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Resolution No. 2012-106RESOLUTION NO. 2012-106 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON REPEALING RESOLUTION NO. 2011-171 REGARDING THE CONFLICT OF INTEREST CODE FOR THE AD HOC ADVISORY COMMITTEE ON ELECTRIC RATES WHEREAS, on October 18, 2011, the City Council of the City of Vernon adopted Resolution No. 2011-171 approving a conflict of interest code for the Ad Hoc Advisory Committee on Electric Rates (the "Committee"); and WHEREAS, on June 7, 2012, by Resolution No. ERC-3, the Committee repealed Resolution No. ERC-2 which adopted a conflict of interest code similar to one required by the Political Reform Act of 1974, as amended (Government Code Sections 81000, et seq.), for state and local government agencies; and WHEREAS, the Committee does not make decisions that affect economic interests, and thus, should not be required to file a Conflicts of. Interests code and economic interest statements; and WHEREAS, the City Council of the City of Vernon desires to repeal Resolution No. 2011-171. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby repeals Resolution No. 2011-171. SECTION 3: The City Clerk of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk of the City of Vernon shall cause this resolution and the City Clerk's certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 19th day of June, 2012. �C W lliam J. Davis Name: Title: H4a/ Mayor Pro-Tem STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2012-106, was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, June 15, 2012, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this 21 day of June, 2012, at Vernon, California. (SEAL) - 3 - CITY CLERK'S OFFICE INTEROFFICE MEMORANDUM DATE: June 21, 2012 TO: Kristen Enomoto, Assistant to the City Administrator Carlos Fandino, Director of Light & Power Mark Whitworth, City Administrator/Fire Chief FROM: Willard Yamaguchi, City Clerk RE: Resolution No. 2012-106 — A Resolution of the City Council of the City of Vernon Repealing Resolution No. 2011-171 Regarding the Conflict of Interest Code for the Ad Hoc Advisory Committee on Electric Rates Transmitted herewith is a copy of Resolution No. 2012-106 referenced above, which was approved by the City Council of the City of Vernon on June 19, 2012. Thank you. WY:dj Attachment c: Resolution Nos. 2011-171, 2012-106 RECEIVED RECEIVED MAY 2 4 2012 CITY CLERK'S OFFICE STAFF REPORT LIGHT & POWER DATE: May 22, 2012 TO: Honorable Mayor and City Council FROM: Carlos Fandino Jr., Director of Light & Powers $I22I 1Z RE: Repeal of Conflict of Interest Code MAY 2 3 2012 CITY ADMINISTRATION PURPOSE Attached is a memorandum from John Van de Kamp and Bob Stern endorsing the City's plan to repeal the conflict of interest code for the Electric Rate Committee. RECOMMENDATION: Recommend a resolution to repeal the conflict of interest code for the Electric Rate Committee. CRF:ah Committee May 21, 2012 To: Jerry Simmons From: John Van de Kamp and Robert M. Stern Re: Vernon Committees You have asked us to review the Conflicts of Interest Codes for two committees in the City of Vernon to see if they should be modified: the Ad Hoc Committee for Economic Development and the Ad Hoc Committee on Electric Rates. The Ad Hoc Committee for Economic Development adopted its conflict of interest code on January 25, 2012, and the Ad Hoc Committee on Electric Rates adopted its conflicts of interest code on October 5, 2011. Executive Summary The two committees, the Ad Hoc Committee for Economic Development and the Ad Hoc Committee on Electric Rates, do not make decisions that affect economic interests and thus should not be required to file Conflicts of Interest Codes and economic interest statements. If it is later determined that the committees are making decisions that are regularly accepted by the City Council, then the committees should be subject to the conflicts provisions of the Political Reform Act of 1974. If members of the committees want to submit economic interest statements on a voluntary basis, they should be permitted to do so. Memorandum The codes adopted for the two Ad Hoc Committees were quite extensive. For the Ad Hoc Committee for Economic Development, members must disclose all interests in real property located in Vernon or within a two mile radius of the city; all investments in entities doing business in the city; all investments or business positions in interests doing business with or soliciting business from the city; and income, loans, travel payments and gifts from anyone who has real property or does business in or with the city. For the Ad Hoc Committee on Electric Rates, the disclosures are not as broad. Members must disclose interests in real property within the service area of the City of Vernon Light and Power Department; business positions with entities within the service area of the Department, investments of 10% or greater in entities within the service area of the Department; investments and business positions with electric utilities, power exchanges, power plants, fuel supply/transportation entities, suppliers, vendors, sellers, re -sellers, buyers, traders, brokers, marketers, consultants, and other businesses that purchase, sell, and/or transfer electrical energy or fuel for the generation of electrical energy and do business with the City of Vernon Light & Power Department,and income, loans, travel payments and gifts from anyone who is in the service area of the Department. The initial question that must be addressed: do these committees make decisions or participate in making decisions for the city? If they do, then the conflicts codes are required. If not, the codes are not mandated by state law. The conflicts of interest portions of the Political Reform Act of 1974 were designed to identify persons who were making or participating in making decisions affecting economic interests. The 1974 Act was carefully crafted to take into account a 1970 California Supreme Court decision which ruled that the state could not require persons to disclose assets that could not be affected by their governmental decisions. [See City of Carmel by the Sea v. Young, (1970) 2 Cal.3d 259.] Thus, it must be determined if these commissions make governmental decisions. The California Fair Political Practices Commission has issued regulations that provided guidance on this question. The regulations say that members of commissions (even those that are non -salaried or advisory) possess decisionmaking authority: 1. if they make a final governmental decision; 2. if they may compel a governmental decision (or prevent a decision through veto power or the exclusive power to initiate a decision); or 3. if they make substantive recommendations that are and over an extended period of time have been regularly approved without significant amendment or modification by the another public official or governmental agency (namely, the Vernon City Council). See FPPC Reg. 18701. It appears that the the two Vernon committees do not meet the first two parts of the regulation and that it may be too early to determine if they meet the third part (over a period of time their recommendations have been approved without significant amendment or modification). The Fair Political Practices Commission has issued opinions addressing situations similar to this. For example, in the Wilson opinion issued in 1994, it said: Where a board or commission charged with making substantive recommendations has been newly formed and has no history of its recommendations being regularly approved over an extended period of time, this agency has advised that such a board or commission is not yet a decisionmaking entity under the Act. [Wilson Advice Letter 1-94-307 and confirmed by several other similar advice letters.] Because the two Vernon committees are brand new and have no track record where the city council has regularly approved their recommendations, it appears that the city should not continue to require conflicts of interest statements and disclosures by the members of the committees until it is clear that the committees come within this requirement. We would suggest that the city keep careful track of the committees' recommendations forwarded to the city council and how the council responds to the recommendations. If after a period of time (no more than two years), the council is accepting all or most of the recommendations without significant changes, then the committees should be required to adopt the appropriate conflicts codes. If the members of the committees want to voluntarily submit disclosure statements in the future, they may do so, but it should be made clear that this is not a requirement since most are not considered public officials within the terms of the Political Reform Act. (Any member of the committees who are already public officials, such as city oouncilmembers and other city officials, must continue to file their statements.) Members of the committee who wish to withdraw their disclosure statements from the public record should ask the city clerk to return their statements to them.