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HomeMy WebLinkAbout2015 Finance Commission Handbook - In Lieu of Bylaws - Novem /I "ANT I N G T £lI �,( �.,„ _,cRPOAATFA..'. ��\� �• ,.�, %. �� = t_" •. T� � :• •• C, ` = 1 1 -.• v. •••e B 17, 1909,p;"•• UNTV ,// FINANCE COMMISSION HANDBOOK (Finance Commission Update-November 2015) TABLE OF CONTENTS PAGE Introduction 1 Council and Staff Liaison Role 2 Qualifications 2 Duties and Responsibilities 2 Attendance Requirements 3 Composition and Term 3 Composition Duration of Terms Voluntary Retirement Successive Terms Removal of Members 3 Meetings 4 Regular Adjourned Regular Special Quorum Proceedings Officers 4 Secretary to Commission 4 Parliamentary Procedures 4 Agenda Information 5 Public Meeting Procedure 6 Committees 6 Ad Hoc Committees Organizations 7 Conflict of Interest&Code of Ethics 8 Brown Act 9 Appendix A. Parliamentary Procedure at a Glance B. Glossary of Terms C. Brown Act D. City Charter Section 405-Establishing Commission E. Huntington Beach City Policies 1. HBMC Chapter 2.100 Operating Policy for Boards and Commissions 2. Financial Policies 3. Chapter 2.15—Finance Department 4. Ordinance 4056—Finance Commission 5. Chapter 2.109—Finance Commission 6. Chapter 2.110—Investment Advisory Board F. Conflict of Interest Resolution No. 2008-09 Code of Ethics Resolution No. 2005-08 INTRODUCTION The City Council establishes commissions, boards and committees to advise the Council in specific areas of interest stated in the ordinance or resolution that creates each commission, board or committee. The main purpose of the commission is to advise the Council and increase citizen participation in the affairs of government. An appointment to a commission is an honor and a responsibility. The City Council has confidence in the judgment and integrity of its appointees and relies on them for information and recommendation on specific matters. As advisors to the Council, regular attendance at meetings, understanding the duties of their role and working to contribute to the betterment of the community is needed of each commissioner. Since the Council appoints commissions as group advisors, it is improper for individual commission members to attempt to persuade, entreat or pressure the Council into accepting a recommendation. The role of the commission is to assist the City Council in the development and analysis of information. Normally, all business transacted with the Council from the commission will be through the secretary. Usually, the communication from commission will be in writing to the City Manager for distribution to the City Council as an agenda item. The Mayor serves as an ex-officio member to the commission. Staff is assigned to assist in a technical, advisory capacity and perform clerical duties. This handbook has been prepared to assist commissioners in the performance of their duties. Included are policies adopted by City Council, general information items and the delineation of procedures, rules and regulations that relate to commission and commissioners. (1) COUNCIL AND STAFF LIAISON ROLE The role of the City Council and staff in relation to the various boards, commissions, committees and advisory groups is defined below. Input from these citizen groups is very important to the Council and essential to the decision-making process. The Council members who act as Council liaison should be the most knowledgeable and up-to-date Council member on the various facts and issues related to the assigned group. He/she, in turn, is responsible for keeping the rest of the Council informed on the activities of the group. The Council liaison is not expected to attend every meeting, but occasional attendance is desirable. The Council liaison also reviews applications for vacant positions and recommends appointments to the Council. Particular emphasis is placed on the fact that each advisory group should get to know its own Council liaison and keep in close contact with them, since they are its first line of communication to the Council. The Council members, of course, cannot attend every meeting for each group to which they are assigned. However, liaison members would be pleased to meet with you to discuss any special problems or projects and will try to attend regular meetings when their schedule permits. The basic function of the staff person is to keep the advisory group informed of current happenings within the city which relate to the group's purpose, and the "do's and don'ts" of actions the group wishes to take. The staff person may also produce the minutes, prepare reports, write draft letters, etc., as required by the commission. QUALIFICATIONS Each City Council Member shall appoint one member of the Commission to serve the same term as the City Council member. The Commission shall have a written handbook and guidelines as it deems necessary to provide for its chair and officers and their method of selection, time and place of meetings and for such other matters relative to its work and administration of its duties which are not otherwise provided for by statute or ordinance. Any resident of the City of Huntington Beach may be appointed to the Finance Commission. The Council seeks persons who are interested in serving the City and are willing to donate their services. Each member should be concerned with the general public welfare. No member is selected on the basis of representing a specific business, district, organization or cause. DUTIES AND RESPONSIBILITIES Advisors to the City Council must be cognizant of the fact that the decisions based on recommendations of advisory groups are not easily made. The ultimate judgment in these matters is vested in the people chosen by the majority to have the wisdom it takes to run city affairs. The responsibility of advisory groups is to assist the City Council in carrying out its obligations of public office. (2) ATTENDANCE REQUIREMENTS In order to function at maximum efficiency, it is essential that each commissioner maintain an excellent attendance record. Absence from three (3) consecutive meetings without formal consent from the commission chair shall be deemed to constitute the retirement of such member and the position shall become vacant. COMPOSITION AND TERM The commission shall be composed of seven (7) members who shall be appointed by the City Council Members. Each Member of the commissions shall serve the same term as the Council Member who appointed them. In the event the office of any appointing Councilmember becomes vacant during the term thereof, the term of the Finance Commissioner appointed by such Councilmember shall terminate thirty (30) days after such vacancy occurs. Following expiration of his/her term of office, each member of the Finance Commission shall continue to serve until his/her successor is appointed and qualified. Members of the Finance Commission may be removed by the Councilmember of which he/she is appointee, upon announcement of such removal at a regular City Council meeting; provided, however, that no member of the Finance Commission may be removed prior to January 1 following any general municipal election. Voluntary Retirement. Members may voluntarily retire from the commission at any time. In such a case, or any other vacancies for whatever cause, successors are to be appointed by the Mayor, with the approval of the City Council, for the unexpired term of the office. Successive Terms. Each City Council Member shall appoint one member of the Commission to serve the same term as the City Council member. Members may be serve the same term as their appointing Council Member, up to two four-year terms of office. REMOVAL OF MEMBERS The terms of office specified herein, shall not be deemed arbitrary and should the Mayor, with the approval of the City Council, determine that it would be in the best interest of the department that a member be retired, it may be so ordered and a successor appointed for the unexpired term of office. (3) MEETINGS Regular Meetings. The Finance Commission shall meet in regular session on the fourth Wednesday of each month at 5:00 p.m., unless it should fall on a holiday. In such case, the following day shall be designated or as agreed upon by the majority of the Commission. Commission may revise the regular meeting schedule as agendized and approved by a simple majority of the Commission. Adjourned Regular Meetings. An adjourned regular meeting may be held to consider matters that cannot be properly considered at the regular meeting or if a quorum is not present at the regular meeting. Such actions serve as adequate notice to members present. Members not present are notified by the secretary. Special Meetings. A special meeting may be called by the chair or a majority of the commission members. When a special meeting is called, notice of the meeting must be given to commissioners and posted on the City website prior to the meeting. The notice must include the date, time and place of the meeting and the topic to be discussed. Additionally, an agenda announcing the meeting must be posted on the bulletin board outside Council Chambers at least seventy-two hours in advance of the meeting. Discussion at special meetings must be limited to those items that have been publicized in the agenda. Quorum Procedures. A quorum of the voting members of commission must be present in order to conduct regular business. A majority of the members of the Finance Commission in office shall constitute a quorum. A majority vote of the members present, and voting, where a quorum is present at any regular or special meeting is required to carry a motion, proposal or resolution. Upon demand of any member, the roll shall be called for yeas and nays for any question before the Finance Commission. OFFICERS The commission shall elect from its members a chair and vice chair at the regular January meeting. Such officers shall serve for one year and until their successors are elected. The Chair and Vice-Chair may make and second motions and shall have a voice vote in all proceedings of the commission. SECRETARY TO COMMISSION The Director of Finance, or his/her designee, shall serve as secretary to the commission without vote and shall keep permanent minutes of the commission meetings. The secretary shall be responsible for the preparation of the agenda. PARLIAMENTARY PROCEDURES "Robert's Rules of Order-Revised" will cover procedures of the Finance Commission business meetings unless inconsistent with provisions of the articles therein. Refer to Parliamentary Procedures at a Glance, Appendix A. (4) AGENDA INFORMATION The following is a brief explanation of the Finance Commission agenda structure: A. ROLL CALL/PLEDGE OF ALLEGIANCE B. ORAL COMMUNICATIONS/PUBLIC COMMENTS Anyone wishing to address the commission on any matter may do so under Public Comments. The Finance Commission welcomes public comments on all items either on the agenda or on issues within the jurisdiction of the Finance Commission. Comments are limited to three minutes per person, per item or subject matter, and time may not be donated to others. The Commission is not allowed to discuss or take action on any items not on the agenda. The Commission requests that this public forum be utilized in a positive and/or constructive manner. Questions or comments to the Commission regarding non-agendized items may be referred to city staff for a response. C. APPROVAL OF MINUTES D. DIRECTOR ITEMS This section shall include information items from the Finance Director. These are short items of interest and/or information and not intended for review or approval from the commission. E. DISCUSSION ITEMS This section shall include items from the City Council, the Finance Director and Commission. It may be used as a forum for review, discussion and approval of items. Commission Members may place items on the agenda after discussion and approval by a majority vote of the members present. (5) PUBLIC MEETING PROCEDURES This statement has been prepared to provide a better understanding of procedural standards for public meetings before the Finance Commission. Regular meetings of the Finance Commission are held on the fourth Wednesday of each month at 5:00 p.m., in Room B-7, Lower Level of City Hall. Adjourned meetings and special meetings may be scheduled at other times. Finance Commission proceedings are governed by "Robert's Rules of Order Revised." Members of the community are welcome to address the Finance Commission during a Public Meeting on the published Agenda of Business or during the Oral Communications portion of this meeting. Speakers are requested to fill out the "request to speak"form and to give it to the Recording Secretary who will call out the names of the speakers in the order in which they are received. Comments are limited to three minutes per speaker, per item or subject matter, and time may not be donated to others. Please respect this time limit so that all may have an equal opportunity to present their views. This is a time for commissioners and staff to listen to views and so we will not ask or respond to questions or comments at this time. At the conclusion of the Public Meeting or Oral Communications, prior to proceeding with commission discussion regarding the topic, commissioners can address staff with either a statement or a question raised by a speaker. In addition, a commissioner can ask staff to provide the speaker with additional or corrected information. COMMITTEES Commission committees are vitally important to the decision making process of the commission. They may be formed to study various requests, problems or plans and ultimately make recommendations to commission. Public reaction, financial impact and advantages to the community are taken into consideration Ad Hoc Committees. Members of the commission may at times serve on ad hoc committees. These committees are created to address a specific issue, and it is anticipated that such committees will not be ongoing but will be disbanded when that specific issue has been addressed. Such committees can be formed by the commission or City Council and may include members from Council, other commissions or boards and the general public. (6) ORGANIZATIONS The Finance Department and commission maintains contacts with a variety of community organizations and professional bodies. These groups and their relationships with the department and/or commission are delineated briefly as follows: Investment Advisory Board. The Investment Advisory Board acts in an advisory capacity to the City Council and City Treasurer in matters pertaining to all the City's investments, including the investment policy and information for the annual investment report. CSMFO. The California Society of Municipal Finance Officers is a statewide organization serving all California Municipal finance professionals. CSMFO promotes excellence in financial management through innovation, continuing education and the professional development of their members. CMRTA. California Municipal Revenue and Tax Association is a statewide organization serving all California local government tax and revenue professionals. The CMRTA is dedicated to communicating important tax and revenue changes, providing education and training in all aspects of revenue and permits, supporting the highest level of professional services to the public, creating partnerships with agencies and organizations of mutual interest, and sponsoring and supporting effective legislation. CMTA California Municipal Treasurers Association was founded in 1958 by Municipal Treasurers to improve their function in local Government and serves as a vehicle for quality assurance, comprehensive education programs, high professional standards and public accountability. GFOA The Government Finance Officers Association, founded in 1906, represents public finance officials throughout the United States and Canada. The association's nearly 18,000 members are federal, state/provincial, and local finance officials. The GFOA's mission is to enhance and promote professional management of governmental financial resources by identifying, developing, and advancing fiscal strategies, policies and practices for the public benefit. CAPPO The California Association of Public Procurement Officials was formed in 1915, dedicated to maintaining the highest standards of professional behavior and ethical conduct in public purchasing. Cappo's members exchange ideas in an effort to resolve problems affecting California's public agencies by sharing information on technical advances, cost factors, new laws, and sources for products. This open collaboration helps to strengthen the skills of public procurement officials as they fulfill their responsibilities to the public they serve. AFP The Association of Finance Professionals is the professional society that represents finance executives globally. AFP established and administers the Certified Treasury Professional and Certified corporate FP&A Professional credentials. (7) CONFLICT OF INTEREST Commission members should always be on the alert for any conflict of interest that may exist as to matters coming before them for consideration. It is imperative that each member notify the department director or secretary to the commission of any possible financial conflict of interest. The responsibility lies with the member to also complete an annual financial disclosure form. The state law on Conflicts of Interest is divided into three categories: 1) influencing governmental decisions; 2) making contracts; and 3) financial disclosures. A delineation of the various codes are presented in Appendix F.1. Pursuant to the Political Reform Act of 1974, a Conflict of Interest Code must be prepared by all cities. The City of Huntington Beach has conformed to this regulation by adopting Resolution No. 2008-09. The city resolution is also presented in Appendix F of this handbook. CODE OF ETHICS The City Council, City departments and all boards, commissions, and committees are to formally review the City of Huntington Beach Code of Ethics and sign the acknowledgement. The Mayor, City Manager, and Chairpersons shall be responsible for accomplishing this review. New members of the City Council, boards, commissions, and committees and new employees are to be provided a copy of the Code of Ethics for review when they are elected or appointed. STATE-LAW-MANDATED ETHICS TRAINING One of the components of AB1234 mandates that all local agency officials receive a minimum of two hours of training in ethics and ethics law. "Local agency officials" includes any members of the legislative body who receive any type of compensation, salary or stipend, or any employee designated to take ethics courses. The ethics training requirements is a biennial requirement that must be provided by an attorney. The Commission Secretary will notify members when training sessions will be available. (8) BROWN ACT The Brown Act is described as the strictest open-meeting law in the United States. It is designed to insure that meetings of organizations supported with public funds are conducted openly without restrictions on the right of the public to attend. As members of a public body, Finance Commissioners must comply with the provisions of this law. The law requires that meetings at which a majority of the commission is in attendance must be open to the public. Members of a group subject to the provisions of the Brown Act are in violation of the law and subject to criminal penalties, if they knowingly take an action at a meeting held in violation of the Act. For purposes of the Act an "action" is: 1) a collective decision made by a majority of the members, 2) a collective commitment by the majority of the members to make a specific decision, or 3) an actual vote by a majority of the members when it acts as a body. If meetings are scheduled, publicized and held as outlined in the section of this manual entitled Meetings, Brown Act requirements for public decision will have been met. A non- agendized item can be brought before the commission for action if two-thirds of the entire commission vote to agendize it or if two-thirds or less are present, then the vote must be unanimous to agendize an issue for action at that meeting. The Brown Act as it relates to commissions is discussed by the City Attorney's Office in Appendix C. (9) APPENDIX A PARLIAMENTARY PROCEDURE AT A GLANCE PARLIAMENTARY PROCEDURE AT A GLANCE (Adapted from a chart prepared by the League of Women Voter of Minnesota) MAY YOU NEED MOTION MOTION TO DO YOU INTER- A DEBAT- AMEND- VOTE THIS SAY THIS RUPT? SECOND? ABLE? ABLE? REQUIRED Adjourn "I move to No Yes No No Majority meeting adjourn." "I move to No Yes Yes Yes Majority adjourn to ..." Recess the "I move to No Yes No Yes Majority meeting recess..." Complaint- "Point of Yes No No No None* Noise, etc. privilege." Delay "I move to No Yes Yes No Majority consideration table the move until..." Limit(or "I move to limit No Yes No Yes 2/3 Vote extend) (extend) debate debate to..." Close Debate "I move the No Yes No No 2/3 Vote previous question." Have some- "I move to No Yes Yes Yes Majority thing studied refer this further matter to a committee." (specify committee) Amend a "I move to No Yes Yes Yes Majority motion (an amend by ... amendment (adding, may only be inserting, amended striking out) once) Introduce "I move No Yes Yes Yes Majority business that..." (original main motion) Object to "Point of Yes No No No None, Chair procedures order." decides majority Take up a "I move to No Yes No No matter take from the previously table..." tabled APPENDIX A PARLIAMENTARY PROCEDURE AT A GLANCE (continued) MAY YOU NEED MOTION MOTION TO DO YOU INTER- A DEBAT- AMEND- VOTE THIS SAY THIS RUPT? SECOND? ABLE? ABLE? REQUIRED Reconsider a "I move to No Yes Yes, if motion No Majority. If vote reconsider the for recon- carried, - May be done vote on..." sideration was motion is only on day debatable before the vote is taken house as or next day though no - Mover must action had have voted on been taken prevailing side - No vote may be twice reconsidered Rescind a "I move to No Yes Yes Yes 2/3 vote or vote rescind" majority if prior notice given previous meeting. Request "I request a Yes, if No No No None, Chair information point of pertinent to decides about either information pending subject about the business matter or subject under parliamentary debate" or procedure "correct parliamentary procedure to..." Consider "I move to No Yes No No 2/3 Vote something change the out of its order of scheduled business order(or (suspend the suspend a rules) and convention consider..." rule) To challenge "I appeal the No Yes Yes No Majority a ruling by Chair's the Chair decision..." *Chair decides and may be appealed. APPENDIX B 1. GLOSSARY OF TERMS GLOSSARY OF TERMS Accounting Method — The City of Huntington Beach accounts for its financial position and operations according to generally accepted accounting principles (GAAP) for governmental units prescribed by the Government Accounting Standards Board (GASB). A fund or account group is an accounting entity with a self-balancing set of accounts recording the financial position and results of operations of a specific governmental activity. The City prepares financial statements on the modified accrual basis for all governmental fund types except for the financial statements of the proprietary fund types, which are prepared on the accrual basis. Accrual Basis — The basis of accounting under which transactions are recognized when they occur regardless of the timing of related cash flows. Adopted Budget — The City Council approved annual budget establishing the legal authority for the expenditure of funds set forth in the adopting City Council budget resolution. Americans with Disabilities Act (ADA) —This Federal law requires that public facilities be accessible to individual with physical limitations. Appropriation — A legal authorization granted by a legislative body to make expenditures and to incur obligation for specific purposes. Appropriation Account — A budgetary account set up to record specific authorizations to spend. The account is credited with original and any supplemental appropriations and is charged with expenditures and encumbrances. Appropriation Limit—As a governmental entity in the State of California, the City is subject to the Gann Spending Limit Initiative, which limits the amount of annual appropriations of tax proceeds. Assessed Valuation —A dollar value placed on real estate or other property by the County of Orange as a basis for levying property taxes. Audit — Prepared by an independent certified public accountant (CPA) to form an opinion regarding the legitimacy of transactions and internal controls. An audit is an examination and evaluation of the City's records and procedures to ensure compliance with specified rules, regulations, and best practices. Bond — A written promise issued by the City to pay a specific sum of principal amount, at a specified date(s) in the future, together with periodic interest at a special rate to raise capital, usually to pay for the construction of long-term infrastructure projects. Two major types of bonds include General Obligation Bonds and Revenue Bonds. Bond Proceeds—Funds received from the sale or issuance of bonds. Budget—A Plan of financial operation embodying a summary and detail of authorized expenditures for a given period and the proposed means of financing them. Business Unit — An eight digit accounting reference comprised of the fund, department, and program. Expenditures and revenues are budgeted within business units. Capital Assets — Assets of long-term character that are intended to continue to be held or used for a period of more than one year, such as land, buildings, machinery, furniture, and other equipment. Capital Improvement Program (CIP)—A long-range plan for the development and replacement of long- term assets such as streets, buildings, water and sewer systems. Capital Outlay — Expenditures which result in the acquisition of assets with an initial cost of at least $10,000 and an expected life of at least two years. GLOSSARY OF TERMS Capital Project Funds — Used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by proprietary fund types). Charges for Services — Reimbursement for services rendered to the public or to some other program/fund in the City. City Charter—The legal authority granted by the State of California establishing the entity known as the City of Huntington Beach and giving it the ability to provide services and collect revenue to support those services. Community Development Block Grant (CDBG) — The Housing and Community Development Act of 1974 provides funds to cities and counties to develop urban communities, decent housing, a suitable living environments, and expanded economic opportunities principally for low and moderate-income persons. This federal program gives priority to activities, which benefit low and moderate-income individuals. Community Facilities District (CFD) — A special district that can issue tax-exempt bonds as a mechanism by which public entities finance construction and/or acquisition of facilities and provide public services to the district. Comprehensive Annual Financial Report (CAFR) — The official annual report of the City's financial condition, which encompasses all funds, at the conclusion of the fiscal year. Consumer Price Index (CPI) — A statistical description of price levels provided by the United States Department of Labor. The change in this index from year to year is used to measure the cost of living and economic inflation. Cost Allocation —A method used to charge General Fund overhead costs to other funds. Debt Service—The repayment of principal and/or interest on borrowed funds. Debt Service Funds — Governmental fund type used to account for the accumulation of resources for, and the payment of general long-term debt principal and interest. Debt Service Requirement— The amount required to pay interest on outstanding debt, serial maturities of principal for serial bonds, and required contributions to accumulate monies for future retirement of term bonds. Deficit—The excess of liabilities of a fund over its assets. Department — The basic organizational entity of government that is functionally unique in its delivery of services. Depreciation — Expiration the service life of capital assets attributable to wear and tear, deterioration, action of the physical elements, inadequacy, or obsolescence. Developer Fees — Adopted fees requiring new development or redevelopment to pay its proportional share of the costs associated with providing the necessary public infrastructure. Equipment Replacement — Appropriations budgeted for the purchase of rolling stock and movable assets. GLOSSARY OF TERMS Encumbrances—Commitments related to unperformed contracts for goods and services. Enterprise Funds — A fund established to account for operations that are financed and operated in a manner similar to private enterprise. Examples of enterprise funds are water and sewer services. Expenditure—The actual spending of funds set aside by appropriation for identified goods and services. Expense — The payment of cash on the transfer of property or services for the purpose of acquiring an asset, service, or settling a loss. Fee—A general term used for any charge levied by government for providing as service or permitting an activity. Fiscal Year(FY)—The twelve-month period to which the annual operating budget applies and at the end of which a government determines its financial position. The City of Huntington Beach fiscal year is October 1 to September 30. Fixed Assets— Purchases of physical inventory items that are intended to be held or used for long term, such as equipment or infrastructure. Full-time Equivalent Position (FTE)—Staffing collectively based on a 2,080-hour year. Fund — A fiscal and accounting entity with a self-balancing set of accounts, recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein which are segregated for the purpose of carrying on specific activities of government functions. Fund Balance—The excess of the assets of a fund over its liabilities, reserves, and carryovers. General Fund — The fund used to account for all financial resources except those identified for special purposes. The operating fund of the City that receives unrestricted revenue such as property and sales taxes. The fund used to provide a wide range of public services. Generally Accepted Accounting Principles (GAAP) — Uniform minimum standards for financial accounting and recording. Governmental Accounting Standards Board (GASB) — Develops standardized reporting for government entities. Grants — Contributions, gifts, or assets from another government entity to be used or expended for a specified purpose, activity, or facility. HUD— U. S. Department of Housing and Urban Development. Indirect Costs—A cost necessary for the functioning of the organization as a whole, but which cannot be directly assigned to one service. Infrastructure—Facilities that support the daily life and growth of the City, for example roads, water lines, sewers, public buildings, and parks. Interfund Transfers — Monies transferred from one fund to another. Such money is transferred to finance the operations of another fund or to reimburse the fund for certain expenditures/expenses. GLOSSARY OF TERMS Internal Service Fund —A fund used for the financing of goods or services provided by one department or agency to other departments or agencies on