SR 06-28-2016 8C
City Council
Report
City Council Meeting: June 28, 2016
Agenda Item: 8.C
To: Mayor and City Council
From: Marsha Moutrie, City Attorney, City Attorney's Office
Subject: Potential Amendments to City Charter Article XXII (the Oaks Initiative) for
November 2016 Election
Recommended Action
Staff recommends that the City Council hold a public hearing, receive public comment,
and approve the proposed language amending Article XXII of the City Charter (the Oaks
Initiative).
Executive Summary
At its most recent meeting on June 14, 2016, Council conducted a study session on
possible proposed amendments to Article XXII of the City Charter, commonly known as
the Oaks Initiative. Council provided guidance on specific potential amendments, which
would, among other things, strengthen the measure by clarifying its requirements,
protect constitutional rights and facilitate enforcement; and Council directed staff to
return with proposed language that would implement its guidance. This report fulfills
that direction.
The proposed amendments supported by Council and recommended by staff appear on
Attachment A. If approved by the voters, they would: expand the scope of the Oaks
ding
prohibition applies outside the City limits; specify enforcement procedures; and clarify
that remedies are cumulative. At least for now, staff continues to recommend against
modifying the Oaks Initiative to reach back in time for the reasons discussed at the last
Council meeting.
In addition to placing the amendments shown in Attachment A on the November ballot,
staff also supports making modifications to the guidelines, as discussed at the last
Council meeting. However, staff recommends making those at an upcoming meeting or
meetings so that any additional concerns discussed during consideration of the
amendments to the measure and changes approved by the voters may also be
addressed.
Background
th
The staff report of June 14 includes background information on the Oaks Initiative and
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the currently proposed amendments. Because it was before Council at its most recent
meeting, that information is not repeated here.
th
At the June 14 study session, Council supported or did not question proposed
amendments that would: expand the scope of the measure so that its prohibition applies
the City
Manager, Department Heads and their designees who award benefits; exempt
uncompensated volunteers who serve nonprofits that receive City funding, clarify that
the remedies specified in the Oaks Initiative are not exclusive and that the prohibition
enforcement
.
bers expressed
various concerns about proposing that change. Among others, those concerns included
Council also discussed whether the Oaks Initiative should be modified and expanded to
a public benefit. Most Council members who spoke to this issue and the City Manager,
expressed concern about how this change would be administered and enforced.
However, because the discussion occurred in the context of a study session, Council
did not vote on the issue.
Discussion
The amendments supported by Council and shown on Attachment A are all
recommended by staff. They would:
to include City Council members, Planning Commission members, the City
Manager, Department Heads and their designees who conf
benefits";
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also those who confer private advantages in return for receiving public
benefits, e.g., City contractors and campaign donors;
Exempt from the prohibition are persons providing volunteer,
uncompensated service as directors, trustees, partners or officers of
nonprofit corporations that receive City funding; however, this exemption
would not apply to trustees, directors, partners or officers of organizations
that control or actually are political committees as defined by state and
federal law and organizations that control or own other organizations;
Clarify enforcement procedures by expressly obligating the City Attorney
to refer Oaks complaints to the Chief Deputy of the Criminal Division or an
independent investigator;
Expressly state that the remedies established by the measure are
cumulative rather than exclusive;
Establish that the Oaks prohibition applies outside the boundaries of the
City so that the Oaks prohibition may not be avoided by simply accepting
the personal advantage in another city.
it would reach back in time for the reasons given at
ultimately be approved, uncertainty as to exactly what procedural pathway a particular
application would take, and the fact that residents would have to choose between
applying for approvals and exercising their constitutional right to participate in the
political process through campaign contributions. Moreover, as was noted at the last
meeting, additional amendments to the Oaks Initiative may be proposed in the future, if
experience shows they are warranted; and, in any event future clarifications can and
,
will be accomplished through modifications to the guidelines. Nonetheless, if Council
decides to propose amendments that would make it
language suggested by Hueston Hennigan (It appears in Attachment B.) However,
.
staff notes that other changes to the Oaks Initiative would likely also be necessary to
ensure that the expansion of the prohibition in one section does not create
inconsistencies with others.
