Loading...
HomeMy WebLinkAbout10-17-22 CPRL&L Committee PacketOTAY WATER DISTRICT CONSERVATION, PUBLIC RELATIONS, LEGAL & LEGISLATIVE COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA MONDAY October 17, 2022 1:00 P.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1.ROLL CALL 2.PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE COMMITTEE ON ANY SUBJECT MATTER WITHIN THE COMMIT- TEE'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA DISCUSSION ITEMS 3.ADOPT ORDINANCE NO. 587 AMENDING SECTION 6, CONFLICT OF INTEREST CODE, CONTAINED WITHIN THE DISTRICT’S CODE OF ORDINANCES TO UP- DATE THE GIFT LIMIT FOR THE 2021 AND 2022 CALENDAR YEARS; AND TO NOTE THE GIFT LIMIT INCREASE IN JANUARY 2023 AND EVERY ODD YEAR THEREAFTER (SHINOFF) [5 minutes] 4.ETHICS POLICY UPDATE (MARTINEZ / SEGURO) [10 minutes] 5.ADJOURNMENT BOARD MEMBERS ATTENDING: Gary Croucher, Chair Jose Lopez All items appearing on this agenda, whether or not expressly listed for action, may be delib- erated and may be subject to action by the Board. The Agenda, and any attachments containing written information, are available at the Dis- trict’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the 2 Agenda and all attachments are also available by contacting the District Secretary at (619) 670-2253. If you have any disability that would require accommodation in order to enable you to partici- pate in this meeting, please call the District Secretary at 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on October 14, 2022 I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on October 14, 2022. /s/ Tita Ramos-Krogman, District Secretary STAFF REPORT TYPE MEETING: Regular Board Meeting MEETING DATE: November 2, 2022 SUBMITTED BY: Tita Ramos-Krogman, District Secretary W.O./G.F. NO: APPROVED BY: Tita Ramos-Krogman, District Secretary Jose Martinez, General Manager DIV. NO. SUBJECT: Adoption of Ordinance No. 587 Amending Section 6, Conflict of Interest Code, of the District’s Code of Ordinances GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Ordinance No. 587 amending Section 6, Conflict of Interest Code (COIC), contained within the District’s Code of Ordinances to update the gift limit for the 2021 and 2022 calendar years; and to note the gift limit increase in January 2023 and every odd year thereafter in accordance with Government Code 89503(f). PURPOSE: To amend Section 6, COIC, contained within the District’s Code of Ordinances pursuant to Government Code Section 89503(f) to update the gift limit for the 2021 and 2022 calendar years; and to note the gift limit increase in January 2023 and every odd year thereafter. COMMITTEE ACTION: See Attachment A. ANALYSIS: As required by the Political Reform Act (“Act”), staff has conducted a biennial review of the District’s COIC. The District’s General Counsel reviewed the COIC and has suggested that the COIC be updated to include Designated Persons gift limit for the 2021 and 2022 calendar years, and to note the gift limit increase for the 2023 calendar year and every odd year thereafter. The language has been AGENDA ITEM 3 added to Footnote 8 for Section 6.10: PROHIBITION ON RECEIPT OF GIFTS IN EXCESS OF AMOUNT ESTABLISHED BY LAW and states: Designated Persons are prohibited from accepting gifts from any single source in a calendar year with a total value in excess of designated amounts. See Govt. Code § 89503, sub-divisions (e), (f) and (g). [Note: Pursuant to Gov. Code § 89503(f), the FPPC adjusts the gift limit every odd-numbered year to reflect changes in the Consumer Price Index; the gift limit for the 2021 and 2022 calendar years is set at $520; therefore the gift limit will be updated in January 2023 and every odd year thereafter, until further notice. See also 2 CCR § 18940.2] Ordinance No. 587 is submitted for the Board’s approval to amend the COIC as indicated above. A strike-thru copy of the COIC is attached to the ordinance for reference. FISCAL IMPACT: None. LEGAL IMPACT: None. Attachments: Attachment A – Committee Notes Attachment B - Ordinance No. 587 Strike-Thru Copy of the District’s COIC Attachment C – Clean Copy of the Proposed COIC ORDINANCE NO. 587 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT AMENDING SECTION 6, CONFLICT OF INTEREST CODE, OF THE DISTRICT’S CODE OF ORDINANCE BE IT ORDAINED by the Board of Directors of Otay Water District that the District’s Code of Ordinances, Section 6, Conflict of Interest Code (COIC), be amended to update the limit for the 2021 and 2022 calendar years; and to note the gift limit increase in January 2023 and every odd year thereafter (Government Code Section 89503(f).) The amendments are presented in Exhibit A attached to this ordinance. NOW, THEREFORE, BE IT RESOLVED that the amendments to Section 6, Conflict of Interest Code, to the District’s Code of Ordinances shall become effective immediately upon adoption. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting duly held this 2nd day of November 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ President ATTEST: _____________________________ District Secretary ATTACHMENT B -201 OTAY WATER DISTRICT CONFLICTS OF INTEREST CODE DIVISION I DISTRICT ADMINISTRATION CHAPTER 5 PERSONNEL PRACTICES SECTION 6 CONFLICT OF INTEREST CODE The Political Reform Act (Government Code section 81000, et seq.) requires state and local government agencies to adopt and promulgate conflict of interest codes. The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. Sec. 18730) that contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency’s code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation and the attached Appendix, designating positions and establishing disclosure requirements, shall constitute the Conflict of Interest Code of the Otay Water District (District). 6.01 DEFINITIONS The definitions contained in the Political Reform Act of 1974 (Government Code Sections 81000 et seq.), regulations of the Fair Political Practices Commission (2 Cal. Code of Regs. Sections 18100, et seq.), and any amendments to the Act or regulations, are incorporated by reference into this Conflict of Interest Code. 6.02 DESIGNATED EMPLOYEES The persons holding positions listed in the Appendix are designated employees. It has been determined that these persons make or participate in the making of decisions which may foreseeably have a material effect on financial interests. The General Manager or his/her designee shall have the authority to designate any person holding a position within the District as a person designated to provide disclosures regardless of whether or not the position that the person holds is included in the Appendix if, in the view of the General Manager or his/her designee, the person has the potential to make or participate in the making of decisions which may foreseeably have a material effect on financial interests. Exhibit A -202 6.03 DISCLOSURE CATEGORIES This Code does not establish any disclosure obligation for those designated employees who are also specified in Government Code Section 87200 if they are designated in this code in that same capacity, or if the geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction in which those persons must report their financial interest pursuant to Article 2 of Chapter 7 of the Political Reform Act, Government Code Sections 87200, et seq.1 In addition, this code does not establish any disclosure obligation for any designated public officials who are designated in a conflict of interest code for another agency, if all of the following apply: (A)The geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction of the other agency; (B)The disclosure assigned in the code of the other agency is the same as that required under Article 2 of Chapter 7 of the Political Reform Act, Government Code Section 87200; and (C)The filing officer is the same for both agencies. Such persons are covered by this Code for disqualification purposes only. With respect to all other designated employees, the disclosure categories set forth in the Appendix specify which kinds of financial interests are reportable. Such a designated employee shall disclose in his or her Statement of Economic Interest those financial interests he or she has which are of the kind described in the disclosure categories to which he or she is assigned in the Appendix. It has been determined that the financial interests set forth in a designated employee’s disclosure categories are the kinds of financial interests which he or she foreseeably can affect materially through the conduct of his or her office. 6.04 STATEMENTS OF ECONOMIC INTERESTS: PLACE OF FILING All officials and employees required to submit a Statement of Economic Interest (employees in Designated Positions) shall file their statements with the General Manager, or his or her designee. The District shall make and retain a copy of all statements filed by Designated Positions and forward the originals of such statements to the Executive Office of the Board of Supervisors of San Diego County. 1 Designated employees who are required to file statements of economic interest under any other agency’s Conflict of Interest Code or under Article 2 for a different jurisdiction, may expand their statement of economic interests to cover reportable interest in both jurisdictions, and file copies of this expanded statement with both entities in lieu of filing separate and district statements, provided that each copy of such expanded statement filed in place of an original is signed and verified by the designated employee as if it were an original. See Government Code Section 81004. -203 All retained statements, originals or copies shall be available for public inspection and reproduction. (Cal. Gov’t Code § 81008).2 The General Manager, or his or her designee may file Statements of Economic Interests electronically in accordance with the provisions of Government Code Section 87500.2. 6.05 STATEMENTS OF ECONOMIC INTERESTS: TIME OF FILING (A) Initial Statements. All designated employees employed by the agency on the effective date of this code, as originally adopted, promulgated, and approved by the code reviewing body, shall file statements within 30 days after the effective date of this code. Thereafter, each person already in a position when it is designated by an amendment to this code shall file an initial statement within 30 days after the effective date of the amendment. (B) Assuming Office Statements. All persons assuming designated positions after the effective date of this code shall file statements within 30 days after assuming the designated positions, or if subject to State Senate confirmation, 30 days after being nominated or appointed. If a person assumes an office between October 1 and December 31 and files an assuming office Statement of Economic Interests, that person need not file an annual Statement of Economic Interests pursuant to Section 87203 until one year later than the date specified in subsection C below. (C) Annual Statements. All designated employees shall file statements no later than April 1. (D) Leaving Office Statements. All persons who leave designated positions shall file statements within 30 days after leaving office. (E) Military Service. If a person reports for military service as defined in the Servicemember's Civil Relief Act, the deadline for the annual statement of economic interests is 30 days following his or her return to office, provided the person, or someone authorized to represent the person's interests, notifies the filing officer in writing prior to the applicable filing deadline that he or she is subject to that federal statute and is unable to meet the applicable deadline, and provides the filing officer verification of his or her military status. 