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HomeMy WebLinkAbout22 - City Distribution of Tickets or PassesCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 22 (June 23, 2009) TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: David R. Hunt, City Attorney ext. 3131, dhunt @city.newport- beach.ca.us SUBJECT: Consideration of Adoption of Policy and Procedures for City Distribution of Tickets or Passes Through the City ISSUE: Should the City Council adopt new Administrative Services Policy F -27, "Policy and Procedures for Distribution of Tickets or Passes." RECOMMENDATION: Adopt new Administrative Services Policy F -27, "Policy and Procedures for Distribution of Tickets or Passes." BACKGROUND: The City of Newport Beach has never adopted a formal policy regarding the distribution of tickets or passes to events by City officials. In light of recent regulations adopted by the Fair Political Practices Commission ( "FPPC) pertaining to tickets and passes, adoption of a policy dealing with the issue is advisable. "Gifts" as defined under the Political Reform Act, and as clarified by the regulations of the FPPC, are considered reportable as income and go toward determining whether a public official has a financial interest in a decision. When it comes to "gifts ", the regulations distinguish between those given by an individual by a public official and those given to the City for its distribution to public officials. New FPPC regulation section 18944.2 addresses this issue and more particularly addresses the issue "tickets or passes" that are distributed by and through the City. Gifts to Individuals vs. Gifts to the Citv. Regulation 18944.2 addresses individual gifts as any payment made to an individual where the individual recipient decides to use of the gift; and the use made of the gift can Consideration of Adoption of Policy and Procedures for City Distribution of Tickets or Passes Through the City June 23, 2009 Page 2 be for pure personal pleasure as opposed to being for City business. These types of individual gifts to public officials are reportable on Form 700 as income to the official. De minimis gifts (under $50 from a single source) are not reportable. Gifts to individuals are also subject to a $420 per year limit from any one source (for 2009 - 2010.) Gifts to the City, on the other hand, are not reportable and have no annual limit. Tickets or Passes to Events — Regulation 18944.1 In December 2008 (effective February 2009), the FPPC amended Section 18944.1 (FPPC Regulation 18944.1 is included as Attachment "V) restricting the use of tickets or passes to certain events by City officials. The most important change in this regulation is that tickets or passes must be declared as "gifts" to the City official unless the City can demonstrate that the City official's use of the ticket or pass serves a governmental purpose that the City official reimbursed the City for the value of the ticket/pass that that the City official declared -the value of the ticket or pass as income on his /her income tax return. The new regulation regarding tickets or passes applies to both tickets donated to the City by an outside source and tickets purchased by the City for distribution to City officials, as well as to tickets that the City obtains pursuant to a contract with the event organizer or because the City owns or controls the event facility. The new regulation requires the City to adopt a written policy defining the public purposes for distribution of tickets or passes and setting out procedures for the City's distribution. Tickets or passes are not considered gifts or income to City officials who receive them pursuant to the written policy adopted by the City. Proposed Policy We have drafted a proposed policy (Draft Policy F -27 is included as Attachment "2 ") to fulfill the requirements of Regulation 18944.1 for the Council's consideration. We have not addressed general gift issues since they are governed by the Government Code, FPPC regulations, and the current City Employee Policy Manual (Policy 3.4 of that Manual is included as Attachment "3"). We can address the issue of gifts more comprehensively if the Council desires, but felt we should limit our efforts at this time to the issue of tickets or passes under the new regulation. The proposed policy as the following features: 1. Defines "public purposes" consistent with the Political Reform Act and the regulations implementing the Act. Consideration of Adoption of Policy and Procedures for City Distribution of Tickets or Passes Through the City June 23, 2009 Page 3 2. Identifies the circumstances under which such tickets or passes may be distributed to City officials and not trigger a disclosure requirement on the City official's Form 700 and the method for distribution. 