This column is a service of the Institute for Local Government’s Ethics Project, which offers resources on public service ethics for local officials. For more information, visit www.ca-ilg.org/trust. The Institute for Local Government thanks Karen Getman and Tom Willis of the Remcho, Johansen and Purcell law firm for their contributions to this article.

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Question

In the AB 1234 ethics training that local officials must take, we learned about permissible and impermissible uses of public resources, including using public resources for political purposes. I understand that the California Supreme Court recently issued a decision on what public agencies may and may not do with respect to ballot measure campaigns. Did that case change the law? And are there new Fair Political Practices Commission (FPPC) regulations on this issue as well?

Answer

The California Supreme Court decision, Vargas v. City of Salinas, was issued in late April 2009.¹ The case made existing law more specific. And yes, the FPPC is also considering regulations on this issue.

Lawsuit Background

The case involved the City of Salinas’ activities related to a ballot measure that would have repealed the city’s utility user’s tax. In anticipation of the nearly 13 percent revenue loss, the city held a series of workshops (during city council meetings) that described the cuts to services and programs that would occur if the ballot measure passed. The city council also adopted a provisional budget detailing where cuts would occur if the ballot measure passed. Minutes of the meetings were posted on the city’s website (in keeping with the city’s normal practice, the minutes included a summary of the statements made by each speaker, including those supporting the ballot measure). The city also prepared a one-page summary of the cuts in programs and services and included this information in its regular city newsletter.

The Supreme Court’s Decision In Vargas

Proponents of the ballot measure argued that these activities violated the prohibition against using public resources for campaign purposes. The state Supreme Court disagreed. The court took into account a number of factors in reaching this conclusion, including that the city emphasized facts concerning the effectof the measure’s passage, used non-inflammatory language and distributed the information only through regular city information channels.²

The court also reaffirmed that public entities are entitled to the protection of the Anti-Strategic Litigation Against Public Participation (Anti-SLAPP) law, which allows these cases to be decided on a more expedited basis.³

The Big Picture: The Values at Stake

The California Supreme Court was clear that public agencies may use public resources to analytically evaluate the merits of a proposed ballot measure and inform the public about its findings.⁴ What public agencies may not do is mount a campaign on the measure.⁵

It’s important to keep in mind the philosophical context of this debate about how far local agencies may go in using public resources with respect to ballot measure activities.

The restriction is based on the court’s concern that allowing public agencies to use public resources for ballot measure advocacy raises the specter of distorting the democratic electoral process⁶ and undermining its fairness.⁷ The court worried that this could occur if a public agency overwhelmed voters (and presumably the voices of those with differing views) by using taxpayer dollars to engage in a wide range of activities to communicate the agency’s views.⁸ As the concurring opinion suggested, preserving the integrity of the electoral process involves making sure that public agency communications do not “drown out private communication.”⁹

What’s OK and What’s Not

In Vargas, the state Supreme Court reverted to the more fact-based, analytical approach of its earlier decisions on public agency electoral activities. This approach emphasizes considering such things as the “style, tenor and timing” of communications to determine when public agency ballot measure materials and activities step over the line (known as the Stanson v. Mott standard).¹⁰

The court tried to clarify the standard by creating, in essence, three categories of activities:

1. Those that are usually impermissible campaign activities;
2. Those that are usually permissible informational activities; and
3. Those that may require further analysis under the “style, tenor and timing” test.

These categories were an apparent effort to address local agency concerns by defining a standard as clearly as possible.¹¹ Impermissible activities include bumper stickers, posters, advertising “floats,” television and radio spots and billboards.¹² Another improper activity is using public resources to disseminate advocacy materials prepared by others.¹³ “Promotional campaign brochures” and similar materials are also not allowed, even when those documents contain some useful factual information for the public.¹⁴

Permissible activities include:

• Taking a position on a ballot measure in an open and public meeting where all perspectives may be shared;¹⁵
• Preparing staff reports and other analyses to help decision-makers determine the measure’s impact and what position to take;¹⁶
• Responding to inquiries about ballot measures in ways that provide a fair presentation of the facts about the measure and the agency’s view of a ballot measure’s merits;¹⁷
• Accepting invitations to present the agency’s views to organizations interested in the ballot measure’s effects;¹⁸ and
• Sharing the agency’s views on and analyses of a measure’s impacts and merits.¹⁹

The safest approach is to share information in a simple, measured and informative way. The information should be delivered through regular agency communications channels (for example, the agency’s existing website and newsletter) in a way that emphasizes facts and does not use inflammatory language or argumentative rhetoric.²⁰ The communication should not encourage the public to adopt the agency’s views, vote one way or another, or take any other actions supporting or opposing the measure.²¹ Because the City of Salinas kept its activities within these bounds, the court found that it had not violated the law.

