And they certainly have a better funded capital program.

So at this time they don't see our rating going up to hit San Diego's A plus.

But they do note that we are managing our capital budget extremely well and getting more of our surplus revenue into capital.

So congratulations to us all.

And that concludes my report.

Thank you.

I would just is there any public comment on the executive director's report.

Commissioners, any comments?

I would just like to congratulate our director for being one of the San Francisco Business Times most influential women this year.

So congratulations and I hope you have a wonderful, wonderful time at the ceremony.

Thank you so much.

Item 9B informational presentation by the city attorney's office regarding conflicts of interest and misconduct.

A general overview of the law.

Good afternoon.

Is that okay?

Okay.

This, of course, is no substitute for the legally required annual training that you all undergo.

So this is more in the spirit of being a brief refresher on some of these topics.

And I just want to sort of quickly move through some common scenarios.

Of course, I'm free to please feel free to jump in and ask questions as I'm going through this brief presentation.

And definitely always feel free to give me a call at any time if you have any questions about any of these topics.

I'm fairly easy to get a whole hold of through either Michelle or Director Forbes.

Please feel free to reach out at any time.

So a I'm gonna go through five very brief scenarios this afternoon.

So the first is a scenario in which a commissioner uh spouses or partner works for a nonprofit organization seeking a grant from the department, subject to a competitive bidding process.

This grant is subject to the commission's approval.

Question here is is there any conflicts?

Is there any issues that the commissioner should be aware of?

Answer is yes.

There are certainly some conflict of interest rules or uh guidelines to keep in mind.

The first is that, as you all know, recusals from particular government decisions are triggered by financial interests.

So things such as um organizations or entities, even a nonprofit organization that employs a commissioner's or official spouse or partner is something that can trigger conflict of interest.

And in general, con when there is a conflict of interest, recusal is required.

And I should stress that this is especially true for contracts.

Conflict of interest laws regarding contracts, grants, agreements, MOEs are very, very strict with severe remedies and severe consequences for all involved.

Um in addition, um I should also say that serving as a board member of a nonprofit organization.

So in this hypothetical, I'd had posed that the spouse or partner had worked for the nonprofit organization question.

But serving as a board member, even a volunteer board member some kinds can sometimes trigger these conflict of interest rules as well.

Uh so if you're ever in a situation ro roughly analogous to that, please check in with me.

And the last point I want to make is that in this scenario, I had posed that this was this grant or this agreement was subject to a competitive bidding process.

The simple fact that a grant or agreement is subject to competitive bidding process does not automatically cure any potential conflicts.

Now, competitive bidding is important for its own reasons, but it does not necessarily cure all ethics issues that could arise in these kinds of circumstances.

So quickly moving on to my second scenario, uh a gift scenario involving a business lunch.

So let's imagine a contractor doing business with your department invites you out to lunch to share her thoughts about oncoming projects or things on the horizon for your department or commission.

And let's say the contractor offers to pick the bill up for lunch.

Any ethics concerns?

Yes.

No surprise.

Um there are certain concerns that comes up with gifts.

And there's a wide array of laws, rules, exceptions to rules that come up with gifts.

But here are some of the basic ones that come up.

Uh, under local law, we have established something called the restricted source rule, which generally prohibits any gifts worth more tworth more than $25 from anyone doing business with your department or commission or seeking to personally lobby you within the past 12 months.

So that hypothetical I just described, the contractor that was offering to pick up the bill would be a restricted source, and anything that that contractor offer would be presumptively subject to this $25 gift limit.

In addition to that, as you were all aware as Form 700 filers, you also have certain gift reporting obligations.

Any gift worth more than $50 or a cumulative series of gifts worth more than $50 over a calendar year also must need to be reported on your Form 700.

Now there are certain common sense gift exceptions, such as gifts from family members that you don't need to report.

Now there are certain common sense gift exceptions, such as gifts from family members that you don't need to report, but this kind of gift or lunch is something that clearly would be subject to disclosure on the Form 700.

A couple of other sort of questions?

Of course.

But if you should each pick up your own tab for lunch, that's exactly absolutely correct.