HomeMy WebLinkAbout2018 07-24 CC HA ADJ MINBook 100 / Page 144
07-24-2018
MINUTES OF THE ADJOURNED REGULAR MEETING OF THE
CITY COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION —
HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY
July 24, 2018
The Adjourned Regular Meeting of the City Council and Community Development
Commission — Housing Authority of the City of National City was called to order at
6:09 p.m. by Mayor / Chairman Ron Morrison.
ROLL CALL
Council / Board members present: Cano, Mendivil, Morrison, Rios, Sotelo-Solis.
Administrative Officials present: Dalla, Deese, Denham, Duong, Manganiello,
Morris -Jones, Mosley, Parra, Raulston, Roberts, Rodriguez, Vergara, Williams,
Ybarra.
PLEDGE OF ALLEGIANCE TO THE FLAG BY MAYOR RON MORRISON
PUBLIC COMMENTS
Martin Ruiz, National City, spoke about his experience as an intern working in the
Mayor's office.
Matt Dunn, San Diego, spoke on Electro Politics, race, policing, and how it can
affect the upcoming election.
The following speakers spoke on justice and Earl McNeil: Julie Corrales, Marco,
Jules Jay, Earl McNeil III, Norma Velasquez, Earl McNeil IV, Earl McNeil II
(Tasha Williamson), Brooke Schuller, Diamond Wallace, Liz Shopes, Anita Turner,
Yusef McNeil, Mark Lane, Therese Hymer, Susannah Bankead, Shane Parmely,
Art Fusco, Cat Mendonca, Gretel Rordriguez, Rashida Hamecel, Pat Aceves,
Armando Abundis, Muhamed Abduan, Leah Blake, and Ira Carter -Campbell.
PROCLAMATIONS
PROCLAMATION ADMIN (102-2-1)
1. Alzheimer's and Brain Awareness Month
2. NaFFAA San Diego/ Imperial Region Filipino -American Friendship Day
ACTION: Proclamations were continued to a future meeting.
CITY COUNCIL
CONSENT CALENDAR
Book 100 / Page 145
07-24-2018
ADOPTION OF CONSENT CALENDAR. Item No. 3 (NCMC), Item Nos.
4 through 14 (Resolution Nos. 2018-134 through 2018-144), and Item No. 15
(Temporary Use Permit). Motion by Sotelo-Solis, seconded by Cano, to approve
the Consent Calendar. Carried by unanimous vote.
MUNICIPAL CODE 2018 (506-2-33)
3. MOTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
APPROVING THE WAIVING OF THE READING OF THE TEXT OF THE
ORDINANCES CONSIDERED AT THIS MEETING AND PROVIDING
THAT SUCH ORDINANCES SHALL BE INTRODUCED AND/OR
ADOPTED AFTER A READING OF THE TITLE ONLY. (City Clerk)
ACTION: Approved. See above.
LABOR RELATIONS POA MOU 2016-2019 (605-3-12)
4. Resolution No. 2018-134. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY 1) AUTHORIZING THE CHIEF OF POLICE TO
SIGN A MEMORANDUM OF UNDERSTANDING WITH THE FEDERAL
BUREAU OF INVESTIGATION (FBI) TO PARTICIPATE IN OPERATIONS
WITH THE HUMAN TRAFFICKING AND CHILD EXPLOITATION TASK
FORCE (HTCETF), 2) AUTHORIZING THE ACCEPTANCE OF FUNDS,
AND 3) AUTHORIZING THE ESTABLISHMENT OF AN APPROPRIATION
AND CORRESPONDING REVENUE BUDGET FOR OVERTIME UP TO
THE AMOUNT OF $18,042 PER FISCAL YEAR. THE HTCETF
CONDUCTS CRIMINAL INVESTIGATIONS TO IDENTIFY AND TARGET
CRIMINALS WHO ENGAGE IN SEX TRAFFICKING, FORCED LABOR
TRAFFICKING, DOMESTIC SERVITUDE AND TO RESCUE CHILD
VICTIMS; TO REDUCE THE VULNERABILITY OF CHILDREN TO
SEXUAL EXPLOITATION AND ABUSE. (Police)
ACTION: Adopted. See above.
CONTRACT (C2015-56)
GRANT / OTS DUI / TRAFFIC EDUCATION (206-4-4)
5. Resolution No. 2018-135. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY; 1) AUTHORIZING THE ACCEPTANCE OF A
GRANT AWARD IN THE AMOUNT OF $100,000 FROM THE OFFICE OF
TRAFFIC SAFETY (OTS) FOR THE SELECTIVE TRAFFIC
ENFORCEMENT PROGRAM (STEP) GRANT 2019 TO CONDUCT DUI
AND TRAFFIC RELATED ENFORCEMENT OPERATIONS; 2)
AUTHORIZING THE CHIEF OF POLICE TO EXECUTE THE
AGREEMENT OF THE AWARD OF THE GRANT FUNDS; AND 3)
AUTHORIZING THE ESTABLISHMENT OF FUND APPROPRIATIONS
AND CORRESPONDING REVENUE BUDGET. (Police)
ACTION: Adopted. See above.
Book 100 / Page 146
07-24-2018
CONSENT CALENDAR (cont.)
CONTRACT (C2018-48)
6. Resolution No. 2018-136. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY WAIVING THE FORMAL BID PROCESS
PURSUANT TO NATIONAL CITY MUNICIPAL CODE SECTION 2.60.220,
SUBSECTION (B), SOLE SOURCE PROCUREMENT AND AUTHORIZING
THE MAYOR TO EXECUTE THE AGREEMENT WITH THERMO
SCIENTIFIC PORTABLE ANALYTICAL INSTRUMENTS, INC., FOR THE
NOT TO EXCEED AMOUNT OF $61,896.15 FOR THE POLICE
DEPARTMENTS PURCHASE OF TWO (2) TRUNARC CHEMICAL
IDENTIFICATION SYSTEMS, WITH A 5-YEAR WARRANTY ON EACH
MACHINE. (Police)
ACTION: Adopted. See above.
CONTRACT (C2013-27)
7. Resolution No. 2018-137. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE
THE FIRST AMENDMENT TO THE CITY OF SAN DIEGO FIRE AND
EMERGENCY MEDICAL DISPATCH SERVICES AGREEMENT BY AND
BETWEEN THE CITY OF SAN DIEGO AND THE CITY OF NATIONAL
CITY TO EXTEND THE TERM OF THE AGREEMENT FOR ONE
ADDITIONAL YEAR, RETROACTIVE TO JULY 1, 2018 THROUGH JUNE
30, 2019. (Fire)
ACTION: Adopted. See above.
FIRE DEPT ADMIN (305-1-1)
8. Resolution No. 2018-138. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY WAIVING THE FORMAL BID PROCESS
PURSUANT TO MUNICIPAL CODE SECTION 2.60.260 FOR THE
PURCHASE OF A PIERCE ARROW XT PUMPER WITH EQUIPMENT
FOR THE NATIONAL CITY FIRE DEPARTMENT, AND AUTHORIZING
THE CITY TO PIGGYBACK THE CITY OF LOS ANGELES SUPPLY
CONTRACT 59710 — AMENDMENT 1 WITH PIERCE MANUFACTURING,
INC., FOR A NOT TO EXCEED AMOUNT OF $707,701.37 USING THE
VEHICLE REPLACEMENT FUND. (Fire)
ACTION: Adopted. See above.
FIRE DEPT ADMIN (305-1-1)
9. Resolution No. 2018-139. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY WAIVING THE FORMAL BID PROCESS
PURSUANT TO MUNICIPAL CODE SECTION 2.60.260 FOR THE
PURCHASE OF A PIERCE ARROW XT PUMPER WITH EQUIPMENT
FOR THE NATIONAL CITY FIRE DEPARTMENT, AND AUTHORIZING
THE CITY TO PIGGYBACK THE CITY OF LOS ANGELES SUPPLY
COTRACT 59710 — AMENDMENT 1 WITH PIERCE MANUFACTURING,
Book 100 / Page 147
07-24-2018
CONSENT CALENDAR (cont.)
FIRE DEPT ADMIN (305-1-1)
9. Resolution No. 2018-139 (continued).
INC., FOR A NOT TO EXCEED AMOUNT OF $707,701.37 USING THE
VEHICLE REPLACEMENT FUND. (Fire)
ACTION: Adopted. See above.
ENGINEERING / PUBLIC WORKS DEPT - GRANTS / REPORTS ADMIN
(1104-1-1)
10. Resolution No. 2018-140. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY, WAIVING THE FORMAL BID PROCESS
CONSISTENT WITH NATIONAL CITY MUNICIPAL CODE SECTION
2.60.260 REGARDING COOPERATIVE PURCHASING AND
AUTHORIZING THE CITY (BUYER) TO PIGGYBACK THE NATIONAL
JOINT POWERS ALLIANCE CONTRACT #120716-NAF TO AWARD THE
PURCHASE AND BUILD -OUT OF TWO (2) 2019 FORD TRANSIT
CONNECT VANS (S7E) XL LWB TO NATIONAL AUTO FLEET GROUP IN
AN AMOUNT NOT TO EXCEED $58,506.68 FOR THE ENGINEERING
AND PUBLIC WORKS FACILITIES MAINTENANCE DIVISION.
(Engineering/Public Works)
ACTION: Adopted. See above.
PARKING & TRAFFIC CONTROL ADMIN 2018 (801-2-40)
11. Resolution No. 2018-141. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY AUTHORIZING THE INSTALLATION OF 25
FEET OF ADDITIONAL RED CURB "NO PARKING" ON THE WEST SIDE
OF "L" AVENUE, NORTH OF E. PLAZA BOULEVARD (TSC NO. 2018-12).
(Engineering/Public Works)
ACTION: Adopted. See above.
12. Resolution No. 2018-142. RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF NATIONAL CITY AUTHORIZING THE INSTALLATION OF
STOP CONTROL AT VARIOUS INTERSECTIONS WITHIN THE
NEIGHBORHOOD BOUNDED BY E. 1ST STREET TO THE NORTH, E.
4TH STREET TO THE SOUTH, HIGHLAND AVENUE TO THE EAST AND
"D" AVENUE TO THE WEST (TSC No. 2018-13). (Engineering/Public
Works)
ACTION: Adopted. See above.
13. Resolution No. 2018-143. RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF NATIONAL CITY AUTHORIZING THE REMOVAL OF ONE,
15-MINUTE TIME RESTRICTED PARKING SPACE IN FRONT OF THE
RESIDENCE LOCATED AT 1039 "D" AVENUE (TSC No. 2018-14).
(Engineering/Public Works)
ACTION: Adopted. See above.
Book 100 / Page 148
07-24-2018
CONSENT CALENDAR (cont.)
PARKING & TRAFFIC CONTROL ADMIN 2018 (801-2-40)
14. Resolution No. 2018-144 RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY AUTHORIZING THE REMOVAL OF TWO, 30-
MINUTE TIME RESTRICTED PARKING SPACES IN FRONT OF THE
BUILDING LOCATED AT 1900 WILSON AVENUE (TSC No. 2018-15).
(Engineering/Public Works)
ACTION: Adopted. See above.
TEMPORARY USE PERMITS 2018 (203-1-34)
15. Temporary Use Permit — Pumpkin Station hosted by Pinery Christmas
Trees, Inc. at Westfield Plaza Bonita Mall from September 28, 2018 thru
October 31, 2018 with no waiver of fees. (Neighborhood Services)
ACTION: Approved. See above.
PUBLIC HEARINGS: ORDINANCES AND RESOLUTIONS
MUNICIPAL CODE 2018 (506-2-33)
16. Ordinance No. 2018-2449. PUBLIC HEARING AND ADOPTION OF AN
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
AMENDING NATIONAL CITY MUNICIPAL CODE TITLE 13,
SECTION 13.22.060, SUBSECTION "A" PERTAINING TO PUBLIC
IMPROVEMENT REQUIREMENTS FOR SINGLE BUILDING PERMITS.
(Engineering/Public Works)
RECOMMENDATION: Provide second reading and adopt Ordinance of the
City Council of the City of National City amending National City Municipal
Code Title 13, Section 13.22.060, Subsection "A".
TESTIMONY: None.
ACTION: Motion by Sotelo-Solis, seconded by Cano to close the
Public Hearing. Carried by unanimous vote.
Motion by Cano, seconded by Mendivil, to adopt the Ordinance.
Carried by the following vote, to -wit: Ayes: Cano, Mendivil, Morrison.
Nays: Rios, Sotelo-Solis. Absent: None. Abstain: None.
A RECESS WAS CALLED AT 7:19 P.M.
THE MEETING RECONVENED AT 9:55 P.M.
ALL MEMBERS WERE PRESENT
ITEM NO. 17 WAS RE -INTRODUCED
MEMBER MENDIVIL RECUSED HIMSELF AND LEFT THE CHAMBER DURING
CONSIDERATION OF ITEM NOS. 17 THROUGH 20 BECAUSE HE IS AN
OWNER OF RENTAL PROPERTY
Book 100 / Page 149
07-24-2018
NON CONSENT RESOLUTIONS
ELECTION NOV 2018 ADMIN (505-7-9)
17. Resolution No. 2018-145. RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF NATIONAL CITY CALLING AND GIVING NOTICE OF THE
HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON
TUESDAY, NOVEMBER 6, 2018, FOR THE PURPOSE OF SUBMISSION
OF A BALLOT MEASURE TO THE VOTERS AS REQUIRED BY THE
PROVISIONS OF THE LAWS OF THE STATE OF CALIFORNIA
RELATING TO GENERAL LAW CITIES. (City Clerk)
RECOMMENDATION: Adopt the Resolution.
TESTIMONY: None.
ACTION: Motion by Sotelo-Solis, seconded by Rios, to adopt the
Resolution. Carried by the following vote, to -wit: Ayes: Cano,
Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain:
Mendivil.
ELECTION NOV 2018 ADMIN (505-7-9)
18. Resolution No. 2018-146. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY ORDERING THE SUBMISSION OF A
MEASURE TO THE QUALIFIED VOTERS OF THE CITY OF NATIONAL
CITY AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON
NOVEMBER 6, 2018, RELATING TO APPROVAL OF AN ORDINANCE
ESTABLISHING A PROGRAM OF RESIDENTIAL RENT CONTROL,
INCLUDING CREATION OF AN INDEPENDENT RENT BOARD, AND
INCLUDING JUST CAUSE FOR EVICTION PROTECTIONS AND RENT
STABILIZATION PROVISIONS. (City Clerk)
RECOMMENDATION: Adopt the Resolution.
TESTIMONY: A statement in support of rent control, by
Alicia Sanchez, National City, was read into the record by Translator
Laura Casas.
Rafael Bautista, Dr. Peter Brownell, Adriana Huerta, Irvine Martinez,
and Paola Martinez Montes submitted speaker slips in support of
rent control but were not present to speak.
ACTION: Mayor Morrison stated for the record that the proposed
action is legally required and the City Council has no discretion in the
matter. Motion by Rios, seconded by Sotelo-Solis, to adopt the
Resolution. Carried by the following vote, to -wit: Ayes: Cano,
Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain:
Mendivil.
Book 100 / Page 150
07-24-2018
NON CONSENT RESOLUTIONS (cont.)
ELECTION NOV 2018 ADMIN (505-7-9)
19. Resolution No. 2018-147. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY REQUESTING THE BOARD OF
SUPERVISORS OF THE COUNTY OF SAN DIEGO TO CONSOLIDATE A
GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 6, 2018
WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON THAT
DATE PURSUANT TO SECTION 10403 OF THE ELECTIONS CODE.
(City Clerk)
RECOMMENDATION: Adopt the Resolution.
TESTIMONY: None.
ACTION: Motion by Sotelo-Solis, seconded by Rios, to adopt the
Resolution. Carried by the following vote, to -wit: Ayes: Cano,
Mendivil, Morrison. Nays: Rios, Sotelo-Solis. Absent: None. Abstain:
None.
RENT CONTROL MEASURE 2018 (505-7-8)
20. Resolution No. 2018-148. RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF NATIONAL CITY AUTHORIZING THE FILING OF AN
IMPARTIAL ANALYSIS AND WRITTEN ARGUMENTS RELATING TO A
MEASURE TO APPROVE AN ORDINANCE ESTABLISHING A
PROGRAM OF RESIDENTIAL RENT CONTROL, INCLUDING CREATION
OF AN INDEPENDENT RENT BOARD, AND INCLUDING JUST CAUSE
FOR EVICTION PROTECTIONS AND RENT STABILIZATION
PROVISIONS. (City Clerk)
RECOMMENDATION: Adopt the Resolution.
TESTIMONY A statement in support of rent control, by Irma Reyes,
National City, was read into the record by Translator Laura Casas.
Carmen Perez Dion and Rick Bates submitted speaker slips in
support of rent control, but were not present to speak.
ACTION: Motion by Rios, seconded by Sotelo-Solis, to adopt the
Resolution. Carried by the following vote, to -wit: Ayes: Cano,
Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain:
Mendivil.
MEMBER MENDIVIL RETURNED TO THE CHAMBER.
NEW BUSINESS
HOUSING & ECONOMIC DEVELOPMENT DEPT ADMIN (1104-1-9)
21. Update on the status of finalizing Maintenance and Operating Agreements
with the National City Historical Society, National City Living History Farm
Preserve and the San Diego Electric Railway Association for consideration
by the City Council. (Housing & Economic Development)
ACTION: No action was taken.