2 See Government Code section 81010 and 2 Cal. Code of Regs. section 18115 for the duties of filing officers and persons in agencies who make and retain copies of statements and forward the originals to the filing officer. -204 6.06 STATEMENTS FOR PERSONS WHO RESIGN PRIOR TO ASSUMING OFFICE Any person who resigns within 12 months of initial appointment, or within 30 days of the date of notice provided by the filing officer to file an assuming office statement, is not deemed to have assumed office or left office, provided he or she did not make or participate in the making of, or use his or her position to influence any decision and did not receive or become entitled to receive any form of payment as a result of his or her appointment. Such persons shall not file either an assuming or a leaving office statement. (A)Any person who resigns a position within 30 days of the date of a notice from the filing officer shall do both of the following: 1.File a written resignation with the appointing power; and 2.File a written statement with the filing officer declaring under penalty of perjury that during the period between appointment and resignation he or she did not make, participate in the making, or use the position to influence any decision of the agency or receive, or become entitled to receive, any form of payment by virtue of being appointed to the position. 6.07 CONTENTS OF AND PERIOD COVERED BY STATEMENTS OF ECONOMIC INTERESTS (A)Contents of Initial Statements Initial statements shall disclose any reportable investments, interests in real property and business positions held on the effective date of the code and income received during the 12 months prior to the effective date of the code. (B)Contents of Assuming Office Statements Assuming office statements shall disclose any reportable investments, interests in real property and business positions held on the date of assuming office or on the date of appointment, and income received during the 12 months prior to the date of assuming office or the date of being appointed, respectively. (C)Contents of Annual Statements Annual statements shall disclose any reportable investments, interests in real property, income and business positions held or received during the previous calendar year provided, however, that the period covered by an employee’s first annual statement shall begin on the effective date of the code or the date of assuming office, whichever is later. -205 (D)Contents of Leaving Office Statements Leaving office statements shall disclose reportable investments, interest in real property, income and business positions held or received during the period between the closing date of the last statement filed and the date of leaving office. 6.08 MANNER OF REPORTING Statements of economic interest shall be made on forms prescribed by the Fair Political Practices Commission and supplied by the agency, and shall contain the following information: (A)Investments and Real Property Disclosure When an investment or an interest in real property3 is required to be reported4, the statement shall contain the following: 1.A statement of the nature of the investment or interest; 2.The name of the business entity in which each investment is held, and a general description of the business activity in which the business entity is engaged; 3.The address or other precise location of the real property; 4.A statement whether the fair market value of the investment or interest in real property equals or exceeds two thousand dollars ($2,000), exceeds ten thousand dollars ($10,000), exceeds one hundred thousand dollars ($100,000), or exceeds one million dollars ($1,000,000). (B)Personal Income Disclosure When personal income is required to be reported5, the statement shall contain: 3 For the purpose of disclosure only (not disqualification), an interest in real property does not include the principal residence of the filer. 4 Investments and interests in real property which have a fair market value of less than $2,000 are not investments and interests in real property within the meaning of the Political Reform Act. However, investments or interests in real property of an individual include those held by the individual’s spouse and dependent children as well as a pro rata share of any investment or interest in real property of any business entity or trust in which the individual, spouse and dependent children own, in the aggregate, a direct, indirect or beneficial interest of 10 percent or greater. 5 A designated employee’s income includes his or her community property interest in the income of his or her spouse but does not include salary or reimbursement for expenses received from a state, local or federal government agency. -206 1.The name and address of each source of income aggregating $500 or more in value or $50 or more in value if the income was a gift, and a general description of the business activity, if any, of each source; 2.A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed to each source, was one thousand dollars ($1,000) or less, greater than one thousand dollars ($1,000), greater than ten thousand dollars ($10,000), or greater than one hundred thousand dollars ($100,000); 3.A description of the consideration, if any, for which the income was received; 4.In the case of a gift, the name, address and business activity of the donor and any intermediary through which the gift was made; a description of the gift; the amount or value of the gift; and the date on which the gift was received. A gift includes forgiveness of a debt or a rebate or discount of a debt owed6; 5.In the case of a loan given or received, the annual interest rate and the security, if any, given for the loan and the term of the loan. 6.Gov. Code section 82030 defines income and specifically excludes: (a)Any loan or loans from a commercial lending institution which are made in the lender's regular course of business on terms available to members of the public without regard to official status. (b)Any loan from or payments received on a loan made to an individual's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother- in-law, sister-in-law, nephew, niece, uncle, aunt, or first cousin, or the spouse of any such person, provided that a loan or loan payment received from any such person shall be considered income if he or she is acting as an agent or intermediary for any person not covered by this paragraph. (c)Any indebtedness created as part of a retail installment or credit card transaction if made in the lender's regular course of business on terms 6 2 Cal. Code of Regs. section 18940 -207 available to members of the public without regard to official status. (C)Business Entity Income Disclosure When income of a business entity, including income of a sole proprietorship, is required to be reported7, the statement shall contain: 1.The name, address, and a general description of the business activity of the business entity; 2.The name of every person from whom the business entity received payments if the filer’s pro rata share of gross receipts from such person was equal to or greater than $10,000. (D)Business Position Disclosure When business positions are required to be reported, a designated employee shall list the name and address of each business entity in which he or she is a director, officer, partner, trustee, employee or in which he or she holds any position of management, a description of the business activity in which the business entity is engaged, and the designated employee’s position with the business entity. (E)Acquisition or Disposal During Reporting Period In the case of an annual or leaving office statement, if an investment or an interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the statement shall contain the date of acquisition or disposal. 6.09 PROHIBITION ON RECEIPT OF HONORARIA A.No designated public official shall accept any honorarium from any source if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (a), (b), and (c) of Government Code Section 89501 shall apply to the prohibitions in this section. 7 Income of a business entity is reportable if the direct, indirect, or beneficial interest of the filer and the filer’s spouse in the business entity aggregates a 10 percent or greater interest. In addition, the disclosure of persons who are clients or customers of a business entity is required only if the clients or customers are within one of the disclosure categories of the filer. -208 This section shall not limit or prohibit payments, advances, or reim- bursements for travel and related lodging and subsistence authorized by Government Code section 89506. 6.10 PROHIBITION ON RECEIPT OF GIFTS IN EXCESS OF AMOUNT ESTABLISHED BY LAW8 A.No designated public official shall accept gifts with a total value of more than the maximum amount established by law, in any calendar year, from any single source, if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (e), (f), and (g) of Government Code section 89503 shall apply to the prohibitions in this section. 6.11 LOANS TO PUBLIC OFFICIALS A.No elected officer of a state or local government agency shall, from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the elected officer holds office or over which the elected officer’s agency has direction and control. B.No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the public official holds office or over which the public official’s agency has direction and control. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. C.No elected officer of a state or local government agency shall, from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer’s agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any 8 Designated Persons are prohibited from accepting gifts from any single source in a calendar year with a total value in excess of designated amounts. See Govt. Code § 89503, sub-divisions (e), (f) and (g). [Note: Pursuant to Gov. Code § 89503(f), the FPPC adjusts the gift limit every odd-numbered year to reflect changes in the Consumer Price Index; the gift limit for the 2021 and 2022 calendar years is set at $520; therefore the gift limit will be updated in January 2023 and every odd year thereafter, until further notice. therefore, the $470 limit adopted by the FPPC in January of 2017 will be updated in January 2019 and every odd year thereafter, until further notice. See also 2 CCR § 18940.2] -209 indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender’s regular course of business on terms available to members of the public without regard to the elected officer’s official status. D.No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer’s agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender’s regular course of business on terms available to members of the public without regard to the elected officer’s official status. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. E.This section shall not apply to the following: 1.Loans made to the campaign committee of an elected officer or candidate for elective office. 2.Loans made by a public official’s spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in- law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such persons, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3.Loans from a person which, in the aggregate, do not exceed five hundred dollars ($500) at any given time. 4.Loans made, or offered in writing, before January 1, 1998. 6.12 LOAN TERMS A.Except as set forth in subdivision (B), no elected officer of a state or local government agency shall, from the date of his or her election to office through the date he or she vacates office, receive a personal loan of five hundred dollars ($500) or more, except when the loan is in writing and clearly states the terms of the loan, including the parties to the loan agreement, date of the loan, amount of the loan, term of the loan, date or dates when payments shall be due on the loan and the amount of the payments, and the rate of interest paid on the loan. B.This section shall not apply to the following types of loans: -2010 1.Loans made to the campaign committee of the elected officer. 2.Loans made to the elected officer by his or her spouse, child, parent, grandparent, grandchild, brother, sister, parent-in- law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such person, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3.Loans made, or offered in writing, before January 1, 1998. C.Nothing in this section shall exempt any person from any other provision of Title 9 of the Government Code. 6.13 PERSONAL LOANS A.Except as set forth in subdivision (B), a personal loan received by any designated public official shall become a gift to the designated public official for the purposes of this section in the following circumstances: 1.If the loan has a defined date or dates for repayment, when the statute of limitations for filing an action for default has expired. 2.If the loan has no defined date or dates for repayment, when one year has elapsed from the later of the following: a.The date the loan was made. b.The date the last payment of one hundred dollars ($100) or more was made on the loan. c.The date upon which the debtor has made payments on the loan aggregating to less than two hundred fifty dollars ($250) during the previous 12 months. B.This section shall not apply to the following types of loans: 1.A loan made to the campaign committee of an elected officer or a candidate for elective office. 2.A loan that would otherwise not be a gift as defined in this title. 3.A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor has taken reasonable action to collect the balance due. 4.A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor, based on reasonable -2011 business considerations, has not undertaken collection action. Except in a criminal action, a creditor who claims that a loan is not a gift on the basis of this paragraph has the burden of proving that the decision for not taking collection action was based on reasonable business considerations. 5.A loan made to a debtor who has filed for bankruptcy and the loan is ultimately discharged in bankruptcy. C.Nothing in this section shall exempt any person from any other provisions of Title 9 of the Government Code. 6.14 DISQUALIFICATION No designated employee shall make, participate in making, or in any way attempt to use his or her official position to influence the making of any governmental decision which he or she knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the official or a member of his or her immediate family or on: (A)Any business entity in which the designated employee has a direct or indirect investment worth $2,000 or more; (B)Any real property in which the designated employee has a direct or indirect interest worth $2,000 or more; (C)Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating $500 or more in value provided to, received by or promised to the designated employee within 12 months prior to the time when the decision is made; (D)Any business entity in which the designated employee is a director, officer, partner, trustee, employee, or holds any position of management; or (E)Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating to the maximum amount established by law, or more, in value provided to, received by, or promised to the designated employee within 12 months prior to the time when the decision is made. 6.15 LEGALLY REQUIRED PARTICIPATION No designated public official shall be prevented from making or participating in the making of any decision to the extent his or her participation is legally required for the decision to be made. The -2012 fact that the vote of a designated public official who is on a voting body is needed to break a tie does not make his or her participation legally required for purposes of this section. 6.16 DISQUALIFICATION OF STATE OFFICERS AND EMPLOYEES In addition to the general disqualification provisions of Section 6.14, no state administrative official shall make, participate in making, or use his or her official position to influence any governmental decision directly relating to any contract where the state administrative official knows or has reason to know that any party to the contract is a person with whom the state administrative official, or any member of his or her immediate family has, within 12 months prior to the time when the official action is to be taken: (A)Engaged in a business transaction or transactions on terms not available to members of the public, regarding any investment or interest in real property; or (B)Engaged in a business transaction or transactions on terms not available to members of the public regarding the rendering of goods or services totaling in value $1000 or more. 6.17 DISCLOSURE OF DISQUALIFYING INTEREST When a designated public official determines that he or she should not make a governmental decision because he or she has a disqualifying interest in it, the determination not to act may be accompanied by disclosure of the disqualifying interest. 6.18 ASSISTANCE OF THE COMMISSION AND COUNSEL Any designated employee who is unsure of his or her duties under this code may request assistance from the Fair Political Practices Commission pursuant to Government Code Section 83114 and 2 CCR Sections 18329 and 18329.5 or from the attorney for his or her agency, provided that nothing in this section requires the attorney for the agency to issue any formal or informal opinion. 6.19 VIOLATIONS This code has the force and effect of law. Designated employees violating any provision of this code are subject to the administrative, criminal, and civil sanctions provided in the Political Reform Act, Government Code Sections 81000 – 91015. In addition, a decision in relation to which a violation of the disqualification provisions of this code or of Government Code Section -2013 87100 or 87450 has occurred may be set aside as void pursuant to Government Code Section 91003. 6.20 PROHIBITED TRANSACTIONS Members of the Board of Directors and Designated Employees shall comply with the Prohibited Transactions policy, annexed hereto as Exhibit A, pursuant to California Government Code Sections 1090, et seq. 6.21 INCOMPATIBLE ACTIVITIES Members of the Board of Directors, District officers, and all other District employees shall comply with the Incompatible Activities policy, annexed hereto as Exhibit B, pursuant to California Government Code Sections 1126, et seq. -2014 APPENDIX OTAY WATER DISTRICT CONFLICT OF INTEREST CODE DESIGNATED POSITIONS DESIGNATED EMPLOYEES’ TITLE OR FUNCTION__ DISCLOSURE CATEGORIES ASSIGNED Members of the Board of Directors 1, 2, 3, 4, 5, 6 General Manager 1, 2, 3, 4, 5, 6 District Secretary 6 Assistant Chief of Finance 1, 2, 5, 6, 7 Chief of Administrative Services 1, 2, 3, 4, 5, 6, 7 Chief Financial Officer 1, 2, 5, 6, 7 Chief of Engineering 1, 2, 3, 4, 6, 7 Chief of Water Operations 1, 2, 3, 4, 6, 7 Associate Civil Engineer 1, 2, 3, 4, 7 Communications Officer 6 Customer Service Manager 2, 5, 7 Environmental Compliance Specialist 1, 2, 3, 4, 7 Engineering Manager 1, 2, 3, 4, 7 Field Services Manager 1, 2, 3, 4, 7 Finance Manager 2, 5, 7 GIS Manager 3, 6, 7 Human Resources Manager 3, 6 IT Manager 3, 6, 7 Network Engineer 3, 6, 7 -2015 Purchasing and Facilities Manager 2, 6 Safety and Security Specialist 1, 2, 3, 4, 6 Senior Procurement and Contracting Analyst 6 Senior Civil Engineer 1, 2, 3, 4, 7 System Operations Manager 1, 2, 3, 4, 7 Utility Services Manager 1, 2, 3, 4, 7 Consultant/New Positions9 1, 2, 3, 4, 5, 6 District Officials who manage public investments, as defined by 2 Cal. Code of Regs. § 18701 (b) are not subject to the District's Conflict of Interest Code except with respect to its disqualification provisions. They must file disclosure statements under Government Code § 87200 et seq. [2 CCR § 18730(b)(3)] These positions are listed above for informational purposes only. Individuals holding the positions listed below are officials who manage public investments and who must file their disclosure statements under Government Code Section 87200: Members of the Board of Directors General Manager Chief Financial Officer Asst. Chief Financial Officer Financial Consultants Individuals holding the above-listed positions may contact the Fair Political Practices Commission for assistance or written advice regarding their filing obligations if they believe that their position has been categorized incorrectly. The Fair Political Practices 9 Consultants/New Positions are included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code, subject to the following limitation: The General Manager may determine in writing that a particular consultant or new position, although a “designated position,” is hired to perform a range of duties that is limited in scope and, thus, not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultant’s or new position’s duties and, based upon that description, a statement of the extent of the disclosure requirements. The written determination is a public record and shall be retained for public inspection in the same manner and location as this Conflict of Interest Code (Gov. Code section 81008) Consultants are required to file disclosure statements where they: (a) conduct research and arrive at conclusions with respect to rendition of information, advice, recommendation or counsel independent of control and direction of the agency or any agency official other than normal contract monitoring; and (b) possess no authority with respect to any agency decision beyond the rendition of information, advice, recommendation or counsel. -2016 Commission makes the final determination whether a position is covered by Government Code Section 87200. Government Code Section 87200 requires that individuals holding the above-listed positions shall, each year at a time specified by commission regulations, file a statement disclosing their investments, their interests in real property and their income during the period since the previous statement filed. The statement shall include any investments and interest in real property held at any time during the period covered by the statement, whether or not they are still held at the time of filing. -2017 APPENDIX, CONTINUED