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HomeMy WebLinkAbout7.1 Campaign Contributions Urgency Ordor 19 82 /ii � 111 DATE: TO: FROM: SUBJECT STAFF REPORT CITY COUNCIL September 2, 2014 CITY CLERK File # 630 -20 Honorable Mayor and City Councilmembers Christopher L. Foss, City Manager " Adoption of Urgency Ordinance and Introduction of an Ordinance amending Section 2.28.030 of the Dublin Municipal Code Relating to Campaign Contributions Prepared by John D. Bakker, City Attorney EXECUTIVE SUMMARY: At the August 19, 2014 City Council meeting, the City Council directed the City Attorney's Office to draft an amendment to Section 2.28.030 of the Dublin Municipal Code that would allow candidates to transfer funds between campaign accounts but require the transferred funds to be attributed to specific contributors for the purposes of the $500 limit on contributions with respect to the receiving campaign account. The City Attorney's Office has prepared two ordinances, an urgency ordinance and a regular ordinance, consistent with the City Council's direction. FINANCIAL IMPACT: 1101 RECOMMENDATION: Staff recommends that the City Council either: 1) Waive the reading of and adopt, by a four - fifths vote, an Urgency Ordinance Amending Section 2.28.030 of the Dublin Municipal Code; and waive the reading of and INTRODUCE an Ordinance Amending Section 2.28.030 of the Dublin Municipal Code; or, 2) Waive the reading of and INTRODUCE an Ordinance Amending Section 2.28.030 of the Dublin Municipal Code. DESCRIPTION: Chapter 2.28 of the Dublin Municipal Code (the Code) prohibits any one person from contributing more than $500 to a candidate with respect to a single election, and it prohibits candidates and committees from accepting such contributions. To ensure compliance with state and federal law, the City Council amended Chapter 2.28 in 2009 to expressly allow a candidate to transfer funds from one campaign account to another if both campaigns are controlled by the same candidate. As currently written, the transfer provision of Chapter 2.28 allows contributors to contribute, and candidates to accept, more than $500 to a candidate with respect to a single election. Under the current provision, any contributions made to a candidate and deposited into an original Page 1 of 3 ITEM NO. 7.1 campaign fund are not treated as contributions if transferred to a second campaign. For example, a contributor may contribute $500 to a candidate's campaign for a future election, and the candidate can transfer the funds to a campaign fund for a different campaign. Although the transferred funds could be attributed to the contributor, under the current Municipal Code provisions, he or she could contribute an additional $500 to a second campaign. At its August 19, 2014 meeting, the City Council discussed this issue and directed the City Attorney to return with proposed urgency and non - urgency ordinances that would allow candidates to transfer funds between campaign accounts but require the transferred funds to be attributed to specific contributors for the purposes of the $500 limit on contributions with respect to the receiving campaign account. Staff chose to follow the approach to inter - campaign transfers that applies to transfers to state candidate controlled accounts under the Political Reform Act. Government Code Section 85306 (Attachment 3) permits inter - campaign transfers but imposes certain accounting rules and uses those rules to ensure contributions do not exceed statutory contribution limits. Our review of other local agency campaign contribution limits disclosed that most did not explicitly deal with transfers and that those that did also borrowed the state approach. Using this approach, the attached ordinances would amend Section 2.28.030 to provide as follows with respect to transfers: A candidate may transfer campaign funds from one committee controlled by the candidate to a campaign committee for elective city office controlled by the same candidate. Contributions transferred shall be attributed to specific contributors using a "last in, first out" or "first in, first out" accounting method, and these attributed contributions when aggregated with all other contributions from the same contributor shall not exceed the limits set forth in subsection A of this section [$500]. A committee transferring funds must designate in its records at the time of its first transfer whether it elects the "last in, first out" or a "first in, first out" method of accounting for the current and future transfers. This designation is irrevocable. Candidates and committees shall comply with the accounting, recordkeeping and disclosure requirements set forth in section 18536 of Title 2 of the California Code of Regulations, except that references therein to state contribution limits shall be deemed to refer to the requirements of this chapter. The prohibitions stated in this subsection shall not apply to contributions made by a candidate to his or her campaign. The Fair Political Practices Commission regulation referenced, section 18536 (Attachment 4), imposes certain accounting, record keeping, and disclosure requirements on transfers. To comply with the accounting methods, candidates would use campaign records already required pursuant to state campaign disclosure laws, and would follow procedures already established by the Fair Political Practices Commission. As an example, assume a candidate has $650 left over in his or her account and the end of a campaign and he or she wishes to transfer that amount to another campaign fund for a subsequent election. Under the "last in, first out" approach, the $650 is attributed to the first donors. That is, if Contributors A and B were the first and second contributors to the campaign, respectively, and each contributed $500, then Contributor A could not contribute to the subsequent