Book 100 / Page 151
07-24-2018
NEW BUSINESS (cont.)
MEMBER CANO STATED THAT HE WOULD BE RECUSING HIMSELF FROM
THE NEXT ITEM SINCE IT RELATES TO SOME ITEMS THAT INVOLVE HIM.
MEMBER CANO LEFT THE CHAMBER
CITY ATTORNEY REPORTS (509-1-3)
22. Results of investigations by Lozano Smith, Attorneys at Law into the
allegations against Councilmember Cano and the allegation against
Councilmember Rios. (City Attorney)
PRESENTATION: The Investigative report titled "Report of Special
Counsel" was distributed to the Mayor, City Council, Staff, and the public.
Attorney William Curley reviewed the methodology, conclusion, and
recommendations of the report.
TESTIMONY: Attorney Cory Briggs, representing Member Mona
Rios, requested a copy of an e-mail sent to Attorney Curley from
Member Cano and addressed various aspects of the report.
Attorney Briggs, representing San Diegans for Open Government,
requested any public records addressing an expense item mentioned
in the report. Attorney Briggs offered suggestions on how to avoid
future problems with code violations.
RECOMMENDATION: The City Council review the report thoroughly
and that it come back on the September 4th City Council agenda for
direction on how to proceed and to provide direction on
recommendations regarding a formal public apology.
ACTION: The consensus was to place the report on the
September 4th Agenda. There was no vote.
Note: A copy of the Special Counsel Report is attached as Exhibit 'A'.
MEMBER CANO RETURNED TO THE CHAMBER
COUNCIL POLICY ADMIN (102-13-1)
23. City Council discussion and direction on draft City Council Policy #119 -
Code of Ethics and Conduct for Elected Officials, Council Appointed
Officials, and Members of City Boards, Commissions and Committees.
(City Manager)
ACTION: Motion by Mendivil, seconded by Cano, to bring back the
draft policy in resolution form on September 4th and include a
Glossary of Terms. Carried by unanimous vote.
Book 100 / Page 152
07-24-2018
B. COMMUNITY DEVELOPMENT COMMISSION - HOUSING AUTHORITY
NON CONSENT RESOLUTIONS - HOUSING AUTHORITY
CONTRACT (C2013-52)
HOUSING AUTHORITY 2018 (404-1-7)
24. Resolution No. 2018-67. RESOLUTION OF THE COMMUNITY
DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY
OF NATIONAL CITY AUTHORIZING THE EXECUTIVE DIRECTOR TO
EXECUTE A SUBORDINATION AGREEMENT WITH WILMINGTON
TRUST, NATIONAL ASSOCIATION, SUBORDINATING THE PROJECT
DEED OF TRUST THAT SECURES THE DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS (TENANT
RESTRICTIONS) ON SUMMERCREST APARTMENTS LOCATED AT
2721 PLAZA BOULEVARD IN NATIONAL CITY. (Housing & Economic
Development)
RECOMMENDATION: Adopt the Resolution to execute the Subordination
Agreement.
TESTIMONY: None.
ACTION: Motion by Sotelo-Solis, seconded by Mendivil, to adopt the
Resolution. Carried by unanimous vote.
C. REPORTS
STAFF REPORTS
Director of Finance Mark Roberts announced the resignation of Financial Services
Officer and current Acting Director of Finance Javier Carcamo who accepted a
lateral position for the City of Poway.
MAYOR AND CITY COUNCIL
CITY COUNCIL ADMIN (102-16-1)
25. Discussion of language for a resolution in opposition to the Trump
Administration's "Zero Tolerance" Policy and Family Separation of
Immigrants. (Councilmember Sotelo-Solis)
ACTION: Motion by Cano, seconded by Mendivil, to not move
forward with a Resolution.
Substitute motion made by Rios, seconded by Sotelo-Solis, to move
forward with a Resolution with recommended revisions. Motion failed
by the following vote, to -wit: Ayes: Rios, Sotelo-Solis. Nays: Cano,
Mendivil. Absent: None. Abstain: Morrison.
Original motion to not move forward failed by the following vote,
to -wit: Ayes: Cano, Mendivil. Nays: Rios, Sotelo-Solis. Absent: None.
Abstain: Morrison.
Book 100 / Page 153
07-24-2018
MAYOR AND CITY COUNCIL (cont.)
Member Mendivil spoke of his disappointment in regards to the City Council not
coming together as a unit based on what transpired during the last City Council
meeting on the Earl McNeil matter.
Member Sotelo-Solis responded to Member Mendivil's comments saying that the
issue does affect the community and there has to be transparency. She defended
herself for the times in the past when she has asked questions and said she will
stay true to who she is. Member Sotelo-Solis then read the following statement
into the record: "On behalf of Councilmember Rios and I, we are writing to
highlight the importance of transparency and the need for a thorough investigation
in the Earl McNeil case, the City of National City, and the City Police Department.
Our sincere thoughts and prayers are with the McNeil family. There are questions,
and due to the ongoing investigation nature as to what occurred and what the
outcome will be, we ask for questions to be answered in a timely and thorough
manner. As Councilmembers and supporters of law enforcement, and believers in
a thorough process, we know firsthand, and have funded, the improvements and
purposeful efforts our National City Police Department has done to work side by
side with our community to improve community relations. We all stand together for
transparency and accountability so that the family and community can find solace.
Thank you."
Member Rios said she hopes that Member Mendivil listened to the statement that
was read into the record. She spoke briefly on her history as a Councilmember
and how she will always strive to govern the same and will continue to ask the
questions and make sure that there is a balance. At the last meeting, she was
concerned about things getting out of hand and felt a need to reevaluate the
response.
Member Cano criticized the motives and conduct of two of his Council colleagues;
he said they made the situation worse by the motion they made; that they created
a hostile work environment and that he was disappointed in them.
Mayor Morrison reviewed the protest history of some of the people who have been
disrupting Council meetings. He took issue with their conduct and motives and
said he was not going to be an ally of people who want to tear down the City and
questioned what would be accomplished by putting the item on the agenda.
City Attorney Morris -Jones announced that the Special Meeting on July 25th has
been cancelled.
CLOSED SESSION REPORT
There was no Closed Session report.
Book 100 / Page 154
07-24-2018
ADJOURNMENT
Motion by Sotelo-Solis, seconded by Cano, to adjourn the meeting to the next
Regular Meeting of the City Council and Community Development Commission -
Housing Authority of the City of National City - Tuesday — September 4, 2018 -
6:00 p.m. - Council Chambers - National City, California. Carried by unanimous
vote.
Regular Meeting of the City Council and Community Development Commission -
Housing Authority of the City of National City - Tuesday — September 4, 2018 -
6:00 p.m. - Council Chambers - National City, California.
The meeting closed at 12:38 a.m.
The foregoing minutes were approved at the Regular Meeting of
January 22, 2019.
CITY COUNCIL LEGISLATIVE RECESS
August 7, 2018 - City Council Meeting - Dispensed With
August 21, 2018 - City Council Meeting - Dispensed With
CITY OF
NATIONAL CITY
CALIFORNtQ
IONAL
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REPORT OF SPECIAL COUNSEL
July 24, 2018
LS
Prepared by:
William P. Curley, III, Esq.
Presented to:
Angil Morris -Jones, City Attorney
Lozano Smith
AT T O R N i AT LAW
EXHIBIT 'A'
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY 1
A. INTRODUCTION AND OVERVIEW 1
B. NARRATIVE SUMMARY OF THE CITY'S GOVERNANCE AND
ORGANIZATION 1
C. STANDARD OF REVIEW 4
D. THE INVESTIGATION PROCESS 4
E. OVERVIEW OF REPORT'S PURPOSE 5
F. ORGANIZATION OF REPORT 6
G. FINDINGS 6
II. EVIDENCE GATHERING: PARTICIPANTS, RECORDS, AND TESTIMONY 8
A. ELECTED OFFICIALS, DEPONENTS, AND DOCUMENTS 8
III. DID COUNCILMEMBER CANO VIOLATE, OR CAUSE TO BE VIOLATED,
CALIFORNIA GOVERNMENT CODE SECTION 87100 — CONFLICTS OF
INTEREST? 10
A. SUMMARY AND FINDINGS 10
B. DISCUSSION 11
C. CONCLUSION AND RECOMMENDATIONS 12
IV. DID COUNCILMEMBER CANO VIOLATE ANY OTHER LAWS OF THE STATE
OF CALIFORNIA GOVERNMENT CODE SECTION 87100, CONFLICTS OF
INTEREST, BY INFLUENCING OR CAUSING THE NON -ENFORCEMENT OF
THE BUILDING CODE VIOLATIONS AT 1135 MARY LANE, NATIONAL CITY,
CA 91950 FOR AN APPROXIMATELY FIVE (5) YEAR PERIOD? 14
A. SUMMARY 14
B. FINDINGS AND DISCUSSION 14
1. VIOLATION OF OTHER LAWS 14
2. ETHICAL AND FIDUCIARY VIOLATIONS 14
C. CONCLUSION 16
V. WAS A HOSTILE ENVIRONMENT CREATED BY THE CONDUCT OF CITY
COUNCILMEMBER RIOS? 17
A. DISCUSSION 17
B. CONCLUSION 17
EXECUTIVE SUMMARY
A. INTRODUCTION AND OVERVIEW.
On April 30, 2018, the City of National City ("City") engaged Lozano Smith to
conduct an investigation into three defined subject matter topics. These three topics of
inquiry were defined by the City's City Council at a regular meeting of the City Council.
Lozano Smith assigned Mr. William P. Curley, III to conduct the investigation and prepare
this report. Mr. Curley interfaced with the City's City Attorney, Angil Morris- Jones, as
regards to obtaining records and interviewing City Councilmembers and City staff. All
officials cooperated, with the exception of City Councilmember Jerry Cano.
Councilmember Cano, the subject of the three areas of investigation declined to be
interviewed and so impaired the ability of this investigator to achieve definitive
conclusions about two of the three subject areas. The third subject area was addressed
by Councilmember Cano, directly and through his legal counsel. A definite conclusion
was reached: there was no inappropriate touching, bullying, or hostile behavior conducted
by City Councilmember Mona Rios against Councilmember Cano. The assertion was
made in the course of City Council meeting for unknown reasons. Regardless, of the
reason for the accusation, it is not sustained and bears no further action by the City
Council or City staff.
This report will address the context and setting of the City, the governance
structure, the municipal organization, the interaction of the City Council between itself and
staff and follow with specific discussion of the three areas of investigation.
This report will not reach final legal conclusions due to the non -participation of
Councilmember Cano, but will provide final determinations by the investigator based on
available facts. Further, reference will be made to available "next steps" for City
consideration.
B. NARRATIVE SUMMARY OF THE CITY'S GOVERNANCE AND
ORGANIZATION.
The City is a general law city (as opposed to a charter city). This means the
general laws of the State of California ("State"), together with local city legislation, regulate
the conduct of the City officers, employees, and derivatively, the public members present
in the City.
This general law city is governed by the City Manager form of government. This
form of government is used by the majority of California cities.
The City has codified the City Manager form of government, with its unambiguous
direction to the City Council as to its role being limited to policy and legislation, not to
Executive Summary 1 Section I
interference in or with City staff. The oversight and management of City staff is the sole
lawful domain of the City Manager.
The City's Municipal Code reads, in Section 2.01.030 - Intermediary Role:
Except for the purpose of inquiry, the city council and its
members shall deal with the administrative service solely
through the city manager, and neither the city council nor any
member thereof shall give orders to any of the subordinates
of the city manager.
This city legislation makes clear the respective roles of the members of the City
Council and the City Manager. This government system works to the benefit of all the
community if respected and followed. If not, the result is tension and uncertainty, leading
to an unhealthy work environment for all of the City staff.
National City, by the unanimous reporting of all persons interviewed, suffered
serious economic stress as to declining government revenues during the 2008 national
economic "bursting bubble." The City is still in the recovery phase and continuing to make
positive strides for the City's governmental operation and public service. A critical factor
that cannot be overestimated — and which apparently lies at the core of several of the
issues being investigated — was the decimation of long-term City staff during that time
period. Retirements and departures removed both manpower and "institutional memory,"
and the inability to afford replacing the departed staff resulted in consolidations and
reorganization of City departments and operations. Staff should be commended for their
loyalty and willingness to take on new tasks, as that willingness allowed the City to
continue to deliver necessary services to the community. The downside of this
necessary, but forced, reorganizing, in the content of the concurrent loss of institutional
memory was that staff with little or no substantive expertise or training was now delivering
services. All efforts were made with the best of intentions, but were inconsistent with the
services and exercise of discretion of established veteran professionals who were fluent
in the various skill sets. This often resulted in ad hoc, inconsistent, and "learning as you
go" circumstances. But again, the public was being serviced. This is the personification
of loyal service and "a pint doing the work of a gallon." Necessarily, some new staff made
decisions were not consistent with those of established professionals with a normal
workload; staff did not have that luxury, therefore they acted reasonably and in good faith
in the circumstances they were given. I am advised that, given the bettering economic
circumstances, most, if not all, of the budget -related stresses are improving, as is feasible
given the City's overall needs. This, with recommended remedial actions, are believed
to function to prevent the reoccurrence of the "triage" decisions which had to be made,
given the "then" financial realities.
The City Councilmembers, for unknown reasons, appear fractured, polarized, and
are prone to present to the public that they do not show respect for the office each
member holds. Certainly, every elected leader must be true to their beliefs and lead the
City as they honestly believe to be in the community's best interests. However, that can
Executive Summary 2 Section I
be accomplished with courtesy, respect, and decorum. Personal feelings appear to play
a greater role than may be beneficial to the community. The public takes its lead from
the City Councilmembers' conduct. Special attention to respectful and professional
conduct should be a conscious effort of all councilmembers. Perception impacts
residents, staff, businesses, and future opportunities. Comradery, rather than
combativeness, should be the prevalent attitude of the members of the City Council. All
five members are dedicated to collectively serve the community as a whole — that must
be demonstrated to all, for the health and success of the City. Disrespect, argument, and
personal comments have no beneficial purpose in a City Council business meeting.
The City is experiencing growth and leadership changes, which always create a
sense of uncertainty. The City's leadership must assist in this time of change in a positive
manner, focused on the good of the community.
I acknowledge that there may be other perspectives held by people both within
and external to "City Hall." Regardless, as a result of candid discussions with most City
Councilmembers and relevant staff, the foregoing memorializes my perspective as
regards the governance of the City. I have been serving cities, in both legal and staff
roles, since 1979, and I have worked with dozens of cities and many elected officials and
staff members. I base my observations on local testimony and my experience.
The City also has a thorough and careful attention to State law -required ethics
training (AB 1234) and harassment training (AB 1661/GC 12950.1). The City's municipal
code, in Section 2.74.010, requires the ethics training be provided. The City has
confirmed that regular and rigorous training has been provided to all elected officials, in
both areas of legislative concern. To punctuate the importance of ethical behavior, the
City Council previously and unusually adopted, by ordinance, the clear requirement to
regularly undergo ethical conduct training. This local law is Section 2.74.010 — Ethics
Training —Required of the City's Municipal Code, which reads:
"The following persons shall receive training required by
Government Code Section 53235 at least every two years, in
a program approved by the city manager:
A. Mayor and members of the city council.
B. City clerk.
C. City treasurer.
D. Members of all boards and commissions identified in
Title 16 of this code.
E. All employees who are required to file a statement of
economic interests pursuant to the Political Reform
Act, Government Code Section 87100, et seq."
(*emphasis added)
Executive Summary 3 Section I
No member of the City's governance structure can assert that they were unaware
of the requirement to act ethically, and to strive to perform beyond the minimum legal and
ethical requirements. As leaders, all should go beyond the minimum floor of ethical
conduct so as to set an example of what is expected conduct in National City.
C. STANDARD OF REVIEW.
In order to ensure a uniform unbiased and trustworthy process, the investigator
has utilized three competent legal guidelines as to this fact-finding investigation. The
investigator utilized the following three judicial and ethical directives in the course of this
investigation:
a. City Attorneys' Ethical Standards (League of California Cities)
b. California Civil Jury Instructions — 106. Evidence
c. California Civil Jury Instructions — 107. Witnesses
The purpose of the three guidelines is to advise all interested persons of the
investigative methodology utilized, so that the conclusions are understood in the correct
context. All evidence was fairly assessed, written and oral, and the conclusions reached
are derived from the available evidence. The conclusions may change upon the receipt
of additional evidence, including but not limited to, testimony from Councilmember Cano.
Councilmember Cano declined to be interviewed, so all conclusions are based upon the
public records of the City, as well as the testimony of the four incumbent councilmembers
and relevant executive staff. As those interviewed were percipient witnesses to
interactions with Councilmember Cano, their testimony was determined to be relevant,
credible, and unbiased. The firsthand accounts proffered by those providing testimony
was of sufficient scope for the investigator to reach a conclusion, but is subject to change
if additional information is discovered.
The above -referenced three directives are attached, following this page.
D. THE INVESTIGATION PROCESS.
This office was tasked with investigating three defined issues as described by the
City Council:
1. Did Councilmember Cano violate California Government Code Section
87100 in the course of his failure, for approximately five (5) years, to bring
his property at 1135 Mary Lane, National City, CA 91950 into compliance
with the City's enforced Building Code?
