Cal. Penal Code § 5

21. 11 Cal. Penal Code § 19
.
12 Cal. Gov’t Code §§ 3060-30

74. 13 Cal. Penal Code § 7

4. 14 See Cal. Gov’t Code § 995.8. See also Los Angeles Police Protective League v. City of Los Angeles, 27 Cal. App. 4th 168, 32 Cal. Rptr. 2d 574 (1994) (finding city was not required to provide the defense of police officers accused of vandalism and conspiracy to commit vandalism).
15 See Cal. Gov’t Code § 995.2(a)(2) (public agency may refuse defense of civil action if, among other reasons, the agency finds the official acted because of “actual fraud, corruption or actual malice.”) See
also Cal. Gov’t Code § 822.2 (immunity from liability
for misrepresentation does not apply in instances of corruption). 16 See Cal. Gov’t Code § 818.
17 California Rules of Pr
ofessional Conduct for Lawyers, Rule
3-600(A); Ward v. Superior Court, 70 Cal. App. 3d 23, 138 Cal. Rptr. 532 (1977) (county counsel’s client is county, not assessor in his individual capacity).
18 18 U.S.C. § 666.
19 See 18 U.S.C. §§ 666 (
specifying maximum 10-year prison term
and fine “under this title”), 3571 (general fine for violating federal criminal laws).
20 26 U.S.C. § 7
201.
21 Id.
22 26 U.S.C. § 7
206(1).
23 U.S. v. Gayt
an, 342 F.3d 1010 (9th Cir. 2003).
24 18 U.S.C. §§ 1341 (mail fr
aud), 1343 (wire fraud), 1346 (honest
services).
25 U.S. v. Sawy
er, 239 F.3d 31, 39 (1st Cir. 2001) (finding sufficient evidence of guilt apart from proof of violation of state law). 26 U.S. v. Lopez-Lukis, 102 F.3d 1164, 1169 (11th Cir. 1997) (noting that effort to improperly control composition of decision- making body constituted an effort to deprive public of honest services); McNally v. U.S., 483 U.S. 350, 362-63 (1987) (Justice Stevens, dissenting). 27 See Skilling v. U.S., 130 S.

Ct. 2896, 2931(2010) (holding that
in order to avoid unconstitutional vagueness, 18 USC § 1346 only criminalizes bribes and kick-back schemes).
28 18 U.S.C. §§ 1341 (“. . . shall be fined under this title or imprisoned not mor
e than 20 years, or both.”), 1343 (“shall be fined under this title or imprisoned not more than 20 years, or both.”). 29 See Cal. Gov’t C
ode §§ 87100-87105.
30 2 Cal. Code Regs. § 18
707(a)(1)(C).
31 2 Cal. Code Regs. § 18
700(d).
32 Cal. Gov’t Code § 8
7300.
33 2 Cal. Code Regs. § 18
229.
34 Cal. Gov’t Code §§ 8
2030, 87103(c); 2 Cal. Code Regs. §§ 18700,
18700.1.
35 Cal. Gov’t Code § 8
7103(c). See also Larsen Advice Letter, No. A-82-
192 (1982).
36 2 Cal. Code Regs. § 18
229 (referring to Cal. Gov’t Code § 82029
defining “immediate family”).
37 2 Cal. Code Regs. § 18
700.
38 Cal. Gov’t Code § 8
7103(b); 2 Cal. Code Regs. § 18700(c)(6)(B).
39 2 Cal. Code Regs. § 18
229.
40 See Cal. Gov’t C
ode §§ 82033, 87103(b).
41 2 Cal. Code Regs. § 18
229.
42 Cal. Gov’t Code §§ 8
2034, 87103(a); 2 Cal. Code Regs. § 18700(c)
(6)(A).
43 Cal. Gov’t Code § 8
7103(d); 2 Cal. Code Regs. § 18700(c)(6)(D).
44 2 Cal. Code Regs. §§ 18 700(c)(6)(D), 18700.2(b).
45 Cal. Gov’t Code § 8
2033 (pro rata interest, if own 10 percent
interest or greater).
46 Cal. Gov’t Code § 8
2030(b)(8), (10).
47 Cal. Gov’t Code§ § 8
2028, 87103(e); 2 Cal. Code Regs. §§
18940(c), 18940.2(a)..
48 Cal. Gov’t Code § 8
7103(e); 2 Cal. Code Regs. §§ 18940(c),
18940.2(a).
49 Cal. Gov’t Code § 8
9503(f).
26 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS 50 See generally Cal. Go v’t Code § 87103. See also 2 Cal. Code Regs. § 418700(c)(6)(C), (E).
51 See Cal. Gov’t C
ode § 1098(a).
52 Id.
53 See Cal. Gov’t C
ode § 1098(b)
54 See generally,
2 Cal. Code Regs. § 18702.2.
55 2 Cal. Code Regs. § 18
702.2(a)(5).
56 2 Cal. Code Regs. § 18
703.
57 2 Cal. Code Regs. § 18
703(b),(c).
58 See 2 Cal. Code R
egs. § 18707.
59 2 Cal. Code Regs. §18
707(a)(1)(A).
60 2 Cal. Code Regs. §18
707(a)(3)(C).
61 2 Cal. Code Regs. § 18
704(d)(2)(A).
62 2 Cal. Code Regs. § 18
704(d)(2)(B).
63 2 Cal. Code Regs. § 18
229.
64 2 Cal. Code Regs. § 18
704(d)(2)(C).
65 See 2 Cal. Code R
egs. § 18707(a)(2). See also Hamilton v. Town of
Los Gatos, 213 Cal. App. 3d 1050, 261 Cal. Rptr. 888 (1989). 66 See Cal. Gov’t C
ode § 36810 (for general law cities). See also Cal.

Civ. Code § 12; Cal. Civ. Proc. Code § 15.
67 See Cal. Gov’t C
ode § 25005; Cal. Educ. Code §§ 35164 (K-12
districts), 72000(d)(3) (community college districts).
68 2 Cal. Code Regs. § 18
707(a)(1)(C); Farwell v. Town of Los Gatos,
222 Cal. App. 3d 711, 271 Cal. Rptr. 825 (1990) (subsequently ordered not published). See also 62 Cal. Op. Att’y Gen. 698, 700 (1979).
69 Farw
ell v. Town of Los Gatos, 222 Cal. App. 3d 711, 271 Cal. Rptr. 825 (1990) (subsequently ordered not published). See also 62 Cal. Op. Att’y Gen. 698, 700 (1979).
70 See generally Cal. Go
v’t Code §§ 91000-14.
71 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
72 See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
73 Cal. Gov’t Code § 91000(b
). See also Cal. Gov’t Code § 83116(c)
(providing that the FPPC may impose administrative penalties of up to $5,000 per violation of the Political Reform Act). 74 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
75 See Cal. Gov’t C
ode § 91003(b).
76 California Att
orney General, Conflicts of Interest, 55 (2010),
available at http:/ / ag.ca.gov/ publications/ coi.pdf. 77 Id.
78 See California Housing Financ
e Agency v. Hanover/California
Management and Accounting Center, Inc. (2007) 148 Cal.App.4th 682.
79 Cal. Gov’t Code § 109

7.1. 80 See Cal. Gov’t C
ode § 1091.5.
81 See Cal. Gov’t C
ode § 1091(a), (c).
82 See Cal. Gov’t C
ode § 1091(b)(2).
83 See Cal. Gov’t C
ode § 1091(b)(8).
84 2015 Cal. Stat. ch. 49
5, § 1 (amending Cal. Gov’t Code § 1091).
85 See Cal. Gov’t. C
ode § 1091.
86 California Att
orney General, Conflicts of Interest, 67(2010),
available at http:/ / ag.ca.gov/ publications/ coi.pdf. 87 See 70 Cal. Op
. Att’y Gen. 45 (1987).
88 See Cal. Educ. C
ode § 35107(e).
89 People v. Chac
on, 40 Cal. 4th 558, 53 Cal. Rptr. 3d 876 (2007).
90 See Cal. Gov’t C
ode § 12519.
91 See Cal. Gov’t C
ode § 1097.
92 Thomson v. Call
, 38 Cal. 3d 633, 214 Cal. Rptr. 139 (1985).
93 See Cal. Gov’t C
ode § 1092.
94 Cal. Gov’t Code § 8
7406.3; 2 Cal. Code Regs. § 18746.3.
95 Cal. Gov’t Code § 8
7407.
96 Cal. Gov’t Code § 532
27(a).
97 Cal. Gov’t Code § 532

27.2(a).
98 Cal. Educ. Code § 35
107(b)(1).
99 Cal. Educ. Code § 7
2103(b)(1).
100 Cal. Gov’t Code § 532
27(a); Cal. Educ. Code §§ 35107(b)(1),
72103(b)(1).
101 Bd. of Retirement of K
ern County Employees’ Retirement Ass’n v.

Bellino, 126 Cal. App. 4th 781, 24 Cal. Rptr. 3d 384 (2005). 102 See generally Cal. Go
v’t Code §§ 91000-14.
103 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
104
See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
105
Cal. Gov’t Code § 91000(b
). See also Cal. Gov’t Code § 83116(c)
(providing that the FPPC may impose administrative penalties of up to $5,000 per violation of the Political Reform Act). 106
See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).

Institute for Local Government | 27
CHAPTER 3:

Perk Issues,
Including Compensation,
Use of Public Resources,
and Gift Laws
28 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS Chapter 3: Perk Issues, Including Compensation, Use of Public Resources, and Gift Laws

CONTENTS
Compensation Issues .................................................................................................................................................... 29 Basic Rules .............................................................................................................................................................. 29 Counties .................................................................................................................................................................. 29 Special Districts .................................................................................................................................................... 29 Cities ......................................................................................................................................................................... 31 Chart
er Cities ................................................................................................................................................... 31 General La
w Cities .......................................................................................................................................... 31 Local Agency Chief Ex
ecutives and Staff .........................................................................................................32 Special Issue: Speaking and Other F
ees ............................................................................................................33 Basic No-Honoraria Rule ..............................................................................................................................33 Exceptions t
o No-Honoraria Rules ..............................................................................................................33 Penalties ...................................................................................................................................................................33 Reimbur
sement of Expenses ....................................................................................................................................... 34 Basic Rules .............................................................................................................................................................. 34 When May Expenses Be R
eimbursed? ...................................................................................................... 34 Pr
ocess Requirements ................................................................................................................................... 34 Amounts ........................................................................................................................................................... 34 Penalties ...................................................................................................................................................................35 California La
w Penalties ................................................................................................................................35 Federal La
w Penalties .....................................................................................................................................35 Restrictions on Use of Public R
esources ....................................................................................................................36 Basic Rules ...............................................................................................................................................................36 No Per
sonal or Political Use of Public Resources .....................................................................................36 No Use of Public R
esources on Ballot Measure Related Activities .......................................................36 Pr
ohibition Against Mass Mailings at Public Expense ............................................................................36 Penalties ...................................................................................................................................................................37 Gifts t
o Public Officials ..................................................................................................................................................38 Basic Rules ...............................................................................................................................................................38 Questions for P
ublic Officials to Ask About Nice Gestures .........................................................................38 Ex
ceptions/Gifts Subject to Special Rules ........................................................................................................39 What to Do About Un
wanted Gifts? ................................................................................................................40 Penalties ................................................................................................................................................................... 41 California La
w Penalties ................................................................................................................................. 41 Federal La
w Penalties ..................................................................................................................................... 41 Income T ax V
iolations ........................................................................................................................................... 41 Use of Campaign Funds ................................................................................................................................................ 42 Basic Rule ................................................................................................................................................................ 42 Penalties .................................................................................................................................................................. 42 Endnotes and A
dditional Information ....................................................................................................................... 43 Institute for Local Government | 29
Compensation Issues

BASIC RULES
T ypically there is a legal limit on public official
compensation levels, either in state or local statutes.

Public officials, particularly elected ones, may only
receive such compensation that the law allows.
1 Any extra
compensation must be refunded.2 Moreover, as protectors of the public purse, courts generally take a strict approach to public official compensation limits.
3 COUNTIES
County boards of supervisors set their salaries;
supervisors’ salaries are subject to referendum.
5 SPECIAL DISTRICTS
California law sets the salaries for members of special district governing boards—typically in the law that creates the particular kind of special district.
6 Salaries usually are
tied to the days a public official spends participating in meetings or other district-related work, with a maximum number of compensated days per month. The chart on the
next page contains examples from some of the numerous
types of special districts throughout the state.

WITH MONEY COMES EDUCATION
If a local agency provides any type of compensation
or payment of expenses to members of a legislative
body, then all of the members must have two hours
of ethics training within one year of entering public
service. Subsequent trainings must occur every two
years after that.
4 For more information on these requirements,
see www.ca-ilg.org/ AB1234compliance.
30 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS Special Districts
Type of District Per Day/Meeting Maximum Maximums
Airport districts $100 for attending each board meeting Not to exceed four meetings in a calendar month7
Cemetery districts $100 for attending each board meeting Not to exceed four meetings in a calendar month8
Community Services districts $100 per day Not to exceed six days of compensated service per month9
Fire Protection districts $100 for attending each board meeting Not to exceed four meetings in a calendar month 10 Harbor districts No per day salary $600 per month11
Hospital districts $100 for attending each board meeting Not to exceed five meetings in a calendar month12 Park and Recreation districts $100 for attending each board meeting $500 per month13 Sanitation districts $100 per day for board meetings or service provided at the request of the
board
Not to exceed six days per month14
Utility districts $100 per day $600 per month15
Vector Control districts T rustees serve without compensation T rustees serve without compensation 16 Irrigation Districts
Irrigation districts of less than 500,000
acres
$100 per day Not to exceed six days of compensated
service17
Irrigation districts of less than 500,000
acres that produce or deliver electricity
$100 per day OR $600 per month An annual cap of $15,00018 Irrigation districts of 500,000
acres or more
No per day salary Salary to be fixed by ordinance and subject to referendum but cannot exceed the salary
of a member of the Imperial County Board of
Supervisors19
Institute for Local Government | 31
Water Districts
Type of District Per Day Maximum Maximums
Water district directors (as defined) $100 per day Not to exceed 10 days of compensated service per month20
California water district officials (as
defined)
$100 per day No maximum21
County water district directors (as defined) $100 per day Not to exceed 6 days of compensated service per month22
Contra Costa County Water District
directors (as defined)
$100 per day Not to exceed 10 days of compensated service per month23
Municipal water district directors (as
defined)
$100 per day Not to exceed 6 days of compensated service per month24
What kinds of meetings and days of work may a
district official be compensated for? T ypically:
» A meeting of any “legislative body” as defined by
California’s open meeting laws;
» A meeting of an advisory body; and
» Conference attendance or educational activities,
including ethics training.25
Agencies may compensate officials for attendance at other events as specified in a written policy adopted in a public meeting.
26 Note that these parameters don’t apply when
the district does not pay compensation based on number
of days doing district business, but instead pays a more salary-like form of compensation.
27 CITIES
Charter Cities
For charter cities, elected official compensation is a matter of local concern which may be addressed in the city’s
charter.
28 General Law Cities
Broadly speaking in general law cities, city council
members’ baseline compensation is set by ordinance;
such compensation is tied to parameters established in
California law in the 1980s.
29 The starting points are:30
General Law Cities
City Size by Population Baseline Per Month Salary
Up to and Including 35,000 $300
Over 35,000 Up to and
Including 50,000 $400
Over 50,000 Up to and
Including 75,000 $500
Over 75,000 Up to and
Including 150,000 $600
Over 150,000 Up to and
Including 250,000 $800
Over 250,000 Population $1000
General law cities may increase these amounts by
up to five percent per year from the date of any prior
adjustments.
31 When a city council votes to increase
compensation, the increase takes effect in the future—not during the deciding council members’ current terms.
32 Elected mayors may receive additional compensation.33 These amounts compensate city council members for
their service on the council, including any commission, committee, board, authority, or similar body on which
32 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS the city council member serves, unless California law
authorizes additional compensation.34 If California law provides for additional council member compensation
for serving on a commission—but that statute does not
specify an amount of compensation—the compensation is
$150 per month.
35 DISCLOSURE REQUIREMENTS WHEN

MAKING COMPENSATED APPOINTMENTS
From time to time, a decision-making body will
be asked to appoint one or more of its members
to certain positions. If that appointment involves
additional compensation, the agency must make a
special disclosure.
36 The disclosure is on a form provided by the Fair
Political Practices Commission and must be posted
on the agency’s website.
37 LOCAL AGENCY CHIEF EXECUTIVES

AND STAFF
Governing bodies must approve all contracts with local
agency chief executives (as defined) in open session,
which must be reflected in the minutes.
38 In addition,
salaries, salary schedules and fringe benefits must be
approved at a regular (as opposed to a special) meeting of the body.
39 Senate Bill 1436, signed into law on August
22, 2016, also requires a governing body to orally report a summary of its recommendation for a final action
regarding local agency executive compensation during the open meeting in which that final action is to be taken and prior to the body actually taking that final action.
40 Copies of contracts are public documents that must be made available on request.
41 Moreover, local agencies must
report the annual compensation of its elected officials, officers and employees to the State Controller and, if
the agency maintains one, post such information on the
agency’s website.
42 The California Constitution provides that “[a] local government body may not grant extra compensation or
extra allowance to a public officer, public employee, or contractor after service has been rendered or a contract has been into and performed in whole or in part, or pay a claim under an agreement made without authority of
law.”
43 Thus, even if a public employee’s compensation is
later deemed to be inadequate, it is not legal for a local agency to compensate the employee over and above the
amount fixed by contract or law.

Beginning in 2012, California law prohibits local agencies 44 from approving contracts for chief executives or
department heads (as defined45) that contain automatic
renewal clauses that provide for automatic compensation adjustments that exceed the cost of living.
46 Contracts must also comply with California law
restrictions on the amount of severance an agency pays if it becomes necessary to terminate a contract with a local agency employee.
47 Copies of severance agreements are
public documents.48
If an employee is subsequently convicted of abuse of
position (as defined
49), the employee must reimburse:
• 1) any severance payments paid,50 and
• 2) any paid leave provided pending charges.51

FOR MORE INFORMATION
On executive compensation issues, see
www.ca-ilg.org/ post/ executive-compensation-issues.

For specific questions, please contact agency counsel.

Institute for Local Government | 33
SPECIAL ISSUE: SPEAKING AND

OTHER FEES
Basic No-Honoraria Rule
California law also regulates the degree to which public officials may receive payments for giving a speech, writing an article or attending a public or private conference, convention, meeting, social event, meal or similar
gathering.
52 No local elected office holder, candidate
for local elected office, or designated employee may
accept such payments—which are known as honoraria.
53 The notion is such communications are part of a public official’s service.

If one receives an honorarium from someone who is
unaware of the rules, there is a 30-day time limit for
returning it.
54 Exceptions to No-Honoraria Rules
Some gestures in connection with speaking or writing
engagements are allowed. These include:
» Payments Voluntarily Made to Charitable and Similar
Organizations. An organization may recognize a public
official’s speech, article or meeting attendance by
making a direct contribution to a bona fide charitable, educational, civic, religious, or similar tax-exempt
nonprofit organization.
55 A public official may not make
such donations a condition for the speech, article or
meeting attendance.
56 In addition, the official may
not claim the donation as a deduction for income tax
purposes.
57 Nor may the donation have a reasonably
foreseeable financial effect on the public official or
on any member of the official’s immediate family.
58 The official may not be identified to the nonprofit
organization in connection with the donation.
59 » Payments Deposited in Local Agency General Fund.

An honorarium given to an official that is unused may
be deposited into the local agency’s general fund within 30 days of receipt, so long as it is not claimed by an
official as a deduction from income for income tax
purposes.
60 » Income from Bona Fide Occupation. An official may be paid income for personal services if the services
are provided in connection with a bona fide business,
trade, or profession (such as teaching, practicing law, medicine, insurance, real estate, banking, or building
contracting) and the services are routinely provided
in connection with the trade, business or profession.
61 This exception does not apply, however, when the
main activity of the business or profession is making
speeches.
62 » Some Gestures in Connection with a Speech or Panel Discussion. An official may accept certain gestures
when the official gives a speech, participates in a panel or seminar, or provides a similar service. These are
exempt from the honoraria ban and are not considered
“gifts” by the Political Reform Act. These include free admission to the event, refreshments and similar non-
cash nominal benefits received at the event, necessary
lodging and subsistence provided directly in connection with the speech, panel, seminar, or service, and
transportation (within California) to the event.
63 PENALTIES
The restrictions against accepting fees are part of
the Political Reform Act. Violations of these laws are
punishable by a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
64 These penalties can include any or all of the following:
» Immediate loss of office;65
» Prohibition from seeking elected office in the future;66 » Fines of up to $10,000 or more depending on the
circumstances;67 and
» Jail time of up to six months.68

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
34 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS Reimbursement of Expenses

BASIC RULES
California law contains certain requirements and
restrictions on local agency practices relating to
reimbursing local elected and appointed officials’
expenses.

When May Expenses Be Reimbursed?
The core test on whether an expense is reimbursable is
whether the expense was “actual and necessary” in the
official’s performance of official duties.
69 Local agencies
must adopt expense reimbursement policies that specify
which kinds of activities are reimbursable for decision- making body members.
70 Many also have policies that
govern employee reimbursements. Such policies are an
opportunity for a local agency to make findings on why
reimbursable activities are necessary to the individual’s performance of their duties.
71 Of course, if one has already received a cash advance or other form of payment for an expense, one may not
request reimbursement. Double-charging a public agency
for expenses misappropriates public resources and is a
crime.
72 Process Requirements
For decision-making body member reimbursements, local
agencies must:
» Use expense report forms;73
» Identify a “reasonable time” within which these forms must be submitted;74 and
» Require that all expenses be documented with
receipts.
75 Those requesting reimbursement must show their request falls within the agency’s parameters for use of public
resources.
76 Many local agencies have also adopted similar
policies for employee reimbursements.

All expense reimbursement requests and supporting
documentation are public records.77
Amounts
Local reimbursement policies may specify what
constitutes reasonable rates for travel, meals, lodging and other expenses. For decision-making body
reimbursements, if a local policy does not specify
reimbursement rates, then the reimbursable rates default to Internal Revenue Service guidelines.
78 If a public official wants to seek reimbursement for levels of expenses not otherwise authorized under the agency’s reimbursement policy, then the official may seek prior
approval for such reimbursement from the governing body (before incurring the expense).
79 Officials who spend more than allowed under their
agencies’ reimbursement policies have the option of
simply paying the extra costs themselves.
80 California law requirements relating to expense
reimbursement policies and restrictions on reimbursement rates only apply to reimbursements of members of a
legislative body.
81 Although charter cities may not be
subject to this requirement given their home rule authority, many charter cities have such policies as a matter of good practice.
82 Again, many local agencies have adopted policies that govern reimbursements for staff as well as elected and
appointed officials. Another option is to have the policies address expenses other than those are, strictly speaking, “reimbursed” (for example, those expenses that are paid by the agency in the first instance).

