What happens if this Charter Amendment is approved?

The charter amendment directs City Council to create a program of “small donor matching” for local candidates for Mayor and Council. Approval of the amendment defines a specific budget allocation and broad terms for participation. Council must then develop an ordinance including all the details needed to implement the program with integrity.

E.g. In November 2021, Ann Arbor voters approved a charter amendment to change the process for City contracting. That charter amendment removed the standard of “lowest responsible bidder” and replaced it with “best value.” The amendment directed a shift in policy but did not include details for implementation.. In January 2022, City Council approved an ordinance defining how “best value” would be measured for the purpose of meeting the terms of the charter amendment.

Approval of the Small Donor Matching Fund charter amendment is only the first step in establishing a program that meets the needs of Ann Arbor.

What would an ordinance look like?

Other progressive communities have approved ordinances for similar small donor matching programs. Ann Arbor can look to what exists elsewhere and consider what will work best for our local community. Ordinances in peer cities such as Denver, Portland (ME), and Evanston articulate specific terms such as::

-Administration details. An ordinance will establish an application process and disbursement process for the Fair Elections Fund. Elsewhere, these programs are often administered by a City Clerk.

-Minimum donation requirements for participation. An ordinance may set terms for eligibility, such as a minimum number of small donations that a candidate must document in order to qualify for matching funds through the program. 

-Documentation of small donations. An ordinance may define what information candidates must submit in order to receive matching funds. For example, donors may be required to sign statements confirming that they donated their own funds, without coercion.

How might Ann Arbor implement this program?

All candidates for local office (including City Council and Mayor) must comply with campaign finance rules established by the state of Michigan. Those rules include donation limits and disclosure/reporting requirements for all expenditures.  Campaign finance records for all local candidates are filed with and maintained by the Washtenaw County Clerk. A violation of campaign finance rules - or a failure to meet requirements - can result in fines and penalties.

Candidates participating in the Fair Election Fund would agree to additional rules and restrictions, more than what is already required under state law. By ordinance, the City may establish fines and penalties for violation of these rules and restrictions. All documents related to the small donor matching fund will become public records, available through the Freedom of Information Act. The City may choose to publish these records online, as the County does.

For more on this question, see the bullet points below.

PROPOSED CITY OF ANN ARBOR FAIR ELECTIONS FUND

Approval of the Small Donor Matching Fund charter amendment is only the first step in establishing a program that meets the needs of Ann Arbor. Below, see the terms of the charter amendment, as well as terms that could be included in a City ordinance, following best practice in successful programs elsewhere.

TERMS OF THE PROPOSED FAIR ELECTIONS FUND CHARTER AMENDMENT 

• The Fair Election Fund (FEF) will receive an annual allocation of three-tenths of one percent of the city of Ann Arbor’s general fund budget. Ann Arbor’s FY25 general fund budget is $139,662,996. An allocation of three-tenths of one percent would be $418,989

• Participating candidates will accept no contributions from PACs, corporations, entities or other organizations

• Qualified contributors are persons who are eligible voters and tax-payers in the city of Ann Arbor 

• FEF matches will be made only for qualified monetary contributions of between $5 and not more than the first $50 from a qualified contributor to a participating candidate

• Qualified monetary contributions will be matched at a ratio of 9-1 by the FEF

• A participating candidate for city council may receive no more than $40,000 in FEF matching funds for qualified monetary contributions

• A participating candidate for mayor may receive no more than $90,000 in FEF matching funds for qualified monetary contributions

• Transfers from the FEF will be made within 10 business days upon receipt of qualified small donor contributions

• Participating candidates for mayor will limit individual contributions above the initial $50 matched qualified contribution to $612.50, or 25% of the maximum individual contribution allowed under Michigan law ($2,450) 

• Participating candidates for council will limit individual contributions above the initial matched qualified contribution to $306.25, or 25% of the maximum individual contribution allowed under Michigan law ($1,225)

• Beginning in January 2028, and at 4 year intervals thereafter, the dollar value of small donor contributions and matching limits will be adjusted in accordance with changes in the consumer price index

• In the event of a drop in general fund revenue of 2% or more, annual allocation to the FEF may be waived for one year only by a two-thirds (8-2) vote of Council 
  

PRACTICABLE TERMS FOR A NEW CITY ORDINANCE TO IMPLEMENT THE FAIR ELECTION FUND

• Qualified monetary contributions must be received during the qualifying period, beginning October 1 in the year preceding the November elections and ending 30 days before the election

• Matching funds from the FEF will be available to any candidate for city council or mayor who chooses to participate and meets the following eligibility requirements:

• If running for city council collect at least 20 qualified donations, of which at least 10 must be from the ward in which the candidate is running

• If running for mayor, collect at least 50 qualified donations, of which at least 10 must be from each ward

• Have statements from qualified contributors indicating that the contributor understands that the purpose of the contribution is to help the participating candidate qualify for the FEF and that the contribution is made without coercion or reimbursement

• File an agreement with the City Clerk acknowledging FEF match rules, limits, and restrictions, and agreeing to observe all requirements under penalty

• Successfully file all candidacy materials (affidavit of identity and correct number of petition signatures, campaign committee formation statement), and campaign finance statements documenting at least the minimum number of required qualified contributions

• FEF matching funds will be reported as contributions on all required finance disclosures to the Washtenaw County Clerk. FEF matching funds will be used for campaign expenditures as permitted by the Michigan Campaign Finance Act. 

• Participating candidates must comply with all campaign finance reporting requirements and meet all filing deadlines, including full and complete disclosures of all campaign contributions. Candidates who fail to do so will not be eligible to receive further FEF matches and will be required to return FEF funds already received  

• FEF funds may not be transferred to another individual, candidate, PAC, or organization

• A participating candidate who withdraws from candidacy must notify the City Clerk and return all unspent FEF funds with a final accounting of campaign expenditures

• At the conclusion of the campaign, a participating candidate who received matching funds must provide a final accounting of campaign expenditures within 90 days and repay the FEF as a defined percentage of unused campaign funds.