Even though the ballot measure in Vargas would have reduced agency revenues, the court said the above principles apply no matter what kind of ballot measure is pending — regardless of whether the measure increases or cuts revenues or involves more substantive policy issues (for example, land use).²²

Any activity or expenditure that doesn’t fall into the first two categories created by the court must then be evaluated by the Stanson “style, tenor and timing” standard against a backdrop of overarching concern for fairness and nondistortion in the electoral process.²³ As the concurring opinion in Vargas suggested, time will tell where lines ultimately are drawn.²⁴

Political Reform Act Issues

Local agencies engaged in activities related to ballot measures should also be mindful of campaign expenditure reporting requirements when producing materials that either expressly advocate or unambiguously urge a particular result in a ballot measure election.²⁵ These reporting requirements apply to activities advocating the qualification (as well as the passage or defeat) of a ballot measure.²⁶ This means campaign activities may be reportable if they occur after an agency votes to put a matter on a ballot or the measure starts circulating for signatures.

In this regard, it’s important to distinguish between transparency requirements and prohibitions. The Vargas case related to the prohibition against using public resources for campaign purposes. The Political Reform Act’s campaign disclosure requirements, however, are transparency requirements; the message is that the public has a right to know who is spending money — and how much — to influence elections.

For state and local agencies, the Fair Political Practices Commission’s existing regulations say that expenditures on ballot measure-related communications are reportable unless the communications constitute a fair and impartial presentation of facts relating to the measure.²⁷ Also not reportable are the costs of making staff reports on ballot measures available at the request of a member of the public, discussing the measure and taking a position at an agency meeting (and reporting that action in the minutes) and preparing ballot arguments.²⁸

The Fair Political Practices Commission will re-examine its regulations in light of the Vargas decision — including the scope of its mass mailing regulations — at its September 2009 meeting. A future column will update Western City readers on what happened and what it means for local agency ballot measure activities. In the meantime, for updates on the status of these regulations, visit www.fppc.ca.gov/index.html?id=52 for current and pending regulation text.

Stay Tuned

Regardless of how these issues are resolved, the Vargas opinion appears to be an argument for public agencies to continue striving for robust, regular, diverse and frequent lines of informational communication with their communities on all issues — not just ballot measure issues. For more information on ways to do this, the Institute for Local Government invites local officials to take advantage of the resources available from its Collaborative Governance Initiative, online at www.ca-ilg.org/cgi.

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What About Activities Before a Measure Is Placed on the Ballot?

Vargas did not change current law, which allows a local agency to also use public resources to put a measure on the ballot.²⁹ The theory is that prior to and through the drafting stage of a proposed ballot measure, the activities do not involve attempting to either persuade the voters or otherwise influence the vote.³⁰ The question is: To what extent may local agencies use public resources to fund activities related to placing a measure on the ballot?

The Vargas opinion seems to set up the prospect of a two-part analysis in evaluating public agency activities with respect to ballot measures before they are placed on the ballot. The first part relates to the issue of whether a particular public agency has the authority to spend money on ballot measure activities. The other part concerns whether that authority oversteps what the courts may perceive as constitutional restrictions on what may be done with public resources.³¹

For example, earlier cases involving challenges to putting a measure on the ballot seemed to emphasize a scope-of-authority issue. In other words, did the agencies have authority to use public resources for the activities that occurred prior to a measure being placed on the ballot? Cities and counties have such authority to place measures on the ballot;³² the question is: What kinds of activities can they engage in as part of the effort to put a measure on the ballot?

