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HomeMy WebLinkAboutItem 3a: Municipal Campaign Expenditures and Financing rer 4 ot,vo U A>, 4,„ U Ir .:fedaw�<::e f" n.n. s no leg ilk* 0 %� °� ° MEMORANDUM Office of the City Attorney Date: October 4, 2011 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS . FROM: STEPHEN P. DEITSCH, CITY ATTORNEY *OA P. bil&i,.., S UBJECT: REPORT, DISCUSSION AND DIRECTION REGARDING THE REGULATION OF MUNICIPAL CAMPAIGN EXPENDITURES AND FINANCING Recommended Action: Provide Direction SUMMARY At the regular City Council meeting on September 6, 2011, Council Member Segal requested City Council support to have the City Attorney research whether the City can place a cap on campaign spending. Council Members Chandler and Amundson supported Council Member Segal's request to have the City Attorney research this issue and place on a future agenda for discussion. As a result of City Council direction, the attached legal opinion dated September 14, 2011 was prepared by the City Attorney and distributed to the City Council on September 22, 2011. DISCUSSION Article I, Chapter 7 of the Arcadia Municipal Code ("AMC") allows candidates running for local office to adopt voluntarily limits on campaign spending, which was adopted by Ordinance No. 2078 in 1997. Section 1701 permits candidates running for an elected city office to voluntarily adopt a campaign expenditure ceiling based on a formula of fifty ($0.50) cents per city resident and Section 1702 in turn, requires the City Council to determine and adopt by resolution not less than six (6) months prior to each general municipal election, the number of City residents for purposes of the voluntary campaign expenditure limit. As set forth in the attached memorandum prepared by the City Attorney, if the City Council desires limiting campaign expenditures voluntarily by candidates in municipal elections, the City would have to amend Sections 1701 and 1702 of the AMC to reflect changes in California law since their adoption in 1997. City efforts to regulate local campaign spending must fall within constitutional boundaries and adhere to the California Political Reform Act (Government Code § 81000 et seq.) ("Act"). The Act and the regulations enacted under it set forth a comprehensive statutory scheme governing 1 campaign financing in state and local elections. However, the Act expressly permits local agencies to some extent to enact local regulations concerning campaign financing. The City cannot impose a spending limit on a candidate's use of his or her personal funds in an election. A candidate who contributes personal funds to his or her own campaign engages in protected First Amendment expression. The U.S. Supreme Court emphasized that candidates should have the "unfettered opportunity" to air their views so the people could evaluate candidate's personal qualities and positions on public issues. Thus, limiting the use of a candidate's personal funds either as part of a mandatory expenditure limit or a limit on campaign contributions is unconstitutional. Voluntary campaign expenditure limits, on the other hand, are permissible for example where they are conditioned on the receipt of public funds. If a candidate has accepted to be bound by the Act's voluntary campaign expenditure limits, the Act's "bank account rule," and other relevant regulations will count the candidate's use of his or her personal funds towards the overall voluntary campaign expenditure limit. Further, the Act's remedies will apply to a candidate who exceeds these voluntary limits. The only exception to this rule according to the Fair Political Practices Commission ("FPPC") is the use of personal funds for filing fees and for ballot pamphlet statements, which would not count as part of any limit. As the City is prevented from enacting an outright cap on campaign spending, if the City is interested in regulating local campaign financing on a mandatory basis, it may instead consider regulating campaign contributions. Unlike limits on campaign expenditures, the courts have recognized that the government has an interest in capping the amount of contributions to candidates for political office. Sections 1701 and 1702 of the AMC are silent on candidates' acceptance of public funds and/or limits on campaign contributions. However, these sections provide for voluntary limits, and such voluntary limits have been upheld as constitutional. It should be noted that several cities throughout California have enacted local campaign finance regulations with contribution limitations that range from $250 in San Diego for a city council candidate ($300 for mayoral or city attorney candidates), to $300 in Irvine, to $500 in Los Angeles for a city council candidate ($1,000 for mayoral, city attorney or city controller candidates). FISCAL IMPACT There would be no fiscal impact to the City as a result of City Council action. 