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15 - 2nd Annual Mayor's CelebrationProtecting our community's health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Costa Mesa Sanitary District ….an Independent Special District Memorandum T o: Board of Directors From: Scott Carroll , General Manager Date: April 24, 2014 Subject: 2 nd Annual Mayor’s Celebration – The Art of Leadership Summary On May 8, 2014, the second annual Costa Mesa Mayor’s Celebration will be at the Segerstrom Center for the Arts to communicate the necessity of arts education as a critical component of a complete and successful education. The event is a fundraising opportunity to support performing arts education programs at Costa Mesa High School, Estancia High School and programs provided by Segerstrom Center for the Arts and South Coast Repertory Children’s Conservatory . S ta ff Recommendation That the Board of Directors : 1. Establish the purpose CMSD is trying to serve as a sponsor to the Mayor’s Celebration – The Art of Leadership; and 2. Describe how the expenditures will advance CMSD’s purpose; and 3. C onsider being a Silver Sponsor to the Mayor’s Cele bration – The Art of Leadership; and 4. Approve budget adjustment in the amount of $2,500 to provide adequate funding for the sponsorship. Analysis The Mayor and the City of Costa Mesa has partnered with the Costa Mesa Chamber of Commerce and South Coast Metro Alliance and with the support of Segerstrom Center of the Arts to provide visual and performing arts education programs to Costa Mesa high schools as well as providing a fundraising opportunity to support these programs. ITEM NO. 15 Board of Directors April 24, 2014 Page 2 of 3 The group is seeking different levels of sponsorships that range from Platinum Sponsor ($10,000) to Silver Spons or ($2,500). Silver Sponsors receive the following: • Preferred Seating: Six tickets • CMSD name on:  Invitation  Print Advertisements  Event Program  Post Event Thank You Card  Li sted in Media Releases  Introduction at May 8 th event  Name on Event Sponsor Event Video  Recognized on Costa Mesa Chamber of Commerce & South Coast Metro Websites with links to District’s website. Attachment “A” is a memo from District Counsel about the gif t of public funds and expenditures for a proper public purpose. On July 31, 2013, The Board approved new procedures to determine if the District can officially sponsor events and/or non -profit organizations. Before the District can be a sponsor, the Boar d must follow the following procedures. • Establish the purpose CMSD is trying to serve by being a sponsor. This must be a purpose established as one of the District’s statutory powers or a power that would be incidental to those purposes. For example, Di strict purposes are to properly treat sewage, to prevent SSOs, to reduce landfill dumping, and to recycle. Attachment B is a prepared chart to assist the Board in making the determination for the two current requests as well as future requests. • Then, des cribe how the expenditures will advance CMSD’s purpose. Strategic Plan Element & Goal This ite m adheres to Strategic Element 3 .0, Partnerships , and Strategic Goal No. 3.5 ., Participate in community groups and civic organization activities . Legal Revie w Not applicable Environmental Review Participation in the City of Costa Mesa Mayor’s celebration is not a disturbance of the environment similar to grading or construction and is not a project under CEQA or the District’s CEQA Guidelines. Financial Revi ew To be a Silver Sponsor will cost $2,500. This cost is not currently budgeted . In order to provide adequate funding, the following budget adjustment is required. Board of Directors April 24, 2014 Page 3 of 3 Solid Waste Fund Account Account Number Increase Decrease Public Info/Ed/Community Promo 10 -100000 -4420 $1,250 Special Programs 10 -000002 -4300 $1,250 Liquid Waste Fund Account Account Number Increase Decrease Public Info/Ed/Community Promo 20 -200000 -4420 $1,250 Annual Sewer Maintenance 20 -000001 -4364 $1,250 Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the April 24 , 201 4 Board of Directors regular meeting at District Headquarters and on District’s website. Attachment A: Memo from District Counsel, dated June 27 , 2013, regarding Gift of Public Funds / Expenditures for a Proper Public Purpose Reviewed by: Interim Finance Manager Wendy Davis LAW OFFICES OF HARPER & BURNS LLP A LIMITED LIABILITY PARTNERSHIP INCLUDING A PROFESS IONAL CORPORATION JOHN R. HARPER* 453 SOUTH GLASSELL STREET ALAN R. BURNS ORANGE, CALIFORNIA 92866 COLIN R. BURNS TELEPHONE (714) 771-7728 Of Counsel FACSIMILE (714) 744-3350 JUDI CURTIN* MICHAEL MONTGOMERY* Alan R. Burns *A PROFESSIONAL CORPORATION arburns@harperburns.com To: Honorable President and Board of Directors From: District Counsel Date: June 27, 2013 Re: Gift of Public Funds / Expenditures for a Prope r Public Purpose ______________________________________________________________________________ Article XVI, Section 6 of the Cal Constitution prov ides that a public entity may not make a gift of public funds. The primary question to be asked is whether a private purpose is being served, as opposed to a public purpose. Over and above that primary test, one public entity cannot make a gift of its resources to another public agency if it does not advance the public pur pose of the donor agency. In Golden Gate Bridge and Highway District et al. v. Luehring et a l. (1970) 4 Cal.App.3d 204, the Court held that a bridge district that collected tolls could n ot turn over the surplus to a county, since the purposes of the two agencies were different. In an Attorney General opinion, it was also opined that a sanitary district could not donate its prope rty to a park and recreation district but was required to sell that property for full and fair co nsideration. (46 Ops.Cal.Atty.Gen. 138.) Our sanitary district powers include the power to p lan and build sewer facilities, as well as collect garbage and operate dumpsites. We are also authorized to make and enforce regulations for other sanitary purposes not in conflict with st ate law. (HSC § 6521.) We are also given the power to do any act necessary or proper to the comp lete exercise and effect of our powers (incidental powers). (HSC § 6522) Using that autho rity, we have engaged in recycling and waste reduction, as well as FOG reduction programs. We h ave in the past provided similar sponsorships of programs that advanced our public p urposes. Those would include the recent Muzeo trash/art project. The courts will generally defer to the judgment of the legislative body making a determination that a public purpose is being served if that judgm ent has a reasonable basis. C ONCLUSION To be able to justify a questionable expenditure as not being a gift of public funds, we must establish what District purpose we are trying to se rve. After we identify that purpose, the Board needs to make a determination that a public purpose is being served by articulating how the Harper & Burns LLP | 453 South Glassell Street, Orange, California 92866 | Telephone (714) 771-7728 | Facsimile (714) 744-3350 | www.harperburns.com Costa Mesa Sanitary District Gift of Public Funds / Expenditures for a Proper Pu blic Purpose June 27, 2013 Page 2 expenditure advances that purpose. The Board’s jud gment should not thereafter be disturbed by the courts if its judgment on the matter had a reas onable basis. I recommend that the Board: 1. Articulate the purpose being served by identifying what District power we are advancing (e.g, awareness of trash recycling, not dumping in the sewer, not allowing grease to accumulate in sewerlines, etc.). 2. Describe how the expenditure advances that purpose. 3. Have the full Board vote on the matter so there is a Board judgment that a proper public purpose is being served. This needs to be determined in a properly noticed B oard meeting. Only Board approval will entitle the decision to judicial deference. In fac t, if any staff person determined to make the expenditure without Board approval, there could be personal liability. The fact a staff person acted honestly and in good faith provides no defens e to personal liability. (Mines v. Del Valle (1927) 201 Cal. 273.) Respectfully submitted, Alan R. Burns District Counsel cc: General Manager-District Clerk Treasurer