HomeMy WebLinkAboutReport: "Ballot Measures - What are Proper & Improper Expenditures of Public Funds"Mayor
Ron Morrison
Council Members
Louis Natividad
Alejandra Sotelo-Solis
Mona Rios
Jerry Cano
TO:
4-*- CALIFORNIA NATIONAL CH City Attorney
a c 9„� Claudia Gacitua Silva
INCOgpppsTE� —� Elise Cusato
Senior Assistant City Attorney
Office of the City Attorney Deputy City Attorney
Jennifer Knight
MEMORANDUM
Mayor and City Council
Members of City Boards and Commissions
All City Employees
DATE: June 18, 2013
FROM: City Attorney
SUBJECT: Ballot Measures — What are Proper and Improper Expenditures of Public Funds
Recently, this Office issued a Memorandum titled "Restricted and Allowable Political Activities"
dated August 14, 2012. The City of National City's Sales and Use Taxi is set to expire in 2016.
The City is assessing its fiscal condition in light of the sunset of the sales tax which includes
analyzing whether its fiscal conditions warrant a ballot measure to extend the one percent sales
tax. As part of the City's consideration of a potential ballot measure, the City Council requested
the City Attorney to prepare a memorandum explaining the parameters of allowable political
activities. The prior memorandum, dated August 14, 2012, is attached for reference and remains
applicable. The purpose of this memorandum is to elaborate upon the prior memorandum in
regard to the restrictions of City officers and employees in their use of public funds with regard
to a proposed ballot measure.
I. THE DEVELOPMENT AND DRAFTING OF A PROPOSED BALLOT
MEASURE IS AN EXERCISE OF LEGISLATIVE AUTHORITY AND,
THEREFORE, PUBLIC FUNDS MAY BE USED.
Developing and drafting an initiative is not inherently partisan in nature so it is not subject to the
prohibitions of advocating in support of, or in opposition to, an initiative already drafted and
placed on the ballot. Thus, this discussion applies to the development and drafting stage of a
potential ballot measure.
National City Municipal Code sections 4.24.010 — 4.24.180.
1243 National City Boulevard; National City, California 91950-4301
Tel.: (619) 336.42201 Fax: (619) 336.4327
A. Courts have found the certain expenditures proper before a ballot measure is placed on
the ballot.
Expenditures for the development and drafting of a proposed ballot measure, including research and
gathering statistical information are permissable. (League of Women Voters of California v.
Countywide Criminal Justice Coordination Committee, 203 Cal. App. 3d 529 (1988)).
B. Case Law
In the League of Women Voters case, the Los Angeles County Board of Supervisors established
the Countywide Criminal Justice Coordination Committee (CCJCC) which included, among
many others, the chairman of the board of supervisors, the Los Angeles County sheriff, the
district attorney, the mayor, the city attorney, and the president of the city council. The CCJCC
formed a standing legislative subcommittee to study a proposal to implement certain procedural
changes in the criminal justice system. The members of the subcommittee decided, among other
things, to pursue an initiative to reduce the requirement for conviction or acquittal in all felony
cases, except capital crimes, to ten votes rather than twelve.
The subcommittee worked on the proposed initiative using county employees, in lieu of the
performance of other duties, county supplies, and county support services in formulating,
drafting, and typing drafts of the proposed initiative that would be submitted to the Secretary of
State for qualification as a ballot measure. The district attorney assigned an employee to gather
statistics relating to the non -unanimous jury verdict provision under consideration. The county
sheriff drafted a letter to Paul Gann informing him of the proposed initiative. The district
attorney sent a letter to a private citizen, responding to an inquiry concerning the proposed
initiative, utilizing county stationery and the services of a county typist.
The subcommittee discussed a proposal from a consulting firm concerning direct mail
solicitation of popular and financial support for the draft proposed initiative and the signature
gathering effort, but the consultant was not engaged. The subcommittee discussed potential
proponents for the initiative.
The county sheriff and the district attorney joined a citizens committee which supported the
proposed initiative. They identified themselves as individuals personally supporting the
qualification of the proposed initiative. The county board of supervisors officially recorded its
position supporting the proposed initiative.
The court in League of Women Voters held that the expenditure of public funds for these
activities was proper. The court said that "the development and drafting of a proposed initiative
is not akin to partisan campaign activity, but is more closely akin to the proper exercise of
legislative authority." The court also said that "one of the primary functions of the elected and
appointed executive officials is, of course, to devise legislative proposals to attempt to
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implement the current administration's policies." Therefore, "[i]t is logical to conclude the power
to devise legislative proposals to serve a local entity's perceived interests implies the power to
draft proposed legislation." The court went on to say that prior to and through the drafting stage
of a proposed initiative, the action is not taken to attempt to influence voters either to qualify or
to pass an initiative measure. The audience at which these activities are directed is not the
electorate per se; there is not attempt to persuade or influence any vote. Finally, the court said
that "the power to draft the proposed initiative necessarily implies the power to seek out a willing
proponent. We do not perceive the activities of identifying and securing such a proponent for a
draft initiative as entailing any degree of public advocacy or promotion, directed at the
electorate, of the single viewpoint embodied in the measure."