3. Sets out the responsibilities of the City Manager and City Clerk regarding distribution of tickets or passes, filing required Form 802, maintenance of records and posting required information to the City website. Other types of gifts not addressed in proposed Policy F -27 are subject to the general requirements of the Political Reform Act and FPPC Regulations. At such time as the FPPC requires the City to adopt a separate policy concerning other types of gifts, this policy may be amended. ALTERNATIVES The Council may choose to proceed with a policy or not to proceed with a policy. The Council may also give direction to revise the proposal as the Council sees fit. FINANCIAL IMPACT None. ENVIRONMENTAL REVIEW This is not a project under CEQA that requires environmental review and the proposed action has no potential for environmental impact. CONCLUSION It is recommended that the City Council approve Administrative Services Policy F -27, "Policy and Procedures for Distribution of Gifts and Tickets or Passes." Prepared by: David R. Hunt City Attorney Consideration of Adoption of Policy and Procedures for City Distribution of Tickets or Passes Through the City June 23, 2009 Page 4 Attachments: 1. FPPC Regulation 18944.1, "Gifts: Tickets or Passes to Events" 2. Draft Policy F -27 3. 3.4 of the City Employee Policy Manual governing gifts to Employees ATTACHMENT 1 (Regulations of the Fair Political Practices Commission Title 2, Division 6, California Code of Regulations) § 18944.1. Gifts: Tickets or Passes to Events. For purposes of this regulation "ticket or pass" means admission to a facility, event, show, or performance for an entertainment, amusement, recreational, or similar purpose. (a) Ticket or pass provided by source other than official's agency. A ticket or pass provided to an official for his or her admission to an event at which the official performs a ceremonial role or function on behalf of the agency is not a gift to the official. (b) Ticket or pass provided to official by official's agency. (1) When an agency provides a ticket or pass to an official of that agency, the ticket or pass is not subject to the provisions of this regulation, provided that the official treats the ticket or pass as income consistent with applicable state and federal income tax laws and the agency reports the distribution of the ticket or pass as income to the official in complying with the provisions of subdivision (d) below. (2) When an agency provides a ticket or pass to a public official that otherwise meets the definition of gift under Section 82028 and is not exempt under applicable Commission regulations, the official will meet the burden under Section 82028 that equal or greater value has been provided in exchange therefor, provided that all of the following requirements are met: (A) With respect to a ticket or pass from an outside source provided to an official by the officials agency: (i) The ticket or pass is not earmarked by the original source for use by the agency official who uses the ticket or pass; (ii) The agency determines, in its sole discretion, which official may use the ticket or pass. (iii) The distribution of the ticket or pass by the agency is made in accordance with a policy adopted by the agency in accordance with subdivision (c) below. (B) With respect to a ticket or pass provided by the official's agency to an agency official, which ticket or pass the agency obtains (i) pursuant to the terms of a contract for use of public property, (ii) because the agency controls the event (such as a state or county fair), or (iii) that is purchased by the agency at fair market value, the distribution of the ticket or pass is made in accordance with subdivision (c) below. (c) Any distribution of tickets or passes under subdivision (b)(2) by an agency to, or at the behest o1; its officials must be made pursuant to a written policy duly adopted by legislative or governing body of the agency that state the public purposes to be accomplished by the agency policy. If the agency maintains a website, the written policy shall be posted on the website in a prominent fashion. The written policy shall contain, at a minimum, the following: (1) a provision setting forth the public purposes of the agency to be accomplished by the distribution of tickets or passes; (2) a provision requiring that the distribution of any ticket or pass by the agency to, or at the behest of, an official accomplish a public purpose of the agency; and (3) a provision prohibiting the transfer by any official of any ticket or pass, distributed to such official pursuant to the agency policy, to any other person, except to members of the official's immediate family solely for their personal use. (d) The distribution of a ticket or pass pursuant to this regulation, including a ticket or Pass that is provided to the official under subdivision (b)(1) above, shall be posted, on a form provided by the Commission, in a prominent fashion on the agency's website, within 30 days after the distribution. If the agency does not maintain a website, the form shall be maintained as a public record, be subject to inspection and copying under Section 81008(a), and be forwarded to the Commission for posting on its website. The posting shall include the following: (1) the name of the person receiving the ticket or pass, except that if the ticket or pass is distributed to an organization outside the agency, the agency may post the name, address, description of the organization, and the number of tickets or passes provided to the organization in lieu of posting the names of each individual from the organization; (2) a description of the event; (3) the date of the