207179rLcil File No. 207179 — By Robert F.
ORIGINAL TO t':Ji' C(.ERK terson-
CITY OF ST. Ye Paul heretofore th s tfroCity ttimofUNCIL
'me authorized the establishment o E
OFFICE OF THE �Cas City departm nts, whi hity b
CIL
RESOLUTION--Q,,,
are to be used in
,o3lu�hases within and it2tr ul'
PRESENTED BY tisj partmeet�nna
COMMISSIONERrs r7Labi,6.Cd�S 5,-
No. �i'�1'�g
WHEREAS, the Council of the City of Saint Paul heretofore
has from time to time authorized the establishment of petty cash
funds within the City by various City departments, which petty,
cash funds are to be used in making minor purchases within and
for an office or department; and i
WHEREAS, it has become necessary for the Comptrolle:
of the City of Saint Paul to determine the propriety of using
said funds to pay for luncheons and other non - office expenses
connected with City business, and the Comptroller, in order ti
perform his auditing responsibilities in a consistently unifo:
manner, must be able to determine whether such expenditures a:
for a public purpose in accordance with a certain opinion of
Corporation Counsel dated March 15, 1962, hereto attached; an(
WHEREAS, the Comptroller of the City of Saint Paul,
accordance with the Charter of the City of Saint Paul and the
opinion above referred to, and in order to facilitate such
consistent audit, has recommended that such payments not be
made from petty cash funds, now, therefore, be it
RESOLVED, That petty cash funds shall not be used t(
defray licheon expenses and other non - office expenses incurrl
for a public purpose, and that all such expenditures'for such
items done to further the business of the City shall hereafte:
be approved by the appropriate department head, and payment sl
be in each case authorized by the City Council by resolution
of the City Council, Board of Water Commissioners and /or Boar(
of Education, and further, that payment for such expenditures
shall be made by miscellaneous claim against department funds
and not from any petty cash fund, and be it
e
in
11
FURTHER RESOLVED, That all payments heretofore made or
authorized from such petty cash funds inconsistent with this
resolution and prior to the approval of said resolution be nd
the same are hereby ratified and approved, so that the resolution
shall have no retroactive effect-:otherwise.
COUNCILMEN
Yeas Nays
DeCourey
Holland
-Less ---,
Mortinson
Peterson
S M 0.01
Ir
Adopted by the Cou
MAY 111962
Qcting
PUBLISHED
19__
19—
�yor
/7 ,-6v
f
DUPLICATE TO PRINTER.
- CITY OF ST. PAUL COUNCIL NO.
OFFICE OF THE CITY CLERK FILE
COUNCIL RESOLUTION — GENERAL FORM
PRESENTED BY
COMMISSIONER DATE
WHEREAS, the Council of the City of Saint Paul heretofore
has from time to time authorized the establishment of petty cash
funds within the City by various City departments, which petty,
cash funds are to be used in making minor purchases within and,
for an office or department; and
WHEREAS, it has become necessary for the Comptroller;
of the City of Saint Paul to determine the propriety of using
said funds to pay for luncheons and other non - office expenses
connected with City business, and.the Comptroller, in order tot
perform his auditing responsibilities in a consistently uniform
manner, must be able to determine whether such expenditures are
for a public purpose in accordance with a certain opinion of the
Corporation Counsel dated March 15, 1962, hereto attached; and,
WHEREAS, the Comptroller of the City of Saint Paul, in
accordance with the Charter of the City of Saint Paul and the '
opinion above referred to, and in order to facilitate such
consistent audit, has recommended that such payments not be
made from petty cash funds, now, therefore, be it 1.
RESOLVED, That petty cash funds shall not be used to'
defray luncheon expenses and other non - office expenses incurred
for a public purpose, and that all such expenditures for such
items done to further the business of the City shall hereafter
be approved by the appropriate department head, and payment shall
be in each case authorized by the City Council by resolution
of the City Council, Board of Water Commissioners and /or Board
of Education, and further, that payment for such expenditures
shall be made by miscellaneous claim against department funds
and not from any petty cash fund, and be it
FURTHER RESOLVED, That all payments heretofore made or
authorized from such petty cash funds inconsistent with this
resolution and prior to the approval of said resolution be and
the same are hereby ratified and approved, so that the resolution
shall have no retroactive effect otherwise.
