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HomeMy WebLinkAbout9005 - Conflict of Interest CodeRESOLUTION NO. 9005 • A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING A CONFLICT OF INTEREST CODE APPLICABLE TO DESIGNATED CITY OFFICIALS AND EMPLOYEES PURSUANT TO THE POLITICAL REFORM ACT OF 1974 WHEREAS, Government Code Section 87300 requires every local government agency to adopt and promulgate a Conflict of Interest Code; and WHEREAS, there has been presented to the City Council a proposed Conflict of Interest Code to be applicable to certain designated City officials and employees, a copy of which is on file with the City Clerk; and WHEREAS, the City Council has held a public hearing to consider said Conflict of Interest Code; and • WHEREAS, the City Council has determined that the It proposed Conflict of Interest Code meets the legal requirements of the Political Reform Act of 1974, and is a fair and equitable regulation as applied to those City officials and employees designated therein. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Newport Beach hereby adopts the Conflict of Interest Code attached hereto and incorporated herein by this reference. BE IT FURTHER RESOLVED that the City Clerk is hereby instructed to take all necessary action to implement compliance with the Code, including the preparation and distribution of -1- necessary reporting forms and the subsequent filing and recording of all required reports. i ATTEST: City Clerk ADOPTED this 28th day of February , 1977. .....q ERTIf1ED AS 4E_ ORIGINAL CIN CLERK OF TYE CIT'i GF DAM NIAR 2 _1977 • )2or DDO /bc 2/25/77 CONFLICT OF INTEREST CODE CITY OF NEWPORT BEACH No ADOPTION In compliance with the Political Reform Act of 1974, California Government Code Section 81000, et se q., the City Of Newport Beach hereby adopts this Conflict of Interest Code, which shall apply to certain City officials and designated employees of this City, as specifically required by California Government Code Section 87300. II DESIGNATED POSITIONS The positions listed in Exhibit "A" are deemed to be designated positions. City officials and employees holding these positions are deemed to make or participate in the making of decisions which may foreseeably have a material effect on a financial interest. III EXEMPT POSITIONS The City Council finds that unsalaried members of Boards, Com- missions and Council- appointed Committees which serve solely in an advisory capacity, are persons who do not hold positions which entail • the making or participating in the making of governmental decisions which may foreseeably have a material effect on any financial interest and are therefore exempt from the provisions of this Code. IV DISCLOSURE STATEMENTS A designated official or employee shall be assigned to one or more of the disclosure categories set forth in Exhibit "B ". Each designated official or employee shall file an annual statement disclosing that officials or employee's interest in investments, real property and income required to be reported under the category to which the official or employee's position is assigned in Exhibit "B ". V PLACE OF FILING All designated officials and employees required to submit a statement of financial interests shall file the original with the City Clerk. VI TIME OF FILING A. Initial Statement. Each designated official and employee shall file an initial disclosure statement within thirty (30) • days after the effective date of this Code. The initial disclosure statement shall disclose any reportable investments, and any interests in real property,but not income held at the time of reporting. -2- Ll • t B. Other Employees. Officials and employees appointed, promoted or transferred to designated positions shall file an initial statement not less than ten (10) days before assuming office or such position, unless an earlier assumption of office is required, in which case the statement shall be filed within thirty (30) days of assuming the office or designated position of employment. C. Annual Statements. An annual statement shall be filed in the month of April of each year by each designated official and employee. Annual statements shall cover the period of January 1 through December 31 of the calendar year preceding the statement and shall disclose any reportable investments, interests in real property and income. D. Leaving Office. Any designated official or employee who leaves his office or position shall file a disclosure statement within thirty (30) days of the effective date of leaving the office or position. The leaving office statement shall disclose reportable investments, interests in real property, and income during the period since the closing date of the previous statement filed pursuant to this Code. VII CITY COUNCIL AND CITY MANAGER The disclosure and filing provisions of this Code shall not be applicable to members of the City Council or City Manager, but such designated persons shall comply with the disclosure require- ments of California Government Code Sections 87200, et sec. VIII REPORTABLE INTERESTS A. Investments. Investments in business entities are reportable if: -3- 1. The business entity, including parent corpora- tions, subsidiary corporations or otherwise related business entities, • (a) has an interest in real property located in part or in whole within the boundaries of the City, within two (2) miles thereof or within two (2) miles of land owned or used by the City; or (b) does business or plans to do business within the City; or (c) has done