event; (4) the face value of the ticket or pass; (5) the number of tickets or passes provided to each person; (6) if the ticket or pass is behested, the name of the official who behested the ticket or pass; and (7) a description of the public purpose under which the distribution was made or, alternatively, that the ticket or pass was distributed as income to the official. (e) The Commission recognizes the discretion of the legislative or governing body of an agency to determine whether the distribution of a ticket or pass serves a legitimate public purpose of the agency, provided the determination is consistent with state law. (f) The provisions of subdivision (b) apply only to the benefits the official receives by the admission and are not applicable to any other benefits the official may receive that are not included with the admission, such as food or beverages, or any other item presented to the official at the event. Note: Authority cited: Section 83112, Government Code. Reference: Section 82028, Government Code. HISTORY 1. Renumbering of former section 18726.7 to section 18944.1 with amendment of section heading filed 6- 22 -94; operative 6 -22 -94 (Register 94, No. 25). 2. Change without regulatory effect relocating section filed 11 -17 -94 pursuant to section 100, title 1, California Code of Regulations (Register 94, No. 46). 3. Amendment of first paragraph and subsections (a) -(b) and (d) -(e) filed 7- 25 -95; operative 7 -25 -95 pursuant to Government Code sectionl 1343.4(d) (Register 95, No. 30). 4. Repealer and new section filed 1 -8 -2009; operative 2 -7 -2009. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. ice of Administrative Law, 3 Civil 010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2009, No. 2). ATTACHMENT 2 DRAFT POLICY AND PROCEDURES FOR CITY DISTRIBUTION OF TICKETS OR PASSES BACKGROUND F -27 The Newport Beach City Council, Boards, Commissions and officials are subject to certain laws and regulations pertaining to gifts. The Fair Political Practices Commission ( "FPPC ") enforces the provisions of the Political Reform Act contained in Government Code Section 81000 et seq., as well as the regulations contained in Title 2, California Code of Regulations, Sections 18110 et seq. PURPOSE The City strives to provide impartial and high quality services to its residents, businesses and visitors. The receipt by City officials of gifts or other items of value can be perceived as attempts to influence City operations and the City wishes to avoid any appearance of impropriety or favoritism. Additionally, however, City official attendance at public events is necessary to achieve the goals of governance, both to promote the policies of the City and to maintain close contact with the citizens and interest groups within the City. This policy outlines a fair and impartial procedure for the disposition of tickets or passes by the City in furtherance of a governmental purpose. It implements the directives of FPPC regulations and establishes procedures as required by Section 18944.1, for the acceptance and /or distribution of tickets or passes by the City. This policy also ensures that tickets or passes distributed by the City are disclosed upon the required FPPC forms. I. DEFINITIONS A. Unless otherwise provided herein, words and terms used in this Policy shall have the same meaning as that contained in the Political Reform Act of 1974 and the FPPC Regulations, as the same may be from time -to -time amended. B. "Beneficial use for official City business" means a use that will further a legitimate. City purpose and assist the City in carving out its mission, programs or goals. Beneficial uses include those governmental purposes set forth in Section II, Policy Pertaining to Tickets and Passes, below. Where not specifically listed, beneficial uses are to be determined on a case -by -case basis. C. "City Manager' means the City Manager or his/her designee. D. "City Official" means any City elected official, appointed official, or person designated in the City's Conflict of Interest Code. E. "Gift" means anything of value, including meals, for which the recipient has not provided equal or greater value in return. A gift includes a rebate or discount in the price of anything unless the rebate or discount is made in the regular course of business to members of the public. A gift does not include de minimis gifts of food or incidental items, such as snacks, pens, etc., so long as the cumulative value of such gift does not exceed $50 in a calendar year from any one source. A gift does not include a ticket or pass subject to Section II, Policy Pertaining to Tickets or Passes, as set forth below. F. "In the course of official City duties" means pursuant to a person's City job responsibilities, or because of a person's City position. G. "Ticket or pass" is defined as the means for admission to a facility, event, show or performance for an entertainment, amusement, recreational or similar purpose, if the ticket or pass is either gratuitously provided to the City by an outside source; purchased by the City; acquired by the City as consideration for use of a City venue; or acquired and distributed by the City in any other manner. II. POLICY PERTAINING TO TICKETS OR PASSES A. Public Purpose. 