CVUSD Special Board Meeting 12/18/2025

001or trustee Joey Gonz Gonzalez will be so >> or trustee Jocelyn Vargas superintendent Dr. Francis Esparza >> assistant superintendent of human resources Dr. Monica Makovich. >> Uh, present. >> Assistant Superintendent and Educational Services, Soro Sanchez, >> present. >> Assistant Superintendent of Business Services, Julie Van, >> present. >> And as we'll go on to the approvals of the agenda, is there a motion to approve the agenda? moved by. Do you have a second? >> Second by um Trusty Garcia. >> All those in favor? >> Do we need roll call? Okay. >> President Thomas Cortez. >> Yes. >> Vice President Valerie Garcia. >> Hi. >> Clerk Arondo. >> Trustee Joey Auna. >> Hi. Trustee I >> trustee Jesus Gonzalez. >> Trustee Jocelyn Vargas motion carries on to the 12 second public comments. Are there any comments? No

002being none. uh to enter into close session. >> Good morning. >> The recommendation is to enter into close session after the >> presentation >> actual um presentation. >> Okay. >> So, we're moving board up. Okay. So we're on the board photograph board governor photograph by Atkinson Lloyd and Ro and >> we probably need to call for are there any public comments before this open session item? >> Is there any further comments? No, >> we haven't received any. Okay, just making sure that way we can slide to Brown Act while we're talking about Brown Act and other laws. Okay. Uh, good morning everybody. My name is Brook Himenez. I'm a partner with the Riverside office of Atinson Anderson, Loyal Ruth, and Bromo. Um, I not too far, not too far away. Um, I'm the most close

003office, but I do work with a lot of the districts out here in the desert, and I'm happy to work with all of you here in Coachella as well. Um today we're going to you know complete the required AB 2158 training concerning uh ethics for uh governing board members as well as other agency officials. And we'll talk about some new training requirements uh that were came into place in 2025 and then some that are going to be adopted and will come into place in uh January 1, 2026. We'll go through all of the various laws that govern ethics and conflicts of interest for agency officials. We'll talk a little bit about the Brown Act and how that transparency piece, how that's required as part of the ethics uh requirements that board members must must follow.

004We'll talk about the gifts and the reporting, the form 700 process. We'll go over some of your board bylaws just so you're familiar. I'm sure many of you are very familiar and you can easily access them on your district's web page, but we highlighted some that touch upon ethics and transparency. And then um we'll talk about perks um incompatible offices and and some of the Brown Act as well. >> Question. >> Is this being recorded for those people if they have problems over Zoom to be joining us? >> Uh that's a good question. I don't know. I do know that um >> yes it is being lately. >> Okay. Thank you. >> All right. So on our agenda, we'll talk about AB 2158. There are new rules. There's also an additional Senate bill that's included

005in here that we'll go over. We'll overview ethical behavior, conflicts of interest, perks, transparency laws, fair process and local governance rules form 700 like I said and then any other considerations with respects to board member roles and ethical duties and then we'll conclude with any questions or discussion and then each of the um participants including all of the trustees and agency officials will get a um certificate of participation for today's um participation so that you have that to comply with AB 2158. So all right so we will go through first AB 2158 which is the law that does require all um county or county office school district charter school agency officials to receive uh ethics training uh every every other year. So at least two hours of ethics training taken every two years and then

006upon six months of assuming your role. It applies to employees designated by the local agency to receive ethics training. Typically this is going to be your cabinet level employees, maybe your executive assistants depending on how closely they work with the board and the superintendent. That will include all of those individuals. Um, and in 2025, the law was specifically expanded to include school districts uh within these particular rules, these training requirements. So, it applies to board members who serve as of January 1, 2025, who must receive two hours of training um by January 1st, 2026. So, all of you are in compliance because we are January 1. Um it does not apply to members whose terms um end on January 1, 2026. I don't know if you had any turnover on your board um this or

007this is not an election year, so probably not. But um had there been some turnover, it would not apply to those outgoing members. It does require me as the course provider to provide a proof of participation which all of you will receive at the end of the meeting today. And then, as I mentioned, there's also a Senate bill that was passed this year, I want to say in October, um, Senate Bill 287, which further amended the government code sections related to ethics training and expanded the training requirements to department heads as well as similar administrative officers. That's the way that it's defined, which uh like I said, based upon our reading of the new statute, that would be all of your cabinet level employees. I would say department heads, if you have a director that's

008like director of special education, even if they're not an assistant super superintendent, they would be a department head. And then other administrators that are working in your district are now also required to receive this training beginning January 2026. And then officials who commence service after January 1, 2026 must receive their first training within six months of commencing their their office or their service in that role. um agencies, districts are now required to pl to post on their web page instructions for members of the uh public and contact information for those members to request the training records. So, um it would likely be on your board page saying something for copies of the training materials or contact information for the trainer. Here's, you know, here's the link for that. So, that would be needs to be

009implemented. And then additionally, which is uh something that is brand new, agency officials as it's been expanded must now receive at least two hours of fiscal and financial training at least once every two years. So this is an addition to the ethics training requirement. So now beginning next year, uh you all will need to receive two hours the financial fiscal training. The training materials must be developed in consultation with experts in local governance. Um, many districts work with those agencies that I'm sure are probably working on some materials that will be suitable for this requirement. And then again, there's a proof of participation that will be required for this new training as well. All right. So, what is ethical behavior? Essentially, it's just doing the right thing when no one is paying attention. Um and

010when doing the wrong thing uh even when doing the wrong thing is still legal right so it's basically up upholding a standard of conduct one in case there is some sort of audit or investigation that basically shows that yes this person did the right thing and then also in circumstances when such audit or investigation would say yeah this was legal but maybe not as ethical as we would like. So essentially being above board on everything. So general ethics principles encompass values surrounding trustworthiness, respect, fairness and responsibility. Uh responsibility and government meaning that the public should know of of your conduct of the decisions that are made by the board. Um because board members are elect elected officials and as you know under the Brown Act their decisions are transparent or must be transparent so members

011of the public can oversee the officials that they voted for. It's also equally important to avoid any appearance of impropriy. So even if legally there isn't a legal conflict of interest. We'll go over today's uh in today's training there is uh provisions related to the appearance right the common law conflict of interest. So it won't be under a statute but under the common law provisions even if there's an appearance of impropriy this could be a violation of your ethical duties. And then of course we talked about transparency which is key to the public's ability to hold their public officials accountable and ensure that their local officials are ethical. So, some of the laws that we're going to talk about today that govern ethics for uh agency officials include the penal code specific to bribery, government

012code section 1090 which will discuss um financial interest in any contract made by the district and then the political reform act which is also in the government code. It's and it is slightly different. A lot of times there might be questions about how are these different and why do we have two different sets of laws? Well, the Political Reform Act prohibits influence on a district decision, not necessarily a contract entered, but any decision that is made by the district. >> It's not. >> Yeah, it's like >> Oh, no. Okay. Um, let's see. I wonder if I just need to not If I just need to show this. >> Okay. Can you see if it's showing now? This slide is that okay? >> Yeah. >> Okay. Okay. Um, government code, I'd like to discuss government code

0131090 and, uh, the the political reform act are slightly different. 1090 governs contracts made. Uh, the P governs decisions made. So, there's a distinction there. Um, and then we'll talk about the common law conflicts of interest as well. All right. With respect to the penal code, penal code section 68 prohibits bribery, um it does not require that a specific official action be pending when the bribe is given. So, um the timeline doesn't have to appear that money was given to a public official at the time there was a decision that was going to be made or a pending decision. It doesn't require that the bribe was intended to influence any particular act as well. So they don't have there's the whoever's challenging does not have to prove that this particular action was profited by this

014particular bribe of funds or some sort of other money given. um as long as there's kind of more of a general um finding that there is an expectation that if the person gives this money to the recipient that they will receive some sort of that they will be able to influence some sort of decision or act by the public official. So um it just need the evidence just needs to demonstrate that there exists subjects of potential action by the recipient board member or agency official that the bribe was given uh with the intent to influence that particular action. Right? Uh the penal code section 687.5 criminalizes the giving of a bribe to any official. So the person who is giving it is going to be um convicted potentially as well as um the person who

015receives it as well. So there is it it does cover both the agency official as well as the the person who's giving making the bribe. Uh seven penal code 719 makes it a crime to threaten a public officer, employer official with the intent to cause them to do something or to refrain from doing doing something. So, um, this is kind of another form that's similar to a bribe. So, not just giving money, but some sort of threat that has legitimacy that they are putting on the public official in order to do something that they want them to do or to refrain from doing something. I would say in my experience, thankfully, I've never had a situation where there was an allegation of a right. All right. So, let's talk about conflicts of interest in public

016contracts under government code 1090. Uh, we get this question often, so we went ahead and put it in here. Um, can every conflict of interest problem be solved by simply just having the board member recuse themselves from voting? No, that is not true, especially under government code 1090. So there are situations where uh to cure the potential conflict the board member can simply recuse themselves and identify the conflict and everything is fine and the board can proceed. There are only certain circumstances where that is allowable in most occasions because of the board member's interests um and that the the contract itself ultimately cannot be entered into. So this is false. it can't you cannot solve every problem by simply just having the board member or interested official recuse themselves. Can you give an example? >>

017Um so well I'll give you kind of the general example. So let's say you have a public agency official or board member who is also an owner of a business, right? And up for a decision by the board is whether to contract with that particular business. Correct. So that person, the official is going to be financially interested in that contract, right? Because if the board grants the contract that that individual is going to receive some financial gain. Um they there are some exceptions here. They cannot be interested in that contract. They cannot uh influence the decision to enter into that contract at all. though, and we'll talk about this, the the law presumes that just because that person's a member of the board that they're automatically in conflict. So, there's a presumption already created that

018because this person's a member of the board, the entire board is conflicted out. There are some things that the board can do to kind of get over that presumption, but essentially it is um showing well it's a situation where even if that board member recuses themsself, if there's um there's this presumption that they influence everyone else's decision, like the other members are going to say, "Oh yeah, we still want to help out board member A because we know that they own this reputable business and we like we want to work with them in individually anyways." But um that would be a situation where you cannot simply cure it by having that board member recuse themselves. So that's a situation that we do see from time to time. There are exceptions and we'll talk about those.

019Let's say the interest by the individual member is remote or considered legally a non-interest and that's going to depend upon how much ownership they have, what their actual role is in the outside business and other items. So I I won't say that necessarily that can't always happen. There are certain exceptions to the rule, but that's usually where it comes about where you have like a trustee who owns their own business and that business is up for contract with the district. >> Excuse me. >> Yeah, >> there's a distinction between an owner and someone who simply works for a company as well. >> Correct. >> And that's where we're going to get into the uh remote interest. So, thank you for bringing that up. Yes, there's a distinction between ownership um working as like an officer

020in that other business and just being simply an employee. And so, we'll talk about the differences there. So the general rule under 1090 is public officials shall not be financially interested in any contract made by them in their official capacity or by any body or board of which they are a member. There's two components to the law. One is that the individual board member who is uh first you have to find an individual board member who is financially interested and one which prescribes the board itself for being involved. So basically prohibits the board from being involved. The purpose is to prevent self-defeing. Um and essentially the the case that kind of governs it is from 1985. It states no person can faithfully serve two masters who interests may or may be in conflict even if

021there's not an appearance of conflict initially like we both the district's interested in this particular contract and then the contract contractor is also very interested and your interests seem to be aligned. You can never foresee whether later there might be some sort of conflict between the two which is why it's important to prohibit these types of uh conflicts from the beginning at the start of the contract. Okay. So who's covered under 1090? All state and local officers employees and multimember bodies whether elected or appointed both at the state and local level. And this includes consultants. And what is covered? Like I said before, 1090 is specific to contracts. So this could be a written contract that's presented to the board, an oral contract, which I hope I never see, and purchases made outside of the

