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HomeMy WebLinkAbout03 - Campaign Contribution Limit IncreaseCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 3 July 14 2009 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: David R. Hunt, City Attorney ext. 3131, dhunt @city.newport- beach.ca.us SUBJECT: SECOND READING REGARDING AMENDMENT OF CAMPAIGN CONTRIBUTION ORDINANCE, AS REVISED, TO INCREASE THE LIMIT ON INDIVIDUAL CAMPAIGN CONTRIBUTIONS TO $1,000, AND PROVIDE FOR ADJUSTMENT OF CONTRIBUTION LIMITS BASED ON THE CONSUMER PRICE INDEX ISSUE: Should the Council adopt the amend campaign raise individual campaign contribution limits from provide for adjustment of contribution limits base second reading and adoption? RECOMMENDATION: contribution ordinance, as revised, in order to m the current $500 to $1,000 per person, and d on the Consumer Price Index (CPI) through Based upon the Council's action at the June 25, 2009 meeting, we recommend you conduct second reading and adopt Ordinance No. 2009 -14 amending Chapter 1.25 of the Municipal Code, as revised. DISCUSSION: The Council conducted a first reading of this proposed ordinance at its June 25, 2009 meeting. It gave direction on alternatives and one slight modification. Both changes are now incorporated in the final ordnance as directed. Therefore, per the Council's previous direction, we recommend second reading and adoption of final Ordinance No. 2009 -14 as attached. Environmental Review: This is not a project under CEQA. Public Notice: This agenda item has been noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). It was posted at City Hall and on the City's website. Funding Availability: No funding is necessary. Amendment to Campaign Contribution Ordinance July 14, 2009 Page 2 Alternatives: The Council may choose not to take the action recommended or instruct staff to consider alternatives for Council's consideration. Prepared by: David R. Hunt, City Attorney Attachments: Revised Ordinance Amending NBMC Chapter 1.25 (A09- 004521- Staff Report - Second Reading ORDINANCE NO. 2009-14 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, AMENDING CHAPTER 1.25 TO NEWPORT BEACH MUNICIPAL CODE PERTAINING TO MUNICIPAL ELECTION CAMPAIGN CONTRIBUTION AND EXPENDITURE CONTROL NOW THEREFORE, the City Council of the City of Newport Beach, California, HEREBY ORDAINS as follows: SECTION 1: Chapter 1.25 of Newport Beach Municipal Code is hereby amended to read as follows: Sections: 1.25.010 Purpose and Findings. 1.25.015 Intent. 1.25.020 Definitions. 1.25.030 Campaign Contributions -- Limitations. 1.25.040 Penalties. 1.25.050 Severability. 1.25.010 Purpose and Findings. The City Council of the City of Newport Beach finds and declares as follows: A. The primary purpose of the ordinance codified in this chapter is to prevent corruption, or the appearance of corruption, which results from the real or imagined influence of large contributions on the conduct or actions of candidates elected to office. B. The limits on contributions to candidates and controlled committees imposed by this chapter will encourage candidates and their supporters to raise funds from a greater number of persons than would otherwise involve themselves in the political process. C. Contribution limits encourage persons to expend funds that would otherwise be contributed to candidates on direct political expression which will broaden the discussion and debate on issues of importance to the electorate. D: These contribution limits will not reduce the total amount of money potentially available, or used, to promote expression in the context of a political campaign, but will increase the. amount of independent expenditures and encourage the dissemination of political expression through a wider variety of media sources. 1 E. Local campaign contribution limits are municipal affairs and this chapter is authorized pursuant to the laws and Constitution of the State of California, as well as the Charter of the City of Newport Beach. F. The contribution limitations imposed by this chapter are consistent with the spirit, intent and letter of the Political Reform Act of 1974. 1.25.015 Intent. The intent of this chapter is to impose limits on the amount of money that may be contributed to a candidate or controlled committee to achieve the purposes specified in Section 1.25.010. This chapter is not intended, and shall not be construed, to establish any reporting, filing, or procedural requirement in addition to, or different from, the Political Reform Act or the regulations adopted by the Fair Political Practices Commission (FPPC). 1.25.020 Definitions. The terms used in this chapter shall have the same definitions as specified in the Political Reform Act, and FPPC regulations. In those cases where definitions in the Political Reform Act or FPPC regulations contain a specific reference to any State election, candidate, or electoral criteria, the definition shall be modified to reflect the municipal equivalent, or in the absence of a municipal equivalent, to delete the specific reference. 