FOR MORE INFORMATION
See the following resources:
» “Buying Meals for Others on the Public’s Dime,”
available at www.ca-ilg.org/ dime.
» “Expense Reimbursement Frequently Asked
Questions,” available at
www.ca-ilg.org/ExpenseReimbursementFAQs.
» Sample reimbursement policies available at
www.ca-ilg.org/SampleReimbursementPolicies.

For specific questions, please contact the Fair
Political Practices Commission or agency counsel.

Institute for Local Government | 35

PENALTIES
California Law Penalties
Penalties for misuse of public resources or falsifying
expense reports in violation of expense reporting policies include:
» Loss of reimbursement privileges;83
» Restitution to the local agency;84
» Civil penalties of up to $1,000 per day and three times the value of the resource used;85 and
» Criminal prosecution and a lifetime bar from public
office.86
At some point, personal use of public resources becomes embezzlement—a form of theft.
87 Embezzlement may constitute “willful misconduct” which warrants the removal from office of a public officer, or it may be prosecuted as a felony violation. A public officer convicted of embezzlement is guilty of a felony punishable by imprisonment; in addition, that person is ineligible thereafter to hold public office within California.
88 Federal Law Penalties
Federal prosecutors have been known to treat the receipt of illegitimate expense reimbursements or advances as
income to the official. Because the official has not typically reported these payments as such on the official’s tax
returns, the official then becomes subject to an action for income tax evasion.

The Internal Revenue Code is notoriously complex and its penalty sections are no exception. The general penalty for willful income tax evasion is a fine of up to $100,000 and up to five years in prison, or both. Those convicted are also responsible for paying the costs of prosecution.
89 Failure to
report information to the tax authorities is punishable by fines of up to $25,000 and/ or a year in federal prison, plus the costs of prosecution.
90 If the postal service was used in any way, such use can also become the basis for a charge of mail fraud.
91 Mail
fraud is punishable by up to five years in federal prison per violation and/ or a fine of the greater of 1) twice the gain to the violator or 2) $250,000 per violation.
92 If the program has any degree of federal funding,
the federal criminal laws against corruption and
embezzlement will also apply.
93 FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
36 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS Restrictions on Use of Public
Resources

BASIC RULES
No Personal or Political Use of Public Resources
Under California law, using public resources for either personal or political purposes is illegal.
94 “Public resources”
include such things as:
» Money (for example, charges made on an agency
credit card or account);95
» Staff time;
» Equipment (for example, machinery, vehicles,
technology, tools, telephones, furniture and
computers); and
» Supplies (for example, items one would otherwise
purchase at office supply or hardware stores).
“Use” means the use of public resources that is substantial enough to result in a gain in advantage for the user
and a loss to the local agency that can be estimated
as a monetary value.
96 Using a public agency vehicle
for personal errands is an example, as is using office
equipment and supplies for one’s political campaign,
business or family purposes (for example, the office
photocopier).

There are very narrow exceptions for “incidental and
minimal” use of resources. The purpose of these
exceptions appears to be more to prevent traps for the
unwary; they do not constitute an affirmative authorization for personal use of public resources. An “occasional
telephone call” is an example of an incidental and minimal use of public resources.
97 In addition, subsequent reimbursement or payment for resources misused is not a defense.
98 No Use of Public Resources on Ballot Measure Related Activities
Local agencies may take positions on ballot measures, as long as they do so in an open meeting where all points of view can be heard.
99 They generally may not, however, use
public resources to engage in campaign- type advocacy
with respect to the agency’s position. Materials that urge voters to either “vote yes” or “vote no” on a measure
constitute campaign advocacy,
100 so are materials whose
style, tone and timing indicate that their purpose is
advocacy as opposed to informational.
101

FOR MORE INFORMATION
On ballot measure activities, see
www.ca-ilg.org/ballot-measure-activities.

Prohibition Against Mass Mailings at Public Expense
The law reflects the notion it is unfair for public officials to use public resources to enhance their visibility and name identification with potential voters. For this reason, California law forbids sending mass mailings at public
expense.
102 The FPPC has defined “mass mailings” as
sending more than 200 substantially similar pieces that contain the name, office or pictures of elected officials except as part of a standard letterhead using the official’s name and office.
103
The rules on what constitute a mass mailing are quite
complex. Make sure to consult with agency counsel
whenever sending out materials that contain elected
officials’ names, offices or pictures (for example,
newsletters). Also, there are some exceptions to the
prohibition (for example, legal notices and directories).

FOR MORE INFORMATION
On mass mailings, see the following resources:
» “Career-Saving Tips on Mass Mailings,” available
at www.ca-ilg.org/ massmailing.
» The Fair Political Practices Commission fact
sheet on prohibited mass mailings available
at www.fppc.ca.gov/learn/ public-officials-
and-employees-rules-/ communications-
sent-using-public-funds/ campaign-related-
communications.html.

Institute for Local Government | 37

PENALTIES
Public officials face both criminal and civil penalties for using public resources for personal or political benefit.104 Criminal penalties include:
» T wo- to four-years in state prison;105 and
» Permanent disqualification from public office.106
Civil penalties include fines of up to:
» $1,000 for each day the violation occurs;
» Three times the value of the resource used;107 and
» Possible reimbursement for the costs of any litigation initiated by private individuals, including reasonable
attorney’s fees.108
For specific questions, please contact the Fair Political Practices Commission or agency counsel.

Additionally, the FPPC may impose an administrative
fine of up to $5,000 per violation.109
Misuse of public resources is also punishable under
laws prohibiting misappropriation of public resources
and embezzlement.
110
Both intentional and negligent violations of the law are punishable.
111

FOR MORE INFORMATION
On penalties for ethics law violations, see
www.ca-ilg.org/ consequences.

ETHICS CODES VERSUS LOCAL

CONFLICT OF INTEREST CODES
The Political Reform Act requires local agencies to
adopt local conflict of interest codes.112
These codes supplement state law, by specifying
which positions in the agency are subject to which
ethics laws.

For more information, see “About Local
Conflict of Interest Codes” (see http:/ /www.
ca-ilg.org/local- conflict-of-interest-codes)
and the FPPC’s materials on adopting local
conflict of interest codes (see www.fppc.
ca.gov/index. php?id=228).
38 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS Gifts to Public Officials

BASIC RULES
Receiving gifts can present a host of issues for public officials. Of course, making demands for gifts in exchange for official action violates California and federal laws prohibiting bribery and extortion.
113 Such demands also
deprive the public of its right to honest services from public officials.
114
Gifts that are not requested present other issues.

California law puts an annual limit on the aggregate value of gifts a public official can receive from a single source; gifts over a certain amount also must be reported on a
public official’s Statement of Economic Interests.

Generally speaking, California public officials must:
» Report gifts worth $50 or more on their Statement of Economic Interests.115 Gifts from a single source must
be added up over the course of a calendar year. An
official’s reporting obligation is triggered when the
combined value of a series of gestures from a single
gift-giver reaches $50 or more.
» Not receive gifts that exceed $460 (2015-16) from
a single source per calendar year.116 This limit can be exceeded by accepting a single large gesture or a series of gestures over the course of a calendar year from the same gift-giver that total more than $460 (2015-16).
117
» Having accepted gifts may keep a public official from participating in the decision-making process. If a
public official accepts gestures with a value of more
than $460 (2015-16) from a single gift- giver in the
twelve months preceding the official’s involvement in a decision affecting that gift giver, the official may have to disqualify himself from participating in that decision- making process.
118
More detail on these rules is available at www.ca-ilg. org/ GiftCenter. These rules apply to elected officials, top level managers and others who are covered in the agency’s local conflict of interest code or make governmental decisions. 119
Putting aside what the rules allow, public officials are well-advised to look beyond what the law allows in
any situation involving a nice gesture. This includes
considering how residents will view a public official’s actions.

COMPLIANCE STRATEGY:

Questions for Public Officials to Ask About Nice
Gestures

One way to analyze one’s likely obligations under
California’s gift rules is to ask:

1. Did I or my family receive something of value?

2. What’s its value?

3. Who gave it to me?

4. Did I do something in exchange for what I
received?

5. What kind of gift is it and do special rules apply
as a result?

6. Which of the permitted courses of action do I
want to take with respect to the gift?
Explanations of each of questions are available at
www.ca-ilg.org/GiftCenter.

Unless one of the exceptions applies
120 (see the chart on
the following page), a public official receives a gift for purposes of California’s gift rules any time the official receives anything that:
» Has a monetary value;
» Provides the official with a personal benefit, and
» For which the official doesn’t pay full value.121
Institute for Local Government | 39

EXCEPTIONS/GIFTS SUBJECT TO SPECIAL RULES

Certain kinds of gestures either are exempt from California’s gift rules or are subject to special treatment.

More information on each of these is available at www.ca-ilg.org/GiftCenter.

Special Rules Relating to Who Receives the Gift
(Question 1 at www.ca-ilg.org/GiftCenter)
� Gifts to family members122
Gifts Subject to Special Valuation Rules
(Question 2 at www.ca-ilg.org/GiftCenter)
� Air transportation123
� Nonprofit or political fundraiser tickets 124
� Other tickets and passes125
� Invitation only events126
Special Rules for Certain Sources of Gifts
(Question 3 at www.ca-ilg.org/GiftCenter)
� Someone who is an intermediary for another127
� Group gifts128
� Family gifts129
� Gestures received in the context of certain relationships:
• Bona fide dating relationships130
• Existing personal or business relationship131
• Long term relationships132
� Acts of neighborliness133
� Agency gifts134
• Gifts from public agencies to agency officials135
• Agency provided tickets or passes136
• Agency raffles or gift exchanges137
Gestures that Are Part of An Exchange
(Question 4 at www.ca-ilg.org/GiftCenter)
� Gifts paid for (reimbursed) in full138 or in part139 � Gifts exchanged on occasions like birthdays or holidays140 � T rading off who pays for meals or activities (“reciprocal ex
changes”)141
� Employee gift exchanges142
� Barter transactions143
� Presentations, event attendance and articles written144 � Ceremonial functions145
� Employment-related gestures146
� Business gestures147
� Gestures in connection with volunteer nonprofit service148 � Prizes in bona fide competitions149
Additional Special Rules Based on Type of Gift
(Question 5 at www.ca-ilg.org/GiftCenter)
� Home hospitality150
� Informational material151
� Inheritances152
� Leave credits153
� Disaster relief payments154
� Personalized plaques or trophies155
� Wedding gifts156
� Tra ve l157 and free transportation from transportation companies158 � Tickets /free admissions159
� Payments t o worthy causes made at an official’s request (behested payments
)160
� Wedding guest benefits161
� Bereavement offerings162
� Acts of compassion163
� Gift made because of existing personal or business relationship unrelat
ed to the official’s position where there is no evidence the official makes decisions that affect the gift giver.164 Gifts can be:
» T angible or intangible
» Real property or personal property
» Goods or services165
Under some circumstances, gifts that an official’s family receives are considered gifts to the official for purposes of California’s gift rules.
166
40 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS

TRAVEL PASSES FROM TRANSPORTATION

COMPANIES
When an official is offered free or discounted
transportation, the official is well-advised to ask, “Who is offering the travel?” Different rules may apply to gifts of travel depending on who is the source of the gift.

If the gift of travel is from a transportation carrier, a public official should be especially careful. California law forbids elected and appointed public officials
from accepting free passes or discounted travel from
transportation companies.
167
This prohibition applies to any kind of travel — personal, business or on behalf of one’s public agency — to any
location, near or far. The rule applies both to elected and appointed public officers but not to employees.
168
However, sometimes the rule doesn’t apply. The chief
exception is when the free or discounted travel is
available to the general public and is given for reasons unrelated to the person’s status as a public official.
169
For example, the prohibition against accepting free
travel from transportation companies did not apply
when:
� The elected official received a first-class airline
upgrade because he was going on his honeymoon
and the upgrade was given to all honeymooners.
170
� An elected official received free airline travel
because he was the spouse of a flight attendant.171
� An elected official exchanged frequent flier miles for an airline ticket because the earning of frequent-flier miles is done without regard to the person’s status as
an officeholder.
172

WHAT TO DO ABOUT
UNWANTED GIFTS?
Some officials have a no-gifts policy or may be concerned about the public perceptions associated with receiving
gifts from certain sources (or certain kinds of gifts).

They may also just not want the gift.

Under such circumstances, an official has the
following options:
» Decline the gift in the first place or return the gift unused to the gift giver within 30 days of receiving
it.173 Documenting one’s actions (for example, with a
thanks-but-no-thanks note), can be helpful.
» If the item is a pass or ticket, simply not use the pass or ticket and not let anyone else do so.174
» Donate the gift, unused, within thirty days of receipt to a 501(c)(3) tax-exempt nonprofit organization or to a
government agency, without claiming a tax deduction
for the donation. (Note the donation must be made
within 30 days of the gift’s receipt and the gift must
be unused. Note too that for gifts to nonprofits, the
nonprofit must be one which neither the official nor a
family member holds a position.)
175
» Reimburse the donor for the fair market value of
the gift within 30 days of receiving it.176 Keeping
documentation (for example, a cancelled check) of the
reimbursement is a good practice.

For gifts that are over the annual limit or would put the official over the annual limit for that gift giver, some officials also “buy down” the value of a gift (or the most recent gift in a series) to keep the value of the gift(s) from that gift giver below the annual limit.

The official then reports the fact that they received
gift(s), what the gift(s) was/were, and the source of the gift(s) on their Statement of Economic Interests. Again, when paying down the gift, it is best to do so by check and then make sure the donor cashes the check.

FOR MORE INFORMATION
On gift laws, see the following resources:
» The Institute Gift Resource Center,
see www.ca-ilg. org/GiftCenter.
» The Fair Political Practices Commission fact
sheet titled “Limitations and Restrictions on
Gifts, Honoraria, T ravel and Loans,” available
at www.fppc.ca.gov/ content/ dam/fppc/NS-
Documents/TAD/Public%20Officials%20
and%20Employees/LocalGiftFactSheet.pdf.

For specific questions, please contact the Fair
Political Practices Commission or agency counsel.

Institute for Local Government | 41

PENALTIES
California Law Penalties
These gift limit and reporting requirements are part of the Political Reform Act. Violations of these laws are
punishable by a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
177
These penalties can include any or all of the following:
» Immediate loss of office;178
» Prohibition from seeking elected office in the future;179 » Fines of up to $10,000 or more depending on the
circumstances;180 and
» Jail time of up to six months.181
Federal Law Penalties
Honest Services Fraud
Under federal wire and mail fraud laws, the public has the right to the “honest services” of public officials.
182
The basic concept is that a public official owes a duty of loyalty and honesty to the public—similar to a trustee
or fiduciary.
183 That duty is violated when a public official
makes a decision that is not motivated by his or her
constituents’ interests but instead by his or her personal interests.
184 Specifically, honest services fraud refers to
actions that constitute bribery and kickback schemes.185 In one instance, federal authorities prosecuted a city
treasurer whose decisions to award contracts were
motivated in part by gifts.
186
The maximum penalty for being guilty of wire and/ or
mail fraud includes a jail term of up to 20 years and a $250,000 fine.
187
Extortion
A demand for gifts or other benefits in exchange for
official action could also constitute extortion. Extortion occurs when someone obtains money through threat of
harm or under color of official right.
188 T o be chargeable
as a federal offense, the act must affect interstate
commerce. The maximum penalty for extortion under
federal law is 20 years in prison and a $250,000 fine.
189
A person convicted of a felony involving extortion
is forever disqualified from seeking elected office in
California.
190

INCOME TAX VIOLATIONS
Income tax problems arise when officials receive money
and other kinds of valuable items and don’t report them on their income tax forms. Prosecutors don’t need to
show that the money or gifts were received in exchange
for improper purposes—only that they were not reported
on the official’s income tax form.

Income tax evasion carries with it a possible five-year prison term and a fine of up to $100,000.
191 In addition,
prosecutors can require the defendant to pay for the
costs of prosecution (in addition to one’s own costs
associated with defending against the prosecution).
192
The sometimes-related crime of filing a false tax return is punishable by a maximum three-year prison term
and a fine of up to $100,000 (along with the costs of
prosecution).
193

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
42 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS Use of Campaign Funds

BASIC RULE
In general, money raised to support a person’s election to office may only be used for political, legislative, or governmental purposes. It’s not okay to spend these
monies is a way that confers a personal benefit on the
candidate.
194 Any expenditure that confers a substantial
personal benefit on an individual must be directly related to a political, legislative, or governmental purpose.
195 For
example, using campaign funds to repair your car so you can travel to and from campaign events confers a personal benefit and is not a proper expenditure of those funds.

FOR MORE INFORMATION
On the permissible use of campaign funds, see
Campaign Disclosure Manual 2: Information for
Local Candidates, Superior Court Judges, Their
Controlled Committees and Primarily Formed
Committees for Local Candidates, 2007, available
online at www.fppc.ca.gov.

For specific questions, please contact the Fair
Political Practices Commission or agency counsel.

PENALTIES
These restrictions are part of the Political Reform Act.

Violations of these laws are punishable by a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
196
These penalties can include any or all of the following:
» Immediate loss of office;197
» Prohibition from seeking elected office in the future;198 » Fines of up to $10,000 or more depending on the
circumstances;199 and
» Jail time of up to six months.200

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

Institute for Local Government | 43
Endnotes and Additional
Information
Note: The California Codes are accessible at http:/ /leginfo. legislature.ca.gov/. Fair Political Practices Commission regulations are accessible atwww.fppc.ca.gov/the-law/
fppc-regulations/ regulations-index.html. A source for case law information is www.findlaw.com/ cacases/ (requires
registration).
1 For example, the salary of council members of general law cities is contr
olled by Government Code section 36516(a), which
permits a city council to establish by ordinance a salary up to a ceiling determined by the city’s population. The electorate may approve a higher salary. Cal. Gov’t Code § 36516(b). A council member appointed or elected to fill a vacancy is compensated in the same amount as his or her predecessor. A directly-elected mayor may receive additional compensation with the consent of the electorate or by ordinance of the city council. Cal. Gov’t Code § 36516.1.
2 County of San Diego v
. Milotz, 46 Cal. 2d 761, 767, 300 P. 2d 1,
4 (1956) (action to recover fees from court reporter for faulty work).
3 Id.
4 Cal. Gov’t Code §§ 53234-35.

See www.ca-ilg.org/
ab1234compliance.
5 Cal. Const. art. XI, § 1(b
).
6 See, e.g., Cal. Pub
. Res. Code § 5784.15(a), (b) (park and
recreation district board members may be compensated a
maximum of $100 per day for board meetings and $500 per month); Cal. Health & Safety Code § 6489 (sanitation district board members may receive $100 per day for board meetings or service rendered at request of board, not to exceed six days per month); Cal. Water Code §§ 20201, 20202 (water district officials—as defined—may, by ordinance, provide for compensation of $100 per day for each day’s attendance at board meetings or each day’s service rendered at the board’s request; not to exceed 10 days service/ meetings per month); Cal. Water Code §§ 34740-41 (California water districts must adopt bylaws fixing compensation paid to officers, but may not exceed $100 per day for attendance at board meetings and for each day’s service at the request of the board); Cal. Water Code § 30507 (county water district directors receive compensation not to exceed $100 per day for each day’s attendance at board meetings or each day’s service rendered at the board’s request but not to exceed six days service/ meetings per month); Cal. Water Code § 30507.1 (Contra Costa County Water District directors receive compensation not to exceed $100 per day for each day’s attendance at board meetings or each day’s service rendered at the board’s request but not to exceed 10 days service/ meetings per month); Cal. Water Code § 21166 (irrigation district directors in districts of less than 500,000 acres receive 1) compensation of up to $100 per day, not to exceed six days, 2) irrigation district directors in districts that produce or deliver electricity receive one of the following: up to $100 per day or $600 per month, with an annual cap of $15,000); Cal. Water Code § 22840 (irrigation districts of 500,000 acres or more receive a salary to be fixed by ordinance and subject to referendum but cannot exceed the salary of a member of the Imperial County Board of Supervisors); Cal. Water Code § 71255 (municipal water district directors receive compensation not to exceed $100 per day for each day’s attendance at board meetings or each day’s service rendered at the board’s request but not to exceed six days service/ meetings per month).
7 Cal. Pub. Util. C
ode § 22407.
8 Cal. Health & Safety C
ode § 9031(a).
9 Cal. Gov’t Code § 6
1047(a).
10 Cal. Health & Safety C
ode § 13857(a).
11 Cal. Harb. & Nav . Code § 6060.
12 Cal. Health & Safety C
ode § 32103.
13 Cal. Pub. R
es. Code §§ 5784.15(a), (b).
14 Cal. Health & Safety C
ode § 6489(a).
15 Cal. Pub. Util. C
ode § 11908.1(a).
16 Cal. Health & Safety C
ode § 2030(a).
17 Cal. Water C
ode § 21166.
18 Id.
19 Cal. Water C
ode § 22840.
20 Cal. Water C
ode §§ 20201, 20202.
21 Cal. Water C
ode §§ 34740-41.
22 Cal. Water C
ode § 30507.
23 Cal. Water C
ode § 30507.1.
24 Cal. Water C
ode § 71255.
25 Cal. Gov’t Code § 53232.
1(a).
26 Cal. Gov’t Code § 53232.
1(b).
27 Cal. Gov’t Code § 53232.
1(c).
28 Cal. Const. art. XI, § 5(b
)(4).
29 See Cal. Gov’t C
ode § 36516.
30 See Cal. Gov’t C
ode § 36516(a).
31 Cal. Gov’t Code § 365
16(a)(4).
32 See Cal. Gov’t C
ode § 36516.5 (providing a change of
compensation does not apply during the same term but allowing adjustment when one or more members serving staggered terms begin new terms).
33 See Cal. Gov’t C
ode § 36516.1.
34 See Cal. Gov’t C
ode § 36516(c).
35 Id.
36 2 Cal. Code Regs. § 18
702.5(b)(3).
44 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS 37 Id. The form is called “Form 806.” More information regarding F
orm 806 is available from the Fair Political Practices
Commission website at: http:/ /www.fppc.ca.gov/learn/ public- officials-and-employees-rules-/ agency-report-of-public-official- appointments-form-806.html.
38 Cal. Gov’t Code § 532
62 (a) (“All contracts of employment with a
superintendent, deputy superintendent, assistant superintendent, associate superintendent, community college president,
community college vice president, community college deputy vice president, general manager, city manager, county administrator, or other similar chief administrative officer or chief executive officer of a local agency shall be ratified in an open session of the governing body which shall be reflected in the governing body’s minutes.”).
39 Cal. Gov’t Code §54956(b) (“Not
withstanding any other law,
a legislative body shall not call a special meeting regarding the salaries, salary schedules, or compensation paid in the form of fringe benefits, of a local agency executive, as defined in subdivision (d) of Section 3511.1. However, this subdivision does not apply to a local agency calling a special meeting to discuss the local agency’s budget.”).
40 2016 Cal. Stat. ch. 175, § 1 (amending Cal. Go
v’t Code § 54953).
41 Cal. Gov’t Code § 532
62(b) (“Copies of any contracts of
employment, as well as copies of the settlement agreements, shall be available to the public upon request.”).
42 Cal. Gov’t Code §§ 538
91, 53892, 53908.
43 Cal. Const. art. XI, § 10(a).
44 Cal. Gov’t Code § 35