campaign, and Contributor B could contribute $350. Under the "first in, first out" approach, the $650 is attributed to the last donors. If Contributors A and B were the second -to -last and last contributors, respectively, Contributor A Page 2 of 3 could contribute $350 to the subsequent campaign, and Contributor B could not contribute anything. The attached ordinances do not impact the overall ability of campaign committees to transfer money. This is important because transfers may receive heightened constitutional protection as a type of campaign "expenditure." (Buckley v. Valeo (1976) 424 U.S. 1, 28 -29, 45; Services Employees International, AFL -CIO v. Fair Political Practices Commission (1992) 955 F.2d 1312, 1322.) The ordinances would, however, extend the $500 contribution limit to circumstances in which candidates transfer funds between campaign accounts. As a restriction only on contributions, the amended Section 2.28.030 would be consistent with state and federal constitutional protections of free speech and association, which protect contributions less stringently than expenditures. (Buckley, 424 U.S. at 28 -29, 45.) The attached ordinances would also allow a candidate who contributes money to his or her own campaign to transfer funds to another of his or her campaigns without limitation. Chapter 2.28 currently allows unlimited self - funding with regard to individual campaigns accounts, and the amended provision would extend this policy to transfers. Regular ordinances must, by state law, be introduced and adopted at separate meetings of city councils. Moreover, such ordinances may not take effect sooner than thirty days after their adoption. Because the City is less than three months away from a municipal general election and, absent an immediate change to the Code, candidates and contributors may accelerate campaign contributions and inter - campaign transfers in order to gain an advantage in the election before a regular ordinance could take effect, the City Council may want to consider adopting an urgency ordinance at tonight's City Council meeting. If the City Council chooses to do so, staff recommends that the City Council adopt the urgency ordinance and introduce a regular ordinance at tonight's meeting. Although Staff believes that sufficient grounds exist for an urgency ordinance, Staff prepared a non - urgency ordinance out of an abundance of caution. The urgency ordinance would be effective immediately. The non - urgency ordinance would be adopted at a subsequent regular meeting (anticipated to be September 16, 2014) and effective 30 days thereafter. The non - urgency ordinance will supersede the urgency ordinance when it goes into effect. The mechanics of this "dual ordinance" procedure will ensure that only those charged with violating the ordinance during the time between the effective date of the urgency ordinance and the non - urgency ordinance could challenge the urgency findings. NOTICING REQUIREMENTS /PUBLIC OUTREACH: The Agenda for this evening's City Council meeting was posted and published pursuant to applicable state law. Special public notice is not required to adopt an Urgency Ordinance. ATTACHMENTS: 1. An Urgency Ordinance of the City of Dublin Amending Section 2.28.030 of the Dublin Municipal Code Relating to Campaign Contributions 2. An Ordinance of the City of Dublin Amending Section 2.28.030 of the Dublin Municipal Code Relating to Campaign Contributions 3. Government Code Section 85306 4. California Code of Regulations, Title 2, Section 18536 Page 3 of 3 ORDINANCE NO. AN URGENCY ORDINANCE OF THE CITY OF DUBLIN AMENDING SECTION 2.28.030 OF THE DUBLIN MUNICIPAL CODE RELATING TO CAMPAIGN CONTRIBUTIONS The City Council of the City of Dublin does hereby ordain as follows: Section 1. Section 2.28.030 of the Dublin Municipal Code is hereby amended to read as follows: "2.28.030 Limitations on contributions. A. No person shall make any contribution or contributions to a candidate or committee which exceeds the cumulative amount of five hundred dollars ($500), nor shall any such contribution or contributions which exceed the cumulative amount of five hundred dollars ($500) be accepted by any candidate or committee from any person with respect to a single election. B. The prohibitions stated in subsection A of this section shall not apply to contributions made or received in support of, or in opposition to, a ballot measure, nor shall said prohibitions apply to contributions made by a candidate to his or her campaign. C. A candidate may transfer campaign funds from one committee controlled by the candidate to a campaign committee for elective city office controlled by the same candidate. Contributions transferred shall be attributed to specific contributors using a "last in, first out" or "first in, first out" accounting method, and these attributed contributions when aggregated with all other contributions from the same contributor shall not exceed the limits set forth in subsection A of this section. A committee transferring funds must designate in its records at the time of its first transfer whether it elects the "last in, first out" or a "first in, first out" method of accounting for the current and future transfers. This designation is irrevocable. Candidates and committees shall comply with the accounting, recordkeeping and disclosure requirements set forth in section 18536 of Title 2 of the California Code of Regulations, except that references therein to state contribution limits shall be deemed to refer to the requirements of this chapter. The prohibitions stated in this subsection shall not apply to contributions made by a candidate to his or her campaign." Section 2. Severability. The provisions of this Ordinance are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words or parts thereof of the ordinance or their applicability to other persons or