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Next Steps
Once language is approved, staff will bring a resolution to Council that includes the
actual ballot language. Additionally, staff will return to Council with proposed changes
to the gui
proposed amendments.
Financial Impacts and Budget Actions
Approving this language for the proposed amendments will cause no financial impact.
Placing the proposal on the b
insignificant amount.
Prepared By:
Marsha Moutrie, City Attorney
Approved Forwarded to Council
Attachments:
A. Proposed Amendments to the Charter
B. Proposal to Amend
C. Staff Report 1986 (June 14, 2016) Oaks Initiative Web Link
D. Written comments
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Add to 8-C
06-28-2016
Anne Samartha
From:Mary Marlow <m.marlow@verizon.net>
Sent:Monday, June 27, 2016 10:37 AM
To:Ted Winterer; Kevin McKeown Fwd; Gleam Davis; Terry OÔDay; Pam OConnor; Tony
Vazquez; Sue Himmelrich
Cc:Rick Cole; Marsha Moutrie; councilmtgitems
Subject:Council Agenda Item 8C Meeting of June 28, 2016
Dear Mayor and Council Members,
The Transparency Project is pleased to see progress on the Oaks amendments slated for the November
ballot. However, we have concerns with the omission of an important amendment recommended by Mr.
Hueston in his April report to council. The June 28, 2016, Staff Report at page 3 opposes the recommendation
by John Hueston to strengthen the Oaks Initiative and deal with a point City Attorney Marsha Moutrie has
herself repeatedly raised. Ms. Moutrie has previously argued that because Oaks only prohibits receiving
campaign contributions from a developer or contractor after approving an agreement with them and
not before, it may suffer from substantive due process impediments.
Mr. Hueston disagreed with Ms. Moutrie, but said that to add in a prohibition on receiving a campaign
contribution (or other benefit) before the approval would only “further the anti-corruption interests of Oaks”
and would solve any potential problem raised by Ms. Moutrie. Ms. Moutrie’s Staff Report now opposes
making Oaks stronger and eliminate the “mismatch” she herself raised. The Hueston Report on pages 53-54
reads:
"Ms. Moutrie and others argue that there is an anti-corruption interest in preventing city officials from
receiving advantages before approving projects, similar to the anti-corruption interest in preventing city officials
from receiving advantages after approving projects. There is no reason to restrict ex-post personal or campaign
advantages but not ex-ante personal or campaign advantages. Ms. Moutrie argues that the mismatch is arbitrary
and may violate substantive due process rights.”
"We think a reasonable argument can be made that the restriction occurring after the vote is not
arbitrary. The Oaks Initiative is focused on limiting quid pro quo corruption where the remuneration offered in
exchange for approval of a public benefit is contingent on the approval. Nevertheless, we believe that the best
solution is to amend the Oaks Initiative to add a prohibition against receiving ex-ante benefits. Such an
adjustment absolutely furthers the anti-corruption interests of the Oaks Initiative…” (see Pages 53-54 of
Hueston Report)
The Transparency Project agrees with Mr. Hueston and urges the Council to strengthen Oaks and eliminate Ms.
Moutrie’s (misplaced) objection that in its current form Oaks suffers from a “mismatch” or potential due
process proportions. Indeed, as Council member O’Connor told the Council on January 28, 2014, the law
governing the Metro Board deals with contributions made before a benefit is approved.
The issue of the trigger date can easily be dealt with, including as suggested by Mr. Hueston or when an
application is made, a Request for Proposal response is submitted or a filing to begin the process of building or
renovating is made with the City.