022formal contracting process. So even if a formal contract is not made, if the uh district is going to be using a particular vendor and having purchase orders, that still is covered under uh 1090. The term contract is interpreted broadly and includes negotiations, discussions, reasoning, planning, and the give and take that comes before the ultimate uh contract is entered into. And this is where we sometimes have um trustees get in a little bit of trouble. So they will participate in meetings and discuss this particular vendor, but then they'll recuse themselves only on the at the time that the vote is made on whether to contract with that particular vendor. But under this case, the Chapman case, um just being involved in the negotiations or any discussion related to that contract is enough to create a conflict

023of interest. All right. So, what does making a contract mean? uh the contract making process begins at the time the idea for the contract comes about and continues through the actual signing and execution of that contract and then like I said before just the individual's membership on a board establishes a presumption that they participated in this forbidden contract. So essentially um the law already presumes that the contract is void or voidable because it automatically presumes that this person was participating in discussing the contract, negotiating the contract of entering into the contract. And so mere just kind of recusal doesn't always save from that conflict, right? Because you have to overcome that presumption. And there are specific times when that would occur and that's with respect to the remote interest and the non-interest. Um the full

024disclosure of the interest by that particular officer is also immaterial because it doesn't guarantee the absence of influence. So this is one where officials need to be extra careful. If they can foresee that there's potentially a conflict that where they can financially gain from a particular contract, they need to be very very careful and mere just disclosing that ahead of time doesn't remove the possibility that your benefit might have already influenced your other uh trustees. So um it's suggested that knowledge of a fellow officer's interest might lead the officer other officers to favor them, right? to give them some sort of benefit because it presumes that you all are a unit and that one person's interest might be an interest for everybody else even if not so direct. um other government actions. The definition of

025a contract, like I said, is defined very broadly, but it does not include other types of government actions such as adopting regulations and board policies, issuing a permit or a license, conducting investigation, or issuing a report. So, all the other types of day-to-day things that you all have to do, it's not considered a contract. So, if the decision is made to conduct an investigation, that's not a contract or allow a particular permit, that's not a contract, or adopt a policy or regulation. Um we'll talk about the paytoplay prohibition from Senate Bill 1439 which is uh going to be discussed later but generally it discusses receiving some sort of contribution from an outside vendor for the purpose of granting them uh use in the district some sort of access right some and we'll we'll talk about

026that so there is a caveat there but generally other actions that are not contractual in nature are not going to be considered um under government code 1090. When an employee instead of a board member has a financial interest, the public entity may be prohibited from making the contract if the employee was being involved in at any stage of making that. Right? So there's not an automatic presumption like there is for members of the board. Like let's say you have a cabinet member who also owns a business and they're financially interested. There's not a presumption that the entire board is now conflicted, but they the board or district might be prohibited from entering into that contract if if there's any finding that that employee was involved at all like recommending that vendor or providing information on

027behalf of the vendor or any other types of actions that would kind of raise that conflict. And then of course we're going to get into the P and the appearance of impropriety doctrine under the common law conflicts of interest as well. So sometimes What might not be a conflict under 1090 might still be a conflict under the P or the common law doctrine. So when we get asked questions about conflicts, we have to analyze all of them. And uh one thing to note is the Fair Political Practices Commissions. what they will do and it might be in our materials but when we have questions sometimes and we're not sure um we're allowed to anonymously um ask for their opinion on something. So we can send them a letter detailing all the facts like this you

028know this board member is this has this potential interest in this uh we do not believe that there's a conflict here but we'd like your opinion and you can take that opinion from them and rely on that to avoid liability. So that is something that we would do as legal counsel. Um we give our legal opinion but we always try to vet it through the FPPC because we find like this is going to help insulate from liability. Um and then if we're wrong at least they can kind of kind of go through it and highlight no you have to also consider this other law right you considered 1090 but what about the P here's what we're finding there. Okay. So, with respect to a government code 1090 situation, um you have to first ask is

029there a financial interest because that is kind of what triggers the potential conflict. An official has a financial interest in a contract if they might profit from it. So, you don't have to show that they actually are going to profit, but just that they might. So you follow the money um see you know if there's any possibility that they will profit and that would include um an interest by their spouse maybe are they going to profit by way of a family member that's also going to be analyzed um the interest is like I said is cann specific to entering into a contract the purpose is to prevent a situation where a public official would stand to gain or lose something with respect to the contract over which they could influence For the purpose of 1090,

030a contract would benefit an official source of income if it benefits them directly. It also will benefit them if it benefits their spouse, the earnings of their spouse. Um, and the reachback period under the P, there is no reachback period under 1090. And I'll talk about what that is. But under 1090, when you look at the contract, the pendency and the interest, it's only during the time when the official might benefit directly or indirectly. Um, it's only during the business relationship. So, um, basically only during the time that they sit on the board and actually have a financial interest in that particular contract. under the P there's a reachback period where they can go back to maybe beforehand was there this interest and then eventually now it's come to fruition. So it's more stringent under

031the P. Under the 109 you're only going to look at the time frame of when they sat on the board and when the interest arose under under the P you're going to look back and say was this like a developing interest. Okay. under and we talked a little bit and we mentioned this under 1090 there are two categories of exceptions. The first one is a remote interest and the second is a non-interest. This these are situations where the individual's conflict will not completely void contract. Okay. So, what's a remote interest? A remote interest is a is where someone's interest in a contract um is where they are not essentially like the owner. So, here's an officer or an employee of a nonprofit entity that exempt that is exempt from taxation. So, if they're simply just

032an officer or maybe an employee of that particular vendor. Um so that if the public official is determined to have a remote interest that they the district can enter into the contract as long as that official discloses their interest um to the to the board or to the agency notes their the interest in the official record. So this would be kind of in your board minutes and disqualifies themsel from voting on the contract and does not influence anyone else's decision whether to enter into that contract at all. So they're completely disqualified from any decision-m negotiation and the ultimate vote. They're disclosing their interest well ahead of time and their interest is noted in the district's official records. So u one of the remote interests again is that of an officer or employee. Um again but

033even if this is remote the board member must avoid all involvement in making the contract. Another example is if you're an employee or agent of the contracting party. If the contracting party has more than 10 employees or 10 or more employees and the officer is an employee or agent of that contracting party for at least three years beforehand. So, if they've worked at that company for many years, at least three years beforehand, it's a larger company that has 10 or more employees. Um, and the officer does not own or owns less than 3% of the shares of the stock. You know, most companies don't have stock. So, this doesn't come about very often, but if there is if it is traded, then the officer or the individual has to own less than 50% of it.

034and then the employer agent is not an officer or director of the contracting party and did not participate in actually creating the bid. So this would be a situation like your run-of-the-mill employee who just happens to work for a vendor that the contract that the district is deciding on whether to contract with, right? They're not a, you know, a large state owner. they're not an agent or an officer of that particular employer and the contracting party has 10 or more employees and they worked for that um contractor for a number of years. This comes out this comes about often. So, I'd say a lot of times it's ultimately determined that a particular officer's interest is just considered remote under 1090 and they can continue the district, sorry, can continue contracting with that party so long

035as the officer does all the things that were in the prior slide, meaning they disclose their interest. They noted the official record of the district and they disqualify themselves from all stages of entering into that contract. The other exception is the non-interest exception. So this is a situation where the legislators determine that for policy reasons these are just completely exempt from 1090 it does not require extension. So an example would be ownership of less than 3% in a corporation and the officials income does not exceed 5% of their total annual income. So something like it's not their primary source of income, but they also receive some sort of benefit from a different type of corporation. They own less than 3% kind of like a side business or something. That's considered to be a non-interest. Another

036example is where an off they're an officer that's being reimbursed for their actual expenses that they incurred while performing their official duties. So if you are traveling as part of your duties as an official and somehow whatever company outside of the district is reimbursing you for those actual costs that doesn't create an interest between you and that company. So that's considered a non-interest for conflict for 1090 purposes. And then another non-interest is that of a spouse of the officer um in in their employment so long as the spouse has already been employed for at least one year before the board member was elected or the official like cabinet member was appointed. So we get questions like this often. So I'm running for election to particular board and my spouse already works in that district. Can

037I become a board member? Yes, you can. as long as your spouse has already worked there for a year prior to your appointment or your elect becoming into office. Um we'll talk I think it's on the next slide is what do you do now that your spouse is actually already employed and you are a member of the board. The general rule is they cannot benefit. They can't be promoted during the time that you sit on the board. um you can't uh vote for them to receive some sort of extra raise or extra benefit that any other employee would not get. So um generally employment of the spouse after the board member is elected is prohibited. So once they're sitting on the board, they cannot have their spouse apply and get hired in that same district.

038Um an employee, a public employee whose spouse is a member of the board may not be promoted as I said before. Um, however, there's an exception. If the spouse is a member of a bargaining unit and the new contract with salary increase is presented to the board for approval, that's allowable. What's not allowable is like an extra benefit that that employee spouse would receive outside of what the other members of their unit. Another what we kind of call an exception. It's really not an exception because there is still a conflict of interest, but the rule of necessity will allow certain actions to still take place even with that conflict. So essentially, the rule of necessity applies when a public official does have a financial interest under 1090 or the P, but there's no legal alternative

039to accomplish the action by the district without that person without without having to go through that particular conflict. So if the rule of necessity applies, the board member must still abstain from any participation in the action. And I will say the rule of necessity rarely rarely rarely applies. Um I think one example that I have was I think there was a is it a safety contract? There was something that would needed to be done legally by a particular date and it related to a decision that only the board could make. No one else outside of the agency or the district or the board could make the decision and they had to related to safety but I can't remember the details and so by law they were required to make this decision there ultimately there was

040a board member who potentially would have received a financial benefit from it. It wasn't real, but it was, you know, potential and it was kind of a real possibility. And ultimately, we determined that yes, you do have a financial conflict of interest. So, normally the board would not be able to enter into this contract because of it. However, under the rule necessity, they have to legally they're required to do that and so they can go ahead and still proceed anyways. But board member you must abstain from any discussion, consideration, negotiation or entering or any vote with respect to that particular. So um it rarely applies. These are the situations where we definitely send the letter to the MPPPC asking for their opinion and they'll they'll usually say yeah we think this is a necessity that

041is going to allow the board to continue to act. All right. So, what are the penalty if there happens to be a 1090 violation? So, if the violation is willful, which I would say I've never had in my experience happen and you never have any of your experiences ever happened. Um, if there is a willful violation though, it's punishable by a fine of not more than $1,000 or by imprisonment. So, it's not only just a fine, it's also considered, I think it's a misdemeanor. Um, and someone can be incarcerated for willfully entering into a contract where they know that they have a financial interest. They willfully decide they're not going to recuse themselves and they continue on that course. Anyways, that's going to need require some evidence that this person knew and still continue. Um,

042for an official to act willfully, his or her actions must be purposeful and with knowledge of their financial interests. The individual may forever be disqualified from holding any public office in California and the contract is going to be void because of that and the public official may lose any money received by way of that contract. So, their their financial gain is actually going to be recouped back. The state will order that it's disparaged from that public official. Um, the California Supreme Court, however, recently ruled that there is no private right of action for individuals to sue a school district on the basis of 1090, which is interesting because, as you might be aware, um, p members of the public can sue a school district or ask for the attorney general to investigate like Brown Act

043type violations and other types of conflicts. But the California Supreme Court, I think it was two years ago ruled a member of the public cannot actually bring a lawsuit against a school district under 1090. So, um, that would be, I think, independently. It would have to probably be like the district attorney's office who gets information and believes that the crime has been committed and then they'll prosecute that. Any questions about government code 109? All right. And don't worry, I'm going to give you all a break. So, we are here for three hours, but I will make sure that there is at least a break in between because I know this is not the most exciting topic. All right. So, uh I've mentioned the political reform act or the P and so let's talk about the

044conflicts of interest under that set of laws. So they're also set forth in government code section 87100. The general rule under the P is that no public official shall make or in any way attempt to use their official position to influence a decision, government decision in which they have an economic interest. So again, we're following the money. We're looking at does this person have some sort of financial benefit from a particular decision that's going to be made. So the decision not does not necessarily need to be an entering of a contract. It can be any other type of decision so long as that decision might result in an official being financially benefited. So in general public officials are disqualified from participating in any government decision in which they have a financial interest. The intent of