11.1(c) (defining local agency as “a county,
city, whether general law or chartered, city and county, town, school district, municipal corporation, district, political subdivision, or any board, commission, or agency thereof, or other local public agency”).
45 Cal. Gov’t Code § 35

11.1(d) (defining “local agency executive” as
“any person employed by a local agency who is not subject to the Meyers-Milias-Brown Act (Chapter 10 (commencing with Section 3500)), Chapter 5 (commencing with Section 45100) of Part 25 of Division 3 of Title 2 of the Education Code, or Chapter 4 (commencing with Section 88000) of Part 51 of Division 7 of Title 3 of the Education Code, and who meets either of the following requirements: (1) the person is the chief executive officer of the local agency, or (2) the person is the head of a department of a local agency).
46 Cal. Gov’t Code § 35

11.2 (“On or after January 1, 2012, any
contract executed or renewed between a local agency and a local agency executive shall not provide for the following: (a) An automatic renewal of a contract that provides for an automatic increase in the level of compensation that exceeds a cost-of-living adjustment....”).
47 Cal. Gov’t Code § 35

11.2 (“On or after January 1, 2012, any
contract executed or renewed between a local agency and a local agency executive shall not provide for the following:… (b) A maximum cash settlement that exceeds the amounts determined pursuant to Article 3.5 (commencing with Section 53260) of Chapter 2 of Part 1 of Division 2 of Title 5.”) See also Cal. Gov’t Code § 53260(a) (“All contracts of employment between an employee and a local agency employer shall include a provision that provides that regardless of the term of the contract, if the contract is terminated, the maximum cash settlement that an employee may receive shall be an amount equal to the monthly salary of the employee multiplied by the number of months left on the unexpired term of the contract…”).
48 Cal. Gov’t Code § 532 62(b) (“Copies of any contracts of employment, as well as copies of the settlement agreements, shall be available to the public upon request.”).
49 Cal. Gov’t Code § 532

43.4 (“For purposes of this article, ‘abuse of
office or position’ means either of the following:
(a) An abuse of public authority, including, but not limit ed to,
waste, fraud, and violation of the law under color of authority. (b) A crime against public justic
e, including, but not limited to,
a crime described in Title 5 (commencing with Section 67), Title 6 (commencing with Section 85), or Title 7 (commencing with Section 92) of Part 1 of the Penal Code.”).
50 Cal. Gov’t Code §§ 532

43.2 (“On or after January 1, 2012, any
contract of employment between an employee and a local agency employer shall include a provision which provides that, regardless of the term of the contract, if the contract is terminated, any cash settlement related to the termination that an employee may receive from the local agency shall be fully reimbursed to the local agency if the employee is convicted of a crime involving an abuse of his or her office or position.”), 53243.3 (“On or after January 1, 2012, if a local agency provides, in the absence of a contractual obligation, for any of the payments described in this article, then the employee or officer receiving any payments provided for those purposes shall fully reimburse the local agency that provided those payments in the event that the employee or officer is convicted of a crime involving the abuse of his or her office or position.”).
51 Cal. Gov’t Code §§ 532
43 (“On or after January 1, 2012, any
contract executed or renewed between a local agency and an officer or employee of a local agency that provides paid leave salary offered by the local agency to the officer or employee pending an investigation shall require that any salary provided for that purpose be fully reimbursed if the officer or employee is convicted of a crime involving an abuse of his or her office or position.”), 53243.3 (“On or after January 1, 2012, if a local agency provides, in the absence of a contractual obligation, for any of the payments described in this article, then the employee or officer receiving any payments provided for those purposes shall fully reimburse the local agency that provided those payments in the event that the employee or officer is convicted of a crime involving the abuse of his or her office or position.”). 52 See Cal. Gov’t C
ode § 89501 (definition of honorarium).
53 See Cal. Gov’t C
ode § 89502 (general prohibition).
54 See Cal. Gov’t C
ode § 89501(b)(2).
55 See 2 Cal. Code R
egs. §18932.5(a)(1) (direct charitable
contributions excluded from honorarium definition).
56 See 2 Cal. Code R
egs. §18932.5(a)(2).
57 See 2 Cal. Code R
egs. §18932.5(a)(3).
58 See 2 Cal. Code R
egs. §18932.5(a)(4).
59 See 2 Cal. Code R
egs. §18932.5(a)(5).
60 See Cal. Gov’t C
ode § 89501(b)(2).
61 See Cal. Gov’t C
ode § 89501(b)(1).
62 Id.
63 2 Cal. Code Regs. § 18
932.4(e).

Institute for Local Government | 45
64 See generally Cal. Go
v’t Code §§ 91000-14.
65 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
66 See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
67 Cal. Gov’t Code § 91000(b
).
68 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
69 Cal. Gov’t Code § 53232.
2(a).
70 Cal. Gov’t Code § 53232.
2(b).
71 65 Cal. Op. Att’y Gen. 5
16, 522 (1982) (citing Collins v. Riley, 24
Cal. 2d 912, 918, 152 P.2d 169 (1944) and determining that the expenses of a handicapped council member met this standard); 61 Cal. Op. Att’y Gen. 303 (1978) (citing Gibson v. Sacramento County, 37 Cal. App. 523, 174 P. 935 (1918)); Madden v. Riley, 53 Cal. App. 2d 814, 823, 128 P.2d 602, 607 (1942) (propriety of conference expenses for networking purposes).
72 See People v. Br
adley, 208 Cal. App. 4th 64 (2012), reh’g denied
(2012), rev. denied (2012) (upholding the conviction of city manager and council member of misappropriating public funds Penal Code section 424-when they made charges on city credit card for expenses that they had also received cash advances for). 73 Cal. Gov’t Code § 53232.
3(a).
74 Cal. Gov’t Code § 53232.
3(c).
75 Id.
76 Cal. Gov’t Code § 53232.
3(b).
77 Cal. Gov’t Code § 53232.
3(e).
78 Cal. Gov’t Code § 53232.
2(c).
79 Cal. Gov’t Code § 53232.
2(f).
80 Cal. Gov’t Code § 53232.
2(g).
81 See Cal. Gov’t C
ode § 53232.2(b).
82 See Cal. Const. ar
t. XI, § 5. County of Sonoma v. Comm’n on State
Mandates, 84 Cal. App. 4th 1264, 101 Cal. Rptr. 784 (2000). 83 Cal. Gov’t Code § 53232.
4(a).
84 Cal. Gov’t Code § 53232.
4(b).
85 Cal. Gov’t Code § 53232.
4(c). See also Cal. Gov’t Code § 8314.
86 Cal. Gov’t Code § 53232.
4(d). See Cal. Penal Code § 424. See also
Cal. Elect. Code § 20 (making those convicted of embezzlement or theft of public money ineligible for public office). 87 Cal. Penal Code § 504.
88 Cal. Penal Code § 5

14. See also Cal. Elect. Code § 20 (making
those convicted of embezzlement or theft of public money ineligible for public office).
89 See 26 U.S.

C. § 7201.
90 See 26 U.S.

C. § 7203.
91 See gener
ally 18 U.S.C. §§ 1341-46.
92 See gener
ally 18 U.S.C. § 3571(b), (d).
93 See, e.g, 18 U.S.C. §§ 6
41 (crime of embezzlement against the
United States), 648 (misuse of public funds).
94 See Cal. Penal C
ode § 424; Cal. Gov’t Code § 8314.
95 See P
eople v. Bradley, 208 Cal. App. 4th 64 (2012) (upholding the conviction of city manager and council member of
misappropriating public funds— Penal Code section 424— when they made personal charges on city credit card).
96 Cal. Gov’t Code § 8314(b
)(4).
97 Cal. Gov’t Code § 8314(b
)(1).
98 See People v. Br
adley, 208 Cal. App. 4th at 81-82 (holding
restitution was not a defense because misappropriation occurs as soon as credit card was use for personal purpose or unused cash advances were not promptly returned; this is particularly the case when restitution is prompted by a criminal investigation). 99 Vargas v
. City of Salinas, 46 Cal. 4th 1, 35-37, 92 Cal. Rptr. 3d 286, (2009). See also Choice-in-Education League v. Los Angeles Unified School Dist., 17 Cal. App. 4th 415, 429-431, 21 Cal. Rptr. 3d 303 (1993) (school district did not illegally expend public funds by holding and broadcasting school board meeting at which the board took position opposing a statewide ballot initiative); League of Women Voters of California v. Countywide Criminal Justice Coordination Committee, 203 Cal. App. 3d 529, 560, 250 Cal. Rptr. 3d 161 (1988). See also Cal. Elect. Code § 9282.
100
Cal. Gov’t Code § 54
964(b)(3).
101 Vargas
, 46 Cal. 4th at 40, citing Stanson v. Mott, 17 Cal. 3d 206, 130 Cal. Rptr. 697 (1976).
102 See Cal. Gov’t C
ode § 89001.
103 See 2 Cal. Code R
egs. § 18901.
104 See Cal. Penal C
ode § 424; Cal. Gov’t Code § 8314.
105 Cal. Penal Code § 42
4 106 See Cal. Penal C
ode § 424. See also Cal. Elect. Code § 20 (making
those convicted of embezzlement or theft of public money ineligible for public office).
107
Cal. Gov’t Code § 8314(
c)(1).
108 Cal. Gov’t Code § 910

12. 109 Cal. Gov’t Code § 83116.
46 | Understanding the Basics of Public Service Ethics Laws | PERK ISSUES, INCLUDING COMPENSATION, USE OF PUBLIC RESOURCES, AND GIFT LAWS 110 Cal. Penal Code § 424 (“(a) Each officer of this state, or of any count
y, city, town, or district of this state, and every other person charged with the receipt, safekeeping, transfer, or disbursement of public moneys, who either:

1. Without authority of law, appropriates the same, or any portion thereof, to his or her own use, or to the use of another; or,

2. Loans the same or any portion thereof; makes any
profit out of, or uses the same for any purpose not
authorized by law . . .”).
111
Cal. Gov’t Code § 8314(
c)(1).
112 Cal. Gov’t Code § 8
7300.
113 Cal. Penal Code §§ 68(a), 5
18; 18 U.S.C. §§ 201, 872-880.
114 Under federal wir
e and mail fraud laws, the public has the right
to the “honest services” of public officials. 18 U.S.C. §§ 1341 (mail fraud), 1343 (wire fraud), 1346 (honest services). The basic concept is that a public official owes a duty of loyalty and honesty to the public—similar to a trustee or fiduciary. U.S. v. Sawyer, 239 F.3d 31, 39 (1st Cir. 2001) (finding sufficient evidence of guilt apart from proof of violation of state law). That duty is violated when a public official makes a decision that is not motivated by his or her constituents’ interests but instead by his or her personal interests. U.S. v. Lopez-Lukis, 102 F.3d 1164, 1169 (11th Cir. 1997) (noting that effort to improperly control composition of decision-making body constituted an effort to deprive public of honest services); McNally v. U.S., 483 U.S. 350 at 362-63 (Justice Stevens, dissenting).
115
Cal.Gov’t C
ode § 87207(a)(1). For more information, see
http:/ /www.ca-ilg.org/StatementofEconomicInterests.
116 Cal. Gov’t Code § 8
9503; 2 Cal. Code Regs. § 18940.2 (the FPPC
adjusts the limit biennially).
117 If the limit is exc
eeded one has several options, any of which
must be exercised within 30 days of receiving the gift. One may return the gift unused to the donor, reimburse the donor for all or a portion of the value of the gift or donate the gift, without claiming a tax deduction, to a 501(c)(3) charitable organization or government agency. 2 Cal. Code Regs. §18941(c).
118
Cal. Gov’t Code § 8
7103(e); 2 Cal. Code Regs. § 18700(c)(6)
(E). This is because public officials may not make, participate in making, or influence governmental decisions which affect their personal financial interests. Cal. Gov’t Code § 87100. The law makes a judgment that one is financially self-interested in a decision when one accepts gifts exceeding the $460 (2015-16) gift limit from someone affected by that decision. Cal. Gov’t Code § 89503; 2 Cal. Code Regs. § 18940.2(a).
119
2 Cal. Code Regs. §§ 18
940(d), 18730(b)(8.1)(A) (application of
the gift disclosure rules). See also 2 Cal. Code Regs. §§ 18701(a), 18730(b)(9) (application of the disqualification/ conflict of interest rules). See also 2 Cal. Code Regs. § 18940.1(b) (definition of “official”).
120
See generally 2 Cal. C
ode Regs. § 18942 (list of exceptions in the
regulations).
121 See generally 2 Cal. C
ode Regs. § 18940(a).
122 2 Cal. Code Regs. § 18
943.
123 2 Cal. Code Regs. § 18
946.5.
124 2 Cal. Code Regs. § 18
946.4.
125 2 Cal. Code Regs. §18 946.1.
126 2 Cal. Code Regs. §18
946.2.
127 Cal. Gov’t Code §§ 8
7210, 87313; 2 Cal. Code Regs. § 18945(b)
(the source of the payment is the source of the gift).
128 2 Cal. Code Regs. §18
945.2.
129 2 Cal. Code Regs. § 18
942(a)(3).
130 2 Cal. Code Regs. § 18
942(a)(18)(A).
131 2 Cal. Code Regs. § 18
942(a)(19).
132 2 Cal. Code Regs. § 18
942(a)(17)(C).
133 2 Cal. Code Regs. § 18
942(a)(17).
134 2 Cal. Code Regs. § 18
944.
135 2 Cal. Code Regs. § 18
944.3.
136 2 Cal. Code Regs. § 18
944.1.
137 2 Cal. Code Regs. § 18
944.2.
138 See Cal. Gov’t C
ode § 82028(a).
139 2 Cal. Code Regs. § 18
941(c)(3).
140 2 Cal. Code Regs. § 18
942(a)(8)(A).
141 2 Cal. Code Regs. § 18
942(a)(8)(B).
142 2 Cal. Code Regs. § 18
944.2(d) (does not apply to tickets or
passes that come from someone outside the agency).
143 See Cal. Gov’t C
ode § 82028(a).
144 Cal. Gov’t Code §§ 8
9501, 89502.
145 2 Cal. Code Regs. §§ 18
942(a)(13), 18942.3.
146 See Cal. Gov’t C
ode §§ 82030, 82030.5, 87207.
147 See Cal. Gov’t C
ode §§ 82005, 87207, 87209.
148 See Cal. Gov’t C
ode § 82028(a); Institute for Local Government,
Commitment to Nonprofit Causes and Public Service: Some Issues to Ponder, at 7 (2008). Available at www.ca-ilg.org/ document/ commitment-nonprofit-causes- and-public-service- some-issues-ponder.
149
2 Cal. Code Regs. § 18
942(a)(14).
150 2 Cal. Code Regs. § 18
942(a)(7).
151 2 Cal. Code Regs. §§ 18
942(a)(1), 18942.1.
152 2 Cal. Code Regs. § 18
942(a)(5).
153 2 Cal. Code Regs. § 18
942(a)(9).
154 2 Cal. Code Regs. § 18
942(a)(10).
155 2 Cal. Code Regs. § 18
942(a)(6).
156 2 Cal. Code Regs. §§ 18
946.3, 18942(b)(2).
157 2 Cal. Code Regs. §§ 18
950-18950.3.

Institute for Local Government | 47
158 See Cal. Const. ar t. XII, § 7 (“A transportation company may not grant free passes or discounts to anyone holding an office in this state . . .”).
159 2 Cal. Code Regs. §§ 184
92(a)(13), 18942.1(c), 18946.1, 18946.2,
18946.4.
160 See Cal. Gov’t C
ode § 82015 (note the behested payment
reporting requirement also applies to candidates). For more information, see www.ca-ilg.org/BehestedPayments.
161
2 Cal. Code Regs. § 18
942(a)(15).
162 2 Cal. Code Regs. § 18
942(a)(16).
163 2 Cal. Code Regs. § 18
942(a)(18)(B).
164 2 Cal. Code Regs. § 18
942(a)(19).
165 2 Cal. Code Regs. § 18
940(a).
166 See generally 2 Cal. C
ode Regs. § 18943.
167 See Cal. Const. ar
t. XII, § 7 (“A transportation company may not
grant free passes or discounts to anyone holding an office in this state . . .”).
168
See 3 Cal. Op. A
tt’y Gen. 318 (1944).
169 74 Cal. Op. A
tt’y Gen. 26 (1991).
170 Id.
171 67 Cal. Op. A
tt’y Gen. 81 (1984).
172 80 Cal. Op. Att’y Gen. 146 (199
7).
173 2 Cal. Code Regs. § 18
941(c)(1).
174 2 Cal. Code Regs. § 18
946.1 (b)(3) (“A pass or ticket has no
reportable value unless it is ultimately used or transferred to another person.”).
175
2 Cal. Code Regs. § 18
941(c)(2).
176 2 Cal. Code Regs. § 18
941(c)(3).
177 See generally Cal. Go
v’t Code §§ 91000-14.
178 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
179
See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
180
Cal. Gov’t Code § 91000(b
).
181 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
182
18 U.S.C. §§ 1341 (mail fr
aud), 1343 (wire fraud), 1346 (honest
services).
183 U.S. v. Sawy
er, 239 F.3d 31, 39 (1st Cir. 2001) (finding sufficient evidence of guilt apart from proof of violation of state law). 184 U.S. v. Lopez
-Lukis, 102 F.3d 1164, 1169 (11th Cir. 1997) (noting
that effort to improperly control composition of decision- making body constituted an effort to deprive public of honest services); McNally v. U.S., 483 U.S. 350 at 362-63 (Justice Stevens, dissenting).
185
See Skilling v
. U.S., 130 S.Ct. 2896, 2931(2010) (holding that
in order to avoid unconstitutional vagueness, 18 USC §1346, defining “scheme or artifice to defraud,” only criminalizes bribes and kick-back schemes).
186
U.S. v. Kemp
, 379 F.Supp. 2d 690, 697-98 (E.D. Penn. 2005).
187 18 U.S.C. §§ 1341 (“…shall be fined under this title or imprisoned not mor
e than 20 years, or both.”). 1343 (“shall be fined under this title or imprisoned not more than 20 years, or both.”). See generally 18 U.S.C. § 3571(b), (d).
188
18 U.S.C. § 195

1. 189 18 U.S.C. § 195
1(a). See generally 18 U.S.C. § 3571(b).
190 See Cal. Elect. Code § 20 (making those c
onvicted of a felony
involving bribery, embezzlement, extortion or theft of public money ineligible for public office).
191
26 U.S.C. § 7
201.
192 Id.
193 26 U.S.C. § 7
206(1).
194 See Cal. Gov’t C
ode §§ 89510-22. Campaign funds include “any
contributions, cash, cash equivalents, and other assets received or possessed” by a campaign committee. Cal. Gov’t Code § 89511(b)(1).
195
Cal. Gov’t Code § 8
9512 (an expenditure of campaign funds must
be reasonably related to a legislative or governmental purpose, unless the expenditure confers a substantial personal benefit, in which case such expenditures must be directly related to a political, legislative or governmental purpose). “Substantial personal benefit” means a campaign expenditure which results in a direct personal benefit with a value of more than $200. Cal.

Gov’t Code § 89511(b)(3).
196
See generally Cal. Go
v’t Code §§ 91000-14.
197 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
198
See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
199
Cal. Gov’t Code § 91000(b
).
200 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
48 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS Blank Page
Institute for Local Government | 49
CHAPTER 4:

T ransparency Laws
50 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS Chapter 4: T ransparency Laws

CONTENTS
Economic Interest Disclosure ...................................................................................................................................... 51 Basic Rules ............................................................................................................................................................... 51 Penalties ...................................................................................................................................................................53 Campaign Contribution Disclosur
e ........................................................................................................................... 54 Basic Rules .............................................................................................................................................................. 54 Penalties ...................................................................................................................................................................55 Charitable Fundr
aising Disclosure ..............................................................................................................................56 Basic Rules ...............................................................................................................................................................56 Penalties ...................................................................................................................................................................57 Penalties f
or Extortion under State and Federal Law ...............................................................................57 Honest Services F
raud ....................................................................................................................................57 The Public’
s Right to Access Records ........................................................................................................................ 58 Basic Rules .............................................................................................................................................................. 58 Penalties ...................................................................................................................................................................59 Conducting the P
ublic’s Business in Public .............................................................................................................. 60 Basic Rules .............................................................................................................................................................. 60 Good Ethics Equals Good P
olitics ....................................................................................................................... 61 T ypical C
losed Session Issues ............................................................................................................................ 62 Penalties ...................................................................................................................................................................63 Nullification of Decision ................................................................................................................................63 Criminal Sanctions ..........................................................................................................................................63 Other Consequences ......................................................................................................................................63 The Public’
s Right to Participate in Meetings .......................................................................................................... 64 Basic Rules .............................................................................................................................................................. 64 Posting and F
ollowing the Agenda .............................................................................................................. 64 The P
ublic’s Right to Materials Not Included in the Agenda Packet ................................................... 64 Special Issues ......................................................................................................................................................... 64 Electronic R
ecording of Meetings is Allowed ........................................................................................... 64 Sign-In Must Be Voluntary
............................................................................................................................ 64 The Public’s Right to be Heard.....................................................................................................................64 Penalties .................................................................................................................................................................. 66 Nullification of Decision ............................................................................................................................... 66 Criminal Sanctions ......................................................................................................................................... 66 Other Measures .............................................................................................................................................. 66 Pot
ential Civil Rights Violations .................................................................................................................. 66 Endnotes and A
dditional Information ........................................................................................................................67 Institute for Local Government | 51
Economic Interest Disclosure

BASIC RULES
There is an adage about one’s life being an open book.