Respectfully,
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Add to 8-C
06-28-2016
Mary Marlow, Chair
Santa Monica Transparency Project
Cc: Rick Cole, City Manager
Marsha Moutrie, City Attorney
2
Add to 8-C
06-28-2016
Anne Samartha
From:Mary Marlow <mmarlow7@icloud.com>
Sent:Monday, June 27, 2016 10:38 AM
To:Ted Winterer; Kevin McKeown Fwd; Gleam Davis; Terry OÔDay; Pam OConnor; Tony
Vazquez; Sue Himmelrich
Cc:Rick Cole; Marsha Moutrie; councilmtgitems
Subject:Council Agenda Item 8C Meeting of June 28, 2016
Dear Mayor and Council Members,
The Transparency Project is pleased to see progress on the Oaks amendments slated for the November
ballot. However, we have concerns with the omission of an important amendment recommended by Mr.
Hueston in his April report to council. The June 28, 2016, Staff Report at page 3 opposes the recommendation
by John Hueston to strengthen the Oaks Initiative and deal with a point City Attorney Marsha Moutrie has
herself repeatedly raised. Ms. Moutrie has previously argued that because Oaks only prohibits receiving
campaign contributions from a developer or contractor after approving an agreement with them and
not before, it may suffer from substantive due process impediments.
Mr. Hueston disagreed with Ms. Moutrie, but said that to add in a prohibition on receiving a campaign
contribution (or other benefit) before the approval would only “further the anti-corruption interests of Oaks”
and would solve any potential problem raised by Ms. Moutrie. Ms. Moutrie’s Staff Report now opposes
making Oaks stronger and eliminate the “mismatch” she herself raised. The Hueston Report on pages 53-54
reads:
"Ms. Moutrie and others argue that there is an anti-corruption interest in preventing city officials from
receiving advantages before approving projects, similar to the anti-corruption interest in preventing city officials
from receiving advantages after approving projects. There is no reason to restrict ex-post personal or campaign
advantages but not ex-ante personal or campaign advantages. Ms. Moutrie argues that the mismatch is arbitrary
and may violate substantive due process rights.”
"We think a reasonable argument can be made that the restriction occurring after the vote is not
arbitrary. The Oaks Initiative is focused on limiting quid pro quo corruption where the remuneration offered in
exchange for approval of a public benefit is contingent on the approval. Nevertheless, we believe that the best
solution is to amend the Oaks Initiative to add a prohibition against receiving ex-ante benefits. Such an
adjustment absolutely furthers the anti-corruption interests of the Oaks Initiative…” (see Pages 53-54 of
Hueston Report)
The Transparency Project agrees with Mr. Hueston and urges the Council to strengthen Oaks and eliminate Ms.
Moutrie’s (misplaced) objection that in its current form Oaks suffers from a “mismatch” or potential due
process proportions. Indeed, as Council member O’Connor told the Council on January 28, 2014, the law
governing the Metro Board deals with contributions made before a benefit is approved.
The issue of the trigger date can easily be dealt with, including as suggested by Mr. Hueston or when an
application is made, a Request for Proposal response is submitted or a filing to begin the process of building or
renovating is made with the City.
Respectfully,
1
Add to 8-C
06-28-2016
Mary Marlow, Chair
Santa Monica Transparency Project
Cc: Rick Cole, City Manager
Marsha Moutrie, City Attorney
2
Add to 8-C
06/28/2016
Anne Samartha
From:Carmen Balber <carmen@consumerwatchdog.org>
Sent:Tuesday, June 28, 2016 12:23 PM
To:Council Mailbox
Cc:councilmtgitems
Subject:Oaks Initiative Amendments
Attachments:CWOaks6-28-16.pdf; ATT00001.htm
Follow Up Flag:Follow up
Flag Status:Flagged
Mayor Vazquez and Councilmembers,
Please find attached Consumer Watchdog’s comments on the staff recommendations on amendments to the
Oaks Initiative. As some of you know, Consumer Watchdog’s Oaks Project was the sponsor of the Oaks
Initiative in 2000. While we generally support the proposal brought to you by staff, it is hardly worth placing a
measure on the ballot if you do not significantly strengthen the law. The proposal in the Hueston review to
extend the law’s impact to the period before a public benefit is awarded would extend its anti-corruption
protections and be a significant way to strengthen the law. The proposal was excluded by staff, but we urge you
to adopt it.
