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R-2018-077 Adopting Revised Conflict of Interest Code, Rescinding R-2016-070RESOLUTION NO. R-2018-077 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH ADOPTING A REVISED CONFLICT OF INTEREST CODE; RESCINDING RESOLUTION NO. R-2016-070 WHEREAS, the Political Reform of 1974 (California Government Code §81000, et seq.) provides that public officials shall not participate in or influence decisions relating to matters in which they know, or in which they have reason to believe, that they have a financial interest; and WHEREAS, the Political Reform Act and implementing state regulations (Califomia Code of Regulations, Title 2, Division 6, §18110, et seq.) adopted by the Fair Political Practices Commission (FPPC) set forth various rules applicable to such conflicts of interest, including rules of disclosure and participation; and WHEREAS, among the regulations are rules requiring cities to adopt Conflict of Interest Codes setting forth conflict of interest policies and identifying the agency's Form 700 filers, and to review and update these policies biennially; and WHEREAS, by Resolution the Pismo Beach City Council previously has adopted such a Conflict of Interest Code and desires to adopt necessary and appropriate amendments thereto. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach that the City of Pismo Beach's revised Conflict of Interest Code is hereby adopted as set forth in Exhibit A to this Resolution. BE IT FURTHER RESOLVED that Resolution R-2016-070, adopting the most recent iteration of the City's Conflict of Interest Code, is hereby rescinded. UPON MOTION OF Mayor Pro Tem Howell, seconded by Council Member Blake, the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 18th day of September 2018, by the following vote: AYES: 4 Howell, Blake, Guthrie, Waage NOES: 0 ABSENT: 1 Reiss ABSTAIN: 0 RECUSED: 0 Approved: Attest: ‘ Erica Inde I' , City Clerk PAGE 1 OF 11 R-2018-077 Exhibit A CITY OF PISMO BEACH CONFLICT OF INTEREST CODE I. INCORPORATION AND TERMS A. Incorporation The Political Reform Act (Government Code §81000, et seq.) requires local government agencies to adopt and implement conflict of interest codes. The Fair Political Practices Commission ("FPPC") has adopted regulations (California Code of Regulations Title 2, Division 6, §18730, et seq.) containing the terms of a standard conflict of interest code, which may be incorporated by reference in a local agency's Code. Regulations 18730, et seq. may be amended by the FPPC from time to time to conform to amendments to the Political Reform Act. The terms of Regulation 18730, et seq. and any duly adopted amendments thereto are hereby incorporated into this Conflict of Interest Code by reference. FPPC Regulation 18730, et seq., together with the following Code provisions designating filer positions, establishing financial interest disclosure categories, and establishing supplemental local conflict of interest limitations, shall constitute the Conflict of Interest Code ("Code") of the City of Pismo Beach ("City"). B. Conflict with other laws The provisions of this Code are in addition to, and not intended to modify or abridge, the provisions of the Political Reform Act of 1974 (Government Code §81000, et seq.), Government Code §1090, et seq., California Code of Regulations Title 2, Division 6, §18110, et seq., or other federal, state, or local regulations pertaining to conflict of interest. In the event any provision of this Code is in conflict with federal, state, or local law, such law shall prevail and the validity of the remaining sections of this Code shall not be affected. II. CONFLICT OF INTEREST, GENERALLY A. Generally No City official shall make, participate in making, or in any way attempt to use his or her official position to influence, a governmental decision in which the official knows, or has reason to know, that that the official has a financial interest. B. Gifts 1. Statutory (Category 1) filers shall comply with the provisions of the Political Reform Act relating to gifts, honoraria, travel payments, and loans, including but not limited to Government Code §82028, §89500 et seq., and accompanying regulations. 2. For all City officials who are subject to the City's Personnel Rules, Personnel Rule 25.02.01 relating to gratuities is hereby incorporated by reference. HI. DISCLOSURE (STATEMENTS OF ECONOMIC INTERESTS) A. Requirement to File The City of Pismo Beach positions identified in Section III.0 have the authority to make, or participate in making, decisions that may foreseeably have a material effect on the personal financial interests of the individuals exercising the duties of the positions. Such PAGE 2OF11 R-2018-077 Exhibit A individuals are deemed to have the potential for conflict of interest and thus shall be required to file FPPC Form 700 Statements of Economic Interests ("Form 700") with the City of Pismo Beach, in accordance with the intervals and deadlines set forth in Section III.E.2. This requirement applies to any individual, whether employee, consultant, contractor, elected official, appointed official, volunteer, or otherwise, who performs the duties of the position. B. Classification of Filers City of Pismo Beach Form 700 Filers are hereby categorized as follows: 1. Statutory Filers (Category 1 Filers) Individuals exercising the duties of City positions identified in Government Code §87200 are hereafter referred to as "statutory filers." Statutory filers are herein classified as Category 1 filers