Brown Act’s “Committee Exception” Does Not Apply To Special Meetings

March 2019
Number 18

A California appellate court has focused on the distinction between a regular meeting and a special meeting of the local legislative body when considering an exception to public comment under the Ralph M. Brown Act (Brown Act). In Preven v. City of Los Angeles (Preven), the Second District Court of Appeal found that the City of Los Angeles had improperly relied on the Brown Act’s “committee exception” to stop public comment during a special meeting regarding a topic that had properly been addressed by a committee composed of City Council members.

Background Information

The Brown Act requires that public agencies provide the public with an opportunity for participation in the legislative process. At a regular meeting, the public has the opportunity to comment on not only agenda items, but also any item within the subject matter jurisdiction of the public agency. During a special meeting, on the other hand, the governing body may limit public comment to only the items described on the agenda.

The Brown Act’s public comment requirement is found at Government Code section 54954.3. Subdivision (a) of that statute sets forth the “committee exception” and specifically references regular meetings:

However, the agenda need not provide an opportunity for members of the public to address the legislative body on any item that has already been considered by a committee, composed exclusively of members of the legislative body, at a public meeting wherein all interested members of the public were afforded the opportunity to address the committee on the item, before or during the committee’s consideration of the item, unless the item has been substantially changed since the committee heard the item, as determined by the legislative body.

Preven specifically focused on whether the exception applies to special meetings as well as regular meetings. The appellant in Preven filed a lawsuit against the City of Los Angeles after the City, citing the “committee exception,” had denied appellant the opportunity to comment at a special city council meeting because he had already spoken at a regular meeting of the City Council’s Planning and Land Use Committee the night before. The trial court ruled that the committee exception applied to both special meetings and regular meetings. The trial court reasoned that appellant had been afforded the opportunity to discuss the agenda item at the committee meeting the night before, and therefore could be barred from comment at the special meeting addressing the same agenda item.

On appeal, the appellate court found the trial court’s holding in error. It held that, pursuant to the plain language of Government Code section 54954.3(a), the “committee exception” does not apply to special meetings at all. The public is entitled to comment at special meetings even where the agenda item was covered at a prior committee meeting.

Takeaways

In light of this decision, a public agency subject to the Brown Act must take care in denying public comment pursuant to the “committee exception.” This exception only applies to regular meetings, and only applies to items which were previously discussed by a committee made up of board or council members, where the public was allowed to address the committee on those same items. The purpose of the Brown Act is to facilitate public participation with local government decisions, and improperly denying public comment could produce an adverse result.

If you would like more information about the decision in Preven or have any questions relating to exceptions to the Brown Act generally, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter and LinkedIn or download our mobile app.

Written by:

William P. Curley III

Partner

Matthew M. Lear

Associate

©2019 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

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PERB Decision Provides Guidance Addressing “Public Hearing” Requirement

March 2019
Number 17

In a recent decision, the Public Employment Relations Board (PERB) addressed the public hearing requirement an agency must satisfy before implementing its last, best, and final offer (LBFO), after completing applicable impasse procedures. In City of Yuba City (2018) PERB Dec. No. 2603-M, PERB upheld an administrative law judge decision dismissing an unfair practice charge brought against the City of Yuba City (City) by Public Employees Union Local 1 (Local 1) alleging violation of the Meyers-Milias-Brown Act (MMBA).

Background

Local 1 alleged that the City unlawfully failed to hold a public hearing before imposing a LBFO in violation of section 3505.7 of the MMBA. Government Code section 3505.7 provides that after completing any applicable impasse procedures, and no earlier than 10 days after the parties receive the factfinding report, the agency “may, after holding a public hearing regarding the impasse, implement its [LBFO]….” This case marks the first time PERB has considered violation of the public hearing requirement as a potential standalone violation of the MMBA.

Local 1’s allegations specifically charged that, by identifying the item on the City Council’s agenda as “Local 1 imposition,” rather than as a public hearing regarding the impasse, and by focusing on the need to impose terms rather than on the disputed issues, the City failed to follow the statutory procedures prescribed by the MMBA.