Nowhere is this truer than for public officials and
their financial situations. When people become public
servants, the public gets to learn a great deal about their financial lives. California voters established some of these disclosure requirements when they approved the Political Reform Act (PRA) in 1974.
1 Those entering public service
sacrifice a degree of their privacy.

The disclosure requirements of the PRA apply to all
“designated employees” of an agency.2 “Designated
employees” is broadly defined to include local elected
officials (e.g., members of city councils, county boards of supervisors, and district boards), executive level agency employees (e.g., General Managers and Superintendents), and consultants and appointed members of councils,
commissions, boards, committees and other local
agency bodies with significant decision-making authority that exceeds a solely advisory function. “Designated
employees” also includes persons in staff positions
required to disclose their economic interests under
the agency’s local conflict of interest code because the position entails the making, or participation in the making, of decisions which may foreseeably have a material effect on any financial interest of the employee.

This disclosure is made on a form called a “Statement
of Economic Interests.” It may also be referred to by the acronym “SEI” or its number, “Form 700.” A web-based
version of the form is available from the Fair Political Practices Commission (FPPC) website: www.fppc.ca.gov.

Local agencies may adopt electronic filing procedures with FPPC oversight.
3 One’s local agency usually provides paper
copies of the form as well.

This form is filed upon assuming office, on an annual basis while in office and upon leaving office.
4 Local rules may
impose more stringent requirements.

The following kinds of economic interests must be
disclosed if they meet certain minimum thresholds:
» Sources of income;
» Interests in real property;
» Investments;
» Business positions; and
» Sources of gifts. See the table on the following page.

ETHICS CODES VERSUS LOCAL

CONFLICT OF INTEREST CODES
The PRA requires local agencies to adopt local
conflict of interest codes, which supplement
California law by specifying which positions in the
agency are subject to which ethics laws.
5 For more information, see “About Local Conflict of
Interest Codes” (available atwww.ca-ilg.org/ sites/
main/files/file-attachments/ about_local_conflict_
of_interest_codes.pdf) and FPPC materials on
adopting local conflict of interest codes (seewww.
fppc.ca.gov/learn/ rules-on-conflict-of-interest-
codes/local-government-agencies-adopting-
amending-coi.html).
52 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS

TYPES OF ECONOMIC INTERESTS THAT MUST BE DISCLOSED
» Sources of Income. Disclosure is required for income of $500 or more provided or promised to an official from one source (including any income received from a business, nonprofit organization, government agency, or individual) for the previous calendar year (for annual disclosures) or the previous 12 months (for assuming office statements).
6 “Income” includes a community property interest in a spouse or domestic partner’s7 income.8 » Personal Finances. An official has an economic interest in that official’s expenses, income, assets or liabilities and those of his or her immediate family (spouse or domestic partner9 or dependent children).10 » Real Property. An interest in real property must be disclosed where the interest is worth $2,000 or more. The interest may be held by the official, the official’s spouse or domestic partner11 (even as separate property) or children, or anyone acting on their behalf. Real property interests can also be created through leaseholds, options and security or mortgage interests in property.
12 » Investments. Another disclosable interest is created when the official, the official’s spouse or domestic partner13 (even as separate property), or dependent children or anyone acting on their behalf, has an investment worth $2,000 or more in a business entity that has an interest in real property in the jurisdiction, or does business or plans to do business in the jurisdiction, or has done business within the jurisdiction at any time during the two years prior, even if the official does not receive income from the business. 14 » Business Employment or Management. If the official serves in a director, officer, partner, trustee, employee, or other management position in a busines
s entity, an economic interest is created.15 Note that this does not apply to a member of the board of a nonprofit entity.16
» Related Businesses. The official must disclose an interest in a business that is the parent, subsidiary or is otherwise related to a business in which the official:
• Has a direct or indirect investment worth $2000
or more; or
• Is a director, officer, partner, trustee, employee, or manager.17 » Business-Owned Property. A direct or indirect ownership interest in a business entity or trust that owns real property is another disclosable interest.18
» Loans. Another type of potentially disclosable interest is created by the receipt of a loan, unless the loan is from a commercial lending Institution or indebtness created as part of a retail installment or credit card transaction, issued on the same terms as available to anyone in the public.19 » Gifts. Gifts from a single source must be totaled up over the course of a calendar year. An official’s reporting obligation is triggered when the combined value of gifts from one source totals $50 or more. 20 For more
information about gifts, please see Chapter 3, and www.ca-ilg.org/GiftCenter.23 Institute for Local Government | 53

PENALTIES
Economic interest disclosure requirements are part of
the PRA. Failure to report or incomplete reporting are
punishable by a variety of civil, criminal and administrative penalties depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
21 Penalties for violation of the PRA can include one or more of the following:
» Immediate loss of office;22
» Prohibition from seeking elected office in the future;23 » Fines of up to $10,000 or more depending on the
circumstances;24 and
» Jail time of up to six months.25
In addition to the above penalties, failure to file a
Statement of Economic Interests on time will result in
late fees of $10 per day, up to a maximum of $100.
26 FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
54 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS Campaign Contribution
Disclosure

BASIC RULES
California has an extensive framework for transparency
with respect to campaign contributions.
27 The basic
reasoning behind these laws is that the public has a right to know who gives money and other forms of support to
candidates for public office. Another stated justification is that the prospect of public disclosure will discourage improper influences.
28 These transparency requirements apply not only
to candidates, but also to groups which organize
to participate in the election process (known as
“committees”).
29 T ransparency requirements also apply
to those who make large contributions, ten thousand
dollars ($10,000) or more in a calendar year, to influence elections.
30 Those who participate in campaigns to pass
or defeat ballot measures are also subject to these
requirements.
31 Cities and counties may have additional campaign
finance disclosure laws for candidates for offices within their jurisdiction or committees focused on local ballot measures.
32 Copies of these local ordinances must be filed
with the FPPC.33
In addition, certain categories of local officials are subject to restrictions on campaign contributions received from people with business pending before the agency. Chapter 5 (pages _-_) explains these restrictions.

Chapter 3 explains the restrictions on how campaign funds may be spent.

On campaign contribution disclosure, see the
following resources:
» The FPPC has extensive information to guide
candidates and ballot measure committees on
these requirements. Visit the FPPC website at
www.fppc.ca.gov or call the FPPC’s toll-free
number: 1-866-ASK-FPPC (1-866-275-3772).
» The Political Reform Division of the California
Secretary of State’s office issues identification
numbers to campaigns and committees, provides
technical assistance to filers, and maintains
disclosure reports for public access. Visit the
Secretary of State’s website at www.sos.ca.gov/ prd
or call 916-653-6224.
» For federal elections (Presidential, U.S. Senate,
House of Representatives), consult the Federal
Election Commission at 1-800-424-9530 or on the
web at www.fec.gov.

For specific questions, please contact the Fair Political Practices Commission.

FOR MORE INFORMATION
Institute for Local Government | 55

PENALTIES
The PRA includes campaign contribution disclosure
requirements. Violations of the PRA are punishable by
a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
34 These penalties can include any or all of the following:
» Immediate loss of office;35
» Prohibition from seeking elected office in the future;36 » Fines of up to $10,000 or more depending on the
circumstances;37 and
» Jail time of up to six months.38

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

OTHER DISCLOSURE REQUIREMENTS
The California Public Records Act is the main
source of authority providing public access
to documents in the possession of public
agencies in California. There are specific
disclosure requirements that are useful to note
that are discussed in more detail online and in
other chapters of this guide:
» General gifts to public agencies must be
disclosed on a special form and posted on
the agency website. For more information,
see www.ca-ilg.org/GiftsQuestion3 and
www.fppc.ca.gov/learn/ public-officials-and-
employees-rules-/ gifts-and-honoraria.html.
» Gifts of event tickets to public agencies must
be disclosed on a special form and submitted
to the FPPC for posting on its website. For
more information, see www.ca-ilg. org/
GiftsQuestion3 and www.fppc.ca.gov/learn/
public-officials-and-employees-rules-/
reporting-ceremonial-role-events-and-ticket-
admission.html.
» Campaign contributions in excess of $250
received during the preceding 12 months
from any party or participant in a pending
permit or license application are discussed on
chapter 5.

There are of course other disclosure and
notice requirements that are not listed
here; these are just some that often raise
issues concerning public confidence and
ethics.
56 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS Charitable Fundraising
Disclosure

BASIC RULES
A frequently overlooked disclosure obligation relates to an official or candidate’s charitable or other fundraising activities. This obligation is referred to as the “behested payments” requirement. The reasoning behind these laws
is that the public has a right to know who is contributing to an elected official’s favorite charities and other causes.

The disclosure requirement is triggered when:
» A person or entity donates $5,000 or more in a
calendar year;
» The donation is for a legislative, governmental or
charitable purpose; and
» The donation is made at the behest of the a public
official. This means the official or candidate (or their employee or agent):
• Has requested or suggested the donation;
• Controls or directs the donation; or
• Plays a cooperating, consulting, or coordinating role with respect to the donation.39
The report must contain the following information:
» The contributor’s name and address;
» The dollar amount or fair market value of the
contribution;
» The date or dates on which the contributions were
made;
» The name and address of the recipient of the
contribution;
» If goods or services were contributed, a description of those goods and services; and
» A description of the purpose or event for which the
contribution was used.40
The official must make this report once contributions
from a single donor (whether an individual or an
organization) have reached the $5,000 aggregate
threshold for any calendar year. Once this occurs,
all contributions the donor makes or made for the
calendar year must be disclosed within 30 days after:
1) the date the $5,000 threshold was reached, or 2)
the date the payment was made, whichever occurs
later.
41 Within 30 days of the donor reaching the $5,000
threshold, the elected official must file a report with his or her agency (typically through the agency’s filing officer)

42. The FPPC’s “Form 803 - Behested Payments Report”
should be used to make this disclosure.
43 What is a “legislative, governmental or charitable”
purpose? The law does not define these words,
but charitable causes typically involve Internal
Revenue Code section 501(c)(3) organizations. A
“governmental” cause might include such things as
fundraising for a new public library. The reference to
a “legislative” cause apparently has its roots in a 1996 FPPC advice letter which addressed a situation in
which a State Senator asked a private party to pay the
airfare and expenses for a witness to come testify at a legislative hearing.
44 Of course, when a public servant conditions his or her official actions on a contribution to a worthy cause it is criminal extortion under both state and federal law.
45 See discussion in the next section.

FOR MORE INFORMATION
On charitable fundraising, see the following resources:
» “Raising Funds for Favorite Causes,” available at
www.ca-ilg.org/fundraising.
» “Using Public Resources for Gifts and Charitable
Purposes,” available at www.ca-ilg.org/
PublicResourcesforGifts.
» “Commitment to Nonprofit Causes and Public
Service: Some Issues to Ponder,” available at www.
ca-ilg.org/ nonprofits.
» “Understanding the ‘Behested Payments’ Issue,”
available at www.ca-ilg.org/BehestedPayments.

For specific questions, contact the FPPC or
agency counsel.

Institute for Local Government | 57

PENALTIES
These disclosure requirements are part of the PRA. PRA
violations are punishable by a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
46 Penalties for Extortion under State and Federal Law
California Law
If an official demands, solicits, or otherwise compels a contribution to a charitable organization in exchange for performing an official act favorable to the person making the contribution, the official’s act of compelling the
contribution could be prosecuted as extortion. Extortion under color of official right is a misdemeanor under
California law.
47 Misdemeanors are punishable by up to
six months in county jail, a fine of up to $1,000, or both.48 Extortion can also be the basis for a grand jury to initiate removal-from-office proceedings for official misconduct. 49 Federal Law
If the official’s extortion affects interstate commerce, it is chargeable as a federal offense, which, under federal law, has a maximum penalty of 20 years in prison and a
$250,000 fine.
50 Honest Services Fraud
Under federal wire and mail fraud laws, the public has
the right to the “honest services” of public officials. 51 The basic concept is that a public official owes a duty of loyalty and honesty to the public—similar to that owed
by a trustee or fiduciary.
52 That duty is violated when a
public official makes a decision that is not motivated by his or her constituents’ interests but instead by his or her personal interests.
53 In one instance, federal authorities prosecuted a city treasurer whose decisions to award contracts were
motivated in part by whether the firm contributedto
political and charitable causes favored by the
treasurer.
54 The maximum penalty for wire and/ or mail fraud
includes a jail term of up to 20 years and a
$250,000 fine.
55 FOR MORE INFORMATION
On penalties for violations of ethics laws,
see www.ca-ilg.org/ consequences.
58 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS The Public’s Right to
Access Records

BASIC RULES
There are two sets of laws and regulations that govern
public records in California. One set governs the public’s right to access public records.
56 The other set governs
which records an agency must retain and for how long.57 Pursuant to the California Public Records Act (“CPRA”), the public has the right to access materials that are
created in the course of conducting the people’s
business.
58 These materials include any writing prepared,
owned, used or retained by a public agency, with some
exceptions.
59 “Writings” include, among other things,
documents, computer data, e-mails, facsimiles and
photographs.
60 Public agency records are generally subject to public disclosure unless a specific exemption applies.
61 A few of
the exemptions worth noting are:
» The “pending litigation” exemption, which exempts
from disclosure documents prepared in support of
ongoing litigation (but for this protection, lawyers suing an agency could obtain all documents containing the
agency’s legal strategy just by asking for them).
62 » The “drafts” exemption, which exempts from disclosure preliminary drafts, notes or other interagency or
intra-agency memoranda not retained in the agency’s
ordinary course of business. The public agency also
must be able to demonstrate that the public’s interest
in nondisclosure clearly outweighs the public’s interest in disclosure.
63 » The “personal privacy” exemption, which exempts from disclosure personnel files, medical records or other
such files, the disclosure of which would constitute an unwarranted invasion of personal privacy.
64 Despite these exceptions, the safe assumption is that most materials used, prepared, or simply maintained by a public agency—including e-mails—are records subject to
disclosure.

A person may make a request for records in any manner,
whether orally in person or over the phone, or in a writing mailed, emailed, faxed or personally delivered to the
agency.
65 There are two ways for a person to gain access
to requested records, and the requester may choose either or both: 1) inspecting the records at the local agency’s office during regular business hours; and 2) receiving
copies of the requested records.
66 A request for records must be specific and clear enough for the local agency to be able to determine what
records the requester seeks.
67 However, if the request is
overly broad or unclear, the local agency must assist the requester with revising the request so that it seeks more easily identifiable records; for instance, the local agency can describe the kind of records it possesses that may be relevant given the purpose of the request and how those records are maintained.
68 Within ten calendar days of receiving a CPRA request, a local agency must respond to the requester notifying them of whether there are records responsive to the request
that the agency will disclose.
69 If the agency is withholding
any records pursuant to one or more applicable
exemptions, the response must be in writing and identify the exemption(s) invoked to justify the nondisclosure.
70 Sometimes records will contain both nonexempt and
exempt information, and the agency must redact a writing to conceal the portions that are exempt before disclosing the writing.
71 Although the CPRA sets a specific deadline
for responding to a records request, the CPRA simply states that the nonexempt records must be actually disclosed to the requester “promptly.”
72 RECORDS RETENTION
Counties and cities generally must retain
public records for a minimum of two years,
but for special districts, the duration of time
varies based on the type of records sought
to be destroyed.
73 Most local agencies adopt
record retention schedules as part of their
records management system. These define
which records must be retained and for how
long. The California Secretary of State provides
local agencies with record management
guidelines.
74 A safe assumption is that most materials
involved in one’s public service are public
records subject to disclosure.

Institute for Local Government | 59
On Public Records, see the following resources:
» The People’s Business: A Guide to the California
Public Records Act, 2008. Available at the League
of California Cities website at www.cacities.org/
PRAGuide or in hardcopy form from www.cacities.
org/ publications or by calling (916) 658-8217.
» The People’s Business December 2014 Guide
Supplement, 2014. Available at the League of
California Cities website at www.cacities.org/
Member-Engagement/Professional-Departments/
City-Attorneys/Publications.
» The People’s Business: 2014 Chart of Frequently
Requested Information and Records, 2014. Available
at the League of California Cities website at www.
cacities.org/Member-Engagement/Professional-
Departments/City-Attorneys/Publications.
» Summary of the California Public Records Act,
2004. Available on the California Attorney
General’s website at http:/ / ag.ca.gov/ publications/
summary_public_records_act.pdf.

For specific questions, please contact agency counsel.

PENALTIES
Anyone can sue the agency to enforce the right to access public records which are subject to disclosure.75 If the agency loses, it must pay costs and attorney’s fees.76

FOR MORE INFORMATION
On penalties for violations of ethics laws,
see www.ca-ilg.org/ consequences.

FOR MORE INFORMATION
60 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS Conducting the Public’s
Business in Public

BASIC RULES
The underlying philosophy of California’s open
government laws is that public agency processes should
be as transparent as possible. Such transparency is vital in promoting public trust in government.

The Ralph M. Brown Act (Brown Act) is California’s
open meeting law for the governing bodies of nearly all local agencies.
77 The Brown Act provides minimum legal
requirements for local agency transparency in decision- making.
78 (Please note that community college boards
are subject to less stringent requirements than are other local agencies. Check the endnotes for specific references to open meeting laws pertaining to community college
districts.)
79 Under the Brown Act, elected and most appointed local agency decision-making bodies, including many advisory
committees, must conduct their business in open and
public meetings to assure that the local decision-making process is observable by the public.
80 The issue of what
kinds of bodies are subject to open meeting laws may
require careful legal analysis. For purposes of clarity, this guide uses the term “decision-making body” and
“decision-makers,” but the reader should be aware that
this term is imprecise.

A “meeting” is any congregation of a majority of the
members of a decision-making body to discuss, hear,
deliberate, or make a decision on any item within the
agency’s jurisdiction. In other words, a majority of a
decision-making body cannot hear a presentation or
talk privately about an issue within its subject matter jurisdiction, no matter how the conversation occurs,
whether by telephone or e-mail, on a private blog, or at a local coffee shop.
81 The following are some key things to keep in mind:
» Committees and Advisory Bodies. Advisory groups or
committees formally created by a governing body are
subject to the open meeting laws. Standing committees
are subject to the open meeting laws if they have
a continuing subject- matter jurisdiction or have a
meeting schedule fixed by charter or formal action of
the governing body.
82 » Serial Meetings. Avoid unintentionally creating a “serial” meeting—a series of communications that
result in a majority of decision-makers conferring on an issue. For example, if two members of a five-member
decision-making body consult with each other outside
of a public meeting (which is not in and of itself a
violation) about a matter of agency business, and then
one or both of those individuals consults with a third
member on the same issue, a majority of the body has
consulted on the same issue and a violation of the open meeting law has occurred. Note the communication
does not need to be in person and can occur through
a third party. For example, sending or forwarding
e-mail can be sufficient to create a serial meeting, as can a staff member polling decision-makers members
in a way that reveals the members’ positions to one
another.
83 However, separate communications of an employee
or official of a local agency with individual decision- makers to answer questions or provide information are
permissible, as long as those communications do not
communicate information about other decision-makers’
comments or positions.
84 For example, the General
Manager of a special district may have an individual
meeting with Board Member A to answer questions
or provide information about a proposal, and then the
General Manager may have a similar meeting with Board
Member B, as long as the General Manager does not
communicate Board Member A’s comments or position on
the proposal to Board Member B.

Institute for Local Government | 61

GOOD ETHICS EQUALS GOOD POLITICS
The media is highly vigilant in monitoring
compliance with open government
requirements—and quick to report on
perceived violations.
» Posting and Following the Agenda. The Brown
Act requires that at least 72-hours before a regular
meeting, and 24-hours before a special meeting, a local agency must post an agenda for the meeting, including
on the agency’s website, if the agency maintains one.
85 In general, public officials may only discuss and act on items included on the posted agenda for that meeting.
86 However, decision-makers or staff may briefly respond to questions or statements during the public comments
section of the meeting even if the questions or
statements are unrelated to any agenda items. Officials can also request staff to look into a matter or place
a matter on the agenda of a subsequent meeting.
87 Action may be taken on a matter not on the agenda
only when the decision-making body determines by a
majority vote that an emergency situation exists or the decision-making body determines by a two-thirds vote
of those officials present at the meeting that there is a need to take immediate action and the need for action
came to the attention of the local agency subsequent to the agenda being posted.
88 » Permissible Gatherings. Not every gathering of
members of a decision-making body outside of a
noticed meeting violates the law. For example, an open
meeting violation would not occur if a majority of a
decision-making body attends the same educational
conference or a meeting not organized by the local
agency as long as certain requirements are met.
89 Neither is attendance at a social or ceremonial event in and of itself a violation.
90 The basic rule to keep in
mind is a majority of members of a decision-making
body cannot discuss agency business (including at
conferences or social events) except at an open and
properly noticed meeting.
» Closed Sessions. The open meeting laws allow
for closed discussions only under very limited
circumstances.91 For example, a governing body may
generally meet in a closed session to receive advice
from its legal counsel regarding pending or reasonably
anticipated litigation.
92 However, the reasons for
holding the closed session must be noted on the
agenda and different disclosure requirements apply to
different types of closed sessions.
93 See the table on
the next page for information on what kinds of closed
sessions are permissible.

Because of the complexity of the open meeting laws, close consultation with the agency’s legal advisor is necessary to ensure that all requirements are met.

FOR MORE INFORMATION
On open meeting laws, see the following resources:
» Open and Public V: A Guide to the Ralph M.

Brown Act, 2016. Available on the League of
California Cities website at www.cacities.org/
OpenandPublicV or in hardcopy form by visiting
www.cacities.org/ publications or by calling (916)
658-8217.
» The Brown Act: Open Meetings for Local
Legislative Bodies, 2003. Available on the
California Attorney General’s website at
http:/ / oag.ca.gov/ open- meetings.
» “Closed Session Leaks: Discretion is the Better
Part of Valor – and Ethics,” available at
www.ca-ilg.org/ closed-session-leaks.
» The use of technology and public meetings is
discussed in Meetings and T echnology: Finding the
Right Balance, 2013. Available at www.ca-ilg.org/
technology-and-meetings.

