BEVERLY HILLS STAFF REPORT. Consideration of Retaining the California Fair Political Practices Commission (FPPC) to Enforce Local Ethics Ordinances
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1 BEVERLY HILLS Meeting Date: February 19, 2019 To: From: STAFF REPORT The Honorable Mayor & Members of the City Council Emily Milder, Assistant City Attorney Laurence S. Wiener, City Attorney Subject: Consideration of Retaining the California Fair Political Practices Commission (FPPC) to Enforce Local Ethics Ordinances Attachments: 1) Contract between the FPPC and the City of Sacramento for enforcement services INTRODUCTION Assembly Bill 2880, effective January 1, 2019, authorizes cities to contract with the Fair Political Practices Commission (FPPC) for the administration, implementation, and enforcement of local campaign finance or government ethics laws. Currently, our ethics laws are enforced through the City Prosecutor. The City Attorney s office is seeking direction from the Council regarding whether the City should explore an agreement between the City and the FPPC to retain their enforcement services and remove enforcement from the discretion of the City. DISCUSSION Currently, the City s campaign finance laws and lobbyists laws are enforced through the City Prosecutor s office. The City Prosecutor s office was chosen to enforce the City s ethics laws because the City Prosecutor s office is generally free from the influence of lobbyists. As of January 1, 2019, pursuant to Section of the Government Code, a city may enter into an enforcement contract with the FPPC to enforce its ethics laws. The contract must: 1) reimburse the FPPC for its costs, and 2) consult with the FPPC before adopting or amending an ordinance that the FPPC has agreed to enforce. Upon entering into such an agreement, the FPPC acts as the city s civil prosecutor responsible for civil enforcement of the law. In this role, the FPPC may provide advice, investigate possible violations, and bring administrative and civil actions without obtaining permission from the local agency. The contract may be terminated by either party at any Page 1 of 3 02/13/2019
2 Meeting Date: February 19, 2019 time, and may not contain a financial disincentive to terminate. State law does not go into greater detail regarding contract terms or the negotiation process. The FPPC s Acting Executive Director, Loressa Hon, was able to provide our office with further information. The first step in the process of negotiating an agreement would be to supply the FPPC with answers to a list of questions, outlined below, at which point the FPPC would provide the City with a cost estimate. To initiate the process, the FPPC has asked for the following information: The text of the ordinance or ordinances that the City would like the FPPC to enforce. The number of elected and appointed City officials and commissioners, and the length of their terms. The frequency of local elections, and the number of candidates who have been on the ballot in the past two most recent elections. The City s population. All of these variables will affect the FPPC s cost estimate. While the relevance of the number of officials and candidates and the frequency of elections is self-evident, the first item the specifics of the ordinances to be enforced bears further elaboration. If the FPPC determines that the City s ordinance(s) require amending to better comply with the Political Reform Act (PRA), then the cost estimate will be higher, as it will include time that the FPPC anticipates spending on working with the City to revise the ordinance(s). Relatedly, the FPPC may offer to provide education and training on the PRA to City officials, which would increase costs. Additionally, enforcing two ordinances would of course cost more than enforcing one ordinance. The City has two ethics ordinances, one pertaining to campaign contributions and expenditures (Title 1, Chapter 8 of the municipal code), and one pertaining to paid legislative advocates (Title 1, Chapter 9). The FPPC is experienced at enforcing campaign contributions and expenditures ordinances, but not as familiar with paid legislative advocate ordinances. Ms. Hon was unable to say whether the FPPC would be willing to enforce