business within the City at any time during the two (2) years prior to the time that the disclosure statement of the designated employee is filed; and 2. The fair market value of the investment of the designated employee or his or her spouse is greater than One Thousand Dollars ($1,000.00); and 3. The investment either: (a) is held by the designated employee or his or her spouse and constitutes a financial interest in, or security issued by, the business entity, including but not limited to common stock, preferred stock, rights, warrants, options, debt instruments and any partnership or other ownership interest; or (b) is held by any business entity or trust in which the designated employee or his or her spouse owns, directly, indirectly or beneficially, a ten percent (10 %) interest or greater, and constitutes a financial interest in, or security issued by, a business entity qualifying under paragraph 2. above; provided, however, that in the • event that the ownership interest of the designated employee or his or her spouse in such business entity or trust is less than fifty percent (50 %), the value, for the purpose of paragraph 2., of the investment relates to the value �� • of the pro rata share of the designated employee or his or her spouse in the investment held by the business entity or trust; and provided further, that in the event that the ownership interest of the designated employee or his or her spouse in such business entity or trust is fifty percent (50%) or more, the value, for the purpose of paragraph 2., of the investment relates to the entire value of the investment held by the business entity or trust. EXCEPTION: An investment is not reportable if it constitutes a time or demand deposit in a financial insti- tution, a share in a credit union, an insurance policy, or a bond or other debt instrument issued by any government or government agency. B. Interests In Real Property. Interests in real property are reportable interests if: 1. The real property to which the interest pertains is located in part or in wholes City; or (a) within the boundaries of the City; or (b) within two (2) miles of the boundaries of the (c) within two (2) miles of land located outside of the boundaries of the City which is owned or used by the City; and 2. The fair market value of the interest of the designated employee or his or her spouse is greater than one Thousand Dollars ($1,000.00); and 3. The interest is either: (a) a leasehold, beneficial or ownership interest held by the designated employee or his or her spouse; or -5- L �6 (b) an option held by the designated employee or his or her spouse to acquire such an interest; or (c) an interest or option held by a business entity or trust in which the designated employee or his or her spouse owns directly, indirectly or beneficially, a ten percent (10 %) interest or greater; provided, however, that in the event that the ownership interest of the designated employee or his or her spouse in such business entity or trust is less than fifty percent (50 %), the value, for the purpose of paragraph 2., of the real property interest or option relates to the value of the pro rata share of the designated employee or his or her spouse in the real property interest or option held by the business entity or trust; and provided further, that in the event that the ownership interest of the designated employee or his or her spouse in such business entity or trust is fifty percent (50 %) or more, the value, for the purpose of paragraph 2., of the real property interest or option relates to the entire value of the real property interest or option held by the business entity or trust. 4. An interest in real property does not include the principal residence of the filer. if: C. Sources Of Income. Sources of income are reportable 1. The source of income was either: (a) a business entity located or doing business as described in subsection A. 1.; or (b) an individual residing within the City; or (c) a non - profit association or corporation having its principal place of business within the City; and Q9 2. Either- (a) the aggregate amount of income received by the designated employee or his or her spouse from the • source during the period covered by the disclosure state- ment was Two Hundred Fifty Dollars ($250.00) or more in value; or (b) if the income was a gift received by the designated employee or his or her spouse from the source during the period covered by the disclosure statement, the value of the gift was Twenty -Five Dollars ($25.00) or more; and or 3. The income was either received by: (a) the designated employee or his or her spouse; (b) received by any business entity or trust in which the designated employee or his or her spouse owns, directly, indirectly, or beneficially, a ten percent (10 %) interest or greater; provided, however, that in the event that the income is received by a business entity described in this paragraph (b), the value, for the purpose of paragraph 2., of the income relates to the pro rata share of the designated employee or his or her spouse in the income of the business entity or trust. INCOME INCLUDES, except to the extent excluded by this subsection, income of any nature from any source located within the City, including but not limited to any salary, wage, advance, payment, dividend, interest, rent, capital gain, return of capital, gift (including any gift of food • or beverage), loan, forgiveness or payment of indebtedness, discount in the price of anything of value unless the discount