In rejecting this argument, PERB noted that the agenda and staff report described the parties’ bargaining history, and notified the public that the parties had reached impasse and exhausted impasse procedures. Additionally, the union admitted it had the opportunity to prepare for the Council meeting and had received the agenda and staff report. Further, the Mayor “opened up the public hearing” during the public portion of the meeting. Based upon these facts, PERB concluded that the City had satisfied section 3505.7’s requirement to conduct a public hearing regarding the impasse.

Local 1 also argued that the City did not intend to hold a public hearing regarding the impasse because (1) the “Local 1 imposition” item did not appear on the agenda where public hearings were required to be listed per the City’s local rules and (2) the City failed to provide adequate notice required under the Brown Act of a public hearing regarding the impasse. PERB also rejected this argument on the basis that the City had adequately informed the public that the City Council would be considering imposing the LBFO and the opportunity for public comment had been provided.

In other words, the fact the item was not described as a “public hearing” on the agenda at a particular location on the agenda did not establish a violation of section 3505.7’s public hearing requirement under the facts. Rather, PERB clarified that section 3505.7’s public hearing requirement is satisfied when the agency (1) provides adequate notice to the public that it intends to consider imposing terms and conditions on employees (the LBFO) and (2) allows public comment concerning the proposed imposition of the LBFO.

Takeaways

While the PERB’s decision was dependent upon the facts in this case, there are some important takeaways:

  1. After completing impasse procedures and before imposing an LBFO, agencies should ensure that section 3505.7’s public hearing requirements are met. To reduce exposure to similar claims, the agenda should clearly describe the item as a “public hearing regarding impasse pursuant to Government Code section 3505.7,” or words to that effect. Local rules pertaining to agenda requirements (e.g. location of hearings on agenda and timely posting, etc.) should be followed. Please note the Educational Employment Relations Act does not appear to have a similar public hearing requirement.
  2. The staff report should describe the parties’ bargaining history, impasse, and compliance with applicable impasse procedures.
  3. The item should be considered and deliberated upon in open session during a regular meeting in which public comment is invited.
  4. The government agencies should ensure the union is provided with sufficient time to prepare for the public hearing by ensuring the agenda is timely posted and all documents supporting the agenda item are timely provided to the union.

For more information about this decision or about labor law questions in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also subscribe to our podcast, follow us on Facebook, Twitter and LinkedIn or download our mobile app.

Written by:

Jenell Van Bindsbergen

Partner

Meera H. Bhatt

Associate

©2019 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Records Owned And Held By A Third Party Are Not Public Records Even If A Public Agency Has A Right To Access Such Records

March 2019
Number 16

A recent California appellate court ruling has clarified the reach of the California Public Records Act (CPRA). InAnderson-Barker v. City of Los Angeles, the Second District Court of Appeal held that records in the possession of a third party contractor under a contract with the City of Los Angeles were not subject to the CPRA where the city had access to but did not actually possess or control the records.

Background

In Anderson-Barker, the plaintiff sought to compel the city to disclose electronically stored data relating to vehicles that private towing companies had impounded as directed by Los Angeles Police Department per a contractual agreement. The city had access to this information but did not control the data stored, nor did it control the databases on which it was stored. The city argued that the requested data did not qualify as “public records” under the CPRA because the city did not possess or control the data. Recent amendments to the contract with the third party contractors expressly stated that the data was “owned” by the contractors. The trial court ruled in favor of the city, and the Court of Appeal
affirmed that decision.

Analysis

The court focused on the issue of possession to decide whether the data in question must be produced under the CPRA. Prior state and federal cases (the latter addressing the Freedom of Information Act) had held that records are considered in possession or “constructive possession” of a public entity if they have “the right to control the records.” The court, particularly following federal cases, held that constructive possession does not apply when the entity only has access to the data: “[t]o conclude otherwise, would effectively transform any privately-held information that a state or local agency has contracted to access into a disclosable public record.”

