HomeMy WebLinkAbout15 AB1234 EXPENSE REIMBURSE POLICY 09-18-06AGENDA REPORT
Agenda Item
Reviewed:
City Manager
Finance Director
MEETING DATE: SEPTEMBER 18, 2006
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: CITY ATTORNEY
SUBJECT: REQUIREMENTS TO ADOPT EXPENSE REIMBURSEMENT POLICIES;
ETHICS TRAINING; COMPENSATION FOR SERVICE
SUMMARY
Last year, the Governor signed two bills that affect expense reimbursement and
compensation of elected local officials. Assembly Bill 1234 ("AB 1234"), the "Local
Government Sunshine Bill," requires cities to establish written expense reimbursement
policies for elected city officials. The policies must state what types of occurrences
qualify a city official to receive reimbursement of expenses and place limits on the
amounts of expenses that may be reimbursed without prior City Council approval. A.B.
1234 imposes strict requirements on California local agencies relating to reimbursement
policies for travel, meals, lodging, and other actual and necessary expenses for
members of their legislative bodies incurred in the performance of official duties. The
current practice of providing a monthly "stipend" to cover expenses as an alternative to
reimbursement for actual expenses incurred is not consistent with AB 1234.
In addition to establishing a written expense policy, this bill also requires ethics training
of city officials.
Assembly Bill 11 ("AB 11") imposed limitations on the ability of the City Council to
establish the compensation for boards and commissions that the City Council creates
and appoints itself to serve as the governing board of such entities.
The Council will consider a resolution establishing expense guidelines and
reimbursement policy for City Council and Commission Members to comply with the
requirements of AB 1234.
RECOMMENDATION
It is recommended the City Council adopt the proposed Resolution Establishing Expense
Guidelines and an Expense Reimbursement Policy for City Council and Commission
members.
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FISCAL IMPACT
Staff anticipates that there will be a slight increase in costs associated with the
processing of the paperwork and documentation required for the implementation of the
program and the cost for providing the periodic training required under law.
DISCUSSION
1. Expense Reimbursement Policy
A. Adoption of Expense Reimbursement Policy.
AS 1234 places certain limitations on how members of legislative bodies may be
compensated for attending meetings and reimbursed for travel, lodging, and meals.
Under the bill, a local agency is only authorized to compensate its legislative body
members for attending the following: (I) meetings of the governing board, (ii) meetings
of advisory bodies, and (iii) conferences. The local agency is prohibited from providing
compensation for attending other types of meetings unless those meeting are included
within a written policy adopted by City Council.
AS 1234 also restricts the manner in which legislative body members are reimbursed for
travel, lodging, and meal expenses. Specifically, AB 1234 provides that "if a local
agency reimburses its legislative body members for actual and necessary expenses
incurred in the performance of official duties," then the local agency is required to adopt
a written policy specifying the types of occurrences (e.g., conferences) that qualify a
legislative body member for reimbursement of expenses relating to travel, meals,
lodging, and other actual and necessary expenses. AB 1234 would also require
legislative body members seeking reimbursement for travel, lodging, and meals to file
an expense report. These expense reports must then be completed, submitted within a
"reasonable time" after incurring the expense, and be accompanied by receipts.
Additionally, members have to provide a "brief' report on meetings attended at the
expense of the local agency at the next regularly scheduled meeting of the legislative
body.
AS 1234 does not permit "stipends" or "monthly expense allowances" in lieu of
reimbursements for actual expenses incurred. Thus, the City's current practice of
affording councilmembers the option of receiving a fixed sum monthly allowance in lieu
of reimbursement of actual, documented expenses should be repealed. The proposed
Resolution contains a provision repealing Resolution No. 83-1 which established the
monthly expense allowance alternative.
AB 1234's reimbursement policy applies to "legislative bodies" as that term is defined in
the Ralph M. Brown Act. The reimbursement policy may establish its own
reimbursement rates. Otherwise, the Internal Revenue Service reimbursement rates
apply. The policy may also define the types of meetings and events for which legislative
body members may be reimbursed or provided per diem or compensation for their
attendance. However, AB 1234 requires that conference lodging costs cannot exceed
the maximum group rate available at the time of booking. Additionally, if group or
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government rates are available, then the agency must use them. Any requests for
reimbursements that are not specifically covered by an agency's policy must be
approved in a public meeting before the expense is incurred.
