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CC - Adoption of an Ordinance Amending Chapter 3.06 of Title 3 of the Culver City Municipal Code Pertaining to Campaign Finance and Other Political Activities.
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Contact Person/Dept: Martin Cole/City Clerk; and Lisa Vidra/City Attorney
Phone Number: 310-253-6000; and 310-253-5660
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: Yes [X] No []
Commission Action Required: Yes [] No [X] Date:
Commission Name:
Public Notification: (E-Mail) Meetings and Agendas - City Council (09/10/15); (E-Mail) Persons Who Have Filed FPPC Form 501 (Candidate Intention Statement) (09/10/15); (E-Mail) Persons Who Provided Contact Information and Provided Comments at the 08/24/15 City Council Meeting and September 8, 2015 Council Ad-Hoc Subcommittee Workshop (09/10/15)
Department Approval: Martin Cole/City Clerk (09/09/15); and Carol Schwab/City Attorney (09/09/15)
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RECOMMENDATION
Staff recommends the City Council adopt an ordinance amending Chapter 3.06 of Title 3 of the Culver City Municipal Code (CCMC) which provides revisions and updates to the current CCMC provisions pertaining to campaign finance and other political activities.
BACKGROUND
On August 24, 2015, the City Council introduced an ordinance amending CCMC Chapter 3.06 pertaining to campaign finance and other political activities. As stated in the August 24, 2015 staff report, the proposed ordinance was brought forward to the City Council to consider proposed revisions, as significant sections of the existing ordinance are outdated and considered contrary to state, federal, and Constitutional law. After working with staff and outside consultants/counsel for the past year, the revisions were recommended to the full City Council by members of the City Council Campaign Finance Ad Hoc Subcommittee, Vice Mayor Andrew Weissman and Council Member Jim Clarke (Subcommittee).
At the August 24, 2015 meeting, the Subcommittee gave a brief introduction and staff presented a report on the most significant issues related to the current campaign finance provisions contained in the Culver City Municipal Code (CCMC), describing the major proposed revisions. A few public comments were made, which included statements that the proposed ordinance was complicated and concerns about timing of the proposed adoption in proximity to the 2016 General Municipal Election.
After receipt of public comments and City Council deliberation, the City Council introduced the proposed ordinance, with the understanding that staff would hold a Campaign Finance Community Workshop to be chaired by the Subcommittee, to allow the public to get further information prior to the time the City Council considers the ordinance for adoption. Accordingly, a public workshop was held on September 8, 2015, to provide the community with an opportunity to obtain additional information and ask questions.
The proposed ordinance is brought back this evening for further discussion and recommended adoption. A copy of the detailed staff report from the August 24, 2015 meeting is attached (Attachment 5). Below is additional information to assist the City Council in its discussion. Also included in this report is a summary of the questions raised during the public workshop and the responses to those issues.
DISCUSSION
State regulations governing campaign finance in California are found in the Political Reform Act (PRA) and Fair Political Practice Commission (FPPC) regulations. The FPPC enforces the provisions of the PRA. However, the PRA does not address campaign contribution limits for local elections. Local entities have the authority to supplement the PRA by adopting additional restrictions and regulations, as long as they do not conflict with the state’s provisions. Further, any such additional restrictions are also subject to applicable federal law, including decisions of the Supreme Court of the United States (SCOTUS).
As discussed in detail during the August 24, 2015 City Council meeting, the current campaign finance language found in CCMC Chapter 3.06 has many provisions that are contrary to current state, federal, and Constitutional law. The proposed ordinance before the City Council this evening for adoption will protect the City and allow candidates to conduct campaigns for the April 2016 General Municipal Election within the framework of current Constitutional campaign finance law.
For ease of compliance with campaign finance law, it should be noted that the majority of the provisions in the proposed ordinance are consistent with the rules and regulations of the Fair Political Practices Commission (FPPC). Further, there are a few additional provisions specific to Culver City, including the contribution limits for persons and committees ($1,000), small contributor committee specifications and limits ($2,000), City contractor contribution limits ($250) and employee political activities regulations.
Subcommittee Community Workshop:
The Community Workshop was held on September 8, 2015. Following is a summary of public comments/questions and Subcommittee/staff responses:
1) Comment: Information on changes to the ordinance should be made available to candidates early in the process (i.e., upon receipt of the first filing document with the City).