is available to members of the public without regard to official status, rebate, reimbursement of expenses, per -7- 'y 0 r� �J diem, or contribution to an insurance or pension program paid by any person other than an employer, and including any community property interest in income of a spouse. Income shall also include a pro rata share of any income of any business entity or trust in which the individual or spouse owns, directly or indirectly, or beneficially, a ten percent (10 %) interest or greater. INCOME DOES NOT INCLUDE: (1) campaign contributions required to be reported under Chapter 4 (commencing with Section 84100) of Title 9 of the Government Code; (2) salary and reimbursement for expenses or per diem received from a state or local government agency and reimbursement for travel expenses and per diem received from a bona fide educational, academic or charitable organization; (3) gifts of informational material, such as books, pamphlets, reports, calendars or periodicals; (4) gifts which are not used and which, within thirty (30) days after receipt, are returned to the donor or delivered to a charitable organization without being claimed as a charitable contribution for tax purposes; (5) gifts from an individual's spouse, child, parent, grandparent, grandchild, brother, sister, parent -in- law, brother -in -law, sister -in -law, aunt, uncle, or first cousin or the spouse of any such person; provided that a gift from any such person shall be considered income if the donor is acting as an agent or intermediary for any person not covered by this paragraph (5); (6) any devise or inheritance; �� • • (7) interest, dividends or premiums on a time or demand deposit in a financial institution, shares in a credit union or any insurance policy, payments received under any insurance policy, or any bond or other debt instrument issued by any government or government agency; and (8) dividends, interest or any other return on a security which is registered with the Securities and Exchange Commission of the United States Government; (9) other than gift, income received from any source outside the jurisdiction of the City and not doing business within the jurisdiction of the City, not planning to do business within the jurisdiction of the City, or not having done business within the jurisdiction of the City during the two (2) years prior to the time any statement or other action is required by this Code; (10) income from a source which is a former employer if: all income from the employer was received by or accrued to the designated employee prior to the time he or she became a designated employee, the income was received in the normal course of the previous employment, and there was no expectation by the designated employee that he or she assumed the designated position of renewed employment with the former employer, IX CONTENT OF DISCLOSURE STATEMENTS A. Investments. When an investment is required to be reported, the statement shall contain: 1. The name and address of the business entity in which each investment is held; • • 2. A general description of the business activity in which the business entity is engaged; 3. A statement of the nature of the investment; 4. A statement of whether the fair market value of the investment exceeds Ten Thousand Dollars ($10,000.00), and whether it exceeds One Hundred Thousand Dollars ($100,000.00); and 5. In the case of investments wholly or partially acquired during the period covered by an annual disclosure statement, the date of acquisition and, if such interest in such property was disposed of during such period, the date of disposition. S. Interests In Real Property. When an interest in real property is required to be reported, the statement shall contain: property; 1. The address or other precise location of the real 2. A statement of the nature of the interest in the real property; 3. When the real property is not used principally as the residence of the designated employee making the filing, state- ment of whether the fair market value of the interest exceeds Ten Thousand Dollars ($10,000.00) and whether it exceeds One Hundred Thousand Dollars ($100,000.00); and 4. In the case of an interest in real property wholly or partially acquired during the period covered by an annual disclosure statement, the date of acquisition and, if such interest in such property was disposed of during such period, the date of disposition. -10- • �i C. Income and Gifts. When personal income is required to be reported, the statement shall contain: 1. The name and address of each source of income aggregating Two Hundred and Fifty Dollars ($250.00) or more in value; 2. A general description of the business activity, if any, of each source; 3. A statement whether the aggregate value of income from each source was greater than One Thousand Dollars ($1,000.00), and whether it was greater than Ten Thousand Dollars ($10,000.00); 4. A description of the consideration, if any, for which the income was received; and 5. In the case of income of a business entity, in which the designated employee or his or her spouse owns a ten percent (10 %) interest or more: (a) name and address and a general description of the business activity of the business entity; (b) if such business entity provides legal or brokerage services, the name of every natural person, non- profit association or corporation and business entity who paid fees to such business entity if the pro rata share of the designated employee or his or her spouse of such fees was One Thousand