AGENDA #7
TO: Mayor and Town Council
FROM: Ralph D. Karpinos, Town Attorney
SUBJECT: Draft Ordinance: Lobbying and Ethical Guidelines
DATE: May 24, 2004
The attached resolution would call a public forum for June 14, 2004, to receive citizen comment on a proposed Lobbying and Ethics Ordinance.
The attached proposed ordinance would establish registration and reporting for paid lobbyists who contact Town elected officials and Town staff. Officials and staff of public agencies would not be required to register or report their lobbying activities.
The draft ordinance would also establish ethical guidelines for Town elected officials and encourage the reporting of contacts between elected officials and representatives of other public agencies seeking to influence Town Council decisions.
BACKGROUND
On January 12, 2004, the Council received a petition from Elaine Barney, representing the Coalition of Neighbors Near Campus. The petition asked the Council to consider adoption of regulations requiring registration of lobbyists and asked the Council to consider ethical guidelines. A copy of the petition is attached (Attachment 1). At the Council’s Planning Retreat on January 15, 2004, the Council established a Council committee to consider the petition. The Committee met twice in February, 2004 and reviewed legal memoranda, policy reports and samples ordinances from around the country.
On March 22, 2004, the Committee presented a report to the Town Council. Attachment 2 is a copy of that report. The Council discussed the report on March 22 and again on March 24 and asked that a draft ordinance be prepared, reviewed with the Committee and brought back to the Council for its consideration. Attachment 3 is an excerpt from the Council’s March 22 and March 24, 2004 minutes.
A draft ordinance was prepared and, on May 6, the Committee met again and discussed the draft. The proposed Ordinance includes adjustments made in response to comments made by members of the Committee on May 6. However, the Committee members took no formal vote on the draft ordinance and have not reviewed this revised draft. Members of the Committee may wish to offer their comments to the full Council this evening.
DISCUSSION
The proposed Ordinance would add two Articles to Chapter 2 of the Town Code: one establishing Lobbying Regulations; and, one establishing additional Disclosure and Ethics Guidelines for Town Elected Officials.
A. Key points of the Ordinance
i. Lobbyist is defined as an individual who receives a threshold amount of compensation for the purpose of lobbying Town elected officials and appointed officials and employees with authority to make recommendations to the Council.
ii. Threshold compensation is set at $200 per quarter or $800 per year.
iii. Lobbying includes direct communication in person, by telephone or in writing.
iv. Officers and employees of public agencies working on behalf of their agencies are exempt.
v. Comments made at public meetings are exempt.
vi. Persons who are not being compensated are exempt.
i. Lobbyists expecting to receive the threshold compensation must register with the Town Clerk.
ii. Registered lobbyists are required to disclose their status as lobbyists at the time a communication with a Town official is begun.
iii. Registration includes providing certain information regarding who the lobbyist is representing.
iv. Registration fee is $25 per year.
i. Expense statements are required to be filed by each lobbyist quarterly if they have received compensation or made expenditures exceeding the threshold amount.
ii. Activities reports include providing certain information regarding the issues for which lobbying took place and expenditures, including the identity of the recipient of any gift, favor or gratuity.
i. Lobbying registration and reports are public information.
ii. Officials have a duty to report any lobbying effort by a lobbyist who they believe is not registered.
B. Procedures Established by Ordinance
Under Article V, the lobbying regulations, persons who receive the threshold amount of compensation would be required to register with the Town Clerk. They would be required to keep records and make a report to the Town Clerk regarding their contacts with any Town official, appointed or elected, who could influence a Town Council legislative, quasi-judicial or administrative decision. This could include such contacts as:
1. A telephone call or email message to a department head regarding a proposed recommendation on a development application.
2. A lunch meeting with the Town Manager regarding the selection of an architect for a proposed Town project.
3. An invitation to an elected official to meet at the site of a rezoning application.
The reports required to be filed would need to include a description of the subject matter of the issue considered at the meeting.
Officials of public agencies would not be required to register or to file such reports. However, they would be encouraged to file voluntary reports describing their activities in the same manner as those lobbyists required to do so.