for disclosure purposes. This Code does not establish the filing requirements or disclosure obligations for statutory filers, but such requirements and obligations are partially restated herein for ease of reference. Supplemental policies may herein be imposed, but such policies are not intended to supersede or abridge other regulation, and in the event of conflict with state regulation, the state regulation will control. Refer to Section I.B. 2. Designated Filers (Category 2 and Category 3 Filers; Interim Filers) Individuals exercising the duties of all other City positions identified in this Code are hereafter referred to as "designated filers." This term shall include individuals exercising the duties of a position not specifically identified in this Code, but required by the City to file a Form 700 due to recognized potential for conflict of interest. Designated filers are herein classified as Category 2, Category 3, or Interim filers for disclosure purposes. This Code establishes the filing requirements and disclosure obligations for designated filers, to the extent that state regulation does not. 3. Interim Filers An individual assuming a new position not yet covered under the City's Conflict of Interest Code must file a Form 700 if the duties of the position involve the making or influencing of governmental decisions. These individuals must file full disclosure until the Code is revised to include the new position; in the alternative, the City may establish a written limited disclosure requirement for the position. The City Manager shall have the power to designate new or existing positions for disclosure on an interim basis pending revision of this Code. Such designations shall be made if the City Manager determines that the position entails the making or participating in the making of governmental decisions which may foreseeably have a material effect on personal financial interests. PAGE 3 OF 11 R-2018-077 C. List of Filer Positions Administration & City Council Assistant City Attorney Candidate for City Council Member Candidate for Mayor City Attorney City Council Member City Manager Conference and Visitors Bureau Executive Director Mayor Tourism Coordinator Administrative Services Department City Treasurer Finance Manager Information Technology Manager Advisory Bodies (Voting Members Only) Building Appeals Board Member Conference and Visitors Bureau Board Member Industrial Development Authority Board Member** Parking Advisory Committee Member Parks, Recreation and Beautification Commissioner Planning Commissioner Public Facilities Corporation Board Member** Public Financing Authority Board Member** Public Financing Agency Board Member** Special Events Committee Member Community Development Assistant Planner Associate Planner Building Inspector Building Official Code Compliance Officer Community Development Director Planning Manager Plans Examiner/Building Inspector Recreation Manager Senior Planner Consultants Engineering Consultants Environmental Consultants Legal Consultants Other Consultants PAGE4OF 11 Disclosure Category 2 1 1 1 1 1 2 1 3 1 2 3 2 2 2 2 2 1 2 2 2 2 3 3 3 3 3 2 3 3 3 3 Full disclosure unless otherwise assigned in writing.* Exhibit A Form 700 Schedules A-1, A-2, B, C All All All All All A-1, A-2, B, C All A-1, A-2, C All A-1, A-2, B, C A-1, A-2, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C All A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, C A-1, A-2, C A-1, A-2, C A-1, A-2, C A-1, A-2, C A-1, A-2, B, C A-1, A-2, C A-1, A-2, C A-1, A-2, C A-1, A-2, C All, unless otherwise assigned in writing. * R-2018-077 Fire Department Battalion Chief Deputy Fire Chief Fire Captain Fire Captain/Specialist Fire Chief Fire Marshal Management Services Department City Clerk Management Services Director Police Department Police Chief Police Commander Public Works Department/Engineering Division Assistant Engineer Engineer Public Facilities Manager Public Works Director/City Engineer Senior Civil Engineer Utilities Manager Unassigned Department Senior Management Analyst Management Analyst Other positions (Interim Filers). New positions that involve the making or influencing of government positions but have yet to be added to this Code; new or existing positions identified by the City Manager as having the potential for conflict of interest. * The City Manager may determine in writing that a particular consultant has been hired to perform a range of duties that is sufficiently limited in scope so as not to require full compliance with the disclosure requirements of this Code. Such written determination shall include a description of the consultant's duties and, based upon that description, a statement of the extent of disclosure requirements, if any. The determination of the City Manager is a public record and shall be retained for public inspection in the same manner and location as the consultant's Form 700s. In this Code, "consultant" shall have the meaning as defined in California Code of Regulations Title 2, Division 6, §18700.3(a). 2 2 3 3 2 2 2 2 2 3 3 3 3 2 3 3 3 3 Full disclosure unless otherwise assigned in writing.* Exhibit A A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, C A-1, A-2, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, B, C A-1, A-2, C A-1, A-2, C A-1, A-2, C A-1, A-2, C A-1, A-2, B, C A-1, A-2, C A-1, A-2, C A-1, A-2, C A-1, A-2, C All, unless otherwise assigned in writing.