B. Ethics Training.
Generally, AS 1234 requires local agency officials to receive no less than two hours of
training in general ethics principles and ethics laws every two years. The bill allows
officials to fulfill this requirement by taking courses developed in consultation with the
Fair Political Practices Commission and the Attorney General. For purposes of this
requirement, "public official" is defined as any member of the City Council of member of
a City commission, committee, board or other body of the City, whether permanent or
temporary, decision-making or advisory, created by ordinance, resolution, or formal
action of the City Council,
At a minimum, the ethics training must cover the following topics:
1. Laws relating to personal financial gain by public servants, including, but not
limited to, laws prohibiting bribery and conflict-of-interest laws;
2. Laws relating to claiming prerequisites of office, including, but not limited to, gift
and travel restrictions, prohibitions against the use of public resources for personal
or political purposes, prohibitions against gifts of public funds, mass mailing
restrictions, and prohibitions against acceptance of free or discounted transportation
by transportation companies;
3. Government transparency laws, including, but not limited to, financial interest
disclosure requirements and open government laws; and
4. Laws relating to fair processes, including, but not limited to, common law bias
prohibitions, due process requirements, incompatible offices, competitive bidding
requirements for public contracts, and disqualification from participating in decisions
affecting family members.
The City may develop its own ethics training course and include its own ethics policies
in the curriculum or contract with an outside educational provider to satisfy the ethics
training requirement. If the City elects to do its own training, it must first submit its
curriculum to the State Attorney General and the Fair Political Practices Commission for
approval.
Staff is working on scheduling ethics training for the City Council and Commission
members through the Institute for Local Government. This training will likely be held in
either October or November. Once a date has been confirmed, staff will notify the
Council and all Commission members. In addition to the training staff is working on,
there is a self-study course offered through the Institute for Local Government. Several
organizations including the League of California Cities currently offer ethics training for
elected officials. It is also our understanding that several, if not all, of the city council
members have already received the requisite training through attendance of various
League of California Cities meetings or conferences.
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C. Brief Reports on Meetings Attended.
The new law also provides that whenever members of a legislative body attend a
meeting at the expense of the local agency, the members must provide a brief report
about the event at the next regular meeting of the legislative body.
D. Public Records and Penalties.
The new law also provides that penalties for misuse of public resources or for falsifying
expense reports may include, but are not limited to, (1) the loss of reimbursement
privileges, (2) restitution to the local agency, (3) the filing of a civil action by the Attorney
General or the District Attorney for intentional or negligent use of public resources for
unauthorized purposes, which may include civil pe'nalties of up to $1,000 for each day
on which a violation occurs, plus three times the value of the unlawful use of public
resources (Government Code 98314), and, (4) criminal prosecution for misuse of public
resources, including imprisonment for two, three, or four years in state prison and
disqualification from holding any office in California (Penal Code 9424).
2. Compensation for Members of Governing Boards
Last year also saw the passage of AS 11 which established certain limitations on the
ability of the City Council to establish the compensation for boards and commissions
that the City Council creates and appoints itself to serve as the governing board of such
entities. The City Council has established a redevelopment agency and a financing
authority and is therefore eligible to receive compensation for its members serving on
the governing board for each of these entities. Pursuant to state law, the maximum
amount that can be paid to a member of a redevelopment agency is $30.00 for each
meeting. The Council has implemented this compensation for service as the City's
redevelopment agency. For any other entity, which would include the City's Financing
Authority, the maximum compensation amount is $150.00 per month. The Council has
not adopted or implemented this compensation for its members, even though it is
available under AS 11.