045just being generally disqualified is to address both the actual and apparent conflict of interest situations where their interest conflicts with their other public duties. So essentially they are being withholden to themselves when they're making this decision because of their own benefit and not for the benefit of the district essentially. So they're basically um allowing their personal interest to influence their public official duties. So um some definitions under the P public official is kind of broadly defined just like under 1090 to include every board member, officer, employee or consultant of a local agency. So that would be like your officers or your highle employees. Um it does technically also cover employees as well and it's defined just as employee. Um, I've never seen a P action or accusation against a specific employee that's not a high

046level, not like a cabinet or director level official in the district. So, but it if you look at the definition, it does cover all employees. Um economic interest is defined as an interest if it is reasonable that the decision will have a material financial effect on that public official that is distinguishable from the benefit of the public in general. So um and we'll talk about a little bit um how to distinguish between does this person have a material financial benefit that is different or distinguishable from the benefit to the public in general. Um and then of course it also includes benefits to members of their immediate family. So this is going to include their spouse and their kids. So if there's a financial benefit to family then it might also raise an economic interest that

047creates a conflict financ >> of course. >> Okay. Yes. >> Underdependent children. So if they are now over 18 that doesn't >> um if they still live with you. There's case there's a case on this. there were an adult child that lived with a trustee that benefited from and I think it was like a contract that was entered. So it was a 1090 and a PR issue and they found that to be created a conflict because they were still considered dependent um because they still resided with the board member >> but not but if they don't reside then >> yeah if they're truly not dependent then I would say that they would not be covered under this. I'd still be mindful though um under the common law conflict of interest provisions because of the appearance

048of impropriety. Right? So there's still that piece that um kind of have to consider as well. >> Okay. The test to determine whether there is a conflict of interest under the P is first are you looking at whether a public official is involved? Are they really um covered under the P? And then is the official making a decision? Are they participating in the making of a decision or are they using their official position to influence the making of a decision? So even if they're not ultimately responsible, are they influence influencing that decision in some way? The third thing to consider is is it reasonably foreseeable that the decision could materially affect their financial interest. So even if it's not realized at this point, is it foreseeable that somehow in the future they are going to

049materially benefit from this particular decision? Um trying to think of a situation that I had. Uh I did. So I had a superintendent who um or maybe it was a board member. they were voting on um whether a bond measure to have like um to have you know to to develop the community in the area and in that particular community one of them actually lived there and their property value would increase if the new development was made so we had that question did and I'll tell you the ultimate answer um but we found that this particular it was either a board member or superintendent their benefit benefit in the new development that was being considered by the board was no different than the material or financial impact or benefit of the public that was going

050to benefit in that development. So ultimately and the FPPPC agreed that it wasn't a conflict of interest, but that is an example that did come up. Um okay. And then will the effect of the decision on the public officials financial interest be distinguishable from the effect on the public generally? In my example, it was not distinguishable. So, this would be something that you'd have to look at. Are they going to benefit and no one else will? Or are they going to benefit much more than anyone else will? And if so, then it is definitely a prohibited conflict. If the answer to all of these four questions is yes, the public official does have a conflict. And absent an exception, the official cannot make the decision. They can't participate in the making of the decision. And

051they cannot attempt to influence the decision um that's ultimately made by the district. So what's an economic interest? So interest would include interests in business entities. again like if there's an ownership interest in a particular business entity that the district is working with and there's a decision concerning that particular business um an investment of $2,000 or more in real property creates an economic interest. So, if they have invested a certain amount of money, more than 2,000 in real property and the district is making a decision concerning that property, maybe to purchase that particular property to build a school or something like that, I would say that's probably disqualifying economic interest for that individual. Um, and sources of income that would aggregate to at least $500 in the past year. So, a business where they receive

052income, the official is paid at least $500 and you can show that through the, you know, they're looking at their tax documents from the year prior. Um, any donor or intermediary agent of a donor of any gift aggregating $630 and we'll talk about the form 700 requirements. Um, and the increase last year um in 2024 it was 590. In 2025, it's 6:30. It'll stay put 6:30 through December 2026. Um, that's going to be the receipt of donations or gifts that in the aggregate are $630 or more are prohibited. We'll talk about that. Interest in a business entity for which the official is an officer, director, employee or employee irrespective of their income. So if there is a business that's contracting or entering into yeah entering into a contract with the district and the public official

053is an employee despite whatever income they might receive, there is potentially a disqualifying conflict of interest there and would have to go through the four-step criteria. And then interest in personal finances and those of their immediate family again. So if it benefits their dependent children or their spouse then they have a a potentially disqualifying interest. So where it becomes the analysis kind of there's an exception and the analysis is concerning what their interest is and whether it's distinguishable from other members of the public there. So the effect of disqualification. So a prohibited interest under the P does not bar the board from acting. They can continue to act. They can make that decision but the official is prohibited from being involved. They must disqualify themselves which is different than just recus. We'll talk about the

054distinction. They must first publicly identify the financial interest that gives rise to the conflict with enough detail so that members of the public can understand that. So we would ask that they put that in the official board minutes so that individuals can actually understand or members of the public what this financial interest is. Then the individual must recuse and leave the room until after the discussion after the vote and any other dis disposition or discussion related to that particular decision unless there's it's on the consent agenda. So that there's an exception there. If you have your consent agenda and there's 10 items on there and that one just happens to be in there, you still have to disclose publicly that there's an interest there, but the individual is voting as a poll on the consent

055items, not necessarily on that one particular one. Where it becomes problematic is where um a member of the board pulls that small item from the consent calendar agenda and for discussion, then they need to recuse themselves completely. they would vote on the rest of the consent items and then could not be involved in that particular discussion. Uh the public official may speak on the issue during the time that the general public speaks. So they're disclosing it in the official records like on the board agenda or in the board minutes um somewhere in writing and they can actually speak use their three minutes as a member of the public to talk about it if they want to inform the public in more detail of what that interest is. Um, I've never seen anyone do that, but

056that's an option that they have. If the official is an employee rather than a member of the board, commission, or council, the officials announcement is required to be in writing and given to the official supervisor or other specified individual. So, they need to let their supervisor know that there's a potential conflict here with the decision that's being made in that employees department or maybe that employee might be involved in. So, So disqualification versus abstension. So when a public official is considered afflicted, they're legally required to not participate in any part of the decision-making process. Abstension is different. This is when a public official volunteers to not participate in any part of the decision-making process. They're disqualified if they're legally required. They're just abstaining. You know, as you know, board members can decide to abstain, right?

057that's a decision that they have and your bylaws allow for them to decide when to abstain. But if there's a conflict, it's considered a disqualification, not an abstension. So when it's announced on the on the agenda or in writing, it needs to state that this particular board member is disqualified from any part of the making of this decision or contract. It should not state that they have stained or willow stain anything like that. So making sure that you use the correct language. All right. Enforcement of the P. So the attorney general uh is usually the the the office that will enforce violations of the P. Um the FPPPC which governs conflicts in public agencies. The district attorney's office can bring an action against a particular official and private citizens are authorized to enforce the P

058through criminal sanctions, civil liability, and civil penalties. So, a member of the public who might be paying attention to things that happened in your school district can look into whether there was a conflict of interest in a particular decision by a board member, by a cabinet member, director, employee, any other official and decide, you know what, I want to bring a private right of action against this particular person, board member or board as a whole or district as a whole under the P. What they usually do is they provide that information and they actually work with the attorney general's office or the district attorney to bring that action. Um, individuals who violate could be um subject to a fine uh to the greater $1,000 or three times the amount of the benefit. So if they

059receive a benefit and whatever one is greater. So um $1,000 or three times the amount of the benefit. So if it's under a thousand, it'll be a thousand or it'll be whatever that benefit is. The amount their person failed to report or unlawfully contributed, expended, or gave or received may be imposed upon conviction as well. So they might be convicted of the crime, but they might also have to pay this fine as well. And they're going to look at how how much will this person benefit and then only a formal written opinion of the FPPC will confer immunity from liability under the P. So this is again a situation that I described previously that if there's any question that there might be a conflict to send it over to the FPPC because if there is

060a legal action later the only thing that will absolve liability or prevent liability is that formal opinion from the FPPC that says no this is not a comp. So if a private right private individual brings a lawsuit, you have this letter in hand that says no, I've already vetted this with the FPPC and this is not a conflict and there you are. No liability and no criminal sanction will be against you. So it is a very useful tool. Okay. Private citizen action is akin to a private attorney general action. Like I said before, very similar. private citizens may sue for injunctive relief. Um, so what that means is they could sue not just for monetary relief but actually instead for an injunction basically saying I'm suing so that the court can prohibit this individual from

061participating in this particular action or this contract due to this conflict. So it basically just stops the individual or board from taking some sort of action that might violate the P. Or they can sue to compel compliance with the act. So they can say, I'm suing this board because they don't comply with the P and I'm going to get an order that they're asking for is that the judge say you must comply and specifically do the following things to ensure compliance with the P. And then plaintiffs who prevail may be entitled to attorney's fees. So that's where it does get expensive. So even if the ultimate penalty is just an injunction, which doesn't really have a monetary cost, um you will have to pay an attorney's fees to your own attorney to help defend that

062particular action. And you may have to pay the attorney's fees of the plaintiff if after the action goes, you know, through um fruition that the plaintiff prevails. So it does does get costly if you're paying attorney's fees for your own attorney as well as the plaintiffs. And then defendants who prevail must show that the action was objectively without foundation when it was brought or the plaintiff continued to litigate after it was clearly basically um without any foundation. This is a hard burden to meet. So ultimately even when you win through the litigation, you still lose because in most cases you're not going to get your own attorney's fees back unless you can basically prove that it was frivolous from the beginning. there was it lacked any foundation in law and they still brought it or

063they they realized during the litigation that there was no legal basis and they continued forward with that particular action. So there's still going to be a cost in most cases. You will not be able to recoup your the district's attorney's fees even if the district is successful. All right. So it's been about an hour. So, I think this is a good time to take >> uh is a 10-minute break enough time? >> Yeah. Okay, we'll break for 10 minutes. coffee. back in the water. Yeah, I need to find I know. I was thinking about Yeah. >> Get it right. Like it's like instead the whole week red. >> Okay. >> There you go. or the other brought Right. Goodbye. All right. So, let's go and um talk about the common law conflicts of interest or

064what's called the appearance of impropriety. So oftent times there we'll get a question and we'll first analyze under 1090 then we'll do an analysis under the PRA and then we'll always do an analysis under what's called the common law conflicts of interest provisions. They're largely found in cases like decisions from the courts. Um there is not a specific set of statutes. at least arise from common law like decisions from many many many many years back related to public officials in the holding of office. So under the common law provisions uh the basic principle is that a public officer is bound to exercise the powers conferred to them with disinterest skill zeal and diligence and primarily for the benefit of the public. So ultimately public officials need to perform their duties in a way that is

065not personally interested um in a way that benefits the public. The courts which >> wait >> yes of course >> no idea what I don't know what disinterested means in this. >> No thank you for your question. So what disinterest means is that when you're performing your duties as an official of the district, you cannot be personally interested. So that means disinterested meaning not personally interested to where you're going to take some sort of action or render a decision that personally benefits you or personally interests you versus the public. Yeah. So the common law doesn't just look at financial benefits. Common law conflicts of interest also look at any other kind of personal interest that an individual official might have um in performing their duties for the public agency. So ultimately the general principle is

066that you should act for the benefit of the public or at least your public your community and not be personally interested in those type in those actions. So again the conflicts under common law are developed by court decisions. These decisions find that there is a common law prohibition uh that creates a conflict of interest uh in order to achieve fairness from public officers and bodies. So the purpose is basically to achieve fairness so that individuals who are um elected to their office or other highlevel officials in the school district who are hired that they act in fairness um to the individuals they serve. Public officers are required to exercise their powers in an unbiased manner. Individuals seeking consideration from public bodies are entitled to be given fair and unprejudiced treatment without private interest. pecuniary or

