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09.01 Campaign Contributions from Committees ORD 04-19 �� .0�9� 1� :'GORPORqTe: 'V' 7'ti'::`3� O`•, � �' - �= AGENDA ITEM :� Z�,�c�`�GA�`�o July 9, 2019 TO: Honorable Mayor and Members of the City Council THRU: Rick Otto, City Manager FROM: Gary A. Sheatz, City Attorney REVIEW: City Manag r Finance 1 . SUBJECT Ordinance No. 04-19 — Introduction and first reading of an Ordinance of the City Gouncil of the City of.Orange related to Campaign.Contributions from C.ommittees. 2.. SUMMARY An ordinance of the City Council of the City of Orange amending Title 2 of the Orange Municipal Code, by amending Chapter 2.10; section 2.10.090 regulating contributions from committees. . 3. RECOMMENDED ACTION Adopt Ordinance No: 04-19. 4. FISCAL IMPACT None. 5. STRATEGIC PLAN GOALS Goal 1: Provide outstanding public service a. Obtain, implement, and evaluate public input into our services and pr.ograms. 6. DISCUSSION AND BACKGROUND City campaigns.are primarily regulated by the Political Reform Act ("Act"), Government Code Section 8100 et seq. However, Government Code does allow cities to adopt local contribution limits and other campaign regulations as long as they do not conflict uvith state law. As such, in 1992, the City of Orange adopted a campaign reform ordinance codified in Chapter 2.10 of the Orange Municipal Code. Shirley Grindle, the original author of the City of Orange Campaign Reform Law, recently recommended several clarifying amendments .to City Code sectio.n 2.10.090 regulating contributions from committees. Ms. Grindle's suggestions were provided to clarify rules ITEM � • � 1 7/09/2019 that apply to existing transfer requirements and one-time intra-candidate campaign committee transfers. The proposed changes are summarized as follows: 1. Amendment to OMC Section 2.10.090 C.2. This amendment adds language clarifying that the transferred contributions shall be deemed contributed, aggregated, during the same election cycle in which they are received. While this may seem obvious and unnecessary it was not specifically stated and is important for calculating campaign contribution limits during an election cycle. Changes to this section also include the requirement that transferred contributions shall be itemized on Schedule A of Form 460 and identify the transferor committee for those contributions transferred. Here again is a provision that implied reporting transferred funds would be itemized but was not specifically stated. The amended language makes City Candidate compliance easier. ' 2. Amendment to OMC Section 2.10.090 C.3. The old language has been eliminated in its entirety. It required a City Candidate to notify each contributor, to which a transferred contribution is attributed, of the amount of the transfer, and thereafter file an affidavit of proof of compliance with this section when he or she files their campaign disclosure statement. Failure to comply with this section called for the transferred funds to be forFeited to the City's general fund. Aside from being confusing and cumbersome to comply with, this provision is likely unenforceable under existing state law. As this provision has never been complied with, nor enforced by this office, the City Attorney recommends deleting it from the Code. Replacement language has been added clarifying the rules for one-time intra- candidate campaign committee transfers. It provides that a City Candidate shall make a one-time transfer of campaign contributions from a different campaign controlled committee only at the time he or she forms their City campaign committee. Subsequent contributions from a transferor committee are prohibited. 3. Delete OMC Section 2.10.090 C.4. in its entirety. With the adoption of the revised language proposed in the preceding section this section is redundant and no longer necessary. - The City Attorney has reviewed and recommends the changes proposed in Section 2.10.090 C, as attached. The amendments clarify existing transfer and reporting provisions making compliance easier and less cumbersome and eliminates redundancy in the Code. 7. ATTACHMENT • Ordinance No. 04-19 - Clean • Ordinance No. 04-19 — Redline ITEM 2 7/09/2019 ORDINANCE NO. 4-19 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ORANGE AMENDING SECTION 2.10.090 OF THE ORANGE MUNICIPAL CODE RELATING TO CONTRIBUTIONS FROM COMMITTEES. WHEREAS,the City of Orange has adopted campaign reform laws, codified in Chapter 2.10 of the Orange Municipal Code ("Code"), which are intended to supplement the Political Reform Act of 1974; and WHEREAS, Section 2.10.090 of the Code regulates the transfer of campaign funds and contributions to a campaign comrnittee for a City office from another campaign committee; and WHEREAS, this current Code section is unclear in some regards, and as such, is cumbersome to comply with and difficult to enforce; and WHEREAS, the proposed changes provide clarity to the transfer of campaign funds among campaign committees. NOW THEREFORE,the City Council of the City of Orange does ordain as follows: SECTION I. Orange Municipal Code Section 2.10.090 is hereby amended to read as follows: 2.10.090—Contributions from Committees. A. Contributions Transferred from Committees. Contributions from candidate controlled committees to a City Candidate Committee are prohibited except as provided in Section 2.10.090.C. B. No committee controlled by a City Candidate or Elective City Officer shall make any contribution to any other committee supporting or opposing a City Candidate for office. C. Contributions Transferred Between Controlled Committees by the Same City Candidate. If a City Candidate has more than one controlled committee, any transfers into the City Candidate's City Candidate Committee sha11 be governed by the following rules: 1. Transferred contributions shall be deemed contributed during the election cycle in which they are transferred to the receiving City Candidate Committee. 2. Transferred contributions shall be attributed to each contributor on a last in-first out (LIFO) basis and shall be aggregated with any contributions made by such contributor directly to the City Candidate Committee in the same election cycle and shall be subj ect to the contribution limits of this chapter. Transferred contributions shall be itemized on Schedule A of Form 460 or any successor form, and shall identify the transferor committee for those contributions being transferred. 