While the League of Women Voters case clearly does state that the expenditure of public funds is
proper to secure a proponent of a proposed initiative, case law is not clear whether this includes
the expenditure of public funds to expressly advocate for the qualification of a proposed
initiative on the ballot. In conjunction with the limitations of advocacy, discussed below, City
officers and employees should be careful not to expend public funds to expressly advocate for
the qualification of a proposed initiative on the ballot.
II. PROVIDING THE PUBLIC ACCURATE, FAIR, AND IMPARTIAL FACTS IS
PERMISSABLE, HOWEVER, PUBLIC FUNDS CANNOT BE USED TO
SUPPORT OR OPPOSE THE APPROVAL OR REJECTION OF A BALLOT
MEASURE ON THE BALLOT.
An officer, employee, or consultant of a local agency may not expend or authorize the
expenditure of any of the funds of the local agency to support or oppose the approval or rejection
of a ballot measure by the voters. California Government Code section 54964(a). "Expenditure"
means a payment of local agency funds that is used for communications that expressly advocate
the approval or rejection of a clearly identified ballot measure by the voters. California
Government Code section 54964(b)(3). "Ballot measure" means an initiative, referendum, or
recall measure certified to appear on a regular or special election ballot of the local agency, or
other measure submitted to the voters by the governing body at a regular or special election of
the local agency. California Government Code section 54964(b)(1).
However, public funds may be used to provide information to the public about ballot measures.
[Section 54964(a)] does not prohibit the expenditure of local agency funds to
provide information to the public about the possible effects of a ballot measure on
the activities, operations, or policies of the local agency, if both of the following
conditions are met:
(1) The informational activities are not otherwise prohibited by the
Constitution or laws of this state.
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(2) The information provided constitutes an accurate, fair, and impartial
presentation of relevant facts to aid the voters in reaching an informed
judgment regarding the ballot measure.
California Government Code section 54964(c).
The line between what expenditures support or oppose a ballot measure and what expenditures
provide information is not always clear. Therefore, we look to case law as a guide. Courts have
looked at the facts of each case to determine whether the expenditure is proper. "The determination
of the propriety or impropriety of the expenditure depends upon a careful consideration of such
factors as the style, tenor, and timing of the publication; no hard and fast rule governs every case."
Stanson v. Mott, 17 Cal. 3d 206, 222 (1978).
A. Courts have found the following expenditures proper after a ballot measure is placed on
the ballot.
1. Expenditures for the preparation of materials such as a report by the City Manager or
staff that includes past and present facts such as how an initiative is enacted. (Vargas
v. City of Salinas 46 Cal. 4th 1 (2009)).
2. Expenditures to prepare written reports describing the potential service cuts,
reductions in facilities, and reduction in programs resulting from a proposed ballot
measure, as long as the reports are moderate in tone and do not contain emotional or
inflammatory warnings about the negative consequences for the residents of the city
if the ballot measure does not pass. (Vargas; Peninsula Guardians, Inc. V. Peninsula
Health Care District, 200 Cal. App 4th 1108 (2011)).
3. Expenditures to present these reports at City Council meetings. (Vargas).
4. Expenditures to present the city's view on a measure at a meeting of a public or
private organization, when requested by such organization. (Stanson).
5. Expenditures to make information about potential service cuts resulting from a
proposed ballot measure available on the city's website and at the city clerk's office
and public libraries, as long as the information is presented in a moderate tone and
does not expressly urge voters to vote for or support the proposed ballot measure.
(Vargas; Peninsula Guardians).
6. Expenditures to conduct a public forum at which all may appear and freely express
their views pro and con concerning a proposed ballot measure. (Choice -in -Education
League v. Los Angeles Unified School District, 17 Cal. App. 4th 415 (1993)).
7. Expenditures to organize and conduct a debate between proponents of different sides
of a ballot measure. (Choice -in -Education).
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8. Expenditures to televise a public meeting when such televising serves primary
purposes unrelated to the agency's advocacy of a partisan position. (Choice -in -
Education).
9. Expenditures to pass a resolution officially supporting or opposing a ballot measure if
the issue is properly noticed pursuant to the Brown Act and the expression of support
or opposition is done at a public meeting at which there is an opportunity for differing
viewpoints to be heard. (Choice -in -Education).