Thank you,
Carmen Balber
Carmen Balber
Executive Director
Consumer Watchdog
2701 Ocean Park Blvd, Ste 112
Santa Monica, CA 90405
p: (310) 526-0746
c: (310) 403-0284
carmen@consumerwatchdog.org
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June 28, 2016
Santa Monica City Council
1685 Main St #209
Santa Monica, CA 90401
Dear Council Members,
In 2000, volunteers with Consumer Watchdogs Oaks Project gathered nearly 12,000 signatures
to qualify the Taxpayer Protection Amendment (Oaks Initiative) for the ballot. It received
nearly 60% of the vote. For the next fifteen years, most members of this City Council and the
City Attorney did everything they could to undermine, ignore or overturn the law. We are glad to
see Santa Monica finally embracing the will of the voters to enforce this voter-approved anti-
corruption law. It has been a long time coming.
However, it does not strengthen the law to omit a key recommendation of the city-
commissioned ethics review: That you extend the Oaks Initiative to the period while a contract is
being considered. It will take more than a commitment to enforce Oaks Initiative which should
have begun fifteen years ago to erase the citys long history of obstructionism.
The Hueston report recounted that history, of a four-year lawsuit to invalidate the voter-approved
measure, of the city attorneys subsequent refusal to enforce it, and of the 2006 Prop W that the
council placed on the ballot to overturn it. The Council claimed Prop W strengthened the Oaks
Initiative too, when in fact it would have overturned the laws central prohibition on kickbacks to
city officials. That history of opposition to the law requires the Council be beyond reproach in
proposing any changes to the law. To do so, you should adopt all of Huestons recommendations.
The Oaks Initiative prohibits city officials from awarding public benefits, such as development
agreements and contracts, to entities and then receiving a personal benefit from them, such as
campaign contributions or employment.
When the city of Pasadena chose to strengthen the Oaks Initiative in 2006, its changes extended
these prohibitions to the bidding period before a vote. It is working in Pasadena, and, as the
Hueston review pointed out, similar provisions have been tried and upheld in federal court. If
your sticking point is uncertainty about when a bidding process begins, the Council should
consider Pasadenas solution: Making the trigger when the Request for Proposal is issued. The
relevant language from Pasadenas law:
No person or entity who bids on a contract with the City, or enters into a lease
agreement or land sales agreement with the City, with a value in excess of
$25,000, which requires approval by the City Council, shall make any campaign
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contribution to any member of or candidate for the City Council, or committee
controlled by the member or candidate, from the time the Request for Proposal or
other bid process has been issued or from the time negotiations commence,
whichever is earlier, until the negotiations have terminated. When negotiations
have terminated, this Article continues to apply to the public benefit recipient, if
any. This section does not apply to low bid contracts as defined by Section 1002
of the City Charter.
We support the other proposals in the staff report: spelling out who is a public official, where the
law applies, and who will enforce it. However, they could all be implemented today without
going to the voters. Only one of these applying the prohibition to public benefit recipients
needs a vote of the public to approve. And although we support this change to allow enforcement
against both a public official and a company for violating the law, it does not strengthen the law
by expanding its anti-corruption protections.
The one proposed change that would strengthen the law is the one that is not in the language
before you extending it to the bidding period before a public benefit is awarded. Significant
public resources have already been spent on the Hueston review, and even more cost will go
along with placing a city-sponsored measure on the ballot. Dont expend those taxpayer
resources without doing something that will truly benefit the taxpayers. We urge you to
strengthen anti-corruption protections in Santa Monica by including the change in time frame in
the ballot measure the Council places before the voters. With this change, Consumer Watchdog
will be pleased to support it.
Sincerely,
Carmen Balber