2 RECOMMENDED ACTION If the City Council would like to continue to regulate campaign expenditures by candidates in municipal elections on a voluntary basis, the City would have to amend Sections 1701 and 1702 of the Arcadia Municipal Code to reflect changes in California law since their adoption in 1997. Alternatively or together with any such voluntary expenditure limit, the City Council could consider limiting campaign contributions to City Council candidates (separate and apart from and not counting personal contributions by the candidate). CONCUR: Donald Penman City Manager Attachment: City Attorney Memorandum dated September 14, 2011 3 OF All ��4 zALiroe rii'4,d c). riP714 il .reap` ::ril, o lna•n.puwl.G u■u.l 3,1303 CO4 o4� OS`b MEMORANDUM Office of the City Attorney Date: September 14, 2011 CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE MATERIAL TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: STEPHEN P. DEITSCH, CITY ATTORNEY St-014K Q' DSA c'L.. SUBJECT: REGULATION OF MUNICIPAL CAMPAIGN EXPENDITURES AND FINANCING BACKGROUND Chapter 7 of the Arcadia Municipal Code ("AMC") allows candidates running for local office to adopt voluntarily limits on campaign spending. Section 1701 of the AMC permits candidates running for an elected city office to voluntarily adopt a campaign expenditure ceiling based on a formula of Fifty Cents per city resident. Section 1702 of the AMC in turn, requires the City Council to determine by resolution and not less than six months prior to each general municipal election, the number of City residents for purposes of the voluntary campaign expenditure limit. As the foregoing ordinances were adopted and have gone unchanged since 1997, the City has requested the City Attorney's opinion as to what options it has available in further regulating municipal campaign financing in accordance with changes in law. QUESTIONS PRESENTED 1. May the City enact mandatory campaign expenditure limits in municipal elections? 2. May the City continue to regulate campaign expenditures by candidates for the City Council in municipal elections through Sections 1701 and 1702 of the AMC? Short Answers 1. Likely not. Any such regulations would meet heightened constitutional scrutiny and likely fail. If the City is interested in regulating the amount of money spent in municipal elections, it is more likely to be met with success, instead, by regulating the contributions to candidates for City Council. 1 A copy of Chapter 7 of the AMC is attached hereto at the end of this memorandum. 1 2. Yes, however, the City must amend Sections 1701 and 1702 of the AMC to reflect changes in California law since their adoption. Moreover, the City might want to consider amending said provisions to incentivize candidates to limit their campaign expenditures in municipal elections. DISCUSSION 1. Local Regulation of Campaign Financing City efforts to regulate local campaign financing must fall within constitutional boundaries and adhere to the California Political Reform Act (Government Code § 81000 et seq.) ("Act"). The Act and the regulations enacted pursuant thereto set forth a comprehensive statutory scheme governing campaign financing in state and local elections. However, the Act expressly permits local agencies to enact local regulations concerning campaign financing. Specifically, Government Code2 Section 81013 provides as follows: "Nothing in this title prevents the Legislature or any other state or local agency from imposing additional requirements on any person if the requirements do not prevent the person from complying with this title." The only limitations on local campaign financing regulations are that the regulations may only be applied to candidates seeking election in the local agency's jurisdiction. The regulations may also only be applied to the candidates' controlled committees and general purpose committees3 active only in that local agency's jurisdiction.4 According to Section 81013, the City may enact its own campaign finance regulations, which may include provisions to voluntarily limit campaign expenditures or limit campaign contributions to a specified dollar amount. Limiting Campaign Expenditures Ordinances or regulations that restrict campaign contributions or expenditures implicate First Amendment rights.5 Restrictions on campaign expenditures face the highest constitutional scrutiny which requires, to be valid, that such restrictions must be both "narrowly tailored to the evil that may legitimately be regulated,"6 and necessary to serve a compelling state interest.' 2 All further statutory references are to the California Government Code unless otherwise specified. 3 Political Action Committees are considered general purpose committees and are subject to the same rules and regulations. Gov. Code§§ 82027.5, 82013. 4 Gov. Code § 81009.5,subd. (b). 5 See Buckley v. Valeo(1976)424 U.S. 1, 19. 6 Federal Election Comm'n v.National Conservative PAC(1985)470 U.S.480,496. 7 Federal Election Comm'n v.Massachusetts Citizens for Life, Inc. (1986)479 U.S.238,251; See also Citizens United v. Federal Elections Comm'n 2010 U.S.LEXIS 766. 