1. If I Ran the Circus: A Special District Election Through the Eyes of Dr. Seuss Mon The Fair Campaign Practices Act Gray Butler Snow LLP Alan Matlosz and Michael Persichitte George K. Baum September 2014 Alan Matlosz George K. Baum & Company Monica Rosenbluth Butler Snow, LLP Matt Gray Butler Snow, LLP

2. 2 This presentation is a general summary of the legal restrictions on spending public funds to urge a vote for or against a measure. However, readers should contact a lawyer for advice on specific questions.

3. 3 FCPA – WHAT IS IT ? The FCPA is a state law that restricts the use of PUBLIC money in most campaigns – Restricts a public entity’s ability to spend public money – Restricts the ability of elected officials and employees of the public entity to spend public money Found at 1-45-117, C.R.S. and in Article XXVIII of the Colorado Constitution (“Amendment 27”)

4. 4 FCPA – C OVERED P UBLIC E NTITIES FCPA applies to the following public entities: – Agency, department, board, division, bureau, commission or council of the state or any political subdivision of the state Title 32 special districts and their board members – Home rule municipalities and home rule counties that have adopted provisions that address campaign finance issues are exempt

5. 5 FCPA – C OVERED E LECTIONS FCPA applies to the following elections: – Statewide ballot issue submitted for the purpose of having a title set pursuant to 1-40-106(1) or which has had a title set – Local ballot issue submitted for the purpose of having a title set pursuant to 31-11-111 or which has had a title set 31-11-111 applies to counties (see 30-11-103.5)

6. 6 FCPA – C OVERED E LECTIONS FCPA applies to the following elections: – Referred measure as defined in 1-1-104(34.5) "Referred measure" includes any ballot question or ballot issue submitted by the general assembly or the governing body of any political subdivision to the eligible electors of the state or political subdivision pursuant to article 40 or 41 of Title 1 Is a special district organizational election, or another court-ordered special district election, a “referred measure?”

7. 7 FCPA – C OVERED E LECTIONS FCPA applies to the following elections: – Measure for the recall of any officer that has been certified for submission to electors

8. 8 FCPA – W HEN THE R ESTRICTIONS S TART Statute does not specify when FCPA restrictions kick in – But decisions indicate that FCPA applies starting at the time when a measure is formally submitted to the voters

9. 9 FCPA – R ESTRICTIONS O N P UBLIC E NTITIES A special district may not make a contribution in a campaign involving the nomination, retention, or election of any person “Contribution” defined in Amendment 27 and in 1-45-103 – Contribution means: - Money (whether it’s given directly or loaned, or a loan guarantee) - Things (gifts or loans of property) - Anything else of value given for the purpose of promoting the candidate -Contribution does NOT mean: - Individual campaign volunteers - Contributions made by membership organizations or corporations to a political committee created by the organization or corporation

10. 10 FCPA – R ESTRICTIONS O N P UBLIC E NTITIES A special district may not make a donation to any person for the purpose of making an independent expenditure – “Independent expenditure” defined in Amendment 27

11. 11 FCPA – R ESTRICTIONS O N P UBLIC E NTITIES A special district may not expend public moneys from any source, or make contributions, to urge electors to vote in favor of or against certain ballot issues or measures

12. 12 FCPA – P ERMITTED ACTIVITIES OF P UBLIC E NTITIES A special district can expend public moneys to distribute a factual summary, but the summary must include arguments both for and against the proposal. The summary must not contain a conclusion in favor of or against the proposal (ie, must not urge a vote one way or another) A special district can adopt a resolution supporting or opposing issues of official concern – News of resolution can be disseminated through regular, established means (other than paid advertising)

13. 13 FCPA – T O U RGE OR N OT TO U RGE FCPA prohibits a special district from expending public funds to urge voters to vote for or against – Some early decisions suggested it may be possible to expend public funds in non-advocacy manner – “Urge” now defined by Court of Appeals: Present, advocate or demand earnestly or pressingly Taking a position favorable or opposed to Conveying the message that the measure should be approved Do you like green eggs and ham?

14. 14 F CPA – P ERMITTED A CTIVITIES OF E LECTED O FFICIALS AND E MPLOYEES Permitted activities by special district employees and board members: – District employees and board members can respond to unsolicited questions about issues of official concern – District employees with policy making responsibilities and board members can spend no more than $50 of public moneys in the form of letters, telephone calls, or other activities incidental to expressing opinion on issues of official concern – Board members may express a personal opinion on any issue – District employees and board members may expend PERSONAL funds, make contributions, or use personal time to urge electors to vote one way or another on an issue of official concern

15. 15 FCPA - E NFORCEMENT Enforcement Provisions – 180 days from date of violation to file written complaint with Secretary of State – Secretary of State refers complaint to Administrative Law Judge http://www.sos.state.co.us/pubs/elections/CampaignFinan ce/complaints.html – Civil penalty of at least double and up to five times the amount contributed In a recent case, an ALJ fined a county commissioner personally for a violation of the FCPA – Any appropriate order, sanction or relief

16. 16 FCPA – H OW TO A NALYZE A S ITUATION Essential elements of a case involving ballot measures: – Is it a political subdivision? – Was it a covered election? – Did the FCPA provisions apply yet? – Was there an expenditure of public money? – Were voters urged to support or oppose a measure?