The registration forms and reports would be kept in the Town Clerk’s office and would be available for public inspection. The Town Clerk, in consultation with the Manager and Attorney, would be responsible for seeking compliance with the reporting deadlines established by the Ordinance.
If a member of the Town staff or an elected official is contacted by an unregistered lobbyist, he or she would be under a duty to report that contact to the Town Clerk under Section 2-94 of the proposed ordinance.
Under Article VI, guidelines are set for the disclosure by elected officials of contacts they have with representatives of public agencies who are exempt from the lobbying regulations. The guidelines encourage Town elected officials to disclose, in a report to the Town Clerk, of any such contacts relative to matters that would be the subject of a lobbying report if the lobbying regulations were to be applicable.
The receipt of a gift by an elected official that a reasonable person could believe is intended to influence the official should also be reported under the guidelines. Gifts in excess of $80 in any three-month period should not be accepted. Tickets to large events are not subject to the monetary limit as long as they are general tickets and not in a special reserved area that would facilitate communication between officials and lobbyists or officials of other public agencies. The receipt of such tickets or passes should, however, be disclosed.
The guidelines further call for the discouragement of communications, outside of the formal public hearing process, with persons seeking to comment on or influence a pending quasi-judicial application. This would include site visits with applicants and meetings with neighborhood interest groups. The guidelines provide that such contacts should be disclosed as part of the hearing of any such application.
C. Potential Staffing Implications
There are some staffing and potential budgetary implications involved in establishing a registration and reporting requirement for lobbyists in this proposed ordinance. The proposed ordinance would establish both record keeping and reporting responsibilities on members of the Town professional staff that could be somewhat time-consuming. However, the issues raised by the original petition and the proposed lobbying regulations are primarily policy matters for the Council to consider.
The disclosure and ethical guidelines also have some staffing implications. We would note, however, that the guidelines are not mandatory in nature. Some of the guidelines, in particular those related to pending quasi-judicial proceedings, have been discussed with members of the Council at orientation and on other previous occasions.
RECOMMENDATION
That the Council review the attached proposed Ordinance and consider how it wishes to proceed.
The attached resolution would schedule a public forum on the proposed Ordinance for June 14, 2004. The Ordinance could be considered for enactment this evening.
ATTACHMENTS:
A RESOLUTION CALLING A PUBLIC FORUM FOR JUNE 14, 2004, TO CONSIDER LOBBYING REGULATIONS AND NEW DISCLOSURE AND ETHICAL GUIDELINES (2004-05-24/R-9)
BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council calls a public forum for June 14, 2004, at 7 pm in the Council Chambers of Town Hall to receive public comment on a proposed new Ordinance establishing lobbying regulations and additional Council ethical and disclosure standards.
BE IT FURTHER RESOLVED by the Council that the proposed ordinance is referred to the Town Manager to provide a report, for the June 14, 2004, forum on:
This the 24th day of May, 2004.
Lobbying and Ethics Ordinance draft
AN ORDINANCE TO ESTABLISH LOBBYING REGULATIONS AND ADDITIONAL ETHICAL AND DISCLOSURE STANDARDS FOR MEMBERS OF THE CHAPEL HILL TOWN COUNCIL (2004-05-24/O-7)
BE IT ORDAINED by the Council of the Town of Chapel Hill as follows:
Section 1. Chapter 2 of the Town Code is hereby amended by adding a new Article V. to read as follows:
“ARTICLE V. LOBBYING REGULATIONS
Sec. 2-85. Findings and Purposes.
The Town Council does hereby find that:
(a) The citizens of the Town of Chapel Hill have the right to know the identity and professional affiliation of persons who, acting in exchange for compensation on behalf of others, seek to influence the actions of their Town government.
(b) The public registration of persons who serve as paid lobbyists for others and seek to influence the actions of Town of Chapel Hill elected and appointed officials will help preserve and promote better government for the Town of Chapel Hill.