2 U.S. Supreme Court cases addressing the issue have held that campaign spending limits are unconstitutional restrictions on First Amendment rights.8 According to the U.S. Supreme Court, these types of restrictions violate the First Amendment because they limit the number of issues a candidate or group can discuss and affect the depth of expression that a candidate or group can explore, while limiting the number of people a candidate or group can reach.9 Unlike campaign contribution restrictions, the government's interest in ridding the electoral process of the corruption and appearance of impropriety is insufficient to justify campaign-related expenditure limits.lu Also an insufficient justification to limit campaign-related expenditures is equalizing the amount of funds spent by the candidates and their committees or equalizing competing candidates' financial resources.11 Indeed, the U.S. Supreme Court has suggested that no governmental interest thus far expressed has sufficiently justified the restriction on the quantity of political expression imposed by campaign expenditure limitations.12 Similarly, the City cannot impose a spending limit on a candidate's use of his or her personal funds in an election.13 A candidate who contributes personal funds to his or her own campaign engages in protected First Amendment expression.14 The U.S. Supreme Court emphasized that candidates should have the "unfettered opportunity" to air their views so the people could evaluate candidate's personal qualities and positions on public issues.15 The government's interest in preventing the appearance of impropriety and actual corruption cannot justify placing burdens on the candidates expenditure of his or her own personal funds because the problem of undue influence on candidates is'inapplicable to this context.16 Thus, limiting the use of a candidate's personal funds either as part of a mandatory expenditure limit or a limit on campaign contributions is unconstitutional.17 Voluntary campaign expenditure limits on the other hand, are permissible where they are conditioned on the receipt of public funds.18 If a candidate has accepted to be bound by the Act's voluntary campaign expenditure limits, the Act's "bank account rule,"19 and other relevant regulations 0 will count the candidate's use of his or her personal funds towards the overall voluntary campaign expenditure limit. Further, the Act's remedies will apply to a candidate who exceeds these voluntary limits.21 The only 8 Randall v. Sorrell(2006)548 U.S. 230,241-242[affirming Buckley]. 9 Id. 1°Buckley,supra, at p.46. 11/d. 12 Randall, supra,at p. 242. 13 Buckley, supra,at p. 54, 57 n65. 14/d. at p. 52. 15 Id. at p. 52-53. 16 Id. at p. 53. 17 Id. I B Id. 19 Codified at Gov. Code§ 85201. 20 Cal. Code Regs.,tit.2§ 18540,subd. (d). 21 See Gov. Code§§ 85400,85403. Penalties under the Act include charges of a misdemeanor for knowing and willful violations(Gov. Code§ 91000,subd.(a).);fines and penalties up to the greater of$10,000 or three times the amount that the candidate failed to report properly or unlawfully contributed,expended,gave or received(Gov. 3 exception to this rule according to the Fair Political Practices Commission ("FPPC") is the use of personal funds for filing fees and for ballot pamphlet statements.22 Thus, while the City may not outright cap campaign spending, it may condition campaign spending limitations on the acceptance of public funding or support. Sections 1701 and 1702 of the AMC are silent on candidates' acceptance of public funds. However, these sections provide for voluntary limits, and such voluntary limits have been upheld as constitutional. Limiting Contribution Amounts As the City is prevented from enacting an outright cap on campaign spending, if the City is interested in regulating local campaign financing on a mandatory basis, it may instead consider regulating campaign contributions. Unlike limits on campaign expenditures, courts have recognized that government has an interest in capping the amount of contributions to candidates for political office. Concerns regarding corruption, the appearance of corruption, and circumvention of otherwise valid campaign finance regulations have all been upheld as sufficiently important governmental interests to support a restriction on campaign contributions.23 However, the goal of equalizing political opportunities between candidates and parties has been rejected as a sufficiently important governmental interest, and cannot be used as the basis for a limitation on campaign contributions.24 In determining the specific dollar amount, the courts have cautioned that it cannot be so low as "to render political association ineffective, drive the sound of a candidate's voice below the level of notice, and render contributions pointless."25 The Courts have reasoned that campaign contribution limitations that are set too low violate the constitutional free speech and association rights of candidates. Additionally, local campaign contribution limitations should be supported by some showing of local concern regarding the appearance of corruption in the local