a cost-reimbursement basis. Joint Powers Authority (JPA) — A JPA is formed when it is to the advantage of two or more public entities with common powers to consolidate their forces to acquire or construct a joint-use facility. Long Term Debt—Debt with a maturity of more than one year after the date of issue. Long Term Financial Plan — A combination of financial forecasting and strategizing to identify future challenges and opportunities, causes of fiscal imbalances and strategies to secure financial sustainability. Mandate— Legislation passed by the state or federal government requiring action or provision of services or programs. Measure M — An initiative passed by Orange County voters to fund transportation improvements using revenue generated by a countywide sales tax. Memorandum of Understanding (MOU) —As used in this budget document refers to agreements, for a specified period of time, between the City and various employee associations, outlining wage increases, provision of and contribution levels for benefits, and employment-related matters. Municipal Bond—A bond issued by a state or local government. Municipal Code—A compilation of enforceable ordinances adopted by the City Council. National Pollution Discharge Elimination System (NPDES) — This Federal regulation sets standards for the quality of storm water discharged into rivers, lakes, and oceans. Non-Departmental — Program costs that do not relate to any one particular department, but represent costs that are general and citywide in nature. Object Code — A five digit accounting reference to a specific revenue or expense item. Combines with the business unit to create a revenue or expenditure account number. Operating Budget—Plan of current non-capital expenditures and the proposed means of financing them. Operating Expenses — The cost for materials and equipment required for a department to perform its functions. Operating Revenue—Funds received as income to pay for ongoing operations. Operating Transfers — Legally authorized transfers from a fund receiving revenue to the fund through which the resources are to be expended, such as transfers from the General Fund to a Special Revenue or Capital Projects Fund. Ordinance—A formal legislative enactment by the City Council. If it is not in conflict with any higher form of law, such as state statute or constitutional provision, it has the full force and effect of the law within the boundaries of the City. Organization Chart — A pictorial representation of the administrative and functional structure of a City unit. GLOSSARY OF TERMS Other Funds — Within this budget document, those funds that are not included as part of the General Fund. Pension Tax Rate — City Charter amendment allowing the City Council to set a tax rate and levy an override tax on the assessed value of property up to a maximum amount as determined by an annual actuarial study to recover a portion of the City's costs related to a supplemental retirement program. Performance Measures — A set of measurable objectives, linked to the City's various strategic plan goals, which are determined by a department and used to gauge a program, business unit, or division's effectiveness and efficiency. Used as a management tool during the budget development process to set priorities and shift resources as necessary. Personnel Services—Expenditures for salaries and benefits for employees of the City. Program Budget — A budget wherein expenditures are based primarily on program of work and the performance of certain functions. Public Employees Retirement System (PERS) — Statewide retirement system that covers most City of Huntington Beach employees. Redevelopment Agency (RDA) - An Entity formed to renovate older areas of the City to increase economic vitality. Reserve — The City uses and designates reserves according to adopted financial policies. In addition to the required seven percent reserve, there is the: Equipment Reserve, used to replace obsolete vehicles and equipment while setting aside funds for future equipment and vehicle needs; Capital Improvement Reserve (CIR), a designated reserve for various capital projects; and the General Liability Reserve which is designated for workers compensation and liability claims. Resolution—A special order of the City Council, which has a lower legal standing than an ordinance. Revenue — Sources of income financing the operation of government. Special Revenue Funds — Funds that are separately administered because restrictions have been placed on how revenues may be spent by the City Council, the State of California, or the Federal government. Strategic Plan — The process of defining a strategy, or direction, and making decisions on allocating resources to pursue this strategy, including capital and employees. The City adopted its strategic plan in August 2006, setting five broad goal areas, each with its own set of related projects: Financial, Infrastructure, Land use and Economic Development, Engaging the Community, and City Services. Tax Allocation Bond (TAB) — Bonds issued in conjunction with a redevelopment project. The taxes pledged to their repayment come from the increase of assessed value over and above a pre-established base. The redevelopment creates this added value, known as the tax increment. Taxes— Compulsory charges levied by a government for the purpose of financing services performed for the common benefit. This term does not include specific charges made against particular persons or property for current or permanent benefits such as special assessments. Tax Increment—Property tax that is collected as a result of increased valuation within the RDA. Tax Rate—The amount of assessment stated in terms of a unit of the tax base. GLOSSARY OF TERMS Transfers —Amounts moved from one fund to another to assist in financing the services for the recipient fund. Transient Occupancy Tax (TOT) — A tax imposed on individuals with hotel/ motel stays less than thirty days. Unencumbered Balance — The portion of an appropriation that is neither expended nor encumbered. The amount of budget still available for future purposes. Unfunded Liabilities—The unfunded liability, the present value of the expected future benefits vested to date, is the amount by which the plan's liabilities exceed the assets on a given date. User Fees and Charges — A cost paid for a public service or the use of a public facility by the entity benefiting from the service. Utility Users Tax (UUT) — A tax imposed on users for various utilities in the City including water, telephone, gas, electric, and cable TV services. APPENDIX C BROWN ACT GOVERNMENT CODE 54950-54962 kiii i-- oLFEAGRN UE® CITIES OPEN & PUBLIC IV: A Guide to the Ralph M. Brown Act (2nd Edition,July 2010) September 2013 Supplement This supplement to OPEN&PUBLIC IV•A Guide to the Ralph M. Brown Act discusses changes to the law that have taken effect since the publication of the second edition of the guide in 2010. The supplement covers both statutory changes and appellate decisions that affect the Brown Act. For ease of reference,these updates direct the reader to the chapter, subheading and page of the guide's main text. Our objective is to provide the most complete and current resource to assist local agencies in complying with Brown Act requirements. This supplement is to be used in conjunction with the original publication. This supplement is made available thanks to the hard work and dedication of the Brown Act Committee of the City Attorneys' Department and League Staff: Michael Jenkins, Brown Act Committee Chair Heather C. McLaughlin City Attorney,Hermosa Beach, City Attorney, Benicia Rolling Hills and West Hollywood Jenkins&Hogin LLP Maribel S. Medina Meyers,Nave,Riback, Silver& Wilson Paul Zarefsky Deputy City Attorney, San Francisco Celeste Stahl Brady Stradling Yocca Carlson&Rauth Michael W. Barrett City Attorney,Napa Brian Libow City Attorneys' Department President and Curtis S. Kidder Committee Liaison Assistant City Attorney, Los Angeles City Attorney, San Pablo League Staff: Patrick Whitnell, General Counsel Koreen Kelleher, Deputy General Counsel Janet M. Leonard, Legal Assistant OPEN & PUBLIC IV: A Guide to the Ralph M. Brown Act (2nd Edition,July 2010) September 2013 Supplement CHAPTER 3: MEETINGS • LOCATION OF MEETINGS Page 20—Add new endnote to the 4th bullet point: 94 Ops.Cal.Atty.Gen. 15 (2011) (water district may hold its board meetings at the principal office of the district even if it is located outside the jurisdiction of the district) CHAPTER 4: AGENDAS, NOTICES, AND PUBLIC PARTICIPATION • AGENDAS FOR REGULAR MEETINGS Page 24—Replace the second paragraph with the following: The agenda must be posted at least 72 hours before the regular meeting in a location"freely accessible to members of the public." [Gov. Code § 54954.2(a)(1).] The courts have not definitively interpreted the "freely accessible"requirement. The California Attorney General has interpreted this provision to require posting in a location accessible to the public 24 hours a day during the 72-hour period,but any of the 72 hours may fall on a weekend. [78 Ops.Cal.Atty.Gen. 327 (1995).] This provision may be satisfied by posting on a touch screen electronic kiosk accessible without charge to the public 24 hours a day during the 72-hour period. [88 Ops.Cal.Atty.Gen. 218 (2005).] While posting an agenda on an agency's Internet Web site will not,by itself, satisfy the "freely accessible"requirement since there is no universal access to the internet, an agency has a supplemental obligation to post the agenda on its Web site if: (1) the local agency has a Web site, and(2) the legislative body whose meeting is the subject of the agenda is either(a) a governing body, or(b)has members that are compensated, with one or more members that are also members of a governing body. [Gov. Code §§ 54954.2(a)(1) and 54954.2(d).] Q. May the meeting of a governing body go forward if its agenda was either inadvertently not posted on the city's Web site or if the Web site was not operational during part or all of the 72- hour period preceding the meeting? A. The Brown Act does not address this question nor is there any case law on the subject. Public agency attorney opinions vary. Hence, should this situation arise, seek a legal opinion from your agency attorney. 1 The agenda must state the meeting time and place and must contain"a brief general description of each item of business to be transacted or discussed at the meeting, including items to be discussed in closed session." [Gov. Code, § 54954.2(a)(1).] Special care should be taken to describe on the agenda each distinct action to be taken by the legislative body, and avoid overbroad descriptions of a"project" if the "project" is actually a set of distinct actions that must each be separately listed on the agenda. [San Joaquin Raptor Rescue v. County of Merced (2013) 216 Cal.App.4th 1167 (legislative body's approval of CEQA action(mitigated negative declaration)without specifically listing it on the agenda violates Brown Act, even if the agenda generally describes the development project that is the subject of the CEQA analysis.] • NOTICE REQUIREMENTS FOR SPECIAL MEETINGS Page 25—Replace the second to the last sentence in the second paragraph, to read: The special meeting notice must also be posted at least 24 hours prior to the special meeting using the same methods as posting an agenda for a regular meeting: (1) at a site that is freely accessible to the public, and(2) on the agency's Web site if: (1)the local agency has a Web site, and(2) the legislative body whose meeting is the subject of the agenda is either(a) a governing body, or (b)has members that are compensated, with one or more members that are also members of a governing body. [Gov. Code §§ 54956(a) and (c).] Page 26—Add the following new heading and paragraphs after "Notice Requirements for Emergency Meetings"to read: • NOTICE OF COMPENSATION FOR SIMULTANEOUS OR SERIAL MEETINGS A legislative body that has convened a meeting and whose membership constitutes a quorum of another legislative body, may convene a simultaneous or serial meeting of the other legislative body only after a clerk or member of the convened legislative body verbally announces (1) the amount of compensation or stipend, if any, that each member will be entitled to receive as a result of convening the meeting of the other legislative body, and(2)that the compensation or stipend is provided as a result of convening the meeting of that body. [California Government Code section 54952.3] No verbal disclosure of the amount of the compensation is required if the entire amount of such compensation is prescribed by statute and no additional compensation has been authorized by the local agency. Further, no disclosure is required with respect to reimbursements for actual and necessary expenses incurred in the performance of the member's official duties, such as for travel, meals, and lodging. 2 • NOTICE REQUIREMENTS FOR TAX OR ASSESSMENT MEETINGS AND HEARINGS Page 26—Replace the first paragraph with the following: The Brown Act prescribes specific procedures for adoption by a city, county, special district, or joint powers authority of any new or increased tax or assessment imposed on businesses. [California Government Code Section 54954.6] Though written broadly, these Brown Act provisions do not apply to new or increased real property taxes or assessments as those are governed by the California Constitution, Cal. Const. Art. XIIIC or XIIID, enacted by Proposition 218. At least one public meeting must be held to allow public testimony on the tax or assessment. In addition, there must also be at least 45 days' notice of a public hearing at which the legislative body proposes to enact or increase the tax or assessment. Notice of the public meeting and public hearing must be provided at the same time and in the same document. The public notice relating to general taxes must be provided by newspaper publication. The public notice relating to new or increased business assessments must be provided through a mailing to all business owners proposed to be subject to the new or increased assessment. The agency may recover the reasonable costs of the public meetings, hearings, and notice. • THE RIGHT TO ATTEND AND OBSERVE MEETINGS Page 28—Add a new paragraph immediately before the Q &A box to read: All actions taken by the legislative body in open session and the vote of each member thereon must be disclosed to the public at the time the action is taken. [Gov. Code §54953(c)(2)] Page 28—Replace the last paragraph with: The legislative body may remove persons from a meeting who willfully interrupt proceedings. [California Government Code section 54957.9] Ejection is justified only when audience members actually disrupt the proceedings. [Norse v. City of Santa Cruz(9th Cir. 2010) 629 F.3d966 (silent and momentary Nazi salute directed towards mayor is not a disruption);Acosta v. City of Costa Mesa (9th Cir. 2013) 718 F.3d 800 (city council may not prohibit"insolent" remarks by members of the public absent actual disruption)] If order cannot be restored after ejecting disruptive persons, the meeting room may be cleared. Members of the news media who have not participated in the disturbance must be allowed to continue to attend the meeting. The legislative body may establish a procedure to re-admit an individual or individuals not responsible for the disturbance. [California Government Code section 54957.9] CHAPTER 5: CLOSED SESSIONS • REAL ESTATE NEGOTIATIONS Page 37--Replace the final two sentences on page 37 to read: If final approval rests with another party, the local agency must report the approval and the substance of the agreement upon inquiry by any person as soon as the agency is informed of it. 3 is PUBLIC SECURITY Page 41--Replace the paragraph in this section in its entirety with: Legislative bodies may meet in closed session to discuss matters posing a threat to the security of public buildings, essential public services, including water, sewer, gas, or electric service, or to the public's right of access to public services or facilities over which the legislative body has jurisdiction. Closed session meetings for these purposes must be held with designated security or law enforcement officials including the Governor, Attorney General, district attorney, agency attorney, sheriff or chief of police, or their deputies or agency security consultant or security operations manager.40 Action taken in closed session with respect to such public security issues is not a reportable action. Page 43—Replace endnote 14 with: 14 California Government Code section 54956.9 (e). Page 43—Replace endnote 16 with: Shapiro v. San Diego City Council(2002) 96 Cal.App.4th 172; see also 93 Ops.Cal.Atty.Gen. 51 (2010) (redevelopment agency may not convene a closed session to discuss rehabilitation loan for property already subleased to loan recipient, even if the loan incorporates some of the sublease terms and includes an operating covenant governing the property); 94 Ops.Cal.Atty.Gen. 82 (2011) (real estate closed session may address form, manner and timing of consideration and other items that cannot be disclosed without revealing price and terms). CHAPTER 6: REMEDIES Page 47—Add the following new bullet after the bullet title "Invalidation": • APPLICABILITY TO PAST ACTIONS Any interested person, including the district attorney, may file a civil action to determine whether past actions of a legislative body occurring on or after January 1, 2013 constitute violations of the Brown Act and are subject to a mandamus, injunction, or declaratory relief action. [Government Code Section 54960.2(a); Senate Bill No. 1003, Section 4 (2011-2012 Session)] Before filing an action, the interested person must, within nine months of the alleged violation of the Brown Act, submit a"cease and desist" letter to the legislative body, clearly describing the past action and the nature of the alleged violation.[Government Code Sections 54960.2(a)(1), (2)] The legislative body has 30 days after receipt of the letter to provide an unconditional commitment to cease and desist from the past action.[Government Code Section 54960.2(b)] If the body fails to take any action within the 30-day period or takes an action other than an unconditional commitment, a lawsuit may be filed within 60 days. [Government Code Section 54960.2(a)(4)] 4 The legislative body's unconditional commitment must be approved at a regular or special meeting as a separate item of business and not on the consent calendar. [Government Code Section 54960.2(c)(2)] The unconditional commitment must be substantially in the form set forth in the Brown Act. [Government Code Section 54960.2(c)(1)] No legal action may thereafter be commenced regarding the past action. [Government Code Section 54960.2(c)(3)] However, an action of the legislative body in violation of its unconditional commitment constitutes an independent violation of the Brown Act and a legal action consequently may be commenced without following the procedural requirements for challenging past actions. [Government Code Section 54960.2(d)] The legislative body may rescind its prior unconditional commitment by a majority vote of its membership at a regular meeting as a separate item of business not on the consent calendar. At least 30 days' written notice of the intended rescission must be given to each person to whom the unconditional commitment was made and to the district attorney. Upon rescission, any interested person may commence a legal action regarding the past actions without following the procedural requirements for challenging past actions. [Government Code Section 54960.2(e)] 5 m . . . .... _ . ,, .. rgi ...... ,,,...... .. f, ,, ,„,,, 4.. to 1. ti 40 0 .4.4.41144- t. • Ai, 1 JO 1 R i k q .._ _ OPEN & PUBLIC IV: A Guide to the Ralph M. Brown Act -2ND EDITION, REVISED JULY 20I0- �OEAiOUE CITIES ACKNOWLEDGEMENTS The League thanks the following individuals for their work on this update to the original publication: EDITORIAL BOARD EDITORIAL BOARD FOR OPEN &PUBLIC IV FOR OPEN &PUBLIC IV, Michael Jenkins,Chair 2ND EDITION Jenkins&Hogin LLP Michael Jenkins,Chair City Attorney Jenkins&Hogin LLP Cities of Diamond Bar,Hermosa Beach, City Attorney Rolling Hills and West Hollywood Cities of Diamond Bar,Hermosa Beach, Rolling Hills and West Hollywood Sonia Rubio Carvalho Best,Best&Krieger Lori Barker City Attorney City Attorney Cities of Azusa,Claremont,and Yorba Linda City of Chico Debra E.Corbett Theresa E.Fuentes City Attorney Assistant City Attorney City of Tracy City of Pasadena Theresa E. Fuentes Thomas D.Jex Deputy City Attorney Burke,Williams&Sorensen City of Pasadena Assistant City Attorney City of Hemet Daniel S. Hentschke General Counsel Martin Koczanowicz San Diego County Water Authority Cota Cole&Associates City Attorney Gerald L. Hobrecht City of Grover Beach City Attorney City of Vacaville Yana Welinder Colantuono&Levin,PC Hilda Cantu Montoy Assistant City Attorney Montoy Law Office City of Auburn City Attorney City of San Joaquin Paul Zarefsky Deputy City Attorney Eileen M.Teichert City and County of San Francisco City Attorney City of Sacramento League staff: Patrick Whitnell,General Counsel Kourtney Burdick, Deputy General Counsel Janet Reynolds,Legal Secretary/Office Manager The editors thank Manuela Albuquerque,Retired City Attorney,Berkeley;Steven L.Dorsey,Richards, Watson&Gershon;Whitnie Henderson,Association of California Water Agencies;Craig Labadie,City Attorney,Concord;Tom Newton,California Newspaper Publishers Association;Ted Prim,Attorney General's Office;Cindra J.Smith,Community College League of California;and JoAnne Speers,Institute for Local Government,for their invaluable assistance. CHAP R 1 : IT IS THE PEOPLE'S BUSINESS ill Ale. 11111 t a • 'All ' r s. - . f -y Alt it,71,4 Ai THE RIGHT OF ACCESS BROAD COVERAGE NARROW EXEMPTIONS PUBLIC PARTICIPATION IN MEETINGS CONTROVERSY BEYOND THE LAW—GOOD BUSINESS PRACTICES ACHIEVING BALANCE HISTORICAL NOTE TABLE OF CONTENTS FOREWORD CHAPTER 1: IT IS THE PEOPLES BUSINESS The right of access 2 Broad coverage 3 Narrow exemptions 3 Public participation in meetings 4 Controversy 4 Beyond the law—good business practices 4 Achieving balance 5 Historical note 5 CHAPTER 2: LEGISLATIVE BODIES What is a"legislative body"of a local agency? 8 What is not a legislative body"for purposes of the Brown Act? 10 CHAPTER 3: MEETINGS Brown Act meetings 14 Six exceptions to the meeting definition 14 Collective briefings 17 Retreats or workshops of legislative bodies 17 Serial meetings 17 Informal gatherings 19 Technological conferencing 19 Location of meetings 20 CHAPTER4:AGENDAS, NOTICES,AND PUBLIC PARTICIPATION Agendas for regular meetings 24 Mailed agenda upon written request 25 Notice requirements for special meetings 25 Notices and agendas for adjourned and continued meetings and hearings 25 Notice requirements for emergency meetings 26 Educational agency meetings 26 Notice requirements for tax or assessment meetings and hearings 26 Non-agenda items 26 Responding to the public 27 The right to attend and observe meetings 28 Records and recordings 29 The public's place on the agenda 30 CHAPTER 5: CLOSED SESSIONS Agendas and reports 35 Litigation 36 Real estate negotiations 37 Public employment 38 Labor negotiations 40 Labor negotiations-school and community college districts 40 Other Education Code exceptions 41 Grand jury testimony 41 License applicants with criminal records 41 Public security 41 Multijurisdictional drug law enforcement agency 41 Hospital peer review and trade secrets 42 The confidentiality of closed session discussions 42 CHAPTER6: REMEDIES Invalidation 46 Civil action to prevent future violations 47 Costs and attorneys fees 47 Criminal complaints 47 Voluntary resolution 48 ........ OPEN & PUBLIC IV A GUIDE TO THE RALPH M. BROWN ACT il 4. + +' 4 011 , :AMON t. CH. 1: IT IS THE PEOPLE'S BUSINESS CH. 2: LEGISLATIVE BODIES CH. 3: MEETINGS CH. 4:AGENDAS, NOTICES, AND PUBLIC PARTICIPATION CH. 5: CLOSED SESSIONS CH. 6: REMEDIES OPEN & PUBLIC IV: A GUIDE TO THE RALPH M. BROWN ACT, 2ND EDITION Revised July 2010 O EA OU CITIES Copyright©2000,2007,2010 League of California Cities All nghts reserved.This publication,or parts thereof,may not be reproduced in any form without the permission of the League of California Cities. FOREWORD The goal of this publication is to explain the requirements of the Ralph M.Brown Act,California's open meeting law,in lay language so that it can be readily understood by local government officials and employees,the public and the news media.We offer practical advice—especially in areas where the Brown Act is unclear or has been the subject of controversy—to assist local agencies in complying with the requirements of the law. A number of organizations representing diverse views and constituencies have contributed to this publication in an effort to make it reflect as broad a consensus as possible among those who daily interpret and implement the Brown Act.The League thanks the following organizations for their contributions: Association of California Healthcare Districts Association of California Water Agencies California Association of Sanitation Agencies(CASA) California Attorney General—Department of Justice City Clerks Association of California California Municipal Utilities Association California Redevelopment Association California School Boards Association California Special Districts Association California State Association of Counties Community College League of California California First Amendment Project California Newspaper Publishers Association Common Cause League of Women Voters of California This publication is current as of June 2010.Updates to the publication responding to changes in the Brown Act or new court interpretations are available at www.cacities.org/opengovernment. This publication is not intended to provide legal advice.A public agency's legal counsel is responsible for advising its governing body and staff and should always be consulted when legal issues arise. To improve the readability of this publication: • Most text will look like this; • Practice tips are in the margins; • Hypothetical examples are printed in blue;and • Frequently asked questions,along with our answers,are in shaded text. Additional copies of this publication may be purchased by visiting CityBooks online at www.cacities.org/store. CHAPTER 1 : w } IT IS THE PEOPLE'S BUSINESS i; . 11/1 117 y 1 THE RIGHT OF ACCESS Two key parts of the Brown Act have not changed since its adoption in 1953.One is the Brown Act's initial section,declaring the Legislature's intent: "In enacting this chapter, the Legislature finds and declares that the public commissions,boards, and councils and the other public agencies in this State exist to aid in the conduct of the people's business.It is the intent of the law that their actions be taken openly and that their deliberations be conducted openly" Practice Tip: "The people of this State do not yield their sovereignty to the agencies which serve them. The The key to the Brown people,in delegating authority,do not give their public servants the right to decide what is good Act is a single sentence. for the people to know and what is not good for them to know.The people insist on remaining In summary,all meetings shall be open informed so that they may retain control over the instruments they have created."' and public except The people reconfirmed that intent 50 years later in the November 2004 election by adopting Proposition when the Brown Act 59,amending the California Constitution to include a public right of access to government information: authorizes otherwise. "The 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."? The Brown Act's other unchanged provision is a single sentence: All meetings of the legislative body of a local agency shall be open and public,and all persons shall be permitted to attend any meeting of the legislative body of a local agency,except as otherwise provided in this chapter"' That one sentence is by far the most important of the entire Brown Act.If the opening is the soul,that sentence is the heart of the Brown Act. 2 OPEN & PUBLIC IV Chapter 1:It Is the People's Busi,:ess ■ BROAD COVERAGE The Brown Act covers members of virtually every type of local government body,elected or appointed, decision-making or advisory.Some types of private organizations are covered,as are newly-elected members of a legislative body,even before they take office. Similarly,meetings subject to the Brown Act are not limited to face-to-face gatherings.They also include any communication medium or device through which a majority of a legislative body discusses,deliberates or takes action on an item of business outside of a noticed meeting.They include meetings held from remote locations by teleconference. New communication technologies present new Brown Act challenges.For example,common e-mail practices of forwarding or replying to messages can easily lead to a serial meeting prohibited by the Brown Act,as can participation by members of a legislative body in an Internet chatroom or blog dialogue. Communicating during meetings using electronic technology(such as laptop computers,personal digital assistants,or cellular telephones)may create the perception that private communications are Practice Tip: influencing the outcome of decisions;some state legislatures have banned the practice.On the other Think of the government's hand,widespread cablecasting and web streaming of meetings has greatly expanded public access to the house as being made of decision-making process. glass.The curtains may be drawn only to further the ■ NARROW EXEMPTIONS public's interest. The express purpose of the Brown Act is to assure that local government agencies conduct the public's business openly and publicly.Courts and the California Attorney General usually broadly construe the Brown Act in favor of greater public access and narrowly construe exemptions to its general rules.4 Generally,public officials should think of themselves as living in glass houses,and that they may only draw the curtains when it is in the public interest to preserve confidentiality.Closed sessions may be held only as specifically authorized by the provisions of the Brown Act itself. The Brown Act,however,is limited to meetings among a majority of the members of multi-member government bodies when the subject relates to local agency business.It does not apply to independent conduct of individual decision-makers.It does not apply to social,ceremonial,educational,and other gatherings as long as a majority of the members of a body don't discuss issues related to their local agency's business.Meetings of temporary advisory committees—as distinguished from standing committees—made up solely of less than a quorum of a legislative body are not subject to 11 the Brown Act. - dz The law does not apply to local agency staff or employees,but they may facilitate a violation by ' acting as a conduit for discussion,deliberation, �' or action by the legislative body., r j /' The law,on the one hand,recognizes the - „. need of individual local officials to meet and discuss matters with their constituents.On the �' other hand,it requires—with certain specific exceptions to protect the community and .,..