In a case involving a local transportation agency, a court of appeal found the agency had authority under state law³³ to find additional sources of funding for transportation and the agency was following the prescribed steps for putting a measure before the voters (which included such activities as preparing a transportation plan).³⁴ The court noted that the agency’s activities occurred before the transportation expenditure plan was approved or the ordinance placing a measure on the ballot was finalized.³⁵

The fact that the agency’s challenged activities occurred well before the measure was put on the ballot was enough for the court. In this regard, the court drew a distinction between activities involving the expenditure of public funds for governing and the expenditure of funds for election campaigning.³⁶

The court in the transportation agency case relied heavily on the analysis of an earlier court of appeal decision. In that case, which involved a county, the court suggested that putting a measure on the ballot was OK, but other activities may be a closer call:³⁷

On balance, we conclude the power to draft the proposed initiative necessarily implies the power to seek out a willing proponent. We do not perceive the activities of identifying and securing such a proponent for a draft initiative as entailing any degree of public advocacy or promotion, directed at the electorate, of the single viewpoint embodied in the measure.³⁸

In Vargas, the state Supreme Court said that it agreed with this case to the extent that it interpreted Stanson as allowing public agencies to express opinions on the merits of a proposed ballot measure, so long as agencies do not spend public funds to mount a campaign about it.³⁹The majority Vargas opinion did not specifically address the issue of activities occurring prior to a matter being placed on the ballot.

Until there is more judicial guidance on this issue, taken together these statements suggest that the safest approach is to limit expenditures and activities to those that focus as directly as possible on developing a measure for the ballot — not on the campaign effort necessary to get the measure to pass.

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Institute Releases Updated Plain-Language Guides On California’s Ethics Laws

The Institute for Local Government has updated its popular publication, A Local Official’s Reference on Ethics Laws. The new guide is presented in five “sub-guides” to make the materials easier for busy public officials to navigate. To see the new offerings, visit www.ca-ilg.org/ethicslaws.

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Footnotes:

[1] Vargas v. City of Salinas, 46 Cal. 4th 1 (April 20, 2009).

[2] Vargas, 46 Cal. 4th at 40 (Slip Op. at 41).

[3] See 46 Cal. 4th at 16-19 (Slip Op. at 13-19). See generally Cal. Civ. Proc. Code § 425.16 (anti-SLAPP statute).

[4] 46 Cal. 4th at 36 (Slip Op. at 43).

[5] Id.

[6] 46 Cal. 4th at 31-32 (Slip Op. at 36-37).

[7] 46 Cal. 4th at 36-37 (Slip Op. at 44).

[8] See 46 Cal. 4th at 32 (Slip Op. at 37).

[9] 46 Cal. 4th at 46 (Concurring Opinion, Slip Op. at 8 (quoting Lawrence Tribe)).

[10] Stanson v. Mott, 17 Cal. 3d 206 (1976). See also Keller v. State Bar, 47 Cal. 3d 1152, 1170-72 (1989).

[11] See 46 Cal. 4th at 33-34, 40 (Slip Op. at 39-40, 49-50).

[12] 46 Cal. 4th at 24, 32, 42 (Slip Op. at 26, 37 (including the billboard example), 39 and 42).

[13] 46 Cal. 4th at 24, 35 (Slip Op. at 26, 42).

[14] 46 Cal. 4th at 39 n. 20 (Slip Op. at 47-8)

[15] 46 Cal. 4th at 35-37 ( Slip Op. at 44-45)

[16] 46 Cal. 4th at 36-37 (Slip Op. at 44-45)

[17] 46 Cal. 4th at 24-25, 33 (Slip Op. at 26 and 40; see also concurring opinion at 3).

[18] 46 Cal. 4th at 25, 36 (Slip Op. at 26 and 43), citing Stanson, 17 Cal.3d at p. 221.

[19] 46 Cal. 4th at 36 (Slip Op. at 44).

[20] 46 Cal. 4th at 34, 40 (Slip Op. at 41, 49); (compare with the tone of the newsletter described in footnote 20).

[21] 46 Cal. 4th at 40 (Slip. Op. at 49). See also Cal. Gov’t Code § 54964(a), (b)(3) (prohibiting local public agency expenditures for activities that expressly advocate the approval or rejection of a clearly identified ballot measure).

[22] 46 Cal. 4th at 40 (Slip Op. at 49).

[23] 46 Cal. 4th at 40 (Slip Op. at 50).