Dollars ($1,000.00) or more; and (c) if such business entity does not provide legal or brokerage services, the name of every natural person, non - profit association or corporation, and business entity from whom such business entity received payments if the pro rata share of the designated employee or his or her spouse of gross receipts from such person, non - profit -11- association or corporation, or business entity was Ten Thousand Dollars ($10,000.00) or more during any calendar year partially or wholly covered by the disclosure statement • being filed; 6. The name and address of each source of income of Twenty -Five Dollars ($25.00) or more in value if the income was a gift; and 7. In the case of income constituting a gift, the amount and the date on which the gift was received. X CONTENTS OF BUSINESS ENTITY INCOME REPORTS When income of a business entity, including income of a sole proprietorship, is required to be reported, the statement shall contains A. The name, address, and a general description of the business activity of the business entity; B. In the case of a business entity which provides legal or brokerage services, the name of every person who paid fees to the business entity if the filer's pro rata share of fees from such person was equal to or greater than One Thousand Dollars ($1,000.00); and C. In the case of a business entity not covered by paragraph B., the name of every person from whom the business entity received payments if the filer's pro rata share of gross receipts from such person was equal to or greater than Ten • Thousand Dollars ($10,000.00) during a calendar year. XI CONTENTS OF MANAGEMENT POSITION REPORTS When management positions are required to be reported, -12- designated employees shall list the name of each business entity not specified above in which he is a director, officer, partner, trustee, employee, or in which he holds any position • of management. 0 *4 ITION OR DISPOSAL DURING REPORTING PERIOD The statement shall include any investments in business entities, interests in real property and income held or received at any time during the period covered by the statement, whether or not they are still held at the time of filing. XIII DISQUALIFICATION A. General Rule. Designated officials and employees have a conflict of interest and shall disqualify themselves from making or participating in the making of any governmental decision when it is reasonably foreseeable that a financial interest of the designated official and employee may be materially affected by the decision. A designated official or employee shall not be required to disqualify himself with respect to any matter which could not be legally acted upon or decided without his participation. B. Makinq Governmental Decisions Actions Included. A designated official or employee makes a governmental decision within the meaning of this Article, when he or she, acting within • the authority of his or her position: 1. Votes on a matter; 2. Appoints a person; -13- action; 3. Obligates or commits the City to any course of 4. Enters into any contractual agreement on behalf of the City; or is 5, Determines not to act, within the meaning of subsection 1. through 4., unless such determination is made because of his or her financial interest. When the determination not to act occurs because of his or her financial interest, the designated employee's determination must be accompanied by disclosure of the financial interest made part of the City's official records, or made in writing to the designated employee's supervisor or appointing power, as appropriate. C. Participating In Decisions; Actions Included. A designated official or employee participates in the making of a governmental decision within the meaning of this Article, when he or she, acting within the authority of his or her position: 1. Negotiates without significant substantive review, with a governmental entity or private person regarding the decision; or 2. Advises or makes recommendations to the decision maker, either directly or without significant intervening sub- stantive review by: (a) Conducting research or investigations which require the exercise of judgment on the part of the designated official or employee and the purpose of which is to influence the decision; or (b) Preparing or presenting any report, analysis or opinion, orally or in writing, which requires the exercise of judgment on the part of a designated official or employee, and the purpose of which is to influence the decision. -14- UA .' . D. Making Or Participating In Decisions; Actions Excluded. Making or participating in the making of a governmental decision as used in this Article shall not include: • 1. Actions of a designated official or employee which are solely ministerial, secretarial, manual, or clerical; 2. Appearances by a designated official or employee as a member of the general public before an agency in the course of its prescribed governmental function to represent himself or herself on matters related solely to his or her personal interests; or 3. Actions by a designated official or employee relating to the compensation or the terms or conditions of his or her employment or contract. E. Financial Interest. A designated official or employee has a financial interest in a decision if it is reasonably fore- seeable that the decision will have a material financial effect on the designated officail or employee, distinguishable from its effect on the public generally, including all property owners within the City, or all