CC 2020-07-14_11b Introduce Ordinance_FPPC Electronic Filing
MEMORANDUM
TO: CITY COUNCIL
FROM: KELLY WETMORE, DIRECTOR OF LEGISLATIVE AND INFORMATION
SERVICES/CITY CLERK
SUBJECT: CONSIDERATION OF INTRODUCTION OF AN ORDINANCE RELATED
TO ELECTRONIC FILING AND ADMINISTRATION OF FAIR POLITICAL
PRACTICES COMMISSION CAMPAIGN DISCLOSURE STATEMENTS
AND STATEMENT OF ECONOMIC INTERESTS FORMS
DATE: JULY 14, 2020
SUMMARY OF ACTION:
Introduction of an Ordinance implementing electronic filing and administration of Fair
Political Practices Commission (FPPC) campaign disclosure statements and statements
of economic interest (Form 700).
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Electronic filing provides significant cost savings by reducing staff time required for the
tracking, scanning, redacting, and posting of campaign disclosure statements and the
tracking of Form 700 filers. The City received a proposal from NetFile, Inc. earlier this
year in the amount of $3,570 per year for its electronic filing system. However, in response
to COVID19 and the resulting budget constraints and expenditure freezes, as well as
acknowledgment of the FPPC’s effort strongly encouraging cities to implement and utilize
electronic filing, NetFile has offered to provide its service at no cost to cities for up to 15
months, and with no set-up fees. In addition, at no obligation to the City, NetFile will pre-
pay the FPPC filing fee of $1,000, which is required from every agency prior to
implementation of an electronic filing system. Therefore, there would be no fiscal impact
to the City in FY 2020-21. Beginning in 2020-21, the annual cost would be funded from
the Department’s existing contractual services budget, which includes funds for records
management services.
RECOMMENDATION:
It is recommended the City Council introduce an Ordinance adding Chapter 2.06 to Title
2 of the Arroyo Grande Municipal Code relating to electronic filing of campaign statements
and statements of economic interests.
BACKGROUND:
On January 1, 2013, Assembly Bill 2452 went into effect adding Government Code
section 84615 of the Political Reform Act of 1974 which allows a local government agency
to require online or electronic filing for an elected officer, candidate, committee, or other
person who is required to file statements, reports, or other documents under the Political
Item 11.b. - Page 1
CITY COUNCIL
CONSIDERATION OF INTRODUCTION OF AN ORDINANCE RELATED TO
ELECTRONIC FILING OF FAIR POLITICAL PRACTICES COMMISSION CAMPAIGN
DISCLOSURE STATEMENTS AND STATEMENTS OF ECONOMIC INTERESTS
JULY 14, 2020
PAGE 2
Reform Act, so long as the filer receives contributions or makes expenditures totaling two
thousand dollars ($2,000) or more in a calendar year. Since passage, many local
government agencies throughout California have chosen to enact paperless filing as a
courtesy to their campaign filers, to increase staff efficiency, and to help reduce the use
of paper. Further, the FPPC supports and encourages efforts to move from a paper-based
reporting system to a more transparent electronic system.
For the City of Arroyo Grande to accept electronically filed campaign statements, the City
Council must adopt an ordinance requiring the use of an online or electronic filing system.
The Statement of Economic Interests (Form 700) electronic filing component does not
require an ordinance by law to implement; however, it is recommended the City Council
adopt electronic filing of Form 700 by ordinance to require filers to submit the form
electronically to ensure compliance with timely filing and improve accuracy in filed
statements.
The law prescribes criteria that must be satisfied by a local government agency to require
online or electronic filing of statements, reports, or other documents, which include the
following:
The system must ensure the integrity of the data and include safeguards
against efforts to tamper with, manipulate, alter or subvert the data;
The system must only accept a filing in the standardized record format
developed by the Secretary of State and compatible with the Secretary of
State’s system for receiving an online or electronic filing;
The system must be available free of charge to filers and to the public for
viewing filings.