DISCLOSURE CATEGORIES The disclosure categories listed below identify the types of investments, business entities, sources of income, or real property which the designated employee must disclose for each disclosure category to which he or she is assigned. Category 1: All investments and business positions in, and sources of income from, all business entities that do business or own real property in the District, plan to do business or own real property in the District within the next year or have done business or owned real property in the District within the past two years. Category 2: All interests in real property which are located in whole or in part within, or not more than two (2) miles outside the boundaries of the District. Category 3: All investments and business positions in, and sources of income from, business entities subject to the regulatory, permit or licensing authority of the Designated Employee’s Department, will be subject to such authority within the next year or have been subject to such authority within the past two years. Category 4: All investments, business positions, and sources of income from, business entities that are engaged in land development, construction or the acquisition or sale of real property in the District, plan to engage in such activities in the District within the next year or have engaged in such activities in the District within the past two years. Category 5: All investments and business positions in, and sources of income from, business entities that are banking, savings and loan or other financial institutions. Category 6: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the District. Category 7: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the Designated Employee’s Department. -2018 EXHIBIT A Prohibited Transactions for Specified Personnel Members of the Board of Directors (“Members”) shall comply with this Prohibited Transactions policy pursuant to California Government Code §§ 1090, et seq. Members shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Members shall not be purchasers at any sale or vendors at any purchase made by them in their official capacity. Members shall not be deemed to be interested in a contract entered into by a body or board of which they are members if the Member has only a remote interest in the contract and if the fact of that interest is disclosed to the body or board of which the Member is a member and noted in its official records, and thereafter the body or board authorizes, approves, or ratifies the contract in good faith by a vote of its membership sufficient for the purpose without counting the vote or votes of the Board of Directors member with the remote interest. “Remote interest” shall be defined as in California Government Code § 1091(b). Members shall not be considered to be financially interested in a contract if their interest is including, but not limited to, any of the following (Government Code § 1091.5): 1.That of an officer in being reimbursed for his/her actual and necessary expenses incurred in the performance of an official duty; 2.That of a recipient of public services generally provided by the public body or board of which he/she is a member, on the same terms and conditions as if he or she were not a member of the board; 3.That of a landlord or tenant of the contracting party if such contracting party is the federal government or any federal department or agency, this state or an adjoining state, any department or agency of this state or an adjoining state, any county or city of this state or an adjoining state, or an public corporation or special, judicial or other public district of this state or an adjoining state unless the subject matter of such contract is the property in which such officer or employee has such interest as landlord or tenant in which even his/her interest shall be deemed a remote interest within the meaning of, and subject to, the provisions of Government Code 1091; -2019 4.That of a spouse of an officer or employee of a public agency if his/her spouse’s employment or office-holding has existed for at least one year prior to his/her election or appointment; 5.That of a non-salaried member of a nonprofit corporation, provided that such interest is disclosed to the board at the time of the first consideration of the contract, and provided further that such interest is noted in its official records; 6.That of a non-compensated officer of a nonprofit, tax-exempt corporation, which, as one of its primary purposes, supports the functions of the board or to which the board has legal obligation to give particular consideration, and provided further that such interest is noted in its official records; For purposes of this paragraph, an officer is “noncompensated” even though he or she receives reimbursement from the nonprofit, tax-exempt corporation for necessary travel and other actual expenses incurred in performing the duties of his or her office. 7.That of compensation for employment with a governmental agency, other than the governmental agency that employs the officer or employee, provided that the interest is disclosed to the board at the time of consideration of the contract, and provided further that the interest is noted in its official records; 8.That of an attorney of the contracting party of that of an owner, officer, employee or agent of a firm which renders, or has rendered, service to the contracting party in the capacity of stockbroker, insurance agent, insurance broker, real estate agent, or real estate broker if these individuals have not received and will not receive remuneration, consideration, or a commission as a result of the contract and if these individuals have an ownership interest of less than 10 percent in the law practice or firm, stock brokerage firm, insurance firm or real estate firm. In addition, Members shall not be deemed to be interested in a contract made pursuant to competitive bidding under a procedure established by law if their sole interest is that of an officer, director, or employee of a bank or savings and loan association with which a party to the contract has the relationship of borrower or depositor, debtor or creditor (Government Code § 1091.5). Authority: California Government Code §§ 1090, et seq. -2020 EXHIBIT B Incompatible Activities Policy District officers, members of the Board of Directors, and all other District employees (collectively, “district personnel”) shall comply with this Incompatible Activities policy pursuant to California Government Code §§ 1125, et seq. District personnel shall not engage in any employment, activity, or enterprise for compensation which is inconsistent, incompatible, in conflict with, or inimical to his or her duties as a member of the Board of Directors, or with the duties, functions, or responsibilities of his or her appointing power or the agency by which he or she is employed. The outside employment, activity, or enterprise of district personnel is prohibited if it: (1) involves the use for private gain or advantage of his or her local District time, facilities, equipment and supplies; or the badge, uniform, prestige, or influence of his or her local District office or employment or, (2) involves receipt or acceptance by district personnel of any money or other consideration from anyone other than the District for the performance of an act which district personnel, if not performing such act, would be required or expected to render in the regular course or hours of their local District employment or as a part of their duties as a local District officer or employee or, (3) involves the time demands as would render performance of his or her duties as a local district personnel member less efficient. Nothing in this policy shall be interpreted to prohibit any outside employment, activity, counsel, or enterprise on behalf of another governmental entity, subject to common law and professional conflict of interest rules. Copies of this regulation shall be posted in prominent places at the District Office. District personnel who violate this regulation may be subject to discipline as set forth in the applicable Code of Ordinances and Policies. Board of Directors members who violate this section may be subject to censure. Disciplinary appeals by district personnel shall be handled pursuant to applicable Code of Ordinances and Policies. Authority: California Government Code §§ 1125, et seq. -201 OTAY WATER DISTRICT CONFLICTS OF INTEREST CODE DIVISION I DISTRICT ADMINISTRATION CHAPTER 5 PERSONNEL PRACTICES SECTION 6 CONFLICT OF INTEREST CODE The Political Reform Act (Government Code section 81000, et seq.) requires state and local government agencies to adopt and promulgate conflict of interest codes. The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. Sec. 18730) that contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency’s code. After public notice and hearing, the standard code may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation and the attached Appendix, designating positions and establishing disclosure requirements, shall constitute the Conflict of Interest Code of the Otay Water District (District). 6.01 DEFINITIONS The definitions contained in the Political Reform Act of 1974 (Government Code Sections 81000 et seq.), regulations of the Fair Political Practices Commission (2 Cal. Code of Regs. Sections 18100, et seq.), and any amendments to the Act or regulations, are incorporated by reference into this Conflict of Interest Code. 6.02 DESIGNATED EMPLOYEES The persons holding positions listed in the Appendix are designated employees. It has been determined that these persons make or participate in the making of decisions which may foreseeably have a material effect on financial interests. The General Manager or his/her designee shall have the authority to designate any person holding a position within the District as a person designated to provide disclosures regardless of whether or not the position that the person holds is included in the Appendix if, in the view of the General Manager or his/her designee, the person has the potential to make or participate in the making of decisions which may foreseeably have a material effect on financial interests. Attachment C -202 6.03 DISCLOSURE CATEGORIES This Code does not establish any disclosure obligation for those designated employees who are also specified in Government Code Section 87200 if they are designated in this code in that same capacity, or if the geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction in which those persons must report their financial interest pursuant to Article 2 of Chapter 7 of the Political Reform Act, Government Code Sections 87200, et seq.1 In addition, this code does not establish any disclosure obligation for any designated public officials who are designated in a conflict of interest code for another agency, if all of the following apply: (A) The geographical jurisdiction of this agency is the same asor is wholly included within the jurisdiction of the other agency; (B) The disclosure assigned in the code of the other agency is the same as that required under Article 2 of Chapter 7 of the Political Reform Act, Government Code Section 87200; and (C) The filing officer is the same for both agencies. Such persons are covered by this Code for disqualificationpurposes only. With respect to all other designated employees, the disclosure categories set forth in the Appendix specify which kinds of financial interests are reportable. Such a designated employee shall disclose in his or her Statement of Economic Interest those financial interests he or she has which are of the kind described in the disclosure categories to which he or she is assigned in the Appendix. It has been determined that the financial interests set forth in a designated employee’s disclosure categories are the kinds of financial interests which he or she foreseeably can affect materially through the conduct of his or her office. 