* ** City Council Members file an expanded Form 700 identifying Industrial Development Authority, Public Financing Authority, and Public Facilities Corporation Board membership. D. Disclosure Categories Disclosure categories describe the types of financial interests that filers must disclose on their Form 700s. These Categories are tailored to the financial interests potentially affected by the official's governmental decisionmaking authority, and do not require public officials to disclose private financial information that does not relate to their capacity as an official for the City of Pismo Beach. Refer to Section III.C. above, which sets forth the Disclosure Category assigned to each filer position. PAGE 5OF11 R-2018-077 Exhibit A Category descriptions herein make general reference to the type of financial interest that must be disclosed. Actual disclosure must be made in accordance with the FPPC Regulations pertaining to each category of financial interest. Filers are encouraged to carefully read the instructions included with each schedule of the Form 700, and the accompanying Form 700 Reference Pamphlet, when determining which interests to disclose. 1. Category 1. Category 1 (statutory) filers must report the following (Form 700 schedules A-1, A-2, B, C, D and E (All schedules)): 1. Investments: direct or indirect financial interest worth $2,000 or more in any business entity (including a consulting business or other independent contracting business) that is located in, doing business in, planning to do business in, or that has done business during the previous two years in, the city of Pismo Beach. (Ownership of less than 10% and ownership of 10% or greater to be reported separately.) 2. Real Property: direct or indirect financial interest worth $2,000 or more in in real property located the city of Pismo Beach. 3. Income, Loans, & Business Positions: the source and amount of gross income of $500 or more received during the reporting period from source(s) located in, doing business in, planning to do business in, or having done business during the previous two years in, the city of Pismo Beach; includes job titles with each reportable business entity even if no income was received during the reporting period. 4. Gift: anything with an actual or estimated fair market value of $50 or more for which the filer not provided equal or greater consideration to the donor; includes gifts accepted but not used. 5. Travel payments: advances and reimbursements for travel and related expenses, including lodging and meals. The complete disclosure obligations for Category 1 Filers shall be in accordance with those set forth in Government Code §87200 et seq., and Title 2, California Code of Regulations §18110 et seq., including any duly adopted amendments thereto. These obligations are restated herein for only ease of reference. 2. Category 2. Individuals exercising the duties of positions classified as Category 2 filers must report the following (Form 700 schedules A-1, A-2, B, and C): 1. Investments: direct or indirect financial interest worth $2,000 or more in any business entity (including a consulting business or other independent contracting business) that is located in, doing business in, planning to do business in, or that has done business during the previous two years in, the city of Pismo Beach. (Ownership of less than 10% and ownership of 10% or greater to be reported separately.) 2. Real Property: direct or indirect financial interest worth $2,000 or more in in real property located the city of Pismo Beach. PAGE 6OF11 R-2018-077 Exhibit A 3. Income, Loans, & Business Positions: the source and amount of gross income of $500 or more received during the reporting period from source(s) located in, doing business in, planning to do business in, or having done business during the previous two years in, the city of Pismo Beach; includes job titles with each reportable business entity even if no income was received during the reporting period. 3. Category 3. Individuals exercising the duties of positions classified as Category 3 filers must report (Form 700 schedules: A-1, A-2, and C): 1. Investments: direct or indirect financial interest worth $2,000 or more in any business entity (including a consulting business or other independent contracting business) that is located in, doing business in, planning to do business in, or that has done business during the previous two years in, the city of Pismo Beach. (Ownership of less than 10% and ownership of 10% or greater to be reported separately.) 2. Income, Loans, & Business Positions: the source and amount of gross income of $500 or more received during the reporting period from source(s) located in, doing business in, planning to do business in, or having done business during the previous two years in, the city of Pismo Beach; includes job titles with each reportable business entity even if no income was received during the reporting period. 4. Category Unassigned. Individuals filing a Form 700 pursuant to Section III.B.3 Interim Filers shall file under the broadest disclosure category, equivalent to the requirements of Category 1, (refer to Section III.D.3) unless a specific, limited disclosure category has been assigned in writing. E. Statement Filing and Retention 1. Filing of Statements Individuals holding positions identified in Section III.0 of this Code ("filers") shall be required to file FPPC Form 700 Statements of Economic Interests ("statements") with the Pismo Beach City Clerk's Office, which will make the statements available for public inspection and reproduction in accordance with Government Code §81008. 