�i/ preserve individual rights—that the decision '�r ' 10.1010. making process be public.Sometimes the boundary between the two is not easy to draw. OPEN &PUBLIC IV ■ Chapter 1:It Is the People's Business 3 ■ PUBLIC PARTICIPATION IN MEETINGS In addition to requiring the public's business to be conducted in open,noticed meetings,the Brown Act also extends to the public the right to participate in meetings.Individuals,lobbyists,and members of the news media possess the right to attend,record,broadcast,and participate in public meetings.The public's participation is further enhanced by the Brown Act's requirement that a meaningful agenda be posted in advance of meetings,by limiting A discussion and action to matters listed on the agenda,and by requiring that meeting materials be made available. Age Legislative bodies may,however,adopt reasonable regulations on public testimony and the conduct of public meetings,including measures to address disruptive conduct and irrelevant speech. t I �' ■ CONTROVERSY Not surprisingly,the Brown Act has been a source of confusion and controversy since its inception.News media and government watchdogs often argue the law is toothless, pointing out that there has never been a single criminal conviction for a violation.They often suspect that closed sessions are being misused. • - Public officials complain that the Brown Act makes it difficult to respond to constituents and requires public discussions of items better discussed privately—such as why a particular person should not be appointed to a board or commission.Many elected officials find the Brown Act inconsistent with their private business experiences.Closed meetings can be more efficient;they eliminate grandstanding and promote candor.The techniques that serve well in business—the working lunch,the sharing of information through a series of phone calls or emails,the backroom conversations and compromises—are often not possible under the Brown Act. As a matter of public policy,California(along with many other states)has concluded that there is more to be gained than lost by conducting public business in the open.Government behind closed doors may well be efficient and business-like,but it may be perceived as unresponsive and untrustworthy. ■ BEYOND THE LAW—GOOD BUSINESS PRACTICES Practice Tip: Violations of the Brown Act can lead to invalidation of an agency's action,payment of a challenger's Transparency is a attorney's fees,public embarrassment,even criminal prosecution.But the Brown Act is a floor,not a ceiling foundational value for for conduct of public officials.This guide is focused not only on the Brown Act as a minimum standard,but ethical government also on meeting practices or activities that,legal or not,are likely to create controversy.Problems may crop practices.The Brown up,for example,when agenda descriptions are too brief or vague,when an informal get-together takes Act is a floor,not a on the appearance of a meeting,when an agency conducts too much of its business in closed session or ceiling,for conduct. discusses matters in closed session that are beyond the authorized scope,or when controversial issues arise that are not on the agenda. The Brown Act allows a legislative body to adopt practices and requirements for greater access to meetings for itself and its subordinate committees and bodies that are more stringent than the law itself requires.6 Rather than simply restate the basic requirements of the Brown Act,local open meeting policies should strive to anticipate and prevent problems in areas where the Brown Act doesn't provide full guidance.As with the adoption of any other significant policy,public comment should be solicited. 4 OPEN &PUBLIC N • Chapter 1:It Is the People's Business A local policy could build on these basic Brown Act goals: • A legislative body's need to get its business done smoothly; • The public's right to participate meaningfully in meetings,and to review documents used in decision- making at a relevant point in time; • A local agency's right to confidentially address certain negotiations,personnel matters,claims and Practice Tip: litigation;and The Brown Act should • The right of the press to fully understand and communicate public agency decision-making. be viewed as a tool to facilitate the business An explicit and comprehensive public meeting and information policy,especially if reviewed periodically, of local government can be an important element in maintaining or improving public relations.Such a policy exceeds the agencies. Local policies absolute requirements of the law—but if the law were enough this guide would be unnecessary.A narrow that go beyond the legalistic approach will not avoid or resolve potential controversies.An agency should consider going minimum requirements beyond the law,and look at its unique circumstances and determine if there is a better way to prevent of law may help instill potential problems and promote public trust.At the very least,local agencies need to think about how their public confidence and avoid problems. agendas are structured in order to make Brown Act compliance easier.They need to plan carefully to make sure public participation fits smoothly into the process. •ACHIEVING BALANCE The Brown Act should be neither an excuse for hiding the ball nor a mechanism for hindering efficient and orderly meetings.The Brown Act represents a balance among the interests of constituencies whose interests do not always coincide.It calls for openness in local government,yet should allow government to function responsively and productively. There must be both adequate notice of what discussion and action is to occur during a meeting as well as a normal degree of spontaneity in the dialogue between elected officials and their constituents. The ability of an elected official to confer with constituents or colleagues must be balanced against the important public policy prohibiting decision-making outside of public meetings. In the end,implementation of the Brown Act must ensure full participation of the public and preserve the integrity of the decision-making process,yet not stifle government officials and impede the effective and natural operation of government. ■ HISTORICAL NOTE In late 1951,San Francisco Chronicle reporter Mike Harris spent six weeks 4116 looking into the way local agencies conducted meetings.State law had long required that business be done in public,but Harris discovered secret meetings or caucuses were common.He wrote a 10-part series on"Your Secret Government"that ran in May and June 1952. Out of the series came a decision to push for a new state open meeting law. Harris and Richard(Bud)Carpenter,legal counsel for the League of California Cities,drafted such a bill and Assembly Member Ralph M.Brown agreed to carry it.The Legislature passed the bill and Gov.Earl Warren signed it into law in 1953. The Ralph M.Brown Act,known as the"Brown Act",has evolved under a series of amendments and court decisions,and has been the model for other open meeting laws—such as the Bagley-Keene Act,enacted in 1967 to cover state agencies. OPEN &PUBLIC IV • Chapter 1:It Is the People's Business 5 Assembly Member Brown is best known for the open meeting law that carries his name.He was elected to the Legislature in 1942 and served 19 years,including the last three years as Speaker.He then became an appellate court justice. Endnotes 1 California Government Code section 54950 2 California Constitution,Art.1,section 3(b)(1) 3 California Government Code section 54953(a) 4 This principle of broad construction when it furthers public access and narrow construction if a provision limits public access is also stated in the amendment to the state's Constitution adopted by Proposition 59 in 2004. California Constitution,Art.1,section 3(b)(2) 5 California Government Code section 54952.2(c);Wolfe v.City of Fremont(2006) 144 Cal.App.4th 533 6 California Government Code section 54953.7 Updates to this publication responding to changes in the Brown Act or new court interpretations are available at www.cacities.org/opengovernment.A current version of the Brown Act may be found at www.leginfo. ca.gov. 6 OPEN &PUBLIC N ■ Chapter 1:It Is the People's Business C HA PTER 2 : LEGISLATIVE BODIES - -. \ : v I Maw , lift . IIIIIIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMII WHAT IS A "LEGISLATIVE BODY"' OF A LOCAL AGENCY? WHAT IS NOT A "LEGISLATIVE BODY" FOR PURPOSES OF THE BROWN ACT? 1 , . CHAPTER 2 : i LEGISLATIVE BODIES ` l -44/14.816411 The Brown Act applies to the legislative bodies of local agencies.It defines"legislative body"broadly to include just about every type of decision-making body of a local agency) WHAT IS A "LEGISLATIVE BODY" OE A LOCAL AGENCY? A"legislative body"includes: • The"governing body of a local agency or any other local body created by state or federal statute."' This includes city councils,boards of supervisors,school boards and boards of trustees of special districts.A"local agency"is any city,county,school district,municipal corporation,redevelopment agency,district,political subdivision,or other public agency.3 A housing authority is a local agency under the Brown Act even though it is created by and is an agent of the state.4 The California Attorney General has opined that air pollution control districts and regional open space districts are also covered.,Entities Practice Tip: created pursuant to joint powers agreements are local agencies within the meaning of the Brown Act.6 The prudent presumption is that an • Newly-elected members of a legislative body who have not yet assumed office must conform to advisory committee or the requirements of the Brown Act as if already in office.'Thus,meetings between incumbents and task force is subject to newly-elected members of a legislative body,such as a meeting between two outgoing members and a the Brown Act.Even member-elect of a five-member body,could violate the Brown Act. if one clearly is not,it may want to comply with the Brown Act. On the morning following the election to a five-member legislative body of a local agency, Public meetings may two successful candidates,neither an incumbent,meet with an incumbent member of the reduce the possibility of legislative body for a celebratory breakfast.Does this violate the Brown Act? misunderstandings and It might,and absolutely would if the conversation turns to agency business. Even though the controversy. candidates-elect have not officially been sworn in, the Brown Act applies.If purely a social event, there is no violation but it would be preferable if others were invited to attend to avoid the appearance of impropriety. 8 OPEN &PUBLIC IV Chapter 2:Legislative Bodies • Appointed bodies—whether permanent or temporary,decision-making or advisory—including planning commissions,civil service commissions and other subsidiary committees,boards,and bodies. Volunteer groups,executive search committees,task forces,and"blue ribbon committees"created by formal action of the governing body are legislative bodies.When the members of two or more legislative bodies are appointed to serve on an entirely separate advisory group,the resulting body may be subject to the Brown Act.In one reported case,a city council created a committee of two members of the Practice Tip: city council and two members of the city planning commission to review qualifications of prospective it can be difficult to planning commissioners and make recommendations to the council.The court held that their joint determine whether mission made them a legislative body subject to the Brown Act.Had the two committees remained a subcommittee of separate and met only to exchange information,they would have been exempt from the Brown Act.' a body falls into the category of a standing • Standing committees of a legislative body,irrespective of their composition,which have either.(1)a committee or an exempt continuing subject matter jurisdiction,or(2)a meeting schedule fixed by charter,ordinance,resolution, temporary committee. or formal action of a legislative body.'Even if comprised of less than a quorum of the governing body, Suppose a committee is a standing committee is subject to the Brown Act.For example,if a governing body creates long-term created to explore the renewal of a franchise committees on budget and finance or on public safety,those are standing committees subject to the or a topic of similarly Brown Act.Further,function over form controls.For example,a statement by the legislative body that limited scope and "the advisory committee shall not exercise continuing subject matter jurisdiction"or the fact that duration.is it an exempt the committee does not have a fixed meeting schedule is not determinative.10"Formal action"by a temporary committee legislative body includes authorization given to the agency's executive officer to appoint an advisory or a non-exempt committee pursuant to agency-adopted policy." standing committee? The answer may depend • The governing body of any private organization either(1)created by the legislative body in order to on factors such as how exercise authority that may lawfully be delegated by such body to a private corporation,limited liability meeting schedules are company or other entity or(2)that receives agency funding and whose governing board includes a determined,the scope member of the legislative body of the local agency appointed by the legislative body as a full voting of the committee's charge,or whether member of the private entity's governing board.12 These include some nonprofit corporations created the committee exists by local agencies.13 If a local agency contracts with a private firm for a service(for example,payroll, long enough to have janitorial,or food services),the private firm is not covered by the Brown Act.14 When a member of a "continuing jurisdiction." legislative body sits on a board of a private organization as a private person and is not appointed by the legislative body,the board will not be subject to the Brown Act.Similarly,when the legislative body appoints someone other than one of its own members to such boards,the Brown Act does not apply. Nor does it apply when a private organization merely receives agency funding.15 The local chamber of commerce is funded in part by the city.The mayor sits on the chamber's board of directors.Is the chamber board a legislative body subject to the Brown Act? Maybe.If the chamber's governing documents require the mayor to be on the board and the city council appoints the mayor to that position, the board is a legislative body.If,however, the chamber board independently appoints the mayor to its board,or the mayor attends chamber board meetings in a purely advisory capacity,it is not. If a community college district board creates an auxiliary organization to operate a campus bookstore or cafeteria, is the board of the organization a legislative body? A: Yes.But,if the district instead contracts with a private firm to operate the bookstore or cafeteria,the Brown Act would not apply to the private firm. OPEN &PUBLIC IV ■ Chapter 2:Legislative Bodies 9 • Certain kinds of hospital operators.A lessee of a hospital(or portion of a hospital)first leased under Health and Safety Code subsection 32121(p)after Jan. 1,1994,which exercises"material authority" delegated to it by a local agency,whether or not such lessee is organized and operated by the agency or by a delegated authority.16 WHAT IS NOT A"LEGISLATIVE BODY" FOR PURPOSES OF THE BROWN ACT? • A temporary advisory committee composed solely of less than a quorum of the legislative body that serves a limited or single purpose,that is not perpetual,and that will be dissolved once its specific task is completed is not subject to the Brown Act.17 Temporary committees are sometimes called ad hoc committees,a term not used in the Brown Act.Examples include an advisory committee composed of less than a quorum created to interview candidates for a vacant position or to meet with representatives of other entities to exchange information on a matter of concern to the agency,such as traffic congestion.t8 • Groups advisory to a single decision-maker or appointed by staff are not covered.The Brown Act applies only to committees created by formal action of the legislative body and not to committees created by others.A committee advising a superintendent of schools would not be covered by the Brown Act. However,the same committee,if created by formal action of the school board,would be covered.19 Q. A member of the legislative body of a local agency informally establishes an advisory committee of five residents to advise her on issues as they arise. Does the Brown Act apply to this committee? A. No,because the committee has not been established by formal action of the legislative body. Q. During a meeting of the city council,the council directs the city manager to form an advisory committee of residents to develop recommendations for a new ordinance.The city manager forms the committee and appoints its members;the committee is instructed to direct its recommendations to the city manager.Does the Brown Act apply to this committee? A. Possibly,because the direction from the city council might be regarded as a formal action of the body notwithstanding that the city manager controls the committee. • Individual decision makers who are not elected or appointed members of a legislative body are not covered by the Brown Act.For example,a disciplinary hearing presided over by a department head or a meeting of agency department heads are not subject to the Brown Act since such assemblies are not those of a legislative body.20 • County central committees of political parties are also not Brown Act bodies.21 10 OPEN &PUBLIC IV - Chapter 2:Legislative Bodies Endnotes 1 Taxpayers for Livable Communities v.City of Malibu(2005) 126 Cal.App.4th 1123 2 California Government Code section 54952(a) 3 California Government Code section 54951.But see Education Code section 35147,which exempts certain school councils and school site advisory committees from the Brown Act and imposes upon them a separate set of rules. 4 Torres v.Board of Commissioners(1979)89 Cal.App.3d 545 5 71 Ops.CalAtty.Gen.96(1988);73 Ops.Cal.Atty.Gen.1(1990) 6 McKee v.Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force(2005) 134 CalApp.4th 354 7 California Government Code section 54952.1 8 Joiner v.City of Sebastopol(1981)125 Cal.App.3d 799 9 California Government Code section 54952(b) 10 79 Ops.Cal.Atty.Gen.69(1996) 11 Frazer v.Dixon Unified School District(1993)18 Cal.App.4th 781 12 California Government Code section 54952(c)(1)(B).The same rule applies to a full voting member appointed prior to February 9,1996 who,after that date,is made a non-voting board member by the legislative body. California Government Code section 54952(c)(2) 13 California Government Code section 54952(c)(1)(A);International Longshoremen's and Warehousemen's Union v.Los Angeles Export Terminal(1999)69 CaLApp.4th 287;Epstein v.Hollywood Entertainment Dist.H Business Improvement District(2001)87 Cal.App.4th 862;see also:81 Ops.CaLAtty.Gen.281 (1998);85 Ops.CalAtty.Gen.55 14 International longshoremen's and Warehousemen's Union v.Los Angeles Export Terminal(1999)69 Cal.App.4th 287, 300 fn.5 15 "The Brown Act,California Attorney General(2003),p.7 16 California Government Code section 54952(d) 17 California Government Code section 54952(b);see also:Freedom Newspapers,Inc.v.Orange County Employees Retirement System Board of Directors(1993)6 Cal.4th 821 18 Taxpayers for Livable Communities v.City of Malibu(2005)126 CaLApp.4th 1123 19 56 Ops.Cal.Atty.Gen.14(1973) 20 Wilson v.San Francisco Municipal Railway(1973)29 Cal.App.3d 870 21 59 Ops.CalAtty.Gen.162(1976) Updates to this publication responding to changes in the Brown Act or new court interpretations are available at www.cacities.org/opengovernment A current version of the Brown Act may be found at www.leginfo.ca.gov. OPEN &PUBLIC IV 3 Chapter 2:Legislative Bodies 11 12 OPEN &PUBLIC N t Chapter 2:Legislative Bodies C HA PTE R 3 : MEETINGS ^ tr a f j r / t -- -... `.__ 401.to ., lipp, BROWN ACT MEETINGS SIX EXCEPTIONS TO THE MEETING DEFINITION COLLECTIVE BRIEFINGS RETREATS OR WORKSHOPS OF LEGISLATIVE BODIES SERIAL MEETINGS INFORMAL GATHERINGS TECHNOLOGICAL CONFERENCING LOCATION OF MEETINGS CHAPTER3 : .... _ _. MEETINGS r;, 7 • d • _.' .. �. • ' *� i . 4 The Brown Act only applies to meetings of local legislative bodies.The Brown Act defines a meeting as: "...any congregation of a majority of the members of a legislative body at the same time and place to hear, discuss,or deliberate upon any item that is within the subject matter jurisdiction of the legislative body or the local agency to which it pertains."'Under the Brown Act,the term"meeting"is not limited to gatherings at which action is taken but includes deliberative gatherings as well. BROWN ACT MEETINGS Brown Act gatherings include a legislative body's regular meetings,special meetings,emergency meetings and adjourned meetings. • "Regular meetings"are meetings occurring at the dates,times,and location set by resolution,ordinance, or other formal action by the legislative body and are subject to 72-hour posting requirements.2 • "Special meetings"are meetings called by the presiding officer or majority of the legislative body to discuss only discrete items on the agenda under the Brown Act's notice requirements for special meetings.3 • "Emergency meetings"are a limited class of meetings held when prompt action is needed due to actual or threatened disruption of public facilities and are held on little notice.° • 'Adjourned meetings"are regular or special meetings that have been adjourned or re-adjourned to a time and place specified in the order of adjournment,with no agenda required for regular meetings adjourned for less than five calendar days as long as no additional business is transacted.' SIX EXCEPTIONS TO THE MEETING DEFINITION The Brown Act creates six exceptions to the meeting definition:6 Individual Contacts The first exception involves individual contacts between a member of the legislative body and any other person.The Brown Act does not limit a legislative body member acting on his or her own.This exception recognizes the right to confer with constituents,advocates,consultants,news reporters,local agency staff or a colleague. 14 OPEN & PUBLIC IV Chapter 3:Meetings Nimimimmmmimmmiiiiiiimmimommmmmommimmmomimmmoi Individual contacts,however,cannot be used to do in stages what would be prohibited in one step.For example,a series of individual contacts that leads to discussion,deliberation or action among a majority of the members of a legislative body is prohibited.Such serial meetings are discussed below. Conferences The second exception allows a legislative body majority to attend a conference or similar gathering open to the public that addresses issues of general interest to the public or to public agencies of the type represented by the legislative body. ry Among other things,this exception permits legislative body members to attend annual association conferences of city,county,school,community college,and other local agency officials,so long as those meetings are open to the public. However,a majority of members cannot discuss among themselves,other than as part of the scheduled program,business of a specific nature that is within 3 their local agency's subject matter jurisdiction. Community Meetings The third exception allows a legislative body majority to attend an open and publicized meeting held by another organization to address a topic of local community concern.Again,a majority cannot discuss among themselves,other than as part of the scheduled program,business of a specific nature that is within their local agency's subject matter jurisdiction.Under this exception,a legislative body majority may attend a local service club meeting or a local candidates'night if the meetings are open to the public. "I see we have four distinguished members of the city council at our meeting tonight," said the chair of the Environmental Action Coalition. "I wonder if they have anything to say about the controversy over enacting a slow growth ordinance?" The Brown Act permits a majority of a legislative body to attend and speak at an open and publicized meeting conducted by another organization.The Brown Act may nevertheless be violated if a majority discusses,deliberates,or takes action on an item during the meeting of the other organization.There is a fine line between what is permitted and what is not;hence, members should exercise caution when participating in these types of events. The local chamber of commerce sponsors an open and public candidate debate during an election campaign.Three of the five agency members are up for re-election and all three participate.All of the candidates are asked their views of a controversial project scheduled for a meeting to occur just after the election. May the three incumbents answer the question? Yes,because the Brown Act does not constrain the incumbents from expressing their views regarding important matters facing the local agency as part of the political process the same as any other candidates. OPEN &PUBLIC IV • Chapter 3:Meetings 15 sommommimmemmimmiiimmilimmimmim Other Legislative Bodies The fourth exception allows a majority of a legislative body to attend an open and publicized meeting of:(1)another body of the local agency and(2)a legislative body of another local agency.'Again,the r R majority cannot discuss among themselves,other than as part of the scheduled meeting,business of • a specific nature that is within their local agency's subject matter jurisdiction.This exception allows,for example,a city council or a majority of a board of supervisors to attend a controversial meeting of the planning commission. v Nothing in the Brown Act prevents the majority of a legislative body from sitting together at such a meeting. They may choose not to,however,to preclude any possibility of improperly discussing local agency A rore- business and to avoid the appearance of a Brown Act violation.Further,aside from the Brown Act,there may be other reasons,such as due process considerations,why the members should avoid giving public • /,+ testimony or trying to influence the outcome of proceedings before a subordinate body. r Q. The entire legislative body intends to testify against a bill before the Senate Local Government Committee in Sacramento.Must this activity be noticed as a meeting of the body? A. No,because the members are attending and participating in an open meeting of another governmental body which the public may attend. Q. The members then proceed upstairs to the office of their local Assembly member to discuss issues of local interest. Must this session be noticed as a meeting and be open to the public? A. Yes,because the entire body may not meet behind closed doors except for proper closed sessions.The same answer applies to a private lunch or dinner with the Assembly member. Standing Committees The fifth exception authorizes the attendance of a majority at an open and noticed meeting of a standing committee of the legislative body,provided that the legislative body members who are not members of the standing committee attend only as observers(meaning that they cannot speak or otherwise participate in the meeting).8 Q. The legislative body establishes a standing committee of two of its five members,which meets monthly.A third member of the legislative body wants to attend these meetings and participate. May she? A. She may attend,but only as an observer;she may not participate. Social or Ceremonial Events The sixth and final exception permits a majority of a legislative body to attend a purely social or ceremonial occasion.Once again,a majority cannot discuss business among themselves of a specific nature that is within the subject matter jurisdiction of the local agency. Nothing in the Brown Act prevents a majority of members from attending the same football game,party, wedding,funeral,reception,or farewell.The test is not whether a majority of a legislative body attends the function,but whether business of a specific nature within the subject matter jurisdiction of the local agency is discussed.So long as no local agency business is discussed,there is no violation of the Brown Act. 16 OPEN &PUBLIC IV ■ Chapter 3:Meetings • COLLECTIVE BRIEFINGS None of these six exceptions permits a majority of a legislative body to meet together with staff in advance of a meeting for a collective briefing.Any such briefings that involve a majority of the body in the same place and time must be open to the public and satisfy Brown Act meeting notice and agenda requirements. • RETREATS OR WORKSHOPS OF LEGISLATIVE BODIES There is consensus among local agency attorneys that gatherings by a majority of legislative body members at the legislative body's retreats,study sessions,or workshops are covered under the Brown Act.This is the case whether the retreat,study session,or workshop focuses on long-range agency planning,discussion of critical local issues,or on team building and group dynamics.9 The legislative body wants to hold a team-building session to improve relations among its members. May such a session be conducted behind closed doors? No, this is not a proper subject for a closed session,and there is no other basis to exclude the public. Council relations are a matter of public business. • SERIAL MEETINGS One of the most frequently asked questions about the Brown Act involves serial meetings.At any one time,such meetings involve only a portion of a legislative body,but eventually involve a majority. The problem with serial meetings is the process,which deprives the public of an opportunity for meaningful participation in legislative body decision-making.The Brown Act provides that"[a]majority of the members of a legislative body shall 0,. not,outside a meeting...use a series of communications of any kind,directly or through intermediaries,to discuss,deliberate,or take action on any item of business that is within the subject matter jurisdiction of the legislative body."10 ► The serial meeting may occur by either a"daisy-chain"or a"hub-and-spoke" I sequence.In the daisy-chain scenario,Member A contacts Member B,Member B contacts Member C,Member C contacts Member D and so on,until a quorum has discussed,deliberated or taken action on an item within the legislative body's subject matter jurisdiction. The hub-and-spoke process involves,for example,a staff member(the hub)communicating with members of a legislative body(the spokes)one-by-one for a decision on a proposed action,11 or a chief executive officer briefing a majority of redevelopment agency members prior to a formal meeting and, in the process,information about the members' respective views is revealed.Each of these scenarios violates the Brown Act. A legislative body member has the right,if not the duty,to meet with constituents to address their concerns. That member also has the right to confer with a colleague or appropriate staff about local agency business. An employee or official of a local agency may engage in separate conversations or communications outside of an open and noticed meeting"with members of a legislative body in order to answer questions or provide information regarding a matter that is within the subject matter jurisdiction of the local agency if that person does not communicate to members of the legislative body the comments or position of any other member or members of the legislative body."12 The Brown Act has been violated however,if several one-on-one meetings or conferences leads to a discussion,deliberation or action by a majority.In one case,a violation occurred when a quorum of a city council directed staff by letter on an eminent domain action.13 OPEN &PUBLIC IV ■ Chapter 3:Meetings 17 A unilateral written communication to the legislative body,such as an informational or advisory memorandum,does not violate the Brown Act.14 Such a memo,however,may be a public record.15 The phone call was from a lobbyist."Say, I need your vote for that project in the south area. How about it?" "Well, I don't know,"replied Board Member Aletto."That's kind of a sticky proposition.You sure you need my vote?" "Well, I've got Bradley and Cohen lined up and another vote leaning.With you I'd be over the top." Moments later,the phone rings again."Hey, I've been hearing some rumbles on that south area project,"said the newspaper reporter."I'm counting noses. How are you voting on it?" Neither the lobbyist nor the reporter has violated the Brown Act,but they are facilitating a violation. The board member may have violated the Brown Act by hearing about the positions of other board members and indeed coaxing the lobbyist to reveal the other board members'positions by asking "You sure you need my vote?"The prudent course is to avoid such leading conversations and to caution lobbyists,staff and news media against revealing such positions of others. The mayor sat down across from the city manager."From now on,"he declared,"I want you to provide individual briefings on upcoming agenda items.Some of this material is very Practice Tip: technical,and the council members don't want to sound like idiots asking about it in public. When briefing Besides that,briefings will speed up the meeting." legislative body members,staff must Agency employees or officials may have separate conversations or communications outside of exercise care not an open and noticed meeting"with members of a legislative body in order to answer questions to disclose other or provide information regarding a matter that is within the subject matter jurisdiction of the local members'views and agency if that person does not communicate to members of the legislative body the comments or positions. position of any other member or members of the legislative body."76 Members should always be vigilant when discussing local agency business with anyone to avoid conversations that could lead to a discussion,deliberation or action taken among the majority of the legislative body. "Thanks for the information,"said Council Member Kim."These zoning changes can be tricky, and now I think I'm better equipped to make the right decision." "Glad to be of assistance,"replied the planning director."Any idea what the other council members think of the problem?" The planning director should not ask,and the member should not answer.A one-on-one meeting that involves communicating the comments or position of other members violates the Brown Act. The agency's Web site includes a chat room where agency employees and officials participate anonymously and often discuss issues of local agency business. Members of the legislative body participate regularly. Does this scenario present a potential for violation of the Brown Act? Yes,because it is a technological device that may serve to allow for a majority of members to discuss,deliberate or take action on matters of agency business. A member of a legislative body contacts two other members on a five-member body relative to scheduling a special meeting. Is this an illegal serial meeting? No,the Brown Act expressly allows this kind of communication,though the members should avoid discussing the merits of what is to be taken up at the meeting. 