The court further explained why this case does not reach the same result as the California Supreme Court’s decision inCity of San Jose v. Superior Court (2017) 2 Cal.5th 608. At issue in City of San Jose was a CPRA request for “all electronic information relating to public business, sent or received by [mayor and council members] using his or her private electronic devices” related to a city-involved real estate matter. The California Supreme Court ruled that such records were subject to the CPRA. (See 2017 Client News Brief No. 11.) The City of San Jose court, focusing on the definition of “public record,” held that a record does not lose its “public record” status simply because of its location on a public employee’s personal account. The Anderson-Barker court focused on a CPRA requirement distinct from the definition of “public record,” that the record must be in the possession or control of the agency, ultimately finding that the City of Los Angeles did not have possession or control of the record because the record was with a third party. The city had only access to the records, and the court concluded that access does not satisfy the requirement of possession or control. However, the court also explained that data actually extracted from the database by the governmental agency and used for a governmental purpose might be disclosable.

Anderson-Barker thus creates a distinction between documents in possession of an employee or official versus documents controlled by a third party contractor. The former will generally be subject to the CPRA, while the latter generally will not.

Takeaways

Under Anderson-Barker, members of the public may not have a right to access records in the possession of a third party contractor. An agency or its employees or officials must control, and not merely have access to records, in order for the records to be subject to mandatory production under the CPRA. Public agencies may wish to address the structure of document control through contractual arrangements with third party contractors, allowing the agency to decide who controls records for purposes of CPRA production.

If you have any questions about theAnderson-Barker v. City of Los Angeles decision or the California Public Records Act in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Harold M. Freiman

Partner

©2019 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Bid Thresholds Raised For 2019

January 2019
Number 4

According to the California Department of Education Office of Financial Accountability and Information Services, pursuant to Public Contract Code section 20111(a), the bid threshold for K-12 school districts’ purchases of equipment, materials, supplies and services (except construction services) has been adjusted to $92,600, effective January 1, 2019. The notice may be viewed here.

The California Community Colleges Chancellor’s Office is expected to announce a similar adjustment to the bid threshold for community college districts’ purchases of equipment, materials, supplies and services (except construction services), pursuant to Public Contracts Code section 20651(a), sometime in the next few days. Once released, that information will be available here.

The bid limit for construction projects remains at $15,000.

The bid thresholds for cities, counties and special districts are not affected by the bid limits discussed above.

On a related note, the Legislature increased the bid limits under the California Uniform Public Construction Cost Accounting Act (CUPCCAA), effective January 1, 2019. (See 2018 Client News Brief No. 47) The increase in the bid limits affects school districts, cities, counties and all other public entities that have adopted CUPCCAA.

For more information on the new bid limits or bidding in general, please contact the author of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Ruth E. Mendyk

Partner

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

New Law Limits School District Collection of Debts from Students and Penalties for Debts

December 2018
Number 85

The California Legislature recently passed Assembly Bill (AB) 1974, which places new prohibitions and restrictions on the collection of debt owed by parents to public schools, including state special schools and charter schools, and school districts, including county offices of education (all referred to herein as school districts). The new law prohibits the practice of punishing students for the failure of their parents to pay debt owed to the school district, adds additional requirements for the collection of student debt, prohibits the sale of such debt, and allows school districts to offer alternative, nonmonetary forms of payment to settle the debt. Importantly, the new law will not impact existing law regarding the imposition of charges for willfully damaged school property or failing to return loaned school property, or the consequences of not paying those charges.

Background

Parents are responsible for the fees and debts incurred by their minor child. School districts can no longer take negative actions against students for their parents’ failure to pay debt. While parents may still be held accountable for the failure to pay permissible student fees (such as fees for transportation to and from school), the student cannot. Schools districts are now barred from imposing the following consequences as a result of the unpaid debt:

  • Denying full credit for any assignments for a class;
  • Denying full and equal participation in classroom activity;
  • Denying access to on-campus educational facilities, including, but not limited to, the library;
  • Denying or withholding grades, transcripts, or a diploma;
  • Limiting/barring participation in an extracurricular activity, club, or sport; and
  • Limiting or excluding from participation in an educational activity, field trip, or school ceremony.

