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HomeMy WebLinkAbout19 Res 2021-33 - Electronic SignaturesMEETING DATE: PREPARED BY: REQUEST: Recommendation STAFF REPORT CITY OF PALM DESERT FINANCE DEPARTMENT June 10, 2021 Janet Moore, Director of Finance/City Treasurer Lori Carney, Director of Administrative Services By Minute Motion approve and adopt Resolution No. 2021-33 allowing for the use of electronic signatures and authorizing the City Manager to establish an Electronic Signature Policy. Waive further reading and adopt Resolution No. 2021-33 allowing for the use of electronic signatures and authorizing the City Manager to establish an Electronic Signature Policy. Background Analysis The City has always had a vital interest in reducing paper, increasing the efficient use of public resources, and ensuring the security and authenticity of City electronic records, including electronic signatures. More importantly now that the COVID-19 global pandemic has led to many disruptions in business processes, it has become crucial to allow the use of electronic signature technology. Prior to the State ordered shutdown, the City was utilizing electronic signatures sparingly on internal documents when original signatures were infeasible or the time sensitive nature required a rapid response. The City still required manual signatures on contracts and official records. Since then, the City has had to utilize electronic signatures in order to conduct day-to-day business during the times that in -person meetings were not allowed to ensure staff's and the public's safety. Because of this, staff sees that electronic signatures will be a necessity going forward as business practices have radically changed. California's "Uniform Electronic Transactions Act" ("UETA") regulates the use of electronic signatures. The attached Resolution will provide the City with the option to use electronic signatures when permitted by law in lieu of manual signatures. To ensure the consistency in the implementation for the City's use of electronic signatures, staff believes a City policy is also necessary. The Resolution also authorizes the City Manager to establish and maintain such a policy. Staff, along with legal counsel have drafted an Electronic Signature Use Policy ("Policy") (Exhibit A to the Resolution). The Policy establishes guidelines for the use and acceptance of electronic signatures used to conduct business with both the City's internal and external customers. June 10, 2021 - Staff Report Electronic Signature Policy Resolution No. 2021-33 Page 2 of 2 Electronic signatures have varying forms, however, formal external documents that are intended to be legally binding will require the signatures to be a 'digital signature'. The digital signature has an electronic identifier, created by computer, that has the same force and effect as the use of a manual signature and may include a certification by a third party. Internal documents and approvals will follow the Policy to ensure that the approval is made by an appropriate staff member, however, they are not required to have certifications. It is expected that allowing the use of electronic signatures will provide efficiencies in many areas including turnaround time, the use of public resources, and cost savings both to the City and the customer. The City may encourage the use and acceptance of electronic signatures in internal and external documents during emergencies, City Hall closures, or times when public health restrictions are in place. With that in mind, the use and acceptance of electronic signatures is, at all times, at the option of the City and may be restricted in their use to be when operationally feasible. Fiscal Analysis The City has existing licenses for software that has this technology and integrates with our other suite of software. Staff will, however, be upgrading to the version that will allow additional functions and add to the safety and security of this process at a minimal cost (less than $7,500 per year). LEGAL REVIEW Craig 7fayes for Robert W. Hargreaves City Attorney DEPT. REVIEW Lori Carney Lori Carney Director of Admin. Services Janet M. Moore Director of Finance City Manager L. Todd Hileman: L. Todd Fti,Levu.aw Attachment: Resolution No. 2021-33 CITY COUNCIL, j TION APPROVED v DENTED RECEIVED OTHER FINANCIAL REVIEW ASSISTANT CITY MANAGER .Andy Firestine Andy Firestine Assistant City Manager MEETING DATE 0 t 11L4 AYES: ►-{a►�►l�� oi�C tt��n11v8To Y pi.Iaman lhicl-kelly NOES: m� ABSENT: V Y1� ABSTAIN: IV an e VERIFIED BY: M &r S / 5 5 Original on File with City Clerk's Office RESOLUTION NO. 2021-33 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPROVING THE ESTABLISHMENT OF AN ELECTRONIC SIGNATURE USE POLICY WHEREAS, the City seeks to establish an Electronic Signature Use Policy to implement guidelines for the use and acceptance of electronic signatures used to conduct business in the City; and WHEREAS, the City wishes to allow the use of electronic signatures in lieu of manual signatures, when permitted by law, and establish when an electronic signature may replace a manual signature; and WHEREAS, the City has a vital interest in reducing the waste of paper, increasing the efficient use of public resources, and ensuring the security and authenticity of City of electronic records, including electronic signatures; and WHEREAS, the City desires to formalize its electronic signature policy; and WHEREAS, the City Council has been presented with a draft Electronic Signature Use Policy in the form attached to this Resolution as Exhibit "A" and by this reference incorporated herein. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The above recitals are true and correct. Section 2. The City Manager is hereby authorized to establish and periodically review and update the Electronic Signature Use Policy. Section 3. The Electronic Signature Use Policy shall be added to the Administrative Procedures as Policy No. CMGR-001. Section 4. This Resolution shall take effect immediately upon adoption. Section 5. The City Manager, or her designee, are hereby authorized, jointly and severally, to do all things which they deem necessary or proper in order to effectuate the purposes of this Resolution and the transactions contemplated hereby; and any such actions previously taken by such officers are hereby ratified, confirmed and approved. Section 6. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. RESOLUTION NO. 2021-33 PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm Desert City Council held on this 10th day of June, 2021, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: KATHLEEN KELLY, MAYOR ATTEST: M. GLORIA SANCHEZ, ACTING CITY CLERK CITY OF PALM DESERT, CALIFORNIA APPROVED AS TO FORM: ROBERT W. HARGREAVES, CITY ATTORNEY BEST, BEST & KRIEGER, LLP Page 2of2 Subject Policy No. Date Approved by CITY OF PALM DESERT ADMINISTRATIVE PROCEDURES ELECTRONIC SIGNATURE USE POLICY Authored by I. PURPOSE. CMGR — 001 Issued: Resolution No. 2021-33 Establishing an Electronic Signature Policy Finance Department/Legal Counsel The City seeks in this Electronic Signature Use Policy ("Policy") to implement guidelines for the use and acceptance of electronic signatures used to conduct business with and within the City. This Policy allows the use of electronic signatures in lieu of manual signatures, when permitted by law, and establishes when an electronic signature may replace a manual signature. The City has a vital interest in reducing the waste of paper, increasing the efficient use of public resources, and ensuring the security and authenticity of City electronic records, including electronic signatures. The use of electronic signature technology will allow the City to collect and preserve signatures on documents quickly, securely, and efficiently. II. LEGAL BACKGROUND. California has adopted statutes regulating the use of electronic signatures including California Civil Code section 1633.1 et seq., otherwise known as the "Uniform Electronic Transactions Act" ("UETA") and California Government Code section 16.5. This Policy and the guidelines and procedures included hereunder are intended to comply entirely with all applicable laws and regulations including, without limitation, the aforementioned statutes. To the extent that any procedure, policy, or guideline contained herein conflicts with applicable law, City staff, officials, and agents and all other persons subject to this Policy are required and expected to comply with the requirements of the applicable law(s). III. DEFINITIONS. A. "Approved List of Certification Authorities" means the list of Certification Authorities approved by the California Secretary of State to issue certification for digital signature transactions involving public entities in California. The current Approved List of Certification Authorities can be found at the following address: https://www.sos.ca.gov/administration/requlations/current- reaulations/technology/digital-signatures/approved-certification-authorities/. 72500.00001 \33 840020.1 Administrative Procedures Manual Electronic Signature Policy Page 2 of 6 B. "Certification Authority" means a person or entity that issues certification for a digital signature transaction. C. "Digital signature" means an electronic identifier, created by computer, intended by the party using it to have the same force and effect as the use of a manual signature. A digital signature is a type of electronic signature. D. "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. E. "Electronic record" means a record, file, or document created, generated, sent, communicated, received, or stored by electronic means. An electronic record generally contains information or a data file that was created and stored in digitized form through the use of computers, machines, and software applications. F. "Electronic signature" means an electronic sound, symbol, or process, attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record. G. "Electronically signed record" means a record, file, or document that has been signed by means of an electronic signature. H. "External document" means any document generated by or required to be signed by persons other than the City. Examples of external documents include contracts to which the City is a party that must be signed by a non -City party or applications completed by the members of the public and submitted to the City. I. "Internal document" means a form or document created by the City and for use exclusively by the City in which a signature is required or used. J. "Manual signature" means an original wet signature applied to a document. K. "Transaction" means an action or set of actions occurring between two or more persons relating to the conduct of business, commercial, or governmental affairs. IV. GENERAL POLICY RULES. The City encourages the use and acceptance of electronic signatures in internal and external documents when it is operationally feasible, where technology permits, and permitted by law. A. Compliance with Law, Policy. To the extent permitted by law and this Policy, the City accepts electronic signatures as legally binding. -2- 72500.00001 \33 840020.1 Administrative Procedures Manual Electronic Signature Policy Page 3 of 6 B. Use Optional. The use or acceptance of electronic signatures shall be at the option of the non -City signatories. Nothing in this policy shall require the City to use or permit the use of electronic signatures. C. Consent. All parties that wish to use electronic signatures shall agree to follow this Policy, shall provide written or electronic consent as to the use of electronic signatures, and shall agree to indemnify the City against any liability associated with electronically transmitting an electronically signed record. D. Internal City Business. 1. The City requires that various internal documents be approved by an employee, supervisor, department head, or other City staff and approvals for internal documents may be signified by an electronic signature as a replacement for a manual signature. 2. If an electronic signature is used for internal documents that create or impose a legal or fiduciary duty, a digital signature may be required, as determined by the City Manager, or designee. 3. The use by the City of electronic records, electronic signatures, and digital signatures for internal City business, including internal documents, shall be in accordance with this Policy and administrative procedures as designated and amended from time to time by the City Manager, or designee. E. External Documents and Transactions. 