(c) Requiring the registration of lobbyists and the reporting of lobbying activities will maintain the confidence of the citizens of Chapel Hill in their duly elected Mayor and Town Council and in the integrity of their municipal government.
(d) In order to preserve the integrity of the Town’s decision-making processes, persons acting as lobbyists should provide to the public full information as to their identity, the identity of their principal, their expenditures and their lobbying activities.
Sec. 2-86. Definitions.
For the purposes of this article the following words and phrases are defined as follows:
(a) Town Official: includes any elected official of the Town, member of any Town Council-appointed advisory board, and any member of the professional staff of the Town Manager’s and Town Attorney’s offices, any department head, deputy department head, assistant department head or other member of the professional staff of any Town department, designated by administrative policy issued by the Town Manager, whose responsibilities include recommending to a Town official the making or modification of any municipal decision.
(b) Municipal Decision includes:
1. the drafting or consideration of any ordinance or resolution for Town Council consideration;
2. a report by a Town official to the Town Council or any Town Council-appointed advisory board;
3. the awarding of any contract by the Town Council for the purchase by the Town of any goods or services;
4. quasi-judicial decisions; and,
5. any other administrative or ministerial decision by the Town Council.
(c) Lobbyist includes:
1. any individual who receives or becomes entitled to receive the threshold compensation during any calendar quarter or year for lobbying and who has had at least one direct communication with a Town official in a calendar quarter;
2. in-house lobbyists who engage in lobbying as part of their regular employment responsibilities for their employer and for which they receive a salary from that employer, at least some part of which is compensation for their lobbying work;
3. individuals under contract to engage in lobbying; and,
4. individuals employed by a firm under contract to provide lobbying services.
(d) Lobbying means direct communication with a Town official for the purpose of influencing a municipal decision on behalf of another person and the solicitation of others by lobbyists to influence such a decision.
(e) Direct communication means talking (either by telephone or in person) or transmitting, in writing or electronically, a message to a Town official.
(f) Threshold compensation shall be set at $200 in any quarterly (three-month) reporting period or $800 in any one calendar year, including pro rated salary for the time spent on lobbying.
(g) Federal, State and local governmental entities include those entities and any agency of the federal, State or a local government, including, but not limited to, a public university or public school board and the Orange Water and Sewer Authority.
Sec. 2-87 Registration of Lobbyists.
Every lobbyist who expects to receive the threshold compensation provided for in this article in the upcoming calendar quarter or year shall register with the Town Clerk as provided in this article.
This section shall extend to any person who undertakes lobbying activities as any part of his duties as an employee of another, regardless of whether such person is formally designated as a lobbyist by his employer.
Sec. 2-88 Duty to Disclose Registration to Town Official.
Every person who is required to register as a lobbyist shall disclose his or her status as a lobbyist to any Town official:
1. before providing anything of value to that official which would require reporting under this article or article VI of this chapter; and,
2. at the beginning of any direct lobbying communication with that official by or on behalf of that lobbyist.
Sec. 2-89. Information Required of Registrants.
No later than January 20th of each year, or within five business days of engaging in any activity which requires such person to register, every person required to register as a lobbyist shall file with the Town Clerk a written statement on a form prescribed by the Town containing the following information:
(a) The registrant's name, permanent address and temporary address (if any) while lobbying;
(b) With respect to each client and each business entity on behalf of which the registrant expects to act as a lobbyist:
1. The name, business address, permanent address and nature of the business of the client or business entity;
2. Whether the relationship is expected to involve compensation or expenditures or both;
3. The name of each Town agency before which the registrant expects to lobby; and,
4. The subject matter or matters on which the registrant will lobby.
(c) If such registrant is retained by another business entity pursuant to a written agreement of retainer or employment, a copy of such agreement shall be attached. If the agreement of retainer is oral, a written statement of the substance thereof shall be attached.
(d) At the time of registering, the registrant shall pay to the Town Clerk an annual registration fee of $25.00.
Sec. 2-90 Reports of Lobbying Activities Required.