2. Did Councilmember Cano violate any State or local laws in the course of
his failure to bring his property at 1135 Mary Lane, National City, into
compliance with the City's Building Code?
Executive Summary 4 Section I
Ethical Principles for City Attorneys'
Adopted October 6, 2005
City Attorneys Department Business Session
Preamble
A city attorney occupies an important position of trust and responsibility within city government.
Central to that trust is an expectation and commitment that city attorneys will hold themselves to
the highest ethical standards. Every effort should be made to earn the trust and respect of those
advised, as well as the community served.
The City Attorneys Department of the League of California Cities has therefore adopted these
ethical principles to:
❑ Serve as an aspirational guide to city attorneys in making decisions in difficult situations,
❑ Provide guidance to clients and the public on the ethical standards to which city attorneys
aspire, and
❑ Promote integrity of the city and city attorney office.
City attorneys are also subject to the State Bar's Rules of Professional Conduct. For an
explanation of how the rules apply to city attorneys, please see Practicing Ethics published by
the League of California Cities in 2004, available at www.cacities.org/attornevs. These
aspirational ethical principles are not an effort to duplicate or interpret the State Bar's
requirements or create additional regulatory standards.
The role of the city attorney and the client city varies. Some city attorneys are full-time public
employees appointed by a city council; some are members of a private law firm, who serve under
contract at the pleasure of a city council. A few are directly elected by the voters; some are
governed by a charter. When reflecting on the following principles, the city attorney should take
these variations into account.
The city attorney should be mindful of his or her unique role in public service and take steps to
ensure his or her words and deeds will assist in furthering the underlying intent of these
principles.
1 When used in this document, the term "city attorney" refers to all persons engaged in the practice of municipal
law. This includes attorneys in firms that provide legal services to cities on an ongoing basis that are the functional
equivalent to services provided by assistant or deputy city attorneys (for example, on redevelopment and personnel
issues).
City Attorney Ethical Principles
Adopted October 6, 2005
Page 2
Fundamental Principles (There is no significance to the order of the list.)
Principle 1 (Rule of Law). As an officer of the courts and local government, the city attorney
should strive to defend, promote and exemplify the law's purpose and intent, as determined from
constitutional and statutory language, the case law interpreting it, and evidence of legislative
intent. As an attorney representing a public agency, the city attorney should promote the rule of
law and the public's trust in city government by providing representation that helps create a
culture of compliance with ethical and legal obligations.
Explanation. The city attorney's advice and actions should always proceed from the
goal of promoting the rule of law in a free, democratic society. Because the public's
business is involved, within the city organization the city attorney should consistently
point out clear legal constraints in an unambiguous manner, help the city to observe such
constraints, identify to responsible city officials known legal improprieties and remedies
to cure them, and if necessary, report up the chain of command to the highest level of the
organization that can act on the client city's behalf.
Examples
1. The city attorney should give advice consistent with the law and the policy
objectives underlying those laws, but may consider and explain good faith arguments for
the extension or change of a legal principle.
2. The city attorney should not attempt to justify a course of action that is clearly
unlawful. Where the city attorney's good faith legal assessment is that an act or omission
would be clearly unlawful, the city attorney should resist pressure to be "creative" to
come up with questionable legal conclusions that will provide cover for the elected or
appointed public officials to take actions which are objectively unlikely to be in
conformance with the legal constraints on the city's actions.
3. The city attorney's guiding principle in providing advice and services should be
sound legal analysis. The city attorney should not advise that a course of action is legal
solely because it is a common practice ("everyone else does it that way"), a past practice
("we have always done it that way"), or because the risk of suit or other consequence for
action is considered low.
4. The city attorney's advice should reflect respect for the legal system.
5. If the city has made a decision that the city attorney believes may be legally
harmful to the city, the city attorney should encourage the city to take any necessary
corrective action but do so in a way that minimizes any damage to the city's interests.
6. The city attorney should be willing to give unpopular legal advice that meets the
law's purpose and intent even when the advice is not sought but the legal problem is
evident to the attorney.
City Attorney Ethical Principles
Adopted October 6, 2005
Page 3
7. The city attorney should not only explain and advise the city on the law, but
should encourage the city to comply with the law's purpose and intent.
Principle 2 (Client Trust). The city attorney should earn client trust through quality legal advice
and the manner in which the attorney represents the city's interests.
Explanation. It is difficult for the city attorney to effectively represent the city if public
officials do not trust the city attorney's competence and professionalism.
Examples
1. The city attorney should use available resources to maximize his or her ability to
advise knowledgeably on issues of municipal law.
2. The city attorney should be clear with individual council members and staff on
the extent to which their communications with the city attorney can and will be kept
confidential. The city attorney should be especially clear when confidentiality cannot be
lawfully maintained.
3. Sometimes the city attorney will be asked a question during a public or private
meeting and the city attorney is unsure of the answer. When time permits, the city
attorney should advise that additional time is needed to research the matter and provide
an appropriate response. If extra time is not available, then the city attorney should be
candid regarding any uncertainty he or she feels about the answer given.
4. When a question is posed and the city attorney knows there is no definitive, clear
conclusion, the city attorney should describe the competing legal considerations, as well
as inform the city of the legally supportable courses of action, together with an evaluation
of the course that is most likely to be upheld.
5. In the event the city attorney is asked in a public forum to provide advice that
could undermine the city's ultimate position, the city attorney should seek to meet in
closed session, if legally permissible, or, if time permits, provide his or her opinion in a
confidential memorandum. If the advice must be given during an open session, then the
city attorney must be mindful of the impact that advice given in public may have on the
city's ultimate position.
6. When the city attorney has a duty to provide documents or other information to
outside law enforcement authorities, he or she should do so in a way to minimize harm to
the city consistent with that duty.
City Attorney Ethical Principles
Adopted October 6, 2005
Page 4
Principle 3 (No Politicization). The city attorney should provide legal advice in a manner that
avoids the appearance that the advice is based on political alignment or partisanship, which can
undermine client trust.
Explanation. The city attorney and the city attorney's advice needs to be trusted as
impartial by the entire council, staff and community.
Examples
1. The city attorney should provide consistent advice with the city's overall legal
interests in mind to all members of the city team regardless of their individual views on
the issue.
2. Each city council member, irrespective of political affiliation, should have equal
access to legal advice from the city attorney, while legal work on a matter consuming
significant legal resources should require direction from a council majority.
3. The city attorney or persons seeking to become city attorney should not make
campaign contributions to or participate in the campaigns of that city's officials,
including candidates running for that city's offices or city officers running for other
offices. For private law firms serving as city attorney or seeking to become city attorney,
this restriction should apply to the law firm's attorneys.
4. When considering whether to become involved in policy advocacy on an issue
that may potentially come before the city, the city attorney should evaluate whether such
involvement might compromise the attorney's ability to give unbiased advice or create
the appearance of bias.
Principle 4 (No Self Aggrandizement). The city attorney should discharge his or her duties in a
manner that consistently places the city's interests above self -advancement or enrichment.
Explanation. The city attorney, by his or her acts and deeds, should demonstrate that his
or her highest professional priority is to serve the city's needs.
Examples
1. The city attorney's operating and legal services budget requests should be based
on the goal of efficiently serving the client city's realistic legal needs (i.e. avoid "empire
building").
2. The city attorney should provide advice without a focus on garnering personal
support or avoiding personal criticism.
City Attorney Ethical Principles
Adopted October 6, 2005
Page 5
3. While it is appropriate for a city attorneys to provide both advisory and litigation
services, a city attorney should give the city a full range of reasonable options including
alternatives to litigation for resolving issues.
Principle 5 (Professionalism and Courtesy). The city attorney should conduct himself/herself
at all times in a professional and dignified manner, interacting with all elected officials, city staff.
members of the public, and the media with courtesy and respect.
Explanation. The city attorney should be a role model of decorum and composure.
Examples
1. The city attorney should provide advice and information to the council and
individual council members in an evenhanded manner consistent with city policy
governing the provision of legal services to the city.
2. The city attorney should communicate in a way that is sensitive to both the
context and audience, explaining the law in a way that is understandable.
3. In interactions with the public, the city attorney's role is to explain procedures and
the law, but not engage in debate.
4. The city attorney should show professional respect for city staff, colleagues, the
legal system and opponents. The city attorney should not personally attack or denigrate
individuals, particularly in public forums.
5. The city attorney should not seem to endorse, by silence or otherwise, offensive
comments made to him/her about others.
6. Sometimes the city attorney will provide advice in public, either because of a
city's approved practices or as necessitated during a public meeting. Such advice should
be provided in a low-key, dispassionate and non -confrontational manner.
7. The tone of the city attorney's advice and representation should not give the
appearance of a personal attack on an individual, even when it is necessary to explain that
a particular official's action is unlawful.
8. The city attorney should be open to constructive feedback and criticism.
Principle 6 (Policy versus Law). The city attorney's obligation is to understand the city's
policy objectives and provide objective legal advice that outlines the legally defensible options
available to the city for achieving those objectives.
Explanation. The city attorney must respect policymakers ' right to make policy
decisions.
City Attorney Ethical Principles
Adopted October 6, 2005
Page 6
Examples
1. The city attorney may offer input on policy matters, but should make clear when
an opinion is legal advice and when it is practical advice.
2. The city attorney should not let his or her policy preferences influence his or her
legal advice.
3. If a city attorney finds it necessary to advise the city that a particular course of
action would be unlawful, the city attorney should strive to identify alternative
approaches that would lawfully advance the city's goals.
Principle 7 (Consistency). The city attorney should conduct his or her practice in a way that
consistently furthers the legitimate interests of cities.
Explanation. Consistency in the legal positions taken by city attorneys is vital to city
attorneys' credibility with the courts, clients, and the public.
Examples
1. The city attorney should not represent a private client if that representation will
necessitate advancing legal principles adverse to cities' clearly recognized and accepted
interests.
2. When providing advice, the city attorney should inform his or her city of any far-
reaching negative impacts a position may have on the city's own potential future interests
as well as cities' interests in general, particularly when establishing legal precedent.
3. The city attorney should carefully consider whether to hire or recommend a firm
that advances legal principles adverse to city interests on behalf of private clients.
Principle 8 (Personal Financial Gain). The city attorney's primary responsibility is to serve
the city's interest without reference to personal financial gain.
Explanation. An important aspect of the city attorney profession is public service.
Examples
1. The city attorney should provide the highest possible quality work regardless of
the remuneration received.
2. The city attorney's representation should be based on a realistic understanding of
the city's needs in light of the city's fiscal and other constraints. However the city
City Attorney Ethical Principles
Adopted October 6, 2005
Page 7
attorney should advise the city when additional resources are necessary to provide the
level of legal services the city requires.
3. The city attorney should refrain from providing unnecessary or redundant services
to the city.
4. The city attorney should never use the power, resources or prestige of the office
for personal gain.
Principle 9 (Hiring by and of City Attorneys). The selection and retention of the city attorney
and city attorney staff should be based on a fair process that emphasizes professional competence
and experience. The process should not include inappropriate considerations such as political,
personal or financial ties.
Explanation. The public's trust in the quality of the city's legal services is undermined if
it appears that considerations other than competence affected the decision to hire
someone.
Examples
1. The city attorney should engage staff and vendors based on objective standards
relating to professional competence and experience.
2. The city attorney should avoid providing gratuities to decision -makers during the
pendency of decisions relating to the city attorney's employment.
3. City attorneys must keep employment negotiations separate from the city
attorney's role as the city's legal advisor.
4. The city attorney should not undermine the employment of an incumbent city
attorney. The city attorney may respond to unsolicited inquiries from a potential client
about future representation.
5. The city attorney should maintain an office that is open to employees from
diverse backgrounds and remove unnecessary barriers to success in his or her office and
in the legal profession.
6. The city attorney should not award or recommend award of litigation or legal
services -related contracts if the public could question whether the contract was awarded
for reasons other than merit, such as the contractor (or member of the contractor)
providing gifts to or participating in political campaigns of (including making campaign
contributions to) officials with the power to award the contracts.
City Attorney Ethical Principles
Adopted October 6, 2005
Page 8
7. The city attorney should hire or recommend staff and consultants who adhere to
these ethical principles and encourage existing staff and consultants to do likewise.
8. The city attorney should seriously consider refusing to represent cities that do not
support the city attorney's adherence to these principles
Principle 10 (Professional Development). The city attorney should contribute to the
profession's development by improving his or her own knowledge and training and by assisting
other public agency attorneys and colleagues in their professional development.
Explanation. For city attorneys to remain a vital, positive part of municipal government,
members of the profession should take affirmative actions to advance respect for and
proficiency by its practitioners.
Examples
1. City attorneys have a strong tradition of assisting their colleagues through formal
or informal sharing of their knowledge and expertise, including active participation in the
League of California Cities, the State Bar and a local municipal attorney group or bar
association. This tradition also includes sharing of research and opinions when consistent
with protecting client confidences.
2. The city attorney should continually strive to improve his or her substantive
knowledge of the law affecting municipalities through presenting or attending appropriate
educational programs.
3. The city attorney should keep in mind the dynamic nature of municipal law and
update his or her understanding of the law on an issue, rather than relying on past
knowledge.
106. Evidence
You must decide what the facts are in this case only from the evidence
you see or hear during the trial. Sworn testimony, documents, or
anything else may be admitted into evidence. You may not consider as
evidence anything that you see or hear when court is not in session,
even something done or said by one of the parties, attorneys, or
witnesses.
What the attorneys say during the trial is not evidence. In their opening
statements and closing arguments, the attorneys will talk to you about
the law and the evidence. What the lawyers say may help you
understand the law and the evidence, but their statements and
arguments are not evidence.
The attorneys' questions are not evidence. Only the witnesses' answers
are evidence. You should not think that something is true just because
an attorney's question suggests that it is true. However, the attorneys
for both sides can agree that certain facts are true. This agreement is
called a "stipulation." No other proof is needed and you must accept
those facts as true in this trial.
Each side has the right to object to evidence offered by the other side. If
I do not agree with the objection, I will say it is overruled. If I overrule
an objection, the witness will answer and you may consider the
evidence. If I agree with the objection, I will say it is sustained. If I
sustain an objection, you must ignore the question. If the witness did
not answer, you must not guess what he or she might have said or why I
sustained the objection. If the witness has already answered, you must
ignore the answer.
An attorney may make a motion to strike testimony that you have
heard. If I grant the motion, you must totally disregard that testimony.
You must treat it as though it did not exist.
New September 2003; Revised February 2005, December 2010, December 2012
Directions for Use
This instruction should be given as an introductory instruction.
Sources and Authority
• "Evidence" Defined. Evidence Code section 140.
• Jury to Decide Questions of Fact. Evidence Code section 312.
• Miscarriage of Justice. Evidence Code section 353.
• A stipulation in proper form is binding on the parties if it is within the authority
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PRETRIAL INSTRUCTIONS CACI No. 106
of the attorney. Properly stipulated facts may not be contradicted. (Palmer v.
City of Long Beach (1948) 33 Ca1.2d 134, 141-142 [199 P.2d 952].)
Courts have held that "attempts to suggest matters of an evidentiary nature to a
jury other than by the legitimate introduction into evidence is misconduct
whether by questions on cross-examination, argument or other means." (Smith v.
Covell (1980) 100 Ca1.App.3d 947, 960 [161 Ca1.Rptr. 377].)
Courts have stated that "[t]he right to object on appeal to misconduct or
improper argument, even when prejudicial, is generally waived in the absence
of a proper objection and request the jury be admonished." (Atkins v. Bisigier
(1971) 16 Ca1.App.3d 414, 427 [94 Ca1.Rptr. 49]; Horn v. Atchison, Topeka &
Santa Fe Ry. Co. (1964) 61 Ca1.2d 602, 610 [39 Cal.Rptr. 721, 394 P.2d 561].)
Secondary Sources
3 Witkin, California Evidence (4th ed. 2000) Presentation at Trial
7 Witkin, California Procedure (5th ed. 2008) Trial, §§ 281, 282
1A California Trial Guide, Unit 21, Procedures for Determining Admissibility of
Evidence, §§ 21.01, 21.03 (Matthew Bender)
27 California Forms of Pleading and Practice, Ch. 322, Juries and Jury Selection,
§§ 322.56-322.57 (Matthew Bender)
48 California Forms of Pleading and Practice, Ch. 551, Trial, §§ 551.61, 551.77
(Matthew Bender)
California Judges Benchbook: Civil Proceedings —Trial (2d ed.) §§ 3.52, 4.99, 5.40,
5.49, 5.69, 12.9, 12.35 (Cal CJER 2010)
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107. Witnesses
A witness is a person who has knowledge related to this case. You will
have to decide whether you believe each witness and how important
each witness's testimony is to the case. You may believe all, part, or
none of a witness's testimony.
In deciding whether to believe a witness's testimony, you may consider,
among other factors, the following:
(a) How well did the witness see, hear, or otherwise sense what he
or she described in court?
(b) How well did the witness remember and describe what
happened?
(c) How did the witness look, act, and speak while testifying?
(d) Did the witness have any reason to say something that was not
true? For example, did the witness show any bias or prejudice or
have a personal relationship with any of the parties involved in
the case or have a personal stake in how this case is decided?
