Brown Act and Conflicts of Interest Presented by Jennifer McQuarrie EMAIL: MCQUARRIELAW@GMAIL.COM PHONE: 805-252-1080 faX: 888-900-3407

Disclaimer THIS SESSION IS INTENDED TO PROVIDE GENERAL INFORMATION REGARDING TOPICS OF CURRENT IMPORTANCE TO CHARTER SCHOOLS AND DOES NOT CONSTITUTE LEGAL ADVICE. THE INFORMATION CONTAINED HEREIN IS NECESSARILY GENERAL AND ITS APPLICATION TO PARTICULAR FACTS AND CIRCUMSTANCES WILL VARY. YOU SHOULD NOT ACT ON THIS INFORMATION WITHOUT CONSULTING LEGAL COUNSEL.

Workshop Goals Board member legal duties Gain an understanding of the Brown Act What is the Brown Act? Policy interests at play Brown Act requirements Conflicts of Interest Government Code section 1090 Political Reform Act Corporations Code

Board Member Legal Duties Duty of Care, Loyalty and Obedience Care: Level of care that prudent person would exercise in like position Loyalty: Undivided allegiance (faithfulness) to school, not self interests Obedience: True to the school’s mission, not personal agenda

What is the Brown Act? Ralph M. Brown Act (CA Gov. Code sections 54950, et seq.) Open meeting requirement for local legislative bodies Includes, among other things: Notice Agenda Public comment

Competing Policy Interests Brown Act Encourage public participation in local government decisions Deter secret legislation by public bodies Charter School Confidential information re students/employees Candor in decision-making and debate Efficient decision-making

What is a Meeting? Broadly defined Congregation of board majority at the same time and place to hear, discuss or deliberate upon any item within its subject matter jurisdiction Includes collective acquisition and exchange of facts before making a decision Includes informal and inadvertent meetings Collective commitment to make a positive or negative decision

What is a Meeting? Serial meetings prohibited Board majority uses direct communication personal intermediaries technology To discuss, deliberate or take action or develop collective concurrence For an action to be taken on an item by the Board Prohibition does not prevent employee/official from engaging in separate conversations or communications with board members to answer questions/provide information So long as does not communicate to members the comments or position of other board members

What is a Meeting? Exceptions: Individual conversations between a board member and another individual Attendance of a majority members at: Open conferences (or similar meetings) Open meetings of other organizations Open meetings of other legislative bodies Purely social or ceremonial gatherings

What is a Meeting? Exceptions continued: Provided they don’t discuss amongst selves school business, other than as part of a program

Compliance - Notice Three types of meetings: Regular meetings Usually designated by resolution or bylaws 72-hours notice Special meetings Called at any time (presiding officer or board majority) 24-hours notice Emergency meetings Very rare 1-hour notice to media outlets that previously requested notice

Compliance - Agenda Regular and Special Meetings: Content Time/location, including any teleconference locations Brief general description of each item of business to be transacted or discussed Including closed session matters (further discussion later in slides) Need not exceed 20 words

Items Not on the Agenda Member or staff, on own initiative or in response to statements made or questions posed by public, asks for clarification, makes a brief announcement or reports on his/her own activities Provide reference to staff or other resources for factual information , request staff to report back to the body at a subsequent meeting concerning any matter or take action to direct staff to place a matter on a future agenda If emergency exists as defined by statute, determined by majority vote 2/3rd vote or unanimous, need to take immediate action and need came to the attention of the body after the agenda was posted

Compliance – Limits at Special Meetings Salaries, salary schedules, compensation in the form of fringe benefits of CEO may not be discussed in special meetings Does not preclude discussion of the budget in a special meeting Oral report of a summary of the recommendation for final action during the open meeting in which the final action is to be taken

Compliance - Posting Post in a location that is freely accessible to the public 24-hours a day and compliant with ADA Website, if the school has one After 1/1/2019, post to homepage through prominent direct link in a certain format Integrated agenda management platform ok If teleconference participation, at each teleconference location