City Council members may receive a salary pursuant to Section 36516 of the
Government Code. The amount of the salary is generally dependent upon the
population of the City and subject to periodic adjustment of 50/0 per year. On August 8,
2006, the Attorney General's Office issued an opinion concluding that council member
salaries may be increased by five percent (50/0) for each year since the time of the last
increase, but the increase must be a simple, non-compounded calculation. For
example, if a city has not adjusted salaries in 5 years, a maximum 25% increase is
permissible (5 x 50/0). According to the AG, the statutorily authorized 5% increase
should not be calculated inclusive of compounding. Per the new AG opinion, a city
council may vote itself an increase of 50/0 multiplied by the number of years since the
last increase.
The AG opinion reads in pertinent part:
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"Only the currently received salary amount is to be part of the
calculations. To make separate calculations for each intervening year
since the date of the last salary increase would base the calculations on
salaries that were not received by the city council members. Nothing in
the language of Section 36516 suggests that the calculations are to be
based upon salary amounts that were never received... We find no basis
in the legislative history to calculate a salary increase based upon annual
salary amounts that were not previously received."
Tustin, like most other cities, calculated prior adjustments using a compounding
methodology. The City's most recent approved increase approved in April of last year
and which will go into effect when the new council is seated after the November
municipal general election used the compounding and not the simple straight method
the AG has opined is mandated under law. The City also calculated the increase over a
five year period and using the compounding methodology, the Council approved an
increase to $861.49 per month. It should be noted that the last increase went into effect
in December of 2000; the next increase is scheduled to go into effect in November of
2006. It is our opinion, therefore, that the increase could have been calculated over
six years. Thus, if we use the AG's methodology, the Council was actually eligible for a
increase to $877.50 and the City Council's prior approved salary increase is therefore
consistent with the AG's opinion.
Douglas Holland
City Attorney
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RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA ESTABLISHING EXPENSE
GUIDELINES AND AN EXPENSE REIMBURSEMENT
POLICY FOR CITY COUNCIL AND COMMISSION
MEMBERS.
The City Council of the City of Tustin, California (the "City") finds:
A. Government Code Section 53232.2 requires any local agency that reimburses
members of a legislative body for actual and necessary expenses incurred in the
performance of official duties to adopt a written policy specifying the types of
occurrences that qualify a member of the legislative body to receive reimbursement of
expenses relating to travel, meals, lodging, and other actual and necessary expenses;
B. Resources of the City of Tustin should only be used when there is a substantial
benefit to the City;
C. Such benefits include but are not limited to:
1. The opportunity to meet with state and federal officials to discuss issues
and matters that may affect City interests;
2. Participating in regional, state, and national organizations whose activities
may affect the City;
3. Attending educational seminars designed to improve the expertise and
information levels of City Council and Commission Members; and
4. Promoting public service and morale by recognizing such service;
D. As a matter of policy, the City should bear the cost of the actual and necessary
expenses incurred by City Council and Commission Members, which include City
Council members, Planning Agency members, Parks and Recreation Commission
members, Traffic Commission members, and other City Commission, Committee, and
Board members, in the performance of their official duties;
E. This expense reimbursement policy provides guidance to City Council and
Commission Members and to City staff on the use and expenditure of City resources for
expense reimbursements made on behalf of City Council and Commission Members
who incur authorized expenses in the performance of officials duties, as well as the
standards against which those expenditures will be measured; and
F. This expense reimbursement policy applies to both reimbursed expenses and
expenses advanced or directly paid by the 'City on behalf of City Council and
Commission Members that may incur such expenses in the course of performing their
official duties.
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Resolution No.
Page 2
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA,
RESOLVES:
SECTION 1. Pursuant to new Government Code Sections 53232.2 and 53232.3, which
law became effective January 1, 2006, the City of Tustin hereby establishes expense
guidelines and an expense reimbursement policy for the City Council and Commission
Members, which is attached hereto as Exhibit "A" and is incorporated herein by
reference.
SECTION 2. City Council Resolution No. 83-1 is repealed.
PASSED, APRROVED, AND ADOPTED at a regular meeting of the City Council of the
City of Tustin held this day of , 2006.
Doug Davert, Mayor
ATTEST:
City Clerk
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Resolution No.
Page 3
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF ORANGE) ss.