(e) What was the witness's attitude toward this case or about giving
testimony?
Sometimes a witness may say something that is not consistent with
something else he or she said. Sometimes different witnesses will give
different versions of what happened. People often forget things or make
mistakes in what they remember. Also, two people may see the same
event but remember it differently. You may consider these differences,
but do not decide that testimony is untrue just because it differs from
other testimony.
However, if you decide that a witness did not tell the truth about
something important, you may choose not to believe anything that
witness said. On the other hand, if you think the witness did not tell the
truth about some things but told the truth about others, you may accept
the part you think is true and ignore the rest.
Do not make any decision simply because there were more witnesses on
one side than on the other. If you believe it is true, the testimony of a
single witness is enough to prove a fact.
New September 2003; Revised April 2004, June 2005, April 2007, December 2012,
June 2015, December 2016
Directions for Use
This instruction may be given as an introductory instruction or as a concluding
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PRETRIAL INSTRUCTIONS CACI No. 107
instruction after trial. (See CACI No. 5003, Witnesses.)
Sources and Authority
• Role of Jury. Evidence Code section 312.
• Considerations for Evaluating the Credibility of Witnesses. Evidence Code
section 780.
• Direct Evidence of Single Witness Sufficient. Evidence Code section 411.
• "It should certainly not be of importance to tell the ordinary man of the world
that he should distrust the statements of a witness whom he believes to be a
liar." (Wallace v. Pacific Electric Ry. Co. (1930) 105 Ca1.App. 664, 671 [288 P.
834].)
Secondary Sources
7 Witkin, California Procedure (5th ed. 2008) Trial, § 281
lA California Trial Guide, Unit 22, Rules Affecting Admissibility of Evidence,
§ 22.30 (Matthew Bender)
48 California Forms of Pleading and Practice, Ch. 551, Trial, § 551.122 (Matthew
Bender)
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3. Did Councilmember Rios cause an occurrence of sexual harassment,
bullying or inappropriate touching of Councilmember Cano at the regular
City Council meeting held on April 17, 2018?
The investigator conducted the investigation by reviewing records of the City,
including building permit records, ethics and sexual harassment training records, the
City's municipal code, Form 700 filings, staff working records, and by conducting face-to-
face interviews with four of the five city councilmembers, executive staff, and the city
attorneys who have represented the City during the subject time period.
This written and oral testimony was evaluated according to the standards
described previously.
All determinations and conclusions are derived from the interviews (absent
Councilmember Cano) and the review of the written materials specified in the report. If
other previously unknown evidence is provided or discovered, the conclusions herein may
change upon the evaluation of such evidence.
E. OVERVIEW OF REPORT'S PURPOSE.
This report is primarily focused upon investigating the three areas of inquiry
directed by the City Attorney's office, at the direction of the City Council. A secondary
purpose is to identify further actions the City Council may consider to further address
issues that were presented in the course of this investigation. These further actions
directly relate to the refusal of Councilmember Cano to be interviewed regarding the
issues. This refusal is inconsistent with the City Council's decision to investigate the
issues and could negatively impact the public's trust in its City Council and specifically
Councilmember Cano. Elected leaders have ethical and fiduciary duties to the members
of the public which should transcend their individual circumstances or desires. Leaders
have a fiduciary and ethical duty to set an example for the community, of proper and
transparent leadership. In this section, I include two articles that address the ethical and
fiduciary duties commonly recognized as being applicable to a councilmember. While
these are not legal duties specifically imposed on the City's councilmembers by statute,
the duty has been identified as existing and able to be violated. This is demonstrated in
the California Attorney General's criminal case against various City of Bell official and
employees. A copy of the complaint is appended to this Section E. Please note cause
of action 7.
Finally, the City has declared that the City's core values, commonly referenced as
the "5 C's," apply to the City Council as posted in the Council Chambers' lobby. The 5
C's succinctly set forth ethical and fiduciary standards that can be expected of all City
personnel, with adherence expected from the elected leaders, as examples to all. These
values are also printed on most, if not all, City business cards. A copy of the core values
follows this section.
Executive Summary 5 Section I
1 EDMUND G. BROWN JR.
Attorney General of California
2 DAVID S. CHANEY
Chief Assistant Attorney General
3 JONATI IAN K. RENNER
Senior Assistant Attorney General
4 ZACKI:RY P. MORA7JINI
Supervising Deputy Attorney General
SUSAN K. LEACH (SBN 231575)
PETER H. CHANG (SBN 241467)
tDeputy Attomeys General
1300 I Street, Suite 125
i P.O. Box 944255
Sacramento, CA 94244-2550
Telephone: (916) 445-1968
Fax: (916) 324-8835
E-mail: Peter.Chang@doj.ca.gov
l tt Attorneys for Plaintiffs
The People of the State of California
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
THE PEOPLE OF THE STATE OF
CALIFORNIA ex rel EDMUND G.
BROWN JR., Attorney General of The State
of California,
Plaintiffs,
ROBERT A. RIZZO, PIER'ANGELA
SPACCIA, RANDY G. ADAMS, OSCAR
HERNANDEZ, TERESA JACOBO,
GEORGE COLE, VICTOR BELLO, AND
GEORGE MIRABAL, in their official and
personal capacities, CITY OF BELL, AND
DOES 1-100, inclusive,
Defendants.
FILING FEE EXEMPT
(Gov. Code, § 6103)
CASE NO.:
COMPLAINT
1. Waste of Public Funds (Code Civ.
Proc., § 526a)
2. Negligence
3. Negligence (Civ. Code, § 1714(a))
4. Fraud
5. Fraud (Civ. Code, §§ 1709 and
1711)
6. Conflict of Interest (Gov. Code, §
1090)
7. Breach of Fiduciary Duty and
Violation of Public Trust
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Plaintiffs, the People of the State of California (the People), by and through Edmund G.
Brown Jr., Attorney General of the State of California, allege as follows:
INTRODUCTION
1. The People bring this action against certain officers and employees of the City of
Bell (the City), challenging their conduct, both intentional and negligent, that enriched themselves
at the expense of the City and its citizens whom they assumed an obligation to faithfully serve.
2. Among other things, the city council members and Chief Administrative Officer
(Robert Rizzo) awarded to themselves and certain other City officers and employees, and took
great pains to conceal, salaries and benefits that grossly exceeded what were reasonable and
commensurate with their respective offices and duties, all in blatant disregard of the public trust
confided in them.
3. Robert Rizzo dictated the terms of the employment contracts for the City officers
and employees, and council members negligently approved those contracts without ever
reviewing or even seeking to learn the terms of the contracts.
4. Defendants, including Robert Rizzo and Pier'angela Spaccia (Assistant Chief
Administrative Officer), were aware that their compensation was excessive and wasteful, and thus
crafted their employment contracts to conceal their full compensation from the public.
5. The city council members were also aware that the compensation that they gave
themselves was excessive and wasteful, and thus they also took action to deceive the public, by
both active concealment and affirmative misrepresentation, as to their true compensation.
6. The excessive and wasteful compensation given tothe defendants was paid out of
public funds, and thus the City and its citizens ultimately footed the bill left by the defendants'
self -enriching activities. In addition to the compensation already paid to defendants, the City is
responsible for a much larger bill in the future when it must pay for the defendants' wrongfully -
gained retirement benefits under Ca1PERS and the City's own Supplemental Retirement Plan.
PLAINTIFF AND JURISDICTION
7. Edmund G. Brown Jr. is the duly elected Attorney General of the State of
California and is the chief law officer of the State. The Attorney General has the power to file
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any civil action or proceeding directly involving the rights and interest of the State, or which he
deems necessary for the enforcement of the laws of the State, the preservation of order, and the
protection of public rights and interests.
8. The Attorney General has determined that this action is necessary for the
enforcement of the laws of the State, the preservation of order, and the protection of public rights
and interests.
9. The violation of laws, both statutory and common law, which are the subject of
this action, occurred in the County of Los Angeles.
DEFENDANTS
10. Defendant Robert A. Rizzo was the Chief Administrative Officer of the City from
May 1993 through at least July 2010. Rizzo is named in both his official and personal capacities.
11. Defendant Pier'angela Spaccia was the Assistant to the Chief Administrative
Officer of the City from July 2003 to June 2008, and the Assistant Chief Administrative Officer
from June 2008 to at least July 2010. Spaccia was hired by Rizzo. Spaccia is named in both her
official and personal capacities.
12. Defendant Randy G. Adams was the Police Chief of the City from May 2009
through at least July 2010. Adams was hired by Rizzo. Adams is named in both his official and
personal capacities.
13. Defendant Oscar Hernandez, at relevant times mentioned herein, was a council
member and/or mayor of the City. Hernandez is currently the mayor. Hernandez is named in
both his official and personal capacities.
14. Defendant Teresa Jacobo, at relevant times mentioned herein, was a council
member of the City. Jacobo is currently a council member. Jacobo is named in both her official
and personal capacities.
15. Defendant George Mirabal, at relevant times mentioned herein, was a council
member and/or mayor of the City. Mirabal is currently a council member. Mirabal is named in
both his official and personal capacities.
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16. Defendant Victor Bello, at relevant times mentioned herein, was a council member
of the City. Bello is named in both his official and personal capacities.
17. Defendant George Cole, at relevant times mentioned herein, was a council member
of the City. Cole is named in both his official and personal capacities.
18. Any reference to Council Member defendants refers to defendants Hernandez,
Jacobo, Mirabal, Bello, and Cole.
19. Defendant City of Bell is a municipal corporation in the County of Los Angeles.
Any reference to the City of Bell as a defendant in this action will be specified. Unless so
specified. any reference to "defendants" or "all defendants" does not include the City of Bell.
20. Any reference to any act of defendants means the act of each defendant acting
individually, jointly, and/or in concert with all other defendants.
21. The true names and capacities of defendants sued herein as DOES 1 through 100,
inclusive, are unknown to the People at this time. The People therefore sue these defendants by
fictitious names. Each of the fictitiously named defendants is responsible in some manner for the
violations of law and accrual of the causes of action. The People will amend this Complaint to
show the true names of each when they are ascertained. Whenever reference is made in this
Complaint to any defendant, the reference shall include DOES 1 through 100, inclusive.
FACTUAL BACKGROUND
I. DEFENDANTS AWARDED THEMSELVES EXCESSIVE COMPENSATION
22. Each defendant has received excessive and wasteful compensation from the City.
The amount of compensation that exceeds what was reasonable and commensurate with
defendants' respective duties and responsibilities provided no use or benefit to the City, and was
totally unnecessary, wasteful, and illegal.
A. Rizzo
23. Defendant Rizzo, as Chief Administrative Officer of the City, had a base salary of
$787,500 in 2010.
24. Rizzo's salary is excessive and wasteful, and was not commensurate with his
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duties and responsibilities. As a point of comparison, Rizzo's base salary is over three times what
cities of comparable population in the L,os Angeles region pay to their city managers on average.
25. Since 1993, the city council has raised Rizzo's salary 16 times, including
automatic raises, by an average of 14 percent every year. In 2005 alone, Council Member
defendants raised Rizzo's salary by more than 47 percent. In 2008, even as defendants cut back
on services to the City's residents and laid off certain city employees, Rizzo received a set of five
new employment contracts that provided for automatic 12 percent annual increases to his base
salary.
26. Even though the city council raised Rizzo's salary over ten -fold between 1993 and
2010, his responsibilities as the Chief Administrative Officer of the City remained nearly the
same.
27. Council Member defendants also provided Rizzo excessive and wasteful benefits.
28. As an illustration, Rizzo's 2008 contracts with the City provide that he accrue
service credit with the California Public Employees' Retirement System (CaIPERS) at double the
normal accrual rate, effectively providing for double the retirement benefits from CaIPERS.
29. In 2008, Council Member defendants further provided Rizzo with 856 hours (107
days) of vacation and 288 hours (36 days) of sick leave per year. The 143 days of annual vacation
and sick leave awarded to Rizzo is excessive and wasteful, in light of the fact that there are only
around 250 working days in a year.
30. Furthermore, defendants permitted Rizzo to convert his vacation and sick leave
into pay at a rate of $304 per hour. In 2009 alone, Rizzo cashed out over 1 100 hours of vacation
and sick leave for over $360,000, bringing his total salary from the City to over $1,100,000.
31. The cost of these and other benefits to the City far exceeds Rizzo's base salary and
is to be determined at trial. For example, Rizzo is a member of both CaIPERS and the City's
Supplemental Retirement Plan. His excessive and wasteful compensation could wrongfully
increase the retirement benefits he would receive from these pension plans and, correspondingly,
the City's liabilities to these plans.
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32. Under the City Charter, the City was to pay Rizzo a salary "commensurate with
the responsibilities of chief administrative officer of the City." The compensation that the
Council Member defendants provided to Rizzo far exceeded his responsibilities as Chief
Administrative Officer and was wasteful.
33. Council Member defendants approved Rizzo's employment contracts without
giving each contract the requisite deliberation, consideration, or due care. Upon information and
belief, Council Member defendants did not review Rizzo's employment contracts before
approving them. Instead, the Council Member defendants either relied on Rizzo's oral
representations as to terms of his own employment contracts or did not seek to discover the terms
of Rizzo's contracts at all, in complete dereliction of their duties to the City. They merely
approved and signed whatever Rizzo directed them to approve and sign.
B. Spaccia
34. Defendant Spaccia, as Assistant Chief Administrative Officer of the City, had a
base salary of $336,000 in 2010. This salary is excessive and wasteful, and was not
commensurate with her duties and responsibilities. As a point of comparison, Spaccia's base
salary is more than 40 percent higher than those of the city managers of cities in the Los Angeles
region with populations comparable to the City.
35. Since Rizzo hired Spaccia in July 2003, she has received salary increases every
year. The Council Member defendants and/or Rizzo raised Spaccia's salary by an average of 19
percent each year, including a 42 percent raise in 2005. In 2008, even as defendants cut back on
services to the City's residents and laid off certain city employees, Rizzo approved a new contract
for Spaccia that provided for a 20 percent raise in 2008 and automatic annual 12 percent raises to
her base salary thereafter.
36. In addition to an excess base salary, Council Member defendants and Rizzo gave
Spaccia excessive and wasteful benefits.
37. As an illustration, Council Member defendants provided Spaccia with 856 hours
(107 days) of vacation and 288 hours (36 days) of sick leave per year. The 143 days of annual
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vacation and sick leave awarded to Spaccia is excessive and wasteful, in light of the fact that
there are only around 250 working days in a year.
38. Furthermore, defendants permitted Spaccia to convert her vacation and sick leave
into pay at a rate of $147 per hour. In 2009 alone, Spaccia cashed out over 1 100 hours of
vacation and sick leave for nearly $175,000, bringing her total salary to over $540,000.
39. The cost of these and other benefits to the City far exceeds Spaccia's base salary
and is to be determined at trial. For example, Spaccia is a member of both CalPERS and the
City's Supplemental Retirement Plan. Her excessive and wasteful compensation could
wrongfully increase the retirement benefits that she would receive from these pension plans and,
correspondingly, the City's liabilities to these plans.
40. Council Member defendants approved the City's contracts with Spaccia without
giving each contract the requisite deliberation, consideration, or due care. None of the Council
Member defendants reviewed any of Spaccia's employment contracts before approving them.
Furthermore, none of the Council Member defendants sought to discover the terms of Spaccia's
employment contracts. They merely approved and signed whatever Rizzo directed them to
approve and sign, in complete dereliction of their duties to the City.
41. Upon information and belief, Rizzo authorized Spaccia's 2008 employment
contract without giving it the requisite deliberation, consideration, or due care as to the
appropriate compensation that was commensurate with her duties and responsibilities.
C. Adams
42. Adams, as the Police Chief of the City had a base salary of more than $457,000.
This salary is excessive and wasteful, and was not commensurate with his duties and
responsibilities.
43. Upon information and belief, Adams' base salary grossly exceeds those of police
chiefs of cities of comparable population in the Los Angeles region.
44. Rizzo approved Adams' employment contract in 2009. In approving Adams'
contract, Rizzo did not consult with or seek the approval of the Council Member defendants.
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45. Rizzo hired Adams as the City's police chief even though he believed that Adams
was not able to fully perform his law enforcement duties as police chief because of purported
preexisting injuries.
46. In addition to his base salary, Rizzo gave Adams excessive and wasteful benefits.
47. As an illustration, Rizzo agreed to provide Adams and his dependents lifetime
healthcare insurance benefits immediately upon the effective date of his contract with no vesting
period. Rizzo further agreed, on behalf of the City, that the City would support Adams' claim for
medical disability retirement in conjunction with his regular service retirement when Adams
retires from the City.
48. The cost of these and other benefits to the City far exceeds Adams' base salary and
is to be determined at trial. For example, Adams is a member of CaIPERS. His excessive and
wasteful compensation could increase the retirement and disability benefits he would receive
from Ca1PERS and, correspondingly, the City's liabilities to Ca1PERS.
49. Upon information and belief, Rizzo entered into Adams' 2009 employment
agreement on behalf of the City without giving the contract the requisite deliberation,
consideration, or due care as to the appropriate compensation that was commensurate with his
duties and responsibilities.
D. Council Member Defendants
50. Council Member defendants awarded themselves excessive and wasteful
compensation.
