TO:                  Mayor and Town Council


FROM:          Council Committee on Voter Owned Elections:  Sally Greene, Mark Kleinschmidt, Bill Strom, and Jim Ward


SUBJECT:       Proposed Public Campaign Financing Program for Chapel Hill


DATE:             June 9, 2008




The purpose of this memorandum is to recommend enactment of the Voter Owned Elections Program for Chapel Hill to be effective beginning with the Fall, 2009 Town of Chapel Hill municipal elections, with certain adjustments as described below based on issues that have arisen during and after the May 14 public hearing.




For several years the Town has been considering a program to provide public funding for municipal elections for candidates who agree to strict reporting, fund raising and expenditure limitations.


In February, 2003, the Council received a petition proposing a “Voter Owned Elections” program for the offices of Chapel Hill Mayor and Town Council to begin with the 2003 Town elections. The Council referred the petition to the Manager and Attorney.


On March 24, 2003, the Council received a report from the Manager and Attorney discussing the need for clear legal authority for such a program and deferred consideration pending the resolution of certain issues related to a program established in the Town of Cary. Based on legal problems experienced by the Cary program, the Council deferred further consideration of a similar program in Chapel Hill while the Town pursued legislative authority for publicly funding municipal election campaigns. 


On July 16, 2007, the North Carolina General Assembly ratified Session Law 2007-222 which authorized the Town of Chapel Hill to conduct a program for the public funding of municipal elections.  Chapel Hill is the first municipality in North Carolina to receive legislative authorization to provide such a locally funded public campaign financing program. 


On November 12, 2007, the Town Council established a Council Committee to work on the development of such a program and to bring back a report and recommendation to the full Council for its consideration. 


The Council Committee on Voter Owned Elections has met a number of times over the last few months.  We have consulted with Kim Westbrook Strach of the North Carolina State Board of Elections and have had input and assistance from Bob Hall and Jenn Frye of Democracy North Carolina.  Staff support has been provided by Ralph Karpinos, Town Attorney.


On March 14, 2008, Kim Strach, Deputy Director, Campaign Finance Division, North Carolina State Board of Elections, provided guidelines, as required by the 2007 Special Legislation, for the Town to follow in establishing a public campaign financing program. 


On April 14, our Committee submitted a recommendation for a proposed program to the Town Council based on the guidance from the State Board of Election and the assistance and input from Bob Hall and Jenn Frye at Democracy North Carolina.  The Council referred our recommendation and report to the Manager and Attorney with direction to prepare a draft ordinance to implement the program based on the Committee’s recommendation. 


On May 14, a draft ordinance to establish the Voter Owned Elections Program prepared by the Town Attorney based on the Committee’s recommendation was presented for Public Hearing in accordance with our April 14 Committee recommendation and the requirements of the enabling legislation from the General Assembly. Attachment 1 includes the materials from the May 14 public hearing.




During the course of the May 14 public hearing and the Council’s discussion that same evening several issues were raised.  In addition, email correspondence and Committee discussions have raised other concerns.


Listed below are the issues we have identified from the public hearing and subsequent discussions.  We offer our comments on these issues and, where appropriate, recommendations for adjustments to the recommended Ordinance to establish the Voter Owned Elections program. 


Issue 1.  What is the justification for the program and for spending public funding on this program at this time?


Explanation of issue:  The Council has received email correspondence from citizens questioning the rationale and need for public funding for local election campaigns in Chapel Hill. 

Committee response: The Council has indicated an interest in considering the establishment of a Voter Owned Elections program for Town municipal elections for several years. Attached are a number of documents showing the growing expense of local municipal election campaigns in Chapel Hill and demonstrating, we believe, the rationale for establishing this program beginning with the 2009 Town municipal elections.  In addition, attached are some of the email from citizens who have questioned the need for this program and responses from members of this Committee.  (Attachment 2)


Issue 2.  How do we account for tangible materials that are held by incumbents from previous campaigns and can be used again?