such an ordinance before further discussion with her colleagues. However, if the City wanted the FPPC to enforce both ordinances and the FPPC agreed to do so, that would obviously affect the FPPC s cost estimate. Finally, Ms. Hon provided a copy of the FPPC s enforcement agreement with the City of Sacramento, attached herewith. While an agreement between the City and the FPPC would almost certainly differ at least somewhat from the agreement with Sacramento due to the variables described above, it provides a useful point of reference. Key terms of the Sacramento contract are as follows: Term: March 1, December 31, 2019 (22 months) Services: o Auditing. The FPPC will audit candidate contributions and expenditures to determine compliance with Sacramento s campaign contributions and expenditures ordinance. Page 2 of 3 02/13/2019
3 Meeting Date: February 19, 2019 o o Enforcement. The FPPC will serve as civil and administrative prosecutor for any violations found of either the local ordinance or the Political Reform Act. Advice, Education, and Training. FPPC will provide advice regarding the local ordinance to candidates and potential contributors upon request, as well as at least one in-person seminar for candidates per election cycle. Cost: The total not-to-exceed amount of the contract is $300,000. o o o A floor payment of $55,000 is due each year of the agreement. The FPPC will bill Sacramento at different set hourly rates for the services of attorneys, paralegals, investigators, auditors, etc. Hours (and ordinary costs and expenses) will be billed against the floor, and all hours, costs, and expenses exceeding the floor will be itemized and invoiced to the city. Initial authority is given for up to $100,000 of work for each year of the agreement, including the floor payment. Beyond that amount, the city manager s approval for additional work is required. FISCAL IMPACT There is no fiscal impact associated with exploring an agreement between the FPPC and the City. As the FPPC has yet to provide a cost estimate to the City, at this time it is not possible to determine the fiscal impact of entering into an enforcement agreement with the FPPC. Note that the cost of reimbursing the FPPC would be offset by whatever the City saves by no longer enforcing its own ordinances which will vary from year to year. Laurence S. Wiener, City Attorneyt4.- Approved By Page 3 of 3 02/13/2019
4 Attachment 1
5 STATE OF CALIFORNIA STANDARD AGREEMENT STD 213 (Rev 06(03) AGREEMENT NUMBER FPPC18O1 REGISTRATION NUMBER 1. This Agreement is entered into between the State Agency and the Contractor named below: 4. STATE AGENCY S NAME FAIR POLITICAL PRACTICES COMMISSION CONTRACTORS NAME CITY OF SACRAMENTO 2. Thetermofthis 3/1/2018 through 12/31/2019 Agreement is: 3. The maximum amount $ 300, of this Agreement is: THREE HUNDRED THOUSAND DOLLARS AND N0/100 The parties agree to comply with the terms and conditions of the following exhibits which are by this reference made a part of the Agreement. Exhibit A Scope of Work 0 page(s) Exhibit B Budget Detail and Payment Provisions 0 page(s) Exhibit C* General Terms and Conditions Check mark one item below as Exhibit D: Exhibit - D Special Terms and Conditions (Attached hereto as part of this agreement) - El Exhibit D* Special Terms and Conditions Exhibit E Additional Provisions Exhibit F - City of Sacramento contract in full 7 pages 0 0 page(s) 0 page(s) Items shown with an Asterisk (*), are hereby incorporated by reference and made part of this agreement as if attached hereto. These documents can be viewed at www. dos. ca.qov/ols/resources/standardcontractlanguage. aspx IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. CONTRACTOR CONTRACTORS NAME (if other than an individual, state whether a corporation, partnership, etc.) CITY Of SACRAMENTO BY (Authorized Signature) DATE SIGNED(Do not type) California Department of General Services Use Only PRINTED NAME AND TITLE OF PERSON SIGNING MLNDY CUPPY CITY CLERK ADDRESS 915 I STREET, NEW CITY HALL, 4TR FLOOR, SACRAMENTO, CA AGENCY NAME STATE OF CALIFORNIA FA I RfQLITICAL PRACTICES COMMISSION BY ($otiz Stgture) DATE SIGNED(Do not type) PRINTED NA A D TITLEF FRSON SIGNING LORE SA HON CIkI[t OF ADMIN ADDRESS Q STREET, SUITE 3000, SACRAMENTO, CA %t( El Exempt per:
6 Reset Form SACRAMENTO Requires Council Approval: N Y ONic ol 1l Ct Council Meeting Date: 04/18/2018 Real Estate Other Party Signature Needed EJ General Information Attachment #: Contract Type: Service Aqreement Original Doc #: PC Type: $ Not to Exceed: $300, Other Party: FFPC Project Name: Campaiqn Law Enforce Agmt Recording Requested Certified Copies of Document: Deed: Tax ID # (if applicable): Preferences: Council Number: File LBEII SBELj DBED MWBED Council Motion #: (approved) Department Information Department: City Clerk Division: Campaign/Elections Project Manager: N/A Supervisor: NJA Contract Services: Tiffany Fabiani Division Manager: Mindy Cuppy Phone Number: Date: 04/18/2018 Org Number: Comment: Other Party: Fair Political Practices Commission (FPPC) Project Name: Capaign Law Enforcement Agreement Department Project Manager: Accounting: Contract Services: Supervisor: Division Manager: Review and Signature Routing Signature or Initial Date City Attorney Signature or Initial Date City Attorney: El Tiffany Ext Authorization Signature or Initial Date Department Director: -m- For City Clerk Finalized: Initial Date: Processing O LtZ%i& Imaged: lnit1ál Date: q /d Received: )C,ty Clerk Slemp Horn) City Manager: Contract Cover/Routing Form: Must Accompany ALL Contracts; however, it is not part of the contract With: Fair Political Practices Commission (FPPC) Title: Campaign Law Enforcement Agmt ( )
7 STATE OF CALIFORNIA FAIR POLITICAL PRACTICES. COMMISSION AND CITY OF SACRAMENTO CAMPAIGN LAW ENFORCEMENT AGREEMENT This agreement is made and entered into this 23rd day of February 2018, by and between the State of California, acting by and through the Fair Political Practices Commission, (hereinafter referred to as the fppc ) and the City of Sacramento (hereinafter referred to as the City ). WHEREAS, the City has determined that it is in the best interest of the City to retain the services of the FPPC to provide for the administration, implementation, and enforcement of campaign laws under Sacramento City Code, Chapter 2.13 Campaign Contribution Limitations (hereafter, Chapter 2.13 ). WHEREAS, the fppc has the special skills, knowledge, experience, and expertise in the enforcement and interpretation of campaign laws necessary to effectively advise, assist, litigate, and otherwise represent the City on such matters. WFIEREAS, the fppc is agreeable to providing for the enforcement and interpretation of campaign laws under the provisions of Chapter WHEREAS, the FPPC s administration, implementation, and enforcement of campaign laws under the provisions of the Chapter 2.13 is expressly authorized by California Government Code Section NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereto agree as follows: 1. The FPPC agrees to provide the City campaign law enforcement and interpretation services for the impartial, effective administration, implementation, and enforcement of the Chapter 2.13 as dictated in paragraph Campaign Law Enforcement Services. A. Auditing The FPPC agrees to audit each candidate and his or her controlled committee for elective City office for whom it is determined that $2,000 or more in contributions have been received or $2,000 in expenditures have been made, whether by the candidate or a committee or pommittees controlled by the candidate or primarily supporting his or her candidacy. Audit periods will be determined by the FPPC to ensure comprehensive audit findings, and may include beginning audit periods beyond the date of the contract With: Fair Political Practices Commission (fppc) Title: Campaign Law enforcement Agmt