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, hereby certify that Resolution No. _ is a full, true, and correct copy, and
was duly adopted at a regular meeting of the City Council of the City of Tustin on
, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Pamela Stoker, City Clerk
City Clerk
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Exhibit "A"
Page 1
EXHIBIT "A"
CITY OF TUSTIN
EXPENSE GUIDELINES AND REIMBURSEMENT POLICY
FOR
CITY COUNCIL AND COMMISSION MEMBERS
The City Council of the City of Tustin believes that it is important that elected officials protect
public resources and foster public trust in the use of those resources. Further, the City Council
believes that the public is best served by officials that remain informed and trained in issues
affecting the affairs of the City and that attendance at institutes, hearings, meetings,
conferences, or other gatherings is of value to the City and its citizens.
In order to uphold the public's confidence in their elected and appointed officials and to comply
with the spirit of state law regarding reimbursement of expenses, the City Council does hereby
set forth the expense guidelines and reimbursement policy for the City Council and Commission
Members.
A. AUTHORIZED EXPENSES
The following types of occurrences qualify any of the City's City Council and Commission
Members, which include City Council members, Planning Commission members, Parks and
Recreation Commission members and any other City Commission, Committee, and Board
members, to receive reimbursement for expenses incurred in the performance of officials duties
relating to travel, meals, lodging, and other actual and necessary expenses that constitute
authorized expenses, provided the requirements of this policy are met:
(1) Communicating with representatives of regional, state, and national government on
issues or matters affecting the City or on City adopted policy or political positions;
(2) Attending conferences and/or educational seminars designed to improve the member's
expertise and information levels, including, but not limited to, ethics training required
pursuant to Government Code Section 53234;
(3) Participating in regional, state, and national organizations whose activities or interests
may affect the City's interests;
(4) Attending City sponsored or co-sponsored events or other community events;
(5) Implementing a City-approved strategy for attracting or retaining businesses to the City;
and
(6) The performance of other such official duties in the interest of the City.
The following expenses require prior City Council approval:
(1) Out-of-state or international travel; and
(2) Expenses which exceed any annual limits established for each member.
All other reimbursement expenses that are not specifically authorized by this policy shall be
approved by the City Council in a public meeting before the expense is incurred,
Examples of personal expenses that the City will not reimburse include, but are not limited to:
(1) The personal portion of any trip taken at City expense;
(2) Political contributions or events;
(3) Travel companion expenses, including spouse, friend, or partner expenses when
accompanying a member on City-related business, as well as children- or pet-related
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Exhibit "A"
Page 2
expenses;
(4) Charitable contributions;
(5) . Social or other recreational events, unless the event has a direct relationship to City
business;
(6) Entertainment expenses, including theater, movies (either in-room or at the theater),
sporting events (including gym, massage, and/or golf related expenses), or other cultural
events;
(7) Non-mileage automobile expenses incurred, including repairs, traffic citations, insurance,
or gasoline; and
(8) Personal losses incurred while on City business (e.g., theft or property destruction).
Any questions regarding the propriety of a particular type of expense should be resolved before
the expense is incurred.
B. EXPENSE AND REIMBURSEMENT GUIDELINES
To conserve City resources and keep expenses within appropriate standards for public
agencies, expenditures, whether paid directly by the City or reimbursed to a member of the
City's legislative bodies, should comply with the following guidelines. Unless otherwise
specifically provided herein, reimbursement for travel, meals, lodging, and other actual and
necessary expenses shall be at the Internal Revenue Service rates presently in effect as
established in Publication 463 or any successor publication. All expenses not covered by this
policy, or which are in excess of the reimbursable rates set forth in this policy, shall not be
reimbursable unless approved by the City Council at a public meeting before the expense is
incurred.
1. Transportation
The most economical mode and class of transportation reasonably consistent with
scheduling needs and space requirements must be used, using the most direct and
time-efficient route. In the event that a more expensive transportation form or route is
used, the cost borne by the City will be limited to the cost of the most economical, direct,
efficient, and reasonable transportation form. Government and group rates offered by a
provider of transportation services shall be used when available.