For specific questions, please contact agency counsel.
62 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS

TYPICAL CLOSED SESSION ISSUES
Local agency open meetings laws vary in terms of what kinds of closed sessions are allowed. Below is a list of matters that generally may be addressed in closed session. The list is illustrative, but not comprehensive, and in many cases, there are statutory limitations and requirements that must be considered. Consult with agency counsel concerning 1) whether a particular type of closed session is permissible and 2) under what circumstances. � Personnel. T o consider the appointment, employment, evaluation of performance, discipline, or dismissal of
a public employee, or to hear complaints against an
employee; however, where the body will be hearing
complaints against an employee, at least 24-hours
before the time for holding the session, the employee
must receive a written notice of his or her right to
require that the hearing be in open session .
94 � Pending Litigation. T o confer with or receive advice from the agency’s legal counsel with respect to existing, threatened or potential litigation.
95 � Real Estate Negotiations. T o grant authority to the agency’
s negotiator regarding the price and terms for
the purchase, sale, exchange, or lease of real property on the agency’s behalf.
96 � Labor Negotiations. T o meet with the agency’s labor negotiator regarding salaries, benefits, and other
matters within the scope of labor negotiations.
97 � Student Disciplinary Issues (for School Districts and Community College Districts). T o consider discipline
of a student if a public hearing would result in the
prohibited disclosure of private information, after
notifying the student (and his or her parents in the
case of minor students) and not receiving in response a request for a public hearing.
98 � Grand Jury Proceedings. T o allow testimony in private before a grand jury (either individually or collectively). 99 � License Applicants with Criminal Records. T o allow an agency to determine whether an applicant for a license
or license renewal with a criminal record is sufficiently rehabilitated to obtain the license.
100
� Public Security. T o confer with designated law
enforcement officials regarding threats to public
facilities or services, or the public’s right of access to those facilities or services.
101
� Multi-jurisdictional Law Enforcement Agency.

T o discuss ongoing multi-jurisdictional criminal
investigations.
102
� Hospital Peer Review and Trade Secrets. T o discuss
issues related to medical quality assurance or involving hospital trade secrets.
103
Just because a topic may be discussed in closed session does not mean that it always must be discussed in closed session. However, sometimes there are reasons for
discussing a matter during a permissible closed session.

For example, the governing body should discuss an
employee disciplinary matter in a closed session meeting to protect the privacy interests of the employee, unless the affected employee gives permission for the governing body to discuss the matter in open session. Other times, the governing body may decide than an open session is in the public’s best interest, even if not required (for example, in determining negotiating positions for the agency). Keep in mind that the decision of whether a meeting should be open or closed (where the governing body has authority to decide) is a collective one, not an individual one. However, also keep in mind that a closed session is permissible
only where a statute specifically allows it. Otherwise, the matter must be discussed in open session.

Institute for Local Government | 63

PENALTIES
Nullification of Decision
Many decisions that are not made according to the
open meeting laws are voidable.
104 After asking the
agency to cure the violation, either the District
Attorney or any interested person may sue to
have the action declared void.
105
Criminal Sanctions
Additionally, members of the governing body who
intentionally violate the open meeting laws may be guilty of a misdemeanor.
106 The penalty for a misdemeanor
conviction is imprisonment in county jail for up to six months or a fine of up to $1,000 or both.
107
Other Consequences
Either the District Attorney or any interested person may sue to remedy past, and prevent future, violations of the open meeting laws.
108Another remedy, under certain
circumstances, is for a court to order all closed sessions be electronically recorded.
109 Costs and attorney fees may
be awarded to those who successfully challenge open
meeting law violations.
110

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

A NOTE ABOUT BLOGGING AND SOCIAL

NETWORKING SITES
Decision-makers who are covered by open meeting
laws must avoid situations in which the majority
of a decision- making body uses the Internet to
communicate with each other about a matter of
agency business. For this reason, decision-makers
must take special care when responding to each
other’s emails, blogs, or posts on social networking
sites (such as Facebook or LinkedIn).

The so-called “Web 2.0” creates opportunities
for people to present information on websites in the
form of a journal. These sites also allow visitors to
make comments or ask questions (called “posts” or
“postings”) in response to
the others’ comments.

For many decision-makers, blogging offers an
effective way to share information with and
communicate with constituents. For example,
rather than having to respond to 10 e-mails asking
the same question, an official can simply post a
response on his or her blog and refer folks to the
answer. Blogging can also be a good way to keep the
public informed, especially as fewer people turn to
traditional media for information.

However, a majority of decision-makers participating
in a blog or other web-based conversation could
constitute a “meeting” within the meaning of the
open meeting laws. This means that the meeting
must be held in accordance with all open meeting
requirements, in an appropriate (accessible to those
with disabilities) location, with prior notice and
an agenda.

What is the reasoning underlying these restrictions?
One is that the public has a right to know about
discussions and decision-making on any issue that
may affect them. There is also an underlying belief
that decision-makers should deliberate on issues
in front of, and facing, their constituents. Another
proposed justification is that officials should hear
the thoughts of the full range of constituents (not
just those on the Internet), should constituents
choose to offer them. Further, public discussions and
decision-making prevents fears of secret backroom
deals made without public knowledge.

For more information, see “Legal Issues Associated
with Social Media” (available at www.ca-ilg.org/
SocialMediaLegalIssues) and “T aking the Bite
Out of Blogs: Ethics in Cyberspace” (available at
www.ca-ilg.org/ blogs).
64 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS The Public’s Right to
Participate in Meetings

BASIC RULES
Another element of open meeting laws is the public’s
right to address the governing body at any open meeting.

An elected official’s duty is to both hear and evaluate these communications. There are a number of basic rules that govern this right. (Again, check the endnotes for specific references to requirements for community college boards.)
111
Posting and Following the Agenda
The open meeting laws provide requirements for informing the public of the date, time, and location of meetings, and the items of business to be addressed at the meetings.
112
The agenda must be posted at least 72-hours in advance
of a regular meeting.
113
Members of the public may request that a copy of the
agenda packet be mailed to them at the time the agenda is posted or upon distribution to the governing body.
114 Local
agencies must post these materials on their website, if the agency has a website.
115
There are a few exceptions to the 72-hour requirement
that relate to unexpected circumstances.
116 These
exceptions, where applicable, also permit an agency to
take action on or discuss items not on the agenda.
117 The
agency may also hold special meetings on 24-hours’
notice
118 or on less than 24-hours’notice if a true
emergency exists.119
The Public’s Right to Materials Not
Included in the Agenda Packet
Any documents or other materials relating to an agenda
item for an open session of a regular meeting of a
governing body distributed less than 72 hours before the meeting must be made available to the public. This must occur when the materials are distributed to the members of the governing body at a public office or location that the agency designates for this purpose. Local agencies must list the address of this office or location on the agendas for all meetings of their governing body.
120
Any documents distributed during a public meeting must
also be made available to the public. This must occur at the meeting if the document is prepared by the agency, or after the meeting if the document is prepared by someone else, such as a member of the public.
121

SPECIAL ISSUES
Electronic Recording of Meetings is Allowed
Anyone attending a meeting may photograph or record it
with an audio or video recorder unless the governing body reasonably finds that the noise, illumination, or obstruction of view would disrupt the meeting.
122
Any audio or video recording of a meeting made by the
local agency becomes a public record that must be made
available to the public for at least 30 days.
123
Sign-In Must Be Voluntary
Members of the public cannot be required to register their name or fulfill any other condition for attendance at a meeting. If an attendance list is used, it must clearly state that signing the list is voluntary.
124
The Public’s Right to be Heard
Generally, every agenda must include an opportunity for the public to address the governing body on any item of interest to the public within the body’s jurisdiction.
125 If the
issue of concern is one pending before the governing body, the opportunity must be provided before or during the
body’s consideration of that issue.
126
Reasonable Time Limits May Be Imposed
Local agencies may adopt reasonable regulations to
ensure everyone has an opportunity to be heard in an
orderly manner.
127
Institute for Local Government | 65
When many people wish to comment on an issue, for
example, an agency may assign a time limit to each
speaker to ensure that everyone has a chance to be heard and the agency can complete its business (individuals
using a translator must be allotted at least twice the
amount of time of a English speaker). However, every
effort should be made to avoid artificially short time limits; this gives the public a reasonable chance to share their views and demonstrates the agency’s commitment to
considering the public’s perspectives.

Handling Disruptions
If an individual or group willfully interrupts a meeting and order cannot be restored, the room may be cleared.
128
Members of the media must be allowed to remain (except
those participating in the disturbance) and only matters on the agenda can be discussed.
129
The chair may encourage everyone to be civil and mutually respectful during the meeting and have disruptive
individuals removed from the room.
130 However, speakers
may not be prevented from criticizing the governing
body.
131
Finally, note that other California laws may provide
additional, subject-specific notice requirements.

FOR MORE INFORMATION

GOOD ETHICS EQUALS GOOD POLITICS
Community relations—and the public’s
opinion of an official’s responsiveness—are
seriously undermined when it appears an
official is not listening to input provided by the
public. There can be even more damage if an
official expresses disagreement in a hostile or
disrespectful way with a position that is being
advocated.

Even if one disagrees with the views being
offered, the statesperson-like approach is to
treat all speakers with the same respect one
would like to be treated with if the roles were
reversed. This is an application of the value of
respect.

On public participation in meetings, see the
following resources:
» The Brown Act: Open Meetings for Local
Legislative Bodies, 2003. Available on the
California Attorney General’s website at
http:/ / oag.ca.gov/ open-meetings.
» Institute resources on civility,
see www.ca-ilg.org/ civility.

For specific questions, please contact
agency counsel.
66 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS

PENALTIES
Nullification of Decision
As a general matter, decisions that are not made according to the open meeting laws are voidable.
132 After asking the
agency to cure the violation, either the District Attorney or any interested person may sue to have the action declared void.
133
Criminal Sanctions
Additionally, members of the governing body who
intentionally violate the open meeting laws may be guilty of a misdemeanor.
134 The penalty for a misdemeanor
conviction is imprisonment in county jail for up to six months, a fine of up to $1,000, or both.
135
Other Measures
Either the District Attorney or any interested person may sue to remedy past and prevent future violations of the open meeting laws.
136 Another remedy, under certain
circumstances, is for a court to order that all closed
sessions be electronically recorded.
137 Costs and attorney’s
fees may be awarded to those who successfully challenge open meeting law violations.
138
Potential Civil Rights Violations
By implementing policies or taking actions to regulate or limit the public’s right to participate in meetings, other than those regulations and limitations specifically allowed under California law and constitutional law principles, the governing board exposes the local agency to liability for violations of individuals’ civil rights
139 including liability for
attorney fees.140

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

VOTERS SUPPORT OPEN GOVERNMENT
In 2004, California voters made public
agency transparency a state constitutional
and statutory requirement. The California
Constitution now provides that “[t]he people
have the right of access to information
concerning the conduct of the people’s
business, and, therefore, the meetings of public
bodies and the writings of public officials and
agencies shall be open to public scrutiny.”
141
Institute for Local Government | 67
Endnotes and Additional
Information
Note: The California Codes are accessible at http:/ /leginfo. legislature.ca.gov/. Fair Political Practices Commission regulations are accessible atwww.fppc.ca.gov/the-law/
fppc-regulations/ regulations-index.html. A source for case law information is www.findlaw.com/ cacases/ (requires
registration).
1 Political Reform Act. Cal. Gov’t Code §§ 87200-10.
2 Cal. Gov’t Code § 8
2019.
3 See Cal. Gov’t C
ode § 87500.2.
4 Cal. Gov’t Code §§ 8
7202-04, 87302. See 2 Cal. Code Regs. §
18722.
5 Cal. Gov’t Code § 8
7300.
6 See Cal. Gov’t C
ode § 87103(c).
7 2 Cal. Code Regs. § 18
229.
8 Cal. Gov’t Code §§ 8
2030, 87103(c).
9 2 Cal. Code Regs. § 18
229.
10 Cal. Gov’t. Code § 8
2029.
11 2 Cal. Code Regs. § 18
229.
12 See Cal. Gov’t C
ode §§ 82033, 87103(b).
13 2 Cal. Code Regs. § 18
229.
14 Cal. Gov’t Code §§ 8
2034, 87103(a) .
15 Cal. Gov’t Code § 8
7103(d).
16 See Cal. Gov’t C
ode § 82005.
17 Cal. Gov’t Code §§ 82034, 8
7103(a), (d).
18 Cal. Gov’t Code § 8
2033 (pro rata interest, if own 10 percent
interest or greater).
19 Cal. Gov’t Code § 8
2030(a),(b)(8), (10).
20 Cal. Gov’t Code § 8
7207(a)(1).
21 See generally Cal. Go
v’t Code §§ 91000-14.
22 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
23 See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
24 Cal. Gov’t Code § 91000(b
).
25 See Cal. Penal C ode § 19 (providing misdemeanors are punishable by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
26 Cal. Gov’t Code § 910

13. 27 See generally Cal. Go
v’t Code §§ 84100-511.
28 See Cal. Gov’t C
ode § 81002(a).
29 See, e.g., Cal. Gov’t C
ode §§ 82013, 84101.
30 See Cal. Gov’t C
ode § 82013(c).
31 See Cal. Gov’t C
ode § 84202.3.
32 See Cal. Gov’t C
ode §§ 81013, 81009.5.
33 Cal. Gov’t Code § 81009
.5(a). Local disclosure requirements can
be found on the Fair Political Practices Commission’s website, available at http:/ /www.fppc.ca.gov/learn/ campaign-rules/local- campaign-ordinances.html.
34 See generally Cal. Go
v’t Code §§ 91000-14.
35 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
36 See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
37 Cal. Gov’t Code § 91000(b
).
38 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
39 See Cal. Gov’t C
ode § 82015(b)(2)(B)(iii); 2 Cal. Code Regs.
§ 18215.3(a). See also Cal. Fair Political Practices Commission, Limitations and Restrictions on Gifts, Honoraria, Travel and Loans, at 8 (2015), available at http:/ /www.fppc.ca.gov/ content/ dam/ fppc/NS-Documents/TAD/Public%20Officials%20and%20
Employees/StateGiftFactSheet.pdf.
40 See Cal. Gov’t C
ode § 82015(b)(2)(B)(iii). See also Fair Political
Practices Commission, California Form 803 – Behested Payments Report Instructions, available at http:/ /www.fppc.ca.gov/ content/ dam/fppc/NS-Documents/TAD/ Agency%20Reports/Form803.
pdf .
41 Cal. Gov’t Code § 8
2015(b)(2)(B)(iii).
42 Cal. Gov’t Code § 8
2015(b)(2)(B)(iii); Fair Political Practices
Commission, California Form 803 – Behested Payments Report Instructions, available at http:/ /www.fppc.ca.gov/ content/ dam/ fppc/NS-Documents/TAD/ Agency%20Reports/Form803.pdf.
43 Fair Political P
ractices Commission, California Form 803 -
Behested Payments Report, available at http:/ /www.fppc.ca.gov/ content/ dam/fppc/NS-Documents/TAD/ Agency%20Reports/
Form803.pdf.
44 See Schmidt Advice L
etter, No. A-96-098 (March 26, 1996); S.

Rules. Comm., S.B. 124 S. Floor Analysis, 1997-1998 Sess., (Cal.

Sept. 2, 1997).
45 Cal. Penal Code § 5
18; In re Shepard, 161 Cal. 171 (1911). See also 18
U.S.C. § 666(a)(1)(B) .
68 | Understanding the Basics of Public Service Ethics Laws | TRANSPARENCY LAWS 46 See generally Cal. Go v’t Code §§ 91000-14.
47 Cal. Penal Code § 5

21. 48 Cal. Penal Code § 19
.
49 Cal. Gov’t Code §§ 3060-30

74. 50 18 U.S.C. §§ 195
1(a), 3571(b).
51 18 U.S.C. §§ 1341 (mail fr
aud), 1343 (wire fraud), 1346 (honest
services).
52 U.S. v. Sawy
er, 239 F.3d 31, 39 (1st Cir. 2001) (finding sufficient evidence of guilt apart from proof of violation of state law). 53 U.S. v. Lopez
-Lukis, 102 F.3d 1164, 1169 (11th Cir. 1997) (noting
that effort to improperly control composition of decision- making body constituted an effort to deprive public of honest services); McNally v. U.S., 483 U.S. 350 at 362-63 (Justice Stevens, dissenting).
54 U.S. v. Kemp
, 379 F.Supp. 2d 690, 697-98 (E.D. Penn. 2005). In
Skilling v. U.S., 130 S.Ct. 2896, 2931 (2010), the U.S. Supreme Court held that in order to avoid unconstitutional vagueness 18 USC §1346 (honest services fraud) only criminalizes bribes and kick-back schemes.
55 18 U.S.C. §1341 (“. . . shall be fined under this title or imprisoned not more than 20 y
ears, or both.”).
56 See Cal. Gov’t C
ode §§ 6250-70.
57 See Cal. Gov’t C
ode §§ 34090-34090.8.
58 See generally Cal. Go
v’t Code §§ 6250-70.5. See also Cal. Const.
art. I, § 3(b)(1).
59 See Cal. Gov’t C
ode §§ 6252-53.
60 Cal. Gov’t Code § 6
252(g) (“‘Writing’ means any handwriting,
typewriting, printing, photostating, photographing, photocopying, transmitting by electronic mail or facsimile, and every other means of recording upon any tangible thing any form of
communication or representation, including letters, words, pictures, sounds, or symbols, or combinations thereof, and any record thereby created, regardless of the manner in which the record has been stored.”)
61 State e
x rel. Division of Industrial Safety v. Superior Court, 43 Cal.

App. 3d 778, 117 Cal. Rptr. 726 (1974); Cook v. Craig, 55 Cal. App. 3d 773, 127 Cal. Rptr. 712 (1976).
62 Cal. Gov’t Code § 6
254(b).
63 Cal. Gov’t Code § 6
254(a).
64 Cal. Gov’t Code § 6
254(c).
65 League of California C
ities, The People’s Business: A Guide to the
California Public Records Act, 11 (2008), available at http:/ /www. cacities.org/PRAGuide (citing Los Angeles Times v. Alameda Corridor T ransportation Authority (2001) 88 Cal.App.4th 1381). 66 Id. at 10.
67 Id. at 11 (citing
Rogers v. Superior Court (1993) 19 Cal.App.4th 469;
Cal. First Amend. Coalition v. Superior Court (1998) 67 Cal.App.4th 159).
68 Id. at 12 (citing Cal. Go
v. Code § 6253.1; State Board of Equalization
v. Superior Court (1992) 10 Cal.App.4th 1177).
69 Id. at 11 (citing Cal. Go v’t Code § 6253(c)).
70 Id. at 13 (citing Cal. Go
v’t Code § 6255).
71 Id. (citing Cal. Go
v. Code § 6253(a); ACLU Foundation v.

Deukmejian (1982) 32 Cal.3d. 440).
72 Id. (citing Cal. Go
v. Code § 6253(b); 88 Ops.Cal.Atty.Gen. 153
(2005); 89 Ops.Cal.Atty.Gen. 39 (2006)).
73 Cal. Gov’t Code §§ 2
6202 (counties), 34090(d) (cities), 60201
(special districts). Note that in California, the Public Records Act is not a records retention statute. See Los Angeles Police Dept. v.

Superior Court, 65 Cal. App. 3d 661 (1977).
74 The Secretary of Stat
e’s Local Government Records Management
Guidelines may be viewed at http:/ /www.sos.ca.gov/ archives/ admin-programs/local-gov-program.
75 Cal. Gov’t Code § 6
258.
76 Cal. Gov’t Code § 6
259(d).
77 See generally Cal. Go
v’t Code §§ 54950-63 (for cities, counties,
special districts and school districts).
78 See Cal. Gov’t C
ode § 54953.7.
79 Cal. Educ. Code §§ 7
2121-29 (for community college district
governing boards).
80 See Cal. Gov’t C
ode § 54952.2(a).
81 Cal. Gov’t Code § 54
952.2(b); Cal. Educ. Code § 72121.
82 Cal. Gov’t Code § 54
952(b).
83 Cal. Gov’t Code § 54
952.2.
84 Cal. Gov’t Code §§ 54
954.2; 54956.
85 Cal. Gov’t Code § 54
952.2(b)(2).
86 Wolfe v
. City of Fremont, 144 Cal. App. 4th 533, 50 Cal. Rptr. 3d 524 (2006); see also S.B. 1732, 2007-2008 Leg., Reg. Sess. (Cal. 2008) (clarifying Cal. Gov’t Code § 54952.2 to include both communications that result in a collective concurrence and those that are part of the process of developing collective concurrence). 87 Cal. Gov’t Code § 54
954.2; Cal. Educ. Code § 72121.5.
88 Cal. Gov’t Code § 54
954.2(a)(2), See Cal. Educ. Code § 72121.5.
89 Cal. Gov’t Code § 54
954.2(b).
90 Cal. Gov’t Code § 54
952.2(c)(2).
91 Cal. Gov’t Code § 54
952.2(c)(5).
92 See, e.g., Cal. Gov’t. C
ode §§ 54956.5-54957, 54957.6, 54957.10,
54962; Cal. Educ. Code § 72122.
93 Cal. Gov’t Code § 54
956.9.
94 Cal. Gov’t Code §§ 54
957(b)(1), (2).
95 Cal. Gov’t Code § 54
956.9.
96 Cal. Gov’t Code § 54
956.8.
97 Cal. Gov’t Code §§ 354

9.1 (school and community college
districts), 54957.6 (other local agencies).

Institute for Local Government | 69
98 Cal. Educ. Code §§ 35
146, 72122.
99 Cal. Gov’t Code § 54
953.1.
100 Cal. Gov’t Code § 54
956.7.
101 Cal. Gov’t Code § 54
957(a).
102 Cal. Gov’t Code § 54
957.8.
103 Cal. Gov’t Code §§ 3
7606, 37624.3; Cal. Health & Safety Code §§
1461, 1462, 32106, 32155.
104 Cal. Gov’t Code § 54
960.1; Cal. Educ. Code § 72121(b).
105 Id.
106 Cal. Gov’t Code § 54
959.
107 See Cal. Penal C
ode § 19.
108 Cal. Gov’t Code § 54
960(a).
109 Cal. Gov’t Code § 54
960(b).
110 Cal. Gov’t Code § 54
960.5.
111 Cal. Educ. Code §§ 7
2121-29 (for community college district
governing boards).
112 Cal. Gov’t Code § 54
954.2(a); Cal. Educ. Code § 72121.
113 Id.
114 Cal. Gov’t Code § 54
954.1.
115 See Cal. Gov’t C
ode § 54954.2. This requirement currently only
applies to:
» The go
verning body of a local agency or any other local body created by state or federal statute; or
» A commission, committee, board, or other body of a local agency, created by charter, ordinance, resolution, or formal action of a legislative body, if the members are compensated for their appearance, and at least one member is also the member of a governing body created by state or federal
statute.

