1. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Avoiding Scandals & News Paper Headlines APRIL 3-6, 2013, LONG BEACH, CA

2. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Avoiding Scandals and Newspaper Headlines: When is a gift reportable? Presented By: Kim Scott, Blach Construction Company Lisa Kaplan, Kaplan Law Group

3. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Agenda Introduction: Ethics Vendor Perspective: Importance of Relationships Standards, Rules and Guidelines Strategies for Productive Relationships Best Practices and Recommendations

4. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Why is this important? Sweetwater / San Diego Contractors / Construction Companies Bonds & Financing Public Perception / Public Trust Ethics Taxpayer Dollars

5. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Relationships Matter Vendors need to understand: –Your specific goals & objectives –Your programs, procedures and protocols –Your culture You need to understand: –Vendors’ service offerings/products –Vendor representatives and business practices –What sets a vendor apart from its competitors

6. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Why do vendors offer gifts and entertainment? To develop relationships through spending time together Get to know you Share common interests KEY: Good Relationships increase communication; increased communication = better products & saving money

7. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Why do vendors make donations? School Districts rely heavily on fundraising through corporate philanthropy: –Political Campaigns –Education Foundations, PTA/PTO events –Sponsorships Vendors want to support their clients and community Vendors benefit from sponsorship publicity (advertising)

8. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Areas of Risk Entertainment Bond Campaigns Individual Campaigns

9. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO General Rules Who is Reportable (SEI) Form 700 –What is a conflict? Bond Campaign Donations –Rules / Regulations / Policies Entertainment –Rules –$420 maximum gift – one source

10. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO The Law: D.O. Reportable Who is form 700 (Statement of Economic Interest) Reportable? –Designated Employee (Political Reform Act ß82019) Campaigning –10% rule (Sanger Advisory Letter – FPPC) Conflict of Interest Rule (GC ß87306.5)

11. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO The Law: Reporting-Conflict-Gifts General Rules: "Assets and income of public officials which may be materially affected by their official actions should be disclosed and in appropriate circumstances the officials should be disqualified from acting in order that conflicts of interest may be avoided.”Gov. Code section 81002(c) "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.”Gov. Code Section 87100 The Political Reform Act prevents conflicts of interest in two ways -- disclosure and disqualification. (See Gov. Code Sections 87100-87350.) 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO

12. The Law: Disclosure Disclosure is made on a form called a "statement of economic interests" (Form 700). The form must be filed each year. Filed forms are public documents that must be made available to anyone who requests them. For most other officials, including employees of state and local government agencies, it is up to the agencies that employ them to decide what their disclosure requirements are. Each state and local agency must adopt a conflict of interest code tailoring the disclosure requirements for each position within the agency to the types of governmental decisions a person holding that position would make. (Gov. Code Sections 87301 and 87302.) Economic Interests: Requiring Disclosure –Business Entities / Real Property / Source of Income / Gifts

13. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO The Law: Disqualification If a public official has a conflict of interest, the official may be required to disqualify himself or herself from making or participating in a governmental decision, or using his or her official position to influence or attempt to influence a governmental decision. To determine whether an official has a conflict of interest many factors must be analyzed. For example, is it reasonably foreseeable that the official's interest will be affected by a particular decision? Will the decision have a significant monetary impact on the financial interest or is the impact minimal? Will the decision affect the official's interest differently than members of the general public? Is the official even making a governmental decision? In many cases, an official will need guidance from the Commission or an attorney to determine whether disqualification is required.

14. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO The Law: Bond Campaigns Mass Mailings –Prohibited: School District Resources Restrictions on Donations –Are there restrictions? “Pay to Play”? Public Perception –News Media Interest –San Diego Article

15. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO The Law: Entertainment Board members and designated employees may accept gifts only under the conditions and limitations specified in Government Code 89503 and 2 CCR 18730. The limitation on gifts does not apply to wedding gifts and gifts exchanged between individuals on birthdays, holidays, and other similar occasions, provided that the gifts exchanged are not substantially disproportionate in value. (Government Code 89503) Gifts of travel and related lodging and subsistence shall be subject to the current gift limitation except as described in Government Code 89506. A gift of travel does not include travel provided by the district for Board members and designated employees. (Government Code 89506)

16. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO The Law: Honoraria Board members and designated employees shall not accept any honorarium, which is defined as any payment made in consideration for any speech given, article published, or attendance at any public or private gathering, in accordance with law. (Government Code 89501, 89502) The term honorarium does not include: (Government Code 89501) 1. Earned income for personal services customarily provided in connection with a bona fide business, trade, or profession unless the sole or predominant activity of the business, trade, or profession is making speeches

17. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Strategies for Productive Relationships District Training Clear Policies Honest Communication

18. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Strategies for Productive Relationships Meetings –Lunch –Coffee –At district offices Free informational workshops Relevant business reasons

19. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Strategies for Productive Relationships Occasional Entertaining: –Conference Dinners –Concerts, golf and sporting events –Entertaining & Gifting Client appreciation events Charity events Limit annual value to under $420

20. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Strategies for Productive Relationships Vendor Policy: Campaign Donations –Types of Campaigns –Value Vendor Policy: Charitable giving –Existing clients versus potential clients –Beneficiary, visibility –Value

21. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Best Practices: Recommendations To Accept or Not to Accept –Vendors Purchasing Construction –School District Board Members Designated Employees –School Bond Campaigns

22. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Vendor Policy Purchasing Department Sample Policy: Restricting Gifts and Gratuities –School District maintains a strict policy prohibiting the acceptance by its employees of gifts and gratuities from any supplier or potential supplier (make this a Board policy). –However, this policy does not preclude employees from accepting promotional or Advertising items such as calendars, desk pads, notebooks and other office gadgets which are offered by business concerns free to all as part of a public relations program.

23. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Vendor Policy Purchasing Department Sample Policy: Allowing Gifts & Gratuities – Define who is a designated employee for State Reporting Purposes Beyond the Superintendent and CBO, districts can define more employees who are designated –Then clearly state in the policy who is a designated employee Distinguish between designated employees accepting gifts and non- designated employees accepting gifts –Define what is considered a gift vs. a donation –Doing a yearly training on the Form 700 and required disclosure through an attorney

24. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Vendor Policy Facilities Department (Best Practices) –Who is Reportable? –Construction Contracts? Bidding –Lowest Bidder –Design, Bid, Build –Lease Lease Back –Public Perception

25. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO District Policy Best Practices Board Policy vs. Staff Policies Board Members = Elected Officials –FPPC Requirements Conflicts: what happens now

26. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO School Bond Campaigns Campaign Committee –Board Members / Staff Members Donations –To limit or to not limit No Public Dollars with Campaign –What can district money be used for?

27. 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Questions? Contact: Lisa M KaplanKim Scott Kaplan Law GroupBlach Construction lisa.kaplan@att.netkim.scott@blach.com (916) 996-1474 (direct line)(408) 869-8357 (work)