3. A one-time transfer shall be made at the time the City Candidate forms his/her controlled committee. Subsequent contributions received by the transferor committee on or after the date the City Candidate formed a committee to run for City office may not be transferred to the transferee committee established for that City office. D. No person or committee shall accept or make any contribution that is conditioned upon all or part of the contribution being transferred to a City Candidate Committee or otherwise violates Government Code Section 84301. Any contributions received in violation of this subsection shall be paid by the City Candidate to the City's general fund within sixty (60) days of discovery of the violation. SECTION II: Should any section, subsection, clause, or provision of this Ordinance for any reason be held to be invalid or unconstitutional, such invalidity or unconstitutionaliiy shall not affect the validity or constitutionality of the remaining portions of this Ordinance;it being hereby expressly declared that this Ordinance, and each section, subsection, sentence, clause and phrase hereof would have been prepared, proposed, approved and ratified irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. SECTION III: A summary of this Ordinance shall be published and a certified copy of the full text of this Ordinance shall be posted in the Office of the City Clerk at least five (5) days prior to the CiTy Council meeting at which this Ordinance is to be adopted. A summary of this Ordinance shall also be published once within fifteen (15) days after this Ordinance's passage in a newspaper of general circulation,published,and circulated in the City of Orange. The City Clerk shall post in the Office of the City Clerk a certified copy of the full text of such adopted Ordinance along with the names of those City Council members voting for and against the Ordinance in accordance with Government Code Section 36933. r ADOPTED this day of ,2019. Mark A. Murphy, Mayor, City of Orange ATTEST: Pamela Coleman, City Clerk, City of Orange 2 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) . CITY OF ORANGE ) I,PAMELA COLEMAN, City Clerk of the City of Orange,California,do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the_day of ,2019, and thereafter at the regular meeting of said City Council duly held on the_day of ,2019,was duly passed and adopted by the following vote,to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Pamela Coleman, City Clerk, City of Orange 3 ORDINANCE NO. 4-19 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ORANGE AMENDING SECTION 2.10.090 OF THE ORANGE MUNICIPAL CODE RELATING TO CONTRIBUTIONS FROM COMMITTEES. WHEREAS, the City of Orange has adopted campaign reform laws, codified in Chapter 2.10 of the Orange Municipal Code ("Code"), which are intended to supplement the Political Reform Act of 1974; and WHEREAS, Section 2.10.090 of the Code regulates the transfer of campaign funds and contributions from another campaign committee to a campaign committee for a City office; and WHEREAS, this current Code section is unclear in some regards, and as such, is cumbersome to comply with and difficult to enforce; and WHEREAS, the proposed changes provide clarity to the transfer of campaign funds among campaign committees. NOW THEREFORE,the City Council of the City of Orange does ordain as follows: SECTION I. Orange Municipal Code Section 2.10.090 is hereby amended to read as follows: 2.10.090—Contributions from Committees. A. Contributions Transferred from Committees. Contributions from candidate controlled committees to a City Candidate Committee are prohibited except as provided in Section 2.10.090.C. B. No committee controlled by a City Candidate or Elective City Officer shall make any contribution to any other committee supporting or opposing a City Candidate for office. C. Contributions Transferred Between Controlled Committees by the Same City Candidate. If a City Candidate has more than one controlled committee, any transfers into the City Candidate's City Candidate Committee shall be governed by the following rules: l. Transferred contributions shall be deemed contributed during the election cycle in which they are transferred to the receiving City Candidate Committee. 2. Transferred contributions shall be attributed to each contributor on a last in-first out �_' '' _ '�; basis and shall be aggregated with any contributions made by such contributor directly to the City Candidate Committee �1 tl�e � � ��,� .� � cI�and shall be subject to the contribution limits of this chapter. �� , lr�sl�lr��ct�. � �a�����ric�ns shali be itemized on � ,-,'rile A of Form 460 or any successor form, and shall identify the transferor ��ulinittee for those contributions being transferred. 3. . � s��rc��r�A one-time transfer shall be made at the time the Citv Candidate forms llis/her controlled committee. Subsequent contributions received by the transferor committee on or after the date the Citv Candidate formed a committee to run for City c�ftice mav not be transferred to the transferee committee established for that Citv oftice. r�,,,�•a.,to�� ,,,;t*oo D. No person or committee shall accept or make any contribution that is conditioned upon all or part of the contribution being transferred to a City Candidate Committee or otherwise violates Government Code Section 84301. Any contributions received in violation of this subsection shall be paid by the City Candidate to the City's general fund within sixty (60) days of discovery of the violation. SECTION II: Should any section, subsection, clause, or provision of this Ordinance for any reason be held to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this Ordinance;it being hereby expressly declared that this Ordinance, and each section, subsection, sentence, clause and phrase hereof would have been prepared, proposed, approved and ratified irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. SECTION III: A summary of this Ordinance shall be published and a certified copy of the full text of this Ordinance shall be posted in the Office of the City Clerk at least five (5) days prior to the City Council meeting at which this Ordinance is to be adopted. A summary of this Ordinance shall also be published once within fifteen (15) days after this Ordinance's passage in a newspaper of general circulation,published,and circulated in the City of Orange. The City Clerk shall post in the Office of the City Clerk a certified copy of the full text of such adopted Ordinance along with the names of those City Council members voting for and against the Ordinance in accordance with Government Code Section 36933. 2 ADOPTED this day of , 2019. Mark A. Murphy, Mayor, City of Orange ATTEST: Pamela Coleman, City Clerk, City of Orange STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF ORANGE ) I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the_day of , 2019, and thereafter at the regular meeting of said City Council duly held on the_day of , 2019,was duly passed and adopted by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Pamela Coleman, City Clerk, City of Orange 3