1. Attendance at functions within the City and functions otherwise relevant to the performance of City business that assist the City in carrying out its mission, programs or goals are reasonably necessary for accomplishing the legitimate purposes of City government. The City actively supports various philanthropic, cultural, civic, and business development organizations and programs within the City and throughout Orange County. City Official attendance at such functions support legitimate public purposes pursued by the City. Therefore, attendance at all such functions are considered to accomplish the public purposes of city governance consistent with state law and specifically with section 18944.1 of Title 2 of the California Code of Regulations. Page 2 of 6 2. Examples of legitimate public purposes accomplished by the distribution of tickets or passes pursuant to this policy include, but are not limited to, the following: • Promotion of local and regional businesses and economic development within the City, including conventions, conferences and annual meetings • Promotion of City - controlled or'sponsored events, activities or programs; • Promotion of community programs and resources available to City residents, including nonprofit organizations and youth programs; • Marketing promotions highlighting the achievements of local residents and businesses; • Promotion of marketing of private facilities available for City resident use, including charitable and nonprofit facilities; • Promotion of public facilities available for City resident use; • Promotion of City growth and development, including economic development and job creation opportunities; • Promotion of City landmarks and /or community events; • Promotion of special events in accordance with any City contract; • Exchange programs with foreign officials and dignitaries; • Promotion of City recognition, visibility and/or profile on a local, state, national or worldwide scale; • Promotion of open government by City official appearances, participation and /or availability at business or community events; • Sponsorship agreements involving private events where the City specifically seeks to enhance the City's reputation both locally and regionally by serving as hosts providing the necessary opportunities to meet and greet visitors, dignitaries, and residents; • All written contracts where the City, as a form of consideration, has required that a certain number of tickets or passes be made available for its use • Employment retention programs; Special outreach or support programs for active military, veterans, teachers, emergency services, medical personnel and other civil service occupations; • Charitable 501(c)(3) _ fundraisers for the purpose of networking with other community and civic leaders or; and • Any purpose similar to above included in any City contract. 3. If a particular event for which tickets or passes are distributed by the City does not fall under one of the above express categories, it shall be considered to fulfill the public purposes of this policy if it achieves the general policy set out in Section 1. above as determined on a case -by -case basis. Page 3 of 6 B. Distribution of Tickets or Passes by the City. 1. Where a ticket or pass is received by the City from an outside source for distribution to City Officials, the distribution of the ticket or pass shall be made consistent with this policy. 2. Tickets or passes shall be distributed under this policy at the sole discretion of the City pursuant to this policy. Tickets or passes may not under any circumstances be earmarked for distribution by any outside source. 3. A ticket or pass may only be distributed by the City under this policy if it serves a public purpose as defined above. If the ticket or pass does not serve a public purpose it shall be returned to its source or shall be given to a non - profit organization that is active within the City. The City Manager shall make the necessary determinations under this policy. 4. The City shall use the following procedure for distributing tickets or passes consistent with this policy: a. Once received, the tickets or passes shall be offered to the Mayor and Members of the City Council for a brief window of opportunity as determined in relation to the timing of the event. b. After that brief window of opportunity has lapsed, any remaining tickets or passes shall be offered to the relevant board or commission membership that are involved in the program or event being promoted during a second brief window of opportunity. c. Once that second brief window of opportunity has lapsed, any remaining tickets or passes shall be offered to department heads during a third brief window of opportunity. d. Once that third brief window of opportunity has lapsed, any remaining tickets or passes shall be offered to all city employees on a first -come first - serve basis. e. Any tickets or passes that remain shall be returned to the source of the tickets or passes. C. Responsibilities of City Manager and City Clerk. 