18 OPEN &PUBLIC IV Chapter 3:Meetings Particular care should be exercised when staff briefings of legislative body members occur by email because of the ease of using the"reply to all"button that may inadvertently result in a Brown Act violation. ■ INFORMAL GATHERINGS Often members are tempted to mix business with pleasure—for example,by holding a post meeting gathering.Informal gatherings at which local agency business is discussed or transacted violate the law if they are not conducted in conformance with the Brown Act."A luncheon gathering in a crowded dining room violates the Brown Act if the public does not have an adequate opportunity to hear or participate in the deliberations of members. Thursday at 11:30 a.m.,as they did every week,the board of directors of the Dry Gulch Irrigation District trooped into Pop's Donut Shoppe for an hour of talk and fellowship.They sat at the corner window,fronting on Main and Broadway,to show they had nothing to hide. whenever he could,the managing editor of the weekly newspaper down the street hurried over to join the board. A gathering like this would not violate the Brown Act if board members scrupulously avoided talking about irrigation district issues.But it is the kind of situation that should be avoided.The public is unlikely to believe the board members could meet regularly without discussing public business.A newspaper executive's presence in no way lessens the potential for a violation of the Brown Act. Q. The agency has won a major victory in the Supreme Court on an issue of importance. The presiding officer decides to hold an impromptu press conference in order to make a statement to the print and broadcast media.All the other members show up in order to make statements of their own and be seen by the media.Is this gathering illegal? A. Technically there is no exception for this sort of gathering,but as long as members do not state their intentions as to future action to be taken and the press conference is open to the public,it seems harmless. •TECHNOLOGICAL CONFERENCING In an effort to keep up with information age technologies,the Brown Act now specifically allows a legislative body to use any type of teleconferencing to meet,receive public comment and testimony,deliberate,or conduct a closed session.18 While the Brown Act contains specific requirements for conducting a teleconference,the decision to use teleconferencing is entirely discretionary within the body. "Teleconference"is defined as"a meeting of a legislative body,the members of which are in different locations,connected by electronic means,through either audio or video,or both."19 In addition to the specific requirements relating to teleconferencing,the meeting must comply with all provisions of the Brown Act otherwise applicable.The Brown Act contains the following specific requirements:20 • Teleconferencing may be used for all purposes during any meeting; • At least a quorum of the legislative body must participate from locations within the local agency's jurisdiction; • Additional teleconference locations may be made available for the public; OPEN &PUBLIC IV • Chapter 3:Meetings 19 • Each teleconference location must be specifically identified in the notice and agenda of the meeting, including a full address and room number,as may be applicable; Practice Tip: Legal counsel for the • Agendas must be posted at each teleconference location,even if a hotel room or a residence; local agency should • Each teleconference location must be accessible to the public and have technology,such as a be consulted before speakerphone,to enable the public to participate; teleconferencing a • The agenda must provide the opportunity for the public to address the legislative body directly at each meeting. teleconference location;and • All votes must be by roll call. Q. A member on vacation wants to participate in a meeting of the legislative body and vote by cellular phone from her car while driving from Washington, D.C.to New York.May she? A She may not participate or vote because she is not in a noticed and posted teleconference location. The use of teleconferencing to conduct a legislative body meeting presents a variety of new issues beyond the scope of this guide to discuss in detail.Therefore,before teleconferencing a meeting,legal counsel for the local agency should be consulted. ■ LOCATION OF MEETINGS The Brown Act generally requires all regular and special meetings of a legislative body,including retreats and workshops,to be held within the boundaries of the territory over which the local agency exercises jurisdiction.21 An open and publicized meeting of a legislative body may be held outside of agency boundaries if the purpose of the meeting is one of the following: • Comply with state or federal law or a court order,or for a judicial conference or administrative proceeding in which the local agency is a party; • Inspect real or personal property,which cannot be conveniently brought into the local agency's territory, provided the meeting is limited to items relating to that real or personal property; Q. The agency is considering approving a major retail mall.The developer has built other similar malls,and invites the entire legislative body to visit a mall outside the jurisdiction. May the entire body go? A. Yes,the Brown Act permits meetings outside the boundaries of the agency for specified reasons and inspection of property is one such reason.The field trip must be treated as a meeting and the public must be able to attend. • Participate in multiagency meetings or discussions,however,such meetings must be held within the boundaries of one of the participating agencies,and all involved agencies must give proper notice; • Meet in the closest meeting facility if the local agency has no meeting facility within its boundaries or at its principal office if that office is located outside the territory over which the agency has jurisdiction; 20 OPEN&PUBLIC IV • Chapter 3:Meetings • Meet with elected or appointed federal or California officials when a local meeting would be impractical, solely to discuss a legislative or regulatory issue affecting the local agency and over which the federal or state officials have jurisdiction; • Meet in or nearby a facility owned by the agency,provided that the topic of the meeting is limited to items directly related to the facility;or • Visit the office of its legal counsel for a closed session on pending litigation,when to do so would reduce legal fees or costs.22 In addition,the governing board of a school or community college district may hold meetings outside of its boundaries to attend a conference on nonadversarial collective bargaining techniques,interview candidates for school district superintendent,or interview a potential employee from another district 23 A school board may also interview members of the public residing in another district if the board is considering employing that district's superintendent. Similarly,meetings of a joint powers authority can occur within the territory of at least one of its member agencies,and a joint powers authority with members throughout the state may meet anywhere in the state.24 Finally,if a fire,flood,earthquake,or other emergency makes the usual meeting place unsafe,the presiding officer can designate another meeting place for the duration of the emergency.News media that have requested notice of meetings must be notified of the designation by the most rapid means of communication available.25 OPEN &PUBLIC IV ■ Chapter 3:Meetings 21 Endnotes: 1 California Government Code section 54952.2(a) 2 California Government Code section 54954(a) 3 California Government Code section 54956 4 California Government Code section 54956.5 5 California Government Code section 54955 6 California Government Code section 54952.2(c) 7 California Government Code section 54952.2(c)(4) 8 California Government Code section 54952.2(c)(6) 9 "The Brown Act,"California Attorney General(2003),p.10 10 California Government Code section 54952.2(b)(1) 11 Stockton Newspaper Inc.v.Redevelopment Agency(1985)171 Cal.App.3d 95 12 California Government Code section 54952.2(b)(2) 13 Common Cause v.Stirling(1983)147 Cal.App.3d 518 14 Roberts v.City of Palmdale(1993)5 Cal.4th 363 15 California Government Code section 54957.5(a) 16 California Government Code section 54952.2(b)(2) 17 California Government Code section 54952.2;43 Ops.Cal.Atty.Gen.36(1964) 18 California Government Code section 54953(b)(1) 19 California Government Code section 54953(b)(4) 20 California Government Code section 54953 21 California Government Code section 54954(b) 22 California Government Code section 54954(b)(1)-(7) 23 California Government Code section 54954(c) 24 California Government Code section 54954(d) 25 California Government Code section 54954(e) Updates to this publication responding to changes in the Brown Act or new court interpretations are available at www.cacities.org/opengovernment.A current version of the Brown Act may be found at www.leginfo.ca.gov. 22 OPEN &PUBLIC IV • Chapter 3:Meetings C HAP T E R 4 : AGENDAS, NOTICES, AND PUBLIC PARTICIPATION J llarnivoir : 414; Ailiv Tr 47 .., r/ 48:„ . .....ii ,r r 47., /. ; - it,'‘. 1111 z 1 —_ ... N .„a.vm a ::. AGENDAS FOR REGULAR MEETINGS MAILED AGENDA UPON WRITTEN REQUEST NOTICE REQUIREMENTS FOR SPECIAL MEETINGS NOTICES AND AGENDAS FOR ADJOURNED AND CONTINUED MEETINGS AND HEARINGS NOTICE REQUIREMENTS FOR EMERGENCY MEETINGS EDUCATIONAL AGENCY MEETINGS NOTICE REQUIREMENTS FOR TAX OR ASSESSMENT MEETINGS AND HEARINGS NON-AGENDA ITEMS RESPONDING TO THE PUBLIC THE RIGHT TO ATTEND MEETINGS RECORDS AND RECORDINGS THE PUBLIC'S PLACE ON THE AGENDA 444 i CHAPTER4: 0. ill, AGENDAS, NOTICES, AND PUBLIC PARTICIPATION 4 01,4►.►.aav j ..a.a(Nv7 Effective notice is essential for an open and public meeting.Whether a meeting is open or how the public may participate in that meeting is academic if nobody knows about the meeting. AGENDAS FOR REGULAR MEETINGS Every regular meeting of a legislative body of a local agency—including advisory committees,commissions, or boards,as well as standing committees of legislative bodies—must be preceded by a posted agenda that advises the public of the meeting and the matters to be transacted or discussed. The agenda must be posted at least 72 hours before the regular meeting in a location"freely accessible to Practice Tip: members of the public."'The courts have not definitively interpreted the"freely accessible"requirement. Putting together a The California Attorney General has interpreted this provision to require posting in locations accessible meeting agenda requires to the public 24 hours a day during the 72-hour period,but any of the 72 hours may fall on a weekend.' careful thought. Posting may also be made on a touch screen electronic kiosk accessible without charge to the public 24 hours a day during the 72-hour period.'However,only posting an agenda on an agency's Web site is inadequate since there is no universal access to the internet.The agenda must state the meeting time and place and must contain"a brief general description of each item of business to be transacted or discussed at the meeting,including items to be discussed in closed session."' The agenda for a regular meeting contains the following items of business: • "Consideration of a report regarding traffic on Eighth Street" • "Consideration of contract with ABC Consulting" Are these descriptions adequate? If the first is,it is barely adequate.A better description would provide the reader with some idea of what the report is about and what is being recommended.The second is not adequate.A better description might read"consideration of a contract with ABC Consulting in the amount of$50,000 for traffic engineering services regarding traffic on Eighth Street." 24 OPEN & PUBLIC IV Chapter 4:Agendas, Notices,and Public Participation The agenda includes an item entitled"City Manager's Report,"during which time the city manager provides a brief report on notable topics of interest, none of which are listed on the agenda. Is this permissible? Yes,so long as it does not result in extended discussion or action by the body. A brief general description may not be sufficient for closed session agenda items.The Brown Act provides safe harbor language for the various types of permissible closed sessions.Substantial compliance with the safe harbor language is recommended to protect legislative bodies and elected officials from legal challenges. •MAILED AGENDA UPON WRITTEN REQUEST The legislative body,or its designee,must mail a copy of the agenda or,if requested,the entire agenda packet,to any person who has filed a written request for such materials.These copies shall be mailed at the time the agenda is posted.If requested,these materials must be made available in appropriate alternative formats to persons with disabilities. A request for notice is valid for one calendar year and renewal requests must be filed Jan. 1 of each year.The legislative body may establish a fee to recover the cost of providing the :\ service.Failure of the requesting person to receive the agenda does not constitute grounds 1111 for invalidation of actions taken at the meeting.' • NOTICE REQUIREMENTS FOR SPECIAL MEETINGS There is no express agenda requirement for special meetings,but the notice of the special meeting effectively serves as the agenda and limits the business that may be transacted or discussed.Written notice must be sent to each member of the legislative body(unless waived in writing by that member)and to each local newspaper of general circulation,and radio or television station that has requested such notice in writing.This notice must be delivered by personal delivery or any other means that ensures receipt,at least 24 hours before the time of the meeting. The notice must state the time and place of the meeting,as well as all business to be transacted or discussed.It is recommended that the business to be transacted or discussed be described in the same manner that an item for a regular meeting would be described on the agenda—with a brief general description.As noted above,closed session items should be described in accordance with the Brown Act's safe harbor provisions to protect legislative bodies and elected officials from challenges of noncompliance with notice requirements.The special meeting notice must also be posted at least 24 hours prior to the special meeting in a site freely accessible to the public.The body cannot consider business not in the notice.6 ■ NOTICES AND AGENDAS FORADJOURNED AND CONTINUED MEETINGS AND HEARINGS A regular or special meeting can be adjourned and re-adjourned to a time and place specified in the order of adjournment.'If no time is stated,the meeting is continued to the hour for regular meetings.Whoever is present(even if they are less than a quorum)may so adjourn a meeting;if no member of the legislative body is present,the clerk or secretary may adjourn the meeting.If a meeting is adjourned for less than five calendar days,no new agenda need be posted so long as a new item of business is not introduced.$A copy of the order of adjournment must be posted within 24 hours after the adjournment,at or near the door of the place where the meeting was held. OPEN &PUBLIC IV ■ Chapter 4:Agendas,Notices,and Public Participation 25 A hearing can be continued to a subsequent meeting.The process is the same as for continuing adjourned meetings,except that if the hearing is continued to a time less than 24 hours away,a copy of the order or notice of continuance must be posted immediately following the meeting.9 NOTICE REQUIREMENTS FOR EMERGENCY MEETINGS The special meeting notice provisions apply to emergency meetings,except for the 24-hour notice.'°News media that have requested written notice of special meetings must be notified by telephone at least one hour in advance of an emergency meeting,and all telephone numbers provided in that written request must be tried.If telephones are not working,the notice requirements are deemed waived.However,the news media must be notified as soon as possible of the meeting and any action taken. News media may make a practice of having written requests on file for notification of special or emergency meetings.Absent such a request,a local agency has no legal obligation to notify news media of special or emergency meetings—although notification may be advisable in any event to avoid controversy. EDUCATIONAL AGENCY MEETINGS The Education Code contains some special agenda and special meeting provisions,"however,they are generally consistent with the Brown Act.An item is probably void if not posted.'2 A school district board must also adopt regulations to make sure the public can place matters affecting district's business on meeting agendas and to address the board on those items.13 ` NOTICE REQUIREMENTS FOR TAX OR ASSESSMENT • MEETINGS AND HEARINGS The Brown Act prescribes specific procedures for adoption by a city,county,special district,or joint powers authority of any new or increased general tax or assessment.'a At least one public meeting must be held to allow public testimony on the tax or assessment.In addition,there must also be at least 45 days notice of a public hearing at which public testimony may be given before the legislative body proposes to act on the tax or assessment.The agency may recover the reasonable costs of the public meetings, hearings,and notice.15 The Brown Act exempts certain fees,standby or availability charges,recurring assessments,and new or increased assessments that are subject to the notice and hearing requirements of the Constitution.16 As a practical matter,the Constitution's notice requirements have preempted this section of the Brown Act. NON-AGENDA ITEMS The Brown Act generally prohibits any action or discussion of items not on the posted agenda.However, there are three specific situations in which a legislative body can act on an item not on the agenda:" • When a majority decides there is an"emergency situation"(as defined for emergency meetings); Practice Tip: • When two-thirds of the members present(or all members if less than two-thirds are present)determine Subject to very limited there is a need for immediate action and the need to take action"came to the attention of the local exceptions,the Brown agency subsequent to the agenda being posted."This exception requires a degree of urgency.Further, Act prohibits any an item cannot be considered under this provision if the legislative body or the staff knew about the action or discussion need to take immediate action before the agenda was posted.A new need does not arise because staff of an item not on the forgot to put an item on the agenda or because an applicant missed a deadline;or posted agenda. • When an item appeared on the agenda of,and was continued from,a meeting held not more than five days earlier. 26 OPEN & PUBLIC IV Chapter 4:Agendas,Notices,and Public Participation The exceptions are narrow,as indicated by this list.The first two require a specific determination by the legislative body.That determination can be challenged in court and,if unsubstantiated,can lead to invalidation of an action. "I'd like a two-thirds vote of the board,so we can go ahead la 41' and authorize commencement of phase two of the East Area ,; ., }: . -;, Project,"said Chair Lopez. "It's not on the agenda. But we learned two days ago that we $100'11 finished phase one ahead of schedule—believe it or not—and I'd like to keep it that way. Do I hear a motion?" The desire to stay ahead of schedule generally would not satisfy • - roc,. "a need for immediate action."Too casual an action could invite r a court challenge by a disgruntled resident. The prudent course is to place an item on the agenda for the next meeting and not risk invalidation. "We learned this morning of an opportunity for a state grant,"said the chief engineer at the regular board meeting,"but our application has to be submitted in two days.We'd like the board to give us the go ahead tonight,even though it's not on the agenda." A legitimate immediate need can be acted upon even though not on the posted agenda by following a two-step process: • First,make two determinations:(a)that there is an immediate need to take action and(b)that the need arose after the posting of the agenda.The matter is then placed on the agenda. • Second,discuss and act on the added agenda item. RESPONDING TO THE PUBLIC The public can talk about anything within the jurisdiction of the legislative body,but the legislative body generally cannot act on or discuss an item not on the agenda.What happens when a member of the public raises a subject not on the agenda? While the Brown Act does not allow discussion or action on items not on the agenda,it does allow members of the legislative body,or its staff,to"briefly respond"to comments or questions from members of the public,provide a reference to staff or other resources for factual information,or direct staff to place the issue on a future agenda.In addition,even without a comment from the public,a legislative body member or a staff member may ask for information, request a report back,request to place a matter on the agenda for a subsequent meeting(subject to the body's rules or procedures),ask a question for clarification,make a brief announcement,or briefly report on his or her own activities.'$However,caution should be used to avoid any discussion or action on such items. Council Member A: I would like staff to respond to Resident Joe's complaints during public comment about the repaving project on Elm Street—are there problems with this project? City Manager:The public works director has prepared a 45-minute power point presentation for you on the status of this project and will give it right now. Council Member B:Take all the time you need;we need to get to the bottom of this.Our residents are unhappy. OPEN &PUBLIC IV Chapter 4:Agendas,Notices,and Public Participation 27 It is clear from this dialogue that the Elm Street project was not on the council's agenda,but was raised during the public comment period for items not on the agenda.Council Member A properly asked staff to respond;the city manager should have given at most a brief response. If a lengthy report from the public works director was warranted,the city manager should have stated that it would be placed on the agenda for the next meeting. Otherwise,both the long report and the likely discussion afterward will improperly embroil the council in a matter that is not listed on the agenda. •THE RIGHT TO ATTEND AND OBSERVE MEETINGS A number of other Brown Act provisions protect the public's right to attend,observe,and participate in meetings. Members of the public cannot be required to register their names,provide other information,complete a questionnaire,or otherwise"fulfill any condition precedent"to attending a meeting.Any attendance ` l ' list,questionnaire,or similar document posted at or near the entrance to the meeting room or .0 circulated at a meeting must clearly state that its completion is voluntary and that all persons may . a attend whether or not they fill it out.19 rr r, . ' .:-,,, • _ No meeting can be held in a facility that prohibits attendance based on race,religion color,national origin,ethnic group identification,age,sex,sexual orientation,or disability or that is inaccessible *'alP f to the disabled.Nor can a meeting be held where the public must make a payment or purchase . ... r rip in order to be present.2°This does not mean however that the public is entitled to free entry to a lowWI ! conference attended by a majority of the legislative body.21 �� rrrr' While a legislative body may use teleconferencing in connection with a meeting,the public must be given notice of and access to the teleconference location.Members of the public must be able to address the legislative body from the teleconference location.22 Action by secret ballot,whether preliminary or final,is flatly prohibited.23 Q: The agenda calls for election of the legislative body's officers.Members of the legislative body want to cast unsigned written ballots that would be tallied by the clerk,who would announce the results. Is this voting process permissible? A: No.The possibility that a public vote might cause hurt feelings among members of the legislative body or might be awkward—or even counterproductive does not justify a secret ballot. There can be no semi-closed meetings,in which some members of the public are permitted to attend as spectators while others are not;meetings are either open or closed.24 The legislative body may remove persons from a meeting who willfully interrupt proceedings.If order still cannot be restored,the meeting room may be cleared.Members of the news media who have not participated in the disturbance must be allowed to continue to attend the meeting.The legislative body may establish a procedure to re-admit an individual or individuals not responsible for the disturbance.25 28 OPEN &PUBLIC IV • Chapter 4:Agendas,Notices,and Public Participation • RECORDS AND RECORDINGS The public has the right to review agendas and other writings distributed by any person to a majority of the legislative body in connection with a matter subject to discussion or consideration at a meeting.Except for privileged documents,those materials are public records and must be made available upon request without delay.26 A fee or deposit as permitted by the California Public Records Act may be charged for a copy of a public record.27 In connection with an upcoming hearing on a discretionary use permit,counsel for the legislative body transmits a memorandum to all members of the body outlining the litigation risks in granting or denying the permit. Must this memorandum be included in the packet of agenda materials available to the public? No.The memorandum is a privileged attorney-client communication. In connection with an agenda item calling for the legislative body to approve a contract, staff submits to all members of the body a financial analysis explaining why the terms of the contract favor the local agency. Must this memorandum be included in the packet of agenda materials available to the public? Yes.The memorandum has been distributed to the majority of the legislative body,relates to the subject matter of a meeting,and is not a privileged communication. A legislative body may discuss or act on some matters without considering written materials.But if writings are distributed to a majority of a legislative body in connection with an agenda item,they must also be available to the public.A writing distributed to a majority of the legislative body less than 72 hours before the meeting must be made available for inspection at the time of distribution at a public office or location designated for that purpose;and the agendas for all meetings of the legislative body must include the address of this office or location.28 A writing distributed during a meeting must be made public: • At the meeting if prepared by the local agency or a member of its legislative body;or • After the meeting if prepared by some other person.29 Any tape or film record of an open and public meeting made for whatever purpose by or at the direction of the local agency is subject to the Public Records Act;however,it may be erased or destroyed 30 days after the taping or recording.Any inspection of a video or tape recording is to be provided without charge on a video or tape player made available by the local agency.30 The agency may impose its ordinary charge for copies.31 In addition,the public is specifically allowed to use audio or video tape recorders or still or motion picture cameras at a meeting to record the proceedings,absent a reasonable finding by the legislative body that noise,illumination,or obstruction of view caused by recorders or cameras would persistently disrupt the proceedings.32 Similarly,a legislative body cannot prohibit or restrict the public broadcast of its open and public meetings without making a reasonable finding that the noise,illumination,or obstruction of view would persistently disrupt the proceedings.33 OPEN &PUBLIC IV • Chapter 4:Agendas,Notices,and Public Participation 29 THE PUBLIC'S PLACE ON THE AGENDA Every agenda for a regular meeting must allow members of the public to speak on any item of interest,so long as the item is within the subject matter jurisdiction of the legislative body.Further,the public must be allowed to speak on a specific item of business before or during the legislative body's consideration of it.34 Must the legislative body allow members of the public to show videos or make a power point presentation during the public comment part of the agenda,as long as the subject matter is relevant to the agency and is within the established time limit? Probably,although the agency is under no obligation to provide equipment. Practice Tip: Public speakers cannot be compelled to give Moreover,the legislative body cannot prohibit public criticism of policies,procedures,programs,or their name or address as services of the agency or the acts or omissions of the legislative body itself.But,the Brown Act provides no a condition of speaking. immunity for defamatory statements.35 The clerk or presiding officer may request speakers to complete a speaker card or identify May the presiding officer prohibit a member of the audience from publicly criticizing an themselves for the agency employee by name during public comments? record,but must respect No,as long as the criticism pertains to job performance. a speaker's desire for anonymity. During the public comment period of a regular meeting of the legislative body,a resident urges the public to support and vote for a candidate vying for election to the body. May the presiding officer gavel the speaker out of order for engaging in political campaign speech? There is no case law on this subject.Some would argue that campaign issues are outside the subject matter jurisdiction of the body within the meaning of Section 54954.3(a). Others take the view that the speech must be allowed under paragraph(c)of that section because it is relevant to the governing of the agency and an implicit criticism of the incumbents. The legislative body may adopt reasonable regulations,including time limits,on public comments.Such regulations should be enforced fairly and without regard to speakers'viewpoints.The legislative body has discretion to modify its regulations regarding time limits on public comment if necessary.For example,the time limit could be shortened to accommodate a lengthy agenda or lengthened to allow additional time for discussion on a complicated matter.36 The public does not need to be given an opportunity to speak on an item that has already been considered by a committee made up exclusively of members of the legislative body at a public meeting,if all interested members of the public had the opportunity to speak on the item before or during its consideration,and if the item has not been substantially changed.37 Notices and agendas for special meetings must also give members of the public the opportunity to speak before or during consideration of an item on the agenda but need not allow members of the public an opportunity to speak on other matters within the jurisdiction of the legislative body.3e 30 OPEN & PUBLIC IV Chapter 4:Agendas,Notices,and Public Participation S ^a. `"e `C f 3 TR A Q'"ye^ry S 'ga"iu <H3v f 1 < m. ,,.. �W _.