067otherwise. So basically individuals who come to the board for requests or information or individuals who work with school district officials um and are um asking for some sort of you know consideration in the district. They must be treated fairly. They must be treated without bias, without prejudice and um the decision ultimately should benefit the public as a whole. Does that mean you have to actually grant the request from the individual? No. It just means that you your decision not to grant that request cannot be because of your own personal dec beliefs or >> everything's based on our own personal decision. Well, ultimately you need to decide uh I'm going >> I understand but ultimately based on our personal decisions how we view the world how we view what would be beneficial to one might >>

068right >> you know it'll differ from other people but basically we might always thought that was a stupid thing to put in there because we all do it based on our environment how we were raised what we believe and yes >> so yes your decisions can be informed by your own experiences is right and your own desires. So I understand you know public officials they get onto a board and they have goals in mind right and those are informed by their own experiences the things that they've seen and the things that they want for their community and that is all good. That's what we want your board members to do as well as your public officials. You want them to go in with a goal ultimately though is what's best for kids, right? We're a

069school district. What's best for the employees in our district and what's best for the district community as a whole. So those decisions will be informed by your own personal interests, right? But you can't allow your own very specific unique interest in yourself to overshadow the overall goal, like the overall benefit to others. Um, okay. This common law prohibition does not go so far as to prevent public officials from voting on matters in which they've expressed particular view. So that's you can still have a particular view and vote on something so long as they're not personally biased in that particular matter. So this these cases are interesting because they a lot of them really old and um they talk about different scenarios where they feel like an individual who is voting has a personal bias um

070with respect to something and they usually look at did that influence their decision in a way that harmed the overall goal of the entity. So that's kind of what they're looking at. So yes, there are going to be personal biases that everybody has when they vote on a particular matter, but they can't allow those to impact or interfere with the overall goal of the district and the board. The appearance of propriety um also set forth in the courts. The courts have repeatedly held that conflict of interest laws apply not only to actual conflicts like the financial ones, but also to this appearance of impropriy. So there going to be situations where ultimately under 1090 in this in the P there's no legal conflict. So it looks like everything maybe because there's a remote interest or

071ultimately it's a non-interest or something of that nature. But it might be considered the appearance of impropriety. So and you'll look and we usually look at the decisions and say has a similar scenario come up in another decision and what did the court find? Did they find that this was too much of a creating an appearance of impropriety? And then we would say although not a legal conflict of interest under the common law, this does give the appearance of impropriy and because of that we recommend X Y or Z. Like maybe you don't participate in that or at least recuse yourself from that. Uh the public office is a public trust created in the interest and benefit of the people in your community and public officers are obligated to discharge their responsibilities with integrity and

072fidelity. So these cases basically just kind of uphold that standard is that board members and officials need to make sure they're up upholding their duties with integrity and fidelity and transparency. We'll talk about that as well. All right. So then under the conflicts of interest umbrella, there's also the Lavine act which is basically like the paytoplay provisions under assembly bill 1439 as of 2023. Um the Lavine act was adopted and it operates in a few ways. So first government code section 84308 applies to agencies whose members are directly elected by voters which include school districts board members. um and officials that are prohibited from accepting, soliciting, or directing a contribution that exceeds $500 from any party or participant for 12 months after the decision of a proceeding that they might be involved. So if you

073have an individual or a party in a particular proceeding um you cannot accept or an individual board member cannot access a contribution more than $500 from that individual within or 12 months after the decision is made in that proceeding. So these this is rarely ever comes up but let's say there is some let's say even like a legal proceeding that comes out and that party's involved and the district is involved after that concludes the individuals in that particular lawsuit have to wait at least 12 months before making any contribution to any member of the court. So you're looking at kind of different official proceedings and actions that are going on. It's it's essentially saying we can't have outside vendors at such paying to have some sort of benefit within the district when they know when

074we know there's like a pending type proceeding that's going on or there used to be one maybe in the year before. Um this was increased from $250 this particular year. So before there was no contribution exceeding 250 now they've raised it to 500. I'm trying to think of where it came up. There was one where I think there was a vendor who contributed to a particular campaign and I think ultimately we rendered a decision that that vendor could not actually enter into a contract with that district for at least a year after that because that could be considered a violation of the Living Act. So, uh, this section prohibits certain officials from taking part in an entitlement for use proceeding. So, basically, um, using district property or services if the official has received a contribution

075exceeding $500 from a party or participant in the past 12 months. Um, essentially this prohibits like applications involving a license or permit for use in the district. I know that very rare circumstances where you're going to be giving someone a permit in particular to use something in the district. Uh an official is also prohibited from accepting, soliciting, or directing a contribution of more than 500 from a party or participant in the proceeding for 12 months after a final decision is rendered. So again, if there's some sort of ongoing proceeding or there's a party who's filed for an application for use or a license in your district, while that application is still pending, a board member or the board cannot accept uh a contribution of $500 once that proceeding is they requested a license and that

076decision is pending. Once that decision is made, still have to wait a whole year before that contribution can be made. So a participant is a person who's not a party but who actively supports or opposes a particular decision in a proceeding involving a license, a permit or other entitlement for use and they have a financial interest in the decision. So this doesn't really come up too much in school districts usually in other like cities. This comes up a lot in cities like use of a particular area in the city. So, a party to a proceeding before an agency involving a license permit or other entitlement for use must disclose on the record any contribution in the amount of more than 500 that's been made in the prior 12 months to any official of the agency.

077And then effective January 1st of this year, an officer may be permitted to participate still in that decision related to the permit, if the officer returns the contributions within 60 days of receiving it or within 30 days or sorry within 30 days from the time that they made the decision or they knew the decision was going to be made or should have known about the contribution. So essentially they receive it, they find out, oh no, this is the same party that has this application for some sort of permit or use. I better make sure I return this. So that is an exception that can be invoked within the 30 days. Um there are exceptions for city attorneys or county councils also effective this year which is an effort to protect the public interest by addressing

078these long-standing pay-to-play kind of political practices of city attorneys. Um, and then there's a violation of this law. It would be a misdemeanor and a fine. Usually the fine is $1,000 for a lot of these conflict of interest statutes. Um, but again, this doesn't come up very often with school districts. It's usually cities who have who issue permits for use. And then usually the county council or the city attorney is working for that particular entity that's asking for the permits. and that county council or city attorney is also making a contribution to a member of that particular city board. That's where it comes off a lot. Okay. There are certain exceptions to the paytoplay rules. uh license permit or other entitlement for use as defined under this law does not include competitively bid contracts that

079are required by law or through the bidding process um or required by agency policy agency rule to be awarded pursuant to a competitive process. So the lowest price right if you have a policy or law that says for these contracts that go out for bbid you have to accept the lowest price that's an exception to this particular pay of play. So they would still the entity would still be able to enter into that contract with that particular vendor notwithstanding the contribution that was made. Uh labor contracts obviously those are required by an agency to be entered into. So if there is some sort of contribution that would not prohibit the agency from entering into a labor contract with their labor partners. Personal employment contracts that would not like prohibit the hiring of a particular individual.

080contracts valued under $50,000. Uh contracts where no party receives any financial compensation. Contracts between two or more agencies, so like two cities contracting with each other, that would be allowed. And then periodic review or renewal of a development agreement unless there's a material modification. So let's say you have an ongoing development project and there is a decision to renew that particular contract maybe for this particular project and there was a contribution made by an individual rel you know uh that vendor um if they're already in having a contract with the district and they're involved in the development there's a development agreement that would be okay to continue that agreement as long as the modification or new agreement is not materially different. So then you'd have to look at is this materially different? Did we receive

081a contribution of more than $500 in the past 12 months? Would that prohibit us from actually continuing with this particular development? Okay. We also have what's called perks of office, gifts of public funds and perks of office. Okay. What is a perk of public office? So, a perk is a payment or profit received in addition to their regular salary. So, a public official and your board member uh the funds that you receive for attending your board meetings. This would be a perk that's in addition to those items where there's a a benefit that is expected, right? So it's outside of just the regular salary. It could be a tip gruty which I think same as a tip or something claimed as an exclusive right. So something that only that individual receives but not just provided

082to the rest of the board or the other officials. Um it's for personal use. Personal use of public resources are activities that are for personal enjoyment, private gain or private advantage. And use means a use of public resources that is substantial enough to in to result in a gain and advantage for that use and a loss of the agency. So essentially it's using something of the district public agency for their own personal benefit that is outside the salary that they would normally receive. This has come up before. I think there's in the next one is an example of mailing like mass mailings. So if an individual trustee is running for board for the next cycle and they use district resources to prepare and create their campaign materials and they use district funds to mail those

083out that would be considered a perk of public office that would be prohibited under this rule. Oh there it is. Yes. Use of public resources for campaign purposes. So state law does prohibit the use of public resources. So district funds for campaigning purposes. The prohibition applies to campaigns to elect candidates and campaigns in support of opposition to ballot measures. So this is where we have to be careful. It makes sense that an individual trustee will not use district funds and services for their own campaign, but also watch out if they're using it to support a particular ballot measure. There's also education code sections I think 7054 that also prohibits the use of any district facility district funds or district resources for the um support or lack of support of a particular candidate or ballot measure.

084So this is in line with this law. So use of an agency credit card for personal expenses that's an easy one as long as it's not for reimbursement. If it is for reimbursement because you're traveling as part of your duties with the district, that's not that's a lap. Reimburseable expenses are allowed. However, using let's say you have a Cal card. Using the Cal card for your own personal expense would definitely be prohibited under this government code section. And then mass mailing, we talked about that as well. Items prepared to be mailed to the public at the district's expense may not feature an elected official affiliated with the district. or include the name, photograph, or other reference to the elected officer if the item is prepared in at their direction. Basically, that individual is saying, "I

085want to mail all this information out. Let's put my name, my face, my title, and send it out to the public using district funds." Because the presumption is it's being done to benefit that particular individual, but not at that individual's costs. So the FPPC defines mass mailings as sending 200 or more identical items of mail, right, that contain the name or picture of an elected official except as part of standard letterhead. So your district has your standard letterhead that also all the trustees and superintendent and maybe some other cabinet members identified. That is okay. That's your standard. Um the other one is use of staff time like use of HR officials or other staff in the district to conduct business for you personally. Right. So um that one seems um I would say to be

086more rare, but I'm aware that it has happened before. All right. So here's an example. Um, in this particular case, the school district was fined 2,000, which is not a huge fine in 2015 for mass mailing violations. Uh, the district prepared and sent a mass mailing at the district's expense consisting of a brochure concerning Prop 39, um, which included information about the expenditure of school improvement bonds and also contained photographs and names of the governing board along with their titles. So, this was specific in support of a ballot. So, this is what's been captured under the law. That's that's prohibited. The maximum fine was $5,000. and determining whether what was the appropriate penalty in this particular case. The FPPC will evaluate the seriousness of the violation, the presence or lack of intent to deceive the

087voting public, whether the violation was deliberate, negligent, or inadvertent, and whether the respondent, which is the official, demonstrated good faith in consulting with the MPPPC prior, and whether there was a pattern of violation, and whether the respondent, the official, upon learning of the violation, voluntarily filed amendments to provide full disclosure. So these are also situations where we would want to get an opinion from the FPPC. Go ahead. >> So then a board member and another one were working on promoting a bond. >> I Yes, that's what this Yes, because that's a ballot measure. So ballot measures or support or defeat of a candidate. Yeah, it says support or defeat of a candidate or ballot measure. It's the way that it's stated. I will say if an individual board member wants to support something on their

088own and they use their own funds and they stayed on their own private social media page or something that they support something, they can do that as long as they present that as being like separate from the district as a whole and make it clear that they did not use any district funds for any of those things. Right. But what if their video footage or their photography is on the school site or on the area that we're going out for? Can they do that? >> It's a good question. I there could be an argument in that case that you're using the district facility as like an advertisement. So, if the district facility in the video looks like it's dilapitated and the bond would really benefit that, then that could prompt individuals to to support that

089ballot measure, right? Um, I would say that could be to potentially considered use of a facility for that purpose. But that's a good question because I don't think it's clear-cut. That example is not. Um, I think where it is clear is that you have someone who works in the district, a videographer or something who's going in and shooting the site to say, "Look at here's what we can do to improve this particular school site if you pass this bond bond measure." Um, that is definitely use of the district's funds for that purpose and that would so I guess it it depends really on the circumstances and effects, but I would in that scenario I would contact the FPPC for sure because it's one of those ones where we're not sure. I mean because anyone maybe

