Santa Paula City Council

The Council did not violate the Brown Act with regard to the Special Meeting of May 13, 2010. (FA-03)

The Council acted within applicable law in its use of enterprise funds generated by the City Refuse Department. (FA-06 and FA-07)

The Council elected to accept a WWTP proposal that was $22 million higher and at a higher monthly cost to ratepayers than the competing proposal. This decision was made contrary to City Manager and staff recommendations. (FA-08 through FA-10, FA-12, FA-13, and FA-15)

The Council did not adequately or reasonably justify their decision in public to award the WWTP contract to the higher-cost vendor. Nor did the Council address the selection of a firm with substantially less experience in the design, construction, and operation of MBR type WWTPs. (FA-08 through FA-13)

The Council compelled itself to make the WWTP contract award decision on the deadline date set by the regulatory agency. (FA-14)

Council members complied with State of California and City requirements for completing campaign contribution disclosure forms. Allegations that Council votes were influenced by campaign contributions were not substantiated. (FA-17 through FA-20)

During the vote on the awarding of the City Refuse contract, some Council members did not announce their receipt of campaign contributions from one of the vendors. (FA-18, FA-19, FA-21, and FA-22)

Council members are inconsistent in complying with City requirements for prior approval of trips relating to City business. (FA-23 through FA-24)

No substantiation was found to support allegations of improper procedure in awarding the refuse contract to a private vendor. (FA-06) 6 Santa Paula City Council Recommendations

The staff report addressed the financing proposals of the competing vendors. Veolia’s proposal offered financing of the project with a short- term construction loan financed through private activity bonds, while helping the City secure a State allocation for tax-exempt debt. PERC offered to provide 30-year fixed-rate private financing. The staff report recommended the Veolia plan as it provided “. . . the best financial option to the City . . .” [Ref-02 and Ref-03]

The Council majority voiced concern with the uncertainty of the bond market associated with the Veolia proposal. They feared that the interest rates might rise, and adding another bond issue to the City’s indebtedness might lead to a lower City credit rating. [Ref-03]

The City Manager stated that, historically, rising bond rates should not present a significant risk. Under the Veolia proposal, bonds could be refinanced at a lower rate. [Ref-03]

PERC and Veolia each submitted a revised Best and Final Offer (BAFO) by the previous Thursday’s deadline. However, the Council allowed PERC to amend its BAFO verbally at the April 15, 2008 Council meeting. Veolia stated that it had met the deadline, stood by its proposal, and objected to the manner in which verbally revised BAFOs were presented at this meeting. [Ref-03]

The Council recognized that they were facing the deadline date of April 15, 2008 set by the regulatory agency. Fines of $10,000 per day were to be assessed if a decision to award the WWTP contract was not made in the time specified. [Ref-03]

On April 15, 2008, the Council awarded the WWTP contract to PERC, contrary to the recommendations of City staff and the City Manager. [Ref-02 and Ref-03]

In addition to the potential for alleged financial risk associated with the Veolia proposal, majority Council members offered the following reasons for awarding the WWTP contract to PERC, with insufficient or no supporting data to quantify and offset cost differences: • the Veolia design lacked redundancy for screens and grit removal 4 Santa Paula City Council • the Veolia plan consumed more electrical energy • the Veolia proposal would have resulted in added costs associated with the purchase of public bonds, including administrative costs and refinancing fees • the PERC design had a smaller footprint, providing more land for future use • the PERC design for the building was aesthetically superior • the PERC proposal offered a recreational vehicle dump station [Ref-03]

In order to ensure ethical behavior by public officials and to promote transparency in government, the California Political Reform Act of 1974 (PRA) mandates periodic reporting by public officials. Among the required reports are Statement of Economic Interests Form 700, and Recipient Committee Campaign Statement and Monetary Contributions Received Form 460. To administer this mandate, the law established the FPPC. [Ref-05 and Ref-13]

City Resolution No. 6697 certifies that the City adopted the FPPC Conflict of Interest Code in its Resolution dated September 20, 2010. Members of the Council are covered by this policy. [Ref-10]

The City regulations regarding conflicts of interest state, in part, “. . . public identification [financial interest in the decision] shall be made orally and shall be made part of the public record . . . [and] . . . the public identification shall be made . . . following the announcement of the agenda item to be discussed or voted on but before the discussion or vote commences. . . .” [Ref-10, and Ref-12]

Council members filed Forms 700 and Forms 460 as required by law. Review of Forms 700 and Forms 460 and comparison to voting records alone, disclosed no evidence to indicate that Council member votes were influenced by campaign contributions.

Two Council members’ Forms 460 showed monetary campaign contributions from a refuse disposal firm actively engaged in business with the City. One of these Council members cast his vote for a firm that contributed to his campaign and was competing for the refuse contract.

The public record did not reflect that Council members made any open disclosure of a possible conflict of interest during debates on the awarding of the City refuse contract, even though members received campaign contributions from one of the firms.

The Council operates under a conflict of interest code which is reviewed annually and supplements requirements of the PRA. Accountability is required by City policy regarding “gifts of travel.” City officials are required to obtain approval from the Council prior to any trips which may Santa Paula City Council 5 involve City affairs. Travel expenses paid by the City or by third persons require specific prior Council approval. [Ref-05, Ref-10, and Ref-11]

In November 2010, a Council member attended a conference in Washington, D.C. without prior approval at third party expense. At this conference, the member was recognized as a representative of the City and “City of Santa Paula” appeared on the list of conference participants. The event was attended by major industries and universities, as well as by local, state, and federal agencies. A record of the Council member’s expenses was reflected in his Form 700. Findings