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Home My WebLink About10 Ord 1362 Establish Campaign Contribution Limit MEETING DATE ��- ��- ��C��I Q CONTINUED TO � d,��, ,��_�l-.�D�.l STAFF REPORT ��sesYozn�a R�n►oiN�� CITY OF PALM DESERT CITY ATTORNEY'S OFFICE MEETING DATE: January 28, 2021 PREPARED BY: Robert Hargreaves, City Attorney, and Jill Tremblay, Deputy City Attorney REQUEST: Introduce and waive first reading of an Ordinance setting local candidate contribution limits pursuant to Assembly Bill 571. Recommendation Introduce and waive first reading of Ordinance No. 1362 An Ordinance of the City Council of the City of Palm Desert, California, Adding Section 2.38.060 Establishing Campaign Contribution Limit Requirements for Elected Officials. Backqround and Svnopsis On September 24, 2020, the City Council reviewed Assembly Bill 571—a bill that, as of January 1, has by default set the City's candidate contribution limit at no more than $4,700 from an individual person per calendar year, as enforced by the California Fair Political Practices Commission ("FPPC"). Prior to AB 571, the City did not have a candidate contribution limit. The City Council directed staff to prepare an Ordinance setting the City's own limit, with options. Discussion AB 571 sets a default contribution limit for elective city offices that is the same as the state Assembly and Senate contribution limits—no more than $4,700 from an individual person per calendar year. The FPPC administers and enforces the default contribution limit for cities that do not set their own limit and makes violations punishable as a misdemeanor. The contribution limit may be adjusted by the FPPC in January of odd- numbered years to reflect increases or decreases in the Consumer Price Index (CPI). If cities do not want to adhere to the $4,700 limit, they may establish their own limit, which will be administered and enforced by the adopting city, rather than the FPPC. January 28, 2021 - Staff Report Ordinance Regarding Candidate Contribution Limit (AB 571) Page2of3 The City may: 1. Do nothing. As of January 1St, the $4,700 statewide candidate contribution limit from one individual per calendar year is imposed on those running for elective City office. The FPPC is responsible for enforcing the restriction. The City can later decide to enact its own limits. 2. Adopt "no limit" limit or set limit other than $4,700 via Ordinance. The City can set its own candidate contribution limit by Ordinance. The proposed Ordinance includes two options: 1) adopt a "no limit" limit; or adopt a limit that is higher or lower than the current $4,700 limit. The City should consider any potential cost of enforcement, as the FPPC will not enforce a City-established limit. So far, Cathedral City is the only Coachella Valley city to adopt a contribution limit, which was set at up to $2,500 from an individual person per election. This new limit applies to any person, company, corporation, or other entity making a contribution to a political candidate running for either City Council or city treasurer. Violations are punishable by a $500 fine. The limit does not apply to a candidate spending his or her own personal funds towards a political campaign. The City of Riverside adopted a "no limit" limit. The County of Riverside has adopted a $20,000 cap on individual contributions per year. The aforementioned limits, and others, are summarized in the following chart: City Population Contribution Limit Bell Gardens 42,875 $250 Cathedral City 55,826 $2,500 Davis 66,757 $100 Dublin 55,844 $500 Encinitas 61,518 $250 Fountain Valley 57,021 $500 Gardena 60,414 $500 Gilroy 53,000 $750 Laguna Beach 22,749 $440 Laguna Niguel 64,836 $1,000 Newark 44,204 $500 Newport Beach 85,326 $1,200 Petaluma 59,540 $200 Poway 49,041 $100 Riverside 336,285 No limit San Luis Obispo 45,802 $300 Santa Cruz 63,789 $350 Watsonville 52,087 $400 West Sacramento 51,272 $250 January 28, 2021 - Staff Report Ordinance Regarding Candidate Contribution Limit (AB 571) Page 3 of 3 Fiscal Analysis There would be no direct fiscal impact to the City in making a decision with regard to establishment of limits on local campaign contributions in City elections. The cost of enforcing the limits would depend on the rigorousness of the enforcement program. LEGAL REVIEW DEPT. REVIEW FINANCIAL ASSISTANT REVIEW CITY MANAGER 7�/�{ N/A .�lndy�'irestine Robert W. Hargreaves Grace Rocha Janet M. Moore Andy Firestine City Attorney Interim City Clerk Director of Finance Assistant City Manager Randy Bynder Ra.Y1,G�y 8yvu�e,y' Interim City Manager ATTACHMENTS: Ordinance No. 1362 September 24, 2020 Staff Report and Memorandum CITYCOUNCILA,ETION * By Minute Motion, pass Ord. No. 1362, APPROVED � DF.NTF,D to second reading, establishing RECEIVED OT�-IER campaign contribution limit require- _ (,�rC'l, l''�lr'�-��_,'�"_ R.