51. In 2010, Council Member defendants who are still on the city council are to
receive over $96,000 in base salary. As a point of comparison, under state law, council members
of general law cities with the population of the City are to receive no more than $4,800 per year.
52. Upon information and belief, the duties and responsibilities of the Council
Member defendants are similar to the responsibilities and duties of their counterparts in cities
with comparable population in the Los Angeles region.
53. Since 2003, Council Member defendants have awarded themselves annual
increases in salary averaging 16 percent each year. In certain years, Council Members defendants
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raised their own salaries multiple times. For example, in 2005, the Council Members awarded
themselves two salary increases of 17 percent each.
54. Council Member defendants further awarded themselves with overtime pay,
bringing their total salaries even higher. For example, Jacobo was paid over $110,000 by the City
in 2009, of which over $16,000 was for purported overtime work.
55. Council Member defendants made each of the salary and benefit increases without
the requisite deliberation, consideration, or due care as to the appropriate compensation that was
commensurate with their duties and responsibilities.
E. Defendants Converted the City Into A Charter City in Order to Increase
Their Compensation
56. Upon becoming a charter city in December 2005, Council Member defendants
awarded themselves salaries far exceeding those of their counterparts in general law cities.
57. Prior to 2006, the City was a general law city. But in 2005, a state law was
proposed that would limit the authority of council members in general law cities to increase their
own salaries. Under those guidelines, Council Member defendants could receive no more than
$400 per month for work they perform on behalf of the City, including work for any City
commissions, boards, or authorities.
58. In reaction to the proposed law, Rizzo approached Council Member defendants
and proposed that the City become a charter city. Upon information and belief, Rizzo told the
Council Member defendants that if the City became a charter city, they could increase their own
salaries and not be restricted by the statutory salary guidelines.
59. Council Member defendants then elected to submit a proposal to convert the City
into a charter city at a special election.
60. At or around the time Rizzo and other defendants worked to turn the City into a
charter city, thus allowing the Council Member defendants to increase their own salaries, the
Council Member defendants gave Rizzo and Spaccia raises of 47 and 42 percent, respectively.
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II. DEFENDANTS DEFRAUDED THE PUBLIC REGARDING THE AMOUNT OF THEIR
COMPENSATION
61. As defendants increased their own compensation at the expense of the City and its
citizens, they took active measures to conceal and/or misrepresent their true compensation to
members of the public.
A. Defendants Intentionally Crafted Ordinances And Their Own Contracts
To Avoid Discovery Of Their Compensation By The Public
62. Each defendant was aware that his or her compensation from the City was
excessive and wasteful. For that reason, they carefully crafted their contracts and other
documents authorizing pay and benefit increases to avoid discovery by the public of their full,
wasteful compensation.
1. Council Member Defendants Defrauded The Public By Approving A
Deceptive Ordinance
63. As an illustration, Council Member defendants passed Ordinance No. 1158 in
February 2005. The title of the Ordinance states, "AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BELL LIMITING COMPENSATION FOR MEMBERS OF THE CITY
COUNCIL PURSUANT TO CALIFORNIA GOVERNMENT CODE § 36516(c)." (underline
added.)
64. Rather than limiting the compensation of council members, as the title of the
ordinance states, the text of the ordinance actually increased the Council Member defendants'
salaries from $673 per month to $1,332 per month —almost doubling their salaries as council
members. (And which does not include their salaries for sitting on the boards of various city
authorities, agencies, and commissions.)
65. Upon information and belief, by using a false and misleading title for Ordinance
No. 1158, Council Member defendants intended to deceive the public. They were aware that only
the title of the ordinance, and not the text, would be published in the agenda and minutes of the
relevant city council meetings. Furthermore, Council Member defendants approved Ordinance
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No. 1 158 as part of a consent agenda during the city council meeting so that there was no public
discussion or deliberation of the ordinance.
66. Additionally, the alleged factual basis and purported justification for Ordinance
No. 1158 were false. The factual justification of the salary increase provided by Ordinance No.
1 158 was that the Council Member defendants had not received a pay increase since 1991, when,
according to the misinformation set out in the 2005 Ordinance No. 1158, they were being paid
$673 per month. But this is false. City council members had previously raised their salaries to
$673 per month in 2001, not 1991.
67. In 2001, pursuant to city Ordinance No. 1139, council members had given
themselves nine years' worth of cumulative five percent per year salary increase, raising their
salaries from $434 per month to $673 per month. The justification for this salary increase in 2001
was that the council member salaries had not been increased since 1992.
68. When Council Member defendants passed Ordinance No. 1 158 in 2005, however.
they used the $673 per month salary as the 1991 starting point (but which was actually set in
2001), and used this falsely stated and inflated base salary to increase their salaries by 14 years'
worth, rather than four years' worth, of cumulative raises.
69. Employing such mathematical sleight-of-hand and utilizing false and deceptive
information as to their alleged salary in 1991, Council Members thus wrongfully provided
themselves with duplicate raises for the nine-year period from 1992 to 2001.
70. At least defendants Cole and Bello were aware of this deception as they approved
both Ordinance No. 1139 and Ordinance No. 1158.
71. From July 2005 to at least July 2009, Council Member defendants maintained their
city council salary steady while increasing their salaries from the various city authorities,
agencies, and commissions by approximately 13 percent each year. While the salaries of the
Council Member defendants were primarily derived from these authorities and commissions, the
Council Member defendants did little or no work for them.
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2. Fraud and Misrepresentation by Rizzo
72. Prior to 2008, Rizzo had a single employment contract with the City that provided
for his entire compensation. In or around September 2008, the terms of Rizzo's employment with
the City were broken up into at least five separate contracts. Rizzo had one primary contract with
the City and four other contracts with four separate component units of the City: Bell Solid Waste
and Recycling Authority, Bell Surplus Property Authority, Bell Community Dousing Authority,
and Bell Public Financing Authority (the Authorities).
73. Upon information and belief, while Rizzo did little or no work for the Authorities,
he and other defendants split his salary among the five contracts to conceal the full amount of his
salary from the public and to mislead and deceive the public as to his compensation.
74. Even before September 2008, Rizzo's responsibilities as Chief Administrative
Officer of the City included work, if any, on behalf of each of the Authorities. Rizzo's
responsibilities with the City, or any of the Authorities, did not change after September 2008.
75. In addition to being fraudulent, Rizzo's 2008 contracts were also unauthorized,
and thus ultra vires. The City Council defendants did not collectively consider, deliberate, or
approve the contracts. Rather, defendant Hernandez signed the contracts on behalf of the City as
the purported mayor. In September 2008, however, Mirabal, not I~Iernandez, was the mayor of
the City. Rizzo's 2008 contracts were therefore not properly authorized.
3. Fraud and Misrepresentation by Rizzo, Spaccia, and Adams
76. Spaccia's contracts with the City were similarly prepared so as to conceal the true
extent of her compensation from the public. For example, Rizzo and Spaccia prepared a contract
for Spaccia in 2008. Spaccia's 2008 contract does not disclose her salary. Rather, it merely
states that she would be paid according to her 2005 contract with the City, and that she was to
receive, and did receive, a 20 percent salary increase two months after the effective date of the
2008 contract, and 12 percent annual increases thereafter.
77. Rizzo, Spaccia, and Adams' efforts to conceal their true compensation from the
public were confirmed in an email exchange between Spaccia and Adams.
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78. In 2009, Spaccia and Adams worked together to prepare Adams' employment
contract with the City. In one draft of his contract, Adams inserted a clause specifying the
number of pay periods in a year. Spaccia, however, instructed Adams to remove that clause
because it could easily be used to calculate his total salary. Spaccia wrote, "[w)e have crafted our
Agreements carefully so we do not draw attention to our pay. The word Pay Period is used and
not defined in order to protect you from someone taking the time to add up your salary."
79. Adams agreed to remove the pay period clause from his contract.
B. 2008 Salary Memorandum
80. In September 2008, on Rizzo's instruction, a memorandum was prepared that
purported to provide the salary information for Council Members defendants and for Rizzo.
Defendants told the city clerk to give this memorandum to any member of the public who
inquired as to the salaries of city officers and employees.
81. Upon information and belief, the memorandum was provided to members of the
public.
82. The salary information provided by the memorandum was false, deceptive, and/or
misleading.
83. The 2008 salary memorandum states that Council Member defendants were paid
$673 per month ($8,076 per year) and Rizzo was paid $15,478 per month ($185,736 per year).
84. In September 2008, however, Council Member defendants were actually paid over
$7,600 per month (over $91,200 per year) and Rizzo was paid over $52,000 per month (over
$624,000 per year).
85. Defendants were aware the information provided by the memorandum was false,
deceptive and/or misleading, and yet agreed to disseminate this memorandum to the public.
III. DEFENDANTS MANIPULATED THE CITY'S SUPPLEMENTAL RETIREMENT PLAN TO
MAXIMIZE THE BENEFIT TO THEMSELVES AND To FURTHER THEIR PERSONAL
AGENDAS AT THE EXPENSE OF TIIE CITY AND ITS CITIZENS
86. In August 2003, the City implemented a Supplemental Retirement Plan (the Plan)
that provided retirement benefits, at the expense of the City, to a small group of City officers and
employees, including the defendants.
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87. Upon information and belief, since the implementation of the Plan, Rizzo, Spaccia,
and other defendants have modified the terms of the Plan to maximize their own benefits and also
to further their personal agendas.
88. As an illustration, Rizzo and Spaccia modified the benefits under the Plan and also
the amount of the City's contribution to the Plan based solely upon when they expected to retire.
The modifications thus provided a unique benefit to them that was not available to other Plan
members.
89. Furthermore, upon information and belief, Rizzo, Spaccia, and other defendants,
for their own purposes, wanted defendant Bello to resign from the city council in 2009. Upon
further information and belief, they thus modified the Plan in 2009 to reduce the eligible
retirement age for council members as an incentive for Bello to resign.
90. Each time the Plan was modified, it was done at the direction of Rizzo, Spaccia,
and/or other defendants.
IV. THE. CITY'S CONTINUING OBLIGATION TO DEFENDANTS
91. Upon information and belief, the City continues to pay defendants their excessive
and wasteful salaries. In addition, the City continues to report defendants' salaries to CaIPERS
and continue to contribute to the City's Supplemental Retirement Plan based on the defendants'
excessive and wasteful salaries obtained through illegal and fraudulent means. Upon information
and belief, the City contributes around $900,000 per year to the Supplemental Retirement Plan.
FIRST CAUSE OF ACTION
Waste of Public Funds/Illegal Expenditure of Public Funds
(Code of Civil Procedure Section 526a)
(Against All Defendants and the City)
92. The People reallege and incorporate by reference the averments in paragraphs 1
through 91.
93. Code of Civil Procedure section 526a provides that an action to obtain a judgment,
restraining and preventing any illegal expenditure of, waste of, or injury to, the estate, funds, or
other properties of a county, town, city or city and county of the state, may be maintained against
any officer thereof, or any agent, or other person, acting in its behalf. The purpose of this statute
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is to restrain or prevent an illegal or wasteful expenditure of public money. An action may also
be prosecuted under this statute to recover illegally or wastefully expended money.
94. As set forth above, the compensation to all defendants beyond what was
commensurate with their duties and responsibilities, and beyond what cities in the Los Angeles
region with comparable populations were paying their officers and employees, was a waste of the
public funds of the City and was illegally expended. Such excess compensation paid to
defendants, in an amount to be proven at trial, provided no benefit to the City and its citizens.
95. The excess compensation paid to defendants was authorized by City ordinances
and/or defendants' employment contracts. The actions of defendants in approving and/or
accepting the excess compensation were not within their scope of duties in their respective
capacities as City officials, and were ultra vires.
96. The excess compensation paid to Council Member defendants, Rizzo, and Spaccia
(from 2003 to June 2008), was authorized by the Council Member defendants. The authorization
of excess compensation to defendants was unreasonable, arbitrary, and a clear abuse of discretion
by Council Member defendants, and was ultra vires.
97. The acceptance of such excess compensation was also unreasonable, arbitrary, and
a clear abuse of discretion by the respective defendants.
98. The excess compensation paid to Spaccia (after June 2008) and Adams was.
authorized by Rizzo. The authorization of excess compensation to Spaccia and Adams was
unreasonable, arbitrary, and a clear abuse of discretion by Rizzo, and was ultra vires.
99. The acceptance of such excess compensation was also unreasonable, arbitrary, and
a clear abuse of discretion by the respective defendants.
100. As alleged above, all defendants agreed and collaborated in the wasteful
expenditure of public funds.
101. Upon information and belief, the City continues to pay the salaries of all
defendants, continues to contribute to its Supplemental Retirement Plan on behalf of all
defendants, and continues to report the salaries of defendants to CalPERS for purposes of
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determining their pensions. Such actions by the City, in light of the defendants' wrongful
conduct as alleged herein, are wasteful and illegal expenditures of public funds.
SECOND AND THIRD CAUSES OF ACTION
Negligence in Authorizing Wasteful Expenditure of Public Funds
Civil Code Section 1714(a)
(Against Council Member Defendants and Rizzo)
102. The People reallege and incorporate by reference the averments in paragraphs 1
through 101.
103. Council Member defendants and Rizzo were negligent in authorizing the wasteful
expenditures of public funds.
104. As public officers and employee of the City, Council Member defendants and
Rizzo have a duty to use due care and reasonable diligence in authorizing the expenditure of
public funds.
105. As set forth above, Council Member defendants failed to exercise due care and
reasonable diligence in approving the employment contracts of Rizzo and Spaccia. The Council
Member defendants did not review the employment contracts prior to approving them, did not
deliberate and consider whether the terms of the contracts were reasonable, appropriate, and
commensurate with the respective duties and responsibilities, and did not even inquire as to the
terms of the contracts before approving them.
106. Similarly, and as set forth above, defendant Rizzo failed to exercise due care and
reasonable diligence in approving the employment contracts of Spaccia and Adams. Rizzo failed
to determine whether the terms of the contracts were reasonable, appropriate, and commensurate
with their respective duties and responsibilities.
107. Council Member defendants and Rizzo's breached their duties of due care in
authorizing the employment contracts, causing wasteful expenditures of the City's public funds.
As a result of defendants' breaches of their duties, the authorization of the employment contracts
was arbitrary and unreasonable, resulting in excessive and wasteful compensation.
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108. The City and its citizens suffered, and continue to suffer, damages as a result of the
defendants' breaches of their duties. The excess compensation that defendants awarded to
themselves and each other provided no use or benefit to the City and constituted wasteful
expenditures of public funds.
109. The defendants are jointly and severally liable for damages to the City. The
defendants had a joint and mutual obligation in ensuring that the compensation to themselves was
reasonable and commensurate with their respective duties and responsibilities. Defendants also
had an equal obligation to direct, govern, and/or influence each other's conduct regarding the
awarding of compensation.
FOURTH AND FIFTH CAUSES OF ACTION
Fraud
Civil Code Sections 1709 and 1711
(Against Council Member Defendants and Rizzo)
110. The People reallege and incorporate by reference the averments in paragraphs 1
through 109.
1 1 1. As set forth above, Council Member defendants defrauded the public by
intentionally hiding the amount of their true compensation received from the City.
1 12. By publication in the Council Meeting Minutes, Council Member defendants
affirmatively misrepresented to the public that Ordinance No. 1158 was to limit their
compensation. In fact, the ordinance nearly doubled their salaries.
113. Upon information and belief, members of the public relied on the
misrepresentation, and were thus deprived of the motive and opportunity to challenge the
wasteful salaries.
114. Upon information and belief, Council Member defendants were aware that
Ordinance No. 1158 was not to limit their compensation but rather to raise their compensation by
nearly 100 percent.
115. Council Member defendants, by such action, intended to trick the public into
believing that Ordinance No. 1158 was to limit their compensation.
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1 16. Rizzo conspired with the Council Member defendants to defraud the public. Upon
information and belief, Rizzo participated in this plan to defraud the public by assisting in the
drafting of Ordinance No. 1158.
117. Council Member defendants' action caused damages to the City and to its citizens.
The excess compensation that defendants awarded to themselves and each other provided no use
or benefit to the City and were wasteful expenditures of public funds.
118. Furthermore, as set forth above, Rizzo concealed or made false representations to
the public as to his true compensation and those of the Council Member defendants.
119. Rizzo caused the false and incomplete salary information to be published to the
public by publishing it in a memorandum to be distributed to the public.
120. Rizzo was aware that the salary information provided in the memorandum was
false and incomplete, and not the true and total compensation provided by the City to himself and
the Council Member defendants.
121. Rizzo intended that the memorandum deceive members of the public who inquired
about the salary of city officials.
122. Upon information and belief, members of the public did receive the memorandum
and relied on the misrepresentations in the memorandum, and thus they were deprived of the
motive and opportunity to challenge the excessive and wasteful salaries.
123. This misrepresentation caused damages to the City and to its citizens. The excess
compensation that defendants awarded to themselves and each other provided no use or benefit to
the City and was a wasteful expenditure of public funds.
SIXTH CAUSE OF ACTION
Government Code Section 1090
(Against Rizzo and Spaccia)
124. The People reallege and incorporate by reference the averments in paragraphs 1
through 123.
125. Government Code section 1090 prohibits city officers and employees from
entering into contracts in their official capacities in which they have a personal financial interest.