6.04 STATEMENTS OF ECONOMIC INTERESTS: PLACE OF FILING All officials and employees required to submit a Statement of Economic Interest (employees in Designated Positions) shall file their statements with the General Manager, or his or her designee. The District shall make and retain a copy of all statements filed by Designated Positions and forward the originals of such statements to the Executive Office of the Board of Supervisors of San Diego County. 1 Designated employees who are required to file statements of economic interest under any other agency’s Conflict of Interest Code or under Article 2 for a different jurisdiction, may expand their statement of economic interests to cover reportable interest in both jurisdictions, and file copies of this expanded statement with both entities in lieu of filing separate and district statements, provided that each copy of such expanded statement filed in place of an original is signed and verified by the designated employee as if it were an original. See Government Code Section 81004. -203 All retained statements, originals or copies shall be available for public inspection and reproduction. (Cal. Gov’t Code § 81008).2 The General Manager, or his or her designee may file Statements of Economic Interests electronically in accordance with the provisions of Government Code Section 87500.2. 6.05 STATEMENTS OF ECONOMIC INTERESTS: TIME OF FILING (A) Initial Statements. All designated employees employed by the agency on the effective date of this code, as originally adopted, promulgated, and approved by the code reviewing body, shall file statements within 30 days after the effective date of this code. Thereafter, each person already in a position when it is designated by an amendment to this code shall file an initial statement within 30 days after the effective date of the amendment. (B) Assuming Office Statements. All persons assuming designatedpositions after the effective date of this code shall file statements within 30 days after assuming the designated positions, or if subject to State Senate confirmation, 30 days after being nominated or appointed. If a person assumes an office between October 1 and December 31 and files an assuming office Statement of Economic Interests, that person need not file an annual Statement of Economic Interests pursuant to Section 87203 until one year later than the date specified in subsection C below. (C) Annual Statements. All designated employees shall filestatements no later than April 1. (D) Leaving Office Statements. All persons who leave designatedpositions shall file statements within 30 days after leaving office. (E) Military Service. If a person reports for military service as defined in the Servicemember's Civil Relief Act, the deadline for the annual statement of economic interests is 30 days following his or her return to office, provided the person, or someone authorized to represent the person's interests, notifies the filing officer in writing prior to the applicable filing deadline that he or she is subject to that federal statute and is unable to meet the applicable deadline, and provides the filing officer verification of his or her military status. 2 See Government Code section 81010 and 2 Cal. Code of Regs. section 18115 for the duties of filing officers and persons in agencies who make and retain copies of statements and forward the originals to the filing officer. -204 6.06 STATEMENTS FOR PERSONS WHO RESIGN PRIOR TO ASSUMING OFFICE Any person who resigns within 12 months of initial appointment, or within 30 days of the date of notice provided by the filing officer to file an assuming office statement, is not deemed to have assumed office or left office, provided he or she did not make or participate in the making of, or use his or her position to influence any decision and did not receive or become entitled to receive any form of payment as a result of his or her appointment. Such persons shall not file either an assuming or a leaving office statement. (A) Any person who resigns a position within 30 days of the date of a notice from the filing officer shall do both of the following: 1. File a written resignation with the appointing power; and 2. File a written statement with the filing officer declaring under penalty of perjury that during the period betweenappointment and resignation he or she did not make,participate in the making, or use the position to influence any decision of the agency or receive, or become entitled toreceive, any form of payment by virtue of being appointed to the position. 6.07 CONTENTS OF AND PERIOD COVERED BY STATEMENTS OF ECONOMICINTERESTS (A) Contents of Initial Statements Initial statements shall disclose any reportable investments,interests in real property and business positions held on the effective date of the code and income received during the 12 months prior to the effective date of the code. (B) Contents of Assuming Office Statements Assuming office statements shall disclose any reportable investments, interests in real property and business positions held on the date of assuming office or on the date of appointment, and income received during the 12 months prior to the date of assuming office or the date of being appointed, respectively. (C) Contents of Annual Statements Annual statements shall disclose any reportable investments,interests in real property, income and business positions held or received during the previous calendar year provided, however, that the period covered by an employee’s first annual statement shall begin on the effective date of the code or the date of assuming office, whichever is later. -205 (D) Contents of Leaving Office Statements Leaving office statements shall disclose reportable investments,interest in real property, income and business positions held or received during the period between the closing date of the last statement filed and the date of leaving office. 6.08 MANNER OF REPORTING Statements of economic interest shall be made on forms prescribed by the Fair Political Practices Commission and supplied by the agency, and shall contain the following information: (A) Investments and Real Property Disclosure When an investment or an interest in real property3 is required to be reported4, the statement shall contain the following: 1. A statement of the nature of the investment or interest; 2. The name of the business entity in which each investment is held, and a general description of the business activity inwhich the business entity is engaged; 3. The address or other precise location of the real property; 4. A statement whether the fair market value of the investmentor interest in real property equals or exceeds two thousanddollars ($2,000), exceeds ten thousand dollars ($10,000),exceeds one hundred thousand dollars ($100,000), or exceedsone million dollars ($1,000,000). (B) Personal Income Disclosure When personal income is required to be reported5, the statementshall contain: 3 For the purpose of disclosure only (not disqualification), an interest in real property does not include the principal residence of the filer. 4 Investments and interests in real property which have a fair market value of less than $2,000 are not investments and interests in real property within the meaning of the Political Reform Act. However, investments or interests in real property of an individual include those held by the individual’s spouse and dependent children as well as a pro rata share of any investment or interest in real property of any business entity or trust in which the individual, spouse and dependent children own, in the aggregate, a direct, indirect or beneficial interest of 10 percent or greater. 5 A designated employee’s income includes his or her community property interest in the income of his or her spouse but does not include salary or reimbursement for expenses received from a state, local or federal government agency. -206 1. The name and address of each source of income aggregating $500 or more in value or $50 or more in value if the incomewas a gift, and a general description of the businessactivity, if any, of each source; 2. A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed toeach source, was one thousand dollars ($1,000) or less,greater than one thousand dollars ($1,000), greater than ten thousand dollars ($10,000), or greater than one hundredthousand dollars ($100,000); 3. A description of the consideration, if any, for which theincome was received; 4. In the case of a gift, the name, address and business activity of the donor and any intermediary through which thegift was made; a description of the gift; the amount orvalue of the gift; and the date on which the gift was received. A gift includes forgiveness of a debt or a rebateor discount of a debt owed6; 5. In the case of a loan given or received, the annual interest rate and the security, if any, given for the loan and theterm of the loan. 6. Gov. Code section 82030 defines income and specificallyexcludes: (a) Any loan or loans from a commercial lendinginstitution which are made in the lender's regular course of business on terms available to members ofthe public without regard to official status. (b) Any loan from or payments received on a loan made toan individual's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, uncle, aunt, or first cousin, or the spouse of any such person,provided that a loan or loan payment received fromany such person shall be considered income if he or she is acting as an agent or intermediary for anyperson not covered by this paragraph. (c) Any indebtedness created as part of a retailinstallment or credit card transaction if made inthe lender's regular course of business on terms 6 2 Cal. Code of Regs. section 18940 -207 available to members of the public without regard to official status. (C) Business Entity Income Disclosure When income of a business entity, including income of a soleproprietorship, is required to be reported7, the statement shall contain: 1. The name, address, and a general description of the business activity of the business entity; 2. The name of every person from whom the business entityreceived payments if the filer’s pro rata share of grossreceipts from such person was equal to or greater than$10,000. (D) Business Position Disclosure When business positions are required to be reported, a designated employee shall list the name and address of each business entity in which he or she is a director, officer, partner, trustee, employee or in which he or she holds any position of management, a description of the business activity in which the business entity is engaged, and the designated employee’s position with the business entity. (E) Acquisition or Disposal During Reporting Period In the case of an annual or leaving office statement, if an investment or an interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the statement shall contain the date of acquisition or disposal. 