MAY 11 1962
COUNCILMEN Adopted by the Council 19—
Yeas Nays
DeCourcy MAY 11 19 2
Holland Approved jj 19—
Favor I
Mortinson
PetersonA Mayor
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January 26, 1962
Mr, Robert J. Swords
Corporation Counsel
Room 316, City Hall
Dear Sir:
There has been a growing tendency in private business to accomplish
many business transactions at the luncheon table whereby this cost is met in
whole or in part by a representative of the business. Should this practice i,
filtrate into City offices as well, the question naturally arises as to the
legality of such expenditures from City funds. This could easily become,a
serious problem. I have reference here to meetings with other than staff or
city employees.
We have attempted to classify the various groups of individuals wh
may create such a problem. These may also be divided into two groups:
I Non - salaries --
Elective officials
Appointive officials
Voluntary help
II Salaries -•
Elective officials
Appointive officials
Administrative officials
Permanent employees
We have also attempted to classify the types of occasions which
arise which would create such a situation.
1. Regular scheduled meetings
2. Specially scheduled meetings
3. Representative of a political body for matters pertaining
A. The general administrative functions
B. Meetings with non - profit organizations
4; Expenses relative to Federal and State officials dealing
with problems concerning City matters.
5. Expenses relative to officials and /or representatives of
state or national associationse
6. Expenses relative to Foreign visitors.
In order to protect the City's interests, the City employees endeavor
ing to perform their duties in a conscientious manner, and to permit. us to
perform our audit function in a consistently uniform and legal manner, I would
like a determination from your office to the following questions:
Mr, Robert J. Swords Page 2 January 26,
1. Is there any Charter or Statutory regulation governing
this type of expenditure?
2. If the answer to Number one is "no," is such an expendi-
ture a legal and proper expenditure of City funds?
3. If the answer to Number two is "yes," - would an adminis-
trative ordinance governing this matter be in order?
An mediate reply will be greatly appreciated.
Yours truly,
Joseph J. Mitchell
City Comptroller
JJM/dn
50c
5/7/62
LW
C 0 P Y
Mr. Joseph J. Mitchell
City Comptroller
Dear Sir:
March 15, 1962
Your letter of January 26, 1962, addressed to the Corporation
Counsel and relating to expenses incurred in luncheon meetings, has been
referred to the undersigned for answer. In it you set forth the observable
fact that many business transactions are now being accomplished at the
dinner table and the expense.of the luncheon or dinner is met by a
representative of one or the other of the businesses involved. Should such
a practice become part of the City's method of transacting its business,
you state that the question as to the legality of such expenses has occurred
to you. I
In attempting to describe the problem as you envision it, you
set forth, first, a classification of the employees who might be involved
The basic dichotomy in your view is between salaried and nonsalaried
individuals. In addition, you also attempt to list the various occasions
which could possibly be the fact situation in which such an expenditure
having baen made. might sea= to be chargeable to the City of Saint Paul.
With regard to both these breakdowns, it should be sLAd that f
it is the opinion of the undersigned that.neither will be of assistance I
in understanding the legal questions involved. As will appear hereinafter,
the law governing expenditure of public funds is the same, regardless of I
whether the party expending the funds is salaried'or nonsalaried, and f
despite his elective, appointive, administrative, or other characteristics.
The law is also unchanged by the particular meeting which serves as the
occasion for such expenditure; hence I pass over both these classifications
with the observation that the law will be the same regardless of where, in
your classification, a particular situation seems to pigeonhole itself.
Having prefaced your request as indicated, you then state that,
in order to enable City employees to perform theirfunctions conscientiously
and also to make possible a uniform and legal application of your auditing
function, you desire us to answer the following questions: I
111. Is there any Charter or Statutory regulation
governing this type of expenditure ?"
C o
Mr. Joseph J. Mitchell -2" March 15, 1952
The answer rothis question must be in the affirmative. The
Constitution of the State of Minnesota, Articlo IS, 3.1, says, in part:
"Taxes shall be uniform upon the same class of subjects,
and shall be levied and collected for gublig puggosgs . . ."
(Emphasis supplied)
In addition, the Charter of the City of Saint Paul, Section 47,
provides as follows:
"No extra compensation. - Sec. 47.. No officer or employee
shall receive from the City of St. Paul or the County of
Ramsey, any other or greater sum _than the salary provided
for or in pursuant to this charter in any manner for ser-
vices performed; and such salaries shall be taken as
including compensation for all services rendered by any
of said officers or employees in auv ether office or
emelg rent for said city or while acting in any other
sagacitys . or uRRn any bgard or committee, and if by the
provisions of any law .or ordinance any such officer shall
be or shall become entitled to receive any other compen.
sation or fees such compensation or fees shall be turned
into me ci. y Lreasury =Ld credited to the general fund."