-. . . �,_a._�„�� .�,b. '�';...�=.rx Na„�..€.:emu r.�,. a,,� n....� Endnotes 1 California Government Code section 54954.2(a)(1) 2 78 Ops.CalAtty.Gen.327(1995) 3 88 Ops.CalAtty.Gen.218(2005) 4 California Government Code section 54954.2(a)(1) 5 California Government Code section 54954.1 6 California Government Code section 54956 7 California Government Code section 54955 8 California Government Code section 54954.2(b)(3) 9 California Government Code section 54955.1 10 California Government Code section 54956.5 11 Education Code sections 35144,35145 and 72129 12 Carlson v.Paradise Unified School District(1971)18 CalApp.3d 196 13 California Education Code section 35145.5 14 California Government Code section 54954.6 15 California Government Code section 54954.6(g) 16 See:Cal.Const.Art.XIIIC,XIIID and California Government Code section 54954.6(h) 17 California Government Code section 54954.2(b) 18 California Government Code section 54954.2(a)(2) 19 California Government Code section 54953.3 20 California Government Code section 54961(a);California Government Code section 11135(a) 21 California Government Code section 54952.2(c)(2) 22 California Government Code section 54953(b) 23 California Government Code section 54953(c) 24 46 Ops.CalAtty.Gen.34(1965) 25 California Government Code section 54957.9 26 California Government Code section 54957.5 27 California Government Code section 54957.5(d) 28 California Government Code section 54957.5(b) 29 California Government Code section 54957.5(c) 30 California Government Code section 54953.5(b) 31 California Government Code section 54957.5(d) 32 California Government Code section 54953.5(a) 33 California Government Code section 54953.6 34 California Government Code section 54954.3(a) 35 California Government Code section 54954.3(c) 36 California Government Code section 54954.3(b);Chaffee v.San Francisco Public Library Corn.(2005)134 Cal. App.4th 109;75 Ops.Cal.Atty.Gen.89(1992) 37 California Government Code section 54954.3(a) 38 California Government Code section 54954.3(a) Updates to this publication responding to changes in the Brown Act or new court interpretations are available at www.cacities.org/opengovernment A current version of the Brown Act may be found at www.leginfo.ca.gov. OPEN&PUBLIC IV Chapter 4:Agendas,Notices,and Public Participation 31 32 OPEN &PUBLIC IV r^ Chapter 4:Agendas,Notices,and Public Participation CHAPTER 5 :• CLOSED SESSIONS } 0 t ►► c :: . Y 'i it. /' I µMile �, . A �- _ F. .a , M z ,, 1.. AGENDAS AND REPORTS LITIGATION REAL ESTATE NEGOTIATIONS PUBLIC EMPLOYMENT LABOR NEGOTIATIONS LABOR NEGOTIATIONS—SCHOOL AND COMMUNITY COLLEGE DISTRICTS OTHER EDUCATION CODE EXCEPTIONS GRAND JURY TESTIMONY LICENSE APPLICANTS WITH CRIMINAL RECORDS PUBLIC SECURITY MULTIJURISOICTIONAL DRUG LAW ENFORCEMENT AGENCY HOSPITAL PEER REVIEW AND TRADE SECRETS THE CONFIDENTIALITY OF CLOSED SESSION DISCUSSIONS CHAPTERS : CLOSED SESSIONS Immo 4,4 The Brown Act begins with a strong statement in favor of open meetings;private discussions among a majority of a legislative body are prohibited,unless expressly authorized under the Brown Act.It is not enough that a subject is sensitive,embarrassing,or controversial.Without specific authority in the Brown Act for a closed session,a matter must be discussed in public.As an example,a board of police commissioners cannot generally meet in closed session,even though some matters are sensitive and the commission considers their disclosure contrary to the public interest.' Practice Tip: Meetings of a legislative body are either fully open or fully closed;there is nothing in between.Closed Meetings are either sessions may involve only the members of the legislative body and only agency counsel,management open or closed.There is and support staff,and consultants necessary for consideration of the matter that is the subject of closed no"in between." session.Individuals who do not have an official role in advising the legislative body on closed session subject matters must be excluded from closed session discussions., May the lawyer for someone suing the agency attend a closed session in order to explain to the legislative body why it should accept a settlement offer? No,attendance in closed sessions is reserved exclusively for the agency's advisors. In general,the most common purpose of a closed session is to avoid revealing confidential information that may,in specified circumstances,prejudice the legal or negotiating position of the agency or compromise the privacy interests of employees.Closed sessions should be conducted keeping those narrow purposes in mind. 34 OPEN & PUBLIC IV Chapter 5: Closed Sessions In this chapter,the grounds for convening a closed session are called"exceptions"because they are exceptions to the general rule that meetings must be conducted openly.In some circumstances,none of the closed session exceptions apply to an issue or information the legislative body wishes to discuss privately.In these cases,it is not proper to convene a closed session,even to protect confidential information.For example,the Brown Act does not authorize closed sessions for general contract negotiations. Practice Tip: Some problems over •AGENDAS AND REPORTS closed sessions arise Closed session items must be briefly described on the posted agenda and the description must state because secrecy itself the specific statutoryexemption.An item that appears on the open meetingbreeds distrust.The p p pp p portion of the agenda may Brown Act does not not be taken into closed session until it has been properly agendized as a closed session or unless it is require closed sessions properly added as a closed session item by a two-thirds vote of the body after making the appropriate and legislative bodies urgency findings. may do well to resist the tendency to call a closed The Brown Act supplies a series of fill-in-the-blank sample,agenda descriptions for various types of session simply because authorized closed sessions,which provide a"safe harbor"from legal attacks.These sample agenda it may be permitted.A descriptions cover license and permit determinations,real property negotiations,existing or anticipated better practice is to go litigation,liability claims,threats to security,public employee appointments,evaluations and discipline, into closed session only labor negotiations,multi-jurisdictional drug cases,hospital boards of directors,and medical quality when necessary. assurance committees., If the legislative body intends to convene in closed session,it must include the section of the Brown Act authorizing the closed session in advance on the agenda and it must make a public announcement prior to the closed session discussion.In most cases,the announcement may simply be a reference to the agenda item 4 Following a closed session the legislative body must provide an oral or written report on certain actions taken and the vote of every elected member present.The timing and content of the report varies according Practice Tip: to the reason for the closed session.,The announcements may be made at the site of the closed session, so long as the public is allowed to be present to hear them. Pay close attention to closed session agenda If there is a standing or written request for documentation,any copies of contracts,settlement agreements, descriptions.using the or other documents finally approved or adopted in closed session must be provided to the requestor(s) wrong label can lead to after the closed session,if final approval of such documents does not rest with any other party to the invalidation of an action taken in closed session. contract or settlement.If substantive amendments to a contract or settlement agreement approved by all parties requires retyping,such documents may be held until retyping is completed during normal business hours,but the substance of the changes must be summarized for any person inquiring about them., The Brown Act does not require minutes,including minutes of closed session.A confidential"minute book"may be kept to record actions taken at closed sessions.,If one is kept,it must be made available to members of the legislative body,provided that the member asking to review minutes of a particular meeting was not disqualified from attending the meeting due to a conflict of interest.'A court may order the disclosure of minute books for the court's review if a lawsuit makes sufficient claims of an open meeting violation. OPEN &PUBLIC IV • Chapter 5: Closed Sessions 35 • LITIGATION There is an attorney/client relationship,and legal counsel may use it for privileged written and verbal communications—outside of meetings—to members of the legislative body.But protection of the attorney/ client privilege cannot by itself be the reason for a closed session.9 The Brown Act expressly authorizes closed sessions to discuss what is considered litigation.The rules that apply to holding a litigation closed session involve complex,technical definitions and procedures.The essential thing to know is that a closed session can be held by the body to confer with,or receive advice from,its legal counsel when open discussion would prejudice the position of the local agency in litigation in which the agency is a party.10 The litigation exception under the Brown Act is narrowly construed and does not permit activities beyond a legislative body's conferring with its own legal counsel.For example,it is not permissible to hold a closed session in which settlement negotiations take place between a legislative body and an adverse party or to hold a closed session for the purpose of participation in a mediation.,, The California Attorney General believes that if the agency's attorney is not a participant,a litigation closed session cannot be held.12 In any event,local agency officials should always consult the agency's attorney before placing this type of closed session on the agenda,in order to be certain that it is being done properly. Litigation that may be discussed in closed session includes the following three types of matters: Existing litigation May the legislative body agree to settle a lawsuit in a properly-noticed closed session, without placing the settlement agreement on an open session agenda for public approval? A. Yes,but the settlement agreement is a public document and must be disclosed on request. Furthermore,a settlement agreement cannot commit the agency to matters that are required to have public hearings. In general,the most common purpose of a closed session is to avoid revealing confidential information that may,in specified circumstances,prejudice the legal or negotiating position of the agency or compromise the privacy interests of employees.Closed sessions should be conducted keeping those narrow purposes in mind. Grounds for convening a closed session in this chapter are called"exceptions"because they are exceptions to the general rule that meetings must be conducted openly.In some circumstances, none of the closed session exceptions apply to an issue or information the legislative body wishes to discuss privately.It is improper in these cases,to convene a closed session,even to protect confidential information.For example,the Brown Act does not authorize closed sessions for general contract negotiations. Existing litigation includes any adjudicatory proceedings before a court,administrative body exercising its adjudicatory authority,hearing officer,or arbitrator.The clearest situation in which a closed session is authorized is when the local agency meets with its legal counsel to discuss a pending matter that has been filed in a court or with an administrative agency and names the local agency as a party.The legislative body may meet under these circumstances to receive updates on the case from attorneys,participate in developing strategy as the case develops,or to consider alternatives for resolution of the case.Generally,an agreement to settle litigation may be approved in closed session.However,an agreement to settle litigation that requires actions that are subject to public hearings cannot be approved in closed session.13 36 OPEN &PUBLIC IV • Chapter 5:Closed Sessions mmmmmmimNomimmNNNNNNNNNmm Threatened litigation against the local agency Closed sessions are authorized for legal counsel to inform the legislative body of specific facts and circumstances that suggest that the local agency has significant exposure to litigation.The Brown Act lists six separate categories of such facts and circumstances.14 The legislative body may also meet under this exception to determine whether a closed session is authorized based on information provided by legal counsel or staff. Initiation of litigation by the local agency A closed session may be held under the pending litigation exception when the — legislative body seeks legal advice on whether to protect the agency's rights and interests by initiating litigation. In certain cases,the circumstances and facts justifying the closed session must be ,, publicly noticed on the agenda or announced at an open meeting.Before holding a closed session under the pending litigation exception,the legislative body must 111 publicly state which of the three basic situations apply.It may do so simply by making a . reference to the posted agenda. Certain actions must be reported in open session at the same meeting following the —- closed session.Other actions,as where final approval rests with another party or the - court,may be announced when they become final and upon inquiry of any person. Each agency attorney should be aware of and should make other disclosures that may be required in specific instances. ■ REAL ESTATE NEGOTIATIONS A legislative body may meet in closed session with its negotiator to discuss the purchase,sale,exchange, or lease of real property by or for the local agency.A"lease"includes a lease renewal or renegotiation. The purpose is to grant authority to the legislative body's negotiator on price and terms of payment.', Caution should be exercised to limit discussion to price and terms of payment without straying to other related issues such as site design,architecture,or other aspects of the project for which the transaction is contemplated.16 May other terms of a real estate transaction,aside from price and terms of payment, be addressed in closed session? No. However, there are differing opinions over the scope of the phrase"price and terms of payment"in connection with real estate closed sessions. Many agency attorneys believe that any term that directly affects the economic value of the transaction falls within the ambit of"price and terms of payment."Others take a narrower,more literal view of the phrase. The agency's negotiator may be a member of the legislative body itself.Prior to the closed session,or on the agenda,the legislative body must identify its negotiator,the real property that the negotiations may concern and the names of the persons with whom its negotiator may negotiate." After real estate negotiations are concluded,the approval and substance of the agreement must be reported.If its own approval makes the agreement final,the body must report in open session at the public meeting during which the closed session is held.If final approval rests with another party,the local agency must report the approval as soon as informed of it.Once final,the substance of the agreement must be disclosed to anyone who inquires. OPEN &PUBLIC IV • Chapter 5:Closed Sessions 37 immmNNNNmNmNmNmimmimiommiiimimmimimimimmimmimimiNNNmimmmmNmNNmNmmi "Our population is exploding,and we have to think about new school sites," said Board Member Jefferson. "Not only that,"interjected Board Member Tanaka,"we need to get rid of a couple of our older facilities." 0 "Well,obviously the place to do that is in a closed session,"said Board Member O'Reilly."Otherwise we're going to set off land speculation.And if 1111111 we even mention closing a school,parents are going to be in an uproar." A closed session to discuss potential sites is not authorized by the Brown Act. Alik tt The exception is limited to meeting with its negotiator over specific sites— which must be identified at an open and public meeting. ■ PUBLIC EMPLOYMENT The Brown Act authorizes a closed session"to consider the appointment,employment,evaluation of performance,discipline,or dismissal of a public employee or to hear complaints or charges brought against the employee."18 The purpose of this exception—commonly referred to as the"personnel exception"—is to avoid undue publicity or embarrassment for an employee or applicant for employment and to allow full and candid discussion by the legislative body;thus,it is restricted to discussing individuals,not general personnel policies.19 The body must possess the power to appoint,evaluate,or dismiss the employee to hold a closed session under this exception.20 That authority may be delegated to a subsidiary appointed body.21 An employee must be given at least 24 hours notice of any closed session convened to hear specific complaints or charges against him or her.This occurs when the legislative body is reviewing evidence, which could include live testimony,and adjudicating conflicting testimony offered as evidence.The employee has the right to have the specific complaints and charges discussed in a public session rather Practice Tip: than closed session.22 If the employee is not given notice,any disciplinary action is null and void 23 Discussions of who to appoint to an advisory body and whether Must 24 hours notice be given to an employee whose negative performance evaluation is to or not to censure a be considered by the legislative body in closed session? fellow member of the legislative body must be No, the notice is reserved for situations where the body is to hear complaints and charges held in the open. from witnesses. However,an employee is not entitled to notice and a hearing where the purpose of the closed session is to consider a performance evaluation.The Attorney General and the courts have determined that personnel performance evaluations do not constitute complaints and charges,which are more akin to accusations made against a person.24 Correct labeling of the closed session on the agenda is critical.A closed session agenda that identified discussion of an employment contract was not sufficient to allow dismissal of an employee.25 An incorrect agenda description can result in invalidation of an action and much embarrassment. 38 OPEN &PUBLIC IV • Chapter 5:Closed Sessions For purposes of the personnel exception,"employee"specifically includes an officer or an independent contractor who functions as an officer or an employee.Examples of the former include a city manager, district general manager or superintendent.An example of the latter is a legal counsel or engineer hired on contract to act as local agency attorney or chief engineer. Elected officials,appointees to the governing body or subsidiary bodies,and independent contractors other than those discussed above are not employees for purposes of the personnel exception.26 Action on individuals who are not"employees"must also be public—including discussing and voting on appointees to committees,or debating the merits of independent contractors,or considering a complaint against a member of the legislative body itself. Practice Tip: The personnel exception specifically prohibits discussion or action on proposed compensation in The personnel exception closed session,except for a disciplinary reduction in pay.Among other things,that means there can specifically prohibits be no personnel closed sessions on a salary change(other than a disciplinary reduction)between discussion or action on any unrepresented individual and the legislative body.However,a legislative body may address the proposed compensation in closed session compensation of an unrepresented individual,such as a city manager,in a closed session as part of a labor except for a disciplinary negotiation(discussed later in this chapter),yet another example of the importance of using correct agenda reduction in pay. descriptions. Reclassification of a job must be public,but an employee's ability to fill that job may be considered in closed session.Any closed session action to appoint,employ,dismiss,accept the resignation of,or otherwise affect the employment status of a public employee must be reported at the public meeting during which the closed session is held.That report must identify the title of the position,but not the names of all persons considered for an employment position.27 However,a report on a dismissal or non-renewal of an employment contract must be deferred until administrative remedies,if any,are exhausted.28 "I have some important news to announce,"said Mayor Garcia."We've decided to terminate the contract of the city manager,effective immediately.The council has met in closed session and we've negotiated six months severance pay." "Unfortunately,that has some serious budget consequences,so we've had to delay phase two of the East Area Project." This may be an improper use of the personnel closed session if the council agenda described the item as the city manager's evaluation.In addition,other than labor negotiations,any action on individual compensation must be taken in open session.Caution should be exercised to not discuss in closed session issues,such as budget impacts in this hypothetical,beyond the scope of the posted closed session notice. The school board is meeting in closed session to evaluate the superintendent and to consider giving her a pay raise. May the superintendent attend the closed session? The superintendent may attend the portion of the closed session devoted to her evaluation,but may not be present during discussion of her pay raise.Discussion of the superintendent's compensation in closed session is limited to giving direction to the school board's negotiator.Also,the clerk should be careful to notice the closed session on the agenda as both an evaluation and a labor negotiation. OPEN &PUBLIC IV • Chapter 5:Closed Sessions 39 ■ LABOR NEGOTIATIONS The Brown Act allows closed sessions for some aspects of labor negotiations.Different provisions (discussed below)apply to school and community college districts. A legislative body may meet in closed session to instruct its bargaining representatives,which may be Practice Tip: one or more of its members,29 on employee salaries and fringe benefits for both union and non-union Prior to the closed employees.For represented employees,it may also consider working conditions that by law require session,the legislative negotiation.These sessions may take place before or during negotiations with employee representatives. body must hold an Prior to the closed session,the legislative body must hold an open and public session in which it identifies open and public its designated representatives. session in which it identifies its designated During its discussions with representatives on salaries and fringe benefits,the legislative body may also representatives. discuss available funds and funding priorities,but only to instruct its representative.The body may also meet in closed session with a conciliator who has intervened in negotiations.30 The approval of an agreement concluding labor negotiations with represented employees must be reported after the agreement is final and has been accepted or ratified by the other party.The report must identify the item approved and the other party or parties to the negotiation.31 The labor sessions specifically cannot include final action on proposed compensation of one or more unrepresented employees.For purposes of this prohibition,an"employee"includes an officer or an independent contractor who functions as an officer or an employee.Independent contractors who do not serve in the capacity of an officer or employee are not covered by this closed session exception. • LABOR NEGOTIATIONS—SCHOOL AND COMMUNITY COLLEGE DISTRICTS Employee relations for school districts and community college districts are governed by the Rodda Act, where different meeting and special notice provisions apply.The entire board,for example,may negotiate in closed sessions. Four types of meetings are exempted from compliance with the Rodda Act: (1) A negotiating session with a recognized or certified employee organization; (2) A meeting of a mediator with either side; (3) A hearing or meeting held by a fact finder or arbitrator;and (4) A session between the board and its bargaining agent,or the board alone,to discuss its position regarding employee working conditions and instruct its agent.32 ..... w, Public participation under the Rodda Act also takes another form.33 All initial proposals of both sides must be presented at public meetings and are public records.The public must be given reasonable time to inform itself and to express its views before the district may adopt its initial proposal.In addition,new topics of negotiations must be made public within 24 hours.Any votes on such a topic must be followed within 24 . ' hours by public disclosure of the vote of each member.34 The final vote must be in public. 40 OPEN &PUBLIC IV ■ Chapter 5:Closed Sessions • OTHER EDUCATION CODE EXCEPTIONS The Education Code governs student disciplinary meetings by boards of school districts and community college districts.District boards may hold a closed session to consider the suspension or discipline of a student,if a public hearing would reveal personal,disciplinary,or academic information about the student contrary to state and federal pupil privacy law.The student's parent or guardian may request an open meeting.35 Community college districts may also hold closed sessions to discuss some student disciplinary matters, awarding of honorary degrees,or gifts from donors who prefer to remain anonymous.36 Kindergarten through 12th grade districts may also meet in closed session to review the contents of the statewide assessment instrument.37 • GRAND JURY TESTIMONY Practice Tip: A legislative body,includingits members as individuals,maytestifyinprivate before agrand jury,either Attendance by the entire g y legislative body before individually or as a group.38 Attendance by the entire legislative body before a grand jury would not a grand jury would not constitute a closed session meeting under the Brown Act,since the body would not be meeting to make constitute a closed decisions or reach a consensus on issues within the body's subject matter jurisdiction. session meeting under the Brown Act. • LICENSE APPLICANTS WITH CRIMINAL RECORDS A closed session is permitted when an applicant,who has a criminal record,applies for a license or license renewal and the legislative body wishes to discuss whether the applicant is sufficiently rehabilitated to receive the license.If the body decides to deny the license,the applicant may withdraw the application. If the applicant does not withdraw,the body must deny the license in public,immediately or at its next meeting.No information from the closed session can be revealed without consent of the applicant,unless the applicant takes action to challenge the denial.39 • PUBLIC SECURITY Legislative bodies may meet in closed session to discuss matters posing a threat to the security of public buildings,essential public services,including water,sewer,gas,or electric service,or to the public's right of access to public services or facilities over which the legislative body has jurisdiction.Closed session meetings for these purposes must be held with designated security or law enforcement officials including the Attorney General,district attorney,agency attorney,sheriff or chief of police,or their deputies or agency security consultant or security operations manager.40 Action taken in closed session with respect to such public security issues is not reportable action. • MULTIJURISDICTIONAL DRUG LAW ENFORCEMENT AGENCY A joint powers agency formed to provide drug law enforcement services to multiple jurisdictions may hold closed sessions to discuss case records of an on-going criminal investigation,to hear testimony from persons involved in the investigation,and to discuss courses of action in particular cases.41 The exception applies to the legislative body of the joint powers agency and to any body advisory to it.The purpose is to prevent impairment of investigations,to protect witnesses and informants,and to permit discussion of effective courses of action.42 OPEN &PUBLIC IV • Chapter 5:Closed Sessions 41 • HOSPITAL PEER REVIEW AND TRADE SECRETS Two specific kinds of closed sessions are allowed for district hospitals and municipal hospitals,under other provisions of law.43 1. A meeting to hear reports of hospital medical audit or quality assurance committees,or for related deliberations.However,an applicant or medical staff member whose staff privileges are the direct subject of a hearing may request a public hearing. 