6.09 PROHIBITION ON RECEIPT OF HONORARIA A. No designated public official shall accept any honorarium fromany source if the member or employee would be required to report thereceipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (a), (b), and (c) of Government Code Section 89501 shall apply to the prohibitions in this section. 7 Income of a business entity is reportable if the direct, indirect, or beneficial interest of the filer and the filer’s spouse in the business entity aggregates a 10 percent or greater interest. In addition, the disclosure of persons who are clients or customers of a business entity is required only if the clients or customers are within one of the disclosure categories of the filer. -208 This section shall not limit or prohibit payments, advances, or reim-bursements for travel and related lodging and subsistence authorized by Government Code section 89506. 6.10 PROHIBITION ON RECEIPT OF GIFTS IN EXCESS OF AMOUNT ESTABLISHED BY LAW8 A. No designated public official shall accept gifts with a total value of more than the maximum amount established by law, in anycalendar year, from any single source, if the member or employee wouldbe required to report the receipt of income or gifts from that source on his or her statement of economic interests. Subdivisions (e), (f), and (g) of Government Code section 89503 shall apply to the prohibitions in this section. 6.11 LOANS TO PUBLIC OFFICIALS A. No elected officer of a state or local government agency shall,from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any officer,employee, member, or consultant of the state or local governmentagency in which the elected officer holds office or over which the elected officer’s agency has direction and control. B. No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any officer, employee, member, orconsultant of the state or local government agency in which the publicofficial holds office or over which the public official’s agency has direction and control. This subdivision shall not apply to loans madeto a public official whose duties are solely secretarial, clerical, or manual. C. No elected officer of a state or local government agency shall,from the date of his or her election to office through the date that he or she vacates office, receive a personal loan from any person whohas a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer’sagency has direction and control. This subdivision shall not apply toloans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card 8 Designated Persons are prohibited from accepting gifts from any single source in a calendar year with a total value in excess of designated amounts. See Govt. Code § 89503, sub-divisions (e), (f) and (g). [Note: Pursuant to Gov. Code § 89503(f), the FPPC adjusts the gift limit every odd-numbered year to reflect changes in the Consumer Price Index; the gift limit for the 2021 and 2022 calendar years is set at $520; therefore the gift limit will be updated in January 2023 and every odd year thereafter, until further notice. See also 2 CCR § 18940.2] -209 transaction, if the loan is made or the indebtedness created in the lender’s regular course of business on terms available to members of the public without regard to the elected officer’s official status. D. No public official who is exempt from the state civil servicesystem pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holdsoffice, receive a personal loan from any person who has a contract with the state or local government agency to which that electedofficer has been elected or over which that elected officer’s agencyhas direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtednesscreated as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender’s regularcourse of business on terms available to members of the public withoutregard to the elected officer’s official status. This subdivisionshall not apply to loans made to a public official whose duties aresolely secretarial, clerical, or manual. E. This section shall not apply to the following: 1. Loans made to the campaign committee of an elected officeror candidate for elective office. 2. Loans made by a public official’s spouse, child, parent,grandparent, grandchild, brother, sister, parent-in-law, brother-in- law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such persons, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans from a person which, in the aggregate, do not exceed five hundred dollars ($500) at any given time. 4. Loans made, or offered in writing, before January 1, 1998. 6.12 LOAN TERMS A. Except as set forth in subdivision (B), no elected officer of a state or local government agency shall, from the date of his or herelection to office through the date he or she vacates office, receive a personal loan of five hundred dollars ($500) or more, except whenthe loan is in writing and clearly states the terms of the loan,including the parties to the loan agreement, date of the loan, amount of the loan, term of the loan, date or dates when payments shall bedue on the loan and the amount of the payments, and the rate of interest paid on the loan. B. This section shall not apply to the following types of loans: 1. Loans made to the campaign committee of the elected officer. -2010 2. Loans made to the elected officer by his or her spouse,child, parent, grandparent, grandchild, brother, sister, parent-in- law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such person, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section. 3. Loans made, or offered in writing, before January 1, 1998. C. Nothing in this section shall exempt any person from anyother provision of Title 9 of the Government Code. 6.13 PERSONAL LOANS A. Except as set forth in subdivision (B), a personal loan received by any designated public official shall become a gift to thedesignated public official for the purposes of this section in thefollowing circumstances: 1. If the loan has a defined date or dates for repayment, whenthe statute of limitations for filing an action for default has expired. 2. If the loan has no defined date or dates for repayment, whenone year has elapsed from the later of the following: a. The date the loan was made. b. The date the last payment of one hundred dollars ($100) or more was made on the loan. c. The date upon which the debtor has made payments on the loan aggregating to less than two hundred fifty dollars ($250) during the previous 12 months. B. This section shall not apply to the following types of loans: 1. A loan made to the campaign committee of an elected officeror a candidate for elective office. 2. A loan that would otherwise not be a gift as defined in thistitle. 3. A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor has taken reasonable action to collect the balance due. 4. A loan that would otherwise be a gift as set forth undersubdivision (A), but on which the creditor, based on reasonable business considerations, has not undertaken collection action. Except in a criminal action, a creditor who claims that a loan is not a gift -2011 on the basis of this paragraph has the burden of proving that the decision for not taking collection action was based on reasonable business considerations. 5. A loan made to a debtor who has filed for bankruptcy and theloan is ultimately discharged in bankruptcy. C. Nothing in this section shall exempt any person from any otherprovisions of Title 9 of the Government Code. 6.14 DISQUALIFICATION No designated employee shall make, participate in making, or in any way attempt to use his or her official position to influence the making of any governmental decision which he or she knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the official or a member of his or her immediate family or on: (A) Any business entity in which the designated employee has adirect or indirect investment worth $2,000 or more; (B) Any real property in which the designated employee has adirect or indirect interest worth $2,000 or more; (C) Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course ofbusiness on terms available to the public without regard toofficial status, aggregating $500 or more in value provided to, received by or promised to the designated employeewithin 12 months prior to the time when the decision is made; (D) Any business entity in which the designated employee is a director, officer, partner, trustee, employee, or holds anyposition of management; or (E) Any donor of, or any intermediary or agent for a donor of, agift or gifts aggregating to the maximum amount established by law, or more, in value provided to, received by, orpromised to the designated employee within 12 months prior to the time when the decision is made. 6.15 LEGALLY REQUIRED PARTICIPATION No designated public official shall be prevented from making or participating in the making of any decision to the extent his or her participation is legally required for the decision to be made. The fact that the vote of a designated public official who is on a voting -2012 body is needed to break a tie does not make his or her participation legally required for purposes of this section. 6.16 DISQUALIFICATION OF STATE OFFICERS AND EMPLOYEES In addition to the general disqualification provisions of Section 6.14, no state administrative official shall make, participate in making, or use his or her official position to influence any governmental decision directly relating to any contract where the state administrative official knows or has reason to know that any party to the contract is a person with whom the state administrative official, or any member of his or her immediate family has, within 12 months prior to the time when the official action is to be taken: (A) Engaged in a business transaction or transactions on termsnot available to members of the public, regarding anyinvestment or interest in real property; or (B) Engaged in a business transaction or transactions on termsnot available to members of the public regarding the rendering of goods or services totaling in value $1000 ormore. 6.17 DISCLOSURE OF DISQUALIFYING INTEREST When a designated public official determines that he or she should not make a governmental decision because he or she has a disqualifying interest in it, the determination not to act may be accompanied by disclosure of the disqualifying interest. 6.18 ASSISTANCE OF THE COMMISSION AND COUNSEL Any designated employee who is unsure of his or her duties under this code may request assistance from the Fair Political Practices Commission pursuant to Government Code Section 83114 and 2 CCR Sections 18329 and 18329.5 or from the attorney for his or her agency, provided that nothing in this section requires the attorney for the agency to issue any formal or informal opinion. 