10. Elected and appointed officials may join, as individuals, a citizen's group advocating
a position on a measure, but may not expend public funds in doing so? (League of
Women Voters).
11. Expenditures for the preparation of and distribution of an objective statement of facts
about a measure in response to a citizen's request. (Stanson).
12. Expenditures to prepare and send a letter to a private citizen responding to an inquiry
concerning the proposed ballot measure if the letter is neutral in tone. (League of
Women Voters).
13. Expenditures to mail to city residents a newsletter containing articles describing the
ballot measure if the newsletter is regularly published by the city and the articles are
moderate in tone and do not exhort voters with regard to how they should vote.
(Vargas; Peninsula Guardians).
14. Expenditures to support an effort to increase voter registration and voter participation
if the effort does not include communications either expressly advocating, or taken as
a whole unambiguously urging, passage or defeat of a ballot measure. (Schroeder v.
Irvine City Council, 97 Cal. App. 4th 174 (2002)).
B. Courts have found the following expenditures improper after a ballot measure is placed
on the ballot.
Generally, any use of public funds by a City official or employee to promote or oppose a ballot
measure is improper. Specifically, the courts have found the following expenditures improper.
1. Expenditures to purchase items such as bumper stickers, posters, or television and
radio spots. (Stanson).
2 While the law does allow officials to participate as individuals in such groups, we urge caution in this regard.
Should one undertake such involvement, it should be made abundantly clear that it is done in the individual capacity
and not as an official.
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2. Expenditures involving the use of public employees during working hours, city
supplies and other city resources to engage in promotional activities. (League of
Women Voters).
3. Expenditures to disseminate literature prepared by private proponents or opponents of
a ballot measure. (Vargas; Stanson)
4. Expenditures to place an advertisement in a newspaper of general circulation in the
city a day prior to the scheduled vote on a ballot measure that is designed to influence
the voters, even though the words "Vote Yes" were not included in the advertisement.
(35 Ops.Atty.Gen 112).
D. Case Law
In the Vargas case, Measure 0 proposed the adoption of an ordinance that immediately would
cut in half, and over a few years, totally repeal, the city's Utility Users Tax (UUT). The UUT
was a local tax that had been in place for more than 30 years and had generated approximately $8
million in annual revenue for the city; a figure that represented 13 percent of the city's general
fund budget.
After Measure 0 had been placed on the ballot, the city manager prepared a lengthy report and
specifically identified the individual programs and service reductions recommended by the city
staff should Measure 0 be adopted. The report discussed in detail the financial implications of
the passage of the Measure, including recommended program and service reduction in each city
department. The report was formally presented to the city council where both supporters and
opponents of Measure expressed their opinions.
Thereafter, at four weekly meetings of the city council, each of the city departments made an
extensive slide presentation to the public describing the reductions in services and programs that
would be implemented in the event UUT revenues were reduced and ultimately eliminated
through the passage of Measure O. Pursuant to the city's normal practice, detailed minutes of
each city council meeting — summarizing the statements of each speaker — were posted on the
official city website. The city also posted on its website the report of the city manager setting
forth the financial impact of Measure 0 and describing in detail the service and program
reductions recommended for each department, the slide presentations that had been made by
each of the city departments, and city staff''s report responding to an alternative implementation
plan advanced by the proponents of Measure O.
After the city council formally voted to specify the particular city facilities, services, and
programs that the council would eliminate or reduce if the UUT were repealed, the city produced
a one -page document that briefly described the initiative measure and the background of the
UUT. The document listed, in separate categories, the "Facilities To Be Closed,"
"Programs/Services To Be Eliminated," "Community Funding To Be Eliminated," and
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"Programs/Services To Be Reduced." Copies of the one -page document were made available to
the public in the city clerk's office at city hall and in all city libraries.
In addition, the city identified the services and programs that would be eliminated or reduced if
the UUT were repealed through a number of articles published in the city's regular quarterly
newsletter. The newsletter included, among other things, an article that contained the same text
as the one -page document described above and additional articles that described the proposed
cuts to police, fire, and recreation/park services that would be implemented should the UUT be
repealed.
The court in Vargas held that the city council had the authority to decide, in advance of the
election on Measure 0, which services would be cut should the Measure be adopted, and then to
inform the city residents of the council's decision. The court also held that in posting on the
city's website the detailed minutes of all the city council meetings relating to the council's
action, along with the detailed and analytical reports prepared by the various municipal
departments and presented by department officials at city council meetings, the city engaged in
permissible informational rather than campaign activity.