2. A meeting to discuss"reports involving trade secrets"—provided no action is taken. A"trade secret"is defined as information which is not generally known to the public or competitors and which:(1)"derives independent economic value,actual or potential"by virtue of its restricted knowledge;(2) is necessary to initiate a new hospital service or program or facility;and(3)would,if prematurely disclosed, create a substantial probability of depriving the hospital of a substantial economic benefit. The provision prohibits use of closed sessions to discuss transitions in ownership or management,or the district's dissolution." ■THE CONFIDENTIALITY OF CLOSED SESSION DISCUSSIONS It is not uncommon for agency officials to complain that confidential information is being leaked from closed sessions.The Brown Act prohibits the disclosure of confidential information acquired in a closed session by any person present and offers various remedies to address willful breaches of confidentiality.45 It is incumbent upon all those attending lawful closed sessions to protect the confidentiality of those Practice Tip: discussions.One court has held that members of a legislative body cannot be compelled to divulge the There is a strong content of closed session discussions through the discovery process.46 Only the legislative body acting as interest in protecting a body may agree to divulge confidential closed session information;regarding attorney/client privileged the confidentiality communications,the entire body is the holder of the privilege and only the entire body can decide to waive of proper and lawful ", closed sessions. the privilege. Before adoption of the Brown Act provision specifically prohibiting disclosure of closed session communications,agency attorneys and the Attorney General long believed that officials have a fiduciary duty to protect the confidentiality of closed session discussions.The Attorney General issued an opinion that it is"improper"for officials to disclose information received during a closed session regarding pending litigation 48 though the Attorney General has also concluded that a local agency may not go so far as to adopt an ordinance criminalizing public disclosure of closed session discussions.49 In any event,the Brown Act now prescribes remedies for breaches of confidentiality.These include injunctive relief,disciplinary action against an employee,and referral of a member of the legislative body to the grand jury50 The duty of maintaining confidentiality,of course,must give way to the obligation to disclose improper matters or discussions that may come up in closed sessions.In recognition of this public policy,the Brown Act exempts from its prohibition against disclosure of closed session communications disclosure of closed session information to the district attorney or the grand jury due to a perceived violation of law,expressions of opinion concerning the propriety or legality of actions taken in closed session,including disclosure of the nature and extent of the illegal action,and disclosing information that is not confidential.51 42 OPEN &PUBLIC IV • Chapter 5:Closed Sessions imimmimmimooamium000imomioommommmimmmoui The interplay between these possible sanctions and an official's first amendment rights is complex and beyond the scope of this guide.Suffice it to say that this is a matter of great sensitivity and controversy. "I want the press to know that I voted in closed session against filing the eminent domain action,"said Council Member Chang. "Don't settle too soon,"reveals Council Member Watson to the property owner,over coffee. "The city's offer coming your way is not our bottom line." The first comment to the press is appropriate—the Brown Act requires that certain final votes taken in closed session be reported publicly.S2 The second comment to the property owner is not—disclosure of confidential information acquired in closed session is expressly prohibited and harmful to the agency. Endnotes 1 61 Ops.Cal.Atty.Gen.220(1978) 2 82 Ops.Cal.Atty.Gen.29(1999) 3 California Government Code section 54954.5 4 California Government Code sections 54956.9 and 54957.7 5 California Government Code section 54957.1(a) 6 California Government Code section 54957.1(b) 7 California Government Code section 54957.2 8 Hamilton v.Town of Los Gatos(1989)213 Cal.App.3d 1050;2 Ca1.Code Regs.section 18702.1(c) 9 Roberts v.City of Palmdale(1993)5 Ca1.4th 363 10 California Government Code section 54956.9;Shapiro v.Board of Directors of Center City Development Corp.(2005) 134 Ca1.App.4th 170(agency must be a party to the litigation). 11 Page v.Miracosta Community College District(2009) 180 Cal.App.4th 471 12 "The Brown Act,"California Attorney General(2003),p.40 13 Trancas Property Owners Association v.City of Malibu(2006)138 Cal.App.4th 172 14 Government Code section 54956.9(b) 15 California Government Code section 54956.8 16 Shapiro v.San Diego City Council(2002)96 Cal.App.4th 172;see also—Ops.Cal.Atty.Gen. (May 21,2010)(2010 WL 2150433)(concluding it is impermissible for a redevelopment agency to meet in closed session to discuss the terms of a rehabilitation loan to a business that was leasing property from the agency when the terms and conditions of the lease itself were not also a matter of discussion.) 17 California Government Code section 54956.8 18 California Government Code section 54957(b) 19 63 Ops.Cal.Atty.Gen.215(1980);but see:Duvall v.Board of Trustees(2000)93 Ca1.App.4th 902(board may discuss personnel evaluation criteria,process and other preliminary matters in closed session). 20 Gillespie v.San Francisco Public Library Commission(1998)67 Cal.App.4th 1165;85 Ops.Cal.Atty.Gen.77(2002) 21 Gillespie v.San Francisco Public Library Commission(1998)67 Cal.App.4th 1165;80 Ops.Cal.Atty.Gen.308(1997). Interviews of candidates to fill a vacant staff position conducted by a temporary committee appointed by the governing body may be done in closed session. 22 Morrison v.Housing Authority of the City of Los Angeles(2003)107 Cal.App.4th 860 23 California Government Code section 54957 24 78 Ops.Cal.Atty.Gen.218(1995);Bell v.Vista Unified School District(2000)82 Cal.App.4th 672; Furtado v.Sierra Community College(1998)68 Cal.App.4th 876;Fischer v.Los Angeles Unified School District(1999) 70 Cal.App.4th 87 25 Moreno v.City of King(2005)127 Cal.App.4th 17 26 California Government Code section 54957 27 Gillespie v.San Francisco Public Library Commission(1998)67 Cal.App.4th 1165 28 California Government Code section 54957.1(a)(5) OPEN &PUBLIC N • Chapter 5:Closed Sessions 43 29 California Government Code section 54957.6 30 57 Ops.Cal.Atty.Gen.209(1974) 31 California Government Code section 54957.1(a)(6) 32 California Government Code section 3549.1 33 California Government Code section 3540 34 California Government Code section 3547 35 California Education Code section 48918,but see Rim of the World Unified School District v.Superior Court(2003) 104 Cal.App.4th 1393(Section 48918 preempted by the Federal Family Educational Right and Privacy Act in regard to expulsion proceedings.) 36 California Education Code section 72122 37 California Education Code section 60617 38 California Government Code section 54953.1 39 California Government Code section 54956.7 40 California Government Code section 54957 41 McKee v.Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force(2005) 134 Ca1.App.4th 354 42 California Government Code section 54957.8 43 California Government Code section 54962 44 California Health and Safety Code section 32106 45 Government Code section 54963 46 Kleitman v.Superior Court(1999)74 Ca1.App.4th 324,327;see also:California Government Code section 54963 47 Roberts v.City of Palmdale(1993)5 Ca1.4th 363 48 80 Ops.Cal.Atty.Gen.231(1997) 49 76 Ops.Cal.Atty.Gen.289(1993) 50 California Government Code section 54963 51 California Government Code section 54963 52 California Government Code section 54957.1 Updates to this publication responding to changes in the Brown Act or new court interpretations are available at www.cacities.org/opengovernment.A current version of the Brown Act may be found at www.leginfo.ca.gov. 44 OPEN &PUBLIC IV • Chapter 5:Closed Sessions CHAPTE R 6 : REMEDIES Xx f11110 ' 1 .' sc/ M •ate—, n1. k ,�. f i ** r► I INVALIDATION CIVIL ACTION TO PREVENT FUTURE VIOLATIONS COSTS AND ATTORNEY'S FEES CRIMINAL COMPLAINTS VOLUNTARY RESOLUTION . , CHAPTER6: s 7 �. REMEDIES ‘ /'" ' 'Nils .,, . .,, , Certain violations of the Brown Act are designated as misdemeanors,although by far the most commonly used enforcement provisions are those that authorize civil actions to invalidate specified actions taken in violation of the Brown Act and to stop or prevent future violations.Still,despite all the safeguards and remedies to enforce them,it is ultimately impossible for the public to monitor every aspect of public officials'interactions.Compliance ultimately results from regular training and a good measure of self- regulation on the part of public officials.This chapter discusses the remedies available to the public when that self-regulation is ineffective. INVALIDATION Any interested person,including the district attorney,may seek to invalidate certain actions of a legislative body on the ground that they violate the BrownAct.'Violations of the Brown Act,however,cannot be invalidated if they involve the following types of actions: • Those taken in substantial compliance with the law; • Those involving the sale or issuance of notes,bonds or other indebtedness,or any related contracts or agreements; • Those creating a contractual obligation,including a contract awarded by competitive bid for other than compensation for professional services,upon which a party has in good faith relied to its detriment; • Those connected with the collection of any tax;or • Those in which the complaining party had actual notice at least 72 hours prior to the meeting at which the action is taken. Before filing a court action seeking invalidation,a person who believes that a violation has occurred must send a written"cure or correct"demand to the legislative body.This demand must clearly describe the challenged action,the nature of the claimed violation,and the"cure"sought.This demand must be sent within 90 days of the alleged violation or 30 days if the action was taken in open session but in violation of Section 54954.2,which requires(subject to specific exceptions)that only properly agendized items are acted on by the governing body during a meeting.2 The legislative body then has up to 30 days to cure and correct its action.If it does not act,any lawsuit must be filed within the next 15 days. 46 OPEN &PUBLIC IV Chapter 6:Remedies The purpose of this requirement is to offer the body an opportunity to consider whether a violation has occurred and to weigh its options before litigation is filed.The Brown Act does not specify how to cure or correct a violation;the best method is to rescind the action being complained of and to start over. Although just about anyone has standing to bring an action for invalidation,,the challenger must show prejudice as a result of the alleged violation.4 An action to invalidate fails to state a cause of action against the agency if the body deliberated but did not take an actions Practice Tip: A lawsuit to invalidate ■ CIVIL ACTION TO PREVENT FUTURE VIOLATIONS must be preceded by a demand to cure and The district attorney or any interested person can file a civil action asking the court to: correct the challenged • Stop or prevent violations or threatened violations of the Brown Act by members of the legislative body action in order to give of a local agency; the legislative body an opportunity to consider • Determine the applicability of the Brown Act to actions or threatened future action of the legislative body; its options. • Determine whether any rule or action by the legislative body to penalize or otherwise discourage the expression of one or more of its members is valid under state or federal law;or • Compel the legislative body to tape record its closed sessions. It is not necessary for a challenger to prove a past pattern or practice of violations by the local agency in order to obtain injunctive relief.A court may presume when issuing an ' injunction that a single violation will continue in the future where the public agency refuses to admit to the alleged violation or to renounce or curtail the practice.6 Note,however,that 'L whew 2 �i f a court may not compel elected officials to disclose their recollections of what transpired in -1E6=— T a closed session.' ' ar it;,;,- Upon finding a violation of the Brown Act pertaining to closed sessions,a court may compel — the legislative body to tape record its future closed sessions.In a subsequent lawsuit to enforce the Brown Act alleging a violation occurring in closed session,a court may upon motion of the plaintiff review the tapes if there is good cause to think the Brown Act has been violated,and make public the relevant portion of the closed session recording. ■ COSTS AND ATTORNEY'S FEES Someone who successfully invalidates an action taken in violation of the Brown Act or who successfully enforces one of the Brown Act's civil remedies may seek court costs and reasonable attorney's fees.Courts have held that attorney's fees must be awarded to a successful plaintiff unless special circumstances exist that would make a fee award against the public agency unjust.,When evaluating how to respond to assertions that the Brown Act has been violated,elected officials and their lawyers should assume that attorneys fees will be awarded against the agency if a violation of the Act is proven. An attorney fee award may only be directed against the local agency and not the individual members of the legislative body.If the local agency prevails,it may be awarded court costs and attorney's fees if the court Practice Tip: finds the lawsuit was clearly frivolous and lacking in merit.9 Attorneys fees will likely be awarded if a • CRIMINAL COMPLAINTS violation of the Brown Act is proven. A violation of the Brown Act by a member of the legislative body who acts with the improper intent described below is punishable as a misdemeanor.10 A criminal violation has two components.The first is that there must be an overt act—a member of a legislative body must attend a meeting at which action is taken in violation of the Brown Act.11 "Action taken"is not only an actual vote,but also a collective decision,commitment or promise by a OPEN &PUBLIC IV • Chapter 6:Remedies 47 majority of the legislative body to make a positive or negative decision.12 If the meeting involves mere deliberation without the taking of action,there can be no misdemeanor penalty. A violation occurs for a tentative as well as final decision.13 In fact,criminal liability is triggered by a member's participation in a meeting in violation of the Brown Act—not whether that member has voted with the majority or minority,or has voted at all. Practice Tip: Training and exercising The second component of a criminal violation is that action is taken with the intent of a member"to deprive good judgment can the public of information to which the member knows or has reason to know the public is entitled"by the help avoid Brown Act Brown Act.14 conflicts.If an arguably meritorious procedural As with other misdemeanors,the filing of a complaint is up to the district attorney.Although criminal challenge is raised,it prosecutions of the Brown Act are uncommon,district attorneys in some counties aggressively monitor may be more prudent to public agencies'adherence to the requirements of the law. voluntarily re-notice and reconsider the action •VOLUNTARY RESOLUTION subject to the challenge. Arguments over Brown Act issues often become emotional on all sides.Newspapers trumpet relatively minor violations,unhappy residents fume over an action,and legislative bodies clam up about information better discussed in public.Hard lines are drawn and rational discussion breaks down.The district attorney or even the grand jury occasionally becomes involved.Publicity surrounding alleged violations of the Brown Act can result in a loss of confidence by constituents in the legislative body.There are times when it may be preferable to consider re-noticing and rehearing,rather than litigating,an item of significant public interest, particularly when there is any doubt about whether the open meeting requirements were satisfied. At bottom,agencies that regularly train their officials and pay close attention to the requirements of the Brown Act will have little reason to worry about enforcement. Endnotes 1 California Government Code section 54960.1.Invalidation is limited to actions that violate the following sections of the Brown Act:section 54953(the basic open meeting provision);sections 54954.2 and 54954.5(notice and agenda requirements for regular meetings and closed sessions);54954.6(tax hearings);and 54956(special meetings). Violations of sections not listed above cannot give rise to invalidation actions,but are subject to the other remedies listed in section 5490.1. 2 California Government Code section 54960.1 (b)and(c)(1) 3 McKee v.Orange Unified School District(2003) 110 Cal.App.4th 1310 4 Cohan v.City of Thousand Oaks(1994)30 Cal.App.4th 547,556,571 5 Boyle v.City of Redondo Beach(1999)70 Cal.App.4th 1109,1117-18 6 California Alliance for Utility Safety and Education(CAUSE)v.City of San Diego(1997)56 Cal.App.4th 1024; Common Cause v.Stirling(1983) 147 Cal.App.3d 518,524.Accord Shapiro v.San Diego City Council(2002)96 Cal. App.4th 904,916&fn.6 7 Kleitman v.Superior Court(1999)74 Cal.App.4th 324,334-36 8 Los Angeles Times Communications,LLC v.Los Angeles County Board of Supervisors(2003) 112 Cal.App.4th 1313, 1324-27 and cases cited therein. 9 California Government Code section 54960.5 10 California Government Code section 54959.A misdemeanor is punishable by a fine of up to$1,000 or up to six months in county jail,or both.California Penal Code section 19.Employees of the agency who participate in violations of the Brown Act cannot be punished criminally under section 54959.However,at least one district attorney instituted criminal action against employees based on the theory that they criminally conspired with the members of the legislative body to commit a crime under section 54949. 11 California Government Code section 54959 12 California Government Code section 54952.6 13 61 Ops.Cal.Atty.Gen.283(1978) 14 California Government Code section 54959 Updates to this publication responding to changes in the Brown Act or new court interpretations are available at www.cacities.org/opengovernment.A current version of the Brown Act may be found at www.leginfo.ca.gov. 48 OPEN &PUBLIC IV • Chapter 6:Remedies .,.,„. .. 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BROWN ACT, 2ND EDITION 1400 K Street,Sacramento,CA 95814 Phone:(916)658-8200 I Fax:(916)658-8240 www.cacities.org Price:S25.00 SKU 789 APPENDIX D CITY OF HUNTINGTON BEACH CITY CHARTER ARTICLE IV CITY OF HUNTINGTON BEACH CITY CHARTER ARTICLE IV Section 405. BOARDS, COMMISSIONS AND COMMITTEES. The City Council shall establish such boards, commissions and committees as are deemed necessary for the orderly functioning of the City. All such boards, commissions and committees shall report directly to the City Council. APPENDIX E HUNTINGTON BEACH CITY POLICIES Chapter 2.100 OPERATING POLICY FOR BOARD AND COMMISSIONS Current ADOPTED FINANCIAL POLICIES Chapter 2.15 FINANCE DEPARTMENT Ordinance 4056 FINANCE COMMISSION Chapter 2.109 FINANCE COMMISSION Chapter 2.110 INVESTMENT ADVISORY BOARD Chapter 2.100 OPERATING POLICY FOR BOARDS AND COMMISSIONS 2.100.010 Establishment All advisory boards and commissions shall be established by ordinance. Committees may be established by resolution. The enabling document may establish the duration,manner of appointment,term of office, and powers and duties. (2896-6/87, 3124-12/91) 2.100.020 Definitions Board.A body of members appointed pursuant to Huntington Beach Charter Section 405 to serve in a continuing advisory capacity to the City Council,except for such boards which have decision making authority pursuant to the particular establishing ordinance creating such board; Commission.A body of members appointed pursuant to Huntington Beach Charter Section 405 which may have decision making authority in those activities delegated to them by the City Council; Committee. A body of members appointed pursuant to Huntington Beach Charter Section 405 on an ad hoc basis to advise the City Council on particular matters. (2896-6/87, 3250-10/94) 2.100.030 Budget When deemed necessary,the City Council may cause to be set aside in the budget for each fiscal year an amount necessary for the functioning of such boards and commissions. (2896-6/87) 2.100.040 Staff The City shall assign a staff liaison to each board and commission. (2896-6/87) 2.100.050 Staff Liaison and Residency Unless otherwise specified,each board or commission is to be assigned one staff liaison specified by the City Council. All members of boards and commissions shall be residents and electors of the City of Huntington Beach. (2896-6/87) 2.100.060 Service Limitation No person shall serve on more than one board or commission at any one time.No person shall serve more than two consecutive terms on any one board or commission, and no person who has been a member for more than two years of a term to which some other person was appointed a member shall be appointed to the same board or commission for more than one further consecutive term.No person who has served two consecutive terms on any one board or commission shall be eligible for reappointment to the same board or commission within 30 days of the expiration of the person's most recent term. (2896-6/87, 3256-11/94, 3323-5/96, 3327-5/96, 3776-9/07) 2.100.065 Statements of Economic Interests Every person appointed to a board,commission, or committee designated by the City Council resolution adopting the City's Conflict of Interest Code, shall file a statement of economic interests with the City Clerk on forms provided by the City Clerk. Statements of economic interests shall be filed upon taking office,annually no later than 30 days after the date specified by law,and upon leaving office.Any such person who fails to file a statement of economic interests as provided in this section shall automatically vacate the office. (3391-8/98) 2.100.070 Employment Limitation No person serving on any board or commission shall hold any full or part-time paid office or employment in the Huntington Beach personnel system while so serving,unless otherwise specified. (2896-6/87) 2.100.080 Duration of Terms Members shall serve until their respective successors are appointed and qualified. The City Council shall have the power to fill any vacancies. Unless otherwise specified,terms of members of boards and commissions shall be four years, staggered so that the majority of terms shall end in odd-numbered years following the election of four councilmembers and remainder of the terms shall end in odd-numbered years following the election of three councilmembers. (2896-6/87) 2.100.085 Attendance Any person appointed to any City board,commission,or committee shall automatically vacate the office upon a fifth unexcused absence during a calendar year or upon more than three consecutive unexcused absences at any time during the term of office. Upon request of the absent member,each board, commission,or committee shall have the authority to determine whether an absence is excused. The appointing authority shall appoint a successor to fill the vacancy. (3124-12/91, 3776-9/07) 2.100.090 Open Meetings All meetings of boards and commissions shall be open to the public unless subject to the closed session exceptions contained in the Ralph M. Brown Act(Government Code Section 54950). (2896-6/87) 2.100.100 Rules Each board and commission may adopt such bylaws and rules as may be necessary or convenient for the conduct of its business,subject to approval of the City Council. (2896-6/87) 2.100.110 Applicability This chapter shall apply to all boards and commissions,unless an ordinance enacted after the date of this section establishes different requirements. (3124-12/91,3323-5/96) 1601111...1.1140 � U Fa r.a) City of Huntington Beach � Financial Policies Adopted Budget — FY 2014/15 %UNT��, go i�I The City of Huntington Beach was incorporated as a Charter City in 1909. Huntington Beach has a Council/Manager form of government, wherein seven City Council members are elected to four-year terms, and the Mayor is filled on a rotating basis from the incumbent Council members. The Council sets and approves the City's Financial Policies through the adoption of a resolution. The purpose of these policies is to help frame resource allocation decisions and establish objectives, standards, and internal control for the City's funds. The following policies provide the basic legal requirements and timeliness of policies. In FY 2014/15 Adopted Budget, new policies were adopted into the Budgeting and Enterprise Funds sections to provide specific directions on the use of City funds and reserves. Please refer to Attachment#5 of City Council Actions section of the FY 2014/15 Adopted Budget. FINANCIAL REPORTING AND ACCOUNTING STANDARDS ❑ The City's accounting system will be maintained in accordance with generally accepted accounting practices and the standards of the Government Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA). ❑ The annual financial report will be prepared within six months of the close of the previous fiscal year. The City will use generally accepted accounting principles in preparing the annual financial statements and will attempt to qualify for the Government Finance Officers Association's Excellence in Financial Reporting Program. ❑ The City will strive for an unqualified audit opinion. An unqualified opinion is rendered without reservation by the independent auditor that financial statements are fairly presented. ❑ The City will contract for an annual audit by a qualified independent certified public accounting firm. The independent audit firm will be selected through a competitive process at least once every five years. The contract period will be for an initial period of three years, with two one-year options. BUDGETING ❑ The budget will be prepared consistent with the standards developed by the Government Finance Officers Association and California Society of Municipal Finance Officers (CSMFO). In addition, a summary version will be provided to the public in a user-friendly format. ❑ The City will maintain a balanced operating budget for all funds with estimated revenues being equal to, or greater than, estimated expenditures, and with periodic City Council reviews and necessary adjustments to maintain balance. ❑ On-going revenues will support on-going expenditures. Revenues from one-time or limited duration sources will not be used to balance the annual operating budget. ❑ Support function appropriations will be placed in the department in which they are managed. ❑ The annual budget will include an additional appropriation of $1 million each year to reduce the CaIPERS unfunded liability for the Safety CaIPERS pension plan. .0IN'-S ,i*ANT NUT02` o�j ,. 4.'��pFa City of Huntington Beach 11 Financial Policies 9`•.,.: -'. Adopted Budget — FY 2014/15 GENERAL FUND BALANCE ❑ There is an established Economic Uncertainties Reserve commitment in the General Fund. The monetary goal of this commitment is equal to the value of two months of the General Fund expenditure adopted budget amount. ❑ Appropriations from the Economic Uncertainties Reserve commitment can only be made by formal City Council action. Generally, appropriations and access to these funds will be reserved for emergency situations. Examples of such emergencies include, but are not limited to: • An unplanned, major event such as a catastrophic disaster requiring expenditures over 5% of the General Fund adopted budget • Budgeted revenue taken by another government entity • Drop in projected/actual revenue of more than 5% of the General Fund adopted revenue budget ❑ Should the Economic Uncertainties Reserve commitment be used and its level falls below the minimum amount of two months of General Fund expenditures adopted budget, the goal is to replenish the fund within three fiscal years. ❑ In addition to the Economic Uncertainties Reserve, there are three permanent reserves established for the purpose of smoothing annual operating budgets, providing flexibility and the ability to take advantage of favorable financial/business conditions, and providing a source to fund unforeseen expenditures. Appropriations from these reserves can only be made by formal City Council action. These permanent reserves are: • Equipment Replacement Reserve for the acquisition of rolling stock, other movable assets, pumps, engines, and any equipment needed to sustain city infrastructure. Planned appropriations from this fund are identified during the annual budget process. The replenishment of this Reserve is outlined below. • Capital Projects Reserve for the construction of city infrastructure. Planned appropriations from this fund are identified during the annual budget process in concert with the Capital Improvement Plan. The replenishment of this Reserve is outlined below. • Litigation Reserve for unforeseen litigation losses exceeding the amount budgeted in the current year. The monetary goal for this Reserve is generally set at the city's self insured limit. This fund will be replenished each year through the annual budget process. ❑ Allocation of the audited General Fund unassigned fund balance (or increases in the Economic Uncertainties Reserve) will be done as follows if, and until, the Economic Uncertainties Reserve commitment is fully funded (i.e., two months of General Fund expenditures): • 50% to Economic Uncertainties Reserve commitment • 25% for Infrastructure Fund • 25% to Capital Improvement Reserve (CIR) commitment ro,. AFL City of Huntington Beach ='t Financial Policies Adopted Budget — FY 2014/15 � UNTV ,,ill os N, GENERAL FUND BALANCE (CONTINUED) ❑ Once the Economic Uncertainties Reserve commitment attains full funding, unassigned fund balance will be divided as follows: • 50% for Infrastructure Fund • 25% to Capital Improvement Reserve (CIR) commitment • 25% to Equipment Replacement commitment ❑ Any unassigned revenues received during the fiscal year will be added to the fund balance of the General Fund. FUND BALANCE CLASSIFICATION ❑ The City's fund balance is made up of the following components: • Nonspendable fund balance typically includes inventories, prepaid items, and other items that, by definition cannot be appropriated. • The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. • The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. The City Council has authority to establish, modify, or rescind a fund balance commitment. • Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. The City Manager or designee has the authority to establish, modify, or rescind a fund balance assignment. • Unassigned fund balance is the residual classification for the City's funds and includes all spendable amounts not contained in the other classifications. ❑ The City considers restricted or unrestricted amounts to have been spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. ❑ The City's committed, assigned, or unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. APPROPRIATION AUTHORITY ❑ The City Council is the appropriation authority for the City Budget. As required by state law, appropriations expire at the end of each fiscal year. 1,i 1 I.: mF9Z City of Huntington Beach Financial Policies 9 -'�_ Adopted Budget — FY 2014/15 e NON-DEPARTMENTAL BUDGET ❑ The City shall maintain a non-departmental budget that is used for expenditures that do not apply to a specific department, are Citywide in nature, or shared by several departments. The Director of Finance and City Manager shall be responsible for administration of this budget. OPERATION OF THE CAPITAL IMPROVEMENT RESERVE (CIR) COMMITMENT ❑ The Capital Improvement Reserve (CIR) will only be used to budget for, and construct, capital improvement projects identified in the City's five-year Capital Improvement Plan (CIP). ❑ Savings from completed capital improvement projects will be retained for use on other infrastructure projects. ENTERPRISE FUNDS ❑ An Enterprise Fund is a type of proprietary fund used to report an activity for which a fee is charged to external users for goods or services. The City will set users fees for each enterprise fund at a rate that fully recovers the direct and indirect costs of providing service. ❑ The City will adjust user fees as necessary to ensure that enterprise funds do not collect revenues at a rate in excess of the fund's operating, capital, and reserve requirements. ❑ Enterprise funds will be supported by their own rates and not subsidized by the General Fund. ❑ Enterprise funds will pay their share of overhead services provided by the General Fund. ❑ The City will maintain a reserve in the Water Fund equal to the sum of the following: • Operations and Maintenance: Thirty-three percent (33%) of the adopted annual budget to ensure adequate working capital for operating expenses. • Capital Improvement Program (CIP): One-hundred-fifty percent (150%) of the average annual planned Capital Improvement Program for the following five years. • Emergency: an amount equal to the estimated cost, as determined by the City Engineer, to replace one groundwater well plus the additional cost of thirty (30) months of imported water needed to replace the production from the average City well. i'N 6T. o& •,..,..e..