ANALYSIS OF ISSUES:
The City Clerk is the local filing officer for campaign disclosure statements filed by
candidates, committees, and officeholders, as well as for statements of economic
interest (commonly known as Form 700) filed by designated public officials, employees,
and consultants. The Clerk currently receives all campaign disclosure forms and Form
700 from filers in paper format and is responsible for the tracking, reviewing, redacting,
scanning, storing, and making these documents available to the public for review. In the
interest of increased efficiency for filers and staff, decreased paper use, and increased
transparency to the public, it is recommended that the City implement electronic filing
for campaign disclosure statements and Form 700.
Earlier this year, the City Clerk was presented with a proposal from NetFile offering a
product discount for its electronic filing system after attending the League of California
Cities New Law and Election Seminar. Due to the ensuing COVID-19 pandemic and
associated financial constraints faced by California cities, NetFile has since offered to
provide its electronic filing system to cities at no cost for up to 15 months. The annual
cost to the City after this period would remain at the original discounted proposal
($3,570/year) for a five-year period. While some jurisdictions have contracted with
Item 11.b. - Page 2
CITY COUNCIL
CONSIDERATION OF INTRODUCTION OF AN ORDINANCE RELATED TO
ELECTRONIC FILING OF FAIR POLITICAL PRACTICES COMMISSION CAMPAIGN
DISCLOSURE STATEMENTS AND STATEMENTS OF ECONOMIC INTERESTS
JULY 14, 2020
PAGE 3
vendors for custom system development, the majority have contracted with NetFile.
NetFile offers additional features and services which are not offered by other vendors,
including various public viewing portal features; free, unlimited training for the filer and
the agency; a 100% web-based hosted environment ensuring data security and storage;
the ability for Form 700 filers to file across several jurisdictions through one log-in point;
a mobile app for Form 700 filers; and tracking modules for ethics and harassment
prevention training. NetFile’s e-filing and administration system for campaign disclosure
and Form 700 is currently used by 170 local government agencies in California, including
the County of San Luis Obispo. If electronic filing is implemented for the City,
Councilmembers would have the ability to utilize one system to file their Form 700 for
multiple positions held within the County.
Security
NetFile is a web-based vendor-hosted application that utilizes “industry best practices”
for securing data, using the same encryption for online filings that is used by banks for
online banking. NetFile stores and back up data at three separate locations, creating the
essential safety measures and redundancy that will allow for recovery of information in
the event of an emergency or disaster. The City’s data will be retained for the required
minimum 10-year period pursuant to Government Code section 84651(a).
Efficiency
As mentioned above, all campaign statements and Form 700’s are currently filed with
the City Clerk in hard copy. The City has approximately 65 filers that are required to file
an annual Form 700, as well as several Assuming Office and Leaving Office statements
throughout the year as designated filers transition in and out of their respective positions.
The City Clerk also accepts campaign statements from candidates, campaign
committees and ballot measure committees. Filings are tracked in a spreadsheet and
notifications are sent individually to filers through a manual process. Paper filings require
manual processes such as scanning, redacting personal information, auditing for errors
and omissions, and maintaining hard copy records. All manual processes completed by
the City Clerk would be automated, resulting in considerable savings of staff time. In
addition, the use of an electronic filing system has shown to increase compliance and
timely filing, likely due to the automated reminders and messaging programmed into the
system. There would also be a decrease in the number of amendments submitted,
attributable to system guidance as each section of disclosure forms are completed to
ensure information is not omitted. Lastly, the system retains information from one filing
to the next, decreasing the time it takes for filers to input information.