090with a drone could do that too, right? And that's not district funds. So that's kind of where it might lean the other way. Um okay. And then with respect to gifts of public funds, so this comes about from time to time where um there's expenditures brought before the district and the district has to decide um are we allowed to spend district money for this purpose? And if it's not clearly for like salaries or uh curriculum or things of that nature, they'll have to decide whether there is a public purpose because otherwise that particular expenditure could be considered an unlawful gift of public funds. So um whenever a public official is voting to approve an expenditure, they must consider whether the expenditure provides benefit to the public. If not, it's an unlawful gift. This is set

091forth in the California Constitution. um it's just a general prohibition that prohibits gifts of public funds. The test to determine whether it is prohibited is whether there's a valid public purpose that justifies the expenditure. So there is a case we'll talk about it I think in the next slide um payment for travel expenses for an elected official's spouse like going on a trip let's say to CSBA and you're taking their they're taking their spouse and using the district's funds that was that would be determined to be a gift of public funds because there's no direct or substantial public benefit for the spouse's travel expenses. So, uh I guess that would be kind of like the simplest example. >> But what if they use the same hotel room and it's already >> um get to a

092hotel room that >> let's say the public official is going to this event which is not in the area. So, they need a hotel and the district is paying for the hotel rooms of all the officials who are attending and the spouse just is staying with them. I would argue that that's an expense for the official, right? The official has to stay somewhere. Um, I think it would be a different fact if they said, "I need a different room because I'm going to have my spouse or family attend with me." That would be different. But if they're getting the same benefit as all the other public officials and they just happen to have a family member attend, I would argue that this is not an unlawful gift of public funds. What's the public purpose? To

093have your official attend this conference. Right. Um, but if there if the spouse is saying, "I had to drive to the airport and get my own flight," that's that's definitely an unlawful gift of public. So, a lot, just so you know, you have board policies and board bylaws that have specific requirements for reimbursements to capture this to like prevent any of this from ever happening. So, um, your board policy is probably in the 2000 series on reimbursements, travel reimbursements, and then the bylaws. I don't know it off the top of my head, but it'll obviously be in the 9,000s. It'll have what's required to get reimbursement and what you have to show um, in order to get that travel expenses reimbured. And it'll have language in there that prohibits the use of any of the

094travel or seeking reimbursement for anyone, you know, outside of the district. So, this usually is not a problem. um donations. So charitable donations, a public official shall not automatically assume it's acceptable for a public for the district to make a donation to a charity. So you can't automatically assume that hey this is not an unlawful gift of public funds. We're making this contribution to a charitable organization. So obviously there's a public purpose that you cannot auto automatically make that assumption under this law because the donation could potentially be uh a gift of public funds depending upon the overall nature of the foundation. So if the donation would not constitute a gift of public funds, the board should make findings about the benefits associated with that with that particular charity. So, if there's ever a question

095about the expenditure, the donation to a charitable organization, and you believe that someone like a member of the public is going to challenge this as being an unlawful gift of public funds, I recommend that in writing and maybe put on in the board meeting or stated or at least in comment or on the agenda the public purpose for this donation. making it very clear that the public purpose of this particular organization supports students in this way. This particular organization supports school our school district and the public in this way to make it clear that it does have a public purpose. So some examples are when the charity provides a service that complements or enhances the public agency itself, right? And we I know you probably work with lots of different foundations and such. As long

096as they actually serve the similar goals as your district, that would be fine. when there's an identifiable secondary benefit to the public agency again and then when the charity provides a service that the public agency could provide but chooses not to, right? They they would do it inside district but can't. So, we're using this other charitable organization that we're going to give donations to because they support our kids in any in a particular way. Okay, we talked a little bit about reimbursement, but for board members and other officials, uh reimbursement, there must be a reimbursement policy in your district. You have uh because the statutes governing reimbursement of of public officials varies and lacks uniformity, it's imperative that you adopt your own policies. I've checked, you do have them. The policy should at a minimum

097specify that an expense shall only be reimbursed if the public official can demonstrate that the expense was actual. They've actually paid and it was necessary as part of their role or their travel or their duty. Uh the attorney general's office has defined a necessary expense as one involving a practical need based upon prevailing business practices and a conference attendance and expenses that are subject to reimbursement because they serve a proper municipal purpose like all the trainings and the conferences and such that you attend. Um, this happened, I guess, in another district that I worked with is there was a particular trustee who wanted to attend a specific conference that didn't have anything to do with school districts. Um, but they thought it was interesting because I think it dealt with uh the state budget as

098a whole. So, the board was like, is this going to be a unlawful gift of public funds if we allow this board member to attend this particular conference and get reimbured for all their travel? I think the conference was in DC or something. Um, and so that had to be considered and I I think ultimately they decided to grant that request and what they did was they looked at the agenda that the agency itself and they stated in on the agenda and in the agenda item the purpose of that person's attendance when they approved when they decided they were going to move for that extra expenditure and how it pertained to the district because it discussed um government finance as a whole which impacts this person's knowledge and ability to be informed related to the

099district's own financials and their budget. So, um that is one example. Um honoraria, this under the P, uh it does prohibit the receipt of honoraria by an elected state or local official and a candidate for office by any source of income that's required to be reported on the on their form 700. Essentially, um we'll talk about the form 700. So we cannot just have in in lie of a gift some sort of receipt of honoraria um reimbursement for travel expenses related to an official or candidates's event. So let's say you have a candidate for office um somebody's traveling to that where that individual or have an official who's giving a speech participating in a panel or seminar are not prohibited and we'll talk about form 700 honoraria. There's a difference between inviting a public official

100like a trustee or high level administrator to give a speech and in exchange they receive some sort of honoraria like a certificate or plaque or something of that nature versus just inviting somebody to attend a particular event and then giving them that exchange when they're not actually there to serve a purpose like present presenting like sitting on a cow. So if they're there like to do a duty or perform a function then that's not considered prohibited aroria. All right. So switching a little bit from conflicts of interest to transparency laws. The first two that or the only two that actually govern are the CPA and the product. So, we talk about the CPA as it relates to board members and other public officials related to transparency because one of the ethical requirements of a board

101member and the district as a whole is to make sure they're transparent with respect to the decisions made and the actions taken. So, nothing is done in secret. I think there's a case that says that with respect to a school board. Um, so how do members of the public look and see what actual board members are doing? Sometimes they serve uh public records requests under the California Public Records Act. Other times they're relying on your board agendas and attending your board meetings and ensuring compliance with the Brown Act. >> All right. Under the CPA, the public has the right to see any materials that are created as part of the district conducting its business. And it's considered the people's business because they elect the officials who run the district. This includes any writing that is

102prepared, used, owned, or retained by the district, by the agency. Documents in the form of written documentation, computer data, electronic data, emails, faxes, nobody uses faxes, photographs, text messages. Um, one that came up recently and I know as you might be experiencing here, there are an increase in CPA requests I would say over the past three, four years, right? Members of the public understand that this is a useful tool to them so that they can find out what the district is doing. Some of them do it for marketing purposes. I don't I don't know exactly, but we've responded to these fairly often. I think right now I probably have 20 pending with the districts I work with. Um, one thing that came up recently was they asked for a copy of a settlement agreement relating

103to a lawsuit that was brought by a student against the district. We looked, we scoured the district does not have a copy of that settlement agreement and said, "Well, of course I don't. I usually allow my JPA council negotiate those agreements. I I send my signature on the signature page, but I don't have a full copy." So when we responded, we let the requester know this is not something that is retained by the district. So they don't have it in their own public records. It's not a public record under the CPA. It's in the attorney's records and they're not a public agency. However, if your attorney has a routine of, hey, here's the fully executed, fully signed settlement agreement and sending it to you, it's now become a public record. And there are exceptions that

104we always look at. You know, even if it's public on its face, what information is contained in the record that we might need to redact or remove because it's not public like pupil information, employee information, um attorney client privilege information, board deliberations, th those types of documents are not public. So, um, documents though under the CPA are presumed to be public unless there's a specific exception in the law that allows for the district to prevent disclosure. Some of those specific exceptions are for pending litigation. So, if they're asking for records relating to a pending lawsuit, you don't have to disclose those. However, once that litigation is resolved or completed through trial, they become public at that point. um deliberative process. That's the one that the board review would use most often. Um not only in

105close session is that confidential under the Brown Act, but also the board deliberates in close session outside of the public and the CP has a specific exception related to documents related to the deliberative process of the board uh personnel records, medical records and other similar files. All right. with respect to what documents are retained by a district. The the city of San Jose case from 2017, I feel like that case was new, but 2017 was a long time ago. Um, basically determine that records in the district's actual or constructive possession must be disclosed. Um, this includes officials, records of the official and the employees of the entity. So essentially where the agency has a right to control the record either through another person or themselves records um do not lose public record status just because

106they're located on an employes personal account. Um what was monumental about this decision is that it basically says that even a board member's personal devices needed to be searched for public records. So if they are using their personal account for official use on their personal device, if there are records that are requested that might be on that device because they used it for official purposes, they would have to do a good faith search of their devices to determine whether there are any responsive records and potentially disclose those. So, um, we, if you've had this before, what we do is we provide an affidavit to each of the board members and other officials that says, um, in response to this records request, I reviewed my personal cell phone, my text messages, my personal email account, and

107I found this many records or I found no records that are responsive. So um just you know keeping that in mind because I think before 2017 the thought was well this is my personal computer my personal email they the public does not get to search that but where it becomes searchable is where they use that for their official duties as well. So she >> Yep. So um so I have a district computer and I have my own work computer. So I have put my sister email on that so I don't have to carry around every everywhere. So I have my the Microsoft account which is separate from my read with me account. >> Um I don't share any of that. So the predistant email stays in the district >> outlook and the other one stays

108on Gmail Chrome. Is that on my personal computer which I stop reading emails on my personal computer even though they're separate? >> The account stays when it so I can search district email on your district district device and personal. The account doesn't change. So you'd be searching the account. However, if you're on your personal device, you're opening a district email, you save a document to the personal device that was attached to that, then the personal device becomes searchable. So, >> yeah. If you're just accessing it because it's on a different device, as long as you can in an app, if you say, I've never saved any district official records on this personal device. I only access the email. Here's everything from my email, my district email. then then I think you're okay with respect to

109that. Um so that's why it's important for using only district email for district purposes if you I don't know if you're given a district cell phone only using that for district purposes um and not forwarding things to your personal email address or saving things to your personal devices. All right. In addition to the public uh CPA and California public records act, uh under the transparency laws that board members are required to comply with includes the Brown Act. Um many of you probably are very familiar with the Brown Act and probably been board members for many years um and understand a lot of the provisions of the Brown Act. So we're not going through a full analysis, but we will touch on some of the main ones related to transparency. So the Brown Act generally required

110a decision-making bodies like boards conduct their business in the open in public in the public's uh view to asssure that the public is fully informed about the decisions that are made. A meeting is a situation involving a majority of the board which business of the district is transacted or discussed. So we'll get this question often even if we didn't vote. Is that considered a meeting? Yes. As long as you're disc discussing district business, that could be considered a meeting if you have more a majority or more, right? So you you all have a seven member board. So that would be four. So if you have four of your board members together talking about district business, that could be considered a meeting under the Brown Act and we would make sure that you have a proper

111agenda that was posted for that meeting. Um a majority of the board or commission cannot talk privately about an issue before the body. the issue, meaning that's before their consideration, no matter how the conversation starts or occurs, or whether by phone, email, or text message. Um, if there is a majority of your board discussing district business outside of a properly agendaized meeting, that's considered a serial meeting. Um, and there's business set forth in government code 554 952.2, two, which is part of the Brown Acts. Individual conversations between a staff member and a board member are not prohibited as long as the staff member does not convey the position of any other member. So, if your superintendent is communicating one way to a board member about an issue, that's allowed. Even if they're communicating one way