However, per 2016 Cal. Stat. ch. 265, § 1 (amending Cal. Gov’t Code § 54954.2), beginning January 1, 2019, the agenda
for a meeting of a legislative body of a city, county, city and county, special district, school district, or political subdivision established by the state must be posted on the local agency’s “primary Internet Web site homepage” if the local agency has a webpage.
116
Cal. Gov’t Code § 54
954.2(b).
117 Cal. Gov’t Code § 54
954.2(b)(2).
118 Cal. Gov’t Code § 54
956.
119 Cal. Gov’t Code § 54
956.5.
120 Cal. Gov’t Code § 54
957.5.
121 Cal. Gov’t Code § 54
957.5(c).
122 Cal. Gov’t Code § 54
953.5(a).
123 Cal. Gov’t Code § 54
953.5(b).
124 Cal. Gov’t Code § 54
953.3.
125 Cal. Gov’t Code § 54
954.3(a); Cal. Educ. Code § 72121.5.
126 Cal. Gov’t Code § 54
954.3(a).
127 Cal. Gov’t Code § 54
954.3(b); White v. City of Norwalk, 900 F.2d
1421, 1425 (9th Cir. 1990).
128 Cal. Gov’t Code § 54
957.9.
129 Id.
130 Cal. Gov’t Code § 54
957.9;Norse v. City of Santa Cruz, 629 F.3d
966, 976 (9th Cir. 2010).
131 Cal. Gov’t Code § 54
954.3(c); Perry Educational Association v.

Perry Local Educators’ Association, 460 U.S. 37, 46 (1983); Acosta v.

City of Costa Mesa, 718 F.3d 800 (9th Cir. 2013).
132
Cal. Gov’t Code § 54
960.1; Cal. Educ. Code § 72121(b).
133 Id.
134 Cal. Gov’t Code § 54
959.
135 See Cal. Penal C
ode § 19.
136 Cal. Gov’t Code § 54
960(a).
137 Cal. Gov’t Code § 54
960(b).
138 Cal. Gov’t Code § 54
960.5.
139 See 42 U.S.C. § 1983.
140 See 42 U.S.C. § 1988.
14 1 Cal. Const. art. I, § 3(b
)(1).
70 | Understanding the Basics of Public Service Ethics Laws | PERSONAL FINANCIAL GAIN LAWS Institute for Local Government | 71
CHAPTER 5:

Fair Process Laws
and Merit-Based
Decision-Making
72 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING Chapter 5: Fair Process Laws and Merit-Based Decision-Making

CONTENTS
The Right to Fair and Unbiased Decision-Makers ...................................................................................................74 Basic Rules ...............................................................................................................................................................74 Effect of V
iolations .........................................................................................................................................................75 Effect on Decision ..................................................................................................................................................75 Due Pr
ocess Violations .........................................................................................................................................75 Vot
e-T rading ....................................................................................................................................................................75 Basic Rules ...............................................................................................................................................................75 Penalties ...................................................................................................................................................................76 Per
sonal Loans .................................................................................................................................................................76 Basic Rules ...............................................................................................................................................................76 Penalties ...................................................................................................................................................................76 Decisions May Not Benefit F
amily ..............................................................................................................................77 Basic Rules ...............................................................................................................................................................77 Penalties ...................................................................................................................................................................77 Re
strictions and Disqualification Requirements Relating to Campaign Contributions ....................................79 Basic Rules ...................................................................................................................................................................

Aff
ected Officials ........................................................................................................................................... 80 Extortion under Calif
ornia and Federal Law .............................................................................................. 81 Kinds of Pr
oceedings Affected ..................................................................................................................... 81 Actions T
hat Must Be T aken ......................................................................................................................... 81 Penalties .................................................................................................................................................................. 82 Agency Staff and P
olitical Activities ...........................................................................................................................83 Basic Rules ...............................................................................................................................................................83 Employment Decisions, Soliciting Suppor
t and Campaign Contributions ..........................................83 Eng
aging in Political Activities During Work Hours or While in Uniform ...........................................83 P
enalties ...................................................................................................................................................................83 Institute for Local Government | 73
Holding Multiple Public Offices ...................................................................................................................................83 Basic Rules ...............................................................................................................................................................83 Special Issues ......................................................................................................................................................... 84 Employ
ees Who Run for the Governing Board of Their Public Agency Employers .......................... 84 Individual Agency Guidelines ...................................................................................................................... 84 Penalties .................................................................................................................................................................. 84 Competitiv
e Bidding Processes for Public Contracts ............................................................................................. 85 Basic Rules .............................................................................................................................................................. 85 Exc
eptions .............................................................................................................................................................. 85 Emergency ....................................................................................................................................................... 85 Pr
ofessional Services ..................................................................................................................................... 85 Special Services .............................................................................................................................................. 85 Design-Build .................................................................................................................................................... 86 Penalties .................................................................................................................................................................. 86 Whistle-Blowing P
rotections........................................................................................................................................87 Basic Rules ...............................................................................................................................................................87 Penalties ...................................................................................................................................................................87 Endnotes and A
dditional Information ....................................................................................................................... 88 74 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING The Right to Fair and Unbiased
Decision-Makers

BASIC RULES
Although California statutes largely determine when
public officials must disqualify themselves from
participating in decisions, common law (judge-made law) and some constitutional principles still require a public official to exercise his or her powers free from personal bias—including biases that have nothing to do with
financial gain or losses.

Under the common law doctrine, an elected official has
a fiduciary duty to exercise the powers of office for the benefit of the public and is not permitted to use those powers for the benefit of private interests. It should be noted that the interest need not be financial.
1 Local officials are much less constrained when
the body is acting in a legislative, as compared
to a quasi-judicial capacity.

In addition, constitutional due process principles require a decision-maker to be fair and impartial when the decision- making body is sitting in what is known as a “quasi-
judicial” capacity. Quasi-judicial matters include variances, use permits, annexation protests, personnel disciplinary actions and licenses. Quasi-judicial proceedings tend
to involve the application of common requirements or
principles to specific situations, much as a judge applies the law to a particular set of facts.

The kinds of impermissible bias
2 include:
» Personal Interest in the Decision’s Outcome.

For example, one court found an elected official was
biased and should not participate in a decision on a
proposed addition to a home in his neighborhood when
the addition would block the elected official’s view
of the ocean from the official’s apartment.
3 Personal
interest bias can also arise when hearing officers
are selected and paid on an ad hoc basis, making
their future work dependent on the public agency’s
goodwill.
4 » Personal Bias.
• People. Strong animosity about a permit applicant
based on conduct that occurred outside the hearing
is one example. Conversely, a strong personal
loyalty toward a party could bias an official as well.
5 • Belief/Ideology. Examples include strong
ideological reactions to a proposed Planned
Parenthood clinic or community center for a
particular ethnic or religious group.
» Factual Bias. For example, information an official
might receive outside the public hearing that causes
the official to have a closed mind to any factual
information that may be presented in a hearing. This is a variation of the “ex parte communications” doctrine,
which suggests that, in quasi-judicial matters, all
communications to decision-makers about the merits
(or demerits) of an issue should occur in the context
of the noticed hearing (as opposed to private meetings
with either side of an issue, for example).
6 » Dual Role Influence. Another example is when
someone plays multiple roles in a decision making
process. A court concluded that a business owner’s
fair hearing rights were violated when a public agency
attorney made the initial decision to deny the renewal
of the business’s regulatory permit then acted as a legal adviser to a hearing officer reviewing that denial.
7 When an official sits in a quasi-judicial capacity, that official’s personal interest or involvement, either in a decision’s outcome or with any participants, can create a risk that the agency’s decision will be set aside by a court if the decision is challenged. T ypically, having the official disqualify himself or herself removes the risk.
8 Decision-makers are also well advised to step aside on participation in a quasi-judicial matter when the decision- maker has pre-judged the matter. Attributes of having
“pre-judged the matter” include having a closed mind or a preconceived and unalterable view of the proper outcome without regard to the evidence.
9 Institute for Local Government | 75
This rule does not preclude holding opinions, philosophies or strong feelings about issues or specific projects; it also does not proscribe expression of views about matters
of importance in the community, particularly during an
election campaign.
10 Nevertheless, if an official has made
very strident and unequivocal statements for or against a pending project or issue, a court could find that the official could not participate as an unbiased decision-maker when the project or issue comes before the agency.
11 Also, local
officials are much less constrained when the body is acting in a legislative, as opposed to quasi-judicial capacity.

FOR MORE INFORMATION
Effect of Violations

EFFECT ON DECISION
An administrative decision tainted by bias will be set aside.

The agency will have to conduct new proceedings free of the influence of the biased decision-maker.
12 DUE PROCESS VIOLATIONS
If the violation rises to the level of a denial of due process under constitutional law, the affected individual(s) may seek damages, costs and attorney’s fees.
13 FOR MORE INFORMATION
On the effect of ethics law violations,
see www.ca-ilg.org/ consequences.

Vote-T rading

BASIC RULES
The California law that prohibits public officials from asking for, receiving, or agreeing to receive bribes in exchange for their votes or other official actions also forbids them from giving, or offering or promising to give, “any official vote” in exchange for another public official’s vote on the“same or another question.”
14 Like bribery, vote-trading is a form of “you-do-this- for-me,-I-will-do-this-for-you” practice. In Latin, this is known as a quid pro quo (“this for that”). Quid pro
quos are legally risky. Any time a public official stops making decisions based on what’s best for the public, the transparency and integrity of the policy-making process is compromised.

Note that the California Attorney General has concluded that the prohibition against vote-trading applies to
exchanges of votes between public officials and not to
commitments made by jurisdictions in an inter-agency
agreement.
15 FOR MORE INFORMATION
On vote trading, see www.ca-ilg.org/votetrading. For
specific questions, please contact agency counsel.

On fair decision-making and bias, see the following
resources:
» When an Elected Official Feels Passionately
About an Issue: Fair Process Requirements in
Adjudicative Decision-Making,” available at
www.ca-ilg.org/bias.
» “When Y our Decision Will Affect a Friend or
Supporter,” available at www.ca-ilg.org/ resource/
when-your-decision-will-affect-friend-or-
supporter.
» Understanding the Basics of Local Agency
Decision- Making, 2009, available at www.ca-ilg.
org/ decisionmaking.
» An Ounce of Prevention: Best Practices for
Making Informed Land Use Decisions, 2006,
available at www.ca-ilg.org/ ounce.

For specific questions, please contact agency
counsel.
76 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING

PENALTIES
Penalties for vote trading include “imprisonment in the state prison for two, three, or four years and . . . by a restitution fine of not less than two thousand dollars
($2,000) or not more than ten thousand dollars ($10,000) . . .”
16 A conviction for vote-trading will also lead to an
immediate loss of office and permanent disqualification from holding any office in the state.
17 FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

Personal Loans

BASIC RULES
Elected officials and others may not receive a personal loan from any officer, employee, member or consultant of the official’s respective agency while in office.
18 There also are limits on elected officials’ and others’ ability to receive loans from those with contracts with the agency (except for bank or credit card loans made in the regular course of the company’s business).
19 Personal loans over
$500 from others must meet certain requirements (for
example, be in writing, clearly state the date, amounts and interest payable).
20 For further discussion of ethics laws
related to personal loans and other economic interests, see Chapter 2.

PENALTIES
These restrictions are part of the Political Reform Act.

Violations of these laws are punishable by a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
21 These penalties can include any or all of the following:
» Immediate loss of office;22
» Prohibition from seeking elected office in the future;23 » Fines of up to $10,000 or more depending on the
circumstances;24 and
» Jail time of up to six months.25

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

Institute for Local Government | 77
Decisions May Not
Benefit Family

BASIC RULES
An important part of a fair process is that everyone,
irrespective of their personal relationship to decision- makers, will have the same access to public agency
benefits and approvals.

An outgrowth of this principle is the rule that public
officials must disclose their interests and disqualify
themselves under the Political Reform Act and other
laws (for example Government Code section 1090’s
proscription against interests in contracts) from
participating in decisions that will have the result of their immediate family’s expenses, income, assets or
liabilities increasing or decreasing.
26 “Immediate family”
includes one’s spouse or domestic partner and dependent children.
27 For further discussion of conflict of interest
disclosure and disqualification, see Chapter 2.

Some jurisdictions have also adopted additional policies to prevent nepotism in hiring, promotions and
appointments. For example, marital status policies
regarding supervisor/ supervisee relationships, consensual workplace romance policies, and anti-fraternizations
policies. For more information about hiring family
members, see “Hiring: When a Relative Wants a Job,”
available at www.ca-ilg.org/fair-processes.

PENALTIES
The disqualification requirements relating to family
members are part of the Political Reform Act. A refusal to disqualify oneself is punishable by a variety of civil, criminal and administrative penalties, depending on
the severity of the violation and the degree of intent
to violate the law that enforcement entities are able to demonstrate.
28 These penalties can include any or all of the following:
» Immediate loss of office;29
» Prohibition from seeking elected office in the future;30 » Fines of up to $10,000 or more depending on the
circumstances;31 and
» Jail time of up to six months.32
If the family members’ interest relates to an interest in a contract, penalties for violating Government Code section 1090 apply (for example, felony prosecution or refunds of amounts paid under the contract).
33 For more information
about Government Code section 1090, see Chapter 2.

EFFECT ON AGENCY AND THOSE
AFFECTED BY AGENCY’S DECISION
When a disqualified official participates in a decision, it can also void the decision.
34 This can have serious
consequences for those affected by the decision as well as the public agency.

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
78 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING Restrictions and Disqualification
Requirements Relating to
Campaign Contributions

BASIC RULES
Generally, the ethics laws with respect to campaign
contributions emphasize disclosure rather than
disqualification.
35 Disclosure enables voters to assess
the degree an official could be influenced by campaign
contributors who appear before the agency. Both financial and in-kind (goods and services) support must be
disclosed.
36 These requirements are discussed on
Chapter 4.

Moreover, the courts have held the receipt of campaign
contributions does not generally give rise to a duty to disqualify for bias. For example, a court determined an elected official who received a campaign contribution
from a developer is not automatically barred from acting on the developer’s land use permit application.
37 The court
left open the possibility this scenario could, under certain circumstances, create a problem.

However, under limited (and sometimes counterintuitive) circumstances, certain local agency officials must
disqualify themselves from participating in proceedings regarding licenses, permits and other entitlements for use if the official has received campaign contributions of more than $250 during the previous twelve months from any
party or participant.
38 Campaign contributions may be
both monetary (dollars) and “in-kind” (goods or services) contributions.
39 In addition, these officials are prohibited from receiving, soliciting or directing a campaign contribution of more than $250 from any party or participant in a license,
permit or entitlement proceeding while the proceeding is pending and for three months after the proceeding.
40 Affected Officials
Generally speaking, this requirement does not apply to
officials directly elected to the board of local agencies while acting in the scope of the office for which they were elected. However, elected officials are covered by this prohibition when they sit as members of other boards
to which they were not elected (such as joint powers
agencies, regional government entities or local agency
formation commissions).
41 Other covered officials include appointed board or
commission members who become or have been
candidates for elective office.
42 These prohibitions apply only with respect to campaign contributions from persons who are financially interested in the outcome of the specified proceedings. Those
interested persons include:
» Parties to the proceeding (such as applicants for the permit, license or entitlement); and
» Participants.43
A participant is a person who is not a party but who
actively supports or opposes a particular decision in a proceeding involving a license, permit or other entitlement for use and who has a financial interest in the outcome of the decision.
44 A person qualifies as a “participant” if he or
she attempts to influence the officers or employees of the agency with respect to the decision or testifies in person before the agency with respect to the decision.
45 Institute for Local Government | 79
Extortion under California and Federal Law
A demand for campaign contributions can also constitute extortion. Extortion occurs when someone obtains money
through threat of harm or under color of official right .46
» California Law. Extortion under California law is a
misdemeanor.
47 Misdemeanors are punishable by up
to six months in county jail, a fine of up to $1,000 or both.
48 Extortion can also be the basis for a grand jury
to initiate removal-from-office proceedings for official misconduct.
49 » Federal Law. T o be chargeable as a federal offense, the act must affect interstate commerce. The maximum
penalty for extortion under federal law is 20 years in
prison and a $250,000 fine.
50 Kinds of Proceedings Affected
The general rule applies to all proceedings involving
licenses and permits, including use permits. This includes:
» Business, professional, trade and land use licenses and permits;
» Land use permits;
» Franchises; and
» Contracts, other than competitively bid, labor or
personal employment contracts.51
Examples of land use permits include conditional use
permits,
52 zoning variances,53 and tentative subdivision
and parcel maps.54 Examples of covered contracts include consulting contracts, whether engineering, architectural or legal.
55 Actions That Must Be T aken
Disclosure
When someone files a permit or license application, that individual must publicly report all covered officials to whom the individual made contributions of more than
$250 during the previous twelve months.
56 Likewise, a
covered official must publicly disclose on the record of the proceeding any party or participant who has contributed more than $250 during the previous twelve months to that official.
57 The disclosure must be made prior to the agency making any decision in the proceeding (without the covered
official’s participation).
58 Disqualification
If prior to making a decision in the proceeding, a covered official knowingly receives more than $250 in campaign
contributions from a party during the previous twelve
months, that official must disqualify himself or herself from participating in the proceeding.
59 Likewise, with
respect to contributions received from a participant, the covered official must disqualify himself or herself if he or she has reason to know, prior to making a decision in the proceeding, that the participant is financially interested in the outcome of the proceeding.
60 (Note the disqualification requirement is triggered by actual receipt of campaign contributions, not simply
asking for a contribution if the request is unsuccessful. Of course, there are significant ethical issues associated with soliciting campaign contributions from either parties or participants while a decision is pending).

Disqualification means the official may not participate in making any decision in the proceeding, and may not in any way attempt to use his or her official position to influence the decision.
61 Avoiding Disqualification
A covered official may avoid disqualification if he or
she returns the contribution, or that portion which is
over $250, within 30 days from the time the official
knows or has reason to know of the contribution and the proceeding.
62 No Contributions During the Proceeding
While the permit or license proceeding is pending and
for three months after the decision, covered officials
must not solicit or receive campaign contributions from either parties or participants (persons who actively
support or oppose a particular decision and are financially interested in the outcome).
63 This prohibition includes
a prohibition against soliciting, receiving or directing contributions on behalf of another person or on behalf
of a campaign committee.
64 Likewise, all parties and participants are prohibited during this period of time from making contributions of more than $250 to any officials involved in the proceedings.
65 80 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING

MORE ON FUNDRAISING
Even when the law does not constrain an
official’s political fund-raising activities (other
than requiring disclosure of donors), it is important
to be extraordinarily judicious in choosing those
one will ask for campaign contributions.

If an individual or company has matters pending
with one’s agency, they (and others, including the
media and one’s fellow candidates) are going to
perceive a relationship between the decision and
whether they contribute to one’s campaign. The
unkind characterization for this dynamic is “shake-
down.”
T wo important points to remember:
• Public officials who indicate their actions on a
matter will be influenced by whether they receive
a campaign contribution put themselves at risk of
being accused of soliciting a bribe or extortion.
• The legal restrictions on campaign fund-raising
are minimum standards.

FOR MORE INFORMATION

PENALTIES
The disqualification requirements are part of the Political Reform Act. A refusal to disqualify one-self is punishable by a variety of civil, criminal and administrative penalties, depending on the severity of the violation and the degree of intent to violate the law that enforcement entities are able to demonstrate.
66 These penalties can include any or all of the following:
» Immediate loss of office;67
» Prohibition from seeking elected office in the future;68 » Fines of up to $10,000 or more depending on the
circumstances;69 and
» Jail time of up to six months.70

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

See the following resources:
» “Raising Funds for Favorite Causes,” available at
www.ca-ilg.org/fundraising.
» Institute resources on ethics on the campaign
trail, see
www.ca-ilg.org/ campaigning-office.
» “FPPC resources on campaign contribution limits,
see www.fppc.ca.gov/learn/ campaign-rules/
state-contribution-limits.html.
»”Campaign Disclosure Manual 2 – Information for
Local Candidates, Superior Court Judges, Their
Controlled Committees, and Primarily Formed
Committees for Local Candidates,” 2016.

Available at www.fppc.ca.gov/learn/ campaign-
rules/ campaign-disclosure-manuals.html.

For specific questions, please contact the Fair
Political Practices Commission or agency counsel.

Institute for Local Government | 81
Agency Staff and
Political Activities

BASIC RULES
There are a number of laws designed to insulate public
employees from having to participate in the campaign
activities of candidates for their agency’s governing board.

Employment Decisions, Soliciting Support
and Campaign Contributions
California law forbids candidates and officials from
conditioning employment decisions on support of a
person’s candidacy.
71 Soliciting campaign funds from agency officers or
employees is also unlawful.
72 There is an exception if the
solicitation is made to a significant segment of the public that happens to include agency officers or employees.
73 Candidates also may not offer or arrange for an increase in salary for an agency employee in exchange for a political contribution.
74 Note that members of the International City/County
Management Association and the City Attorneys
Department of the League of California Cities place a high value on maintaining their independence from the political process. As a result, both organizations encourage their members not to make campaign contributions to local
officials.
75 Engaging in Political Activities During Work Hours or While in Uniform
Engaging in political activities during work hours violates prohibitions against the political use of public resources. 76 Local agencies and school districts may impose additional restrictions on the political activities of employees
during working hours or while on agency property.
77 Such restrictions can include wearing political buttons during work hours and displaying political signs at one’s workstation.
78 Additionally, California law prohibits employees or officers of local agencies from engaging in political activities of any kind while in uniform.
79 For more information about the use of public resources for political purposes, see Chapter 3.

PENALTIES
Violation of the prohibition against soliciting campaign funds from agency staff is punishable as a misdemeanor. 80 Offering or arranging a raise for an agency employee in exchange for a contribution is punishable by up to a year in county jail, a fine of up to $5,000 or both.
81 No penalties are specified in the code sections creating the prohibitions against conditioning employment decisions
on political support or against engaging in political
activities while in uniform.
82 Presumably violations would
fall into the catchall penalty for misconduct in office, which is loss of office.
83 Public officials face both criminal and civil penalties for using public resources for political benefit.
84 See Chapter 3
for more details.

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
82 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING Holding Multiple Public Offices
There is such a thing as too much public service; the
law limits the degree to which public officials can
simultaneously hold multiple offices. The reason is, when an official assumes a public office, he or she takes on responsibility to the constituents of that agency to put their interests first. When an official occupies multiple offices in multiple agencies, fulfilling that responsibility becomes more complicated, both legally and ethically.

Potential legal issues include:
» Political Reform Act issues when the official is in the position of making decisions that affect the official’s economic interests. This issue is covered in Chapter 2; » Section 1090 issues when the official’s position is such that the official has an interest in a contract in which the agency is involved. This issue is also covered in
Chapter 2; and
» Incompatibility of office issues (for example,
membership on the city council and serving on the
board of another local agency) when the official’s
offices are such that the official may be subjected to
conflicting loyalties.
85 The incompatible office holding problem differs from a conflict of interest that involves a potential clash
between one’s private interest and one’s public duties, incompatibility of offices normally refers to the “public- public” situation where no personal conflict of interest is involved. Instead there is a potential clash between one’s responsibility to two sets of constituents.