1.25.030 Campaign Contributions -- Limitations. A. Contributions by Persons to Candidates or Controlled Committee(s). No person shall make any contribution to a candidate and /or the candidate's controlled committee(s), with respect to any single election, which would cause the total amount contributed by such person to the candidate and the candidate's controlled committee(s), when combined, to exceed one thousand dollars ($1,000.00). B. Acceptance or Solicitation by Candidates or Controlled Committee(s). No candidate or controlled committee shall solicit or accept any contribution from any person which would cause the total amount contributed by such person, with respect to any single election, to the candidate and the candidate's controlled committee(s), when combined, to exceed the sum of one thousand dollars $1,000.00). C. Contributions by Candidates. The provisions of subsections (A) and (B) shall not apply to contributions from a candidate to his or her controlled committee(s) nor to the expenditure, by the candidate, of his or her personal funds. D. Contributions to Committees. Contributions made to any person or a committee, and not to a candidate or controlled committee, shall not be considered as contributions to the candidate or controlled committee notwithstanding the fact that such person or committee supports the candidate or uses the contribution with a view to bringing about the nomination or election of the candidate. 2 E. Anonymous Contributions. No candidate or controlled committee shall accept anonymous contributions, with respect to any single election, which would cause the total amount of anonymous contributions received by the candidate and the candidate's controlled committee(s), when combined, to exceed two hundred dollars ($200.00). Subject to the provisions of State law, in the event any candidate or controlled committee(s) receive(s) an anonymous contribution that would, if accepted in whole or in part, result in a violation of this subsection, the candidate or controlled committee(s) shall promptly pay that sum to the City for deposit into the general fund to be used to defray the costs of municipal elections. F. Adjustment for Cost of Living Changes. The campaign contribution limits and contribution acceptance and solicitation limits set forth in Subsections 1.25.030(A) and (B) shall be adjusted in February at two (2) year intervals beginning in 2011 by the City Clerk to reflect annual changes in the Consumer Price Index (CPI) over the previous two (2) year period. The City Clerk shall use the annual percent change in the Consumer Price Index for All Urban Consumers (CPI -U) in the selected local area of Los Angeles — Riverside — Orange County, California to determine the appropriate rate of increase or decrease. Adjustments made pursuant to this subsection shall be rounded to the nearest ten dollars ($100.) 1.25.040 Penalties. A. Any person who knowingly and willfully violates the provisions of Section 1.25.030 is guilty of a misdemeanor. B. In addition to any criminal penalty, if, after a candidate is elected, the candidate is convicted of a violation of the provisions of Section 1.25.030, the election to office of such candidate shall be void and the office shall become vacant as of the date of conviction or on the date upon which the candidate would otherwise take office, whichever occurs later. In such event, the vacancy shall be filled in accordance with the provisions of 403 of the City Charter. If a candidate is convicted of a violation of Section 1.25.030 at any time prior to the election of the candidate, the candidacy shall be terminated immediately and the candidate shall no longer be eligible for election. C. The City Attorney shall have the power to enforce this chapter only to the extent that office has authority to enforce provisions of the Political Reform Act. In the event that the City Attorney is not authorized to enforce the provisions of this chapter, the District Attorney shall generally function as criminal prosecutor and the City Council shall have the authority to appoint a special counsel to enforce civil penalties as provided in subsection (B), or to function as the criminal prosecutor in the event that the District Attorney is unable or unwilling to do so. 1.25.050 Severability. 3 If any provision of the ordinance coded in this chapter, or the application of such provision to any person or circumstances, shall be held invalid, the remainder of the ordinance codified in this chapter to the extent it can be given effect, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, and to this end the provisions of the ordinance codified in this chapter are severable. SECTION: 2: That if any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, clause or phrase hereof, irrespective of the fact that any one to more sections, subsections, sentences, clauses and phrases be declared unconstitutional. SECTION 3: The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 23nd day of June, 2009, and adopted on the 14"' day of July, 2009, by the following vote, to -wit: AYES, COUNCILMEMBERS NOES, COUNCILMEMBERS. ABSENT, COUNCILMEMBERS MAYOR Edward Selich ATTEST: Leilani Brown, City Clerk I7 APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY w By es David R. Hunt, City Attomey Amending Chapter 1.25- Final Post 1st Reading 5 CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 23 June 23, 2009 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: David R. Hunt, City Attorney ext. 3131, dhunt @city.newport- beach.ca.us SUBJECT. AMENDMENT OF CAMPAIGN CONTRIBUTION ORDINANCE, AS REVISED, TO INCREASE THE LIMIT ON INDIVIDUAL CAMPAIGN CONTRIBUTIONS TO $1,000, AND PROVIDE FOR ADJUSTMENT OF CONTRIBUTION LIMITS BASED ON THE CONSUMER PRICE INDEX ISSUE: Should the Council amend the campaign contribution ordinance, as revised, in order to raise individual campaign contribution limits from the current $500 to $1,000 per person, and provide for adjustment of contribution limits based on the Consumer Price Index (CPI)? RECOMMENDATION: Approve an ordinance amending Chapter 1.25 of the Municipal Code, as revised, and pass to second reading on July 14, 2009. DISCUSSION: Statutory Background: The Political Reform Act of 1974 (codified in Title 9 of the California Government Code) sets forth campaign contribution limits for individuals, different types of committees and aggregates of individuals and affiliated entities. Specific limits are set forth in Government Code Sections 5301, 5302, and 5303 for contributions to candidates for state office (the State Legislature), and the Governor and other statewide elected offices (Lieutenant Governor, Attorney General, Insurance Commissioner, Controller, Secretary of State, Treasurer, Superintendant of Public Instruction, and Board of Equalization, per the FPPC website.) For individual contributors, campaign contribution limits currently range from $3,200 (for a state legislative candidate) to $21,200 (for Governor.) It is well established that the City has the authority to enact limits on campaign contributions for elections to local elective office within the City. California Election Code Section 10202 provides that "[a] city may, by ordinance or resolution, limit campaign contributions in municipal elections." Government Code Section 81013 states that local agencies may impose requirements in addition to those imposed by the act on any person, so long as the requirements do not prevent that person from complying with applicable provisions of the Political Reform Act. Government Code Section Amendment to Campaign Contribution Ordinance June 23, 2009 Page 2 85703 also provides, `Nothing in this act shall nullify contribution limitations or prohibitions of any local jurisdiction that apply to elections for local elective office, except that those provisions may not conflict with the provisions of Section 85312." (Section 85312 pertains to payments for communication to members of organizations.) Increasing Individual Contributions to $1.000 Specific limits on candidates for local office are not listed in the Political Reform Act. The FPPC website notes that nothing in Proposition 34 nullifies local contribution limits. The FPPC website also identifies a number of the provisions of the Act which do apply to local candidates, including Sections 85703, 85700, 85312, 85500(b), 855501, 85919, 84204(b), 84305.6, 84511, 84501- 84510, 91005.5 and 85701. None of these sections limit the City s ability to impose or increase its individual campaign contribution limits to the level requested, or to enact legislation providing for future CPI increases. "Limits on contributions to political campaigns are permissible under the First Amendment as long as the Government demonstrates that the limits are closely drawn to match a sufficiently important government interest." Citizens for Clean Govemment v. City of San Diego, 474 F.3d 647, 650 (911' Cir. 2007), quoting Randall v. Sorrell, 126 S.Ct. 2479, 2491 (2006) (internal quotation marks omitted.) The purpose and findings listed in existing NBMC Section 1.25.010 are sufficient to demonstrate important government interests (avoiding corruption, or appearance thereof; encouraging fundraising from a broader range or persons). Campaign contribution limits are restrictions that are closely drawn to further those interests. Raising the contribution limit to $1,000 per individual contributor does not appear to undermine the City's stated interests. The City's current individual campaign contribution limit of $500 was adopted in 1995. Costs associated with political campaigns have increased over the intervening 14 years, to the extent that an individual contribution of $1,000 appears no more likely to result in corruption, the appearance of corruption, or limiting fundraising efforts to a narrow range of contributors than a contribution of $500 would have created in 1995. - At least two other cities reviewed (Torrance and Santa Ana) had individual campaign contribution limits of $1,000. Other cities reviewed included Dana Point ($450), Irvine ($300) and Huntington Beach ($500.) Providing for Adjustments to Contribution Limits Proposition 34 added Section 83124 to the Political Reform Act. Cal. Gov. Code Section 83124 requires that contribution and expenditure limits for elected state offices be increased or decreased in accordance with changes in the Consumer Price Index in January of every odd - numbered year. For elections to state office, adjustments shall be rounded to the nearest one hundred dollars ($100) for limitations on contributions, and to the nearest one thousand dollars ($1,000) for limitations on expenditures. Although many cities in Orange County have enacted provisions tying adjustments in individual local campaign contribution limits to the Consumer Price Index (CPI), the Newport Beach Municipal Code currently contains no provision for increases or decreases tied to the CPI. To allow for such fluctuations in costs, proposed language is provided in the attached redline of the current ordinance. Amendment to Campaign Contribution Ordinance June 23, 2009 Page 3 Other requirements Government Code Section 81009.5 requires any local government that enacts, amends or repeals any ordinance or other provision of law affecting campaign contributions and expenditures to file a copy of the action with the Fair Political Practices Commission. If adopted, the resolution adopting this amendment will need to be filed with the FPPC. Recommendation — Proposed changes to NBMC Chapter 1.25 are reflected in proposed Ordinance No. 2009 - attached hereto. It