1. The City Manager shall manage the receipt, distribution and accounting for all tickets or passes subject to this Policy. Page 4 of 6 2. Upon distribution of a ticket or pass pursuant to this Policy, the City Manager shall either complete FPPC Form 802, Tickets Provided by Agency Report, or provide sufficient information to the City Clerk so that the Clerk may complete the form. 3. No later than thirty (30) calendar days from the distribution of the ticket or pass or approval of this policy, which -ever date last occurs, the City Clerk, shall post the FPPC Form 802 on the City website. 4. The City Clerk shall maintain a completed Form 802 for not less than four (4) years, or other period as specified in any applicable FPPC Regulation. 5. The City Clerk shall cause this Policy to be posted on the City website as soon as reasonably possible after its adoption and shall see to it that the most current version of this Policy is in a prominent fashion on the City website as soon as reasonably possible. D. Other Provisions. 1. A City official may return any ticket or pass unused to the City Manager for redistribution pursuant to this Policy. 2. Only a City Council Member and the City Manager may request distribution of a ticket or pass to a particular person and such distribution must accomplish a public purpose set forth in Section II.B. All other recipients shall be determined by the City Manager pursuant to procedures established by this Policy. E. Restrictions. Tickets or passes distributed to a City Official pursuant to this Policy shall not be: 1. Transferred to any other person, except to the City Official's spouse or dependent children, solely for their personal use; or 2. Sold or exchanged for any consideration. F. Tickets or Passes Distributed Pursuant to this Policy Not Reportable on FPPC Form 700. Page 5 of 6 If a ticket or pass is distributed pursuant to this Policy, it shall not be considered a gift to the recipient and shall not be reportable as a gift on FPPC Form 700. Adopted June xx, 2009 Page 6 of 6 ATTACHMENT 3 3.4 Conflicts of Interest and Acceptance of Gifts and Other Gratuities A. City Employees should perform their duties in a fair and impartial manner, free from bias or influence resulting from their own financial interest or the financial interest of others. The Political Reform Act of 1974 prohibits an Employee from making, or participating in, any decision when it is reasonably foreseeable that the decision could have a material financial impact on a source of income to the Employee or the assets of the Employee. State law and the City Charter prohibit an Employee from having a financial interest in any contract to which the City is a party. Each Employee is required to comply with provisions of State law, the City Charter and resolutions or policies adopted the City Council that are related to conflicts of interest, the reporting of income and business interests, and contracts involving the City and the Employee. Specific requirements include the following: 1. An Employee shall not participate in the consideration or processing of any decision, application, proceeding or other matter involving the Employee's financial interests, including real property, personal property or investments, or those of any member of Employee's spouse or dependent children. The Employee shall disclose to his /her Supervisor any financial interest that may be involved in any such application, discussion, or proceeding. 2. Each Employee shall comply with all applicable provisions of the Political Reform Act of 1974, Regulations adopted by the Fair Political Practices Commission (FPPC) and the City's Conflict of Interest Code, including the reporting of all gifts and economic interests when required to do so. B. The acceptance of gifts or gratuities, such as meals, tickets, presents, and food, from any person having business with the City may be, or create the appearance of, a conflict of interest. To avoid an actual or apparent conflict of interest, each Employee shall: 1. Share gifts that can be shared, such as boxes of candy or food products, with other Employees. 2. Not accept any gift or gratuity when it is reasonably apparent that the gift or gratuity is intended to influence the Employee's performance or non - performance of his or her duties or result in a higher level of service than the donor would otherwise receive. In evaluating whether a gift or gratuity is intended to influence performance or level of service the Employee shall consider the nature, value and timing of the gift or gratuity. 3. An Employee who is unsure if a gift or gratuity with a value in excess of twenty -five dollars ($25.00) could constitute a conflict of interest should consult their immediate Supervisor prior to acceptance. 4. Not accept discounts from the posted or regular price of food, beverages, items or services unless the discount is available to members of the general.public. C. The provisions of Subsection B shall not apply to Employee solicitation of pledges, contributions, or sponsorship for functions or events sponsored, in whole or in part, by the City that are not intended to benefit any individual. Employee solicitations related to events and functions such races, health fairs, charitable activities, and activities to protect or preserve the environment do not benefit the individual Employee and do not create the appearance of a conflict of interest.