Compliance – Rights of the Public Regular and Special meetings: Before or during consideration of the item Participate at each teleconferenced location Reasonable accommodations per ADA Cannot be required to sign in (unless speaking) May record or broadcast meetings May have access to board materials (with some exceptions) May not be censored Allow 2x allotted time to a member of the public when utilizing a translator, unless simultaneous translation provided

Compliance – Closed Session Closed Sessions Generally Sessions must be expressly authorized by statute Narrowly construed Strong bias in favor of open meetings Sensitive, embarrassing or controversial content does not justify application unless expressly allowed Semi-closed meetings not allowed

Compliance – Closed Session Confidentiality of Closed Sessions Person attending may not disclose to a non-attendee Violations enforceable in court Injunction Disciplinary action Grand jury referral

Compliance – Permissible Closed Session Personnel Litigation Real property negotiations Labor negotiations Public security Student discipline Others likely not applicable

Conflict Codes Generally Application of Codes to charters continues to be conflicted Charter commits school to follow all conflict statutes applicable to the District Conflict Codes generally Restrict an entity from entering into a transaction where a board member or employee has a financial interest; or Articulate rules about how an entity may enter into a transaction where a board member or employee has a financial interest

Government Code section 1090 An officer/employee may not make a contract in which s/he is financially interested If no contract signed, no violation Board members are conclusively presumed to have made any contract by the board even if s/he has disqualified from any and all participation in contract Employees can recuse and disqualify from decision

Government Code section 1090 Contracts made in violation of section 1090 are void and cannot be enforced Criminal and civil sanctions

Government Code section 1090 Financial Interest Direct and indirect interests Certainty of financial gain not required, may be a mere possibility No reach-back when looking at interests Applies to community and separate property income of spouse

Government Code section 1090 Remote Interests Disclose the interest to the board Have it noted in the official records of the body Board may take action on the remote interest if it acts in good faith Cannot count the vote(s) of those with remote interests Non-Interests Board may take action without recusal, disclosure may be required

Political Reform Act Enacted in 1974 Application to charters contested Fair Political Practices Commission is enforcing body Government Code section 81000, et seq., conflicts of interest begin at 87100

Political Reform Act Charter school directors, officers employees with decision making authority Look at your own structure to determine who falls within that definition Fill out form 700 Follow the recusal process for interested decisions Prevented from making, participating in making or influencing or attempting to influence a decision

Political Reform Act Making a decision Voting on a matter Appointing a person to a position Obligating the school to a course of action on an issue or Entering a contract for the school Deciding not to act is also making a decision

Political Reform Act Participation in Decision Making Official provides information, an opinion or a recommendation without significant intervening substantive review Solely ministerial, secretarial, manual or clerical not included Appearance before school representing own personal interests not included Actions regarding compensation or employment contracts not included Official may not make employment decisions against self or family members or set those salaries, unless part of overall job classification Public speaking not included Academic and teaching positions not included

Political Reform Act Qualifying Interests Investments in business entities ($2,000+) Interests in real property ($2,000+) Sources of income ($500+ 12 months) Sources of gifts and their agents/intermediaries ($470+ 12 months) Positions with business organizations (director/officer/employee/management) Personal finances of the official and immediate family (spouse or dependent child)

Political Reform Act Personal Financial Effect If it is reasonably foreseeable that a decision will have a material financial effect on the official or family, disqualification is required if the impact is different than the effect on the public generally

Conflict of Interest Form 700 Interests looking backward 12 months File each April 1 Public documents Keep on file with business office, chartering agency likely wants a copy Initial, annual, assuming office, candidate and leaving office

Conflict of Interest Corporations Code Applies to all non profit corporations No more than 49% interested directors on board Recusal and an affirmative finding that interested transaction in the best interest of the corporation when made

Conflict of Interest Manner of Disqualification cont. Board must affirmatively find for each interested transaction It benefits the school It is fair and reasonable at the time School could not have obtained a more advantageous arrangement with reasonable effort Disqualified member shall not be counted toward achieving a quorum while discussing the item