Explanation of issue: At the May 14 public hearing, a concern was raised regarding incumbents (perhaps as well as non-incumbents who have run for Town office in the past) having an advantage due to their having signs and other materials left over from previous campaigns and therefore having access to greater resources than another candidate participating in the program who is campaigning for the first time.


Committee response: We acknowledge the validity of this concern.  Signs and other literature left over from a previous campaign that can be used again are assets to a candidate running in a municipal election.  In an attempt to help compensate for the advantage an experienced candidate might have, we are recommending changes to Section 2-93 and to Section 2-94 of the proposed Ordinance that provides as follows:


In Section 2-93(d), a new subparagraph c. to read as follows:


            “c. a sworn statement from the candidate that lists any campaign literature or signs purchased with campaign funds in a previous campaign which are available to and will be used by the candidate in the current campaign and the current replacement cost of such materials.”


In Section 2-94, a new paragraph (i) to read as follows:


“(i)  The value of campaign literature and signs reported under Section 2-93(d) of this Ordinance shall reduce the amount of the public grant otherwise available to a certified Voter Owned Elections candidate as follows:  The public grant to any candidate shall be reduced by the amount to which the reported value of such materials exceeds $100.”


Issue 3.  How should expenditures for mailers or advertisements on behalf of multiple candidates be handled?


Explanation of issue: At the May 14 public hearing, a concern was raised regarding the allocation of expenses when literature is printed and distributed on behalf of more than one candidate, including incumbents and possibly non-incumbents. 


Committee response: We have been advised by Kim Westbrook Strach at the State Board of Elections that the State Board divides pooled expenditures by multiple candidates equally among the candidates.  We are recommending a new paragraph (d) to Section 2-96 of the proposed Ordinance which would make that clear: 


“(d)  For purposes of these spending limitations, expenditures on advertisements, signs, or other published or broadcast materials that are on behalf of multiple candidates shall be considered prorated among the candidates for whom they are made.”


Issue 4:  Is there still an exemption from reporting requirements for candidates who limit their fundraising and expenditures to less than $3000?  


Explanation of issue: Although the Ordinance establishing the program adds new reporting requirements for all candidates, an issue has been raised regarding whether candidates who certify that they will stay below the $3000 cap for fund raising and expenditures should be exempted from new Town reporting requirements.


Committee response: We believe that candidates who are not participating as certified Voter Owned Elections candidates in the Town’s program and who choose to limit their campaigns to the current State standard that would otherwise exempt them from reporting requirements should also be exempted from the requirements of the program. (That standard is set out in N.C. General Statute Section 163-278.10A and applicable to Chapel Hill’s elections under N.C.G.S. Sec. 163-278.40E.) We are recommending a new paragraph (d) to Section 2-99 of the proposed ordinance which would provide that exemption:


“(d) The reporting requirements of this Section shall not apply to any non-certified Voter Owned Elections candidate who complies with all of the provisions of N.C.G.S. Section 163-278.10A.”


Issue 5:  Should persons eligible to register to vote, or only registered voters, be permitted to make qualifying contributions to candidates?


Explanation of issue: A concern has been identified by Bob Hall at Democracy North Carolina and Kim Westbrook Strach regarding whether a candidate should be able to accept a qualifying contribution from someone who is eligible to register to vote in a Chapel Hill municipal election, but has not done so.  The concern relates to the inability of the State Board to be able to verify the validity of a contribution from a non-registered voter. 


Committee response: We recommend an adjustment to the definition of Qualifying Contribution in Section 2-86(a) of the proposed Ordinance to provide that persons who are making such contributions must be registered voters or must have registered by the time a certified Voter Owned Elections candidate has filed for certification.


Issue 6:  Are the adjustment criteria and formula initially proposed still appropriate?