Significantly, the new restrictions do not apply to “debt owed as a result of vandalism or to cover the replacement cost of public school or school district books, supplies, or property loaned to a pupil that the pupil fails to return or that are willfully cut, defaced, or otherwise injured.” This exception relates directly to Education Code section 48904, which permits the imposition of charges under such circumstances, and so long as adequate due process is provided to the student, authorizes the withholding of grades, diploma, and transcripts of a student where the charge has not been paid. The above exception does not apply to a student who is a current or former homeless youth, or current or former foster youth. As such, school districts must ensure against imposition of consequences against these categories of students, even where the debt is imposed for school property which is not returned or willfully damaged.

AB 1974 imposes the following requirements when collecting the debt from parents owed to the school district:

  • Provide an itemized invoice for any amount owed by the parent or guardian before pursuing payment of the debt;
  • Provide a receipt to the parent or guardian or former student for each payment made to the school or district for any amount owed by the parent or guardian on behalf of the student or former student; and
  • The invoice must include references to school policies relating to debt collection and the rights established under Education Code sections 49014 and 49557.5.

In addition, the school district may offer the student or former student, with the permission of the parent or guardian, alternative, nonmonetary forms of compensation to settle the debt. This alternative must be voluntary and conform to all Labor Code provisions. Further, a school district is prohibited from selling the debt owed by a parent or guardian. Finally, the school district may still contract with a debt collection agency to collect the debt, but the debt collection agency cannot report the debt to a credit agency.

Takeaways

When AB 1974 goes into effect on January 1, 2019, public schools, including state special schools and charter schools, school districts, and county offices of education, will not be able to take negative actions against a student, or former student, for debts owed by the student’s parent or guardian-with the exception of debt imposed as a result of vandalism or for failure to return school property, which is itself limited relative to current or former homeless youth, or current or former foster youth. As school districts and county offices of education look forward to 2019, a review of existing debt-collection practices is recommended, which may lead to the need to modify, establish or eliminate existing policies
and practices to ensure compliance with this new law.

For more information about AB 1974 or about school fees in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Legislature Further Limits the Ability to Consider Expunged, Dismissed, or Sealed Convictions in Hiring Decisions

December 2018
Number 84

Senate Bill (SB) 1412, which takes effect on January 1, 2019, builds on prior law limiting consideration of expunged, dismissed, or sealed convictions in hiring decisions. SB 1412 prevents employers from requiring job applicants to disclose certain criminal convictions that have been expunged, dismissed, sealed, or statutorily eradicated. SB 1412 also provides that employers may only consider particular expunged convictions that are enumerated in the law when making hiring decisions. Exceptions to this prohibition remain for employers-like public school districts and certain other public agencies-that are prohibited from hiring individuals with certain convictions even if the conviction has been dismissed, expunged, or sealed.

Background

In recent years, the Legislature has focused on limiting the types of convictions that may be considered by employers when making hiring decisions. For example, in 2016, AB 1843 was passed generally prohibiting employers from seeking or using information about an applicant’s juvenile convictions in hiring decisions. (See 2016 Client News Brief No. 86.)

Separate from the use or consideration of juvenile convictions in hiring, existing law prevents employers from requiring applicants to disclose convictions that have been expunged, dismissed, or sealed, subject to several exceptions. These exceptions include situations where: (1) the employer is required by law to obtain information regarding an applicant’s convictions; (2) the applicant is applying for a job that would require him to possess or use a firearm; (3) the law prohibits an individual convicted of a crime from holding the position, even if the conviction is expunged, sealed, or dismissed; or (4) the law prohibits the employer from hiring an applicant who has been convicted of a crime. Aside from the above exceptions, once a conditional offer of employment has been made to an applicant, an employer may consider an expunged, dismissed, or sealed conviction.

Since January 1, 2018, California’s Fair Employment and Housing Act also prohibits similar conduct, with specified exemptions. (See 2017 Client News Brief No. 80; 2016 Client News Brief No. 86.)