those served by the City, or on any significant segment of the property owners within the City or those served by the City or of the public generally, or on the official as a member of a profession, industry or occupation, all members of which will be affected to the same extent one 1. A direct or indirect interest in real property if such interest is worth more than One Thousand Dollars ($1,000.00); 2. A direct or indirect investment if such investment • is worth more than One Thousand Dollars ($1,000.00); 3. A course of income as described, other than a loan by a commercial lending institution in the regular course of business, if such income aggregates Two Hundred Fifty Dollars -15- ($250.00) or more in value received by or promised to the designated employee within twelve (12) months prior to the time when the decision is made; or • 4. A business entity if the designated employee is a director, officer, partner, trustee or employee or holds any position of management therein. For the purpose of this Section, indirect investment or interest means any investment or interest owned by the spouse or dependent child of a designated official or employee, by an agent on behalf of a designated official or employee, by any business entity controlled by the designated official or employee or by a trust in which he has a substantial interest. A business entity is controlled by a designated official or employee if the designated official or employee, his agent, spouse and dependent children hold more than fifty percent (50 %) of the ownership interest in the entity. A designated official or employee has a substantial interest in a trust when the official or employee, his spouse and dependent children have a present or future interest worth more than One Thousand Dollars ($1,000.00). F. Affected Materially. 1. Standard of Determination. The financial effect of a governmental decision on a financial interest of a designated official or employee is material if, at the time the designated official or employee makes or participates in the making of a decision, in light of all the circumstances and facts known at the time of the decision, the designated official or employee knows or has reason to know that the existence of the financial • interest might interfere with the designated official or employee's performance of his or her duties in an impartial manner free from bias. -16- Provided that, the making or participating in the making of a governmental decision by a contract consultant or by a person retained to provide information, adivice, recommendation or counsel, has no material financial effect on a business entity or source of income, in which such consultant or person retained is an officer, employee, sole proprietor, or partner, if the only financial effects of the decision are the modification, perpetuation or renewal of the contractual or retainer agreement and /or the opportunity to bid competitively upon a project or contract. 2. Circumstances To Be Considered. In determining the existence of a material effect upon a financial interest, the designated official or employee shall consider relevant factors, including but not limited to the following: (a) In the case of any real property in which the designated official or employee has a direct or indirect interest worth more than One Thousand Dollars ($1,000.00): (1) whether the effect of the decision will be to increase the income - producing potential of the real property by One Hundred Dollars ($100.00) or five percent (5%) per month, whichever is less; and (2) whether the effect of the decision will be to increase the fair market value of the real property by One Thousand Dollars ($1,000.00) or more or by five percent (5 %), whichever is greater. (b) In the case of a business entity in which the designated official or employee has a direct or indirect investment worth more than One Thousand Dollars ($1,000.00), or in the case • of a designated official or employee who is a director, officer, partner, trustee, employee, or holds any position of management in a business entity- -17- (1) whether the effect will be to increase or decrease the annualized gross revenue of the business entity by one percent (1 %) or more of the annual net income of the business entity by five percent (5 %) or more; and • (2) whether the effect of the decision will be to increase or decrease the assets or liabilities of the business entity by Fifty Thousand Dollars ($50,000.00) or more, or by five percent (5%) of its current assets or liabilities, whichever is less. (c) In the case of a source of income of a designated official or employee (other than a loan by a commercial lending institution in the regular course of business) aggregating Two Hundred Fifty Dollars ($250.00) or more in value received by or promised to the designated official or employee within twelve (12) months prior to the time when the decision is made: (1) whether, if the source of income is a business entity, the decision will affect such business entity in the manner described in subsection (b) above; (2) whether the governmental decision will directly affect the amount of income to be received by the de,ai.gnated official or employee; and (3) whether there is a relationship between the governmental decision and the purpose for which the designated official or employee receives income. The specific dollar or percentage amounts set forth in this subsection do not constitute either absolute maximum or minimum levels, but are merely intended to provide guidance and should be considered along with other relevant factors in determining whether a financial interest may interfere with the designated official's or employee's exercise of his or her duties in rendering a decision. CM fs i .