8 B. Enforcement The FP?C agrees to serve as the civil and administrative prosecutor for violations of Chapter The F?PC, at its sole discretion, may investigate possible violations and may commence civil and administrative actions in accordance with Title 9 of the Government Code and with Title 2, Division 3, Part 1, Chapter 5 (commencing with Section 11500) of the Government Code. C. Advice, Education and Training The fppc may, in its sole discretion, provide written and/or verbal assistance to candidates for elected City offices and potential contributors in a City election regarding the provisions of Chapter 2.13 upon the request of the candidates, potential contributors, or their representatives At least once an election cycle, the fppc will provide an in-person seminar to review relevant process, procedures and rules for City candidates. D. Legal Review The FPPC may, in its sole discretion upon request from the City Attorney, conduct a legal review of Chapter 2.13, to determine its compliance with the Political Reform Act or to make recommendations for amendments. Additionally, pursuant to Government Code section (c), the City Council will consult with the FPPC before amending Chapter The term of this Agreement is March 1, 2018, through December Services shall commence on the beginning of this term. No services shall begin before that time. 4. The City agrees to provide the FPPC with a resolution, motion, order, or ordinance of the governing body, which authorizes execution of this Agreement, and indicating the individual who is authorized to sign the Agreement on behalf of the City. 5. The Contract Coordinators for this Agreement shall be: Fair Political Practices Commission Sacramento City Erin V. Peth, Executive Director Matthew Ruyak, Assistant City Attorney 1102 Q Street, Suite I Street, New City Hall, 4th Floor Sacramento, CA Sacramento, CA
9 - 6. In consideration for the above services, the City agrees to pay the FPPC $55,000, due and payable on the execution of the agreement and at the beginning of each year of the contract term as the floor payment for services provided. The FPPC shall track the hours of its employees at the rates provided in sections 7 and 8 below, and shall bill those hours against the $55,000 floor The FPPC shall bill the City at the stated rates for the cost of any work exceeding the $55,000 floor. 7. Pursuant to section 6, for services provided that exceed the floor amount, the City agrees to reimburse the fppc upon receipt of an itemized invoice. The hourly rates used will be those established by the California Attorney General s Office, pursuant to Government Code Section 11044, and set forth in the State Budget Letter (Price Letter) and detailed below. The City agrees to pay an increased hourly rate if these set rates, or the State reimbursement rates, are increased. It is understood by botb parties that no advance written notification is necessary prior to implementing the increased rates. Classification Rate per hour Attorney $170 Paralegal $120 Investigator $120 Program Specialist (Auditor) $99 Political Reform Consultant (Research Analyst) $99 8. Other Costs and Expenses peses: The FPPC shall bill its actual costs for ordinary costs and expenses directly related to the services provided. Ordinary costs and expenses shall be limited to: 1. Court fees, including filing, judicial officer, deposition, transcript and process serving fees. 2. Travel, lodging, and meals pursuant to State reimbursement rates as necessary for fppc employees. 3. Telephone charges, postage, photocopying/document reproduction costs, and damage to property repaired or replaced at State expense. Extraordinary costs and expenses: The FPPC shall bill its actual costs for extraordinary costs and expenses only upon prior approval by the City Attorney. Extraordinary costs and expenses include, but are not limited to: 1. Fees for third-party consultants, investigators, and experts including their travel, lodging, and meals. 3
10 2. Travel, lodging, and meals for witnesses. Non-Teimbursable costs and expenses: The fppc shall not bill for nonreimbursable costs and expenses which include: 1. Rent, utilities, or computer equipment (including legal research services Westlaw or Lexis). 2. Charges for time spent to provide necessary information for monthly billing statements, State audits, or billing inquiries. 3. Charges for work performed for extraordinary costs and expenses not authorized by the City Attorney. 9. The fppc shall provide quarterly billing statements for work performed under this contract. Initial authority is extended for $100,000 of work (including the $55,000 floor and up to $45,000 of billed work) performed during the first year of the contract (date of full execution through December 31, 2018). For each year of the contract, after $100,000 is worked/billed, additional approval shall be required by the City Manager of the City of Sacramento. 