Transparency
The NetFile system incorporates a public portal available on the City’s website, providing
24-hour access to redacted campaign disclosure statements in real-time as soon as
submitted by the filer. This promotes transparency by allowing the public to view
electronically filed campaign disclosure statements online immediately, instead of
waiting until staff has performed the manual processes outlined above. In certain
instances, the NetFile system will also increase the accuracy of filed campaign
Item 11.b. - Page 3
CITY COUNCIL
CONSIDERATION OF INTRODUCTION OF AN ORDINANCE RELATED TO
ELECTRONIC FILING OF FAIR POLITICAL PRACTICES COMMISSION CAMPAIGN
DISCLOSURE STATEMENTS AND STATEMENTS OF ECONOMIC INTERESTS
JULY 14, 2020
PAGE 4
statements by prohibiting any filings that may have inadvertently omitted required
information under the Act (e.g. missing addresses or the stated occupation of individual
donors).
Training
To accommodate the transition from paper to electronic filing, NetFile offers extensive
one-on-one training with filers. The same will apply to candidates and treasurers during
elections and post-election. Training will include set-up of filer accounts, explaining the
online process, how to input data and save reports, prepare statements for e-signature,
and finalizing statements to e-file. Electronic filing would be required upon the effective
date of the proposed ordinance.
In conclusion, electronic filing makes is easier for officials to comply with reporting
obligations and provides the public with information in a more accessible and consistent
format. Electronic filing will also result in less paper being printed and handled, a change
consistent with the City’s ongoing goal to reduce paper file storage. Based on the
information presented, staff believes that the proposed electronic filing system will
operate securely and effectively and would not unduly burden filers, supporting the
findings required to approve the use of electronic filing.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
1. Introduce the Ordinance;
2. Modify and introduce the Ordinance or
3. Provide direction to staff.
ADVANTAGES:
Adoption of the proposed Ordinance will enable campaign disclosure and Form 700
statements to be filed electronically, providing more accuracy in filed statements,
providing public access to statements through the City’s website, permitting a single filing
for multiple offices held, and significantly reducing or eliminating paper handling and
tracking.
DISADVANTAGES:
Some filers may resist converting from filing paper copies of statements to electronic filing
due to perceived technical learning curves; however, feedback received from other City
Clerks who have implemented electronic filing indicate that after filers receive training and
start using the system, there is an increased preference for filing documents
electronically.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
Item 11.b. - Page 4
CITY COUNCIL
CONSIDERATION OF INTRODUCTION OF AN ORDINANCE RELATED TO
ELECTRONIC FILING OF FAIR POLITICAL PRACTICES COMMISSION CAMPAIGN
DISCLOSURE STATEMENTS AND STATEMENTS OF ECONOMIC INTERESTS
JULY 14, 2020
PAGE 5
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Item 11.b. - Page 5
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE ADDING CHAPTER 2.06 (ELECTRONIC
FILING) TO TITLE 2 (ADMINISTRATION AND PERSONNEL)
OF THE ARROYO GRANDE MUNICIPAL CODE RELATING
TO ELECTRONIC FILING OF CAMPAIGN STATEMENTS
AND STATEMENTS OF ECONOMIC INTERESTS
WHEREAS, Government Code Section 84615 currently provides that a local agency may
adopt an Ordinance to require an elected officer, candidate, committee, or other person
required to file statements, reports, or other documents required by Chapter 4 of the
Political Reform Act (commencing with Section 84100 of the Government Code), except
an elected officer, candidate, committee, or other person who receives contributions
totaling less than $2,000 and who makes independent expenditures totaling less than
$2,000 in a calendar year, to file those statements, reports, or other documents online or
electronically with the local filing officer; and
WHEREAS, the City of Arroyo Grande intends to enter into an agreement with NetFile,
Inc., a vendor approved by the California Secretary of State, to provide an online
electronic filing system (“System”) for campaign disclosure statements and statements of
economic interest forms; and
WHEREAS, the System will operate securely and effectively and will not unduly burden
filers. Specifically: (1) the System will ensure the integrity of the data and includes
safeguards against efforts to tamper with, manipulate, alter, or subvert the data; (2) the
System will only accept a filing in the standardized record format developed by the
Secretary of State and compatible with the Secretary of State’s system for receiving an
online or electronic filing; and (3) the System will be available free of charge to filers and
to the public for viewing filings; and
WHEREAS, the City of Arroyo Grande desires to amend Title 2 of the Arroyo Grande
Municipal Code (Administration and Personnel) to add a new Chapter relating to
electronic filing of campaign and conflict of interest statements.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES
ORDAIN AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein by this
reference.