[24] 46 Cal. 4th at 43 (Slip Op. at 4).

[25] Cal. Gov’s Code § 82013(b), 84200.2 Cal. Code Regs., § 18225(b)(2). See also Yes on Measure A v. City of Lake Forest, 60 Cal. App. 4th at 625-626.

[26] See 2 Cal. Code of Regs. § 18225(b) (defining an expenditure as monetary and non-monetary payments used for communications which expressly advocate the qualification, passage or defeat of a clearly identified ballot measure).

[27] 2 Cal. Code of Regs. § 18420.1(a).

[28] 2 Cal. Code of Regs. § 18420.1(c).

[29] Vargas, 46 Cal. 4th at 36 (Slip Op. at 43-44); League of Women Voters of California. v. Countywide Criminal Justice Coordination Committee, 203 Cal. App. 3d 529 (1988); Santa Barbara County Coalition Against Automobile Subsidies v. Santa Barbara County Association of Governments, 167 Cal. App. 4th 1229 (2008). See also Cal. Elect. Code § 9140 [county board of supervisors] & § 9222 [legislative body of municipality]; FPPC Advice Letter to Hicks, No. I-98-007 (02/20/98); FPPC Advice Letter to Roberts, No. A-98-125(06/01/98).

[30] League of Women Voters, 203 Cal. App. 3d at 550 (“The audience at which these activities are directed is not the electorate per se, but only potentially interested private citizens; there is no attempt to persuade or influence any vote.”), citing Miller v. Miller (1978) 87 Cal. App. 3d 762, 768 (1978).

[31] See Vargas, 46 Cal. 4th at 29 (Slip Op. at 33):

As we have seen, in Stanson, supra, 17 Cal.3d 206, this court, after explaining that a “serious constitutional question . . . would be posed by an explicit legislative authorization of the use of public funds for partisan campaigning” (i d. at p. 219, italics added), reaffirmed our earlier holding in Mines, supra, 201 Cal. 273, that the use of public funds for campaign activities or materials unquestionably is impermissible in the absence of “ ‘clear and unmistakable language’ ” authorizing such expenditures. (Stanson, at pp. 219-220.) Section 54964 does not clearly and unmistakably authorize local agencies to use public funds for campaign materials or activities so long as those materials or activities avoid using language that expressly advocates approval or rejection of a ballot measure. Instead, the provision prohibits the expenditure of public funds for communications that contain such express advocacy, even if such expenditures have been affirmatively authorized, clearly and unmistakably, by a local agency itself. Although section 54964, subdivision © creates an exception to the statutory prohibition for communications that satisfy the two conditions set forth in that subdivision, subdivision © (like the other provisions of section 54964) does not purport affirmatively to grant authority to local entities to expend funds for communications that fall within its purview.

[32] See Cal. Elect. Code § 9140 (authorizing boards of supervisors to place measures on the ballot); § 9222 (authorizing city councils to place measures on the ballot).

[33] The Local Transportation Authority and Improvement Act (Act), which the court described as “a comprehensive statutory scheme to ‘raise additional local revenues to provide highway capital improvements and maintenance and to meet local transportation needs in a timely manner’” citing Cal. Pub. Util. Code, § 180001 et seq. See Santa Barbara County Coalition Against Automobile Subsidies v. Santa Barbara County Association of Governments, 167 Cal. App. 4th at 1239-40.

[34] Id.The agency had retained a private consultant to survey voter support for an extension of the sales tax. The consultant determined the arguments in favor of extension that were received most favorably by the voters polled, potential arguments in opposition, and the best strategy to maximize voter support. In addition, agency staff and committee members attended public meetings with civic groups during which staff presented information regarding the transportation expenditure plan, and the importance of extending an earlier sales tax to satisfying the county’s transportation needs. See id. at 1234.

[35] Id. at 1240.

[36] Id. at 1241.

[37] League of Women Voters, 203 Cal. App. 3d at 553 (“Whether CCJCC legitimately could direct the task force to identify and secure a willing sponsor is somewhat more problematical.”)

[38] Id. at 554.

[39] Vargas, 46 Cal. 4th at 36 (Slip Op. at 43).

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This article appears in the August 2009 issue of Western City
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