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Home My WebLink AboutStaff Report 4660 CITY OF PALO ALTO OFFICE OF THE CITY CLERK April 22, 2014 The Honorable City Council Palo Alto, California Ordinance Approving the Use of Online or Electronic Filing of Campaign Statements RECOMMENDED MOTION Recommendation to the City Council to Approve the first reading of an Ordinance Approving the Use of Online or Electronic Filing of Campaign Statements BACKGROUND On January 1, 2013, Assembly Bill 2452 went into effect adding Government Code 84615 which allows a local government agency to mandate online or electronic filing for an elected officer, candidate, committee, or other person who is required to file statements, reports, or other documents under the Political Reform Act, so long as the filer receives contributions or makes expenditures totaling one thousand dollars ($1,000) or more in a calendar year. The law prescribes criteria that must be satisfied by a local government agency to require online or electronic filing of statements, reports, or other documents. The system must be available free of charge to filers and the public for viewing filings, and must include a procedure for filers to comply with the requirement that they sign statements and reports under penalty of perjury. The online or electronic filing system shall only accept a filing in the standardized record format that is developed by the Secretary of State and is compatible with the Secretary of State’s system for receiving an online or electronic filing. There is currently only one company that is certified by the Secretary of State to provide this service. The City Clerk’s Department is currently under contract with this company, NetFile, who also administers the online filing of the Statement of Economic Interest forms. Electronic filings reduces the staff time required to process the campaign forms, and also allows visibility in the public’s eyes to view the filings at any time without waiting to come to the City Clerk’s office. Page 2 Since January of 2013, the following government agencies have converted to online campaign financing: CITIES COUNTIES / REGISTRAR OF VOTERS Anaheim Alameda Berkeley Butte Irvine Monterey Manteca Orange Oakland Riverside Pleasanton San Bernardino Sacramento San Joaquin San Francisco (Ethics Commission) San Luis Obispo San Jose Santa Clara Santa Clara Ventura Sunnyvale DISCUSSION: The default rule under AB 2452 is that all filers that receive contributions or make expenditures totaling $1,000 or more are required to file all campaign statements electronically. However, a local legislative body retains the discretion to limit the electronic filing mandate to certain types of filings or filers that meet higher monetary thresholds. Nothing in the law prevents the City from accepting electronic filings from those who opt-in to the electronic filing system. The draft ordinance before Council maintains the default rules under AB 2452. According to NetFile, most of their agency clients who have adopted paperless electronic filing have adopted the requirement thresholds from AB2452 (i.e. mandatory electronic filing for committees that have spent or received more than $1,000/year). The California legislature adopted the $1,000/year default because this is the level at which a filer must open a committee. While increasing the threshold for mandatory electronic filing offers greater flexibility to filers who may want to continue filing exclusively in paper format, it adds an additional level of complexity in tracking campaign expenditures for the filer, the City Clerk’s office, and the general public. In addition, the draft ordinance imposes an opt-in rule, under which filers that utilize the electronic filing system once are required to use the system for all future filings, regardless of whether they meet the monetary thresholds in the future. Several cities have adopted this rule to ensure continuity of records in the electronic system. The decisions before Council are: First, whether to authorize the electronic filing system and mandate electronic filings for certain elected officers, candidates, committees or other persons required to file statements, reports, or other documents under AB 2452. Second, whether to modify the default rules setting the monetary threshold and types of documents subject to Page 3 mandatory electronic filing. Third, whether to adopt the “opt in” rule, under which a filer that uses the electronic filing system one time is required to electronically file all documents in the future. RESOURCE IMPACT The existing contract with NetFile for the e-filing and administration system for the campaign system is $1,750 per quarter or $7,000 per year. ENVIRONMENTAL REVIEW The adoption of this ordinance is not a project subject to environmental review under the California Environmental Quality Act. ATTACHMENTS:  Electronic Filing of Campaign Statements Draft Ordinance (PDF) Department Head: Donna Grider, City Clerk Page 4 NOT YET APPROVED 140403 dm 0160076 1 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Approving the Use of Online or Electronic Filing of Campaign Statements The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. California Government Code Section 84615 provides that a local agency may require an elected officer, candidate, committee, or other person required to file statements, reports, or other documents, except an elected officer, candidate, committee, or other person who receives contributions totaling less than one thousand dollars ($1,000), and makes expenditures totaling less than one thousand dollars ($1,000), in a calendar year, to file those statements, reports, or other documents online or electronically with the local filing officer. B. The City has entered into an agreement with Westcoast Online Information Systems, Inc. dba NetFile, a vendor approved by the California Secretary of State, to provide an online electronic filing system (“System”) for campaign disclosure statements and statements of economic interest forms. C. The System will operate securely and effectively and will not unduly burden filers. Specifically: (1) the System will ensure the integrity of the data and includes safeguards against efforts to temper with, manipulate, alter, or subvert the data; (2) the System will only accept a filing in the standardized record format developed by the Secretary of State and compatible with the Secretary of State’s system for receiving an online or electronic filing; and (3) the System will be available free of charge to filers and to the public for viewing filings. SECTION 2. Section 2.40.065 (Electronic Filing of Campaign Statements) of Chapter 2.40 (Municipal Elections) or Title 2 (Administrative Code) of the Palo Alto Municipal Code is hereby added to read as follows: “Section 2.40.065 Electronic Filing of Campaign Statements (a) Any elected officer, candidate, committee, or other person required to file statements, reports or other documents described by Chapter 4 (Campaign Disclosure) of Title 9 (Political Reform) of the California Government Code, and that has received contributions and made expenditures of $1,000 or more, shall electronically file such statements using procedures established by the City Clerk. (b) Once an elected officer, candidate, committee, or other person files a statement, report, or other document electronically pursuant to subsection (a), all future statements, reports, or other documents on behalf of that filer shall be filed electronically. (c) In any instance in which an original statement, report, or other document must be filed with the California Secretary of State and a copy of that statement, report, or other document is required to be filed with the City Clerk, the filer may, but is not required to file the copy electronically. NOT YET APPROVED 140403 dm 0160076 2 (d) If the City Clerk’s electronic system is not capable of accepting a particular type of statement, report, or other document, an elected officer, candidate, committee, or other person shall file that document with the City Clerk in an alternative format.” SECTION 3. If any section, subsection, clause or phrase of this Ordinance is for any reason declared invalid, such declaration shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 4. This ordinance shall be effective on the thirty-first day after the date of its adoption. SECTION 5. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney City Manager ____________________________ Director of Administrative Services