�c ,�� ments for elected officials by MEET[ G DA Z Q adopting the "no limit" lim�.f: 4-1. AYES: r � NOEs: �1 ABSENT: G -E- ABSTAIN: VERIFIED BY: Original on File with Ci lerk's Oflice ORDINANCE NO. 1362 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ADDING SECTION 2.38.060 ESTABLISHING CAMPAIGN CONTRIBUTION LIMIT REQUIREMENTS FOR ELECTED OFFICIALS WHEREAS, the California State Legislature in 2019 passed Assembly Bill 571 ("AB 571") which creates campaign contribution limits, identical to those imposed on State Assembly and Senate candidates, for all levels of government; and WHEREAS, while AB 571 sets forth default statewide limits on contributions, it also permits cities and counties to impose contribution limits that differ from the default limits; and WHEREAS, as of January 1, 2021, the AB 571 default contribution limit of$4,700 per individual person per calendar year is assigned to the City of Palm Desert; and WHEREAS, the City Council of the City of Palm Desert wishes to [make local campaign contributions unlimited] **OR** [establish a local campaign contribution limit.] NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS FOLLOWS: SECTION 1. Recitals. The City Council hereby finds and determines that the recitals set forth above are true and correct and are hereby incorporated and adopted as findings and determinations by the City Council as if fully set forth herein. SECTION 2. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code Section 2.38.060 is hereby added as follows: "2.38.060 Local campaign contribution limits. A. Notwithstanding any state law to the contrary, the City imposes an unlimited campaign contribution limit on candidates to elective office within the City. B. Nothing in this section shall be deemed to exempt any person from complying with applicable provisions of any other laws of this state." *****�R***** SECTION 2. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code Sections 2.38.060 is hereby added as follows: "2.38.060 Local Campaign Contribution Limits. A. A person shall not make to a candidate for elective city office, and a candidate for elective city office shall not accept from a person, a contribution totaling more than dollars ($ ) per calendar year, as that amount is increased by the city ORDINANCE NO. 1362 clerk in January of every year to reflect any increase in the Consumer Price Index. The increase shall be rounded to the nearest one hundred dollars ($100). B. In addition to the other duties required under this Chapter, the elections official shall: 1. Supply appropriate forms and manuals to all candidates and committees, and to other persons required to file reports. 2. Determine whether required documents have been filed and, if so, whether they conform on their face with the requirements of this Section and state law. 3. Notify promptly all persons and known committees who have failed to file a document in the form and at the time required by this section, and promptly notify a person, candidate, campaign treasurer, political committee or broad-based political committee of any violations of this section. The elections official shall inform the person, candidate, campaign treasurer, political committee or broad-based political committee that they shall have two (2) weeks to correct the violation. 4. Compile and maintain a current list of all statements or parts of statements filed with the elections official pertaining to each candidate. 5. Monitor reports and statements filed by candidates and committees supporting or opposing candidates for city council as required by this section. C. Any violation of this section shall be enforced by the City as a misdemeanor, infraction, or by administrative citation. The penalty for any violation of this Section shall be a fine in an amount not to eXceed five hundred dollars ($500)." SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional. If for any reason any portion of this Ordinance is found to be invalid by a court of competent jurisdiction, the balance of this Ordinance shall not be affected. SECTION 4. Certification and Publication. The City Clerk of the City of Palm Desert shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted under California Government Code Section 36933. SECTION 5. CEQA. The City Council finds that adoption of this Ordinance is not a "project," as defined in the California Environmental Quality Act because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making. ORDINANCE NO. 1362 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Palm