Every lobbyist or firm that employs lobbyists making expenditures or incurring obligations or receiving compensation or becoming entitled to receive compensation in an aggregate amount exceeding $200 in any quarterly (three-month) reporting period or $800 in any one calendar year for the purpose of engaging in lobbying or whose pro rated salary for the time spent in lobbying activities exceeds such threshold shall file with the Town Clerk an expense statement covering each reporting period. Such report shall be on a form prescribed by the Town Clerk. (No quarterly activity report is required if the activity during the preceding quarter does not exceed the $200 threshold.)
Sec. 2-91. Information required in Lobbying Activities Reports.
The reports required by Sec. 2-90 shall be filed on or before April 30, July 31, October 31, and January 31 for the immediately preceding calendar year quarter.
The reports shall include the following information:
(a) The registrant’s name, permanent address, and temporary address (if any) while lobbying;
(b) The name, business and permanent address and nature of business of the client and of any other business entities on whose behalf lobbying was performed;
(c) A statement of the amount of compensation received from each client to the nearest $100.00;
(d) The name of each Town official before which the registrant lobbied and a brief description of the subject matter of the municipal decision involved;
(e) Amount expended for lobbying; provided, however, that each expenditure of $100.00 or more shall also be itemized by the date of the expenditure, the amount, purpose and beneficiary of the expenditure, the name, address and nature of business of the recipient, and the legislative or administrative action, if any, in connection with which said expenditure was made; and,
(f) An itemized list of every gift, favor and gratuity given to any Town official and the identity of that official.
Sec. 2-92 Exemptions.
This article does not apply to the following:
(a) Federal, State and local governmental entities, and their officers and employees who contact Town officials, provided they are solely engaged in connection with matters pertaining to their official duties on behalf of their respective governmental bodies.
(b) Activities of licensed attorneys constituting the practice of law, provided, however that this article shall apply to any licensed attorney who is acting as a lobbyist and engaged in lobbying activity as herein described.
(c) An individual acting on behalf of himself and members of his immediate family on matters directly affecting those persons’ personal property and interests.
(d) An individual acting on behalf of a business where that individual owns more than 50 percent of the shares, is that individual’s sole proprietorship, or where the individual is the single member of a limited liability company or a partnership in which the individual is a general partner.
(e) Comments made by persons at public meetings and hearings conducted by or on behalf of the Town Council and any of its appointed boards and commissions.
(f) A person who owns, publishes or is employed by a newspaper, any other regularly published periodical, a radio station, a television station, a wire service or any other bona fide news medium that in the ordinary course of business disseminates news, letters to the editors, editorial or other comment or paid advertisements that directly or indirectly oppose or promote municipal decisions if the person does not engage in further or other activities that require registration under this article and does not represent another person in connection with influencing municipal decisions. This subsection does not exempt a person whose relation to the news media is only incidental to a lobbying effort or when a position taken or advocated by a media outlet directly impacts, affects, or seeks to influence a municipal decision in which the media outlet has a direct or indirect financial interest.
(g) An individual who, voluntarily and without compensation, supports a position favorable to another party, where the individual has no affiliation with that party as an officer, member or employee.
Although exempted by subsection (a) of this section, officers of federal, State and local governmental entities who contact Town officials with respect to matters pertaining to their official duties are encouraged to file voluntary registration forms with the Town Clerk, as provided in Section 2-87 of this article, identifying their roles and responsibilities in order to provide a public record of their involvement in Town matters. These persons are further encouraged to submit reports required on a quarterly basis of their lobbying activities as provided in Section 2-91 of this article.
Sec. 2-93 Termination of Lobbying.
A registrant who terminates the activities that require registration and filing under this article shall file with the Town Clerk a termination notice which shall include a report of compensation and expenditures as provided in Sec. 2-91, covering the period of time to the date of termination of his activities as a lobbyist. Such notice and report shall be final and relieve such registrant of further reporting under this article unless and until he later undertakes activities requiring him to register again under this article.
Sec. 2-94 Access to Information: Duty to Report Contacts with Persons Who Have Failed to Register.