agency's elections.26 The specific amount of local campaign contribution limitations will necessarily vary from jurisdiction to jurisdiction based upon the size of the jurisdiction, media costs, news media coverage, and other similar factors.27 Several cities throughout California have enacted local campaign finance regulations with contribution limitations that range from $250 in San Diego for a city council candidate ($300 for mayoral or city attorney candidates), to $300 in Irvine, to $500 in Los Angeles for a city council candidate ($1,000 for mayoral, city attorney or city controller candidates). Code§ 91000,subd. (b).);a four-year disqualification from holding elected office(Gov.Code § 91002)and permit injunctive relief and the award of attorneys fees to the prevailing party(Gov.Code § 91003.). 22 Telephonic Conference with FPPC official,September 12,2011. Note,the Act's voluntary campaign expenditure rules apply to candidates for state office(Gov.Code§ 85400.). 23 Id. at p. 26. 24 Id at p. 48. 25 Nixon v. Shrink Missouri Government PAC(2000)528 U.S.377,397. 26 Id. at pp. 391-394. 27 California Prolife Council Political Action Committee v.Scully(E.D. Cal. 1998)989 F. Supp. 1282, 1298. 4 Therefore, pursuant to the authority granted to the City under Section 81013 and the constitutional limits prescribed by court decisions, the City may limit campaign contributions, provided that candidates are not thereby prevented from complying with the Act, and the City can justify the limitation with findings concerning the potential for corruption in the City's elections. It should also be noted that the Act also provides authority for the City to limit the amount of campaign contributions that a candidate may accept from a PAC.28 In limiting campaign contributions, there does not need to be a distinction between contributions that are given by an individual and contributions that are given by a committee. Both individuals and committees are considered and defined as "persons" for purposes of the Act.29 A regulation limiting local campaign contributions could, likewise, apply to all persons, which would include individuals, committees and PACs. The only restriction, according to Section 81009.5(b), is that the local campaign contribution limitations can only be applied to City candidates and their committees and to general purpose committees that are only active in the City. Contribution limits will also not apply to a candidate's contribution of his or her own funds to his or her campaign.3° 2. The AMC Ordinances AMC Sections 1701 and 1702 reference former Section 8500(c), enacted pursuant to California Proposition 208, which specifically gave local jurisdictions the right to enact voluntary expenditure ceilings for candidates and controlled committees of such candidates for elective office not to exceed one dollar for every resident for each election in that jurisdiction in which the candidate sought election.3 In 2000, California voters passed Proposition 34 ("Prop. 34") which repealed all of Proposition 208's limits on contributions applicable to local elections, along with the statutory authority to adopt local voluntary expenditure limits. However, pursuant to the Act as amended by Prop. 34, cities have the power to adopt local ordinances regulating campaign finance issues provided they do not prevent compliance with the Act.32 Section 85703 specifically states that any local regulation of campaign financing must not conflict with the provisions of section 85312. Section 85312 in turn, states that payments made to communicate the support or opposition of a candidate or ballot measure will not be subject to limits on contributions provided that (1) the communications are made to certain individuals,33 and (2) they are not made for general public advertisement such as broadcasting, billboards, and newspaper 23 Gov.Code § 81013. 29 Gov.Code § 82047. 30 Gov.Code § 85301,subd. (d);Buckley,supra, at p. 53. 31 Gov.Code § 84500 now only governs voluntary campaign contribution limits for state elected office and subdivision(c)exempts contributions from political parties made on behalf of a candidate from the expenditure limit. 32 Gov. Code § 81013;Elec.Code § 10202. 33 Included are"members,employees,shareholders,or families of members,employees, or shareholders of an organization..." Gov. Code §85312. 