increases the limit for individual campaign contributions, and for the solicitation and acceptance of such individual contributions, to $1,000. It also provides two options for tying the limit to fluctuations in the CPI; one is very speck and provides for computation of individual years and rounding the total adjusted amount for a two year period, and one is much simpler and provides for increases or decreases in the CPI within an entire two -year period. Another variable to consider is whether the Council wishes to approve the adjusted limits by Council resolution, or whether the fluctuation should be handled entirely at the staff level. Language providing for both options is provided in the attachment. We recommend the Council consider the options presented in the attached proposed Ordinance 2009 -_, select the options it wishes to adopt, and direct staff to prepare the ordinance as revised, to be introduced for first reading and scheduled for second reading and adoption of the ordinance at the July 7, 2009 City Council meeting. Environmental Review: This is not a project under CEQA. Public Notice: This agenda item has been noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). It was posted at City Hall and on the City's website. Funding Availability; No funding is necessary. Alternatives: The Council may choose not to take the action recommended or instruct staff to consider alternatives for Council's consideration. Pre ared by: David R. Hunt, City Attorney Attachments: Revised Ordinance Amending NBMC Chapter 1.25 ORDINANCE NO. 2009- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, AMENDING CHAPTER 1.25 TO NEWPORT BEACH MUNICIPAL CODE PERTAINING TO MUNICIPAL ELECTION CAMPAIGN CONTRIBUTION AND EXPENDITURE CONTROL NOW THEREFORE, the City Council of the City of Newport Beach, California, HEREBY ORDAINS as follows: SECTION 1: Chapter 1.25 of Newport Beach Municipal Code is hereby amended to read as follows: Sections: 1.25.010 Purpose and Findings. 1.25.015 Intent. 1.25.020 Definitions. 1.25.030 Campaign Contributions -- Limitations. 1.25.040 Penalties. 1.25.050 Severability. 1.25.010 Purpose and Findings. The City Council of the City of Newport Beach finds and declares as follows: A. The primary purpose of the ordinance codified in this chapter is to prevent corruption, or the appearance of corruption, which results from the real or imagined influence of large contributions on the conduct or actions of candidates elected to office. B. The limits on contributions to candidates and controlled committees imposed by this chapter will encourage candidates and their supporters to raise funds from a greater number of persons than would otherwise involve themselves in the political process. C. Contribution limits encourage persons to expend funds that would otherwise be contributed to candidates on direct political expression which will., broaden the discussion and debate on issues of importance to the electorate. D. These contribution limits will not reduce the total amount of money potentially available, or used, to promote expression in the context of a political campaign, but will increase the amount of independent expenditures and encourage the dissemination of political expression through a wider variety of media sources. 1 E. Local campaign contribution limits are municipal affairs and this chapter is authorized pursuant to the laws and Constitution of the State of California, as well as the Charter of the City of Newport Beach. F. The contribution limitations imposed by this chapter are consistent with the spirit, intent and letter of the Political Reform Act of 1974. 1.25.015 Intent. The intent of this chapter is to impose limits on the amount of money that may be contributed to a candidate or controlled committee to achieve the purposes specified in Section 1.25.010. This chapter is not intended, and shall not be construed, to establish any reporting, filing, or procedural requirement in addition to, or different from, the Political Reform Act or the regulations adopted by the Fair Political Practices Commission (FPPC). 1.25.020 Definitions. The terms used in this chapter shall have the same definitions as specified in the Political Reform Act, and FPPC regulations. In those cases where definitions in the Political Reform Act or FPPC regulations contain a specific reference to any State election, candidate, or electoral criteria, the definition shall be modified to reflect the municipal equivalent, or in the absence of a municipal equivalent, to delete the specific reference. 1.25.030 Campaign Contributions — Limitations. A. Contributions by Persons to Candidates or Controlled Committee(s). No person shall make any contribution to a candidate and /or the candidate's controlled committee(s), with respect to any single election, which would cause the total amount contributed by such person to the candidate and the candidate's controlled committee(s), when combined, to exceed five4Hmdnedone thousand dollars ($6W J1 000.00). B. Acceptance or Solicitation by Candidates or Controlled Committee(s). No candidate or controlled committee shall solicit or accept any contribution from any person which would cause the total amount contributed by such person, with respect to any single election, to the candidate and the candidate's controlled committee(s), when combined, to exceed the sum of five4wndredone thousand dollars ($6W $j 000.00). C. Contributions by Candidates. The provisions of subsections (A) and (B) shall not apply to contributions from a candidate to his or her controlled committee(s) nor to the expenditure, by the candidate, of his or her personal funds. D. Contributions to Committees. Contributions made to any person or a committee, and not to a candidate or controlled committee, shall not be considered as contributions to the candidate or controlled committee notwithstanding the fact that such person or committee supports the candidate or uses the contribution with a view to bringing about the nomination or election of the candidate. 