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Section 1090 bars a division in the loyalties of public servants between the public interests of
their constituents and private opportunities for their personal financial gain.
126. As set forth above, defendants violated Section 1090. Rizzo, Spaccia, and other
defendants directed the modification of the City's Supplemental Retirement Plan such that it
created particularized benefits to themselves and furthered their personal agendas.
127. Rizzo, Spaccia, and other defendants directed the modification of the City's
Supplemental Retirement Plan in their official capacities and had a cognizable financial interest in
the Plan above and beyond other members of the Plan.
128. Rizzo and Spaccia's violations of section 1090 were knowing and willful.
129. This violation of section 1090 caused damages to the City and to its citizens.
Rizzo and Spaccia's manipulation of the Plan to provide for unique benefits to themselves
increased the City's obligation to fund the Plan. The increased funding obligations on the City
provided no use or benefit to the City and were wasteful expenditures of public funds.
SEVENTH CAUSE OF ACTION
Breach of Fiduciary Duty and Violation of Public Trust
(Against All Defendants)
130. The People reallege and incorporate by reference the averments in paragraphs 1
through 129.
131. Council members and other officers and employees of a city are charged with
holding and preserving a public trust, and owe a fiduciary duty to the City and its citizens, and
must act in the interest and for the benefit of the people they serve. These duties include the
duties of undivided loyalty and allegiance to the city they are obligated to serve, and the faithful
execution of the public trust confided in them.
132. Defendants, as officers and employees of the City, violated the public trust and
breached their fiduciary duties to the City and its citizens when they awarded themselves and
each other excessive and wasteful compensation that were not commensurate with their
respective duties and responsibilities.
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133. Defendants, as officers and employees of the City, also violated the public trust
and breached their fiduciary duties to the City and its citizens when they accepted the excessive
and wasteful compensation that they awarded to themselves and to each other.
134. Defendants, as officers and employees of the City, further violated the public trust
and breached their fiduciary duties to the City and its citizens when they defrauded and deceived
the public as to their full compensation.
135. Defendants conspired to breach their fiduciaries duties owed to the City and its
citizens. Upon information and belief, each defendant intentionally violated the public trust and
breached his or her fiduciary duty to the City and its citizens, and actively encouraged and
participated in the other defendants' violation of public trust and breach of their fiduciary duties.
136. The City and its citizens suffered damages as a result of defendants' violation of
the public trust and breach of their fiduciary duties. The excess compensation that defendants
awarded to themselves and each other provided no use or benefit to the City and was a wasteful
expenditure of public funds.
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WHEREFORE. the People pray for judgment against defendants as follows:
1. An order requiring defendants, jointly and severally, to make restitution to the
City for compensation they approved and/or accepted, and which was in excess of what was
reasonable and appropriate, in an amount to be proven at trial;
2. An order imposing a constructive trust over the proceeds of compensation that
was in excess of what was reasonable and appropriate, in an amount proven at trial;
3. A declaration that all employment contracts and addenda of Rizzo, Spaccia, and
Adams executed in and after 2005 are null and void ab initio;
4. An order requiring each defendant to make restitution to the People, including
CalPERS, for any amount of pension benefits received by defendants that was in excess of what
was reasonable and appropriate, in an amount to be proven at trial;
5. An order requiring each defendant to make restitution to the City for any
contribution the City made to CalPERS and the City's Supplemental Pension Plan on behalf of
the defendant as a result of the excess compensation, in an amount to be proven at trial;
6. A declaration that the compensation paid to each defendant by the City in
excess of what was reasonable, in an amount to be proven at trial, is not to be considered for
determination of their pensions by CalPERS or the City Supplemental Retirement Plan;
7. An order precluding Rizzo and Spaccia from receiving any benefits under the
City Supplemental Retirement Plan pursuant to Government Code section 1092;
8. A declaration that Rizzo and Spaccia are disqualified from holding public office
in perpetuity pursuant to Government Code section 1097;
9. A declaration that all defendants have vacated their public offices;
10. A declaration that Council Member defendants arc disqualified from holding
public office in perpetuity;
11. An order appointing a receiver to, among other things, facilitate the operation
of the City;
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12. An order enjoining the City from paying salaries or providing benefits to
defendants in excess of what is commensurate with their duties and responsibilities, in an amount
to be proven at trial;
13. An order enjoining the City from disbursing any benefits under its
Supplemental Retirement Plan to defendants;
14. An order enjoining the City from making further contributions to its
Supplemental Retirement Plan;
15. An order enjoining the City from reporting to CalPERS any salaries of
defendants in excess of what is reasonable and appropriate, in an amount to be proven at trial;
I6. Exemplary damages against all defendants;
17. For the People's costs of suit incurred herein; and
18. For such other and further relief as this Court deems just and proper.
Dated: September 15, 2010 Respectfully Submitted,
EDMUND G. BROWN JR.
Attorney General of California
DAVID S. CI LANEY
Chief Assistant Attorney General
JONATHAN K. RENNER
Senior Assistant Auorney General
ZACKERY P. MORAZZINl
Supervising Deputy Attorney General
SUSAN K. LEACII
PETER 11. CHANG
Deputy Attorneys General
Pe}-e\
PETER H. CIIANC;
Deputy Attorney General
Attorneys for Plaintiffs
The People of the State of California
2I
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This report will assess the circumstances of law and ethics, including fiduciary duty
presented by the issues under investigation.
F. ORGANIZATION OF REPORT.
This report commences with a seven (7) part (A through G inclusive) Executive
Summary. The Executive Summary is followed by three (3) sections, each respectively
addressing an investigative direction provided by the City Attorney pursuant to City
Council direction.
The City Council's policies are adhered to as regards disclosures, or not, of
confidential personnel records.
The report, as noted, was limited by the refusal of Councilmember Cano to be
interviewed. The City, by and through the City Council, should evaluate the
circumstances of that refusal and may confer with the City Attorney regarding that
decision and responses thereto by the City Council as a whole.
G. FINDINGS. (summarized)
1. Did Councilmember Cano violate, or cause to be violated, California
Government Code Section 87100 — Conflicts of Interest, which reads:
No public official at any level of state or local government
shall make, participate in making or in any way attempt to
use his official position to influence a governmental
decision in which he knows or has reason to know he has
a financial interest.
Conclusion: No evidence was found to support the determination that
Councilmember Cano influenced the decision -making regarding the
enforcement of building codes at 1135 Mary Lane, National City, CA
91950.
2. Did Councilmember Cano violate any other laws of the State of
California Government Code Section 87100, Conflicts of Interest, by
influencing or causing the non -enforcement of the Building Code
violations at 1135 Mary Lane, National City, CA 91950 for an
approximately five (5) year period?
Conclusion: Based on the evidence, no, no laws were broken by
Councilmember Cano.
3. Was a hostile environment created by the conduct of City
Councilmember Rios?
Executive Summary 6 Section I
Conclusion: No, allegations were rescinded by Councilmember Cano.
Executive Summary 7 Section I
II.
EVIDENCE GATHERING: PARTICIPANTS, RECORDS, AND TESTIMONY
A. ELECTED OFFICIALS, DEPONENTS, AND DOCUMENTS.
The following City officials were interviewed:
1. Angil Morris -Jones, City Attorney
2. Frank Parra, Emergency Services Director
3. Luis Sainz, Chief Building Official
4. Robert Hernandez, Battalion Chief/Fire Marshall
5. Brad Ravlston, Deputy City Manager
6. Michael Dalla, City Clerk
7. Leslie Deese, City Manager
8. Claudia Silva, former City Attorney
9. Ron Morrison, Mayor
10. Albert Mendivil, Vice Mayor
11. Mona Rios, City Councilmember
12. Alejandra Sotelo-Solis, City Councilmember
All interviewees were candid, straight -forward and credible as to the testimony
which they provided. The author believed all interviewees were honest and gave compete
testimony to the extent of their individual knowledge.
The interviews were conducted over the course of several days, and as deemed
necessary, follow-up interviews were conducted.
The following City documents were provided; all documents are deemed current,
competent, and trustworthy.
1. City of National City Municipal Code
2. City of National City City Council meeting video record
3. City of National 5 C's (core values)
4. City of National City Building Department 's records for 1135 Mary Lane,
National City, CA 91950
5. City of National City City Council policies — particularly policies regarding
discrimination, harassment, and bullying (Resolution 93-189, December 7,
1993, and Policy 604, July 3, 2018) — and corresponding City Administrative
Policies implementing the City Council policies (2016)
6. Documentation provided by interviewees
7. City Council agenda packets (online on City's website)
8. Form 700 disclosure of economic interest forms
Other forms review include, but are not limited to:
Evidence Gathering 8 Section II
1. Case law
2. Real Property records
3. California Building Code
4. City records regarding personnel actions
The totality of the oral and written evidence was utilized to achieve the conclusions
set forth in this report.
Evidence Gathering 9 Section II
DID COUNCILMEMBER CANO VIOLATE, OR CAUSE TO BE VIOLATED,
CALIFORNIA GOVERNMENT CODE SECTION 87100 — CONFLICTS OF
INTEREST?
A. SUMMARY AND FINDINGS.
The circumstances unique to the City appear to have allowed the approximately
five (5) year building code non-compliance to be maintained at 1135 Mary Lane, National
City, CA 91950. A uniform message from all interviewed staff was that the Building
Department was, and may still be, understaffed with obsolete and limited technology to
support staff and a continuous and increasing workload. The reality of a "pint doing a
quart's work," as to maintaining service delivery to the public, required the "triaging" of
both code compliance matters and new construction response. The Building Department
has no formal written policies or protocols regarding project specific follow-up and instead
utilizes an ad hoc prioritization strategy, generally guided by the discretion of the
department head, Frank Parra. Matters that present immediate life safety threats, matters
directed by the whole City Council, and new construction that will benefit the economic
development of the City are given first priority or tier of attention. Matters that have the
attention or support of individual members of the City Council appear to receive
secondary prioritization; these do not include Councilmember Cano's property at 1135
Mary Lane, National City, CA 91950. Non -immediate life safety code compliance matters
appear to be accorded to the lowest tier of priority — in light of the staff limitations,
intermittent attention is accorded such low tier matters. Staff hopes a property owner
subject to such lower tier code violations will, upon learning of the violations, be
responsible and remedy the violations without extensive, and perhaps costly, City
enforcement.
The department heads exercise of discretion, and allocation of his staff resources,
was done in good faith in an effort to address the most critical or timely projects.
Unfortunately, this lead to the non -attention to lower priority matters for extended time
periods, such as are found regarding 1135 Mary Lane, National City, CA 91950. While
prioritization of life safety and economically beneficial projects present logical and
necessary responsiveness, the delegation of lower priority matters to, essentially, a "trust
them" category, undermines confidence in the City's delivery of Building Department
services and the ethics of the staff and elected officials.
The identification of the Building Code violations at Councilmember Cano's
property at 1135 Mary Lane, National City, CA 91950 came about in an ironic manner.
Councilmember Cano voluntarily invited Chief Building Official Luis Sainz onto his
improved residential property. This invitation was initiated so that Mr. Sainz could
observe what Councilmember Cano believed to be Building Code violations on an
adjacent property. After inspection, it was determined that the adjacent property satisfied
all City requirements. However, while on -site, Mr. Sainz observed unpermitted and code -
violating improvements in Councilmember Cano's backyard. Those several violations are
Query I — Violation of GC 87100?
10 Section III
the basis of this investigation. City staff informed Councilmember Cano, multiple times,
of the need to prepare plans, obtain permits, and remediate the code violations on the
property. The violations did not present substantive and immediate life safety threats to
Councilmember Cano or his neighbors, so staff triaged the pursuit of the remediation to
a low tier. However, they hoped Councilmember Cano, in light of his status as an elected
official, would correct the deficiencies without the need to apply legal pressure. This did
not occur. City staff ultimately proceeded with pursuing enforcement in the form of
recording the violations with the County recorder.
Councilmember Cano, after public attention was brought upon his continued
violation of Building Code caused the violations to be properly corrected. The actual
basis for completing the correction at this time is not known. It is likely that the
admonishment letter from the City Attorney and the Building Division's strong notice of
violation letter, with its demand to correct the deficiencies, caused the corrections to be
completed. No evidence of abuse of office in the form of seeking preferential treatment
or intimidation by Councilmember Cano was uncovered during the investigation. There
simply was inaction. The circumstances that appear to have allowed this to occur are a
lack of City departmental funding resulting in an overtaxed staff that addressed high
priority matters; the lack of a written policy as to enforcement protocols that set clear and
specific rules; the department head's strategy as to allocating his resources and the
decision of Councilmember Cano not to proceed in the face of sporadic and "soft"
enforcement from the City enforcement staff, as directed by the Emergency Services
department head.
In a nutshell, staff allocated its attention to more serious issues and without
pressure, Councilmember Cano did not correct the known violations.
B. DISCUSSION.
The primary staff participants in this issue are Frank Parra, Emergency Services
Director and Luis Sainz, Chief Building Official.
Mr. Sainz became aware of the Building Code violations are Councilmember'
Cano's property at 1135 Mary Lane, National City, CA 91950 when Councilmember Cano
invited him onto his property, and into his backyard, to view an adjacent property.
Councilmember Cano's concerns about the legal propriety of the adjacent property were
determined to not be sustained, but Building Code violations on Councilmember Cano's
property were identified, leading to the present situation. Director Parra and Mr. Sainz
had discussions, sometimes heated, as to the enforcement efforts to be directed towards
Councilmember Cano's property. Mr. Sainz advocated for a more focused and strong
allocation of time and resources, while Director Parra, respecting that position, believed
his department's meager resources should be directed to higher priority, more beneficial
projects.
The Building Department used consultants, as necessary, to keep up with the
development demands in the City. The understaffing, and lack of policies that guide how
Query I — Violation of GC 87100?
11 Section III
to handle code violations in a uniform manner, appear traceable to the impact of the
2008-2009 national economic "bursting bubble" on the City's revenues. The City
sustained a substantive drop in revenues during that period. On a staffing basis, the City
faced retirements of staff who had the institutional memory of "how the City operated."
Retirements, coupled with routine resignations, came at a time when replacement staff
could not be reasonably afforded, and so the staffing levels and institutional memory
diminished. To address this, the reorganization of remaining staff took place, and staff
was, in some instances, assigned to functions and roles for which they had little or no
prior experience. Basic management skills, rather than subject matter expertise, were
used to ensure a "basic" level of City services was preserved. This is commendable, as
the City staff "stepped up" and loyally took on duties that they could have refused or
rejected. The impact came in the form of a corollary lack of experience, no guiding
policies, and no new resources to assist them. Now Director Parra was, prior to his
appointment, involved in EMS Services. He had no Building Division training, nor Fire
Service tenure. He, hoping to be of assistance, sought to become the head of Fire
Services, Building Division, and the Planning Department. He was designated to head
Fire Services and the Building Division, but the Planning Department was assigned to
others. Accordingly, the Building Division, now under the supervision of Director Parra,
then operated on an ad hoc basis, responding to then current demands, and allocated
attention and resources to the most pressing matters facing the Building Division. All
staff parties interview acknowledged the reality of being underfunded and the reality of
having no set protocols or policies. No person reported or admitted direct or cognizable
pressure from Councilmember Cano to not pursue enforcement actions against his
property. As the department's activities were allocated by triage, with the low risk/low
priority violations being deferred, Councilmember Cano was able to take advantage of
the lack of pursuit by taking no remedial action. Other properties that presented serious
life safety conditions received strong and immediate attention. This is a confirmation of
the strategy used by Director Parra — swiftly address high risk, City Council priority, or
economic development matters and pursue low priority matters when and as deemed
reasonable.
This unique "perfect storm" of forced reorganization, underfunding, and relative
inexperience without guiding policies has allowed Councilmember Cano's property to
stay on the "back burner" of departmental priorities. While understandable, it has
resulted in this situation that calls into question the legal and ethical conduct of
Councilmember Cano. The department head's strategy, while rational, did not work and
should be abandoned. I found no legal impropriety under California Government Code
87100, but did find a need to formalize policies, set clear and transparent priorities, and
to rely less upon discretion and more upon rules and procedures.
C. CONCLUSION AND RECOMMENDATIONS.
1. Respect the City Manager form of government.
City Councilmembers, despite their interest in assisting residents and
business owners, as well as to learn how the City works, should refrain from
Query I — Violation of GC 87100?
12 Section III
"ride-alongs," questioning staff about projects, advocating for a project in
private meetings with staff, and conferring with any staff member without
the City Manager's prior approval.
Councilmember Cano's matter commenced pursuant to one of several
"ride-alongs," where Councilmember Cano became a commenter to staff.
While no undue influence was repeated by staff, this commingling of elected
official and staff, especially on a repeated basis, is not appropriate. The
City Code required separation of elected officials from staff, excepting the
City Manager and City Attorney should be emphasized and respected by
all.
2. Develop standardized policies.
The upheaval resulting from lean economic times is stabilizing. At this time,
definite and certain protocols and policies should be drafted for the Building
Division's activities and thereafter strictly adhered to by all. The exercise of
discretion, while necessary, should be minimized and promptly
memorialized so as to explain the deviation from policy.
3. Employ current technology for record -keeping and calendaring, inspection,
and enforcement activities.