17. Public Policy Strategies How can a District reach out to voters without violating the FCPA? 17

18. Why do tax measures pass or fail? 5. Strong Campaign 4. Commitment to Public Policy Process 1. Demographics of Electorate 2. Perceived Urgency 3. Trust of Institution

19. Election Planning: Four-Phase Approach Sept - Nov 4 March - May Public Information Program Needs Assessment Community Outreach - Letter to Key Influencers - Letter to Active Voters - Newsletter to Active Voters - Presentations - Public Meetings 1 2 Community Feedback June - Aug 3 Adoption of Ballot Question Plan A and Plan B Voter Analysis 500-Word Argument Key Influencer Database Citizen-Led Task Force Public Meetings Mail Survey Task Force Complete March/April Organization Letterhead Committee Community Events Yard Sign Distribution Direct Mail Literature Drop Letters to Editor Print Ads Radio GOTV Other Campaign

20. Key Dates July 25 – District Notifies County Clerk of intent to be on ballot August 27 – IGA for a coordinated election with County September 5 – Board certified ballot issue due to County Clerk September 19 – TABOR statements due to designated election official October 3 – TABOR notice mailed October 13-17 – County Clerk mails ballot packets November 4 – Election Day

21. Four-Phase Approach… Define Most Likely Case (Plan A) Experts Sign-Off Elevations (Other Sizzle) 500-Word Argument Voter Analysis Key Influencer Database Citizen-Led Task Force 15-30 members NOT the usual suspects Formed to vet proposal Staff presents detailed data on budget, needs, etc. Access to results of mail survey and phone poll Committee provides recommendations to the Board Complete March/April 1 Do Your Homework

22. Employees Elected Officials Civic Organization Leaders Business Leaders Top-Tier Property Taxpayers Religious Sector Benefactors News Media Citizen Activists Neighborhood Groups Others Tied to Government Other Alumni Other Key Influencer Database… YOUR ORGANIZATION

23. Four-Phase Approach… Complete March/April March - May Inform the Electorate Do Your Homework Community Outreach - Letter - Q&A Newsletter - Presentations - Task Force Meetings 1 2 Define Most Likely Case (Plan A) Experts Sign-Off Elevations (Other Sizzle) 500-Word Argument Voter Analysis Key Influencer Database Citizen-Led Task Force Employees / Volunteers Key Influencers Active Voter Households

24. Solutions to Dangerous Barriers

25. Cracked tennis courts in Eagle Vail? (It’s Unthinkable!)

27. Four-Phase Approach… Complete March/April March - May Inform the Electorate Do Your Homework Community Outreach - Letter - Q&A Newsletter - Presentations - Task Force Meetings 1 2 Get Their Reaction Public Meetings Mail Survey Phone Poll June- Aug 3 Define Most Likely Case (Plan A) Experts Sign-Off Elevations (Other Sizzle) 500-Word Argument Voter Analysis Key Influencer Database Citizen-Led Task Force

28. Unscientific Town meeting from your kitchen table All active voter households targeted Highest readership (interact with piece) Mail Survey

29. Four-Phase Approach… Campaign Organization Letterhead Committee Community Events Yard Sign Distribution Canvassing Direct Mail Letters to Editor Print Ads Radio GOTV Other Sept – Nov 4 Complete March/April March - May Community Outreach - Letter - Q&A Newsletter - Presentations - Task Force Meetings 1 2 Public Meetings Mail Survey Phone Poll Task Force June - Aug 3 Adoption of Ballot Question Define Most Likely Case (Plan A) Experts Sign-Off Elevations (Other Sizzle) 500-Word Argument Voter Analysis Key Influencer Database Citizen-Led Task Force Inform the Electorate Do Your Homework Get Their Reaction

31. 31 H YPOTHETICAL A title has been set for an amendment to the State Constitution which eliminates the property tax as of January 1, 2015. The Board of Directors adopts a resolution opposing the measure and directs the District Manager to buy a display ad in the local newspaper and to publish the resolution in the District newsletter which is sent to all District taxpayers. The District regularly publishes resolutions in the newsletter but has never published a resolution in the newspaper. Is either a problem? What if the District Manager mails an article from the Special District Association newsletter opposing the measure to the constituents and the cost exceeds $50?

32. 32 H YPOTHETICAL The District Manager informs the District Board in May that the District either needs to submit a mill levy question to its voters in November or make substantial cuts in its budget. The District hires a pollster to conduct a poll to determine the level of support. Based upon the dismal results, the District does not call the election. Is payment for the poll a problem? Does it matter if the District calls the election after the poll is done?

33. 33 H YPOTHETICAL The District reviews its capital plan in May and begins to consider a ballot question for a bond issue. The District Board directs the District Manager to hire a firm to prepare a brochure describing the capital needs, showing architectural renderings of the proposed facilities and explaining that if voters want these facilities, they should vote for the bond question which the District Board may submit to the voters in November. The brochure is mailed to all voters in July. The costs of the preparation and mailing are paid for in July. The District Board adopts a resolution calling the election and setting the ballot title on August 15. Is this a problem? Does it make a difference if the bill is paid for on August 17?

34. 34 Today we discussed what happens when you put a question to the vote Please follow the rules you learned today but don't let them get your goat Complying with the FCPA can be like swimming a moat If you violate the rules, though, you better get on a boat! Don't use as an excuse the fact that you couldn't find your note(s) (or that in actuality they were eaten by a goat) Just remember the FCPA every time you put on your coat When trying to recall the rules it is this nifty gem that you can quote: “”DID THE FACTUAL STATEMENT SEEM FAIR THAT I JUST WROTE?”?? Mr. Gray will never lead you astray And Ms. Rosenbluth, she told you the truth Mr. Matlosz - well, he has fat toes (and now everybody knows).

35. 35 QUESTIONS?