10. Except for extraordinary costs and expenses, no advance notification is necessary for services provided within the initial authority for $100,000 for each year of the contract. 11. The total amount of this Agreement shall not exceed $300,000. Services shall not be provided exceeding the original estimated hours or the total amount of this Agreement unless advance notification is provided and the additional costs are mutually agreed upon in writing. 12. In the event this contract is cancelled or not renewed, the FPPC will provide an estimate of remaining hours necessary to complete audits already in progress to be billed at the hourly rate, and the audits may be completed upon mutual agreement. 13. The FPPC shall provide the City with an itemized invoice detailing all FP?C costs for the administration, implementation and enforcement of Chapter 2.13 under this Agreement. 14. Quarterly itemized invoices will be submitted to: City of Sacramento, at the following s: apinvoices cityofsacramento.org MCuppycityofsacramento.org The City agrees to pay the FPPC within thirty (30) days of the invoice date. 4
11 15. AUDIT The City agrees that the State of California, including the Department of General Services, the Bureau of State Audits, or their designated representative, shall have the right to review and to copy all records and supporting documentation pertaining to the performance of this Agreement. The City agrees to maintain records and supporting documentation for possible audit for a minimum of three (3) years after the final payment, unless a longer period of retention is stipulated. The City agrees to allow auditors access to records and supporting documentation during normal business hours and to allow interviews of any employees who might reasonably have information related to the records. The City agrees that the State of California has the same right to audit records and to interview staff in any subcontract related to the performance of this Agreement. (Government Code Section ) 16. DISPUTES Any dispute concerning a question of fact arising under the terms of this Agreement not disposed of within a reasonable period of time (ten days) by the parties normally responsible for the administration of this Agreement shall be brought to the attention of the Contract CooTdinators for joint resolution. 17. indemnification j: Pursuant to Government Code Section and except as provided below, the City agrees to indemnify, defend (with counsel approved by the fppc General Counsel), and hold harmless the FPPC and its authorized officers, employees, agents, and volunteers from any and afl claim, actions, losses, damages, and liability arising out of the performance of this Agreement, or from the enforcement or interpretation of any provision of Chapter 2.13, from any cause whatsoever, including the acts, errors or omissions of any person and for any costs or expenses incurred by the FPPC on account of any claim except where such indemnification is prohibited by law, FP?C: The FPPC shall indemnify, hold harmless, and defend the City and its authorized officers, employees, agency, and volunteers from any and all claims, actions losses, damages and liability arising from the FPPC s negligence or willful misconduct relating to obligations under this Agreement. 5
12 18. AMENDMENT This Agreement may be amended by written mutual consent of the parties. 19. CANCELLATION This Agreement may be canceled by either party at any time. Under cancellation by either party to this Agreement, the City agrees to pay for all services provided to that date, unless the services required the City s prior approval and such approval was not granted prior to the cancellation date. Fair Political Practices Commission City of Sacramento Erin V. Peth, Executive Director Mindy Cuppy, City Clerk APPR0EO A To L /1 FORM 4 CtyMt n.y Sqiwrl Attested on: (date) Wendy tnon, Assistant ZW1JL7 City Cletk 6