A similar but different conflict can arise when a local agency officer engages in incompatible employment
activities. Here, there is only one public office with the conflict arising from the outside employment activity.
86 BASIC RULES
California law prohibits public officers from simultaneously holding multiple offices that are “incompatible” with one another.
87 Offices are incompatible when:
» Either of the offices may audit, overrule, remove
members of, dismiss employees of, or exercise
supervisory powers over the other office or body;
» Based on the powers and jurisdiction of the offices, there is a possibility of significant clashes of duties or loyalties between the offices; or
» Public policy considerations make it improper for the position of making decisions that affect the official’s economic interests. This issue is covered in Chapter 2; The notion underlying the prohibition is that it can be unfair and unwise to have decision-makers who are
supposed to have just one agency’s (and one agency’s
constituents) interests at heart assume multiple
decision-making roles. As the Attorney General
observed, the public is entitled to utmost loyalty from those who occupy offices.
89 This restriction on holding multiple public offices only applies to positions that are considered to be offices— including appointed or elected members of a governmental board, commission, committee, or other body.
90 The
restriction does not apply to positions of employment in an agency,
91 although employees may be prohibited from
serving on the governing bodies of agencies in which they are employed.
92 Note there can be specific legislative exceptions to this rule.
93 Under some circumstances, local agencies may
allow simultaneous occupancy of what would otherwise
be incompatible offices.
94 When one assumes a public office, one takes
on responsibility to the constituents of that
agency to put their interests first. When one
occupies multiple offices in multiple agencies,
that job becomes more complicated…
Institute for Local Government | 83

SPECIAL ISSUES
Employees Who Run for the Governing Board of Their
Public Agency Employers
Generally, an individual may not serve as an elected or appointed member of a local agency’s governing board
if he or she is an employee of the local agency.
95 If the
employee does not resign, the individual’s employment
automatically terminates upon being sworn into office.
96 Volunteer firefighters are exempt from these provisions if the firefighter receives no salary.
97 Individual Agency Guidelines
Local agencies must adopt rules regarding incompatible
employment activities.
98 FOR MORE INFORMATION
On holding multiple offices see “Holding T wo Positions” available online at www.fppc.ca.gov/learn/ public-
officials-and-employees-rules-/ conflict-of-interest/
holding-two-positions.html.

For specific questions, please contact the Fair Political Practices Commission or agency counsel.

PENALTIES
If an official accepts a second office that is incompatible with an office he or she currently holds, the prior office automatically terminates when the official is sworn into the second office.
99 FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.
84 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING Competitive Bidding Processes
for Public Contracts

BASIC RULES
Public contracting laws — including those adopted at the local level — are designed to give all interested parties the opportunity to do business with the government on an
equal basis.
100
This keeps contracts from being steered to businesses or individuals because of political connections, friendship, favoritism, corruption or other factors. It also assures that the public receives the best value for its money by promoting competition among businesses.
101
Many competitive bidding requirements are locally
imposed, for example by charter cities as part of their municipal affairs authority.
102 California law also authorizes
local agencies to adopt procedures for acquisition of
supplies and equipment.
103 Most purchasing ordinances
require competitive bids for contracts in excess of
designated dollar amounts.

For public works projects, California law defines when
general law cities and counties must use competitive
bidding. For general law cities, public works projects over $5,000 are subject to the state’s competitive bidding
requirements.
104 For county projects, the threshold is based
on population: $6,500 (counties with populations of
500,000 or over),
105 $50,000 (counties with populations
of 2 million or over)106 and $4,000 (all other counties).107 Note that it is a misdemeanor to split projects to avoid competitive bidding requirements.
108
The contract for a competitively bid public project must be awarded to the lowest responsible bidder.
109 A responsible
bidder is one who is able to perform the contract if
awarded.
110

EXCEPTIONS
Emergency
Contracts may be awarded without competitive bidding if the legislative body makes a finding by a four-fifths vote that an emergency exists.
111
Professional Services
Contracts for professional services such as private
architectural, landscape architectural, engineering,
environmental, and surveying, or construction
management firms need not be competitively bid,
but must be awarded on the basis of demonstrated
competence and on the professional qualifications
necessary for the satisfactory performance of the services required.
112 However, if the professional services are too
closely akin to the work typically performed by public
works construction contractors (for example, some
services performed by construction managers), then
competitive bidding may be required.
113
Special Services
The legislative body of any public agency may contract
with and employ persons for special services and advice in financial, economic, accounting, engineering, legal, or administrative matters if such persons are specially trained and experienced and competent to perform the special
services required.
114 The test as to whether services are
special services depends on the nature of the services, the necessary qualifications required of a person furnishing the services, and the availability of the service from public sources.
115
Institute for Local Government | 85
Design-Build
Design-build is a method of project delivery in which
the design and construction functions are combined and
contracted to a single entity (called the “design builder”).

Local agencies (defined to include cities, counties
and special districts
116), with approval of the agency’s
governing body, may use design-build contracting for
building construction projects over one million dollars. 117
Local agencies may award design-build projects using
either the lowest responsible bidder or best value.
118

FOR MORE INFORMATION
On public agency procurement processes,
see the Institute resources available at
www.ca-ilg.org/ post/fair-procurement.

PENALTIES
An agency that improperly awards a bid to any bidder
other than the lowest responsible bidder may be liable for reimbursing the low bidder’s actual cost in submitting the bid, but will not be liable for the low bidder’s lost profits. 119

HONEST SERVICES, FRAUD

AND EXTORTION
Under federal wire and mail fraud laws, the
public has the right to the “honest services” of
public officials.
120
The basic concept is that a public official owes
a duty of loyalty and honesty to the public—
similar to a trustee or fiduciary.
121 That duty is
violated when a public official makes a decision
that is not motivated by his or her constituents’
interests but instead by his or her personal
interests.
122 Specifically, honest services fraud
refers to actions that constitute bribery and
kickback schemes.
123
“Kickbacks” (for example, receiving money
back from proceeds paid to a company
that does business with a public entity) in
exchange for favorable contracting decisions
is one area in which prosecutors have been
particularly active.

The maximum penalty for being guilty of wire
and/ or mail fraud includes a jail term of up to
20 years and a $250,000 fine.
124
An official’s refusal to award a contract unless
the individual receives benefits can also be
prosecuted as extortion.
125 T o be chargeable
as a federal offense, the act must affect
interstate commerce. The maximum penalty
for extortion under federal law is 20 years in
prison and a $250,000 fine.
126
For more information about honest services,
fraud and extortion, see “Making a Federal Case
Out of Corruption,” available at www.ca-ilg.org/
fedcase.
86 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING Whistle-Blowing Protections

BASIC RULES
California whistle-blowing laws make it unlawful for
employers to retaliate against employees who refuse
to participate in unlawful activities.
127 Furthermore, if
an employee can demonstrate by a preponderance of
evidence that his or her whistle-blowing activities were a contributing factor in an adverse employment action,
the burden of proof then shifts to the employer to
demonstrate by clear and convincing evidence that the
employer would have taken the action for “legitimate,
independent reasons” even if the employee had not been
a whistle-blower.
128 These protections apply specifically to
local agency employees.129
California law requires employers to post the state
attorney general’s whistle-blower hotline number at the workplace.
130 Any employee or member of the public
can call the hotline at (800) 952-5225 to register their concerns about potentially unlawful practices.
131

FOR MORE INFORMATION

PENALTIES
Violation of whistle-blower protection laws is a
misdemeanor.
132 The maximum criminal penalty for an
individual is a year of jail time, a fine of $1,000 or both.133 In the case of corporations, the criminal penalty is a fine of up to $5,000.
134
In addition, retaliation against an employee for whistle- blowing activities could result in a suit for violation of the employee’s civil rights.
135 Such actions carry the prospect
of damages136 and attorney’s fees awards.137

FOR MORE INFORMATION
On penalties for ethics law violations,
see www.ca-ilg.org/ consequences.

On whistle-blower protections, see the following
resources:
» “For Whom the Whistle Blows,” available at
www.ca-ilg.org/whistle.
» Walking the Line: What to do When Y ou Suspect
an Ethics Problem, 2005. Available at
www.ca-ilg.org/WhatT oDo.

Institute for Local Government | 87
Endnotes and Additional
Information
Note: The California Codes are accessible at http:/ /leginfo. legislature.ca.gov/. Fair Political Practices Commission regulations are accessible atwww.fppc.ca.gov/the-law/
fppc-regulations/ regulations-index.html. A source for case law information is www.findlaw.com/ cacases/ (requires
registration).
1 See Nussbaum v. W eeks, 214 Cal. App. 3d 1589, 1597-98, 263 Cal.

Rptr. 360, 365-66 (4th Dist. 1989).
2 See Br
eakzone Billiards v. City of Torrance, 81 Cal. App. 4th 1205, 1234 n.23, 97 Cal. Rptr. 2d 467 (2d Dist. 2000) (finding no common law bias).
3 See C
lark v. City of Hermosa Beach, 48 Cal. App. 4th 1152, 56 Cal.

Rptr. 2d 223 (2d Dist. 1996) (finding common law bias). 4 Haas v. Count
y of San Bernadino, 27 Cal. 4th 1017, 119 Cal. Rptr. 2d. 341 (2002).
5 See Breakzone
, 81 Cal. App. 4th at 1234 n.23, 97 Cal. Rptr. 2d at
490.
6 See, e.g., Nightlif
e Partners, Ltd. v. City of Beverly Hills, 108 Cal. App. 4th 81, 89, 133 Cal. Rptr. 2d 234, 241 (2d Dist. 2003). 7 Nightlife Par
tners, 108 Cal.App.4th at 97-98, 133 Cal. Rptr. 2d at
248.
8 See Fairfield v. Superior C
ourt, 14 Cal. 3d 768, 122 Cal. Rptr. 543
(1975); Mennig v. City Council, 86 Cal. App. 3d 341, 150 Cal. Rptr. 207 (2d Dist. 1978).
9 See Cohan v. C
ity of Thousand Oaks, 30 Cal. App. 4th 547, 35
Cal. Rptr. 2d 782 (2d Dist. 1994) (where local ordinance called for “person” appealing planning commission decision to city council to show cause why the commission’s action should be overturned, city council’s decision to appeal the action to itself was an appearance of conflict of interest and was part of overall violation of developer’s substantive and procedural due process rights).
10 Fairfield v. Superior C
ourt, 14 Cal. 3d 768, 122 Cal. Rptr. 543 (1975).
11 Nasha v. Cit
y of Los Angeles, 125 Cal. App. 4th 470, 482, 22 Cal.

Rptr. 3d 772 (2004).
12 See generally Cal. C
iv. Proc. Code § 1094.5. See Clark v. City of
Hermosa Beach, 48 Cal. App. 4th 1152, 56 Cal. Rptr. 2d 223 (2d Dist. 1996) (requiring the council to rehear an appeal from the planning commission’s decision and provide a fair hearing). 13 See 42 U.S.C. §§ 1983, 1988.
14 Cal. Penal Code § 86.
15 91 Cal. Op. Att’y Gen. 46 (2008).
16 Cal. Penal Code § 86.
17 See Cal. Pen. C
ode § 88. See also Cal. Elect. Code § 20 (making
those convicted of a felony involving bribery, embezzlement, extortion or theft of public money ineligible for public office); Cal. Gov’t Code § 1770(h) (providing a vacancy occurs upon conviction of a felony or of any offense involving a violation of official duties).
18 Cal. Gov’t Code § 8
7460(a), (b).
19 See Cal. Gov’t C
ode § 87460(c), (d).
20 See Cal. Gov’t C
ode § 87461.
21 See generally Cal. Go
v’t Code §§ 91000-14.
22 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
23 See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
24 Cal. Gov’t Code § 91000(b
).
25 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
26 2 Cal. Code Regs. § 18
700.
27 See Cal. Gov’t C
ode § 82029.
28 See generally Cal. Go
v’t Code §§ 91000-14.
29 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
30 See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
31 Cal. Gov’t Code § 91000(b
).
32 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
33 See, e.g., P
eople v. Honig, 48 Cal. App. 4th 289, 55 Cal. Rptr. 2d
555 (1996).
34 See Cal. Gov’t C
ode § 91003(b).
35 This is a requir
ement of the Political Reform Act. See generally Cal.

Gov’t Code §§ 84100-511.
36 Cal. Gov’t Code § 8
2015; 2 Cal. Code Regs. § 18421.1.
37 Woodland Hills Residents As
sociation v. City Council, 26 Cal. 3d 938,
164 Cal. Rptr. 255 (1980). But see Cal. Gov’t Code § 84308; 2 Cal. Code Regs. §§ 18438.1-.8 (defining who is disqualified from acting on a land use entitlement application after receipt of a campaign contribution).
38 Cal. Gov’t Code § 84308(
c).
39 See Cal. Gov’t C
ode § 82015; 2 Cal. Code Regs. § 18215.
40 See Cal. Gov’t C
ode § 84308(b).
41 See Cal. Gov’t C
ode § 84308(a)(3); 2 Cal. Code Regs. § 18438.1.
88 | Understanding the Basics of Public Service Ethics Laws | FAIR PROCESS LAWS AND MERIT-BASED DECISION-MAKING 42 See Cal. Gov’t C
ode § 84308(a)(4); 2 Cal. Code Regs. § 18438.1.

See also Davis Advice Letter No. A-02-344.
43 See Cal. Gov’t C
ode § 84308(b), (c); 2 Cal. Code Regs. §
18438.4.
44 See Cal. Gov’t C
ode § 84308(a)(2).
45 Id.
46 Cal.Pen. Code §518; 18 U.S.

C. § 1951.
47 Cal. Penal Code § 5

21. 48 Cal. Penal Code § 19
.
49 Cal. Gov’t Code §§ 3060-30

74. 50 18 U.S.C. § 195
1(a). See generally 18 U.S.C. § 3571(b).
51 See Cal. Gov’t C
ode § 84308(a)(5); 2 Cal. Code Regs. § 18438.2.
52 Cal. Gov’t Code § 65
901.
53 Cal. Gov’t Code § 65
906.
54 Cal. Gov’t Code §§ 66
411-413.5.
55 Cal. Gov’t Code §§ 45
26, 37103, 53060.
56 Cal. Gov’t Code § 84308(
d); 2 Cal. Code Regs. § 18438.8.
57 Cal. Gov’t Code § 84308(
c).
58 Id.
59 Id.
60 Id.
61 Id.
62 Id.
63 Cal. Gov’t Code § 84308(b
).
64 Id.
65 Cal. Gov’t Code § 84308(
d).
66 See generally Cal. Go
v’t Code §§ 91000-14.
67 See Cal. Gov’t C
ode § 1770(h) (providing a vacancy occurs upon
conviction of a felony or of any offense involving a violation of official duties).
68 See Cal. Gov’t C
ode § 91002 (providing no person convicted of a
misdemeanor under the Political Reform Act shall be a candidate for any elective office or act as a lobbyist for a period of four years following the date of the conviction).
69 Cal. Gov’t Code § 91000(b
).
70 See Cal. Penal C
ode § 19 (providing misdemeanors are punishable
by imprisonment in county jail up to six months, a fine not exceeding $1,000, or both).
71 See Cal. Gov’t C
ode § 3204, which reads as follows: No one who
holds, or who is seeking election or appointment to, any office or employment in a state or local agency shall, directly or indirectly, use, promise, threaten or attempt to use, any office, authority, or influence, whether then possessed or merely anticipated, to confer upon or secure for any individual person, or to aid or obstruct any individual person in securing, or to prevent any individual person from securing, any position, nomination, confirmation, promotion, or change in compensation or position, within the state or local agency, upon consideration or condition that the vote or political influence or action of such person or another shall be given or used in behalf of, or withheld from, any candidate, officer, or party, or upon any other corrupt condition or consideration. This prohibition shall apply to urging or discouraging the individual employee’s action.
72 See Cal. Gov’t C
ode § 3205.
73 See Cal. Gov’t C
ode § 3205(c).
74 See Cal. Gov’t C
ode § 3205.5, which reads as follows: No one
who holds, or who is seeking election or appointment to, any office shall, directly or indirectly, offer or arrange for any increase in compensation or salary for an employee of a state or local agency in exchange for, or a promise of, a contribution or loan to any committee controlled directly or indirectly by the person who holds, or who is seeking election or appointment to, an office. A violation of this section is punishable by imprisonment in a county jail for a period not exceeding one year, a fine not exceeding five thousand dollars ($5,000), or by both that imprisonment and fine.
75 The ICMA Code is a
vailable on the ICMA website at:
http:/ / icma.org/ codeofethics.
76 See Cal. Gov’t C
ode § 8314.
77 See Cal. Gov’t C
ode § 3207 (providing that any city, county or
local agency may prohibit or restrict officers and employees engaging in political activity during working hours and political activities on agency premises); Cal. Educ. Code § 7055; 5 U.S.C. §§ 7321-26 (prohibiting employees of state and local executive agencies who work in connection with programs financed in whole or in part by federal loans or grants from engaging in political activities while on duty).
78 See Cal. T
eachers Ass’n v. Governing Bd., 45 Cal.App.4th 1383, 53 Cal.Rptr.2d 474 (1996); 5 C.F.R. § 734.306 example 16 (with limited exception, those employees working in connection with federally funded programs “may not wear partisan political buttons or display partisan political pictures, signs, stickers, or badges while he or she is on duty or at his or her place of work.”). 79 Cal. Gov’t Code § 3206.

See also Cal. Gov’t Code § 3302.
80 See Cal. Gov’t C
ode § 3205
81 See Cal. Gov’t C
ode § 3205.5, which reads as follows: No one
who holds, or who is seeking election or appointment to, any office shall, directly or indirectly, offer or arrange for any increase in compensation or salary for an employee of a state or local agency in exchange for, or a promise of, a contribution or loan to any committee controlled directly or indirectly by the person who holds, or who is seeking election or appointment to, an office. A violation of this section is punishable by imprisonment in a county jail for a period not exceeding one year, a fine not exceeding five thousand dollars ($5,000), or by both that imprisonment and fine.
82 See Cal. Gov’t C
ode §§ 3204, 3206.
83 See Gov’t C
ode §§ 3060-75. See also Steiner v. Superior Court, 50
Cal.App.4th 1771, Cal. Rptr.2d 668 (1996) (discussing the types of misconduct warranting removal from office under section 3060).
84 See Cal. Penal C
ode § 424; Cal. Gov’t Code § 8314.

Institute for Local Government | 89
85 See Cal. Gov’t C
ode § 1099.
86 See Cal. Gov’t C
ode § 1126.
87 Cal. Gov’t Code § 1099(a).
88 Cal. Gov’t Code § 1099(a)(1)-(3).
8 9 91 Cal. Op. Att’y Gen. 25 (2008)
90 Cal. Gov’t Code § 1099(a).
91 Cal. Gov’t Code § 1099(
c).
92 Cal. Gov’t Code § 532
27(a); Cal. Educ. Code §§ 35107(b)(1),
72103(b)(1).
93 See, e.g., Cal. Health & Safet
y Code § 6480(b) (relating to city
officials serving on sanitary districts) See also 85 Cal. Op. Att’y Gen. 239 (2002) (noting the Legislature can create exceptions to the incompatibility doctrine).
94 See 66 Cal. Op. A
tt’y Gen. 293 (1983) (offices of city and county
planning commission are incompatible but county and charter city may adopt legislation specifying otherwise).
95 See Cal. Gov’t C
ode § 53227 (for cities, counties and special
districts); Cal. Educ. Code §§ 35107(b)(1) (school districts), 72103(b)(1) (community college districts). See also 84 Cal. Op.

Att’y Gen. 126 (2001) (community college board member may not become part-time instructor for district).
96 Cal. Gov’t Code § 532
27(a); Cal. Educ. Code §§ 35107(b)(1),
72103(b)(1).
97 See 85 Cal. Op. A
tt’y Gen. 230 (2002) (“salary” does not include
per-call and equipment stipends).
98 Cal. Gov’t Code § 112
6(c).
99 Cal. Gov’t Code § 1099(b
) (noting that this position is
enforceable through Civil Procedure Code section 803). People ex rel. Chapman v. Rapsey, 16 Cal. 2d 636, 107 P.2d 388 (1940). See also Cal. Gov’t Code § 1126.
100
See Cal. Pub
. Cont. Code § 100.
101 Id.
102 Smith v. Cit
y of Riverside, 34 Cal. App. 3d 529, 110 Cal. Rptr. 67
(4th Dist. 1973). See also Cal. Pub. Cont. Code § 1100.7. 103 Cal. Gov’t Code §§ 5420
1-25.
104 Cal. Pub. C
ont. Code § 20162.
105 Cal. Pub. C
ont. Code § 20122.
106 Cal. Pub. C
ont. Code § 20123.
107 Cal. Pub. C
ont. Code § 20121.
108 Cal. Pub. C
ont. Code § 20163.
109 Cal. Pub. C
ont. Code § 20162.
110 See Cal. Pub
. Cont. Code § 1103.
111 Cal. Pub. C
ont. Code §§ 1102, 20168, 22050.
112 Cal. Gov’t Code § 45

26. 113 City of Ingle
wood-Los Angeles County Civic Ctr. Auth. v. Superior
Court, 7 Cal. 3d 861, 103 Cal. Rptr. 689 (1972).
114 Cal. Gov’t Code § 53060
.
115 Cal. School Employees As
s’n v. Sunnyvale Elementary Sch. Dist., 36
Cal. App. 3d 46, 60, 111 Cal. Rptr. 433, 442 (1st Dist. 1973). 116 Cal. Pub. C
ont. Code § 22161(f).
117 Cal. Pub. C
ont. Code § 22162.
118 Cal. Pub. C
ont. Code § 22164.
119 Kajima/Ray W
ilson v. Los Angeles County Metro. Transp. Auth., 23
Cal. 4th 305, 315-16, 96 Cal. Rptr. 2d 747 (2000).
120 18 U.S.C. §§ 1341 (mail fr
aud), 1343 (wire fraud), 1346 (honest
services).
121 U.S. v. Sawy
er, 239 F.3d 31, 39 (1st Cir. 2001) (finding sufficient evidence of guilt apart from proof of violation of state law). 122 U.S. v. Lopez
-Lukis, 102 F.3d 1164, 1169 (11th Cir. 1997) (noting
that effort to improperly control composition of decision- making body constituted an effort to deprive public of honest services); McNally v. U.S., 483 U.S. 350 at 362-63 (Justice Stevens, dissenting).
123
See Skilling v. U.S., 130 S.