112to all seven, that's allowed as long as they are not conveying the position of the other member. So, the conversation cannot go live. Hey board member A, I just got off the phone with board member B and they're in agreement with this. What what do you think? Because then that is creates a serial uh the way that the Brown Act construs and the cases that interpret the Brown Act conrue uh serial meeting they do it very broadly right they define deliberate to include a collective acquisition and exchange of facts preliminary to an ultimate decision. So even if the conversation is just to gather information about something that down the road the board will be voting on, this is enough to create a serial meeting under the Sacramento newspaper case. And then action taken is also

113defined very broadly. It doesn't necessarily mean an actual vote, you know, motion second vote. It actually also includes a collective decision by a majority of the members of the board, a collective commitment or a promise by a majority of the board to make a positive or a negative decision and then of course actual vote. What is not a serial meeting? An employer official may engage in separate comm communications and conversations like I said outside of a meeting with members in order to answer questions or provide information regarding a matter within the jurisdiction of the district as long as they don't communicate the comments or the positions of the others. So like I said usually like your your superintendent will communicate in that way maybe other cabinet members. We have some serial meeting exercises. Um the

114telephone game, one of our four members minds connected. When board member one talks to two, you're fine. Board member one talks to one and or two and three, fine. Once they talk to four, that is that you've connected now these members and obviously five and so on. So they're can basically board member one is saying here's my position on this particular issue. Says it's two, three, and four. That's a serial. Um, in this particular example, are there four board member minds connected? No. Right. So, member one is telling number two and three their position. That's just three. Five and seven are confirming or five is telling their position to seven. But nobody five and seven do not know one, two, or three's position and vice versa. So, this is not a serial meeting. Um and

115then here I would say yes we have four board member mics connected. You have one telling two and three. Three is telling four. So we can only presume that three has told four what members one and two are thinking and that creates a serial meeting. Other examples Friday. This is an example of a Friday memo. This is okay. Right. One way only to all to all seven. No back and forth. Um this obviously they can't pull members to get a consensus. So this would be a serial meeting. Um this one so superintendent gives Friday memo to all members six, seven and five discuss it. I I say that you don't have four connected at this point. Just have the three of them unless they comm start communicating to the superintendent and she communicates to others.

116But at this point they're still safe. This is a violation here because we have well let me look actually six is talking to five and four and seven. So yes I I would say this then is why is a serial thing. >> Okay. >> Yep. So if you're just conveying yours and you're not asking two or three or four therapy yours does that or what numbers do you does that constitute an issue because you're not going back and forth and then saying to three, oh number two is voting this way. I'm voting this way. Number two is voting this way. Communicate that to three. So if you're communicating your position to three other members, there are four members whose minds are together. >> That would be a serial meeting. Even if they don't know the

117other positions of the other members, they all know your position and that could influence their decision outside of a meeting. >> Thank you. >> Yeah. >> Um yeah, number one, I I don't think we have four members connected in this example. No, because four or five are not connected. any okay any two-way communication outside of a board meeting could be or could lead to a violation. So this is why we always recommend being very careful um depending on because it could be inadvertent. So here the superintendent disseminates information to all seven um one board member responds, another trustee responds and then now we have these people talking. At this point they could be there four people members providing their information to a superintendent either directly or indirectly and creating a consensus in that way. So

118it's easy to kind of devolve into that right even if it's not intentional. All right. Uh talk about posting requirements 72 hours before regular meetings. All right. As you probably know, 24 hours in advance of a special meeting like we have today, um the Brown Act allows for post session for limited specific um topics which are set forth in the Brown Act, including personnel, pending litigation, which is consultation with legal counsel, real property negotiations, and labor negotiations, amongst others. Uh, anyone attending a meeting may record the meeting audio or by audio or visual unless that this becomes an actual disruption to your meeting. I would say that rarely ever occurs. Someone just simply reporting rarely will ever create an actual disruption that would allow the the board to order them to stop. Um the consequence

119for a Brown Act violation could be to void the decision that was made as a result of the violation, nullify that decision. Um but the Brown Act builds in provisions that require an individual challenging to give notice to the board and the board has a certain number of days. I think it's 60 days to cure and correct or respond to say this is not a violation and we're not going to do anything different. then that individual can then go to the attorney general to try to enforce the Brown Act. So there is a uh opportunity to cure what you know Brown act violation that occurs. All right. So laws related to fair process and local governance rules. So in addition to what boards do in terms of overseeing finances and policy development and other decisions

120and approving contracts um sometimes they are required to make decisions with respect to usually it's going to be employee due process right so if you have an employee who is being disciplined at a high level like a suspension or a dismissal one of the steps that in the due process latter is a decision by the board. So for due process reasons, it requires that the decision maker, the board be fair and impartial when they are sitting in their capacity and rendering a decision whether they're going to support the recommendation for discipline or not. So types of impermissible bias might include a personal interest in that decision like maybe they know the employee and they have some sort of personal relationship with them. personal bias where they have maybe some animosity or some feelings about the

121individual that might interfere with their ability to make a mutual decision on that. Um or factual bias where they've received information outside of the process that might have impacted their decision, right? They have other information. And then so for that example um if you have like for classified employees if you have a contract that says or a policy that says uh the employee being dismissed classified can have a a hearing before the board it's important that when the board presides over that hearing for due process reasons they do so in a neutral manner. They act like the court of appeal so to speak right they're outsiders. They're not acting as the prosecuting agency, right? They're not the one bringing the charges. That's like through the administration. They're really kind of governing and looking at it,

122determining um without bias whether there's sufficient cause to support dismissal. Then we have the doctrine of incompatible offices. This is under government code 1099. It applies when a public official holds multiple offices. Membership in two offices might create conflicting loyalties. Their offices will be considered incompatible under the law if there's a significant clash of duties or loyalties between them. If the dual office holding would be improper for reasons of public policy or if either officer exercises supervisory auditory removal power over the other. So if you have a member of the board who then becomes a member of the county office board, they would have supervisory power over this board and they cannot hold both office. They would have to remove themselves from um although an individual may not serve as an elected or appointed member

123of a board um if he or she is an employee of the local agency, this would apply to them as well. the employee would not need to resign under these circumstances. Um, but their employment will automatically terminate by law upon being sworn into their office. So, if they're sworn into office, um, let's see, do we have I think a long time ago we had an employee of a school district who became a Granford board in that same district. This was a long time ago. and they automatic their employment automatically terminated because they can't serve in purposes obviously because they would benefit themselves in their employment if they were also. >> So we highlighted some of your policies and bylaws that talk about transparency, the Brown Act, conflicts of interest, and just overall ethics um that

124you can kind of review on your own. You act your district actually has adopted a lot of by laws. So, more than other districts that I work with. So, um you have a bylaw that basically speaks to almost every scenario before your board. So, it is good to be very familiar with those. I'm sure you have a process when new members come in to actually um to actually like review your bylaws. So, I do recommend highly that you become very familiar with them. Some of the the basic ones that I see in mostly every district are the role of the board at 9,000. Okay. >> Um it's good for new board members to understand essentially what their role is once they become a trustee in your district that their role is to maintain oversight. They

125supervise the superintendent. Um they I think there's language about making decisions in the best interest of students and and curriculum and things like that. And then there's board uh viol 9005 which talk about governance standards. Basically how are they going to govern that the board governs as a whole. All seven make a decision. They vote by uh decisions are made by a majority vote for more. Um and then 9010. This one we get questions a lot about who's going to who's going to speak on behalf of this board. So, board bylaw 9010 actually says that uh the spokespersons for your district on behalf of the board or district are this the board president, your superintendent or someone that they've designated. So, in other context, they might say this person is the the person that we

126want to speak on behalf of our district. Other bylaws I've seen in other districts also will list like the PIO. I don't know if you guys have a PIO here, but >> other bylaws will also say in addition, you know, um the PIO will be on that this list or you could you could still in your district even though you don't have them specifically identified, they would be considered a designate of the board. Um it also says individual board members may express personal views in their individual capacity. So if there is a topic out in the media and you want to have an official statement, that official statement is going to come from your fourth president, your superintendent, your PIO or another designate. If an individual board member has an opinion to express with respect

127to that, they are free to express their opinion under the first amendment so long as they make it clear that this is their personal view and not on the behalf of the board or the district as a whole because they're not designated the spokesperson. All right. Board bylaw 9200 talks about limits to board member authority. Um they are these are created for ethic ethical purposes. Basically again that the board is a unit. The seven of them have the authority to make decisions but not one individual board member. That they do not exercise administrative responsibilities or command services of an employee. What they do obviously they vote policy-wise and then they provide instruction to your cabinet and your superintendent to implement that policy and those individuals command the services of the team members in the district

128to to fulfill those goals. So it does trickle down in that way rather than a board member contacting an employee directly and commanding their service. Uh board members are entitled to request any district information through the superintendent. So they can ask for, hey, I want more details on this related to the budget or related to this personnel action or related to this litigation that's going on or student issue and the superintendent can fulfill those requests. U board members do not have authority to resolve complaints on their own. One of the things that a lot of board members you guys will know is because you are elected from your by your community, that community is going to reach out to you with concerns. That's just the way that it works, right? We're not going to prevent

129that from happening. We're not going to prohibit you from listening and being the ear to those community members because that you're serving them. So, we want you to still do that, but you want to make sure that you don't promise them or I'm going to fix this or I'm going to resolve this. Instead, you can say, "Thank you. We'll look into this." And then you confer with the superintendent. There's going to be someone here in your district that that's it's their job, right? If it's a student issue, it's going to go to your student services. Employee issues will go to HR, etc., etc. Um that way individuals who are members of the public are not going to uh they they have to go through the process, right? There's specific board policies that govern complaints and

130investigations and things like that. So you can intake the information. It's good to make sure it trickles down to the superintendent and below to make sure that it is properly handled. You can oversee to make sure hey was I just want to make sure that we you know that somebody's looking into this. That's important to do as well. Um, requests for action are placed on the board agenda for majority approval, of course. So, any action by a member of the public who says, "Hey, I really want your I want the district to do this." Um, they can be directed to follow the process to place an item on the board agenda for the board's consideration and possibly approve. Um, board bylaw 9250 talks about the remuneration, so basically payment to board members for their board

131meeting attendance, reimbursement for travel, and any other benefits like health and welfare that they might get. Um, board member compensation is discretionary, meaning you don't have to accept it if you're a trustee and you decide you don't want to do that. I I'm aware of of other boards that I support where they voted as a whole that they're not going to be paid for their board meeting attendance. They said this is something that they wanted to do as an elected official. Um, but the law does allow for compensation because it takes away from your time, right? You all have jobs and lives and you're busy individuals and you're taking I don't know how many hours your board meetings are, four, five, eight hours out of your uh two times a month to attend these meetings

132until the law does allow for you to be paid for that time and also allows for you to receive health welfare benefits up to the extent of your highest benefited employee. We're on the rolling. Um and the new legislation did increase the authorized base compensation. Um I I looked just looked it's 2,000 per month to attend uh board. So it is increased from time to time. So board bylaw 9270 actually has the conflicts of interest. you'll see the bylaw references, the uh government code 1090, the P and other areas of conflict. So, you can kind of read those for yourself. And it just basically carves out specific uh parts of those laws um within the bylaw. It doesn't rehash all of the statutes, but it does highlight the main points of it and the items

133that the board has decided that they want to highlight in this bylaw. And then 9310 goes through board policies, how the board's going to adopt a policy, what how they adopt their bylaws, how they um govern or oversee the adoption of administrative regulations. Um it might have like the first read, second read type of procedures like in there. And then 9321.1 goes through close session. And it's going the overall bylaw will say that members who are in close session shall not disclose um the information discussed or received in close session outside of close session. And that's per the Brown Act. Um it also um cites the Brown Act provisions related to what items can be in close session. If you've been on the board for many years or worked in a district, you'll understand what

134types of items are close session items versus an open session item. So, conference of legal counsel personnel, um public employee evaluation, some student matters, um labor negotiations. There's also what we used to call like the super secret provision but under the employees educational employee relations act the erra the board is allowed to discuss negotiations and provide parameters outside of a meeting completely they don't have to do it in they could do it in close session at agendaized meeting but under the erra it's not subject to the Brown Act they can get on the phone with their labor negotiator team and discuss parameters outside of a that we call it super secret because a lot of boards don't don't know that that exists. And hopefully in negotiations you don't have to do that often. So it's