2. Filing Intervals and Deadlines Unless otherwise provided by state law, Form 700s shall be filed at the following intervals, and be deemed timely only when received by the City Clerk's Office, or postmarked if mailed, on or before the following deadlines: i. Type of statement: Assuming Office Statement Deadline: Within thirty (30) days of assuming office. Applicable to: • Individuals hired, promoted, reclassified, contracted, appointed, or elected to a filer position (date of swearing in, or commencement of duties, whichever occurs first, to constitute date of assuming office); PAGE 70F11 R-2018-077 Exhibit A • Individuals currently holding a position that is newly classified by revision of this Code (date of revision to constitute date of assuming office for filing purposes); • Individuals holding newly -created positions assigned a disclosure category using FPPC Form 804 (Interim Filers) (date of assignment to constitute date of assuming office). Exception: Statutory filers who leave office and assume another statutory filer position within 45 days; Designated filers hired, promoted, reclassified, contracted or appointed to another designated filer position; Candidates for Council Member or Mayor. ii. Type of statement: Annual Statement Deadline: April 1 of every year (Extended to next working day if April 1 falls on a weekend or holiday). Applicable to: All Filers. Exception: Filers who assumed office between October 1 and December 31 of the prior year. (First filing to be made by next April 1.) iii. Type of statement: Leaving Office Statement Deadline: Within thirty (30) days of leaving office. Applicable to: All Filers. Exception: Statutory filers who leave office and assume another statutory filer position within 45 days; Designated filers hired, promoted, reclassified, contracted or appointed to another designated filer position; Candidates for Council Member or Mayor. iv. Type of statement: Candidate Statement Deadline: No later than the final filing date for nomination papers. Applicable to: Individuals seeking election, including re-election, to an elected City position. Exception: Candidates who have filed an Assuming Office or Annual Statement 60 days or fewer prior to the nomination deadline. 3. Format Statutory filers shall be required to file Form 700s directly with the FPPC, using the FPPC's official online eDisclosure system. Statutory filers shall not file paper copies of their Form 700 with the Clerk's Office. This requirement shall be deemed to include any other designated filer positions that may be accommodated by the online filing system in the future. Statutory filers who also hold a designated filer position must make their statutory position filing using the eDisclosure system and make their designated position filing in hard copy format. Except as noted above for potential future online filing, designated filers shall be required to file Form 700s in wet -signed, hard copy format with the City Clerk's Office. Designated filers shall not file a copy of their Form 700 with the FPPC. Under no circumstance will a digital -format, facsimile, or photocopied Form 700 without wet signature be deemed to satisfy a designated filer's filing requirements, until such time that applicable regulations may be amended to permit the same, or until such time that the City adopts electronic filing provisions in accordance with Government Code §87500.2. PAGE 8 OF 11 R-2018-077 Exhibit A 4. Disposition of Statements Statements for statutory filers shall remain on file electronically with the FPPC and be duplicated for public consumption in the City's electronic document management system. Original statements for designated filers shall retained as described in Section III.E.5 and the official copy shall be maintained for public consumption in the City's electronic document management system. 5. Retention and Destruction of Statements Statements on file in the Clerk's Office will be retained for at least seven (7) years from the date of filing, after which time they may be permanently discarded (Government Code §81009(e)). Hard copies will be retained for two years, after which time they will be discarded provided they have been digitally archived (Government Code §81009(g)). 6. Penalty Any filer who fails to timely file a complete Form 700 by the deadlines outlined in Section III.E.2 will be subject to a penalty of $10 per day for each day the statement is late, up to a maximum of $100, penalty to be assessed upon filing. These funds shall be deposited into the General Fund (Government Code §91013). Any filer who fails to timely file a completed Form 700 within 30 days of the missed filing deadline shall be referred to the FPPC for official enforcement action. IV. DISQUALIFICATION A. Disqualification, Generally All City of Pismo Beach officials are required to disqualify themselves from making, participating in, or in any way attempting to use their official position to influence, a governmental decision in which the official knows, or has reason to know, that he or she has a financial interest. This disqualification requirement is distinct from, and in addition to, the financial interest disclosure requirements provided under state law and this Code. Disqualifying interests may include interests that the official is not required to disclose as part of their Form 700. At a minimum, all agency officials shall disqualify themselves from making, participating in, or influencing a governmental decision (as defined by Regulation §18704), when the