`°"cF City of Huntington Beach = Financial Policies a.,.: ''"/`i Adopted Budget - FY 2014/15 CUUNPi Chi/ ENTERPRISE FUNDS (CONTINUED) ❑ The City will maintain a reserve in the Sewer Service Fund equal to the sum of the following: • Operations and Maintenance: Thirty-three percent (33%) of the adopted annual budget to ensure adequate working capital for operating expenses. • Capital Improvement Program (CIP): One-hundred percent (100%) of the average annual planned Capital Improvement Program for the following five years. • Emergency: an amount equal to the estimated cost, as determined by the City Engineer, to replace one sewer lift station. SPECIAL REVENUE FUNDS ❑ A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are restricted to expenditure for specified purposes. ❑ The City Council will establish which revenues require placement into a special revenue fund. ❑ The City Council will establish which expenditures will be expensed to each special revenue fund. DEBT ISSUANCE & MANAGEMENT ❑ The City will not use long-term debt to pay for current operations. ❑ The City will strive to construct capital and infrastructure improvements without incurring debt. Debt financing will be considered for capital and infrastructure improvements when one or more of the following circumstances exist: • When the term of the debt does not extend beyond the useful life of the improvements. • When project revenues or specific resources will be sufficient to service the long-term debt. • When the cost of debt is less than the impact of the cost caused by delaying the project. CHARGES & USER FEES ❑ "User Fees" are fees for services that are exclusively provided by the City and cannot legally exceed the cost of the service provided nor the statutory limit (if lower). User Fees will be reviewed and/or revised periodically by the City Council. User Fees that do not recover all direct and indirect costs of service will be clearly identified and must be approved by the City Council. ❑ "Charges" are fees that have no statutory limit and typically are set at "market rates" since the public can choose to obtain these services from other sources. Charges will be reviewed and/or revised periodically by the City Council. Charges that do not recover all direct and indirect costs of service will be clearly identified and must be approved by the City Council. ❑ The City Council will be presented annually with a list of all User Fees and Charges indicating when they were last changed. ❑ Fees for infrastructure improvements required by new development will be reviewed annually to ensure that the fees recover development related expenditures. TINGT P'F?�Nu °� Cityof Huntington Beach :.:�9 9 Financial Policies Wi 7 Adopted Budget — FY 2014/15 ,�UUNTV C��\io�A CAPITAL MANAGEMENT ❑ The City will prepare a five-year Capital Improvement Plan (CIP). The plan will be developed biannually and updated annually. The Capital Improvement Plan will include current operating maintenance expenditures, funding to support repair and rehabilitation of deteriorating infrastructure, and the construction of new infrastructure projects. ❑ Prior to planning the construction of new infrastructure, the improvement's future operating, maintenance, and replacement costs will be forecast and matched to available revenue sources in the operating budget. BASIS OF BUDGETING ❑ Governmental, agency and expendable trust fund types, and pension trust funds use a modified accrual basis of accounting. These funds recognize revenue when it is susceptible to accrual. It must be measurable and available to finance current period expenditures. Examples include property taxes, sales tax, governmental grants and subventions, interest and charges for current service. Revenues not susceptible to accrual include certain licenses, permits, fines and forfeitures, and miscellaneous revenue. The City of Huntington Beach recognizes expenditures when it incurs a measurable liability, with the exception of interest on long-term debt, which is recognized when it is due. D The City accounts for proprietary fund types and pension trust funds on the accrual basis, similar to private businesses, recognizing revenue when earned, regardless of the date of receipt, and recognizing expenses when they are incurred. The City selected under GASB Statement 20 (Governmental Accounting Standards Board), to apply all GASB pronouncements as well as an official statement of opinions of the Financial Accounting Board. ❑ The budget includes estimates for revenue that, along with the appropriations, comprise the budgetary fund balance. The appropriated budget covers substantially all fund type expenditures. The City Council adopts governmental fund budgets consistent with generally accepted accounting principles as legally required. There are no significant unbudgeted financial activities. Revenues for special revenue funds are budgeted by entitlements, grants, and estimates of future development and growth. Expenditures and transfers are budgeted based upon available financial resources. The City uses an encumbrance system as an aid in controlling expenditures. When the City issues a purchase order for goods or services, it records an encumbrance until the vendor delivers the goods or performs the service. At year-end, the City reports all outstanding encumbrances as reservations of fund balance in governmental fund types. The City then re-appropriates these encumbrances into the new fiscal year. ./6,9t City of Huntington Beach iiiiiiiiii4 _� Financial Policies :" " Adopted Budget — FY 2014/15 -Uiil - NT , FUND BALANCE DEFINITIONS AND PROJECTIONS ❑ The City is reporting estimated changes in fund balances for all funds with adopted budgets for the current fiscal year. The City has chosen to report certain major funds individually and the others combined within the annual audit. Major funds used in the City's Comprehensive Annual Financial Report (CAFR), plus selected other funds are described. Within the budget document, all funds operated by the City are individually presented. ❑ For governmental funds, the fund balances represent the estimated effort of the adopted budget on the unassigned fund balance that will be reported in the CAFR for prior fiscal year completed. This amount represents the amount available for appropriation by the City Council. ❑ For fiduciary and enterprise funds, the fund balances reported represent the net working capital (current assets minus current liabilities) shown in these funds. This amount closely parallels the unrestricted net assets shown on the CAFR. ❑ The estimated capitalized proprietary fund expenditures represent the estimated amount of expenditures that will be used for fixed assets. In enterprise funds, fixed assets are not recorded as expenditure in the year incurred, but are depreciated over their useful lives. , Chapter 2.15 FINANCE DEPARTMENT 2.15.010 Establishment There is hereby established a Finance Department which shall include the staff functions of finance,and purchasing. (3752-11/06) 2.15.020 Objectives The objectives of the department shall be to establish, facilitate and maintain support to City operating departments. (3752-11/06) 2.15.030 Director—Powers and Duties The Director of Finance shall be appointed by the City Manager. The director shall have the following powers and duties: A.Direct,plan,organize and coordinate programs and activities of the Finance Department. B.Establish and maintain a system of financial procedures,accounts and controls for the City government and each of its offices,officers,departments and agencies. C.Provide direction for the control of all expenditures to ensure that budget appropriations are not exceeded. D.Manage the business license functions including the issuance of permits. E.Direct and administer the City's centralized purchasing function with regard to procurement of all supplies, services and equipment for all City departments and agencies of the City. F. Administration and enforcement of appropriate sections of Title 5 of the Huntington Beach Municipal Code relating to business licensing. G.Administer and enforce all Municipal Code regulations including but not limited to: 1. Licensing Procedures(Chapter 5.08). 2. Natural Resources Production(Chapter 5.32). 3. Transient Occupancy Tax(Chapter 3.28). 4. Late Charges (Chapter 3.48). 5. Service Connections (Chapter 14.08). 6. Fees,Rates and Deposits(Chapter 14.12). H.Establishes and controls all bank accounts,negotiates services and contracts with bank, and handles returned checks and reconciliation thereof. I. Collects and deposits or causes to be deposited monies owed to the City whether by tax, fee, charge,judgment, settlement or otherwise;utilizes letters,phone calls,and collection agencies as required;and may write off uncollectible items up to$10,000.00 without further authorization, between$10,000.00 and$50,000.00 with the prior approval of the City Manager and in excess of $50,000.00 with City Council approval only,in furtherance of the City Treasurer's duties under the City Charter. J. Makes cash flow projections on a weekly and monthly basis. K.Receives all City monies including taxes, fees,water, sewer and trash fees including oil well royalties and transient occupancy taxes in furtherance of the City Treasurer's duties under the City Charter. L.Maintains all trusts,bonds,security agreements, and funds for the City including the filing, depositing,refunds and releases,letters of release,and inquiries relating thereto. (3807-8/08, 3907- 3/11) 2.15.040 Appointment of Subordinates The director,with the approval of the City Manager, shall appoint all other officers,assistants,deputies and employees of the Finance Department. (3907-3/11) 2.15.050 Financial and Accounting Duties of City Clerk Transferred In accordance with Government Code Sections 37209 and 40805.5,the financial and accounting duties imposed upon the City Clerk by Government Code Sections 40802 through 40805 are hereby transferred to the Director of Finance. (3907-3/11) ORDINANCE NO. 4056 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY ADDING NEW CHAPTER 2.109 ENTITLED "FINANCE COMMISSION" The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. The Huntington Beach Municipal Code is hereby amended by adding new Chapter 2.109 entitled "Finance Commission"to read as follows: 2.109.010 Creation. There is hereby created a Finance Commission. 2.109.020 Composition. The Finance Commission shall consist of seven(7)members. Each City Council Member shall appoint one member of the Commission to serve the same term as the City Council member. The Commission shall adopt such bylaws and rules as it deems necessary to provide for its Chair and officers and their method of selection,time and place of meetings and for such other matters relative to its work and administration of its duties which are not otherwise provided for by statute or ordinance. 2.109.030 Purpose. The Finance Commission shall act in an advisory capacity to the City Council in matters pertaining to financial planning. 2.109.040 Duties. The Finance Commission shall have the duty to: A. Review and make recommendations regarding: 1. Fiscal Policies, Financial Planning and Funding, 2. Annual adopted budget, 3. Proposals related to financial matters,. 4. Fiscal impacts of major projects, 5. Service contracts on an as-needed basis, and 6. Proposed State or Federal Legislation which impacts the City's finances. B. Perform such other duties or studies as may be directed by the City Council. 15-4698/120456.doc 1 Ordinance No . 4056 2.109.050 Authority. A. It is intended that the Finance Commission act only in an advisory capacity and not be vested with final authority in the establishment of priorities or the expenditure of funds. B. The Finance Commission shall not interfere with the duties of any elected or appointed officer or employee. 2.109.060 Operating Policies. Except as otherwise provided in this Chapter,the Commission shall conform to operating policies for Boards and Commissions as set forth in Chapter 2.100 of the Huntington Beach Municipal Code. The Commission should meet once per month. 2.109.070 Financial Disclosure. In accordance with California Law, members of the Finance Commission shall be required to file appropriate statements of economic interest. 2.109.080 Brown Act. Meetings of the Finance Commission shall be subject to the open meeting law. SECTION 2. This ordinance shall become effective thirty (30) days from the date of its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 18 t h day of May , 2015. Mayo- ATTEST: APPROVED A FORM: I`ty Clerk City Attorney REVIE D APPROVED: INITIAT D AND APPRO,g14// ‘ ty ager Director of Finance 15-4698/120456.doc 2 Ord. No. 4056 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN,the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a Regular meeting thereof held on May 04,2015, and was again read to said City Council at a Regular meeting thereof held on May 18,2015, and was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council. AYES: Posey, O'Connell,Katapodis, Hardy, Sullivan, Delgleize, Peterson NOES: None ABSENT: None ABSTAIN: None I,Joan L.Flynn,CITY CLERK of the City of Huntington Beach and ex-officio Clerk of the City Council,do hereby certify that a synopsis of this ordinance has been published in the Huntington Beach Wave on May 28,2015. In accordance with the City Charter of said City 4111 • '` • Joan L. Flynn, City Clerk City.I"erk and ex-officio erk Senior Deputy City Clerk of the City Council of the City of Huntington Beach, California Chapter 2.109 FINANCE COMMISSION 2.109.010 Creation There is hereby created a Finance Commission. (4056-6/15) 2.109.020 Composition The Finance Commission shall consist of seven members.Each City Council member shall appoint one member of the Commission to serve the same term as the City Council member. The Commission shall adopt such bylaws and rules as it deems necessary to provide for its Chair and officers and their method of selection,time and place of meetings and for such other matters relative to its work and administration of its duties which are not otherwise provided for by statute or ordinance. (4056-6/15) 2.109.030 Purpose The Finance Commission shall act in an advisory capacity to the City Council in matters pertaining to financial planning. (4056-6/15) 2.109.040 Duties The Finance Commission shall have the duty to: A.Review and make recommendations regarding: 1. Fiscal Policies,Financial Planning and Funding; 2. Annual adopted budget; 3. Proposals related to financial matters; 4. Fiscal impacts of major projects; 5. Service contracts on an as-needed basis; and 6. Proposed State or Federal Legislation which impacts the City's finances. B.Perform such other duties or studies as may be directed by the City Council. (4056-6/15) 2.109.050 Authority A.It is intended that the Finance Commission act only in an advisory capacity and not be vested with final authority in the establishment of priorities or the expenditure of funds. B.The Finance Commission shall not interfere with the duties of any elected or appointed officer or employee. (4056-6/15) 2.109.060 Operating Policies Except as otherwise provided in this Chapter,the Commission shall conform to operating policies for Boards and Commissions as set forth in Chapter 2.100 of the Huntington Beach Municipal Code.The Commission should meet once per month. (4056-6/15) 2.109.070 Financial Disclosure In accordance with California Law,members of the Finance Commission shall be required to file appropriate statements of economic interest. (4056-6/15) 2.109.080 Brown Act Meetings of the Finance Commission shall be subject to the open meeting law. (4056-6/15) Chapter 2.110 INVESTMENT ADVISORY BOARD 2.110.010 Creation There is hereby created an Investment Advisory Board. (3920-11/11) 2.110.020 Composition The Investment Advisory Board shall consist of up to seven members.Each City Council member may appoint one member of the board to serve the same term as the City Councilmember. (3920-11/11) 2.110.030 Purpose The Investment Advisory Board shall act in an advisory capacity to the City Council and City Treasurer in matters pertaining to all the City's investments. (3920-11/11) 2.110.040 Duties The Investment Advisory Board shall have the duty to: A.Prepare an annual report to the City Council.Annually,by January 20th,the board shall submit a report to the City Council. In preparing this report,the board shall review the investment policy, and any other investment information determined by the board to be applicable to its annual report. The report shall include any recommendations by the board pursuant to subsection B of this section. B.Review and make recommendations regarding: 1. City's statement of investment policy. 2. Risk-return analysis. 3. Long-term investment strategies. 4. New investment opportunities. 5. Proposed state or federal legislation which impacts the City's investments. 6. Anticipated exposure to loss. 7. Quarterly reports. 8. Compliance with investment policy. C.Meet on a quarterly basis. D.Perform such other duties or studies as may be directed by the City Council. (3920-11/11) 2.110.050 Authority A.It is intended that the Investment Advisory Board act only in an advisory capacity and not be vested with final authority in the establishment of priorities,the expenditure of funds or the establishment of the investment policy. B.The board shall not interfere with the duties of any elected or appointed officer specified in the City Charter. (3920-11/11) 2.110.060 Operating Policies Except as otherwise provided in this chapter,the Investment Advisory Board shall conform to operating policies for boards and commissions as set forth in Chapter 2.100 of the Huntington Beach Municipal Code. (3920-11/11) 2.110.070 Brown Act Meetings of the Investment Advisory Board shall be subject to the open meeting law (Government Code Section 54950). (3920-11/11) 2.110.080 Powers of Appointment The Investment Advisory Board shall have the power to appoint subcommittees of not more than three of its members to perform tasks within the scope of duties. (3920-11/11) APPENDIX F 1. Resolution 2008-09 Conflict of Interest Code 2. Resolution 2005-08 Code of Ethics RESOLUTON NO. 2008-09 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AMENDING ITS CONFLICT OF INTEREST CODE WHEREAS, the Political Reform Act (Government Code Section 8100 et seq.) requires state and local government agencies to adopt and promulgate conflict of interest codes; and The City of Huntington Beach has adopted a conflict of interest code which has been amended by various resolutions including Resolution 2006-12; The City now desires to amend the code which was previously adopted by Resolution 2006-12; and The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. 18730) which contains the terms of a standard conflict of interest code. After public notice and hearing it may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act, NOW, THEREFORE, the City Council of the City of Huntington Beach hereby resolves as follows: SECTION 1. Regulation Section 18730. The terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference and attached hereto as Exhibit A. This regulation and the attached Exhibit B designating officials and employees shall constitute the conflict of interest code of the City of Huntington Beach. SECTION 2. Filing of Statements. Designated officials and employees shall file their statements with the City Clerk which will make the statements available for public inspection and reproduction. (Gov. Code Section 81008.) Statements for all designated officials and employees will be retained by the City Clerk. SECTION 3. Designation of Positions. The persons holding the position set forth in Exhibit B are designated officials and employees. The Council determines that such persons make or participate in the making of decisions which may foreseeably have a material effect on any financial interest as defined in Government Code Section 87103. SECTION 4. Exclusions. This code shall not apply to: (a) public officials specified in Government Code Section 87200, as is or may be amended, including, but not limited to, members of the City Council, Planning Commissioners,the City Administrator, City Attorney, City Treasurer, and other public officials who manage public investments who are required to file Statements of Economic Interests pursuant to state law; (b) persons required to file Statements of Economic Interests pursuant to regulations which have been or may be adopted by the Fair Political Practices Commission; 07-1052.001/18034 1 Resolution No.2UU8-U9 (c) clerical, secretarial, manual,and ministerial employees. SECTION 5. Disclosure Required. Designated officials and employees as set forth in Exhibit B shall file conflict of interest statements listing financial interests as follows: (a) investments and business positions in, and income from, business entities doing business in the City or entities which have a foreseeable interest in doing business in the City, including businesses responding to requests for proposals issued by the City, and businesses in contractual negotiations with the City. Such designated officials and employees shall also report interests in real property in the City or within two miles of the boundaries of the City or of any property owned or used by the City. SECTION 6. Disqualification. Designated officials and employees must disqualify themselves from making or participating in the making of any decisions which will foreseeably have a material financial effect, distinguishable from its effect on the public generally, on any reportable interest of that employee. No designated employee shall be prevented from making or participating in the making of a decision to the extent his or her participating is legally required for the decision to be made. SECTION 7. Manner of Disqualification. A designated employee required to disqualify himself or herself shall notify his or her supervisor in writing. This notice shall be forwarded to the City Clerk 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 employee who is a member of a City board, commission or committee, notice of disqualification shall be given at the meeting during which consideration of the decision takes place and shall be made part of the official record of said board, commission, or committee. 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. SECTION 8. Previous Resolutions Repealed. City Council Resolution 2006-12, and any other resolution or provision thereof in conflict herewith is hereby repealed. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 19th day of February , 2008. ,0 ___"..4, Mayor APPROVED AS TO FORM: i¶ • •• Clerk Attorne 2•Li.b8 REVIE E ND PPROVED: INITIATED AND APPROVED: Ci y Administrator ity Attorney a-4.0? 07-1052.001/18034 2 Resolution No.2008-09 Resolution No.2008-09 • BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS TITLE 2. ADMINISTRATION DIVISION 6. FAIR POLITICAL PRACTICES COMMISSION CHAPTER 7. CONFLICTS OF INTEREST ARTICLE 2. DISCLOSURE This database is current through 02/10/2006, Register 2006, No. 6. s 18730. Provisions of Conflict of Interest Codes. (a) Incorporation by reference of the terms of this regulation along with the designation of employees and • the formulation of disclosure categories in the Appendix referred to below constitute the adoption and • promulgation of a conflict of interest code within the meaning of Government Code section 87300 or the amendment of a conflict of interest code within the meaning of Government Code section 87306 if the terms of this regulation are substituted for terms of a conflict of interest code already in effect. A code so amended or adopted and promulgated requires the reporting of reportable items in a manner substantially equivalent to the•requirements of article 2 of chapter 7 of the Political Reform Act, Government Code sections 81000, et seq. Tha,requirements of a conflict of interest code are in addition-to other requirements of the Political Reform Act; such as the general prohibition against conflicts of interest contained in Government Code section 87100, and to other state or local laws pertaining to conflicts of interest. (b) The terms of a conflict of interest code amended or adopted and promulgated pursuant to this regulation are as follows: (1) Section 1.Definitions. The definitions contained in the Political Reform Act of.1974, regulations of the Fair Political Practices Commission (2 Cal. Code of Regs. sections 18100, et seq.), and any amendments to the Act or regulations, are incorporated by reference into this conflict of interest code. (2) Section 2. Designated Employees. The persons holding positions listed in the Appendix are designated employees. It has been determined that these persons make or participate in the making of decisions which may foreseeably have a material effect on economic interests. (3) Section 3_ Disclosure Categories. This code does not establish any disclosure obligation for those designated employees who are also specified in Government Code section 87200 if they are designated in this code in that same capacity or if the geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction in which those persons must report their economic interests pursuant to article 2 of chapter 7 of the Political Reform • Act, Government Code sections 87200, et seq. In addition, this code does not establish any disclosure obligation for any designated employees who are Resolution No.2008-09 • designated in a conflict of interest code for another agency, if all of the following apply: •(A)The geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction of • the other agency; • (B)The disclosure assigned in the code of the other agency is the same as that required under article 2 of . •• chapter 7 of the Political Reform Act, Government Code section 87200; and • (C)The filing officer is the same for both agencies. [FN1]' Such persons are covered by this code for disqualification purposes only. With respect to all other designated employees, the disclosure categories set forth in the Appendix specify which kinds ofeconomicinterests are reportable. Such'a designated employee shall disclose in his or her statement of economic interests thoseeconomicinterests he or she has which are of the kind described in the disclosure categories to which he or she is assigned in the Appendix. It has been determined that theeconomicinterests set forth in a . designated employee's disclosure categories are the kinds ofeconomicinterests which he or she foreseeably can affect materially through the conduct of his or her office. (4) Section 4. Statements of Economic Interests: Place of Filing. . • • The code reviewing body shall instruct all designated employees within its code to file statements of . economic interests with the agency or with the code reviewing body, as provided by the code reviewing body in the agency's conflict of interest code. [FN2] (5) Section 5. Statements of Economic Interests: Time of Filing. (A) Initial Statements. All designated employees employed by the agency on the effective date of this code, as originally adopted, promulgated and approved by the code reviewing body, shall file statements within 30 days after the effective date of this code. Thereafter, each person already in a position when it is designated by an amendment to this code shall file an initial statement within 30 days after the effective date of the amendment. (B) Assuming Office Statements. All persons assuming designated positions after the effective date of this code shall file statements within 30 days after assuming the designated positions, or if subject to State Senate confirmation, 30 days after being nominated or appointed. (C) Annual Statements. All designated employees shall file statements no later than April 1. (D) Leaving Office Statements. All persons who leave designated positions shall file statements within 30 days after leaving office. • (5.5) Section 5.5. Statements for Persons Who Resign Prior to Assuming Office. Any person who resigns within 12 months of initial appointment, or within 30 days of the date of notice provided by the filing officer to file an assuming office statement, is not deemed to have assumed office or left office, provided he or she did not make or participate in the making of, or use his or her position to influence any decision and did not receive or become entitled to receive any form of payment as a result of his or her appointment. Such persons shall not file either an assuming or leaving office statement. (A) Any person who resigns a position within 30 days of the date of a notice from the filing officer shall do both of the following: (1) File a written resignation with the appointing power; and (2) File a written statement with the filing officer declaring under penalty of perjury that during the period between appointment and resignation he or she did not make, participate in the making, or use the position to influence any decision of the agency or receive, or become entitled to receive, any form of payment by virtue of being appointed to the position. (6) Section 6. Contents of and Period Covered by Statements of Economic Interests. (A) Contents of Initial Statements. Resolution No.2008-09 Initial statements shall disclose any reportable investments, interests in real property and business positions held on the effective date of the code and income received during the 12 months prior to the effective date of the code. (8) Contents of Assuming Office Statements. Assuming office statements-shall disclose any reportable investments, interests in real property and business positions held on the date of assuming office or, if subject to State Senate confirmation or appointment, on the date of nomination, and income received during the 12 months prior to the date of assuming office orthe date of being appointed or nominated,'respectively. (C) Contents of Annual Statements. Annual statements shall disclose any reportable investments, interests in real property, income and business positions held or received during the previous calendar year provided, however, that the period covered by an employee's first annual statement shall begin on the effective date of the code or the date of assuming office whichever is later, or for a board or commission member subject to Government Code section 87302.6, the day after the closing date of the most recent statement filed by the member pursuant to 2 Cal. Code Regs. section 18754. (D) Contents of Leaving Office Statements. • • Leaving office statements shall disclose reportable investments, interests in real property, income and business positions held or received during the period between the closing date of the last statement filed and the date of leaving office. (7) Section 7. Manner of Reporting. Statements of economic interests shall be made on forms prescribed by the Fair Political Practices • Commission and supplied by the agency, and shall contain the following information: (A) Investment and Real Property Disclosure. When an investment or an interest in real property (FN3] is required to be reported, [FN4] the statement shall contain the following: • 1. A statement of the nature of the investment or interest; • 2. The name of the business entity in which each investment is held, and a general description of the business activity in which the business entity is engaged; 3. The address or other precise location of the real property; 4. A statement whether the fair market value of the investment or interest in real property-equals or exceeds two thousand dollars ($2,000), exceeds ten thousand dollars ($10,000), exceeds one hundred thousand dollars ($100,000), or exceeds one million dollars ($1,000,000). (B) Personal Income Disclosure. When personal income is required to be reported, (FN5] the statement shall contain: 1. The name and address of each source of income aggregating five hundred dollars ($500) or more in value, or fifty dollars ($50) or more in value if the income was a gift, and a general description of the business activity, if any, of each source; 2. A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed to each source, was one thousand dollars ($1,000) or less, greater than one thousand dollars ($1,000), greater than ten thousand dollars ($10,000), or greater than one hundred thousand dollars ($100,000); 3. A description of the consideration, if any, for which the income was received; 4. In the case of a gift, the name, address and business activity of the donor and any intermediary through which the gift was made; a description of the gift; the amount or value of the gift; and the date on which the • Resolution No.2008-09 gift was received; 5. In the case of a loan, the•annual interest rate and the security, if any, given for the loan and the term of the loan. (C) Business Entity Income Disclosure. When income of a business entity, including income of a sole proprietorship, is required to be reported, [FN6] the statement shall contain: . 