135not invoked often. But usually if you're in a situation where your your team's at the table, you're very close to a deal, all they need is like board parameter approval, they can have that conversation outside of a meeting. All right. 9322 goes through the agenda and materials that need to be included in the agenda. Um, and who can request items to be placed on the agenda under the Brown Act, individual members of the public can request that items be placed on the agenda. Employees of the district, even board members can place items on the agenda. The bylaw though will say how that item will be placed, whether discussion or action, whether open or closed, or whether it's already been fully addressed, then I think that's the only time that that item can be denied. But

136that's really rare. >> Brook, I have a question. Yeah, I have companies that want to give presentations sometimes and they'll send us the request to agendaize the item the same day of a board meeting. can't do that. >> Oh, yes. So, your bylaw probably requires that they turn it in at least 24 hours or 7. Read the bylaw. They usually have something that requires a timeline. Otherwise, it would have to go on to the next meeting agenda. >> And do we have to accept every single company that wants to present at a board meeting? >> Um, it depends on Well, the Brown Act does say that they can they can members of public can place items on the agenda. they just have to follow the rules for doing that. So, I'm going to say yes,

137unless there's an exception, meaning let's say it's a vendor and the district already adopted a a contract with that type of vendor and this vendor wants to come in. Maybe you could say this has already been considered and we're not going to. But I usually hesitate um about denying items on an agenda. I I just I think that that might be rife for a a violation. And that's an easy one that members of the public can challenge because they can say, "I did this and I never got it on the agenda." And they will challenge it. Um Okay. When I Are we scheduled till 12 or 12:30? Well, okay. I was going to give you all a break, but I'm going to power through so we can finish. All right. Um, bylaw 9343 governs meeting

138conduct. You'll read that it talks about board members have a duty to vote as long as they don't have a conflict of interest. And um, they choose to abstain, but basically it says you should vote if you can, even though you are allowed to abstain. Um, and abstensions do not count as a yes or no. They're just a non-vote. So you if you have three yes S's and two extensions um and two nos you don't nothing's passed like there's no there's that will not that would die that that action will die. Um public this talks about public comments being subject to reasonable rules like the three minute rule or if you guys have a 20 minute rule per topic or per item or something like that it'll be in your bylaw here. Um, and then,

139oh, I did mention it. I think I got it right. Ed code section 7054 prohibits public funds to urge or def the support or defeat of a ballot measure or a candidate who public office. So, that's going to be in your bylaw as well. Um, stating that. And then this bylaw also governs what to do if there's a disruption during a meeting. the law was amended either last year or the year before um to require additional steps before ordering the room to be cleared or boy but before removing a member of the public for disruption. Um, interestingly, the way that the law was amended actually comp complied with what our advice always was, at least in our firm, was that before a disruptive member is removed that the board president first give a warning to

140say this is causing a disruption and specifying on in open session and saying if you don't stop this, you will be removed. Once that's done, they can be removed. So, this this new law basically says that's a requirement. Now, before it was a courtesy, now we have to do that um before clearing the room. And there's no warning unless if there's a use of force. If it's like a physical disruption or a threat of force, the warning isn't required. So, there is an exception there. And then under the new law, um the way that they have required it is before the the board could clear the room for go behind closed doors. Now, the law says they clear the room instead. They're not there's no going behind closed doors. They can. So, um if you

141were on the board during the pandemic, this might have been something that you had to look at. I worked with some districts that actually had to remove people for disruption. Hopefully, you didn't have to deal with that. All right. Now, we're going to get into form 700. So, how many of you have filed a form 700 before? So most of the vehicle have right. Um it's filed in April. Is it the 15th of April? I think is the deadline every year. Um but it's highly important to make sure you understand the requirements and the intricacies of it to avoid a situation similar to what we've seen in the news in past years. When I first started with um Atinson in or maybe it was I started in 2011, but I think it was in 2012.

142There was like a big scandal about a district who had not reported any of their gifts on their form 700 and it was a big deal and board members were arrested and charged as well as members of the cabinet as for related to construction contracts with the vendors that do construction for school districts. So, this was a big deal kind of when I first came into the business of school law and I know that we as a firm created some uh internal policies to make sure that our clients comply with form 700 with respect to our services and things like that. So, um it's just interesting thing that I had to learn about really early on in my career working with schools. So, um, usually the situation starts with the superintendent and the board accepting

143an invite to go to dinner with some sort of vendor or the school district. Everyone has a great time. Uh, they work with that vendor. They probably already have a relationship, but then it might end up like this. This is so small. This is in 2013. uh four Sacramento area officials received free meals from their bond advisor and they did not disclose on their form 700 and uh under in this particular situation. There were penalties for 86 public officials related to this statewide who are accused of accepting but failing to report violators collectively would pay $22,000 and um I do know that some of them were charged with like the mis related to that. So, yes, you can accept a gift from a vendor, but you must report it if it's um if it the

144cost of that gift is $50 or more, you cannot accept a gift that exceeds or collectively 300 or $630, right? >> So, CSBA is famous for all the vendors and all the legal firms to try to take all of us's dinner. >> Yes, they are. >> Okay. So, I know those meals are over $50. Are we supposed to be putting those on our 700s? >> Yes. >> Thank you. >> Very good. Good question. Yes, you are. Um, and we usually say, don't forget, you know, we'll host like a hospitality and usually there's a sign up there that says the cost for the meals today was this. Please report this on your form 700. And the reason why they have the rule about the aggregate being no more than 630, let's say you work with several

145individuals from an outside vendor, right? Um, and throughout the school year, they take you to dinner and they take you to lunch and they do other things. You have to add up all of those gifts and they cannot be or exceed $630 and you would have to report the aggregate of all of that. So, I had a situation, me personally, where um I've worked really closely with an administrator and we talked about going to a baseball game and I made sure, "Have anyone has anyone else in my firm ever taken you to lunch or dinner or to another event or anything?" And we found out yes and I said, "Sorry, you can't go." And so, we had to make sure of that. And unfortunately, that was the reason why is because we just wanted to

146be careful. Um, a lot of the people that I work with, a lot of district people that I work with, they just don't accept gifts or at all. You know, they want to be extra mindful of it. But I understand at big events like those conferences where, you know, you're invited to dinners, you know, you'll accept the invitation. As long as you report it, you're within the confines of law. So, um, this one came out in 2014. Um, the state ethics regulators cited 260 public officials. So they did an audit around 2013 2014 at the state level and they cited 260 public officials issuing more than $18,000 in fines for failing to support gift or to report gifts on their form 700 from this bond firm. The the FPPC commission launched an investigation in response

147to a report about school district officials who failed for year years to report meals. The bond company, the vendor, handed over its reports in this investigation and they found that just 22 public officials out of 282 that they had taken to dinner actually filed their darts. So it was a rampid issue back then. The FPPC came down, conducted this investigation and issued some sanctions. So we just want to make sure that we are not violating that. So why is it important? Well, legal gifts on gift acceptance. The reason why it's important is because we don't want a gift to look like a bribe, right? Meaning we don't want vendors to pay to play. We want and if they are paying to socialize and and you know as a form of appreciation, then that's reported as

148long as transparently it's not a it's not a right. Right. So, the legal limits, like I talked about before, um I anything that's $50 or more and nothing can exceed 630. Um we find all this through the P statutes, the FPBC advice letters, and other policies that you probably have adopted related to conflicts of interest. Um there is a potential for conflict of interest to develop with vendors, especially if you have your favorite vendor. They take you on trips. They take you and then now you have to vote on whether to extend their contract, right? That looks like a conflict of interest if you're getting a personal benefit. This is why gifts must be tracked and reported and this is for transparency and integrity and accountability purposes and to comply with the law obviously. Um,

149the definition of a gift is any payment made by any person of anything of value, whether tangible or intangible, real or personal property, a good or service provided to an official that confers a personal benefit for which the official does not provide full consideration for the value received. So, this is a gift. They receive something of value that's not an exchange for anything else, right? It's not an exchange for it's not like a contract for work. Gifts include presents, meals, tickets to sporting events, wax, travel, hotel stays, forgiveness of debt, a discount or rebate that's not available to the general public. Gifts to family members also count as gifts to the official unless there's already a working social or similar relationship between the vendor donor and the family member that's completely separate from the official.

150We understand people can be friends and family friends over time and if there is some sort of exchange between them outside of this public official relationship that would be okay. A family member includes spouse, registered domestic partner or dependent child which includes 18. If you have a child who's 18 to 23 years old that lives with you. This kind of answers your question earlier and this is under the California regulation. So gifts of $50 or more or gifts aggregating 50 or more from a single source must be reported on 2700. So if you go to dinner uh 10 times and it's $50 or $5 or more, you have to report all of those times for 25 and 2026. No elected official can accept a gift from one source worth more than $630 in a single

151account year. The previous was 590, so they did increase it. And there are certain exceptions to the definition of what is a gift. Here are the exceptions. Gifts do not include campaign contributions, prizes received based on a bonafide competition, tickets, um, and for the official and a guest for admission at an event where the official is performing a ceremonial function like ribbon cutting. Right? So, if you're inviting the official to cut the ribbon or pre open the ceremony and you're giving them a ticket to the event, a guest, that's not a gift because they're actually performing a function, right? It's kind of like they're doing a job. Personalized plaques or trophies worth less than 250 gifts from family members. So, if you have a vendor who's a family member, um, as distant as first cousins

152or in-laws or former in-laws, those are okay as long as that's the nature of your relationship. Admissions, food or minimal items when making a speech, right? So, if you're invited to make a speech and is part of that entire event, minimal item, food items, or the admission to that event is not considered a stress ball. I don't know if anyone gives a stress ball. Okay. Additional exceptions are bereavement offerings, home hospitality, reciprocal exchanges. So, this has come up a lot in my practice. So, um I sit sometimes with certain tables for negotiations and we all go to lunch in the middle of the day and it they'll pay and then I'll pay and then they pay and then I pay and as long as we're keeping track that it's pretty equal, then that's reciprocal and

153that's not considered a gift that needs to be reported. as long as when I've paid it's not like Ruth's Chris and then I'm not getting McDonald's back, right? Like it has to be equivalent. So, we need to make sure um if that is the case and the relationship you have with the vendor that it is equal. Uh acts of neighborliness, acts of human compassion, gifts from an existing relationship, right? That's important. There are relationships that exist. If there's a gift that's given and it doesn't have any impact on the decision making or the financial effect in their role with the district, that doesn't need to be reported. Uh gifts in a dating relationship, benefits of wedding attendance, and travel and walking. Right? We talked a little bit about benefits and the social relationship. um like

154lunches, dinners if you already have that social relationship. Um parties typically rotate payments on a continuing basis. Talk about the rest reciprocal exchange. If the official receives a disproportionate amount of benefit relative to what they paid, the official must report the excess amount. Right? So the reciprocation is not equal. Whatever is on top of that must be reported. And there cannot be a single exchange that's over the gift limit. So over 600 $30. I don't know what types of gifts would cost that much, but I'm sure there are some. So, we cannot accept anything that by itself would exceed the limit or in aggregate. So, all adding all of the events and lunches and gifts together. So, another exception is gifts given to the agency. A gift to the district, not to you yourself as

155a official of the district. A gift is considered to the agency if it meets all of the following. The agency head controls use of the payment or the gift. So basically, it's a donation to the district. The district gets it, decides what they're going to do with that. They're going to make school student scholarships or they're going to put it towards textbooks or whatever it might be. Uh the payment or gift has to be used for official agency business only, not personal use. and the agency has to report the payment on form 801 within 30 days of using that uh donation and then they complete um FPPC form 801 and it must be maintained as a public record by the district. So, just so you know, these records that are reported to the FPPC are