circumstances. Section 3, Urgency Findings and Declaration. The City Council finds and declares that this Ordinance must be adopted as an urgency matter because it is necessary for the immediate preservation of the public peace, health and safety. The following facts and circumstances support such necessity: Presently, Chapter 2.28 of the Municipal Code permits transfers between candidate committee funds without attributing the transferred funds to the individual contributors to the transferring committee. It is in the public interest to prevent any one person from contributing more than $500 to a candidate with respect to a single election, regardless of whether a campaign committee transfer takes place. Maintaining the integrity of the electoral process is vital to the public peace, health and safety of the City of Dublin. Without the immediate enactment of this Ordinance, candidates, campaign committees, and contributors may accelerate campaign contributions and transfers in order to gain a fundraising advantage before this Ordinance going into effect. Based on said findings, facts and circumstances, the City Council finds that this Ordinance should be adopted as an urgency ordinance for the immediate preservation of the public peace, health and safety, and that it is necessary that this Ordinance should go into effect immediately so as to ensure its effectiveness. Section 4. Effective Immediately. This Ordinance shall become effective immediately upon adoption by at least a four - fifths vote of the City Council. Section 5. Posting. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at least three (3) public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. PASSED, APPROVED AND ADOPTED this 2nd day of September, 2014. AYES: NOES: ABSENT: ABSTAIN: Tim Sbranti, Mayor ATTEST: Caroline Soto, City Clerk 2319009.1 ORDINANCE NO. AN ORDINANCE OF THE CITY OF DUBLIN AMENDING SECTION 2.28.030 OF THE DUBLIN MUNICIPAL CODE RELATING TO CAMPAIGN CONTRIBUTIONS The City Council of the City of Dublin does hereby ordain as follows: Section 1. Section 2.28.030 of the Dublin Municipal Code is amended to read as follows: "2.28.030 Limitations on contributions. A. No person shall make any contribution or contributions to a candidate or committee which exceeds the cumulative amount of five hundred dollars ($500), nor shall any such contribution or contributions which exceed the cumulative amount of five hundred dollars ($500) be accepted by any candidate or committee from any person with respect to a single election. B. The prohibitions stated in subsection A of this section shall not apply to contributions made or received in support of, or in opposition to, a ballot measure, nor shall said prohibitions apply to contributions made by a candidate to his or her campaign. C. A candidate may transfer campaign funds from one committee controlled by the candidate to a campaign committee for elective city office controlled by the same candidate. Contributions transferred shall be attributed to specific contributors using a "last in, first out" or "first in, first out" accounting method, and these attributed contributions when aggregated with all other contributions from the same contributor shall not exceed the limits set forth in subsection A of this section. A committee transferring funds must designate in its records at the time of its first transfer whether it elects the "last in, first out" or a "first in, first out" method of accounting for the current and future transfers. This designation is irrevocable. Candidates and committees shall comply with the accounting, recordkeeping and disclosure requirements set forth in section 18536 of Title 2 of the California Code of Regulations, except that references therein to state contribution limits shall be deemed to refer to the requirements of this chapter. The prohibitions stated in this subsection shall not apply to contributions made by a candidate to his or her campaign." Section 2. This Ordinance shall, upon its effective date, supersede any previously adopted urgency ordinance amending Chapter 2.28 of the Dublin Municipal Code. Section 3. Severability. The provisions of this Ordinance are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words or parts thereof of the ordinance or their applicability to other persons or circumstances. Section 4. Effective Date. This Ordinance shall take effect and be enforced thirty (30) days following its adoption. Section 5. Posting. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at least three (3) public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. PASSED, APPROVED AND ADOPTED this 16th day of September, 2014. AYES: NOES: ABSENT: ABSTAIN: Tim Sbranti, Mayor ATTEST: Caroline Soto, City Clerk 2319008.2 E:1MKIM GOVERNMENT CODE - GOV leg info. legislature.ca.gov /faces /printCodeSection Window.xhtmI TITLE 9. POLITICAL REFORM [81000 - 91014] ( Title 9 added June 4, 1974, by initiative Proposition 9. ) CHAPTER 5. Limitations on Contributions [85100 - 85802] ( Chapter 5 added June 7, 1988, by initiative Proposition 73. ) ARTICLE 3. Contribution Limitations [85300 - 85321] (Article 3 added June 7, 1988, by initiative Proposition 73.) (a) A candidate may transfer campaign funds from one controlled committee to a controlled 85306. committee for elective state office of the same candidate. Contributions transferred shall be attributed to specific contributors using a "last in, first out' or "first in, first out' accounting method, and these attributed contributions when aggregated with all other contributions from the same contributor may not exceed the limits set forth in Section 85301 or 85302. (b) Notwithstanding subdivision (a), a candidate for elective state office, other than a candidate for statewide elective office, who possesses campaign funds on January 1, 2001, may use those funds to seek elective office without attributing the funds to specific contributors. (c) Notwithstanding subdivision (a), a candidate for statewide elective office who possesses campaign funds on November 6, 2002, may use those funds to seek elective office without attributing the funds to specific contributors. (Amended by Stats. 