Ct. 2896, 2931(2010) (holding that
in order to avoid unconstitutional vagueness, 18 USC §1346, defining “scheme or artifice to defraud,” only criminalizes bribes and kick-back schemes).
124
18 U.S.C. §§ 1341 (“. . . shall be fined under this title or imprisoned not mor
e than 20 years, or both.”), 1343 (“shall be fined under this title or imprisoned not more than 20 years, or both.”). 125 18 U.S.C. § 195

1. 126 18 U.S.C. § 195
1(a).
127 See Cal. Lab. C
ode § 1102.5(c) (“An employer, or any person
acting on behalf of the employer, shall not retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.”). 128
Cal. Lab. Code § 110

2.6. 129 See Cal. Lab. C
ode § 1106.
130 See Cal. Lab. C
ode § 1102.8 (requiring employers to post
employees’ rights and responsibilities under the whistle- blower laws, including the telephone number for the Attorney General’s hotline).
131
See Cal. Lab. C
ode § 1102.7 (requiring the Attorney General to set
up the hotline).
132 Cal. Lab. Code § 110

3. 133 Id.
134 Id.
135 See, e.g., Connick v. My
ers, 461 U.S. 138, 103 S.Ct. 1684 (1983);
Pickering v. Bd. of Educ. of Twp. High Sch. Dist. 205, Will County, Ill., 391 U.S. 563, 88 S.Ct. 1731 (1968); Garcetti v. Ceballos, 547 U.S. 410, 126 S. Ct. 1951(2006).
136
42 U.S.C. § 1983.
137 42 U.S.C. § 1988.
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Sacramento, California 95814
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Rosenberg’s Rules of Order
REVISED 2011
Simple Rules of Parliamentary Procedure for the 21st Century By Judge Dave Rosenberg

ii
MISSION and CORE BELIEFS
T o expand and protect local control for cities through education and advocacy to enhance the quality of life for all Californians.

VISION
T o be recognized and respected as the leading advocate for the common interests of California’s cities.

About the League of California Cities
Established in 1898, the League of California Cities is a member organization that represents California’s incorporated cities.

The League strives to protect the local authority and automony of city government and help California’s cities effectively serve their residents. In addition to advocating on cities’ behalf at the state capitol, the League provides its members with professional development programs and information resources, conducts education conferences and research, and publishes Western City magazine.
© 2011 League of California Cities. All rights reserved.

About the Author
Dave Rosenberg is a Superior Court Judge in Y olo County. He has served as presiding judge of his court, and as presiding judge of the Superior Court Appellate Division. He also has served as chair of the Trial Court Presiding Judges Advisory Committee (the committee composed of all 58 California presiding judges) and as an advisory member of the California Judicial Council. Prior to his appointment to the bench, Rosenberg was member of the Y olo County Board of Supervisors, where he served two terms as chair. Rosenberg also served on the Davis City Council, including two terms as mayor. He has served on the senior staff of two governors, and worked for 19 years in private law practice. Rosenberg has served as a member and chair of numerous state, regional and local boards. Rosenberg chaired the California State Lottery Commission, the California Victim Compensation and Government Claims Board, the Y olo-Solano Air Quality Management District, the Y olo County Economic Development Commission, and the Y olo County Criminal Justice Cabinet. For many years, he has taught classes on parliamentary procedure and has served as parliamentarian for large and small bodies.
1 Table of Contents
About the Author ............................................................................................................ii Intr
oduction ....................................................................................................................2 Establishing a Quo
rum ...................................................................................................2 The R
ole of the Chair ......................................................................................................2 The B
asic Format for an Agenda Item Discussion ........................................................2 Mot
ions in General .........................................................................................................3 The T
hree Basic Motions ................................................................................................3 Mult
iple Motions Before the Body .................................................................................4 T o D
ebate or Not to Debate ............................................................................................4 Majo
rity and Super-Majority Votes ...............................................................................5 Count
ing Votes ................................................................................................................5 The M
otion to Reconsider ..............................................................................................6 Cour
tesy and Decorum ..................................................................................................7 Spe
cial Notes About Public Input ..................................................................................7 2 Establishing a Quorum
The starting point for a meeting is the establishment of a quorum.

A quorum is defined as the minimum number of members of the body who must be present at a meeting for business to be legally transacted. The default rule is that a quorum is one more than half the body. For example, in a five-member body a quorum is three.

When the body has three members present, it can legally transact business. If the body has less than a quorum of members present, it cannot legally transact business. And even if the body has a quorum to begin the meeting, the body can lose the quorum during the meeting when a member departs (or even when a member leaves the dais). When that occurs the body loses its ability to transact business until and unless a quorum is reestablished.

The default rule, identified above, however, gives way to a specific rule of the body that establishes a quorum. For example, the rules of a particular five-member body may indicate that a quorum is four members for that particular body. The body must follow the rules it has established for its quorum. In the absence of such a specific rule, the quorum is one more than half the members of the body.

The Role of the Chair
While all members of the body should know and understand the rules of parliamentary procedure, it is the chair of the body who is charged with applying the rules of conduct of the meeting. The chair should be well versed in those rules. For all intents and purposes, the chair makes the final ruling on the rules every time the chair states an action. In fact, all decisions by the chair are final unless overruled by the body itself.

Since the chair runs the conduct of the meeting, it is usual courtesy for the chair to play a less active role in the debate and discussion than other members of the body. This does not mean that the chair should not participate in the debate or discussion. T o the contrary, as a member of the body, the chair has the full right to participate in the debate, discussion and decision-making of the body. What the chair should do, however, is strive to be the last to speak at the discussion and debate stage. The chair should not make or second a motion unless the chair is convinced that no other member of the body will do so at that point in time.

The Basic Format for an Agenda Item Discussion
Formal meetings normally have a written, often published agenda.

Informal meetings may have only an oral or understood agenda. In either case, the meeting is governed by the agenda and the agenda constitutes the body’s agreed-upon roadmap for the meeting. Each agenda item can be handled by the chair in the following basic format:

Introduction
The rules of procedure at meetings should be simple enough for most people to understand. Unfortunately, that has not always been the case. Virtually all clubs, associations, boards, councils and bodies follow a set of rules — Robert’s Rules of Order — which are embodied in a small, but complex, book. Virtually no one I know has actually read this book cover to cover. Worse yet, the book was written for another time and for another purpose. If one is chairing or running a parliament, then Robert’s Rules of Order is a dandy and quite useful handbook for procedure in that complex setting. On the other hand, if one is running a meeting of say, a five-member body with a few members of the public in attendance, a simplified version of the rules of parliamentary procedure is in order.

Hence, the birth of Rosenberg’s Rules of Order.

What follows is my version of the rules of parliamentary procedure, based on my decades of experience chairing meetings in state and local government. These rules have been simplified for the smaller bodies we chair or in which we participate, slimmed down for the 21st Century, yet retaining the basic tenets of order to which we have grown accustomed. Interestingly enough, Rosenberg’s Rules has found a welcoming audience. Hundreds of cities, counties, special districts, committees, boards, commissions, neighborhood associations and private corporations and companies have adopted Rosenberg’s Rules in lieu of Robert’s Rules because they have found them practical, logical, simple, easy to learn and user friendly.

This treatise on modern parliamentary procedure is built on a foundation supported by the following four pillars:

1. Rules should
establish order. The first purpose of rules of
parliamentary procedure is to establish a framework for the orderly conduct of meetings.

2. Rules should
be clear. Simple rules lead to wider understanding
and participation. Complex rules create two classes: those who understand and participate; and those who do not fully understand and do not fully participate.

3. Rules should
be user friendly. That is, the rules must be simple
enough that the public is invited into the body and feels that it has participated in the process.

4. Rules should
enforce the will of the majority while protecting
the rights of the minority. The ultimate purpose of rules of procedure is to encourage discussion and to facilitate decision making by the body. In a democracy, majority rules. The rules must enable the majority to express itself and fashion a result, while permitting the minority to also express itself, but not dominate, while fully participating in the process.
3 Ninth, the chair takes a vote. Simply asking for the “ayes” and then asking for the “nays” normally does this. If members of the body do not vote, then they “abstain. ” Unless the rules of the body provide otherwise (or unless a super majority is required as delineated later in these rules), then a simple majority (as defined in law or the rules of the body as delineated later in these rules) determines whether the motion passes or is defeated.

T enth, the chair should announce the result of the vote and what action (if any) the body has taken. In announcing the result, the chair should indicate the names of the members of the body, if any, who voted in the minority on the motion. This announcement might take the following form: “The motion passes by a vote of 3-2, with Smith and Jones dissenting. We have passed the motion requiring a 10-day notice for all future meetings of this body. ”
Motions in General
Motions are the vehicles for decision making by a body. It is usually best to have a motion before the body prior to commencing discussion of an agenda item. This helps the body focus.

Motions are made in a simple two-step process. First, the chair should recognize the member of the body. Second, the member of the body makes a motion by preceding the member’s desired approach with the words “I move … ”
A typical motion might be: “I move that we give a 10-day notice in the future for all our meetings. ”
The chair usually initiates the motion in one of three ways:

1. Inviting the members
of the body to make a motion, for
example, “A motion at this time would be in order. ”

2. Suggesting a
motion to the members of the body, “A motion
would be in order that we give a 10-day notice in the future for all our meetings. ”

3. Making the
motion. As noted, the chair has every right as a
member of the body to make a motion, but should normally do so only if the chair wishes to make a motion on an item but is convinced that no other member of the body is willing to step forward to do so at a particular time.

The Three Basic Motions
There are three motions that are the most common and recur often at meetings:

The basic motion. The basic motion is the one that puts forward a decision for the body’s consideration. A basic motion might be: “I move that we create a five-member committee to plan and put on our annual fundraiser. ”
First, the chair should clearly announce the agenda item number and should clearly state what the agenda item subject is. The chair should then announce the format (which follows) that will be followed in considering the agenda item.

Second, following that agenda format, the chair should invite the appropriate person or persons to report on the item, including any recommendation that they might have. The appropriate person or persons may be the chair, a member of the body, a staff person, or a committee chair charged with providing input on the agenda item.

Third, the chair should ask members of the body if they have any technical questions of clarification. At this point, members of the body may ask clarifying questions to the person or persons who reported on the item, and that person or persons should be given time to respond.

Fourth, the chair should invite public comments, or if appropriate at a formal meeting, should open the public meeting for public input.

If numerous members of the public indicate a desire to speak to the subject, the chair may limit the time of public speakers. At the conclusion of the public comments, the chair should announce that public input has concluded (or the public hearing, as the case may be, is closed).

Fifth, the chair should invite a motion. The chair should announce the name of the member of the body who makes the motion.

Sixth, the chair should determine if any member of the body wishes to second the motion. The chair should announce the name of the member of the body who seconds the motion. It is normally good practice for a motion to require a second before proceeding to ensure that it is not just one member of the body who is interested in a particular approach. However, a second is not an absolute requirement, and the chair can proceed with consideration and vote on a motion even when there is no second. This is a matter left to the discretion of the chair.

Seventh, if the motion is made and seconded, the chair should make sure everyone understands the motion.

This is done in one of three ways:

1. The chair can ask the mak
er of the motion to repeat it;

2. The chair can r
epeat the motion; or

3. The chair can ask the se
cretary or the clerk of the body to repeat
the motion.

Eighth, the chair should now invite discussion of the motion by the body. If there is no desired discussion, or after the discussion has ended, the chair should announce that the body will vote on the motion. If there has been no discussion or very brief discussion, then the vote on the motion should proceed immediately and there is no need to repeat the motion. If there has been substantial discussion, then it is normally best to make sure everyone understands the motion by repeating it.
4 First, the chair would deal with the third (the last) motion on the floor, the substitute motion. After discussion and debate, a vote would be taken first on the third motion. If the substitute motion passed, it would be a substitute for the basic motion and would eliminate it. The first motion would be moot, as would the second motion (which sought to amend the first motion), and the action on the agenda item would be completed on the passage by the body of the third motion (the substitute motion). No vote would be taken on the first or second motions.

Second, if the substitute motion failed, the chair would then deal with the second (now the last) motion on the floor, the motion to amend. The discussion and debate would focus strictly on the amendment (should the committee be five or 10 members). If the motion to amend passed, the chair would then move to consider the main motion (the first motion) as amended. If the motion to amend failed, the chair would then move to consider the main motion (the first motion) in its original format, not amended.

Third, the chair would now deal with the first motion that was placed on the floor. The original motion would either be in its original format (five-member committee), or if amended, would be in its amended format (10-member committee). The question on the floor for discussion and decision would be whether a committee should plan and put on the annual fundraiser.

T o Debate or Not to Debate
The basic rule of motions is that they are subject to discussion and debate. Accordingly, basic motions, motions to amend, and substitute motions are all eligible, each in their turn, for full discussion before and by the body. The debate can continue as long as members of the body wish to discuss an item, subject to the decision of the chair that it is time to move on and take action.

There are exceptions to the general rule of free and open debate on motions. The exceptions all apply when there is a desire of the body to move on. The following motions are not debatable (that is, when the following motions are made and seconded, the chair must immediately call for a vote of the body without debate on the motion):

Motion to adjourn. This motion, if passed, requires the body to immediately adjourn to its next regularly scheduled meeting. It requires a simple majority vote.

Motion to recess. This motion, if passed, requires the body to immediately take a recess. Normally, the chair determines the length of the recess which may be a few minutes or an hour. It requires a simple majority vote.

Motion to fix the time to adjourn. This motion, if passed, requires the body to adjourn the meeting at the specific time set in the motion. For example, the motion might be: “I move we adjourn this meeting at midnight. ” It requires a simple majority vote.

The motion to amend. If a member wants to change a basic motion that is before the body, they would move to amend it. A motion to amend might be: “I move that we amend the motion to have a 10-member committee. ” A motion to amend takes the basic motion that is before the body and seeks to change it in some way.

The substitute motion. If a member wants to completely do away with the basic motion that is before the body, and put a new motion before the body, they would move a substitute motion. A substitute motion might be: “I move a substitute motion that we cancel the annual fundraiser this year. ”
“Motions to amend” and “substitute motions” are often confused, but they are quite different, and their effect (if passed) is quite different.

A motion to amend seeks to retain the basic motion on the floor, but modify it in some way. A substitute motion seeks to throw out the basic motion on the floor, and substitute a new and different motion for it. The decision as to whether a motion is really a “motion to amend” or a “substitute motion” is left to the chair. So if a member makes what that member calls a “motion to amend, ” but the chair determines that it is really a “substitute motion, ” then the chair’s designation governs.

A “friendly amendment” is a practical parliamentary tool that is simple, informal, saves time and avoids bogging a meeting down with numerous formal motions. It works in the following way: In the discussion on a pending motion, it may appear that a change to the motion is desirable or may win support for the motion from some members. When that happens, a member who has the floor may simply say, “I want to suggest a friendly amendment to the motion. ” The member suggests the friendly amendment, and if the maker and the person who seconded the motion pending on the floor accepts the friendly amendment, that now becomes the pending motion on the floor. If either the maker or the person who seconded rejects the proposed friendly amendment, then the proposer can formally move to amend.

Multiple Motions Before the Body
There can be up to three motions on the floor at the same time.

The chair can reject a fourth motion until the chair has dealt with the three that are on the floor and has resolved them. This rule has practical value. More than three motions on the floor at any given time is confusing and unwieldy for almost everyone, including the chair.

When there are two or three motions on the floor (after motions and seconds) at the same time, the vote should proceed first on the last motion that is made. For example, assume the first motion is a basic “motion to have a five-member committee to plan and put on our annual fundraiser. ” During the discussion of this motion, a member might make a second motion to “amend the main motion to have a 10-member committee, not a five-member committee to plan and put on our annual fundraiser. ” And perhaps, during that discussion, a member makes yet a third motion as a “substitute motion that we not have an annual fundraiser this year. ” The proper procedure would be as follows:
5 Motion to close nominations. When choosing officers of the body (such as the chair), nominations are in order either from a nominating committee or from the floor of the body. A motion to close nominations effectively cuts off the right of the minority to nominate officers and it requires a two-thirds vote to pass.

Motion to object to the consideration of a question. Normally, such a motion is unnecessary since the objectionable item can be tabled or defeated straight up. However, when members of a body do not even want an item on the agenda to be considered, then such a motion is in order. It is not debatable, and it requires a two-thirds vote to pass.

Motion to suspend the rules. This motion is debatable, but requires a two-thirds vote to pass. If the body has its own rules of order, conduct or procedure, this motion allows the body to suspend the rules for a particular purpose. For example, the body (a private club) might have a rule prohibiting the attendance at meetings by non-club members. A motion to suspend the rules would be in order to allow a non-club member to attend a meeting of the club on a particular date or on a particular agenda item.

Counting Votes
The matter of counting votes starts simple, but can become complicated.

Usually, it’s pretty easy to determine whether a particular motion passed or whether it was defeated. If a simple majority vote is needed to pass a motion, then one vote more than 50 percent of the body is required. For example, in a five-member body, if the vote is three in favor and two opposed, the motion passes. If it is two in favor and three opposed, the motion is defeated.

If a two-thirds majority vote is needed to pass a motion, then how many affirmative votes are required? The simple rule of thumb is to count the “no” votes and double that count to determine how many “yes” votes are needed to pass a particular motion. For example, in a seven-member body, if two members vote “no” then the “yes” vote of at least four members is required to achieve a two-thirds majority vote to pass the motion.

What about tie votes? In the event of a tie, the motion always fails since an affirmative vote is required to pass any motion. For example, in a five-member body, if the vote is two in favor and two opposed, with one member absent, the motion is defeated.

Vote counting starts to become complicated when members vote “abstain” or in the case of a written ballot, cast a blank (or unreadable) ballot. Do these votes count, and if so, how does one count them? The starting point is always to check the statutes.

In California, for example, for an action of a board of supervisors to be valid and binding, the action must be approved by a majority of the board. (California Government Code Section 25005.) Typically, this means three of the five members of the board must vote affirmatively in favor of the action. A vote of 2-1 would not be sufficient. A vote of 3-0 with two abstentions would be sufficient. In general law cities in Motion to table. This motion, if passed, requires discussion of the agenda item to be halted and the agenda item to be placed on “hold. ” The motion can contain a specific time in which the item can come back to the body. “I move we table this item until our regular meeting in October. ” Or the motion can contain no specific time for the return of the item, in which case a motion to take the item off the table and bring it back to the body will have to be taken at a future meeting. A motion to table an item (or to bring it back to the body) requires a simple majority vote.

Motion to limit debate. The most common form of this motion is to say, “I move the previous question” or “I move the question” or “I call the question” or sometimes someone simply shouts out “question. ” As a practical matter, when a member calls out one of these phrases, the chair can expedite matters by treating it as a “request” rather than as a formal motion. The chair can simply inquire of the body, “any further discussion?” If no one wishes to have further discussion, then the chair can go right to the pending motion that is on the floor.

However, if even one person wishes to discuss the pending motion further, then at that point, the chair should treat the call for the “question” as a formal motion, and proceed to it.

When a member of the body makes such a motion (“I move the previous question”), the member is really saying: “I’ve had enough debate. Let’s get on with the vote. ” When such a motion is made, the chair should ask for a second, stop debate, and vote on the motion to limit debate. The motion to limit debate requires a two-thirds vote of the body.

Note: A motion to limit debate could include a time limit. For example: “I move we limit debate on this agenda item to 15 minutes. ” Even in this format, the motion to limit debate requires a two- thirds vote of the body. A similar motion is a motion to object to consideration of an item. This motion is not debatable, and if passed, precludes the body from even considering an item on the agenda. It also requires a two-thirds vote.

Majority and Super Majority Votes
In a democracy, a simple majority vote determines a question. A tie vote means the motion fails. So in a seven-member body, a vote of 4-3 passes the motion. A vote of 3-3 with one abstention means the motion fails. If one member is absent and the vote is 3-3, the motion still fails.

All motions require a simple majority, but there are a few exceptions.

The exceptions come up when the body is taking an action which effectively cuts off the ability of a minority of the body to take an action or discuss an item. These extraordinary motions require a two-thirds majority (a super majority) to pass:

Motion to limit debate. Whether a member says, “I move the previous question, ” or “I move the question, ” or “I call the question, ” or “I move to limit debate, ” it all amounts to an attempt to cut off the ability of the minority to discuss an item, and it requires a two-thirds vote to pass.
6 Now, exactly how does a member cast an “abstention” vote? Any time a member votes “abstain” or says, “I abstain, ” that is an abstention. However, if a member votes “present” that is also treated as an abstention (the member is essentially saying, “Count me for purposes of a quorum, but my vote on the issue is abstain. ”) In fact, any manifestation of intention not to vote either “yes” or “no” on the pending motion may be treated by the chair as an abstention. If written ballots are cast, a blank or unreadable ballot is counted as an abstention as well.

Can a member vote “absent” or “count me as absent?” Interesting question. The ruling on this is up to the chair. The better approach is for the chair to count this as if the member had left his/her chair and is actually “absent. ” That, of course, affects the quorum. However, the chair may also treat this as a vote to abstain, particularly if the person does not actually leave the dais.

The Motion to Reconsider
There is a special and unique motion that requires a bit of explanation all by itself; the motion to reconsider. A tenet of parliamentary procedure is finality. After vigorous discussion, debate and a vote, there must be some closure to the issue. And so, after a vote is taken, the matter is deemed closed, subject only to reopening if a proper motion to consider is made and passed.

A motion to reconsider requires a majority vote to pass like other garden-variety motions, but there are two special rules that apply only to the motion to reconsider.

First, is the matter of timing. A motion to reconsider must be made at the meeting where the item was first voted upon. A motion to reconsider made at a later time is untimely. (The body, however, can always vote to suspend the rules and, by a two-thirds majority, allow a motion to reconsider to be made at another time.)
Second, a motion to reconsider may be made only by certain members of the body. Accordingly, a motion to reconsider may be made only by a member who voted in the majority on the original motion. If such a member has a change of heart, he or she may make the motion to reconsider (any other member of the body — including a member who voted in the minority on the original motion — may second the motion). If a member who voted in the minority seeks to make the motion to reconsider, it must be ruled out of order. The purpose of this rule is finality. If a member of minority could make a motion to reconsider, then the item could be brought back to the body again and again, which would defeat the purpose of finality.

If the motion to reconsider passes, then the original matter is back before the body, and a new original motion is in order. The matter may be discussed and debated as if it were on the floor for the first time.

California, as another example, resolutions or orders for the payment of money and all ordinances require a recorded vote of the total members of the city council. (California Government Code Section 36936.) Cities with charters may prescribe their own vote requirements. Local elected officials are always well-advised to consult with their local agency counsel on how state law may affect the vote count.

Richmond City CouncilJanuary 17, 2023

Richmond City Council
January 17, 2023