5 advertisements.34 Pursuant to Section 85703, local jurisdictions with ordinances regulating local campaign financing must provide for this exception in some fashion. As Chapter 7 of the AMC inaccurately cites a repealed and replaced government code section which no longer supports the ordinance, the City may want at the very least to amend Chapter 7 to reflect that its authority to regulate campaign expenditures is in accord with Sections 85703 and 8512. Properly drafted voluntary expenditure limits as well as contribution limits have been determined by the FPPC as neither conflicting nor preventing compliance with the Act.35 For example, a City of Santa Cruz ordinance, attached to this memorandum, which both regulates the amount of money that may by contributed to a candidate running for city office and incentivizes candidates to adhere to voluntary campaign expenditure limits, was determined by the FPPC to be in accord with the Act as amended by Prop. 34.36 The Santa Cruz Ordinance, unlike the AMC, incentivizes candidates to opt into its voluntary expenditure limits by offering to pay for the candidates' costs of maintaining electronic filings with the Secretary of State, as well as prominently displaying a 400- word statement by the candidate on the city's website. The use of public funds by chartered cities and counties for purposes such as these is permitted by California Code of Regulations, title 2, section 18530.37 Because courts have thus far only recognized voluntary campaign expenditure limits as constitutionally valid, candidates must be incentivized to opt in if such restrictions are to be effective. Thus, similar to the City of Santa Cruz, Arcadia might want to consider adopting similar incentives. Attachments: (1) Arcadia Municipal Code Chapter 7 - Elections (2) City of Santa Cruz Voluntary Campaign Expenditure and Contribution Limitations For City Council Candidates Ordinance 34 These expenditures are still subject to the Act's reporting requirements. Schwartz Advice Letter,No.A-10-034. 35 Barisone Advice Letter,No.I-01-201(2002). 36 Id. 37 Cal.Code Regs.,tit.2 § 18530,subd. (a)(the Act's prohibition on the use of public moneys in the form of matching funds or cash subsidies,for the public financing of elections does not apply to public officers and candidates in chartered cities and counties);See also Vargas v. City of Salinas(2009)46 Ca1.4th 1 (only in the absence of clearly unmistakable language specifically authorizing a public entity to expend public funds for campaign-related activities or materials do public entities lack the authority to make such expenditures.). 6 ARCADIA MUNICIPAL CODE CHAPTER 7 CHAPTER 7. - ELECTIONS 1700. - ELECTION DATES. 1701. -ADOPTION OF VOLUNTARY EXPENDITURE CEILING. 1702. - RESOLUTION DETERMINING NUMBER OF CITY RESIDENTS. 1700. - ELECTION DATES. Sections 2500 —2563 of the Elections Code of the State of California and any amendments thereto do not apply to elections conducted under the authority of the City of Arcadia. Subject to adoption of the appropriate resolutions, municipal elections in Arcadia may be held on dates other than those set forth in Section 2500 of the State Elections Code. (Article I, Chapter 7, Section 1700, added by Ordinance No. 1843, adopted 10-21-86) 1701. -ADOPTION OF VOLUNTARY EXPENDITURE CEILING. Pursuant to Government Code Section 85400(c), a voluntary expenditure ceiling of Fifty Cents ($.50) per resident is established for candidates and controlled committees of such candidates for elective office for each election in the City in which the candidate is seeking elective office to a City elective position. As of the effective date of the Ordinance codified in this section, the number of residents in the City for purposes of the voluntary expenditure limit is fifty thousand (50,000) people. Accordingly, no candidate for an elective municipal office in the City of Arcadia who voluntarily accepts expenditure ceilings, and any controlled committee of such a candidate shall make campaign expenditures exceeding Twenty-Five Thousand Dollars ($25,000.00) per election. (Added by Ord. 2078 adopted 10-7-97) 1702. - RESOLUTION DETERMINING NUMBER OF CITY RESIDENTS. With reference to elections for City office that occur subsequent to April 1998, the City Council shall determine, by resolution adopted not less than six (6) months prior to each general municipal election, the number of residents in the City for purposes of the voluntary expenditure limit. (Added by Ord. 2078 adopted 10-7-97) 7 CITY OF SANTA CRUZ, CALIFORNIA ORDINANCE CHAPTER 2.10 VOLUNTARY CAMPAIGN EXPENDITURE AND CONTRIBUTION LIMITATIONS FOR CITY COUNCIL CANDIDATES Sections: Article I. 2.10.010 Purpose and intent. Article II. 2.10.020 Voluntary campaign expenditure and contribution limitation election. Article III. 2.10.030 Benefits and incentives. Article IV. 2.10.040 Repealed by 2004-16 § 2. Article V. 2.10.050 Repealed by 2004-16 § 2. Article VI. 2.10.055 Other city council candidates' statements on city's website. Article VII. 2.10.060 Calculation of voluntarily limited campaign expenditures. Article VIII. 2.10.070 No limitation on fund raising/contributions. Article IX. 2.10.075 Requirement for third pre-election campaign filing Article X. 2.10.080 Penalties. Article XI. 2.10.090 Severability. 2.10.010 PURPOSE AND INTENT. The city council, in consultation with the City of Santa Cruz Campaign Finance Reform Task Force, finds and declares: (a) Monetary contributions to political campaigns are a legitimate form of participation in the American political process, but the financial strength of individuals or organizations should not permit them to exercise a controlling influence on the election of candidates. The rapidly increasing costs of political campaigns have forced many candidates to raise larger and larger percentages of money from interest groups with a specific financial stake in matters before government. (b) The city council enacts this chapter to accomplish the following separate but related purposes: (1) To ensure that individuals and interest groups have a fair and equitable opportunity to participate in the city's electoral and governmental processes. 