Automobile mileage is reimbursable at Internal Revenue Service rates presently in effect
(see www.irs.qov). These rates are designed to compensate the driver for gasoline,
insurance, maintenance, and other expenses associated with operating the vehicle. This
amount does not include bridge and road tolls, which are also reimbursable.
Reasonable and necessary charges for public transportation, taxi, or shuttle service are
reimbursable at actual cost with receipts.
Rental vehicles may be used during out-of-county travel. Rental vehicles may be used
when the efficient conduct of City business preludes the use of other means of
transportation or when a car rental is the most economical mode available. Itemized
receipts must be submitted with vehicle rental reimbursement requests.
2. Lodging
Lodging costs will be reimbursed or paid for when travel on official City business
reasonably requires an overnight stay. Government and group rates offered by a
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Exhibit "A"
Page 3
provider of lodging services shall be used when available.
If such lodging is in connection with a conference or organized educational activity,
lodging costs shall not exceed the maximum group rate published by the conference or
activity sponsor, provided that lodging at the group rate is available to the member at the
time of booking. If the group rate for lodging in connection with a conference or
organized educational activity is not available, the member shall use comparable lodging
that is. (a) consistent with the Internal Revenue Service rates for reimbursement of
lodging as established by IRS Publication 463, or any successor publication; or (b) at a
government rate, if offered by a lodging provider.
Non-reimbursable lodging-related expenses include, but are not limited to, costs for an
extra .person staying in the room, costs related to late check-out or uncancelled
reservations, in-room pay-per-view movie rentals or mini-bar service, and non-City
business related telephone calls. Receipts must accompany all member requests for
lodging reimbursements.
3. Meals
Meal expenses and associated gratuities should be moderate, taking into account
community standards and the prevailing restaurant costs of the area. Actual meal
expenses and associated gratuities will be reimbursed or paid when incurred by the
member in the performance of official duties.
4. Telephone / Fax / Cellular
City Council and Commission Members will be reimbursed for actual telephone and fax
expenses incurred on City business. Telephone bills should identify which calls were
made on City business. For cellular calls when the member has a particular number of
minutes included in the member's calling plan, the member can identify the percentage
of calls made on City business.
5. Airport Parkinq
Long-term airport parking should be used for travel exceeding 24-hours. Actual airport
parking expenses and associated gratuities will be reimbursed or paid when incurred by
the member in the performance of official duties.
6. Other
Baggage handling fees of up to $2 per bag and gratuities of up to 15 percent will be
reimbursed or paid when incurred by the member in the performance of official duties.
Miscellaneous expenses for registration, tuition, parking, educational materials provided
at conferences and telephone charges are reimbursable for City authorized business. All
miscellaneous expenses must be supported with itemized receipts.
Expenses for which members receive reimbursement from another agency are not
reimbursable.
C.
EXPENSE REPORT CONTENT AND SUBMISSION DEADLINE
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Exhibit "A"
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Expense reports must document that the expense in question meets the requirements of this
expense reimbursement policy.
Members must submit their expense reports within sixty (60) days of an expense being incurred,
which shall be accompanied by receipts documenting each expense. Restaurant receipts, in
addition to any credit card receipts, are also part of the necessary documentation. Receipts for
gratuities and tolls under $5 are not required.
All documents related to reimbursement under this policy, except as redacted to maintain the
privacy of certain personal financial data (such as credit card numbers), shall be subject to
disclosure under the California Public Records Act.
D. AUDITS OF EXPENSE REPORTS
All expenses are subject to verification of compliance with this policy.
E. BRIEF REPORTS TO LEGISLATIVE BODY
At the following meeting of the legislative body, members shall briefly report on any meetings
attended at the City's expense. If multiple members attended the meeting at City expense, a
joint report may be made to the legislative body.
F. COMPLIANCE WITH LAWS
Members should keep in mind that some expenditures may be subject to reporting under the
Political Reform Act and other laws. All documents related to reimbursable agency
expenditures, including, but not limited to, expense reports, receipts, and written evidence of
direct City advances or payments for expenses, are public records subject to disclosure under
the Public Records Act.
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