Registration statements, amendments to statements, reports of compensation and expenditures, and notices of termination shall be maintained and made available to all elected officials, members of Town advisory boards, departments of Town government and to the public by the Town Clerk. By February 15th of each year, the Town Clerk shall compile a list of registered lobbyists.
Each Town official shall report to the Town Clerk any person who they believe has undertaken to influence any municipal decision when such Town official has knowledge that the person who they believe has undertaken to influence a municipal decision is not registered as a lobbyist and is not clearly exempted from registration under Sec. 2-92.
Registration statements, reports and other forms filed with the Town Clerk under this article are public records at the time of their filing.
Sec. 2-95 Enforcement and Penalties.
If any person required to register under this article has failed to register, the Town Clerk shall notify such person in person or by certified mail of his failure to register. Such person shall be subject to a fine of $100.00. In addition, any person who fails to register within ten days of the issuance of the notice shall be required to pay an additional fine of $100.00 for each day thereafter until the date of registering.
If a registrant fails to file a report as required herein, the Town Clerk shall, within 15 days of the due date, notify the registrant by certified mail of his failure to file by the required date. The registrant shall thereafter file his report within ten days of the issuance of the notice. Any registrant who fails to file within the ten days shall be required to pay a penalty of $100.00 for each day thereafter until the date of filing. Failure to file within the ten days shall constitute a violation of this article. Upon showing of good cause, the Town Clerk may grant one 30-day extension of time for filing this report.
Sec. 2-96 Conflict of Laws.
Nothing in this article shall be construed as authorizing any communication with any Town elected official or member of any Town board before which a matter is pending where such communication is restricted or prohibited by some other applicable provision of statutory or common law.
If any portion of this article shall be preempted or otherwise declared invalid by any state or federal authority, such action shall not operate to invalidate the remainder of this article and the same shall remain in full force and effect.”
Section 2. Chapter 2 of the Town Code is hereby amended by adding a new Article VI. to read as follows:
“ARTICLE VI . ADDITIONAL DISCLOSURE AND ETHICS
GUIDELINES FOR COUNCIL MEMBERS
Sec. 2-104 Findings and Purposes.
The Town Council does hereby find that:
(a) Ethical behavior on the part of elected officials encourages impartial and independent judgment;
(b) Ethical behavior on the part of elected officials preserves the integrity of the Town’s decision making processes;
(c) Encouragement of ethical behavior on the part of elected officials will enhance the confidence of the citizens of Chapel Hill in their duly elected Mayor and Town Council and in the integrity of their municipal government;
(d) The public disclosure by elected officials of the Town of direct communications they have with officials and employees of federal, State and local governmental entities and others acting on behalf of public agencies who are exempt from the lobbying regulations in Article V of Chapter 2 of the Town Code, will help preserve and promote better government for the Town of Chapel Hill;
(e) The reporting by Town elected officials of direct communications they have with other public officials who seek to influence the actions of Town of Chapel Hill elected officials will help preserve and promote better government for the Town of Chapel Hill;
(f) Appropriate ethical guidelines for elected officials include the reasonable regulation on the receipt of gifts and gratuities and the public reporting of their receipt;
(g) Restrictions on communications, outside of the context of a formal public hearing, related to pending applications which are before the Mayor and Town Council as quasi-judicial applications, are necessary in order to maintain standards of due process.
Sec. 2-105 Definitions.
Unless the context requires otherwise, the definitions in Article V of this Chapter shall apply.
Sec. 2-106. Disclosure of Meetings and Conversations with Persons Representing Public Agencies.
The Mayor and every member of the Town Council of the Town of Chapel Hill should disclose every direct communication with any person representing a federal, State and local governmental entity pertaining to a pending municipal decision.
This article shall not apply to direct communications between the Mayor and Town Council members and Town officials.
Sec. 2-107 Disclosure of Gifts and Gratuities.
The Mayor and every member of the Town Council of the Town of Chapel Hill should disclose any gift, favor, or gratuity received from any lobbyist, any official of a federal, state or local governmental agency, or any citizen under circumstances in which a reasonable person could believe that it is intended to influence him/her in the performance of his/her official duties pertaining to a matter of official Town business.