6.19 VIOLATIONS This code has the force and effect of law. Designated employees violating any provision of this code are subject to the administrative, criminal, and civil sanctions provided in the Political Reform Act, Government Code Sections 81000 – 91015. In addition, a decision in relation to which a violation of the disqualification provisions of this code or of Government Code Section 87100 or 87450 has occurred may be set aside as void pursuant to Government Code Section 91003. -2013 6.20 PROHIBITED TRANSACTIONS Members of the Board of Directors and Designated Employees shall comply with the Prohibited Transactions policy, annexed hereto as Exhibit A, pursuant to California Government Code Sections 1090, etseq. 6.21 INCOMPATIBLE ACTIVITIES Members of the Board of Directors, District officers, and all other District employees shall comply with the Incompatible Activities policy, annexed hereto as Exhibit B, pursuant to California Government Code Sections 1126, et seq. -2014 APPENDIX OTAY WATER DISTRICT CONFLICT OF INTEREST CODE DESIGNATED POSITIONS DESIGNATED EMPLOYEES’ TITLE OR FUNCTION__ DISCLOSURE CATEGORIES ASSIGNED Members of the Board of Directors 1, 2, 3, 4, 5, 6 General Manager 1, 2, 3, 4, 5, 6 District Secretary 6 Assistant Chief of Finance 1, 2, 5, 6, 7 Chief of Administrative Services 1, 2, 3, 4, 5, 6, 7 Chief Financial Officer 1, 2, 5, 6, 7 Chief of Engineering 1, 2, 3, 4, 6, 7 Chief of Water Operations 1, 2, 3, 4, 6, 7 Associate Civil Engineer 1, 2, 3, 4, 7 Communications Officer 6 Customer Service Manager 2, 5, 7 Environmental Compliance Specialist 1, 2, 3, 4, 7 Engineering Manager 1, 2, 3, 4, 7 Field Services Manager 1, 2, 3, 4, 7 Finance Manager 2, 5, 7 GIS Manager 3, 6, 7 Human Resources Manager 3, 6 IT Manager 3, 6, 7 Network Engineer 3, 6, 7 -2015 Purchasing and Facilities Manager 2, 6 Safety and Security Specialist 1, 2, 3, 4, 6 Senior Procurement and Contracting Analyst 6 Senior Civil Engineer 1, 2, 3, 4, 7 System Operations Manager 1, 2, 3, 4, 7 Utility Services Manager 1, 2, 3, 4, 7 Consultant/New Positions9 1, 2, 3, 4, 5, 6 District Officials who manage public investments, as defined by 2 Cal. Code of Regs. § 18701 (b) are not subject to the District's Conflict of Interest Code except with respect to its disqualification provisions. They must file disclosure statements under Government Code § 87200 et seq. [2 CCR § 18730(b)(3)] These positions are listed above for informational purposes only. Individuals holding the positions listed below are officials who manage public investments and who must file their disclosure statements under Government Code Section 87200: Members of the Board of Directors General Manager Chief Financial Officer Asst. Chief Financial Officer Financial Consultants Individuals holding the above-listed positions may contact the Fair Political Practices Commission for assistance or written advice regarding their filing obligations if they believe that their position has been categorized incorrectly. The Fair Political Practices 9 Consultants/New Positions are included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code, subject to the following limitation: The General Manager may determine in writing that a particular consultant or new position, although a “designated position,” is hired to perform a range of duties that is limited in scope and, thus, not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultant’s or new position’s duties and, based upon that description, a statement of the extent of the disclosure requirements. The written determination is a public record and shall be retained for public inspection in the same manner and location as this Conflict of Interest Code (Gov. Code section 81008) Consultants are required to file disclosure statements where they: (a) conduct research and arrive at conclusions with respect to rendition of information, advice, recommendation or counsel independent of control and direction of the agency or any agency official other than normal contract monitoring; and (b) possess no authority with respect to any agency decision beyond the rendition of information, advice, recommendation or counsel. -2016 Commission makes the final determination whether a position is covered by Government Code Section 87200. Government Code Section 87200 requires that individuals holding the above-listed positions shall, each year at a time specified by commission regulations, file a statement disclosing their investments, their interests in real property and their income during the period since the previous statement filed. The statement shall include any investments and interest in real property held at any time during the period covered by the statement, whether or not they are still held at the time of filing. -2017 APPENDIX, CONTINUED DISCLOSURE CATEGORIES The disclosure categories listed below identify the types of investments, business entities, sources of income, or real property which the designated employee must disclose for each disclosure category to which he or she is assigned. Category 1: All investments and business positions in, and sources of income from, all business entities that do business or own real property in the District, plan to do business or own real property in the District within the next year or have done business or owned real property in the District within the past two years. Category 2: All interests in real property which are located in whole or in part within, or not more than two (2) miles outside the boundaries of the District. Category 3: All investments and business positions in, and sources of income from, business entities subject to the regulatory, permit or licensing authority of the Designated Employee’s Department, will be subject to such authority within the next year or have been subject to such authority within the past two years. Category 4: All investments, business positions, and sources of income from, business entities that are engaged in land development, construction or the acquisition or sale of real property in the District, plan to engage in such activities in the District within the next year or have engaged in such activities in the District within the past two years. Category 5: All investments and business positions in, and sources of income from, business entities that are banking, savings and loan or other financial institutions. Category 6: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the District. Category 7: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, or equipment of a type purchased, leased, used, or administered by the Designated Employee’s Department. -2018 EXHIBIT A Prohibited Transactions for Specified Personnel Members of the Board of Directors (“Members”) shall comply with this Prohibited Transactions policy pursuant to California Government Code §§ 1090, et seq. Members shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Members shall not be purchasers at any sale or vendors at any purchase made by them in their official capacity. Members shall not be deemed to be interested in a contract entered into by a body or board of which they are members if the Member has only a remote interest in the contract and if the fact of that interest is disclosed to the body or board of which the Member is a member and noted in its official records, and thereafter the body or board authorizes, approves, or ratifies the contract in good faith by a vote of its membership sufficient for the purpose without counting the vote or votes of the Board of Directors member with the remote interest. “Remote interest” shall be defined as in California Government Code § 1091(b). Members shall not be considered to be financially interested in a contract if their interest is including, but not limited to, any of the following (Government Code § 1091.5): 1. That of an officer in being reimbursed for his/her actualand necessary expenses incurred in the performance of an officialduty; 2. That of a recipient of public services generally provided by the public body or board of which he/she is a member, on the sameterms and conditions as if he or she were not a member of the board; 3. That of a landlord or tenant of the contracting party if such contracting party is the federal government or any federaldepartment or agency, this state or an adjoining state, any department or agency of this state or an adjoining state, anycounty or city of this state or an adjoining state, or an publiccorporation or special, judicial or other public district of this state or an adjoining state unless the subject matter of suchcontract is the property in which such officer or employee has such interest as landlord or tenant in which even his/herinterest shall be deemed a remote interest within the meaning of,and subject to, the provisions of Government Code 1091; -2019 4. That of a spouse of an officer or employee of a publicagency if his/her spouse’s employment or office-holding has existed for at least one year prior to his/her election orappointment; 5. That of a non-salaried member of a nonprofit corporation,provided that such interest is disclosed to the board at the time of the first consideration of the contract, and provided furtherthat such interest is noted in its official records; 6. That of a non-compensated officer of a nonprofit, tax-exemptcorporation, which, as one of its primary purposes, supports the functions of the board or to which the board has legal obligationto give particular consideration, and provided further that suchinterest is noted in its official records; For purposes of this paragraph, an officer is “noncompensated” even though he or she receives reimbursement from the nonprofit, tax-exempt corporation for necessary travel and other actual expenses incurred in performing the duties of his or her office. 7. That of compensation for employment with a governmentalagency, other than the governmental agency that employs the officer or employee, provided that the interest is disclosed tothe board at the time of consideration of the contract, andprovided further that the interest is noted in its official records; 8. That of an attorney of the contracting party of that of anowner, officer, employee or agent of a firm which renders, or hasrendered, service to the contracting party in the capacity of stockbroker, insurance agent, insurance broker, real estateagent, or real estate broker if these individuals have not received and will not receive remuneration, consideration, or acommission as a result of the contract and if these individualshave an ownership interest of less than 10 percent in the law practice or firm, stock brokerage firm, insurance firm or realestate firm. In addition, Members shall not be deemed to be interested in a contract made pursuant to competitive bidding under a procedure established by law if their sole interest is that of an officer, director, or employee of a bank or savings and loan association with which a party to the contract has the relationship of borrower or depositor, debtor or creditor (Government Code § 1091.5). Authority: California Government Code §§ 1090, et seq. -2020 EXHIBIT B Incompatible Activities Policy District officers, members of the Board of Directors, and all other District employees (collectively, “district personnel”) shall comply with this Incompatible Activities policy pursuant to California Government Code §§ 1125, et seq. District personnel shall not engage in any employment, activity, or enterprise for compensation which is inconsistent, incompatible, in conflict with, or inimical to his or her duties as a member of the Board of Directors, or with the duties, functions, or responsibilities of his or her appointing power or the agency by which he or she is employed. The outside employment, activity, or enterprise of district personnel is prohibited if it: (1) involves the use for private gain or advantage of his or her local District time, facilities, equipment and supplies; or the badge, uniform, prestige, or influence of his or her local District office or employment or, (2) involves receipt or acceptance by district personnel of any money or other consideration from anyone other than the District for the performance of an act which district personnel, if not performing such act, would be required or expected to render in the regular course or hours of their local District employment or as a part of their duties as a local District officer or employee or, (3) involves the time demands as would render performance of his or her duties as a local district personnel member less efficient. Nothing in this policy shall be interpreted to prohibit any outside employment, activity, counsel, or enterprise on behalf of another governmental entity, subject to common law and professional conflict of interest rules. Copies of this regulation shall be posted in prominent places at the District Office. District personnel who violate this regulation may be subject to discipline as set forth in the applicable Code of Ordinances and Policies. Board of Directors members who violate this section may be subject to censure. Disciplinary appeals by district personnel shall be handled pursuant to applicable Code of Ordinances and Policies. Authority: California Government Code §§ 1125, et seq. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: November 2, 2022 PROJECT: Various DIV. NO. ALL SUBMITTED BY: Adolfo Segura Chief of Administrative Services APPROVED BY: Jose Martinez, General Manager SUBJECT: REVIEW AND UPDATE OF BOARD OF DIRECTORS POLICY 40, ETHICS POLICY GENERAL MANAGER’S RECOMMENDATION: That the Otay Board review and update Board Policy 40, Ethics Policy. COMMITTEE ACTION: See “Attachment A.” PURPOSE: This is an action item for Board review and update consideration. ANALYSIS: The codification or organization of ordinances provides an essential framework of operating laws for an agency to function. The District’s code of ordinances contains fifty-two (52) Board adopted policies that govern how the District operates. As a standard course of action, the District reviews and updates its Board policies as needed. On January 21, 2021, AB 992 took affect by amending the Brown Act to provide clarity on the actions public officials can and cannot take on social media. Under AB 992, a public or elected official may communicate on a social media platform to answer questions, provide information to the public, or to solicit information from the public. However, via AB 992, a public or elected official “shall” not respond directly to any AGENDA ITEM 4 communication on an internet-based social media platform regarding official agency or District business. The District’s Board Policy 40, or Ethics Policy, contains language regarding Disclosure of Closed Session Matters, Disclosure of Confidential Communications, Ex Parte (On Behalf of or By an Outside Party), including that of written or oral communication; however, there is no language or reference of electronic or social media communications. The use of electronic or social media technology for public communication is a standard process for most, if not, all agencies. As a best practice, policies regarding responsible and professional use of online technology platforms have and continue to be adopted by agencies for their staff, board members, and elected officials. The previous revision of Board Policy 40, or Ethics Policy, was executed in 2001. Given the recent update to the Brown Act, via AB 992, and the absence of electronic communication language throughout the current version of Board Policy 40, staff is presenting recommended updates for Board review and consideration (see Attachment B). FISCAL IMPACT: Joe Beachem, Chief Financial Officer None. STRATEGIC GOAL: Operate the District in a financially sustainable and transparent manner. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – Recommended Updates to Board Ethics Policy 40 ATTACHMENT A SUBJECT/PROJECT: REVIEW AND UPDATE OF BOARD OF DIRECTORS POLICY 40, ETHICS POLICY COMMITTEE ACTION: The Communications, Public Relations, Legal & Legislative Committee met on October 17, 2022, to review this item. The Committee supports presentation to the full Board. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a committee approved item or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full Board. OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 1 of 3 PURPOSE To establish an Ethics Policy to define guidelines and specific prohibitions to which elected officials of the Board of Directors of the Otay Water District must conform in pursuit of their assigned duties and responsibilities to foster public respect, confidence, and trust. POLICY 1. Declaration of Policy The respected operations of democratic government emphasize that elected officials be independent, impartial, and responsible to the people. It requires that they conduct themselves in a manner above reproach. It also imposes an obligation of personal integrity that will foster public respect, confidence, and trust. This policy also outlines responsibilities and best practice recommendations for the use of electronic communication and social media by the Board and individual Board members in their capacity as elected officials. The Board of Directors is committed to open communications with its constituents via the use of available and online technologies within the limits of the law and the Brown Act. This Ethics Policy provides the following general guidelines and specific prohibitions to which elected Otay Water District Officials must conform in pursuit of their assigned duties and responsibilities. 2. Disclosure of Closed Session Matters No member of the Otay Water District Board shall disclose to any person, other than members of the Board, General Manager, or other District staff designated by the General Manager to handle such matters of confidential District business, the content or substance of any information presented or discussed during a closed session meeting unless the District Board President first authorizes such disclosure by the affirmative vote of three (3) members or the majority. 3. Disclosure of Confidential Communications Except when disclosure is mandated by State or Federal law, no member of the District Board shall disclose confidential or ATTACHMENT B OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 2 of 3 privileged communications to any person other than members of the Board, General Manager, or other District staff designated by the General Manager to handle such matters, unless the Board of Directors first authorizes such disclosure by the affirmative vote of three (3) members or the majorityof the Board of Directors. 4. Conduct During Negotiations/Litigation The Board of Directors is authorized to provide direction to specifically identified negotiators in a legally constituted closed session on matters involving pending litigation, real estate negotiations and labor negotiations. If the Board of Directors, in closed session, provides such direction to its negotiators, all contact with the negotiating party or party’s representative shall be limited to and made by those individuals designated to handle the negotiations. During a pending labor negotiation, no member of the District Board shall have any contact or discussion with the negotiating party or the party’s representative regarding the subject matter of the pending negotiation. In addition, during litigation or real estate negotiations, no member of the District Board (unless they have been designated as a negotiator) shall have any contact or discussion with the litigating or negotiating party or the party’s representative regarding the subject matter of the pending litigation or real estate negotiations. Nothing in this section shall prohibit Board members from receiving written or electronic communications provided they are made available to all Board members, the General Manager, or the District’s designated negotiators on an equal basis. 5. Ex Parte Communications The purpose of this provision is to guarantee that all interested parties to any matter before the Board have equal opportunity to express and represent their interests. Ex parte communications are those communications members of the Board have with representatives of only one side of a matter outside the presence of other interested parties. Any type of communication concerning only the status of a pending matter shall not be regarded as an ex parte communication. Any written, electronic (including social media), or oral ex parte communication received by a member of the Board in matters where all interested parties are entitled to an equal opportunity OTAY WATER DISTRICT BOARD OF DIRECTORS POLICY Subject Policy Number Date Adopted Date Revised ETHICS POLICY 40 11/27/01 Page 3 of 3 for a hearing, shall be made a part of the record by the recipient. a. Social Media or Online Technology Communications Definition “Social Media” are third-party hosted online technologies that facilitate social interactions and dialogue. These online technologies are operated by non-District hosted services and may include, but are not limited to social networking sites (Twitter, Facebook, LinkedIn, Instagram, Myspace), micro-blogging tools (Twitter, RSS feeds), audiovisual networking sites (YouTube, Flickr), blogs, etc. b. Social Media or Online Technology General Usage Social media may be used by the Board and/or individual board members to communicate with the public. Directors shall make every effort to ensure that their electronic communications conform to the same standards and protocols established for other forms of communication (Government Code Section 54952.2, Assembly Bill 992, Brown Act, District ordinances, etc.) which includes but is not limited to: applicable record retention laws; the use of digital icons and reactions as means of communication; blocking accounts or access, etc. The content and tenor of online conversations, discussions, and information posts should model the same professional behavior displayed during Board or community meetings. To the extent possible, electronic communications regarding any district-related business shall be transmitted through a district approved account. Examples of business that may not be conducted through unapproved social media include but are not limited to: making policy decisions, official public noticing, and discussing items of legal or fiscal significance that have not previously been released to the public. 6. Violations and Penalties Any violation of this Ethics Policy by a member of the Board shall constitute official misconduct if determined by an affirmative vote of three (3) members or the majority of the Board in an open and public meeting. In addition to any criminal or civil penalties provided by the Federal, State, or other local law, any violation of the Ethics Policy shall constitute a cause for censure by the Board of Directors adoption of a Resolution of Censure.