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Home My WebLink About50B - ORD - LEGAL DEFENSE FUNDREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 21, 2016 TITLE: PROPOSED ORDINANCE TO ADD SECTION 2 -111 TO THE SANTA ANA MUNICIPAL CODE REQUIRING MAYOR AND COUNCIL MEMBER DISQUALIFICATIONS AFTER RECEIVING A LEGAL DEFENSE FUND CONTRIBUTION CITY MANA RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 96' Reading ❑ Ordinance on 2nd Reading ® Implementing Resolution ❑ Set Public Hearing For,_ CONTINUED TO Consider proposed ordinance to add Section 2 -111 to the Santa Ana Municipal Code requiring Mayor and Counciimember disqualification after receiving a contribution in the amount of $250 or more to a Legal Defense Fund, In California, the Political Reform Act' (PRA) Is the primary state law source of campaign finance and disclosure laws, While the PRA regulates the disclosure of campaign contributions and expenditures during elections, It does not establish campaign contribution limits for local candidates. Like lather cities and counties, and as permitted by the PRA, Santa Ana has adopted its own contribution limits and other restrictions for individuals seeking local Office, 2 Santa Ana's regulations, however, do not extend to legal defense funds, The Political Reform Act permits a local candidate or elected officer to establish a separate fund for legal defense, If the candidate or officer Is subject to one or more civil, criminal, or administrative proceedings arising directly out of the conduct of an election campaign, the electoral process, or the performance of the officer's governmental duties. Contributions raised for legal defense must be held in a separate bank account, and funds raised for legal defense may be spent "only to defray attorney's fees and other related legal costs," Gov, 1. Codined at Government Code sections 81000-91014, the PRA also sets ethics standards and conflict -cf- interest rules for state and local government officials, regulates lobbying activity, and establishes gift and honoraria limits. 2 Under the PRA, cities retain authority to impose such limits, Gov. Code § $5703(a) ("Nothing In this act shall nullify contribution limitations or prohibitions of any local Jurisdiction that apply to elections for local elective office, except that these limitations and prohibitions may not conflict with Section 95312. "). Sea also Elections Code § 10202 ( "A city may, by ordinance or resolution, limit campaign contributions In municipal elections. ") 50B -1 Proposed ordinance creating disqualification of Mayor or Councilmembers after receiving a legal defense fund contribution June 21, 2015 Page 2 Coda § 55304.5(a) -(b). Legal defense funds may not be used toward expenses for fundralsing, media or political consulting fees, mass mailing or other advertising. Gov, Code § 55304.5(d) (referring to Gov, Code § 55304). Nor may they be used for the payment or reimbursement for a fine, penalty, judgment, or settlement. Gov. Code § 85304.5(d) (referring to Gov. Coda § 35304), Local agencies have explicit authority to place limitations on contributions to any separate legal defense fund established by a local candidate or office holder. At the May 19, 2015 Code of Conduct and Ethics Council Committee meeting, the Committee directed staff to prepare an ordinance for the adoption of legal defense fund contribution disquallflcatlon rules for the Mayor and Counollmembers that are similar to the City Charter disqualification that results from campaign contributions. The Intent of the ordinance is to limit the perception of undue Influence. As such, the proposed ordinance provides that neither the Mayor, nor any Councilmember shall participate in or influence any City Manager or City Council decision where that decision may have a financial impact on any person or any entity that has made a legal defense fund contribution of $250,00 to the Mayor or Councilmember or any committee controlled by them. The proposed ordinance extends the disqualification for any Individual who has more than a 10 percent Interest in any entity, or is a director, partner or officer of any entity that made a contribution and may receive a financial benefit from such a decision, STRATEGIC PLAN ALIGNMENT n/a FISCAL IMPACT There Is no fiscal Impact associated with this action, A" A-) V� &MOW- Sonia R. Carvalho City Attorney 50B -2 SRC 06/01/2016 ORDINANCE NO. NS -XXX AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING CHAPTER 2 OF THE SANTA ANA MUNICIPAL CODE BY ADDING A NEW SECTION 2- 111 REQUIRING MAYOR AND COUNCIL MEMBER DISQUALIFICATIONS AFTER RECEIVING A LEGAL DEFENSE FUND CONTRIBUTION THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. That the California Political Reform Act permits a local candidate or elected officer to establish a separate fund for legal defense, if the candidate or officer is subject to one or more civil, criminal, or administrative proceedings arising directly out of the conduct of an election campaign, the electoral process, or the performance of the officer's governmental duties. B. That cities have explicit authority to impose limitations, restrictions and /or create consequences in relation to contributions to any separate legal defense fund established by a local candidate or office holder. Section 2. Chapter 2 of the Santa Ana Municipal Code is hereby amended by adding a new Section 2 -111 to read as follows: "Sec. 2.111. - Disqualification due to legal defense fund contribution Neitherthe mayor, nor any councilmember, shall participate in, or use his or her official position to influence a decision to be made by the City Manager or the City Council if it is reasonably foreseeable that the decision will have a material financial effect, apart from its effect on the public generally or a significant portion thereof, on a recent legal defense fund contributor. As used herein, 'legal defense fund contributor" means any individual or entity who or which has made a legal defense fund contribution totaling two hundred fifty dollars ($250.00) or more to the mayor or a councilmember or to any campaign committee controlled by the mayor or the councilmember in the twelve -month period immediately preceding the date of the decision. For purposes of this Section 2 -111 any individual who has more than a ten percent (10 %) equity or revenue interest in the contributing entity, or anyone who is a trustee, director, partner or officer of the contributing entity, shall also be deemed a legal defense fund contributor. " Section 3. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any 55394.00000\29011396.1 1 50B -3 court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. ADOPTED this day of _ 2016 Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: 1% 1L AI AYES: Councilmembers NOES: Councilmembers f L NOT PRESENT: Councilmembers Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY SS394.000M2901(396.1 2 50B -4 I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS -XXX to be the original ordinance adopted by the City Council of the City of Santa Ana on , and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: 55394.00000\29011396.1 3 Clerk of the Council City of Santa Ana 50B -5 MEW