156public. Go ahead. So, we have a company that contracts with us and they put on like they contract the parking lot from us for Coachella and they donate tickets for our students for all the seniors and there's a criteria >> uh for how the student senior gets it. They have to have like a 3.5. They have to have 95% or better attendance and they also give tickets to the district where we have raffled them off to teachers and classified staff and we've also given them to board members and to executive cabinet and those are the donations that are given to the district. So those need to be on the 801. >> Yes. >> Okay. Um some examples are sponsors or your administrator retreats. Um anyone you're using of a conference room for a meeting like

157if that's if they are giving this is kind of like the example that you just gave use of not a conference room but of the parking. Food and beverages are usually considered a gift to the official who consumes them and needs to be on form 700. So the donation, if it really ultimately ends up in an official getting food, it doesn't benefit the whole district, right? It it only benefits the individual. So it's not going to be a 801 form. It's going to be the 700. You'll have to count it. >> Um there are certain exceptions to gifts. If you don't have to report it on your form 700, if you return to the gift to the donor within 30 days, um or if you get the gift and then you donate it to a

158charitable organization within 30 days of receiving it. So, you say, "Thank you very much for this gift of Amazon gift cards, right? I'm going to go ahead and then donate these to some charity, usually like a foundation." Yeah. And then or if you reimburse the donor for the gift within 30 days, you say, "Thank you for these tickets to this sporting event and then paying them back for that amount." >> Good question. >> Yeah. >> So, I've seen it previously where we requested donations for an upcoming event and a vendor um has provided like gift cards and we've wrapped them off. >> Yep. >> That Yes, that is a donation, charitable donation. And I would recommend that the district report it on the 801. >> Okay. Yeah. All right. And then how do we value

159the gifts? If there's a face value, like tickets have face value, you're going to use that. If there is not a face value, you're going to look at fair market value. So you might get a ticket to a Dodgers playoff game. That face value is $50, but you know it is not valued at $50. So, um, I always recommend in those situations to report the fair market value, right? Because we don't want it to appear if some member of the public by CP asks for your form 700, we don't want them to challenge it and look like you are, um, trying to hide that gift. Um, invitationon events. Um, if there's a vendor who hosts an invitationonly event and there's lots of different districts that attend, um, the pro rata share, like all of the

160food is $10,000 for the entire event, it's going to be split up by each district and then you'll have to report the prorat amount. So that's what we usually do. Um, if like we have we host like a hospitality event, we'll say the prorat share of all of the food here is $20 a person or something like that. That doesn't mean the individual meal was actually 20. We just split it up. And then I like I said about tickets face value, but only if used or transferred. I'm really hesitant about it. The law does say you can only use face value, but I'm hesitant for tickets where we know that the value has significantly increased, right? So I always give like the most cautious approach advice because if you have a member of the public

161who challenges it, it would be better to be upfront and appear to be completely transparent, ethical about it. Travel payments, uh, reimbursement for travel or advances for travel or direct payments for transportation. Um, they might be considered income or they might be considered a gift if some vendor is inviting and paying for your travel. So it might be reportable if it's a gift and it might be subject to the limit. Um this might disqualify the individual if it exceeds that limit as well. Um the rules for travel are very specific under the FPTC rules. If it's travel because someone's invited you, it might still be considered a gift because they're inviting you to their event and then they're paying for everything up front. That's why we typically recommend when you're attending events that the district

162pay for it and then or you pay for it and get reimbured by the district because it's not a gift, right? But if you're going on your own because a vendor that you work closely with is inviting you and paying for it up front, it's likely a gift and it has to comply with all of the limits as well as the reporting requirements. Um the form 700 requires disclosure of personal financial interests as well including your income includes your income includes gift received from certain sources. So the form itself lists what types of things need to be reported as income and you have to sign it under penalty of perjury and mandatory filers are defined in your local conflict of interest codes which you also have a board policy that's going to define who's a

163form 700 filer >> under the the local codes. It's usually or always is your board members, your superintendent, and your executive uh cabinet. Some districts have adopted rules that require even like director level to do that. Um I think some principles have you know so double check your policy on that but understand that it does apply to all board members and executive high level higher level officials. So where do you get the form on the FPPC website? uh you have to file it upon taking office within 30 days and upon leaving office within 30 days and then on an annual basis. I was wrong. It was April one. Thought it was the 15th. So it's April 1st. So every year on April 1st and then within 30 days of resuming office or leaving office, you

164file it electronically and typically you file it and your board policy will identify who the district's filing officer is. It's usually the superintendent's assist executive assistant. they will receive or it might be your CBO's executive assistant who will receive all the form 700s for your district and they will officially file them by April 1 with the FPPC. And like I said before, it's a public document. So, um here's kind of an example of what it looks like, how it would be reported. If you make a mistake or you leave something out, please amend your form 700 as soon as possible. There's an amendment form on the FPPC website. Complete only the schedule that had the error on it, not the entire thing again. Um, and then you attach your amendment to your original statement and

165then you submit it all there. And I believe the statute of limitations period for the FPPC to go back, I think, is seven years. So they can go back seven years to look at all your prior file. So consequences. If you accept a gift in excess of $630 in a 12-month period, you're disqualified from participating in any decisions involving the source of that gift. So if your 12-month period is rolling, but you accept a gift in December one, and let's say it's $630, you can't accept any more gifts through December one. If you accept one more dollar, you are now disqualified from participating in any conversation, decision, negotiation related to that source of that of that vendor. You must publicly identify the financial interests that gave rise to this conflict in sufficient detail to the

166public like in a board meeting. You have to recuse yourself from discussing or voting. You have to leave the room unless it's on the consent agenda. And you might also consider whether this would create a 1090 violation if you actually do have a discussion or participate in any way in this contract. The reason for that is there's a question of whether this vendor contract that you vote on gives you a personal benefit because you're getting $630 or more actually in excess of 630 in a year from that vendor. So the in the infrance is you're only approving the contract because they take you on this lavish vacation something like that which I think after 2014 a lot of like I said a lot of district uh board members and administrators are really hands off they

167don't like to accept gifts just to be safe. Um, other considerations related to competitive bidding for public work projects that your district might be undergoing, those are governed under the public contract code. Um, I'm sure your CBO is probably very familiar with these things related to competitive bill bidding. Um, public work projects that are more than 5,000 must be competitively bid and awarded to the lowest bidder after August. Right? You can't just hire or render a family member >> responsibility responsible lowest, >> right? So it does you don't have to do the you have to look at everything. It does say responsible lowest responsible bidder, right? Who submits a responsive bid? So it doesn't necessarily have to be the cheapest in price. You consider who's the lowest responsible. So if this you have a bidder

168who's not the lowest but they are providing maybe better service, they're more responsive, right? Then you can actually um grant them the the contract versus the really the lowest one. So um these laws are intended to eliminate favoritism, fraud, and corruption in awarding public contracts. The exceptions are for emergency work. So, if you have a pipe burst and you have to get that fixed as soon as possible before students come in, um you do not have to send it through the competitive vetting. Um contracts under 5,000 do not have to go through that process. And then those for specialized public services and those are listed in the law. So, project must be awarded to lowest responsible bidder who submits their bid. Obviously, they have to submit a bid. the the district can't go outside of

169the bidding and ask them to take on the contract if they didn't actually submit a bid. The bidder has to be a licensed contractor who's not been barred from entering into a contract with the government before for misconduct. So when they submit their bid, they have to attest based on the the the RFP that the district puts out, they one of the questions that they have to attest that they've never they've not been barred from working with the public agency. The bid must also be an unconditional offer to provide goods and services that are being bid on and must comply with all the bid procedures. So basically um they are bidding for the job and it's not conditioned upon any specific benefit to a particular board member or member of your district. Beested payments are

170donations made at the behest of a government official. So, I'm making a donation on behalf of government officials. So, so um local elected officials who might ask a third party to contribute funds to a school in their district. Um there are some other things. There are some requirements for those type of beested payments and they're also are going to be reported because they're typically considered donations. So, they have to be reported. Um public officials cannot receive free or discounted travel from transportation companies. Right? So, we can't have an airline saying, "Hey, fly with us for free because we know that you're work with such and such school district." And that's under the California Constitution. So, there's that. Loans to public officers. An elected official cannot from the date of their election through the date that

171they vacate their office. So, the time they're in office, receive a loan, personal loan from any officer, employer, or consultant in that agency. So if you are a trustee once you are elected even before you take your office in December and then once you take your office and then after you leave in that time frame you cannot accept a personal loan from any person in the district. Okay. So why are these rules important? Well, um they're important to avoid liability from cross. Um important to avoid things like this going out in the media where you know accepting bribes. This is u you know this in this particular case from 2012 in San Diego. They were officers were found to be accepting of bribes. They found that they were guilty of corruption. They were charged Friday

172with accepting bribes and charged with felony counts of perjury. So what they this related to the seven form 700 I think this is what happened when I first started because I remember it being in San Diego County. Um they did not submit all the gifts on their form 700 and so not only did they get charged with violating the form 700 requirements which is probably a low-level consequence. They the DA charged them with felony perjury and filing false documents because they lied when they signed it under a penalty of perjury. It was not true. So, there could be a felony related to this. So, we want to make sure that we are complying with all of these. Um, here's a situation where a former superintendent was sentenced to two months in prison for participating in

173a pay-to-play scheme in which he demanded campaign contributions from a contractor in order for the contractor to be considered were a contract with that district. The sentence was handed down. They plead guilty to a misdemeanor charge and they were sentenced to uh two months in prison. City councilmen plead guilty to bribery and perjury again because they did not report the gifts that they were receiving and it appeared as though those gifts were bribes in order for that vendor to have a contractual relationship with that with that district. Um he didn't face jail time. He did have probation and he had six months of basically house arrest. No one can find him. Um he had to resign from his city council seats and the folks the bribe was $15,000 from a developer in exchange for that

174developer obtaining a contract. Few more examples. uh former city deputy treasurer was sentenced to 78 months in jail for embezzlement of over $3.7 million in city funds. Um federal prison. This was over the course of six years. They they admitted to stealing that money from the city um and basically play it down in this way. But um over time and nobody had really even noticed that he was using the city funds and taking that for his own personal benefit. He was responsible for kind of receiving cash and for parking and other types of things and he was taking some of it. So this is really like a case of theft of public funds which unfortunately does happen. >> And then this one I think I'm familiar a little bit with this. Here's another case from

1752024. a senior director of fiscal services was sentenced to 70 months in federal prison and ordered to pay over 16 million in restitution for embezzlement, theft, misallocation of funds. They wrote checks in small dollar amounts to this MSE applicable bank account. So, I don't know what he was saying, but like Mike, Scott, Dan, I don't know would write it in there. >> Um, to conceal, he provided the bank reconciliation packets to other people, not the people who submitted them to them, so they couldn't cross reference it. >> And the FBI came and investigated it, and this person was ultimately um convicted his prison. So, as we talked about before, if you have questions, um, and you would like to contact the FPPC, you can do that. We included the information in the materials, you can

176do that anonymously. Say, you know, I work for public school district. I have some questions about this. They'll ask you for a lot of detail. I will say that their their attorneys will say, okay, well, what's the nature of the question? How much money are we talking about? when was the contract entered? Give me as much as detail because they're going to give you a formal legal opinion and they are only relying on your source of information. So, in order for them to do that, they're going to need enough information to render that decision. I will tell you it's not a quick turnaround. I think it took three months the last time I did it beforehand. It used to be like a month and then after co I feel like they maybe they're overwhelmed or

177they just have a maybe they're staffing. I'm not sure, but um it takes some time to get that decision, but it's better to have that decision on hand than not to because it'll absolve you from liability per criminally and civily. So, all right. And any questions? So, that completed they've required two hours of ethics training. I know this was three hours because we did include some of the Brown Act, the CPA, some of your own bylaws and policies. Um, but we it all focuses under the umbrella of conflicts of interest and overall ethics for your local agency officials. And I'll stick around if you have any questions, but thank you. >> Oh, you know what? need to um excuse me, Mr. President, you need to go back to the process of item two. Go through

178that process before we just start talking. >> Yeah. 6.1 session public comment. 32.2 motion by Arando. We have second by and protest. >> Yeah. Hi. >> Hi. Trusty Gonzalez. Is he still on? know that is not on. >> All right, we're on 2.3. >> Yes. And so it's actually me. We still have people in here. Sorry.