Explanation of issue: The guidelines provided by the State Board of Elections require that the funding limits be adjustable over time to reflect growth in the community.  The adjustment criteria are provided in Section 2-100 of the proposed ordinance and were drawn a few months ago based on information then available regarding the number of registered voters.  More recent information from the Orange and Durham County Boards of Elections shows a significant increase in the number of registered voters. 


Committee response: Based on the more recent information we have regarding the number of registered voters in Chapel Hill, we believe it is appropriate to modify the adjustment formula contained in Section 2-100 (c) of the proposed Ordinance by changing the last sentence of that paragraph to read as follows:


“For each full 5,000 registered voters over 40,000 in the total number of active registered voters in Chapel Hill, the criteria referenced in this Section shall be increased by one-eighth of the amount previously authorized.”


Issue 7:  Should some funding be established for the program in the 2008-2009 Fiscal Year Budget?


Explanation of issue: In our April 14 report to the Town Council we recommended that the Council, beginning with the 2008-09 Fiscal Year Budget, set aside moneys to establish the Voter Owned Elections Fund.


Committee response: We continue to believe that it is important to incorporate initial funding in the 2008-09 Budget as a way to start the program’s funding as an indication to prospective candidates next spring who might be considering whether the program would assist them or allow them to run for public office in Chapel Hill.  We recommend this evening that the Council allocate an initial $25,000 to this Fund with the expectation that funding will be added to the program on an annual basis as part of the adoption of the Budget each year.


Issue 8:  Should public funds be eligible for use for post-campaign expenses?


Explanation of issue: Committee members raised concerns regarding the use of public funding for post-election campaign celebratory events. 


Committee response:   The State Board of Election guidelines require that public funds must be used for campaign purposes only.  We are recommending that a new paragraph (f) be added to Section 2-97 of the proposed Ordinance to read as follows:


“(f)  No public funds shall be used for expenditures incurred after the polls are closed in the election for which the candidate has been certified as a Voter Owned Elections candidate.”


Issue 9:  What provisions are there to provide information and assistance to candidate and campaign treasurers regarding the requirements of the program?


Explanation of issue: Based on the discussions at the public hearing and our subsequent Committee’s meeting, we believe  it is important for there to be opportunities for candidates and campaign treasurers to understand the procedures required by the Town’s Voter Owned Elections Program, if it is enacted.


Committee response: Included with this report is a recommended resolution which would direct the Town Attorney to work with the State Board of Elections and other appropriate individuals and agencies to conduct training sessions on the Voter Owned Elections Program, if it is enacted by the Council.  Initially, we recommend at least two opportunities for interested persons to learn how the program works, one session, in April,  2009, when prospective candidates may be considering seeking municipal office, and a second such during the period established for persons to file for municipal office, in July, 2009 and at similar times in each odd numbered year thereafter.


In addition to these issues, we have made a few other minor technical and non-substantive changes to the recommended Ordinance from the version presented at the May 14 public hearing based on review of the document by staff.




  1. We recommend that the Council enact the attached Ordinance to establish the Town of Chapel Hill Voter Owned Elections Program as presented at the May 14 Public Hearing, with the adjustments noted above.
  2. We recommend that the Council adopt the attached Resolution directing the Attorney to work with the State Board of Election and other appropriate persons and arrange for at least two information sessions for prospective candidates, campaign treasurers, and citizens interested in the Town’s Voter Owned Elections Program in the spring and early summer of 2009 and at similar times in each odd numbered year thereafter.
  3. We further recommend that the Council, beginning with the 2008-09 Fiscal Year Budget, set aside funds for the program for the Fall, 2009, Town municipal elections.  We recommend that as part of its consideration of the 2008-09 budget, funding of $25,000 be allocated for this program.  We anticipate that a recommendation for additional funding for the 2009 election campaign will be evaluated as part of the Council’s consideration of the 2009-10 budget next spring. 




  1. May [April] 14 Agenda item with attachments (p. 18).
  2. Correspondence and reports regarding justification for public financing of campaigns (p. 37).