(Emphasis supplied)
Your next question is:
"2. If the answer to Number one is 'no', is such an
expenditure a legal and.proper expenditure of City'
funds ?"
As would appear from the provisions of the Constitution'of the
State of Minnesota, this question can only be answered after being comm
pletely familiar with the facts of the various expenditures involved.
The rule of law in this State is that such expenditures are legal if the;
are for a public purpose. In the decided cases which have touched on
the problem of a public purpose, the courts have said some things which
may be helpful to you in resolving this problem. In an early case the
City of Minneapolis attempted to reimburse a defeated candidate for
expenses he incurred in conducting an election contest. This particular
expenditure was purportedly authorized by an action of the Minnesota
Legislature as well as the City Council, and the court, in holding the
expenditure illegal, set forth and reemphasized the law by saying:
"The rule is well settled that the legislature is
powerless to authorize the expenditure of public funds
by a municipal subdivision of the state, except for a
public purpose."
C 0 P Y
Mr, Joseph J. Mitchell - 3 -
March t5;
What is true of the legislature in this instance applies with equal force
to the governing body of any municipal subdivision.
In a more recent case, the Court had occasion to consider the
effect of a provision in the law authorizing establishment of municipal
liquor: stores, which provision compelled the establishing municipality
to purchase the stock, equipment, and fixtures of any defranchised
liquor dealer. The Court, in holding this provision illegal, again
emphasized the rule referred to above'and further went on to say:
"An expenditure is illegal if the primary object is to
promote a private purpose, although incidentally some
public purpose will also be served."
In another case, however, the Court had, occasion to consider the
validity of the act which established the Seaway Port Authority of Duluth.
The Court said:
"lWiever, the fact that some private interests may derive
some incidental benefit from the development of the Port
does not deprive the Port Authority of its public
character. M we have stated above, it is the primary
ramose etch r.Wtrnla. If it is engaged in a govern-
mental function or public purpose, it does not matter
that some private interests may derive some incidental
benefit from the operation of the Authority *"
(Emphasis supplied)
From these cases and from others decided in this State and
elsewhere, it becomes apparent that the use of public funds for expenses
which are purely personal is'illegal. it further appears that the general
rule regarding payment of expenses bq memos of public funds is that such
expenses must be incurred in pursuit or in furtherance of a public purpose;
that is, that they must be directly connected with and /or required by
official duties and actions. It would seem tgat one of the best tests
of such public purpose would'be the.authorization of such expenditures
in advance either by the individual's superior or by the Council of the
City of Saint Paul.
However, regardless of the authorization obtainecti and
despite the individual's position with the,City, whether W his manner
of compensation or manner of selection, and further without regard to
the occasion at which the expense is made,.all such expenses mu:..- be
tested by the general rule which is that public funds can be used o.av
for public purposes. In each case a determination must be made as to
whether the expenditure Was incurred purely because of public business
or'because it was required by the official duties of the person involved.
.962
n
Q AMY
Mr, Joseph J. Mitchell ••4— March 15, 1962
Your third question;
'
113. If the answer to Number two is 'yes', would an
administrative ordinance governing this matter
be in order ?"
is answered in the view of this writer by saying that it is inadvisable,
since such an administrative ordinance could but reiterate the general
law governing such expenditures and would not eliminate the necessity
for the exercise of judgment in each individual case wherein an expense
was claimed to have been incurred in behalf of, or in connection with the
City's business, Apart from the ordinance's inherent difficulties in
the matter of draftmanship and despite, also, its inability to adequately
treat all possible occasions when the problem might arise, the ordinance
seems doubly inadvisable because it will not in any way assist your office
in making the requisite judgmental determinations of the public character
of the expenses involved,
With regard to these expenses, I am sure that you understand
that they are, of a kind which is about to occur more frequently in some
departments than in others because of the varied duties and responsibilities
of the different. departments insofar as the public and other officials
are concerned; But wherever such expenses and the problem of the propriety
of their .payment from public funds occurs,, each must be weighed by you in
order to see whether they..answer the demand of the law that they have been
incurred for a public, as distinguished from a private, purpose,
I trust that-this answers your inquiry of January 26.
Yours very truly,
Theodore J. Collins
Assistant Corporation Counsel
TJCQ
50 c
5/7/62.