Under the above legal protections for job applicants, concerns were raised that employers have been broadly rejecting applicants with expunged convictions, regardless of the nature of these convictions or their relevance to the job or future job performance. With SB 1412, the Legislature narrows the aforementioned exceptions so employers may only consider expunged, dismissed, sealed, or statutorily eradicated convictions that are enumerated in the law. Specifically, this bill provides that employers may only consider such convictions if: (1) the employer is required by law to obtain information regarding the particular conviction of the applicant, regardless of whether the conviction has been expunged, sealed, dismissed, or statutorily eradicated; (2) the applicant would be required to possess or use a firearm in the course of his or her employment; (3) the law prohibits an individualwith that particular conviction from holding the position sought, regardless of whether the conviction has been expunged, sealed, dismissed, or statutorily eradicated; or (4) the employer is prohibited by law from hiring an applicantwho has that particular conviction, regardless of whether that conviction has been expunged, sealed, dismissed, or statutorily eradicated.

Takeaways

Employers should note that the Legislature has instituted additional protections for the consideration of expunged convictions in the applicant screening process. Under the SB 1412, employers can only ask an applicant about or consider expunged, sealed, or dismissed convictions to the extent permitted by law; they cannot simply withdraw an offer merely because an applicant has a conviction that was dismissed, expunged, or sealed. Keep in mind that public school employers are prohibited from hiring individuals convicted of certain crimes, even if such convictions have been dismissed, expunged, or sealed. The laws concerning the use of criminal convictions in hiring public school staff is highly technical and should be carefully reviewed before making a hiring decision based on a conviction, even if it has been dismissed, expunged, or sealed.

If you have any questions about SB 1412, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Gabriela D. Flowers

Partner

Benjamin Brown

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

SEC: Bank Loans and Other Private Placements to Trigger 10-Day Continuing Disclosure Reporting

November 2018
Number 82

The Securities Exchange Commission’s (SEC) Rule 15c2-12 requires that an issuer of publicly offered municipal securities, such as bonds or certificates of participation, commit to disclosing certain material events that occur while those securities are outstanding. Now, the SEC has added two new items to the list of events requiring disclosure. They are: (1) an incurrence of a material financial obligation, or an agreement to events of default, remedies, priority rights, or other similar terms of a financial obligation, if material; and (2) events occurring in connection with a separate financial obligation that reflect financial difficulties of the issuer (e.g., default, event of acceleration, termination event, modification of terms, etc.). All such material events must be disclosed within 10 days.

In other words, the existence of a private financing unrelated to the securities, such as a vehicle lease financing, or solar panel lease purchase agreement, or any event resulting from those unrelated financings that suggests “financial difficulties,” must be reported.

What is a “financial obligation”?

The term “financial obligation” is defined as (i) a debt obligation; (ii) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) a guarantee of either of the foregoing. Esoteric jargon aside, the term “financial obligation” is commonly read to include private bank loans and other private and direct purchases, municipal leases, capital lease financings, and other types of financial obligations of the issuer. Municipal securities for which a final official statement has already been provided to the Municipal Securities Rulemaking Board (MSRB) are not included in the definition of “financial obligations.” Thus, going forward, issuers must now disclose any new, non-publicly offered loans and equipment financings to the owners of their outstanding publicly-available municipal securities.

The new requirements take effect on February 27, 2019, and are meant to increase disclosure of an issuer’s potential or actual financial difficulties.

Although issuers who adhere to standards of the Governmental Accounting Standards Board and its generally accepted accounting principles likely already include such financial obligations in preparing audited annual financial statements, now such items must be disclosed contemporaneously. All such “material events,” under the Rule, must be disclosed within 10 days of occurrence, by filing notice with the MSRB’s Electronic Municipal Market Access (EMMA).

The absence of meaningful guidance from the SEC regarding which financial obligations are considered “material” under the amendments and, thus, trigger a disclosure requirement, will pose a challenge for issuers.

Agencies who have issued publicly available securities, such as bonds or certificates of participation that remain outstanding, and plan to incur a new financial obligation, such as a capital lease or private bank loan, should consult with counsel to determine whether such event must be disclosed

Lozano Smith serves as bond and disclosure counsel to school districts, community colleges, and other public agencies throughout California and would be happy to provide guidance regarding these developments. If you have any questions regarding initial or continuing disclosure compliance, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Daniel Maruccia

Partner

Kate S. Holding

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.