• %IV MANNER OF DISQUALIFICATION • A designated official or employee required to disqualify himself or herself shall notify his or her supervisor in writing. This notice shall be forwarded to the City Manager, who shall record the employee's disqualification. Upon receipt of such statement, the supervisor shall immediately reassign the matter to another employee. In the case of a designated official, who is a member of a Commission, notice of disqualification shall be given at the meeting during which consideration of the decision takes place and shall be made a part of the official record of the Commission. The member shall then refrain from participating and shall attempt in no way to use his or her official position to influence any other person with respect to the matter. M DEFINITION OF TERMS Except as otherwise provided, the definitions contained in the Political Reform Act of 1974 (Government Code Section 81000, et seq.), the Regulations of the Fair Political Practices Commission, and any amendments to the Act of Regulations, shall be incorporated into this Conflict of Interest Code. EW EFFECTIVE DATE • This Code shall take effect February 28, 1977. -19- • • xvll MISCELLANEOUS A. Legal Opinions. Any designated official or employee who is uncertain of any obligation arising under the provisions of this Code or the Political Reform Act of 1974 (Government Code Sections 81000, et se q.), may request a formal opinion or letter of advice from the City Attorney of the City. In the event the City Attorney is unable or declines, by written notice, to issue an opinion to the designated employee, or in the event the designated employee is dissatisfied with the opinion received from the City Attorney of the City, he may request the City Council of the City to seek a formal opinion or letter of advice from the Fair Political Practices Commission. B. Reliance On Legal Opinion. If a legal opinion is issued in writing by the City Attorney of the City, stating in full the facts and the law upon which the opinion is based, compliance by the designated employee with such opinion may be evidence of good faith in any civil or criminal proceeding brought pursuant to the provisions of the Political Reform Act of 1974 or this Code. The designated official or employee's good faith compliance with the written opinion of the City Attorney of the City shall also act as a complete defense to any disciplinary action that the City may bring under Section 91003.5 of the Political Reform Act or this Code. C. Statute Of Limitations. No judicial proceedings based upon disqualification provision of this Code shall be brought pursuant to Government Code Section 91003(b) to restrain the execution or to set aside official action of the City unless commenced ninety (90) days following official action or decision. -20- • • EXHIBIT "A" Disclosure Designated Positions Category Assistant City Attorney 1 Assistant Community Development Director - Building 1 Assistant Community Development Director - Planning 1 Assistant Public Works Director and City Engineer 1 Assistant to the City Manager (Personnel) 1 City Attorney 1 City Clerk 1 City Librarian 1 Community Development Director 1 Finance Director 1 Fire Chief 1 General Services Director 1 Marine Director 1 Parks, Beaches & Recreation Director 1 Planning Commissioners 1 Police Chief 1 Public Works Director 1 Purchasing Agent 2,3 EXHIBIT "A" • EXHIBIT "B" DISCLOSURE CATEGORIES Category 1 A. Interests In Real Property which is located in whole or in part either (1) within the boundaries of the City of Newport Beach; or (2) within two (2) miles of the boundaries of the City, including any leasehold, beneficial or ownership interest or option to acquire such interest in real property, if the fair market value of the interest is greater than One Thousand Dollars ($1,000.00). B. Investments In Business Entities which (1) have an interest in real property located in part or in whole within the boundaries of the City of Newport Beach, within two (2) miles thereof or within two (2) miles of land owned or used by the City; (2) does business or plans to do business within the City of Newport Beach; or (3) has done business within the City at any time during the two (2) years prior to the time of filing the disclosure statement. Investments with a fair market value less than One Thousand Dollars ($1,000.00) are not reportable. C. Sources Of Income from a business entity located or doing business within the City of Newport Beach when the aggregate amount of income received by the designated official or employee or his or her spouse was Two Hundred Fifty Dollars ($250.00) or more in value, or if the income was a gift received by the designated official or employee or his or her EXHIBIT "B" 0 I* spouse and the value of the gift was Twenty -Five Dollars ($25.00) or more. Category 2 Investments in or income from business entities as described in Category 1, if such business entities manufacture or sell supplies, machinery or equipment of the type utilized by the City of Newport Beach. Category 3 Investments in or income from business entities as described in Category 1, if such business entities are contractors or subcontractors engaged in the performance of work or service of the type utilized by the City of Newport Beach. -2-