8 (2) To minimize the potentially corrupting influence and appearances of corruption caused by excessive contributions and expenditures in campaigns by providing for reasonable recommended voluntary campaign expenditure and contribution limitations for city council candidates. (3) To limit overall expenditures in campaigns, thereby allowing city council candidates and incumbent city councilmembers to spend less of their time on fundraising and more of their time communicating on issues of importance to voters and constituents. (4) To provide impartial and noncoercive incentives that encourage city council candidates to agree to voluntarily limit campaign expenditures. 1) (Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002: Ord. 2000-11 § 1 (part), 2000). 2.10.020 VOLUNTARY CAMPAIGN EXPENDITURE AND CONTRIBUTION LIMITATION OPTION. Each candidate for election to the city council in November, 2002, and for each city council election thereafter, shall, prior to the time he or she files nomination papers with the city clerk, advise the city clerk in writing whether or not the candidate will opt to voluntarily limit his or her campaign expenditures and fund raising in accordance with the formula for voluntary campaign expenditure and contribution limitations set forth in this chapter. The agreement to voluntarily limit campaign expenditures shall pertain to all expenditures incurred by the candidate or the candidate's committee in support of his or her candidacy and shall include such expenditures which a candidate or candidate's committee is required to report pursuant to the California Political Reform Act of 1974, as amended in 2001, whether those expenditures are made before or after the filing of nomination papers. 2) (Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002: Ord. 2000-11 § 1 (part), 2000). 2.10.030 BENEFITS AND INCENTIVES. (a) The city council candidate will receive the benefits and incentives prescribed in subsection (b) when the city council candidate does each of the following: (1) Voluntarily agrees to limit campaign expenditures and contributions in accordance with this chapter; (2) Thereafter abides by that agreement; (3) Forms a controlled campaign committee in accordance with California Government Code Section 84101 (without regard to whether or not the candidate intends to make campaign expenditures in the minimum amount called for by Political Reform Act of 1974, Chapter 4, Campaign Disclosure); 9 (4) Either spends $1,000.00 in support of his or her candidacy or procures 250 signatures of city electors; (5) On behalf of the candidate and candidate's campaign committee, agrees not to accept campaign contributions from an individual, corporation or other entity (other than an "organizational contributor" as defined below) of greater than $250.00 in value (other than contributions made by the candidate herself or himself) per election in support of his or her candidacy indexed by the applicable cost of living adjustment ("COLA"); and (6) On behalf of the candidate or candidate's committee, agrees to accept organizational contributions only under the following conditions: (i) Organizational contributions shall not exceed a total of $600.00 indexed by the applicable COLA; (ii) The organizational contributor has received no contributions from individuals which exceed the limitations established in this chapter for total contributions to candidates or committees by individuals; (iii) The organizational contributor has reported all individual contributions pursuant to the provisions of this chapter and any applicable provisions of state law. If the organizational contributor is not required to formally organize under the Political Reform Act of 1974, as amended in 2001, then the organizational contributor shall make complete contribution information available upon written request of the city. (b) A city council candidate who performs each of the acts delineated in subsection (a) shall receive the following benefits and incentives at no cost to themselves or their candidate's campaign committee: (1) Committees formed in support of a city council candidate may maintain electronic campaign finance records from July first through January thirty-first for each election. The city will provide the vendor, as approved by the Secretary of State and the city will pay for the cost of maintaining the required filings during that period. (2) Candidates who agree to abide by the voluntary campaign expenditure and contribution limits shall be identified prominently on the city's website with a 400 word written statement. The statement will be printed exactly as submitted with no editing by staff. Statements which exceed 400 words will be returned to the candidate who shall be responsible for editing the statement to comply with the 400 word limitation and resubmitting the statement. One photograph of the candidate supplied by the candidate shall be allowed as part of the statement. (i) The candidate's statement must be submitted on a computer diskette in a form compatible with the system employed by or approved by the city clerk's department or alternatively by e-mail to the city clerk's department. 