Desert on the day of , 2021, by the following vote. AYES: NOES: ABSTAIN: ABSENT: Kathleen Kelly, Mayor ATTEST: Grace L. Rocha, Acting City Clerk City of Palm Desert, California APPROVED AS TO FORM: Robert W. Hargreaves, City Attorney STAFF REPORT CITY OF PALM DESERT CITY ATTORNEY'S OFFICE MEETING DATE: September 24, 2020 PREPARED BY: Robert Hargreaves, City Attorney, and Jill Tremblay REQUEST: Review Assembly Bill 571, which sets local campaign contribution limits unless the City sets its own limits, and discuss the City's desire, timing and process to set its own limits. Recommendation Review and consider Assembly Bill 571, discuss the possibility of setting the City's own contribution limits, and discuss timing and process for establishing and enforcing limits. Backaround and Svnopsis The City of Palm Desert does not currently have city council candidate contribution limits. Assembly Bill 571, effective on January 1, 2021, would require the City to either adopt its own limits or use the state's limit of$4,700 per person per year. In other words, if the City does not enact its own limits by the end of the year, it must use the state's limits. However, the City maintains the ability to adopt and/or modify its own limits after AB 571 goes into effect. Therefore, the City is not precluded from adopting its own limits even if it has not done so before 2021. Discussion 1. Why was AB 571 developed? Legislators drafted AB 571 because: • most California cities and counties do not have their own campaign contribution limits; • in cities and counties without limits, candidates typically receive 40% or more of their total campaign funds from a single contributor; • in cities and counties without limits, there is a "risk and the perception that elected officials in those jurisdictions are beholden to their contributors and will act in the best interest of those contributors at the expense of the people"; • the state has a statewide interest in "preventing actual corruption and the appearance of corruption at all levels of government." September 24, 2020 - Staff Report AB 571 Re Campaign Contribution Limits Page 2 of 3 Z. How does AB 571 affect the City? Currently, the City does not have candidate contribution limits. AB 571, which becomes effective on January 1, 2021, would impose the $4,700 state candidate contribution limit on City Council candidates. However, the City has the opportunity to adopt its own limits— at an amount greater or lesser than the state amount—at any time, including after the effective date of AB 571. If the City adopts its own limits now, it will not have to use the $4,700 state limit. If the City does not adopt its own limit by January 1, 2021, it will be required to use the state limit—but only until it adopts its own limit. In other words, the City is not bound by the state limit forever if it does not enact a limit now. The City can adopt its own limit at any time after AB 571 goes into effect. In jurisdictions that default to the state limit, the Fair Political Practices Commission ("FPPC") has greater administration and enforcement authority. Jurisdictions that adopt their own limit will be responsible for administration and enforcement. AB 571 does not place restrictions on small contributor or political party committees. The bill does extend contribution restrictions for elective local office regarding personal loans ' and for committees created to oppose recall measures. The bill allows a candidate for local office to carry over campaign expenditures in connection with a subsequent election for that same office, except in instances where a city and county has barred that practice in light of its own local contribution restrictions. The bill does not impact how much a local candidate may lend to their own campaign from their personal funds. As noted above, the City may: 1. Do Nothing. Under this scenario, as of January 1, 2021, the statewide campaign contribution restriction of$4,700 from one individual per calendar year would be imposed, by default, on those running for elective City office. The FPPC would take responsibility for enforcing the restriction. The City can later decide to enact its own limits. 