Response: In keeping with past practice, the City Clerk provides copies of applicable campaign finance law and regulations to candidates once they begin the official nomination process (commonly known as “pull papers”). The City Clerk’s Office has provided notice to those persons who have filed FPPC Form 501 (Candidate Intention Statement) for the April 2016 General Municipal Election cycle of the August 24, 2015 City Council meeting, the September 8, 2015 Workshop, and tonight’s City Council meeting. Should the City Council adopt the proposed ordinance, the City Clerk’s Office will send a copy to the same group of persons. In addition, City staff will prepare a list of Frequently Asked Questions (FAQs) which will also be provided to the same group and will be posted and updated on the City’s website. It should be noted that City staff will only be able to answer questions related to the general operation of these provisions. Specific campaign questions may be referred to the FPPC or to the campaigns’ own advisors.
2) Question: Small Contributor Committees: May an existing committee convert to a small contributor committee?
Response: Yes, if it meets all the criteria listed in the proposed ordinance. There are FPPC reporting rules for small contributor committees that the existing committee should review to ensure all state regulations are followed. Staff told the person asking the question that staff would provide them with additional information on the FPPC rules that govern the formation of small contributor committees. Subsequently, staff reviewed the FPPC regulations finding that; (1) If a committee has no funds, it can register as a small contributor committee as soon as it meets the other criteria; and (2) Under the PRA, a committee has to go back as far as necessary to cleanse the account of contributions over the limit and transfer those funds to a separate committee.
3. Question: Will a candidate be able to keep in-kind contributions received before the new ordinance goes into effect, even if the value is over and above the new contribution limits?
Response: Yes, any in-kind contributions received prior to the effective date of the ordinance, if adopted, may be kept by the candidate. However, if the value of the in-kind contribution is over the new contribution limit, then the donor may not make an additional contribution to the candidate.
4. Question: How will a commitment to provide in-kind contributions in the future be treated, if the commitment is received before the effective date of the new ordinance?
Response: The FPPC has regulations regarding “enforceable promises” and the timing of when the “enforceable promise” becomes a contribution. The candidate should consult the FPPC rules on “enforceable promises” to determine if it applies to their circumstance.
5. Question: Who will answer questions on implementation of the new ordinance?
Response: Some general questions may be able to be answered by the City Clerk or the City Attorney. Specific questions may be referred to the FPPC. As mentioned above, City staff will provide a list of general “Frequently Asked Questions” and will update it as new questions arise. The FAQs will be published on the City’s website so all candidates have equal access to the information, regardless of who asked the questions.
Summary of Key Changes:
The changes proposed in the draft ordinance involve both legal issues and policy decisions for the City Council. Although the attached August 24, 2015 Staff Report contains most of the same information, for convenience, below is a summary of the key changes, and some of the rationale behind the proposed changes.
• In-Kind Contributions: (Legal Issue) Currently, the CCMC excludes in-kind (non-monetary) contributions from the $500 contribution limit for persons and the $1000 contribution limit for committees. A person or committee may make, and a candidate may receive, unlimited in-kind contributions. Differentiating between monetary and non-monetary contributions has no corollary in state or federal law. Courts have consistently held that the only basis to impose contribution limits is to prevent quid pro quo corruption, or the appearance of corruption. Contribution limits are subject to rigorous review under SCOTUS rulings. There is not even a constitutional “rational basis” for limiting cash contributions to prevent corruption while not limiting in-kind contributions. The proposed ordinance removes the exclusion for in-kind contributions so that the definition of contribution mirrors that of the PRA, including the exceptions found in the PRA. These exceptions as to what constitutes a contribution include personal services, and in-home or in-office fundraisers where the occupant expends $500 or less.
• Contribution Limit Applicable to Persons: (Policy Decision) It is a policy decision for City Council to set contribution limits for City elections (which only involve City Council elections since the 2006 change to the City Charter). The current contribution limit, set in 1989, is $500. (CCMC Section 3.06.015(A)). To account for inflation, the proposed ordinance sets an initial contribution limit of $1000 and provides for an increase of this limit based upon changes in the Consumer Price Index (CPI). The cost of living increase is considered important under SCOTUS decisions to ensure the contribution limits over time allow candidates the ability to raise sufficient funds to mount a competitive campaign for office.