2 E. Anonymous Contributions. No candidate or controlled committee shall accept anonymous contributions, with respect to any single election, which would cause the total amount of anonymous contributions received by the candidate and the candidate's controlled committee(s), when combined, to exceed two hundred dollars ($200.00). Subject to the provisions of State law, in the event any candidate or controlled committee(s) receive(s) an anonymous contribution that would, if accepted in whole or in part, result in a violation of this subsection, the candidate or controlled committee(s) shall promptly pay that sum to the City for deposit into the general fund to be used to defray the costs of municipal elections. F. Adiustment for Cost of Living Changes. 1. Adjustment. The campaign contribution limits and contribution acceptance and solicitation limits set forth in Subsections 1.25.030(A) and (B) shall be adiusted in February at two (2) year intervals beginning in 2011 by the City Clerk to reflect annual changes in the Consumer Price Index (CPI) over the previous two (2) year period. The City Clerk shall use the annual percent change in the Consumer Price Index for All Urban Consumers (CPI -U) in the selected local area of Los Angeles — Riverside — Orange County, California to determine the appropriate rate of increase or decrease. The City Clerk shall compute the adiustment for each year separately, adding the adjustment for each year to the prior year's limit and then rounding the total adjusted amount:forthe two (2) year period. The new limit representing the rounded total adjustments for the previous two U year period shall be presented to the Citv Council for approval by resolution. 2. Rounding of Adjusted Amounts. If the total adiusted limit under Subsections 1.25.030(A) and (B) for the two (2) year period ends in a digit between one and four (4), then the limit shall be rounded down to the next lowest multiple of ten (10). If the final adjusted limit for the two (2) year period ends in a digit between five (5) and nine (9). then the limit shall be rounded up to the next highest multiple of ten (10). (Alternate wording of Section F. for simplified approach allowing the Clerk to round to the nearest $10 every two years.; Does not bring back for Council resolution): Fora simpler approach, instead of two separate section under Subsection F— end current section 1 at"... Orange County. California to determine the appropriate rate of increase or decrease Adjustments made pursuant to this subsection shall be rounded to the nearest ten dollars (SSOX 1.25.040 Penalties. A. Any person who knowingly and willfully violates the provisions of Section 1.25.030 is guilty of a misdemeanor. B. In addition to any criminal penalty, if, after a candidate is elected, the candidate is convicted of a violation of the provisions of Section 1.25.030, the election to office of such candidate shall be void and the office shall become vacant as of the date of conviction or on the date upon which the candidate would otherwise take office, whichever occurs later. In such event, the vacancy shall be filled in accordance with the provisions of 403 of the City Charter. If a candidate is convicted of a violation of Section 1.25.030 at any time prior to the election of the candidate, the candidacy shall be terminated immediately and the candidate shall no longer be eligible for election. C. The City Attorney shall have the power to enforce this chapter only to the extent that office has authority to enforce provisions of the Political Reform Act. In the event that the City Attorney is not authorized to enforce the provisions of this chapter, the District Attorney shall generally function as criminal prosecutor and the City Council shall have the authority to appoint a special counsel to enforce civil penalties as provided in subsection (B), or to function as the criminal prosecutor in the event that the District Attorney is unable or unwilling to do so. 1.25.050 Severability. If any provision of the ordinance codified in this chapter, or the application of such provision to any person or circumstances, shall be held invalid, the remainder of the ordinance codified in this chapter to the extent it can be given effect, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, and to this end the provisions of the ordinance codified in this chapter are severable. SECTION: 2: That if any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this Ordinance. The City Council hereby declares, that it would have passed this Ordinance and each section, subsection, clause or phrase hereof, irrespective of the fact that any one to more sections, subsections, sentences, clauses and phrases be declared unconstitutional. SECTION 3: The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the day of , 2009, and adopted on the day of . 2009, by the following vote, to -wit: AYES, COUNCILMEMBERS 4 NOES, COUNCILMEMBERS ABSENT, COUNCILMEMBERS ZT.We7 Edward Selich ATTEST: Leilani Brown, City Clerk APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY By David R. Hunt, City Attorney 5