1. The security requirements for electronic signatures range from simple to the more complex, depending upon the level of transaction. The following are the classes of documents permitted for electronic signature as amended from time to time by the City Manager, or designee. The list is not intended to be an exhaustive list, nor does it impose electronic signature as a requirement for any particular transaction. The City will only accept electronic signatures that comply with requirements of this Policy. a. Contracts and Amendments b. Grant Documents c. Applications d. Invoices e. Certificates and Permits, as allowed by law f. Correspondence 2. Design professionals, such as architects and engineers, who wish to use an electronic signature and whose manual signature is required for -3- 72500.00001 \33 840020.1 Administrative Procedures Manual Electronic Signature Policy Page 4 of 6 submittal of hard copy plans, will be required to obtain and use a digital signature key for electronically submitted plans. 3. If an electronic signature is used for an external document involving a transaction with the City which creates or imposes a legal duty, such as a contract or amendment, it shall be a digital signature. F. Documents for Which Electronic Signatures are Prohibited. 1. Civil Code section 1633.3 contains a list of transactions for which electronic signatures are not available. 2. Unless otherwise allowed, documents that are recorded with the County of Riverside must contain a manual signature. G. Valid Electronic Signatures. When a manual signature is required, the parties may agree that an electronic signature satisfies that requirement if: 1. The signature is in accordance with the requirements of the UETA; 2. The signature is created using an electronic signature technology that has been approved by the City Manager, or designee, in accordance with the provisions of this Policy; and 3. The signature is in accordance with any and all other applicable laws and regulations. H. Valid Digital Signatures. 1. Digital signatures used in compliance with this Policy shall have the same force and effect as the use of a manual signature provided that the digital signature has all of the following attributes: a. It is unique to the person using it; b. It is capable of verification; c. It is under the sole control of the person using it; d. It is linked to data in such a manner that if the data are changed, the digital signature is invalidated; and e. It conforms to the regulations adopted by the Secretary of State including, but not limited to, the acceptable technology requirements set forth under Title 2, Division 7, Chapter 10, Section 22003 of the California Code of Regulations. -4- 72500.00001 \33 840020.1 Administrative Procedures Manual Electronic Signature Policy Page 5 of 6 2. The Certification Authority issuing the certification for the digital signature transaction must appear on the Approved List of Certification Authorities. 3. Prior to accepting a digital signature, City staff shall ensure that the level of security used to identify the signer of a document is sufficient for the transaction being conducted, that the level of security used to transmit the signature is sufficient for the transaction being conducted, and that the certificate format used by the signer is sufficient for the security and interoperability needs of the City. Minimum Standards. These are minimum standards. Any transaction must be analyzed under the facts and circumstances existing at the time a transaction has been executed. Depending upon the circumstances, the City may require a higher level of signature verification (i.e. out-of-state signatory). Nothing in this Policy prohibits a City official or employee, with the consent from the City Manager, from requiring a wet signature or higher form of secure electronic signature if he or she believes it is prudent or necessary. J. Acceptable Electronic Signature Technologies. The City Manager, or designee, shall identify the level of security procedures required for internal documents and external documents and also identify vendors and technology to execute those security procedures using industry best practices. K. Notaries. This Policy shall comport with California Civil Code section 1633.11(a) which states, "If a law requires that a signature be notarized, the requirement is satisfied with respect to an electronic signature if an electronic record includes, in addition to the electronic signature to be notarized, the electronic signature of a notary public together with all other information required to be included in a notarization by other applicable law." L. Penalty of Periurv. This Policy shall comport with California Civil Code section 1633.11(b) which states, "In a transaction, if a law requires that a statement be signed under penalty of perjury, the requirement is satisfied with respect to an electronic signature, if an electronic record includes, in addition to the electronic signature, all of the information as to which the declaration pertains together with a declaration under penalty of perjury by the person who submits the electronic signature that the information is true and correct." M. Further Acts. Nothing in this Policy shall prevent the City Manager, or designee, from adopting additional guidelines or taking further actions to implement this Policy or to add other permissible forms of electronic signatures to this Policy. -5- 72500.00001 \33 840020.1 Administrative Procedures Manual Electronic Signature Policy Page 6 of 6 V. SANCTIONS. A. Any person that makes inappropriate, illegal, or fraudulent use of electronic signatures, digital signatures, or electronic records in violation of this Policy or of any applicable law or regulation is subject to sanctions up to and including dismissal, suspension, and criminal prosecution as specified in published City policies or ordinances and State law, regardless of whether such sanctions are directly referenced in this Policy. All inappropriate, illegal, or fraudulent uses of any electronic means of transmission shall be prosecuted to the fullest extent permitted by law, including the recovery of attorneys' fees and administrative costs. -6- 72500.00001 \33 840020.1