• Contribution Limit Applicable to Committees: (Policy Decision) Committees are included in the definition of Person under the PRA; thus, under the proposed ordinance, the contribution limit for committees would be the same as the limit for all persons. A higher contribution limit of $2000 is now proposed for “Small Contributor Committees.” It is a policy decision to allow for the formation of small contributor committees. State law allows for a small contributor committee where a group of persons who each make a small contribution to the committee may band together to have their political voice heard. In addition, federal law permits a PAC that has received contributions from at least 51 individuals, has been in existence for at least six months, and that has contributed to at least five candidates, to contribute $5000 rather than $2600 to a candidate. Under the proposed ordinance, a small contributor committee is one that has been in existence at least 3 months, receives contributions from twenty or more persons of $200 or less per calendar year, and that makes contributions to two or more candidates for elected City office. The subcommittee and staff propose $2000 as the small contributor committee limit (double that of persons), similar to the current City provision in CCMC section 3.06.015, where the committee limit is $1000, double that of the limit for persons ($500).
• Candidate’s Receipt of Total Contributions from All Committees: (Legal Issue) Currently, a candidate may only receive a total of $2,500 from all committees (CCMC Section 3.06.015(B)). This provision has been eliminated; otherwise, the current provision could restrict a committee from making a contribution to a candidate of its choosing if that candidate has already accepted contributions at the limit from other committees, which is impermissible under SCOTUS rulings. Thus, in the proposed ordinance, a candidate may accept a $1,000 contribution from any number of committees, as long as they are not controlled by the same person(s).
• Aggregate Limit on Contributions: (Legal Issue) For purposes of the current $500 per person, per election contribution limit, Section 3.06.015(A) of the CCMC aggregates (i.e. combines) all contributions made by a person to a candidate with the contributions made by the same person to any committee supporting that candidate. In other words, if an individual has contributed the maximum $500 to a candidate, that individual is prohibited from contributing to any committee supporting that candidate, including an independent expenditure committee. Just as SCOTUS struck down aggregate caps on the amount a candidate may receive from committees, SCOTUS has struck down aggregate (combined) limits on what a person may contribute to a candidate, either directly or through committees that may be inclined to support that candidate, in an election. Thus, under the new ordinance, a person could contribute $1000 directly to the candidate, but also make a contribution to a committee supporting the candidate (if the committee is not a single candidate committee and also supports other candidates) and/or an independent expenditure committee.
• Contributions by Contractors with the City: (Legal Issue) The current CCMC prohibits any contributions within one year of contracting with the City, for those that have a contract of $25,000 or more with the City. Federal courts have differing opinions on whether contributions from contractors may be totally prohibited. However, the federal Ninth Circuit Court of Appeal, which includes California and other west coast states, allows limits on contractor contributions but does not permit a complete prohibition on contractor contributions. Since California is within the Ninth Circuit, staff recommends following Ninth Circuit law, and limiting but still allowing contributions from contractors. The proposed ordinance (Section 3.06.020) places a limit on contractor contributions to candidates of $250. This reduces the influence a contractor may have on a candidate, but does not completely prevent the contractor from exercising its First Amendment right to support candidates. The proposed ordinance includes a change in the period of time when such a limit would apply.
Additional information on the proposed changes is found in the attached August 24 detailed staff report (Attachment 5), the comparison chart of the language of key provisions (Attachment 4), and the strike-through version of the proposed ordinance (Attachment 2). The proposed ordinance is also attached in its entirety (Attachment 1) as well as the current CCMC Chapter 3.06 (Attachment 3).
Based upon the information above, the Subcommittee and staff recommend the City Council consider the recommendations set forth and adopt the proposed ordinance.
FISCAL ANALYSIS
There is no fiscal impact on the City associated with the adoption of this ordinance.
ATTACHMENTS
1. Proposed Ordinance - clean copy
2. Proposed Ordinance- strike through version
3. Existing CCMC Chapter 3.06
4. Summary of Key Proposed Changes to Campaign Finance Ordinance
5. Staff report from 8/24/15 Introduction of the Ordinance
RECOMMENDED MOTIONS
That the City Council:
Adopt an ordinance amending Chapter 3.06 of Title 3 of the Culver City Municipal Code pertaining to campaign finance and other political activities.