SECTION 2. Chapter 2.06 is hereby added to Title 2 (Administration and Personnel) of
the Arroyo Grande Municipal Code to read as follows:
Chapter 2.06 ELECTRONIC FILING
2.06.010 – Electronic filing of campaign statements and statements of economic
interests.
Item 11.b. - Page 6
ORDINANCE NO.
PAGE 2
a. Any elected officer, candidate, committee or other person required to file
statements, reports or other documents required by Chapter 4 of the Political
Reform Act (commencing with Section 84100 of the Government Code), shall file
such documents online or electronically with the City Clerk, unless exempt from
the requirement to file online pursuant to Government Code section 84615(a)
because the elected officer, candidate, committee or other person receives
contributions totaling less than two thousand dollars ($2,000) and makes
expenditures totaling less than two thousand dollars ($2,000) in a calendar year.
b. Any person holding a position listed in Government Code Section 82700 or
designated in the City’s local conflict of interest code adopted pursuant to
Government Code section 83700 shall file any required Statement of Economic
Interest reports (Form 700) electronically with the City Clerk.
c. Filings set forth in Sections 2.06.010(a) and 2.06.010(b) which are filed and
received electronically with the City Clerk are not required to also be filed with the
City Clerk in paper format. An electronic filing will be the official record of such
filing. Filers must sign electronic filings in the system under penalty of perjury.
d. In any instance in which an original statement, report or other document must be
filed with the California Secretary of State and a copy of that statement, report or
other document is required to be filed with the City Clerk, the filer may, but is not
required to, file the copy electronically.
e. If the City Clerk’s electronic system is not capable of accepting a particular type of
statement, report or other document, an elected officer, candidate, committee or
other person shall file that document with the City Clerk in an alternative format.
SECTION 3. The City Council finds, pursuant to Title 14 of the California Code of
Regulations, Section 15378(b)(5), that this ordinance is exempt from the requirements of
the California Environmental Quality Act (CEQA) in that it is a governmental,
organizational or administrative activity that will not result in direct or indirect changes in
the environment.
SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is
for any reason held to be invalid or unconstitutional by a decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining portions
of this Ordinance. The City Council hereby declares that it would have passed this
Ordinance and each and every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether any portion of the ordinance
would be subsequently declared invalid or unconstitutional.
SECTION 5. A summary of this Ordinance shall be published in a newspaper published
and circulated in the City of Arroyo Grande at least five (5) days prior to the City Council
meeting at which the proposed Ordinance is to be adopted. A certified copy of the full text
of the proposed Ordinance shall be posted in the office of the City Clerk. Within fifteen
(15) days after adoption of the Ordinance, the summary with the names of those City
Item 11.b. - Page 7
ORDINANCE NO.
PAGE 3
Council members voting for and against the Ordinance shall be published again, and the
City Clerk shall post a certified copy of the full text of such adopted Ordinance.
SECTION 6. This Ordinance shall take effect and be in full force and effect thirty (30)
days after its passage.
On motion by ___________________, seconded by ___________, and by the following
roll call vote to wit:
AYES:
NOES:
ABSENT:
the foregoing Ordinance was adopted this __ day of July, 2020.
Item 11.b. - Page 8
ORDINANCE NO.
PAGE 4
______________________________________
CAREN RAY RUSSOM, MAYOR
ATTEST:
______________________________________
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
______________________________________
BILL ROBESON, ACTING CITY MANAGER
APPROVED AS TO FORM:
______________________________________
TIMOTHY J. CARMEL, CITY ATTORNEY
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