official has a financial interest (as defined by Government Code §87103), which may be reasonably foreseen (as defined by Regulation §18701), to be materially affected by the decision (as defined by Regulation §18702 et seq.) in a manner that is distinguishable from its effect on the public generally (as provided in Regulation §18703), upon the official or the official's spouse and dependent children (Government Code §82029). are: Enumerated, the types of disqualifying interests provided in Government Code §87103 1. Any business entity in which the public official has a direct or indirect investment worth two thousand dollars ($2,000) or more; 2. Any real property in which the public official has a direct or indirect interest worth two thousand dollars ($2,000) or more; 3. Any source of income, except gifts or loans by a commercial lending institution made in the regular course of business on terms available to the public, valued at five PAGE 9OF11 R-2018-077 Exhibit A hundred dollars ($500) or more in the aggregate, provided or promised to the official within the 12 months preceding the decision; 4. Any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management; 5. Any donor of, or agent for a donor of, gift(s) provided or promised to the official within the 12 months preceding the decision, if the gift(s) meet or exceed the value set forth in Government Code §89503(f) ($470 in 2018). B. Statutory and Designated Filers Who Are Members of Legislative Bodies Statutory and designated filers who are members of a legislative body (as defined by Government Code §54952) who have a conflict of interest with respect to an agenda item for a noticed meeting must disqualify themselves from participation in consideration of the item. 1. Procedure In accordance with Title2 , California Code of Regulations §§18707(a)(1)(A) and (B), any official with such a disqualifying financial interest shall openly announce the nature of the conflict following the presiding officer's announcement of the item, but before discussion has begun. In announcing the nature of the conflict, the Member shall adhere to the following: • If the conflict arises from an investment, the Member shall announce the name of the business entity in which each investment is held; • If the conflict arises from a business position, the Member shall give a general description of the business activity in which the business entity is engaged as well as the name of the business entity; • If the conflict arises from real property, the Member shall announce 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, the Member shall announce that the property is a residence; • If the conflict arises from income or gifts, the Member shall identify the source; and • If the conflict arises from personal financial effect, the Member shall identify of the expense, liability, asset, or income affected. The official shall then vacate their seat, and except as set forth in Section IV.B.3, leave the room until the matter in question has been resolved. 2. Form and Record of Identification If the governmental decision will be made during an open session of a public meeting, the public identification must be made orally in full compliance with the above. If the governmental decision will be made during a closed session, the public identification must be made orally in open session before the body goes into closed session and may be limited to a declaration that the official's recusal is because of a conflict of interest under Government Code §87100. The public official must not be present when the decision is considered in closed session or knowingly obtain or review a recording or any other non-public information regarding the governmental decision. PAGE 10 OF 11 R-2018-077 G Exhibit A Declarations of disqualification due to conflict of interest shall be made a part of the minute record for both open and closed session meetings. 3. Participation as a Member of the Public Pursuant to Government Code Section 87105(a)(4) and Regulation 18707(a)(3)(c), an official who is a member of a legislative body who is recused from participation in an agenda item during a noticed meeting due to conflict of interest may choose to listen from the audience with the general public, and may address the legislative body of which they are a member regarding matters related solely to his or her personal interests during the time that the general public speaks on the issue, if the official has complied with all of the above. 4. Legal Requirement for Participation No official shall be prevented from making, or participating in the making, of any decision to the extent his or her participation is legally required (as provided in Regulation §18705) for the decision to be made. 5. Tie Votes and Lack of Quorum Except as may be provided by applicable law, an official who is recused due to conflict of interest may not be called upon to break a tie or form a quorum. C. Statutory Filers Not Limited by this Code Disqualification requirements for statutory filers include, but are not limited to, those requirements restated herein for ease of reference; obligations for statutory filers are fully set forth in state law and regulation, including but not limited to Government Code §87105 and California Code of Regulations, Title 2, Division 6, §18707 et seq. and more broadly, Government Code §81000, et seq., Government Code §1090, et seq., and California Code of Regulations Title 2, Division 6, §18110 et seq. 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