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Home > News > News Articles > 2020 > November > FPPC revises “public generally” exception for officials with potential conflicts of interest
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FPPC revises “public generally” exception for officials with potential conflicts of interest

November 18, 2020
City officials now have greater clarity about when a governmental decision will have an “indistinguishable” effect on the public generally, which may permit participation in a decision despite a potential conflict of interest.
The Fair Political Practices Commission (FPPC) recently amended Regulation 18703, which explains how the “public generally” exception applies to conflicts of interest. The change is intended to make it easier to identify potential conflicts of interest. Beginning Nov. 18, Regulation 18703 will expand the exception in instances where the only relevant interest is a city official’s primary residence and clarify application of the exception to special circumstances.

Under the Political Reform Act, city officials may not make, participate in making, or attempt to influence a governmental decision if it is reasonably foreseeable that the decision will have a material financial effect on the official that is different from its effect on the public generally. Regulation 18703 elaborates on the “public generally” exception, providing: “A governmental decision’s financial effect on a [city] official’s financial interest is indistinguishable from its effect on the public generally if the official establishes that a significant segment of the public is affected and the effect on the official’s financial interest is not unique compared to the effect on the significant segment.”
The FPPC generally uses a 25 percent threshold to determine what constitutes a “significant segment of the public.” Specifically, the 25 percent threshold applies when considering the following: businesses or non-profit entities within the official’s jurisdiction; real property, commercial real property, or residential real property within the official’s jurisdiction; and individuals within the official’s jurisdiction.
The FPPC revised Regulation 18703 to create a lower “significant segment” threshold for certain residential real property interests. Under the revised regulation, a city official may participate in a governmental decision affecting the official’s primary residence if 15 percent — rather than 25 percent — of residential real property within the official’s jurisdiction is affected by the governmental decision in an indistinguishable way.
The FPPC also revised Regulation 18703 as it applies in special circumstances, as follows:  
  • Public Services and Utilities. The revised regulation clarifies that a city official may not participate in a decision to impose an assessment, tax, fee, or utility rate, or determine the property or persons subject to an assessment, tax, fee, or utility rate, if the decision would have a material impact on the official’s financial interests. However, a city official may participate in setting or adjusting the amount of the assessment, tax, fee, or utility rate, so long as such charges are applied equally, proportionally, or by the same percentage to the official and all others subject to the assessment, tax, fee, or utility rate. 
  • Limited Neighborhood Effects. Under the revised regulation, a city official may participate in decisions to establish, amend, or eliminate ordinances that restrict on-street parking, impose traffic controls, deter vagrancy, reduce nuisance, or improve public safety, even if the ordinance only affects residential real property in a specific location and includes the city official’s real property, provided that: the decision affects more than 50 properties, or five percent of the residential real properties in the city, in an indistinguishable way; and the city gathers sufficient evidence to support the need for the action at the specific location. 
  • Rental Properties. Under the revised regulation, city officials may participate in decisions affecting the respective rights or liabilities of tenants and owners of residential rental property, including decisions regarding rent control or tenant protections, if: the decision applies to all residential rental properties within the city except those exempted by the Costa-Hawkins Rental Housing Act; the official owns three or fewer residential rental units; and the only interests affected by the decision are the official’s interests in the residential property as a landlord or tenant.  
City officials who have questions about how newly amended Regulation 18703 affects them should contact their city attorney for advice.

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