The purpose of this section is to encourage the disclosure of gifts, favors and gratuities where such gifts, favors and gratuities are not otherwise prohibited by this article or the provisions of Section 14-55 of the Town Code.
For purposes of this article, gift, favor, or gratuity shall include, but shall not be limited to: payment of the cost of travel or the provision of such travel; admission to, or provision of any ticket to an athletic, cultural or other entertainment event for which an admission is charged; or payment for any meal.
Sec. 2-108 Limitation on Acceptance of Gifts and Gratuities.
The Mayor and every member of the Town Council of the Town of Chapel Hill should not accept any gift, favor, or gratuity with a value, or with a value in combination with any other gift, favor or gratuity received in any three month period from the same lobbyist, official of a federal, state or local governmental entity or citizen, that exceeds $80.
Sec. 2-109 Exemptions.
Exempted from the disclosure requirements and monetary limitations on gifts, favors and gratuities in this article are: campaign contributions which otherwise comply with applicable provisions of State law and the Town Code; advertising items; and, souvenirs of nominal value.
Exempted from the monetary limitations on gifts, favors and gratuities in this article are event tickets for banquets, sports events, or other large gatherings, where special seating for these events is not provided for Town officials to sit together with lobbyists or officials of other public agencies and where Town officials are seated among other general ticket holders.
Customary gifts or favors between Town elected officials and their friends and relatives are also exempted from the disclosure requirements and monetary limitations of this article.
Sec. 2-110 Limitation on Communications Regarding Pending Quasi-Judicial Applications.
The Mayor and members of the Town Council should not consider or be influenced by any information they receive in any direct communication by telephone or in person from any applicant or other interested person regarding the substantive merits of any quasi-judicial application pending before the Mayor and Town Council, except where such communication occurs in a public hearing called for consideration of said application. For that reason, such communications outside of the context of a formal hearing on such pending quasi-judicial matters should be avoided to the extent reasonably possible and should be disclosed in the course of the public hearing when they do occur. For example, if the Mayor and members of the Town Council visit a development site with an applicant or representative of an applicant who has a quasi-judicial application pending before the Town Council or attend a community or neighborhood meeting where there is a discussion of a pending quasi-judicial application, these events should be disclosed during the public hearing.
Quasi-judicial applications include special use permits, master plans, development plans and any other applications or matters before the Town Council where the provisions of State law or local ordinance require that the Council receive evidence under oath before making a decision and base their decision on such evidence. Such applications are deemed pending when they have been received by the appropriate department of the Town for consideration.
This guideline does not preclude the gathering or receipt of information from members of the Town staff or the gathering of factual information, provided, however, that such information should be disclosed at a public hearing on the pending application prior to the Council taking final action thereon. This guideline should not be considered a restriction on seated Council members participating in candidate forums as part of their own re-election campaigns.
Sec. 2-111 Timing of Disclosure.
Except as provided in Sec. 2-110, the disclosures called for by this article should be made within 10 days of the event requiring disclosure by the filing of a report with the Town Clerk; provided, however where the disclosure pertains to a matter pending before the Town Council, such disclosure should be made no later than prior to the Council’s closing of the hearing and taking action on that matter. When the timing prevents the filing of a written report with the Town Clerk prior to Council taking action, the disclosure should be made at a public meeting of the Council.
Sec. 2-112 Conflict of Laws.
Nothing in this article shall be construed as authorizing any communication with any Town elected official or member of any Town board before which a matter is pending where such communication is restricted or prohibited by other applicable provision of statutory or common law.
Nothing in this article shall be construed as authorizing any activity which is otherwise prohibited by statutory law, common law or local ordinance.
If any portion of this article shall be preempted or otherwise declared invalid by any State or federal authority, such action shall not operate to invalidate the remainder of this article and the same shall remain in full force and effect.”
Section 3. This Ordinance shall become effective ___________, _____.
This the ________day of _________, 2004.