1. The name, address, and a general description of the business activity of the business entity; 2. 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). (D) Business Position Disclosure. When business positions are required to be reported, a designated employee shall list the name and address of each business entity in which he or she is a director, officer, partner, trustee, employee, or in which he or she holds any position of management, a description of the business activity in which the business entity is engaged, and the designated employee's position with the business entity. . (E)Acquisition or Disposal During Reporting Period. In the case of an annual or leaving office statement,if an investment or an interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the statement shall contain the date of acquisition or disposal. (8) Section 8. Prohibition on Receipt of Honoraria. (A) No member of a state board or commission, and no designated employee of a state or local government agency, shall accept any honorarium from any source, if the member or employee would be required to report the receipt of.incoMe or gifts from that source on his or her statement of economic interests. This section shall not apply to any part-time member of the governing board of any public institution of higher education, unless the member is also an elected official. Subdivisions (a), (b), and (c) of Government Code Section 89501 shall apply to the prohibitions in this section. This section shall not limit or prohibit payments, advances, or reimbursements for travel and related lodging and subsistence authorized by Government Code section 89506. . (8.1) Section 8.1. Prohibition on Receipt of Gifts in Excess of$360. (A) No member of a state board or commission, and no designated employee of a state or local government agency, shall accept gifts with a total value of more than $360 in a calendar year from any single source, if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. This section shall not apply to any part-time member of the governing board of any public institution of higher education, unless the member is also an elected official. Subdivisions (e), (f), and (g) of Government Code section 89503 shall apply to the prohibitions in this section. (8.2) Section 8.2. Loans to Public Officials. (A) No elected officer of a state or local government agency shall, from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the elected officer holds office or over which the elected officer's agency has direction and control. (B) No.public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the public official holds office or over which the public official's agency has direction and control. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. (C) No elected officer of a state or local government agency shall, from the date of his or her election to Resolution No.2008-09 office through the date that he or she vacates office, receive a personal loan from any person who has a • contract with the state or local government agency to which that elected officer has been elected or over which that elected officer's agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit . card transaction, if the loan is made or the indebtedness created in the lender's regular course of business on terms available to members of the public without regard to the elected officer's official status. (D) No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d),.(e), (f), and (g).of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer's agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender's regular course of business on terms available to members of the public without regard to the elected officer's official status. This subdivision shall not apply to loans made to a public official whose duties are - solely secretarial, clerical, or manual. (E) This section shall not apply to the following: • 1. Loans made to the campaign committee of an elected officer Or candidate for elective office. 2. Loans made by a public official's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in- law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such • persons, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans from a person which, in the aggregate,•do not exceed five hundred dollars ($500) at any given time. 4. Loans made, or offered in writing, before January 1, 1998. (8.3) Section 8.3. Loan Terms. (A) Except as set forth in subdivision (B), no elected officer of a state or local government agency shall, from the date of his or her election to office through the date he or she vacates office, receive a personal loan of five hundred dollars ($500) or more, except when the loan is in writing and clearly states the terms of the loan, including the parties to the loan agreement, date of the loan, amount of the loan, term of the loan, date or dates when payments shall be due on the loan and the amount of the payments, and the rate of interest paid on the loan. (B) This.section shall not apply to the following types of loans: 1. Loans made to the campaign committee of the elected officer. 2. Loans made to the elected officer by his or her spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such person, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans made, or offered in writing, before January 1, 1998. (C) Nothing in this section shall exempt any person from any other provision of Title 9 of the Government Code. (8.4) Section 8.4. Personal Loans. (A) Except as set forth in subdivision (B), a personal loan received by any designated employee shall become a gift to the designated employee for the purposes of this section in the following circumstances:- 1. If the loan has a defined date or dates for repayment, when the statute of limitations for filing an action for default has expired. 2. If the loan has no defined date or dates for repayment, when one year has elapsed from the later of the Resolution No.2008-09 In addition to the general disqualification provisions of section 9, no state administrative official shall make, participate in.making, or use his or her official position to influence any governmental decision directly relating to any contract where the state administrative official knows or has reason to know that any party to the contract is a person with whom the state administrative official, or any member of his or her immediate family has, within 12 months prior to the time when the official action is to be taken: • (A) Engaged in a business transaction or transactions on terms not available to members of the public, regarding any investment_or interest in real property; or (8) Engaged in a business transaction or transactions on terms not available to members of the public regarding the rendering of goods or services totaling in value one thousand dollars ($1,000) or more. (10) Section 10. Disclosure of Disqualifying Interest. • When a designated employee determines that he or she should not make a governmental decision because • he or she has a disqualifying interest in it, the determination not to act may be accompanied by disclosure of .the disqualifying interest. • • (11) Section 11. Assistance of the Commission and Counsel. Any.designated employee who is unsure of his or her duties under this code may request assistance from the Fair Political Practices Commission pursuant to Government Code section 83114 and 2 Cal. Code Regs. sections 18329 and 18329.5 or from the attorney for his or her agency, provided that nothing in this section requires the attorney for the agency to issue any formal or informal opinion. • (12) Section 12. Violations. This code has the force and effect of law. Designated employees violating any provision of this code are subject to the administrative, criminal and civil sanctions provided in the Political Reform Act, Government Code sections.81000-91014. In addition, a decision in relation to which a violation of the disqualification provisions of this code or of Government Code section 87100 or 87450 has occurred may be set aside as void pursuant to Government Code•section 91003. [F1‘11] Designated employees who are required to file statements of economic interests under any other agency's conflict of interest code, or under article 2 for a different jurisdiction, may expand their statement of economic interests to cover reportable interests in both jurisdictions, and file copies of this expanded statement with both entities in lieu of filing separate and distinct statements, provided that each copy of such expanded statement filed in place of an original is signed and verified by the designated employee as if it were an original. See Government Code section 81004. [FN2] See Government Code section 81010 and 2 Cal. Code of Regs. section 18115 for the duties of filing officers and persons in agencies who make and retain copies of statements and forward the originals to the filing officer. [FN3] For the purpose of disclosure only (not disqualification), an interest in real property does not include the principal residence of the filer. [FN4] Investments and interests in real property which have a fair market value of less than $2,000 are not investments and interests in real property within the meaning of the Political Reform Act. However, • investments or interests in real property of an individual include those held by the individual's spouse and dependent children as well as a pro rata share of any investment or interest in real property of any business entity or trust in which the individual, spouse and dependent children own, in the aggregate, a direct, indirect or beneficial interest of 10 percent or greater. [FNS] A designated employee's income includes his or her community property interest in the income of his or her spouse but does not include salary or reimbursement for expenses received from a state, local or federal government agency. • [FN6) Income of a business entity is reportable if the direct, indirect or beneficial interest of the filer and the filer's spouse in the business entity aggregates a 10 percent or greater interest. In addition, the disclosure of Resolution No.2008-09 following: • a. The date the loan was made. b. The date the last payment of one hundred dollars ($100) or more was made on the loan. c. The date upon which the debtor has made payments on the loan aggregating to less than two hundred fifty dollars ($250) during the previous 12 months. (B)This section shall not apply to the following types of loans: 1. A loan made to the campaign committee of an elected officer or a candidate for elective office. 2. A loan that would otherwise not be a gift as-defined in this title. 3. A loan that would otherwise be a gift as set forth under subdivision (A), but on.which the creditor has taken reasonable action to collect the balance due. 4. A loan that would otherwise be a gift as set forth under.subdivision (A), but on which the creditor, based on reasonable business considerations, has not undertaken collection action. Except in a•criminal action, a creditor who claims that a loan is not a gift on the basis of this paragraph has the burden of proving that the • decision for not taking collection action was based on reasonable business considerations. 5. A loan made to a debtor who has filed for bankruptcy and the loan is ultimately discharged in bankruptcy. (C) Nothing in this section shall exempt any person from any other provisions of Title 9 of the Government Code. (9) Section 9. Disqualification. No designated employee shall make, participate in making, or in any way attempt to use his or her official position to influence the making of any governmental decision which he or she knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public • generally, on the official or a member of his or her immediate family or on: (A) Any business entity in which the designated employee has a direct or indirect investment worth two thousand dollars ($2,000) or more; (B) Any real property in which the designated employee has a direct or indirect interest worth two thousand dollars ($2,000) or more; (C) Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating five hundred dollars ($500) or more in value provided to, received by or promised to the designated employee within 12 months prior to the time when the decision is made; (D) Any business entity in which the designated employee is a director, officer, partner, trustee, employee,. or holds any position of management; or (E) Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating $360 or more provided to, received by, or promised to the designated employee within 12 months prior to the time when the decision is made. (9.3) Section 9.3. Legally Required Participation. No designated employee shall be prevented from making or participating in the making of any decision to the extent his or her participation is legally required for the decision to be made. The fact that the vote of a designated employee who is on a voting body is needed to break a tie does not make his or her participation legally required for purposes of this section. (9.5) Section 9.5. Disqualification of State Officers and Employees. Resolution No.2008-09 • persons who are clients or customers of a business entity is required only if the clients or customers are within one of the disclosure categories of the filer. <General Materials (GM) - References, Annotations, or Tables> • Note: Authority cited: Section 83112, Government Code. Reference: Sections 87103(e), 87300-87302, 89501, 89502 and 89503, Government Code. HISTORY 1. New section filed 4-2-80 as an emergency; effective upon filing (Register 80, 'No. 14) . Certificate of Compliance included. 2.. Editorial correction (Register 80, No. 29) . 3. Amendment of subsection (b) filed 1-9-81; effective thirtieth day thereafter (Register 81, No. 2) . 4. Amendment of subsection (b).(7) (B) 1. filed 1-26-83; effective thirtieth day thereafter (Register 83, No. 5) . 5. Amendment of subsection (b) (7) (A) filed 11-10-83; effective thirtieth day thereafter (Register 83, No. 46) . 6. Amendment filed 4-13-87; operative 5-13-87 (Register 87, No. 16) . 7. Amendment of subsection (b) filed 10-21-88; operative 11-20-8.8 (Register 88, No. 46) . 8. Amendment of subsections .(b) (8) (A) and (b) (8) (B) and numerous editorial changes filed 8-28-90; operative 9-27-90 (Reg. 90, No. 4-2) . • 9. Amendment of subsections (b) (3) , (b) (8) and renumbering of following subsections and amendment of Notefiled 8-7-92; operative 9-7-92 (Register 92, No. 32) . 10. Amendment of subsection (b) (5.5) and new subsections (b) (5.5) (A)-(A) (2) filed 2-4-93; operative 2-4-93 (Register 93, No. 6) . 11. Change without regulatory effect adopting Conflict of Interest Code for California Mental Health Planning Council filed 11-22-93 pursuant to titlel, section 100, California Code of Regulations (Register 93, No. 48) _ • Approved by Fair Political Practices Commission 9-21-93. 12. Change without regulatory effect redesignating Conflict of Interest Code for California Mental Health Planning Council as chapter 62, section 55100 filed 1-4-94 pursuant to title 1, section 100, California Code ofRegulations (Register 94, No. 1) . 13. Editorial correction adding Historyll and 12 and deleting duplicate section number (Register 94, No. 17) . 14. Amendment of subsection (b) (8) , designation of subsection (b) (8) (A) , new subsection (b) (8) (B) , and amendment of subsections (b) (8.1)- (b) (8. 1) (B) , (b) (9) (E) and Notefiled 3-14-95; operative 3-14-95 pursuant to GovernmentCode section 11343.4 (d) (Register 95, No. 11) . 15. Editorial correction inserting inadvertently omitted language in footnote 4 (Register 96, No. 13) . • Resolution No.2008-09 • 16. Amendment of subsections (b) (8) (A).-(B) and (b) (8.1) (A) , repealer of subsection (b) (8.1) (B), and amendment of subsection (b) (12) filed 10-23-96; operative 10-23-96 pursuant to Government Code section '11343.4 (d) (Register 96, No. 43) . 17. Amendment of subsections (b) (8.1) and (9) (E) filed 4-9-97; operative 4-9-97 pursuant to Government Code section 11343.4 (d) (Register 97, No. 15) . • 18. Amendment of subsections (b) (7) (B)5., new subsections (b) (8.2) -(b) (8.4) (C) and amendment of Notefiled 8-24-98; operative 8-24-98 pursuant to GovernmentCode section 11343.4 (d) (Register 98, No. 35) . 19.. Editorial correction of subsection (a) (Register 98, No. 47) . 20. Amendment of subsections (b) (8.1) , (b) (8. 1) (A) and (b) (9) (E) filed 5-11-99; operative 5-11-99 pursuant to' Government Code section 11343.4(d) (Register 99, Na. 20) _ 21. Amendment of subsections (b) (8.1)-(b) (8.1) (A) and (b) (9) (E) filed 12-6- 2000; operative 1-1-2001 pursuant to the 1974 version of Government Codesection 11380.2 and Title 2, California Code of Regulations, section - 18312(d) and (e) (Register 2000, No. 49) . • 22. Amendment of subsections (b) (3) and (b) (10) filed 1-10-2001; operative 2-1- 2001: Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations_ only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2001., No. 2) . 23. Amendment of subsections (b) (7) (A)4. , (b) (7) (B) 1.-2.-, (b) (8.2) (E)3. , (b) (9) (A) - (C) and footnote 4. filed 2-13-2001. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2001,. No. 7) . 24 . Amendment of subsections (b) (8.1)-(b) (8.1) (A) filed 1-16-2003; operative 1- . 1-2003. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2003, No. 3) . 25_ - Editorial correction ofHistory24 (Register 2003, No. 12) _ 26. Editorial correction removing extraneous phrase in subsection (b) (9. 5) (B) (Register 2004, No. 33) . 27_ Amendment of subsections (b) (2)-(3) , (b) (3) (C) , (b) (6) (C) , (b) (8. 1)- (b) (8. 1) (A) , (b) (9) (E) and (b) (11) -(12) filed 1-4-2005; operative 1-1-2005 pursuant to Government Code section 11343.4 (Register 2005, No. 1) . 28. Amendment of subsection (b) (7) (A) 4. filed 10-11-2005; operative 11-10-2005 (Register 2005, No. 41) . ♦2 CA ADCs 18730+ Resolution No.2008-09 Resolution No. 2008-09 EXHIBIT B • DESIGNATED EMPLOYEES Accountant Accounting Manager Administrative Analyst, Principal Assistant City Attorney Assistant City Clerk Beach Maintenance Operations Manager Business Systems Manager Buyer City Administrator City Attorney City Clerk City Engineer City Treasurer Community Relations Officer Community Services Recreation Supervisor Construction Manager Contract Administrator Deputy City Administrator Deputy City Engineer Deputy City Treasurer Deputy Director of Economic Development Deputy Director of Public Works Deputy Director Recreation,Beaches & Development Detention Administrator Director of Building and Safety Director of Community Services Director of Economic Development Director of Human Resources Director of Information Services Director of Library Services Director of Planning Director of Public Works Economic Development Project Manager Energy Project Manager Facilities, Development& Concessions Manager Finance Director Fire Battalion Chief Fire Chief General Services Manager Geographic Information Systems Manager Human Resources Manager Human Services Program Supervisor Information Systems Communications Manager Information Systems Computer Operations Manager 18736 EXHIBIT B Resolution No. 2008-09 Inspection Manager Inspection Supervisor Law Office Manager Maintenance Operations Manager Marine Safety Division Chief Marine Safety Lieutenant Neighborhood Preservation Program Manager Network Systems Administrator Parking/Traffic Control Supervisor Permit and Plan Check Manager Planning Manager Police Captain Police Chief Police Communications Manager Police Lieutenant Police Records Administrator Principal Accountant Principal Civil Engineer Principal Librarian Principal Planner Project Manager Public Safety Systems Manager Purchasing and Central Services Manager Real Property Agent Recreation, Human & Cultural Services Superintendent Risk Manager Special Events Coordinator Television Producer/Director Transportation Manager Utilities Manager 18736 2 EXHIBIT B Resolution No. 2008-09 BOARDS,COMMISSIONS AND COMMITTEES City Council Convention and Visitors Bureau Design Review Board Planning Commission CONSULTANTS Consultants shall be included in the list of designated officials and employees and shall disclose interests subject to the following limitation: The City Administrator may determine in writing that a particular consultant, although a "designated position," is hired to perform a range of duties that is limited in scope and this is not required to fully comply with the disclosure requirements described in Section 5 above. Such written determination shall include a description of Consultant's duties and, based upon that description, a statement of the extent of disclosure requirements. The City Administrator's determination is a public record and shall be retained for public inspection in the same manner and location as this Conflict of Interest Code. 18736 3 EXHIBIT B Res. No. 2008-09 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on February 19, 2008 by the following vote: AYES: Hansen, Hardy, Bohr, Cook, Coerper, Green, Carchio NOES: None ABSENT: None ABSTAIN: None ddi ) C • Clerk and ex-officio Jerk of the City Council of the City of Huntington Beach, California RESOLUTION NO. 2016-73 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AMENDING THE CITY'S CODE OF ETHICS WHEREAS, on October 4, 1993, the City Council adopted Resolution No. 6524, which established a Code of Ethics to serve as a standard of conduct for all elected officials, officers, employees and members of advisory boards, commissions, and committees of the City of Huntington Beach; and On August 4, 2003,the City Council adopted Resolution No. 2003-51 amending the Code of Ethics; and On January 20, 2004,the City Council adopted Resolution No. 2004-2 amending the Code of Ethics, and On February 16, 2010, the City Council approved a revised version of the Code of Ethics as recommended by the Intergovernmental Relations Committee, NOW THEREFORE,the City Council of the City of Huntington Beach does hereby resolve as follows: 1. That the City of Huntington Beach revised Code of Ethics, a copy of which is attached hereto as Exhibit"A" and incorporated by this reference as though fully set forth herein, is hereby adopted and approved. 2. The City Council, City departments,and all boards, commissions, and committees are to formally review this Code of Ethics with their members annually during the month of January. The Mayor, City Manager and Chairpersons shall be responsible for accomplishing this review. New members of the City Council,boards, commission, and committees and new 16-5499/146272/PD 1 RESOLUTION NO; 2016-73 employees are to be provided a copy of the Code of Ethics for their review when they are elected or appointed. 3. All elected officials, officers,employees and members of advisory boards, commissions, and committees of the City of Huntington Beach shall sign Acknowledgment of Receipt forms(Exhibit A). Said acknowledgments of the elected officials and members of boards, commissions, and committees shall be maintained on file with the City Clerk. Said acknowledgments of officers and employees shall be maintained by the Human Resources Department. PASSED,APPROVED and ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 21st day of November ,2016 CfS/S1494441 Mayor REVIE E D APPROVED: INITIATED AND APPROVED: City ag . City/ Clerk i APPROVED O FORM:�' �:sue;/ Ci Attorney i '- 16-5499/146272/PD 2 I/1WIfq61 ; Exhibit "A" • o�ms000i City of Huntington Beach Code of Ethics Preamble The citizens of the City of Huntington Beach are entitled to responsible, fair and honest city government that operates in an atmosphere of respect and civility. Accordingly, the Huntington Beach City Council adopts this code to: 1. Describe the standards of behavior to which its leaders and staff aspire. 2. Provide an ongoing source of guidance to elected leaders, city officials and staff in their day-to-day service to the city. 3. Promote and maintain a culture of ethics. Pledge On November 21, 2016, the City Council of the City of Huntington Beach adopted a Code of Ethics, which applies to all City elected or appointed officials, city employees, and members of its boards, commissions, committees, and task forces and requires the following pledge: Code of Ethics Responsibility • I understand that the community expects me to serve with dignity and respect, as well as be an agent of the democratic process. • I avoid actions that might cause the public to question my independent judgment. • I do not use my office or the resources of the city for personal or political gain. • I am a prudent steward of public resources and actively consider the impact of my decisions on the financial and social stability of the city and its citizens. Fairness • I promote consistency, equity and non-discrimination in public agency decision-making. • I make decisions based on the merits of an issue, including research and facts. • I encourage diverse public engagement in our decision-making processes and support the public's right to know. Respect • I treat my fellow city officials, staff, commission members and the public with patience, courtesy, civility, and respect, even when we disagree on what is best for the community and its citizens. Honesty • I am honest with all elected officials, staff, commission members, boards, the public and others. • I am prepared to make decisions when necessary for the public's best interest, whether those decisions are popular or not. • I take responsibility for my actions, even when it is uncomfortable to do so. Exhibit "A" 0 1 . . !`'i s _ � 1 f /1 ACKNOWLEDGEMENT PROCESS FOR THE CITY OF HUNTINGTON BEACH CODE OF ETHICS • All current elected and appointed city officials including current members of all city boards, commissions, committees, and task forces, and all current city employees will be given a copy of the newly adopted City Code of Ethics following its adoption on November 21, 2016 and asked to sign an acknowledgement form at that time. THEREAFTER: • All elected officials of the city will be given a copy of the City Code of Ethics and asked to sign an acknowledgement form at the time of their swearing in. • All new employees of the city will be given a copy of the City Code of Ethics and asked to sign an acknowledgement form as part of their new employee orientation. • Each new member of a city board, commission, committee, or task force will be given a copy of the City Code of Ethics and asked to sign an acknowledgement form at their first meeting. • Acknowledgment of Receipt forms for elected officials and members of boards, committees and commissions shall be maintained on file with the City Clerk. Said acknowledgments for officers and employees shall be maintained on file with the Department of Human Resources. ul