2. Set Its Own Limit — Whether Higher or Lower. If the City follows this route, it would need to determine the cost of enforcement and how to pay such an expenditure within the budget. AB 571 does not permit the FPPC jurisdiction to enforce locally established campaign contribution limitations. The City Council may want to form a subcommittee to explore an appropriate limit amount, discuss potential exemptions in certain situations, and determine staff resources needed to enforce the limit. So far, none of the other Coachella Valley cities have adopted campaign contribution limits. The Riverside County Board of Supervisors proposed, at the August 4, 2020 meeting, to set a $20,000 cap on individual contributions per year. The Board's proposal provides that if a candidate either contributes more than $20,000 to their own campaign, September 24, 2020 - Staff Report AB 571 Re Campaign Contribution Limits Page3of3 or is the beneficiary of an independent expenditure campaign in excess of $20,000, the other candidates in that race would be exempted from the campaign contribution limits for that election cycle as well. The proposal further provides that this would prevent a candidate from being put at a competitive disadvantage by their opponent's access to deep pockets that fall outside the legal jurisdiction of the ordinance. The Board directed county counsel to develop an ordinance for review to be implemented before January 1, 2021. An ordinance has yet to come before the Board. The City continues to monitor the Board's action on this item. While other Riverside County cities have not enacted limits, a handful of Orange County cities have set them, as seen below. City Contribution Limit (Annual/per contributor) Laguna Beach $440 Irvine $530 Huntington Beach $600 Newport Beach $1,200 Anaheim $2,100 Fiscal Analvsis There would be no direct fiscal impact to the City in making a decision with regard to establishment of limits on local campaign contributions in City elections. The cost of enforcing the limits would depend on the rigorousness of the enforcement program. No funding source has been identified for such potential enforcement activities, or for the staff time necessary to research and prepare enacting ordinance(s). LEGAL REVIEW DEPT. REVIEW FINANCIAL ASSISTANT REVIEW CITY MANAGER BN ��-�O�' �anr.�'?'�. ?'�?000,r. N/A Robert W. Hargreaves Grace Rocha Andy Firestine City Attorney Acting City Clerk Janet M. Moore Assistant City Manager Director of Finance City Manager Lauri Aylaian: ,L�awii r��eaiaa CI'I'Y COUNCILACITON *By Minute Motion: 1) Direct staff to place this item on the �C�V� OTHER��~ agenda after January 1, 2021, but prior to April 2021; 2) staff to research the potential for the City to either comply or MEE G DA modify State guidelines; 3) staff to explain the costs to the pyES: I � City if it deviates from the State guidelines;4) staff to include j110ESt in their recommendation the option to maintain the status pB5El�T'l�t q uo. 5=0. ABSTAINt VERIFIED BYs Qrl�ius�l on Fi1e with Ciiy k's Oftics STAFF REPORT CITY OF PALM DESERT CITY ATTORNEY'S OFFICE MEETING DATE: September 24, 2020 PREPARED BY: Robert Hargreaves, City Attorney, and Jill Tremblay REQUEST: Review City enforcement if City adopts its own candidate contribution limits under Assembly Bill 571. Backqround and Svnopsis If the City adopts its own candidate contribution limits under Assembly Bill 571, it will have to enforce those limits. The FPPC will only enforce default State limits in the event that the City does not adopt its own limits. Discussion Candidates for City Council will need to fill out various Fair Political Practices Commission ("FPPC") forms in order to run for City Council and maintain compliance with campaign finance law. For example, FPPC Form 460 Recipient Committee Campaign Statement requires each candidate to document the full names, addresses and zip codes of all contributors, lenders and payees of$100 or more and submit this form to the City Clerk. For the most part, City Council candidates will self-enforce candidate contribution limits by keeping track of contributions and submitting proof of same on various FPPC forms to the City Clerk. Cities that have adopted limits have not reported a great need for enforcement actions. For example, the City of Laguna Beach, which has had campaign contribution limits since 1994, has never had to get involved in an enforcement action. Enforcement cases may arise from audits or complaints. The City's monitoring process may detect potential violations through a review or audit of candidate forms. Potential violations may be brought to the City's attention through the complaint process. This process enables anyone to file a complaint alleging violations and explaining the basis for the allegations. Fiscal Analysis The cost of enforcing the limits would depend on the rigorousness of the enforcement program. LEGAL REVIEW DEPT. REVIEW FINANCIAL ASSISTANT REVIEW CITY MANAGER 8}� �f�' N/A N/A Robert W. Hargreaves Grace Rocha Janet M. Moore Andy Firestine Cit Attorne Acting City Clerk Director of Finance Assistant Ciry Manager City Manager Randy Bynder: ��a