10 (ii) The candidate's statement must conform to candidate statement guidelines provided by the city clerk and the content shall be consistent with the requirements of Elections Code Section 13307(a)(1). (iii) A disclaimer shall accompany all such website postings that city council candidate statements have been posted by the city in the form submitted by the candidate without editing, proofreading, or spell-checking by the city, that the opinions and statements set forth are those of the candidates to whom they are attributed and do not reflect the city's official positions on issues addressed in the statement, that the candidate's statement is not a city endorsement of any candidate's candidacy, that the information is submitted to the voters by the city as a service to assist voters and for informational purposes only, and that the statement is not intended to, and does not, exempt any candidate or statement author from civil or criminal liability for any false, slanderous or libelous statements set forth on the city's website. (iv) The candidate's statement may be printed in English and/or a foreign language of the candidate's choice; however, the city will not provide translation services to the candidate and more than one statement in different languages will not be permitted if cumulatively the statements would exceed 400 words. (v) Candidates may submit one statement at any time prior to the election. The city will post the statement within four business days of submittal. (vi) Candidates will appear on the website in the alphabetical order drawn by the Secretary of State for the ballot. (vii) The website will clearly identify whether each candidate has agreed to voluntary spending and contribution limits. (c) Should a city council candidate agree to voluntary campaign expenditure and contribution limitations and thereafter, whether intentionally or inadvertently, fail to abide by that agreement, the candidate, upon discovering said failure, shall immediately notify the city clerk who shall then, to the extent feasible, cease conferring the benefits and incentives afforded by this chapter. Candidates who fail to abide by their agreement shall be responsible for reimbursing the city for costs incurred by the city pursuant to this chapter in reliance upon the agreement. (d)(i) As used in this section the term "applicable cost of living adjustment" or "COLA" shall refer to the Consumer Price Index (CPI) for all urban consumers for the San Francisco/Oakland Bay Area (all items) provided by the U.S. Bureau of Labor Statistics as indexed from a base year that commences as of November 2000. Updated COLA adjustment information shall be made available annually, and shall be rounded to the nearest increment of five dollars. (ii) As used in this section the terms "organizational contributor" and "organizational contribution" shall refer to contributions made by non-commercial organizations such as political action committees or special interest groups formed by individuals or entities that have common interests with the objective, among others, to 11 actively participate in the political/electoral process so as to advance and foster their organizational goals. (e) Expenditures for legal fees and costs incurred in connection with any litigation arising out of an election campaign shall be exempt from the contribution and expenditure limitations of this chapter. (f) In addition to any regular city council election, the benefits and incentives of this chapter shall also be available in any recall election. 3) (Ord. 2004-16 § 1, 2004: Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002: Ord. 2000-11 § 1 (part), 2000). 2.10.040 Repealed by Ord. 2004-16 § 2. 2.10.050 Repealed by Ord. 2004-16 § 3. 2.10.055 OTHER CITY COUNCIL CANDIDATES' STATEMENTS ON CITY'S WEBSITE. City council candidates who do not agree to voluntary campaign expenditure and contribution limitations or who otherwise do not qualify for inclusion on the city's website may appear on the website by tendering a fee to the city clerk. The amount of the fee shall be equivalent to the fee charged by the county elections office for the candidates' inclusion in the sample ballot prepared by the county elections office pursuant to California Elections Code Section 13307. 4) (Ord. 2004-16 § 4, 2004). 