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36 Staff Report - Amending Town Code Relating to Conflict of InterestTOWN OF LOS GATOS Council Agenda Report DATE: MAY 3, 1989 TO: MAYOR AND TOWN COUNCIL FROM: MARY JO LEVINGER, TOWN ATTORNEY SUBJECT: COUNCIL AGENDA DATE: 5/15/89 ITEM NO. 3 ( _ INTRODUCTION OF ORDINANCE OF THE TOWN OF LOS GATOS AMENDING CHAPTER 2 OF THE TOWN CODE BY ADDING SECTION 2-64 RELATING TO CONFLICT OF INTEREST RECOMMENDATION: 1. Waive the reading. 2. Clerk reads title. 3. Introduce the ordinance amending Chapter 2 of the Town Code by adding Section 2-64 relating to conflict of interest. DISCUSSION: The proper operation of democratic government requires that public officials and employees be independent, impartial, and responsible to the people; that government decisions and policy be made in the proper channels of the governmental structure; that public offices not be used for personal gain; and that the public (Continued page 2) PREPARED BY: MARY JO LEVINGER A:/CNCLRPTS/CNFLCT2.TCR MJL:ymf cc: Regular Distribution Reviewed by: ATTORNEY CLERK TREASURER TOWN COUNCIL ACTION DIRECTED TO: ACTION OF COUNCIL: COMMENTS: MAYOR AND TOWN COUNCIL SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 2 OF THE TOWN CODE BY ADDING SECTION 2-64 RELATING TO CONFLICT OF INTEREST MAY 3, 1989 PAGE 2 have confidence in the integrity of its government. The existing Code of the Town of Los Gatos directs officials and employees to disclose private financial interests in matters affecting the Town, and requires disqualification where such conflicts of interest exist. In certain instances, elected and appointed officials have acted in accordance with the State Conflict of Interest Code (Government Code Sections 87100 et seq.). However, various council members have expressed the need for the Town to enact a Code of Ethics, stricter than state law so as to eliminate any appearance of impropriety, and that this should also apply to appointed officials including members of boards and commissions. The proposed additions to the Town Code will establish ethical standards of conduct by setting forth those acts or actions that are incompatible with the best interests of the Town. MJL:LMA:ymf a:/cnclrpts/cnflct2.tcr ORDINANCE NO: ORDINANCE OF THE TOWN OF LOS GATOS AMENDING CHAPTER 2 OF THE TOWN CODE BY ADDING SECTION 2-64 RELATING TO CONFLICT OF INTEREST THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY ORDAIN: SECTION I Section 2-64 of Article VI of Chapter 2 of the Town Code is hereby added to read as follows: Section 2-64 Specific Activities Prohibited - Conflict of Interest In addition to the regulations of 2 California Administrative Code Section 18730 adopted in Section 2-60 of this Article, no elected or appointed Town official, whether paid or unpaid, shall engage in any business or transaction or have any financial or personal interest, direct or indirect, which is incompatible with the proper discharge of the official duties in the public interest or which would tend to impair the independence of judgment or action in the performance of the official duties. "Personal", as distinguished from "financial", interest includes an interest arising from blood or marriage relationship or from an organization of which the official is a part. Special conflicts of interest are enumerated as follows for the guidance of elected or appointed Town officials: 1. Incompatible Employment. No elected or appointed Town official shall engage in or accept private employment or render services for private interests when such employment or service is incompatible, inconsistent, or in conflict with the proper discharge of official duties or would tend to impair the independence of judgment or action in the performance of official duties, except as permitted in Section 1126 et seq. of the Government Code. For the purpose of this section, an official's outside employment, activity, or enterprise is prohibited if any of the following exists: (a) The use for private gain or advantage of the official's local agency time, facilities, equipment and supplies, or the prestige or influence of the official's local agency, office, or employment; (b) The acceptance of new private employment or the formation of a new contract with a private entity which has an existing contract with the Town, is engaged in litigation against the Town, or has submitted development plans to the Town; or (c) It is determined to be incompatible, inconsistent, or in conflict with the proper discharge of official duties by an Opinion of either the Town Attorney or the Fair Political Practices Commission, or statutory or case authority. 2. Representing Private Interests Before Town Boards, Commissions and the Courts. No elected or appointed Town official shall appear on behalf of a private interest except as permitted in 2 California Administrative Code Section 18700(d) before any board or commission of the Town, nor shall the elected or appointed Town official represent a private interest in any action or proceeding against the interest of the Town in any civil or criminal court proceeding to which the Town is a party. 3. Contracts With the Town. No elected or appointed Town official shall have a financial or personal interest in any business transaction or contract with the Town or in the sale of real estate, materials, art work, supplies, services, or other things of value to the Town, except as permitted in Sections 1090 et seq. of the Government Code. 4. Disclosure or Use of Confidential Information. No elected or appointed Town official shall, without prior formal authorization of the public body having jurisdiction, disclose any confidential information concerning any other official or employee, or any other person, or any property or governmental affairs of the Town. Whether or not it shall involve disclosure, no official shall use or permit the use of any confidential information to advance the financial or personal interest of the official or any other person. As used in this section, confidential information is that information, not generally available to the public, which the official obtains by means of the official's special position, and which the official knows is not generally available to the public and is not intended to be so available. 5. Disclosure of Financial or Personal Interest. An elected or appointed Town Official who is determined to have a financial or other private interest in any matter before that body shall disclose the nature and extent of such interest on the records of the commission, the board, the council or other appropriate body and abstain from participating in the matter or in any attempt to use the official position to influence a decision. 6. Sanctions. In addition to any other penalties or remedies provided by law, any violation of this code may constitute a cause for removal from office by the Town Council. 7. Applicability of Code. When an elected or appointed official has doubt as to the applicability of a provision of this code to a particular situation, the official shall apply to the Town Attorney for an advisory opinion. SECTION II This ordinance takes effect 30 days after it is adopted. Within 15 days after this ordinance is adopted the Town Clerk shall cause it to be published once in a newspaper of general circulation published and circulated in the Town. This ordinance was introduced at a meeting of the Town Council of the Town of Los Gatos on , 1989 and adopted by the following vote as an ordinance of the Town of Los Gatos at a meeting of the Town Council of the Town of Los Gatos on , 1989. AYES: COUNCIL MEMBERS NOES: COUNCIL MEMBERS ABSTAIN: COUNCIL MEMBERS ABSENT: COUNCIL MEMBERS SIGNED: MAYOR OF THE TOWN OF LOS GATOS ATTEST: CLERK OF THE TOWN OF LOS GATOS A:/CNCLRPTS/CONFLICT.TCR 4 May 15, 1989 Los Gatos, California CONTINUED ITEMS/MAY 22, 1989 MINUTES OF MAY 8, 1989 MINUTES OF MAY 12, 1989 CODE ENFORCEMENT/REFERRALS TO TOWN ATTORNEY/STATUS REPORT (CONFLICT OF INTEREST/TOWN CODE AMENDMENT/CHAPTER 2 SECTION 2-64 16510 HARW00D ROAD/APPEAL PC DENIAL/OW: FALTERSACK ADJOURNMENT Motion by Mr. Ferrito to adjourn to Monday, May 22, 1989, at which time there will be a Closed Session at 7:00 p.m., and regular adjourned meeting will commence at 7:30 p.m. in the Council Chambers. Seconded by Mr. Carlson. Carried by a vote of 3 ayes. Mr. Hamilton and Mr. Ventura absent. Time of adjournment was 1:35 a.m. Tuesday, May 16, 1989. ATTEST: MARIAN V. COSGROVE TOWN CLERK - 15 -