2001, Ch. 241, Sec. 4. Effective September 4, 2001. Pursuant to Stats. 2000, Ch. 102, Sec. 83, this section applies to candidates for statewide elective office on and November 6, 2002.) http : / /leginfo.legislature.ca.gov / faces /printCodeSectionWindow.xhtmI 1/1 (Regulations of the Fair Political Practices Commission, Title 2, Division 6, California Code of Regulations.) § 18536. Transfer and Attribution of Contributions. For purposes of Government Code section 85306: (a) A committee transferring funds must designate in its records at the time of its first transfer whether it elects the "first in, first out" or a "last in, first out" method of accounting for the current and future transfers. That designation is irrevocable. (1) "First in, first out" means that campaign funds being transferred are attributed to the transferring committee's contributors in chronological order beginning with the earliest of its contributors or,; if there has been a prior transfer, beginning with the earliest contributor for which unattributed contributions remain. (2) "Last in, first out" means that campaign funds being transferred are attributed to the transferring committee's contributors in reverse chronological order beginning with the most recent of its contributors or, if there has been a prior transfer, beginning with the most recent contributor for which unattributed contributions remain. (3) Campaign funds shall be attributed to contributors in the lesser of the following amounts: (A) The actual amount of the original contribution from the person to whom the campaign funds are being attributed; (B) The applicable contribution limit under Government Code section 85301 or 85302; or (C) The amount of campaign funds the committee is seeking to transfer that has not yet been attributed. (b) Except as provided in subdivisions (b) and (c) of Government Code section 85306, campaign funds transferred, when aggregated with all other transfers attributable to, and contributions from, the same contributor, may not exceed the contribution limits applicable to the candidate at the time of the transfer. Campaign funds attributed to a contributor who is a candidate for elective state office at the time of the transfer, when aggregated with all other contributions from that contributor, may not exceed the amount provided in subdivision (a) of Government Code section 85301. (c) The committee transferring the funds shall maintain records that identify the specific contributors to whom any transferred contributions have been attributed. If the transferring committee no longer is required by Government Code section 84104 to maintain detailed records, the receiving committee shall maintain either: (1) Such records from the transferring committee as are sufficient, pursuant to paragraphs (1), (5) and (6) of subdivision (f) of Government Code section 84211, to confirm the identity of the original contributors to whom transfers are being attributed; or (2) Copies of the transferring committee's original verified and filed campaign reports that show the original contribution received from each contributor to whom a transferred contribution is attributed. (d) A committee receiving transferred funds must disclose on its campaign statements each attributed contribution of one hundred dollars ($ 100) or more, providing the same information required by subdivision (f) and, if applicable, subdivision (m) of Government Code section 84211 as disclosed on the campaign statement on which the contribution was originally reported or as contained in the committee's records at the time of the transfer. (e) Transfers made prior to a primary election, when aggregated with all other transfers attributable to, and contributions from, the same contributor, may include amounts that could have been raised for the general election pursuant to Government Code section 85318, provided the receiving committee complies with the requirements of this section. (f) A candidate or committee that receives a contribution which, when aggregated with contributions attributed to the same contributor, would otherwise constitute a violation of Government Code section 85301 or 85302, shall not be in violation of either of those sections provided the contribution is returned pursuant to 2 Cal. Code Regs. sections 18531. (g) A contributor that makes a contribution which, when aggregated with contributions attributed to the same contributor, would otherwise be in violation of Government Code section 85301 or 85302, shall not be in violation of either of those sections unless the contributor was aware of the attribution at the time the contribution was made. (h) This regulation does not apply to a candidate for statewide elective office, or the candidate's controlled committee for that office, in an election held before November 6, 2002. This regulation applies on and after November 6, 2002, to a candidate for statewide elective office, and the candidate's controlled committee for that office, in an election held on or after November 6, 2002. Note: Authority cited: Section 83112, Government Code. Reference: Sections 85200, 85305, 85306 and 85318, Government Code. HISTORY 1. New section filed 7 -17 -2001; operative 7 -17 -2001 (Register 2001, No. 29). A Certificate of Compliance must be transmitted to OAL by 11 -14 -2001 or emergency language will be repealed by operation of law on the following day. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements). For prior history see Register 93, No. 9. 2. Repealer and new section filed 11 -6 -2001; operative 11 -15 -2001 (Register 2001, No. 45).