With regard to the one -page document and making copies of the document available to the
public at the city clerk's office and at public libraries, the Vargas court held that the one -page
document was clearly an informational document that did not advocate or recommend how the
electorate should vote on the ballot measure and its style and tenor was not at all comparable to
traditional campaign material. Finally, the court held that the city did not expend public funds for
impermissible campaign activity by mailing to city residents the newsletter shortly before the
election. The court said that the newsletter was a regular edition of the city's quarterly newsletter
that, as a practice, was mailed to all city residents, rather than a special edition created and sent
to would-be voters. Further, the court said that the style and tenor of the newsletter was
distinguishable from traditional campaign material in that it was moderate in tone and did not
exhort voters with regard to how they should vote.
In the Peninsula Guardians case, the Peninsula Health Care District (District) leased an acute
care hospital facility to Mills -Peninsula Health Service (MPHS). During the term of the lease, the
State of California adopted strict seismic standards for acute care hospitals, which meant that the
hospital would require substantial modifications. District and MPHS determined that compliance
with the seismic standards would be better achieved with the construction of new hospital facility
rather than a retrofit of the existing facility. Therefore, District and MPHS entered into a set of
agreements, which included a Master Agreement, which provided for MPHS to develop,
construct, and operate a new acute care hospital.
Under the agreements, District was obligated to hold an election on a ballot measure asking
voters to approve District's entry into the Master Agreement with MPHS. Measure V was
placed on a mail -in ballot for this purpose.
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Prior to Measure V being placed on the ballot, District communicated with District residents
about the need for a new hospital. The first edition of a newsletter included a letter from the
Board of Directors of District (Board) explaining that the existing hospital did not meet new
seismic safety standards and that a new hospital would be a better approach than retrofitting the
old one. In the second edition of the newsletter, the Board outlined reports and presentations it
had received from its architectural, health care, financial, and economic consultants addressing
different aspects of the proposal for a new hospital. These consultants made presentations at
public Board meetings and the presentations were available on the Board's website. The third
edition of the newsletter summarized a tentative agreement negotiated with MPHS.
After Measure V was placed on the ballot and prior to the election, District sent a newsletter to
District residents which devoted sections to various aspects of Measure V, including the details
of the Master Agreement, the construction timeline, the reason District needed a new hospital,
how the mail -in ballot worked, and the "new hospital for the next century," which set out the
features and facilities included in the new hospital. In this newsletter, it stated that the Board was
"proud of the final terms of the agreement" and described it as a "fair deal".
District also sent three postcard mailers to voters concerning Measure V before the election. The
first mailer was headed "What is Measure V?" and it explained that District and MPHS had
reached an agreement for the construction of new hospital. Under the subheading "Measure V
Will Ensure," the mailer listed four bullet points on the key terms of the Master Agreement. The
second mailer was headed "How the Mail -In Ballot Works." It told voters that there will be no
polling places and restated the four bullet points listed in the first mailer. A third mailer headed
"Don't Forget to Vote," reminded voters to vote and restated the four bullet points. District spent
District funds in connection with the preparation and mailing of the newsletters and postcard
mailers.
The court in Peninsula Guardians, relying heavily on Vargas, held that District's materials, like
those in Vargas, were primarily factual and informative, moderate in tone, and did not include
emotional or inflammatory warnings about the negative consequences for District residents if the
hospital was not approved. Further, the court said that the language in the newsletter and
postcard mailers was consistent with the District's ongoing style of communication with
residents noting that the District's newsletters prior to Measure V being put on the ballot used
similar language. The court also noted that District did not suddenly begin communicating about
the proposed hospital on the eve of the election.
As stated earlier in this memorandum, a court will look at the facts of each case to determine
whether an expenditure of public funds is proper. The determination will depend upon a careful
consideration of the style, tenor, and timing of a communication. City officers and employees should
ensure that any communication regarding a ballot measure already on the ballot is factual and
informative, moderate in tone, and does not advocate or recommend how the electorate should vote
on the ballot measure.
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V. CONCLUSION
The improper use of public funds to promote or oppose a ballot measure already on the ballot can
lead to serious consequences. If any City officers or employees engage in inappropriate spending of
public funds to promote or oppose a ballot measure already on the ballot, the penalties can include
civil suits for declaratory and injunctive relief, for violation of the campaign reporting requirements
of the Political Reform Act, for violation of due process rights protected by the Fourteenth
Amendment, and for reimbursement of public funds. Penalties can also include the invalidation of
the ballot measure. Further, such impermissible expenditures may be the basis for criminal
prosecutions for misuse of public funds or for embezzlement by a public officer.
Specific inquiries on the proper and improper expenditure of public f . ds regarding a ballot measure
should be directed to the City Attorney's Office.
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audi. Ga•'tua Silva
City At