13 STATE OF CALIFORNIA AGREEMENT SUMMARY IRev. 08/2017) CHECK HERE IF ADDITIONAL PAGES ARE ATTACHED AGREEMENT NUMBER FPPC18O1 AMENDMENT NUMBER 1. CONTRACTORS NAME 2. FEDERAL ID. NUMBER CITY OF SACRAMENTO 3. AGENCY TRANSMITTING AGREEMENT J4. DIVISION, BUREAU, OR OTHER UNIT S AGENCY BILLING CODE FAIR POLITICAL PRACTICES COMMISSION ADMIN HAS YOUR AGENCY CONTRACTED FOR THESE SERVICES BEFORE? Yes (If Yes, enter prior Contractor Name and Agreement Number) EZI No PRIOR CONTRACTOR NAME PRIOR AGREEMENT NUMBER 6c, PHONE NUMBER (916) BRIEF DESCRIPTION OF SERVICES Enforcement of the City of Sacramento Campaign Law Enforcement Agreement. 9. AGREEMENT OUTLINE (Include reason IotAgreement: Identify specific problem, administrative requirement, program need or other circumstances making the Agreement necessary; include specia! or unusual terms and conditions.) City of Sacramento has requested FPPC provide campaign law enforcement services. Authority is provided by Gov Code Section PAYMENT TERMS (More than one may apply) E Monthly FIat Rate Quarterly One-Time Payment Progress Payment Itemized Invoice Withhold % Advanced Payment Not To Exceed Reimbursement! Revenue Other (Explain) 11. PROJECTED EXPENDITURES or FUND TITLE ITEM CHAPTER STATUTE GENERAL $300, OBJECT CODE AGREEMENT TOTAL $300, OPTIONAL USE AMOUNT ENCUMBERED BY THIS DOCUMENT. $0.00 PRIOR AMOUNT ENCUMBERED FOR THIS AGREEMENT $0.00 I certify upon my own persona! knowledge that the budgeted funds for the current TOTAL AMOUNT ENCUMBERED TO DATE budget year are available for the period and purpose of the expenditure stated above, $0.00 NAME (Print or Type) 1DATE SIGNED
14 TOTAL STATE OF CALIFORNIA AGREEMENT SUMMARY (Rev, 08/2017) 12. AGREEMENT AGREEMENT TERM TERM COST OF FROM THROUGH THIS TRANSACTION AGREEMENT NUMBER FPPCJ8OJ AMENDMENT NUMBER BID, SOLE SOURCE, EXEMPT Original 3/1/ /31/2019 $300, exempt Amendment 1 Amend ment 2 TOTAL $300, , BIDDING METHOD USED Request for Proposal (RFP) (Attach justification if secondary method is used) j Invitation for Bid (IFB) Other (Explain) n/a E Exempt from Bidding (Give authority for exempt status) j Use of Master Service Agreement Sole Source Contract (Attach STD. 821) Note: Proof of advertisement in the State Contracts Register or an approved form STD. 621, Contract Advertising Exemption Request, must be attached 14. SUMMARY OF BIDS (List of bidders, bid amount and small business status) (if an amendment, sole source, or exempt, leave blank) n/a 15. IF AWARD OF AGREEMENT IS TO OTHER THAN THE LOWER BIDDER, EXPLAIN REASON(S) (if an amendment, sole source, or exempt, leave blank) n/a 16. WHAT IS THE BASIS FOR DETERMINING THAT THE PRICE OR RATE IS REASONABLE? n/a 17a. JUSTIFICATION FOR CONTRACTING OUT (Check one) Contracting out is based on cost savings per Government Code 19130(a). The State Personnel Board has been so notified. Not Applicable (Interagency I Public Works I Other Contracting out is justified based on Government Code 19130(b) When this box is checked, a completed JUSTIFICATION - CALIFORNIA CODE OF REGULATIONS, TITLE 2, SECTION must be attached to this document. 17b, EMPLOYEE BARGAINING UNIT NOTIFICA11ON [1 By checkii1this box, 1 hereby ceriify compliance with Government Code section 19132(b)(1). 18. FOR AGREEMENTS IN EXCESS OF $5,000: Has the letting of the agreement 22. REQUIRED RE OLUTIONS ARE been reported to the Department of Fair Employment and Housing? Yes / N/A ATTACHED 19. HAVE CONFLICT OF INTEREST ISSUES BEEN IDENTIFIED AND RESOLVED No Ye 11 No N/A fl Yes N/A AS REQUIRED BY THE STATE CONTRACT MANUAL SECflON 710? 23. IS THIS A SMALL BUSINESS ANDIOR 20. FOR CONSULTING AGREEMENTS: Did you review any A DISABLED VETERAN BUSINESS contractor evaluations on file with the DGS Legal Office? None on file No Yes N/A CERTIFIED BY DGS? 21. IS A SIGNED COPY OF THE FOLLOWING ON FILE AT YOUR AGENCY FOR THIS CONTRACTOR? No Yes A Contractor Certification Clauses B. STD 204 Vendor Data Record SB1DVBE Certification Number: No Yes N/A No Yes N/A 24. ARE DISABLED VETERANS BUSINESS ENTERPRISE GOALS. REQUIRED? (If an amendment, No (Explain below) Yes /e of Agreement explain changes if any) 25. IS THIS AGREEMENT (WITH AMENDMENTS) FOR A PERIOD OF TIME LONGER THAN THREE YEARS? No Yes (If Yes, provide justification below) I certify that all copies of the referenced Agreement will conform to the original agreement sent to the Department of General Services. SI(N}S.)7._ TURE NAME/TITLE (Print or Type) DATE SIGNED LORESSAHON,CHIEFOFADMIN 7/ I,g
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