The City has recently licensed use of the Meritage calendaring and permit
system. This automated system will ensure that all matters, regardless of
priority, are kept current and within staff's focus. This system, when
combined with clear policies and protocols, will substantially assist in
avoiding future prolonged remedial undertakings.
Query I — Violation of GC 87100?
13 Section III
Iv.
DID COUNCILMEMBER CANO VIOLATE ANY OTHER LAWS OF THE STATE OF
CALIFORNIA GOVERNMENT CODE SECTION 87100, CONFLICTS OF INTEREST,
BY INFLUENCING OR CAUSING THE NON -ENFORCEMENT OF THE BUILDING
CODE VIOLATIONS AT 1135 MARY LANE, NATIONAL CITY, CA 91950 FOR AN
APPROXIMATELY FIVE (5) YEAR PERIOD?
A. SUMMARY.
As Councilmember Cano refused to be interviewed, the investigation has no first
person facts or testimony. All evidence or information has been derived from third parties,
written materials, or conclusions derivative from the information available. The City may
consider requesting review by enforcement agencies (Fair Political Practices
Commission), District Attorney, or other agency that has the investigation powers to
command cooperation.
B. FINDINGS AND DISCUSSION.
1. Violation of other laws.
No definitive conclusion can be reached because Councilmember Cano
refused to be interviewed. That refusal, and the lack of the facts that may
have been provided by Councilmember Cano, denied the investigator
knowledge of facts which could mitigate, clarify, and perhaps demonstrate
the culpability of Councilmember Cano.
As previously found, there is no evidence in the record or testified to by City
Councilmembers and staff that indicate a violation of Government Code
87100. "Passive" influencing of City staff may have occurred, meaning that
Councilmember Cano's status as a member of the City's City Council may
have had some influence on the City staff's exercise of its discretion. If it
did act in such manner, it was not intentionally demanded by
Councilmember Cano or intentionally accorded to Councilmember Cano by
staff. Authority figures are generally accorded automatic respect for their
office, even if subconsciously given by subordinates. This is the main and
overarching reason City councilmembers should only interact with the City
Manager and the City Attorney. These two senior staff members have the
authority to professionally serve as an administrative peer to the policy -
making legislative body members. As such, they are not subject to the
potential subconscious deference which may be accorded City
councilmembers by lower -ranked staff.
As to possible issues presented by the totality of the record, the following
could potentially be issues, but we have inadequate information from which
we can offer an opinion. As previously discussed, if the City Council
Query II — Violation of other laws?
14 Section IV
determines that it wants a definite and certain answer as to other actionable
conduct presented by Councilmember Cano, the referral to enforcement
agencies like the District Attorney's office and the Fair Practice Political
Practices Commission ("FPPC") may be considered. The prolonged code
non-compliance presented by Councilmember Cano required the City
staff's time, and hence public monies, be expended on an ongoing basis.
This expense, without explanation, could be held by an enforcement agency
to be a violation of California Penal Code 424, which addresses misuse or
improper use of public money. Whether or not the ultimate facts would
support this is unknown and would be in the sole discretion of the District
Attorney after inquiry.
Similarly, the FPPC or the District Attorney could find that the common law
general rule against avoiding the appearance of impropriety has been
breached, resulting in a violation of ethical and fiduciary duties to act in a
responsible manner. Again, we cannot predict how these external agencies
may assess and conclude when all facts would be known.
2. Ethical and fiduciary violations.
Aside from legal enforcement by external agencies, this City Council, as a
body, should determine if the approximately five (5) year -long non-
compliance period represents the ethical standards the City Council holds
itself to for the public and staff that it leads.
The fact that the non-compliance period extended for about half a decade,
and appears to only have been resolved when substantial public scrutiny
was applied, does not demonstrate ethical, fiduciary -based conduct by an
elected official. Councilmember Cano should have, at least twice in his
tenure, taken mandated AB 1234 ethics training. The importance of local
ethics is underscored by the fact that the City Council has codified the
requirement for ethics training in its own City code. Section 2.74.010 —
Ethics Training —Required reads:
"The following persons shall receive training required
by Government Code Section 53235 at least every two
years, in a program approved by the city manager:
A. Mayor and members of the city council.
B. City clerk.
C. City treasurer.
D. Members of all boards and commissions
identified in Title 16 of this code.
E. All employees who are required to file a
statement of economic interests pursuant to the
Query II — Violation of other laws?
15 Section IV
Political Reform Act, Government Code Section
87100, et seq."
(*emphasis added)
This "doubling down" on State law's requirement to learn, and then apply
those ethical standards, is a strong declaration of the City's and its City
Council's desire to, at all times, act in an ethical and fiduciary -based
manner.
Further, the City Council has embraced the 5 C's (attached) as a promise
to the community as to its conduct.
In light of Councilmember Cano's refusal to be interviewed, we have no
information as to mitigatory facts, intervening facts, or other good faith
explanations. We have only the fact that no performance occurred for an
approximately five year period.
The City Council, by its own authority, can commend or correct its members
via personal individual comment, collective oral reprimand, or via formal
censure. The City has previously censured councilmembers — the City
Attorney's office can guide the City Council if it seeks to evaluate pursuing
Council -level reaction to the facts as known, including the refusal to
participate in this process.
C. CONCLUSION.
Ethical and fiduciary issues, including a non-remediation commencing June 3,
2013 and only recently being completed, refusal to participate in this City Council -directed
investigation and ongoing interaction with City staff all may be grounds for the City Council
to pursue internal reactions to Councilmember Cano's conduct. External law enforcement
agencies may be communicated with to determine any interest in further obtaining facts
so they may evaluate the need or feasibility of their independent enforcement actions.
Query II — Violation of other laws?
16 Section IV
Semper pro Populus: Fiduciary Duties
and Public Service
This column is a service of the Institute for Local Govemment (1LG) Ethics Project, which offers
resources on public service ethics for local officials. For more information, visit www.ca-ilq.org/trust.
ILG thanks the following individuals for their contributions to this article: Buck Delventhal, San
Francisco City Attorney's Office; Joe Pannone, Aleshire and Wynder; Richard P. Shanahan,
Bartkiewicz, Kronick & Shanahan; and Louis Leone, Stubbs & Leone.
QUESTION
As the chief executive for a local government agency, 1 have seen elected officials become bogged
down in the details of various ethics laws. Instead of examining the proper thing to do in a specific
situation, the focus shifts to whether a certain course of action will get an official in trouble with the
law.
It occurs to me that it might be easier if those of us who care about public service ethics started
speaking in broader terms. For example, what if we just spoke in terms of public servants owing a
fiduciary duty to the public they serve? Doesn't that concept underlie most if not all ethics laws?
Wouldn't that be a simpler way to look at a public servant's ethical obligations?
ANSWER
You pose an intriguing question. There are indeed a number of parallels between ethics laws and
fiduciary responsibilities. In addition, the notion of having a fiduciary duty also touches on some of
the higher obligations of public service above and beyond the minimum requirements of most public
service ethics laws. Thinking about the parallels between fiduciary duties and public service ethics
offers a good opportunity to think broadly about the obligations of public service.
What Is a Fiduciary?
How might concepts underlying fiduciary duty relate to the public's expectations of public officials?
First, let's look at the term "fiduciary." It derives from the Latin terms fides or fiducia, both of which
mean trust and confidence.
Certainly when the public chooses an elected official, the public is putting its trust and confidence in
him or her to act in the public's best interests. The same can be said when one becomes an
employee of a public agency. The agency trusts everyone on its team to put the public's interests
first. Indeed, always putting the public's interests first is the essence of public service ethics.
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In a representative democracy, the public elects officials to act in their interests.1 Elected officials
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make important decisions on behalf of the public, including how to spend taxpayer and other public
monies on infrastructure and services. Copyright 2018 League of California Cities. All rights reserved.
Public officials also exercise the power of the collec.,. ...;; , aaop)larta entor'Ice'regulations Y
Regulations intrude on individuals' prerogatives. Essentially, in a given situation, what an individual
wants to do must yield to the concept of the greater good of the community.
Wielding the power of the public purse as well as the power to regulate are certainly weighty
responsibilities.
Duties of a Fiduciary
Because a fiduciary has the power and obligation to act for another, the law imposes on fiduciaries
strict standards of diligence, responsibility and honesty.
These are very similar to federal law standards for public officials, which impose on public officials
the broad obligation to serve the public honestly. What does that mean? According to federal
prosecutors, honest public service means being conscientious, loyal, faithful, disinterested and
unbiased. Honest public service is performed free of deceit, undue influence, conflict of interest, self -
enrichment, self -dealing, concealment, bribery, fraud and corruption.2 As the following discussion of
fiduciary duty obligations illustrates, the standards are very similar.
Diligence: The Duty to Do a Good Job
The law speaks in terms of a fiduciary using his or her "best efforts" on behalf of those served. This
typically means using all possible skill, care and diligence when acting on behalf of those served. In
the case of public servants, the task is for public officials to use their best skills, care and diligence in
serving the public.
That means educating oneself about the issues facing the community -- talking to the community,
staff and other experts, as well as reading relevant reports and studies. It also means being diligent
in preparing for and attending meetings. Ultimately, it means making decisions that reflect one's best
judgment on what course of action will produce positive results for the community.
Of course, public officials sometimes face very hard decisions, with difficult trade-offs among what
seem to be equally important goals. Determining what the "best" decision is in terms of the public's
interests is easier said than done. However, there are tools to help public officials sort through
arduous choices.
Sometimes laws provide guidance in a given situation. For example, in some situations the law
states that preserving the environment is of primary importance; in other situations, the priority may
be considerations of fairness and
fair processes.
Speaking of fairness, your own values provide another source of guidance. Values relevant to public
service decision -making include trustworthiness, fairness, responsibility, loyalty, compassion and
respect. Sometimes officials translate one or more of these values into decisions that they perceive
offer the most benefits for the most people. Sometimes that approach yields when a decision would
pose an unfair burden on a particular segment of the community.
Hearing directly from the public about what people believe to be in their best interests is another
helpful tool for local officials. The challenge is to make sure an agency uses processes appropriate
to the issue and the type of input desired. Officials who emphasize greater inclusiveness and public
engagement in public service view themselves as stewards of a decision -making process as much
as (or sometimes even more than) the actual decision -makers.
Responsibility and Loyalty: Putting Others' Interests First
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she serves. This means no pu mg ones own mama or po I Ica Interests ahead of the public's. Put
another way, as a public servant, your loyalty must be to the entity you serve and the public's
interests, not your own interests.
The most egregious way a public official might put his or her own interest ahead of the public's is by
engaging in graft -- the misuse of one's position to acquire personal financial gain.3 That can occur
when a public official makes a decision because he or she receives a bribe to decide an issue a
certain way. Another example is when an official receives payment (sometimes known as a kickback)
for steering contracts to certain vendors .
The law prohibits public officials from using public resources for personal gain. The laws against
embezzlement and theft are one such example. However, there are even more subtle forms of
misusing public resources; for example, using public resources to enhance one's visibility in the
community and, hence, chances for re-election. Such uses may well be illegal and certainly conflict
with the ethical obligation to spend limited public resources in a way that benefits the public.
In our political culture, we are so sensitive to the possibility that decision -makers might put their
financial interests ahead of those of the public that some laws are designed to avoid even the
perception that personal financial gain motivated a decision. Conflict -of -interest laws are an example
of such laws.
The premise underlying conflict -of- interest laws is that when decision -makers are in a position
where they might reasonably be tempted to put their own interests ahead of the public, the best
course of action is for them to step aside from the decision -making process. This avoids
any perception that a decision -maker's interests may have influenced his or her decision.
Do the conflict -of -interest laws have a cost? Yes. From time to time, conflict -of -interest laws prevent
certain people from participating in the decision -making process. Those individuals may be smart,
and they may have constituents who very much want them to participate in that decision. They were
also elected to participate on the public's behalf as part of our representative democracy. They may
even be motivated solely by the public's interests. Despite all this, they cannot par ticipate. The goal
is to have the balance fall so the public can be most assured its interests always come first.
This is because the law determines that the public's trust and confidence in its decision -makers is
more important than the decision -makers' participation in every decision. Even the potential
appearance of impropriety damages the public's trust and confidence enough to justify preventing a
decision -maker from participating in important decisions.
Honesty: Being Open and Transparent
A person acting in a fiduciary capacity is held to a high standard of honesty and full disclosure.
When the public places power in the hands of its public officials, the public relies on officials to
exercise that power prudently. Indeed, the definition of "trust" is to rely on the integrity, strength and
ability of a person or thing.4
Former President Ronald Reagan's statement "trust but verify" resonated because, among other
things, people feel most confident their trust won't be betrayed if there is a way to ensure that bad
things aren't happening. President Reagan used the phrase in the context of foreign relations and
weapons monitoring, but the same can be said of transparency in general.
Governmental transparency laws are an example of the public's trust -but -verify attitude toward public
institutions. Such transparency laws include open meeting requirements that decision -making must
occur in meetings where the public can attend and participate. Another example is the requirement
that public records be open and accessible to public review.
Limits of the Fiduciary Duty Concept in Public Service
Although the concept of fiduciary duty can help public servants think through the legal and ethical
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context:�or fiduciaries, the courts are -the ultimate source of accountability. Although public officials
are answerable to the courts in certain situations, they must also answer to the public.
In general, the courts are more likely to second-guess the decisions of true (or formal) fiduciaries
when there is a dispute over whether they met their obligations. The courts are also the ultimate
enforcer of obligations for more tradi tional fiduciaries.
The courts play a role in enforcing the obligations of public officials, of course, by making sure public
decisions and decision -making processes satisfy the requirements of various laws, including ethics -
related laws. As already noted, there are laws related to graft, conflicts of interest, use of public
resources, transparency and fair processes. Sometimes the law defines what types of considerations
cannot enter into a decision (for example, discrimination against certain groups) or others that must
be given certain weight (for example, environmental consider ations or the need for affordable
housing).
However, the courts will not substitute their judgment about what constitutes the public's best
interests when an elected official has made his or her best judgment on what serves the public's
interest. In our system of separated powers, the exercise of policy -making discretion ultimately
resides with policy -makers when they are acting in a legislative capacity. Activities involved in
implementing the law also involve some exercise of discretion with which the courts will not interfere.
The theory is that the electorate is the ultimate check upon unwise, less than fully diligent or
unethical decision -makers.
However, as federal law related to public officials' obligations to engage in "honest" services
indicates, it can be a risky strategy for public officials to focus closely on the fine distinctions under
specific state law that divide lawful from unlawful conduct.
Public officials should develop the habit of asking whether their outside interests, duties or affiliations
actually detract or appear to detract from their ability to exercise an undivided duty of loyalty to the
public's interest and the organization they serve. This standard gets to the core of the issue and
prevents nitpicking over close calls or loopholes in imperfectly written laws.
This strategy also goes beyond the minimum requirements of the law by focusing on the public's
trust and confidence in the decision -making process, and encourages public officials to avoid
conduct that may be, strictly speaking, legal but not ethical.
Conclusion
Does the concept of public officials owing a type of fiduciary duty to the public help simplify what
public service ethics is about? Simplification is frequently in the eye of the beholder, so we will let our
readers be the judge. Certainly the core concept of acting for the benefit of others as opposed to
oneself is equally important to both public service ethics and fiduciary obligations.
Perhaps something like the Marine Corps motto of Semper Fi or "Always Faithful" (Semper Fidelis)
can simplify the way one thinks about public service ethics. Public officials, however, must be faithful
to the concept of all actions being about the public's interests. Semper pro Populus means "Always
for the Public" -- the core message of both a fiduciary approach to public service and the concept
underlying public service ethics laws.
Special Cases: Investing Money and Public Pension Boards
In some situations, the nature of public officials' fiduciary obligations is more explicit.
Investing Money: California Iaw5 specifically says that local governing bodies are fiduciaries when it
comes to investing public money. This means officials have a legal duty to invest according to the
"prudent investor" standard, which generally requires public officials to make investment decisions
with care, skill, prudence and diligence. The statute goes on to specify that preserving the value of
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Public Pension Plans: Pension boards for public pension plans are another variation on the
fiduciary duty theme. Such pension board members are fiduciaries, and the duty they owe is to
pension plan participants? -- not the public as a whole. This means decisions must be in the plan
participants' best interests. Pension board members also have a duty to invest pension plan monies
in the interests of plan participants, using care, diligence and skill.
Some public agency counsel also believe that failure to accurately and completely report pension
fund obligations under the new General Accounting Board Standards (known as GASB 43 and 45)
may also violate fiduciary responsibilities if the plan is underfunded.
Loyalty to the Entity You Serve
When you join an organization's goveming board, typically your role includes an obligation to act
with the organization's best interests in mind.8 As noted in the June 2004 "Everyday Ethics" column,
this can create conflicting loyalties when you serve on a regional body and your city's or county's
interests conflict with what's best for the region.
A variation on that theme occurs when what's best for the city or county as a whole conflicts with
what your supporters want you to do or what's best for your district. As an ethical matter, when you
become a member of a governing board, you take on the responsibility to do what's generally best
for the jurisdiction as a whole. You can argue for measures that mitigate unfair burdens on sub-
areas of the city or county or spread burdens more equitably (since fairness is another ethical
value), but pursuing parochial interests at the expense of the general welfare of the organization as
a whole conflicts with your ethical duties to the organization.