2.10.060 CALCULATION OF VOLUNTARILY LIMITED CAMPAIGN EXPENDITURES. (a) City council candidates who agree to adhere to voluntary campaign expenditure limitations in accordance with this chapter shall be allowed to spend on their city council campaign no more than the voluntary campaign expenditure limitation cap as established by the city clerk prior to the city council election. The voluntary campaign expenditure limitation cap shall be calculated at a rate which corresponds to $0.35 per city resident. In determining the appropriate number of city residents for purposes of this calculation, the city clerk shall use the most recent number established by the California Department of Finance. By way of example: If the city population is 50,000 residents, a candidate who agrees to voluntary campaign expenditure limitations will be authorized to spend a maximum of $17,500.00 ($0.35 x 50,000) on his or her city council campaign. The $0.35 figure referenced in this section shall be adjusted by the city clerk each year for which a city council election is scheduled. For city council elections conducted with the city's general municipal election, the adjustment will be made on June 1. For special municipal elections called to fill a vacant seat on the city council, the adjustment will be made ninety days before the election. The adjustment called for by this section shall be the cost of living adjustment (COLA) computed by 12 reference to the Consumer Price Index (CPI) for all urban consumers for the San Francisco/Oakland Bay Area (all items) provided by the U.S. Bureau of Labor Statistics as indexed from a base year that commences in November 2002. (b) The voluntary campaign expenditure limitation called for by this section shall not include any expenditures made by the candidate or by the candidate's campaign committee in connection with the preparation and publication of the candidate's statement of qualifications in the sample ballot pamphlet published in accordance with California Elections Code Section 13307. (c) Any campaign committee formed by or on behalf of an indigent candidate pursuant to Business and Professions Code Section 8030.4(f) and City of Santa Cruz Resolution No. NS-18,233 shall be responsible for reimbursing the city for any costs incurred by the city with regard to the preparation and publication of the candidate's statement of qualifications in the sample ballot pamphlet published in accordance with California Elections Code Section 13307. 5) (Ord. 2004-16 § 5, 2004: Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002: Ord. 2000-11 § 1 (part), 2000). 2.10.070 NO LIMITATION ON FUND RAISING/CONTRIBUTIONS. This chapter is not intended to, and shall not be construed to, limit the amount of money a city council candidate may raise in support of his or her candidacy. 6) (Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002: Ord. 2000-11 § 1 (part), 2000). 2.10.075 REQUIREMENT FOR THIRD PRE-ELECTION CAMPAIGN FILING. (a) In order to make certain that the voluntary campaign expenditure and contribution limitations established by this chapter will in fact be enforceable and be enforced, the city council determines that the reporting requirement contained in this section is necessary. The city council hereby determines that a third pre-election statement is necessary. The city council further determines that the requirement of this section and chapter do not prevent any person from complying with the requirements of the California Political Reform Act of 1974, as amended in 2002, or other provisions of state law relating to campaign disclosure. (b) In addition to all campaign finance disclosure requirements otherwise imposed by law, city council candidate committees are hereby required to file a third pre-election statement. The third pre-election statement shall be filed with the city clerk on the Friday prior to a special or regular election for the period from sixteen days before the election through the Thursday before the election. This statement is required for all campaign finance committees, as defined by the Political Reform Act of 1974, as amended in 2001. 7) (Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002). 13 2.10.080 PENALTIES. (a) Willful violation of any provision of this chapter by any city council candidate, campaign worker, or any other person, including the acceptance of benefits conferred by this chapter to which the candidate is not entitled and including the filing of false reports which entitle the candidate to the benefits conferred by this chapter, shall constitute a misdemeanor. (b) In addition to, or in lieu of, criminal penalties for violation of this chapter, the city may seek civil or administrative remedies as provided for in this code. 8) (Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002: Ord. 2000-11 § 1 (part), 2000). 2.10.090 SEVERABILITY. If any part or provision of this chapter, or the application thereof to any person or circumstance, is held invalid, the remainder of the chapter, including the application of such part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this chapter are severable. 9) (Ord. 2002-14 § 1 (part), 2002: Ord. 2002-07 § 1 (part), 2002: Ord. 2000-11 § 1 (part), 2000). • 14