County Files Suit Against Planning Commissioner for Breach of Fiduciary Duty
In an interesting development, a county has sued one of its planning commissioners. The county
contends that the commissioner, a realtor, was engaged in a series of transactions designed to
evade the Subdivision Map Act's requirements as part of her business. The suit was filed Nov. 28,
2007, in Placer County Superior Court.9
Among the county's legal theories is that the realtor, as a public official, owed a fiduciary duty to the
county to act in utmost good faith toward the county. The county is arguing that the claimed
violations of the subdivision laws violated that duty and entitle the county to compensatory and
punitive damages. The complaint also includes claims relating to unfair business practices, fraud
and, of course, direct violation of the Subdivision Map Act.
More on Federal Anti -Corruption Laws
For more information about federal law and the penalties related to ethics violations, see "Making a
Federal Case Out of Corruption," December 2006, Western City, available online at www.ca-
ilq.orq/fedcase.
Footnotes:
1 U.S. v. Randall Harold Cunningham, No. 05cr2137 LAB (filed Nov. 28, 2005) page 4 (available at
http://fl 1.find law.com/news.findlaw.com/cnn/docs/cri m/uscnnghm 112805cinf.pdf).
2 graft. Dictionary.com. Dictionary.com Unabridged (v 1.1). Random House, Inc.
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3 trust. Dictionary.com. Dictionary.com Unabridged (v 1.1). Random House, Inc.
http://dictionary.reference.com/browse/trust (accessed: Nov. 11, 2007).
4 See Cal. Gov't Code §53600.3.
5 See Cal. Gov't Code §53600.5.
6 See Hittle v. Santa Barbara County Employees Retirement, 39 Cal.3d 374, 392-93, 216 Cal. Rptr.
733, 743-44 (1985) (noting the fiduciary relationship between plan boards and participants).
7 See, for example, Cal. Corp. Code § 7231(a) (fiduciary obligations of nonprofit mutual benefit
corporation directors).
8 County of Placer v. Burris, No. CV S 22068 (filed Nov. 28, 2007) (see Count VII).
9 County of Placer v. Burris, No. CV S 22068 (filed Nov. 28, 2007) (see Count VII).
This article appears in the February 2008 issue of Western City
Public Officials as Fiduciaries
The values behind government ethics laws
Hana Callaghan
Government Ethics refer to the unique set of duties that public officials owe to the public that they serve. These duties
arise upon entering the public work force either as an elected representative, an appointed official, or a member of
government staff. (For simplicity's sake, please know that when we refer to public officials, we are referring to all public
actors, be they elected, appointed or hired.) Public ethical obligations exist in addition to general ethical obligations
and sometimes government ethics may conflict with personal ethical duties.
The relationship between public officials and the public has been described by scholars as fiduciary in nature. (See
e.g. Rave, 2013; Leib, Ponet & Serota, 2013; Ponet & Lieb, 2011; Natelson, 2004) So what is a fiduciary?
Dictionary.com (http://www.dictionary.com/browse/fiduciary?s=t) defines the term fiduciary as relating to,
"a person to whom property or power is entrusted for the benefit of another." There at least four factors that identify a
relationship as a fiduciary one:
1. The beneficiary has delegated authority to the fiduciary to act on its behalf;
2. The fiduciary has discretionary powers over the beneficiary's assets or interests;
3. The fiduciary is in a position superior to that of the beneficiary due to specialized access, knowledge or ability;
and
4. The beneficiary trusts that the fiduciary will act in the beneficiary's best interest. (Ponet & Leib, 2011.)
Examples of fiduciary relationships include those of the attorney/client, trustee/trust beneficiary, executor/heir,
corporate director/shareholder, and principal/agent. You can see why the public official/citizen relationship is similar:
The public delegates governing authority to public officials to exercise discretion over the public treasury and to create
laws that will impact their lives. The public official, once elected, appointed, or hired, is in a superior position to that
of the individual citizen due to specialized governmental knowledge and the ability to advise, deliberate, and
participate in the representative process. And finally, the public trusts that the public official will act in the public's
best interest.
The concept that government officials have special ethical obligations to the public is actually quite old. In Ancient
Greece Plato called for death for public officials who took bribes. (Laws, 12.955d (http://www.perseus.tufts.edu
/hopper/text?doc=Perseus%3Atext%3A1999.01.0166%3Abook%3D12%3Asection%3D955d)) In 1215 King John of
England signed Magna Carta, which promised among other things, "To no one will we sell, to no one deny or delay right
or justice." (Magna Carta, cl. 40 (https://www.archives.gov/exhibits/featured documents/magna carta
/translation.html)) In 1254 King Louis the IX of France promulgated conflicts of interest rules for provincial governors in
the Grande Ordonnance Pour la Reforme du Royaume. (Davies, Leventhal, & Mullaney, 2013)
In 1776, our Declaration of Independence (http://www.archives.gov/exhibits/charters/declaration transcript.html)
acknowledged the concept of delegated authority,
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with
certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these
rights, Governments are instituted among Men, deriving their just powers from the consent of the
governed." (emphasis added. U.S., 1776)
According to U.S. constitutional historian Robert Natelson many delegates attending the constitutional convention of
1787 advocated for a fiduciary form of government, including James Madison and Alexander Hamilton. Madison
argued, for example, that senators ought to be guardians of justice and the general good, while Hamilton envisioned
that members of the House of Representatives would be guardians of the "poorer orders." Natelson notes that the
concepts of fiduciary government were also held by the states charged with ratifying the new convention. Maryland
representatives literally declared themselves to be the trustees of the public. (Natelson, 2013)
Turning to present day government, what ethical duties flow from the public fiduciary relationship? As noted by legal
scholars David Ponet and Ethan Lieb, "Because fiduciaries are difficult to monitor and have wide access to power over
beneficiary resources and assets, fiduciaries are under rigorous obligations that ensure compliance with their role
responsibilities." (Ponet & Leib, 2011) So, what are those obligations in the government context?
• The duty of care;
• The duty of loyalty;
• The duty of impartiality;
• The duty of accountability (Ponet & Leib, 2011; Natelson, 2004); and
• The duty to preserve the public's trust in government (Wechsler, 2013).
What do each of these duties require?
The Duty of Care
The duty care requires that the public official competently and faithfully execute the duties of the office. Under duty of
care fall such obligations as the duty to manage assets competently and be good stewards of the public treasury, to
use due diligence in the selection and supervision of staff, to follow the rules and to uphold the constitution and laws of
the jurisdiction. Examples of breach of this duty include failure to attend meetings, failure to investigate, failure to
engage in the deliberative process, and failure to vote.
The Duty of Loyalty
Public fiduciaries have an absolute obligation to put the public's interest before their own direct or indirect personal
interests. The public fiduciary breaches this obligation when he or she benefits at the public expense. Prohibited
benefits can be financial (such as engaging in pay to play politics- or participating in decisions that favorably impact an
official's business, property, or investments), career related (such as using public office and/or public resources to
obtain future employment or political position), or personal such as benefits to family members or close associates.
Note that when general ethical duties to family or friends conflict with duty to the public, the public duty must prevail.
Duty of Impartiality
Public officials have a duty to represent all of their constituents fairly. This means that the public fiduciary cannot favor
those of his or her own party over other constituents, or let the fact that someone voted against him or her impact the
ability to act fairly. They must overcome any inherent bias that they possess. As stated by Natelson, public fiduciaries
should avoid targeting particular constituencies for favor or for punishment. The Equal Protection Clause of the US
Constitution is in essence a codification of the duty of impartiality. (Natelson, 2004)
Duty of Accountability
Without a duty of accountability, the public's ability to monitor the behavior of public fiduciaries would be severely
limited. From the duty of accountability flow the duty of transparency and the concepts of disclosure, open meetings,
and accessibility of public records. In 2007 the California Supreme Court articulated the notion of public fiduciary
accountability in International Federation of Professional and Technical Engineers, Local 21, AFL-CIO v. Superior Court,
42 Cal. 4t1'319, 328 (2007). (htto://gov.uchastings.edu/docs/CaseContraCosta.pdf) The Court opined that, "Implicit in
the democratic process is the notion that government should be accountable for its actions. In order to verify
accountability, individuals must have access to government files. Such access permits checks against the arbitrary
exercise of official power and secrecy in the political process." (Id. at 328)
In California, the people's right to know what its government is doing has been enshrined as a fundamental right in the
California Constitution. "The people have the right of access to information concerning the conduct of the people's
business, and, therefore the meetings of public bodies and the writings of public officials and agencies shall be open to
public scrutiny." (Cal. Const. article 1, section 3 (b))(http://www.leginfo.ca.gov/.const/.article 1)
Duty to Maintain Public Trust in Government
Without public trust, government doesn't work. The public is willing to delegate authority and sacrifice some freedoms
in exchange for an orderly and civilized society, but only if it believes that government is acting in the public's best
interest. When the public loses trust in government, public cooperation suffers, compliance with laws fail, and
investors and consumers lose confidence, To quote President Obama, "If the people cannot trust their government to
do the job for which it exists - to protect them and to promote their common welfare - all else is lost." (Obama, 2006)
Trust in government is so important, public fiduciaries are charged with protecting and maintaining the public trust.
Toward this end, as stewards of the public trust, public fiduciaries have a duty to avoid even the appearance of
impropriety. That is to say, even if a particular course of conduct does not meet all of the elements necessary to
constitute a violation of law, it nevertheless may be unethical if it creates the perception of wrongdoing that will harm
the public trust. (Wechsler, 2013) For example, even if a public official believes that he can be impartial in spite of what
might appear to be a potential conflict of interest, the official should be mindful that the public is not privy to all the
facts, can't know what is in the official's mind, and may perceive that the conduct is not in the public's best interest.
The Institute for Local Government advises public officials to always ask themselves whether it would be a bad thing for
a particular course of conduct to be reported on the front page of the local newspaper. (Institute for Local Government,
2013)
Notions of civility and respect towards colleagues and the public also help ensure the public's trust in the efficiency
and effectiveness of government. When animus is displayed by council members towards each other, it causes the
public to wonder if private feuds are taking precedence over the common welfare. When constituents are treated with
lack of respect, it causes the public to doubt the fairness of the proceedings. As nicely summed up by the City of
Portland, Oregon, "Public service requires a continual effort to overcome cynical attitudes and suspicions about the
people in government." (City of Portland, 2009)
Ethics and Ethics Laws
Now that we understand the fiduciary duties owed by public officials, you may be asking, why is it necessary to learn
the laws? The laws actually have evolved as a codification of the values necessary to fulfill public fiduciary duties. 0n
this website is a chart (https://www.scu.edu/ethics/focus-areas/government-ethics/resources/california-government-
ethics-laws/) in which we have identified some California ethics laws and have identified the values we believe underlie
those laws. You may be able to identify more. The laws set very high standards for public conduct and are sometimes
quite complex. Laws are necessary as they provide notice of what conduct is prohibited. However, the laws can't cover
every ethical dilemma and thus merely set the floor for ethical conduct, not the ceiling.
To give an example, we recently held a government roundtable asking whether an official's discussions of public
business on private emails should be disclosed pursuant to a Public Records Act request. The law has yet to give us an
answer on this issue. Legally it might be acceptable right now to keep correspondence on your private email account
private. However, if you recognize that you have a fiduciary duty of accountability and transparency regarding public
business, you may conclude that it is unethical to withhold those private emails about public business from someone
making a public record request. To do otherwise may give rise to the public perception that you have something to
hide. This is an area where your ethics rather than the ethics laws guide your actions. As we like to say around here,
just because something is legal, does not necessarily make it ethical.
References
City of Portland, OR (2009) Code of Ethics. Available at https://www.portlandoregon.gov/auditor/article/279370
(https://www.portlandoregon.gov/auditor/article/279370)
Davies, M., Leventhal, S., & Mullaney, T. (2013) An Abbreviated History of Government Ethics Laws, Part 1. NYSBA
Municipal Lawyer, Summer 2013 Vol. 27, No. 2. Available at http://www.nyc.gov/html/conflicts/downloads
/pdf2/municipal ethics laws ny state/history govt ethicslaws davies.pdf (http://www.nyc.gov/html/conflicts
/downloads/pdf2/municipal ethics laws ny state/history govt ethicslaws davies.pdf)
Institute for Local Government (2013) Understanding California Ethics Laws. Available at http://www.ca-ilg.org/sites
/main/files/understandingbasicsethicslaws finalproof.pdf (http://www.ca-ilg.org/sites/main/files
/understandingbasicsethicslaws finalproof.pdf)
Leib, E., Ponet, D. & Serota, M. (2013) Translating Fiduciary Principles into Public Law, 126 Harv. L. Rev. F. 91.
Available at http://harvardlawreview.org/2013/01/translating-fiduciary-principles-into-public-law/
(http://harvardlawreview.org/2013/01/translating-fiduciary-principles-into-public-law/)
Natelson, R. (2004) The Constitution and the Public Trust, Buff. L. Rev. 1077. Available at
http://scholarship.law.umt.edu/cgi/viewcontent.cgi?article=1018&context=faculty lawreviews
(http://scholarship.law.umt.edu/cgi/viewcontent.cgi?article=1018&context=faculty lawreviews)
Obama, B. (2006, August 28)An Honest Government, A Hopeful Future (Remarks at the University of Nairobi).
Available at http://obamaspeeches.com/088-An-Honest-Government-A-Hopeful-Future-0bama-Speech.htm
(http://obamaspeeches.com/088-An-Honest-Govern ment-A-Hopeful-Future-Obama-Speech. htm)
Ponet, D. & Leib, E. (2011) Fiduciary's Law's Lessons for Deliberative Democracy, 91 B.U.L. Rev. 1249. Available at:
http://ir.lawnet.fordham.edu/faculty scholarship/93 (http://ir.lawnet.fordham.edu/faculty scholarship/93)
http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1092&context=faculty scholarship
(http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1092&context=faculty scholarship)
Rave, D. T. (2013) Politicians as Fiduciaries, 126 Harv. L.Rev. 671. Available at http://harvardlawreview.org/2013/01
/politicians -as -fiduciaries/ (http://harvardlawreview.org/2013/01/politicians-as-fiduciaries/)
Wechsler, R. (2013) Local Government Ethics Programs: A Resource for Ethics Commission Members, Local Officials,
Attorneys, Journalists, and Students, and a Manual for Ethics Reform. Available at http://www.cityethics.org
/ethics%20book (http://www.cityethics.org/ethics%20book)
Hana Callaghan is the director of government ethics at the Markkula Center for Applied Ethics.
► CALIFORNIA
ig JN LLCITY.
C�N�'1JJYlT
1�Ije T(eifg e to Trov idi...
Commitment
We strive for excellence, as we serve the public and each other with integrity, compassion,
responsiveness, and professionalism.
Courtesy
We treat everyone with dignity and respect.
CoCCa6oratian
We work to achieve common goals and value our differences.
Communication
tion
We communicate openly, honestly, and with clear, consistent messages.
Customer Service
We provide excellent service to residents, businesses, visitors, and colleagues.
V.
WAS A HOSTILE ENVIRONMENT CREATED BY THE CONDUCT OF CITY
COUNCILMEMBER RIOS?
A. DISCUSSION.
Councilmember Cano rescinded his allegation as to any improper conduct by
Councilmember Rios. In response to that rescission and his request to have the related
investigation discontinued, the investigation was terminated.
The reasons for the initial allegation are unknown, as Councilmember Cano did
not offer them, nor were they sought by the investigator once the allegation was
rescinded. Councilmember Cano communicated through legal counsel and that
representation was respected so no separate questioning occurred.
All persons should be aware of physical contact, whether inadvertent or
intentional, and seek to avoid contact in all feasible ways, lest a hostile environment be
created, intentionally or inadvertently.
B. CONCLUSION.
The City's City Council, by and through the City Attorney's office, engaged Lozano
Smith, LLC to investigate and conclude, as is possible, on three queries. The
investigation was conducted through personal interviews and review of records of the
City. The facts did not demonstrate a violation of Government Code 87100 occurred
(recognizing no evidence was available from Councilmember Cano) as all staff denied
any express requests for preferential treatment were made by any person, and staff did
not voluntarily extend preferential treatment. City budget, manpower, an absence of
policies, management style, and other demands appear to have caused the lack of
vigorous enforcement which allowed Councilmember Cano to defer correcting the
violations.
The second inquiry was difficult to analyze due to the non -participation of
Councilmember Cano. The legal aspects inherent in the facts are best judged by external
enforcement agencies with stronger investigative powers which are able to compel
cooperation. As to the ethical and fiduciary, issues presented by the facts, the City
Attorney, should consider what, if any, action the conduct of Councilmember Cano is due.
As to allegations of inappropriate touching and resultant hostile environment, this
issue was terminated upon Councilmember Cano's requesting the matter to be
discontinued and rescinding his complaint.
Councilmember Cano's allegations against Councilmember Rios were made in
public. It is recommended that Councilmember Cano, in the course of a public Council
meeting, apologize to Councilmember Rios, and the community, for his inappropriate
Query III — Hostile environment created?
17 Section V
public allegations. Giving equal dignity to the apology, to match the rescinded allegation,
is an appropriate response to this issue.
Query III — Hostile environment created?
18 Section V
We thank you for the opportunity to be of service to the City of National City and
we are available to discuss this report at your convenience.
Cordially,
Lozano Smith
William P. Curley, III
19