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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 gainst itesen- I avou riT aM 6-61 _ armor : M*W att ch�cil • 4 1 • iKs�l�1 33, 1961 Sow sift - a { �a�1 aa�d tslatie� iM aim rist f art 4 Uj# Ob. Iry I e at V�q � � - ;lp�,�lyd. Eliould sash a ire. 0' . Amt -a �. �! •az pas �r s Apep _ dw low tun • ►�t�€' ��` � � !ice 'Mn! �ar�.ow spat ia� ' •a�.r :mw t1jr of T.N3ot+• . ' 1� . y eeiat�e!�+sss bP sdA W-A . F -th*t j�qjtjkjp vI31 be of 446t6ace to Is SAM �alo7a>raeifi4�tiaq� • sar"tteal,r , 744ft - ,, , } .,•- vu.i' y ,� �j `?,. _ ,.�,� _, is , 7 'a:•y *• �_ ? , r - � _ - . .4'w c` ;` j _:```' ��.• :`� f 1 �Y�!,'''�'1;�,:' 1Ri�•= '.,4W' -11 -_ ,y� ,t 4.�i �, f� IA OWbo. As 00 afflnoUvee The po fte met in P"41 of O*i9ste. sow4w.* qW.Itir. of IWU► ftotp old 0" Ol as 11,1111,11M W*si. tam -OW Ofevor ft h4 or 09mv at 4 v*w w i.ft vW* for sw- WAd"-w Ilt br 44 Alw _*uer41 fun,-. Oli 11"M W-1 st 00. betw spew tww wo up; it tbq 7-6 lilt t eel or ........ .... m le Oro l9 Jr. IftM O'l `` . - - Mmh 1. 5,'462 r. r 'app" '.OTO� � ee t is of ' Um A twe- to thd a�n /m9e U�th acuaL ,� is 11te. tet+srt�4t �� •�tt't�aq► t�iadw,tal' aMDi�tldoa. , �e a *On- roMt some tw gW841 W . d as t4 contide'r' tho •leis r� sd' in *w -lir,. �c t �sMrwt of •�nioipsl moil dvp"L* to 'purehrae the tatoelc, eluiprten , tr► icte o rk► a A f sect''# livurw►Aimiorfr si cierip in basing ibis peovIvIaa Wool# NWo . ���, �.;,�rrr�i.� •. e�� �' wait ,6a to aQ t s ��it R . •ieI f p t .,r 1. 4 d � ow 4 r 11104 r� i �.0 6 b" .o0ealot to onplow mm aatti lrh iMib�isbN tlrt fit�li�' AGWOPitr of Atilt!►. TIW : , s ?*Alt that Mot . p4* iatefod 4a w d.ri.o _ i 606ftt fair i1"llNaw►1 of the Port ' Betas .trt raw tAs .�ori tr sp3r of tie. ptttli o ' oharidlot. V we iaa" staud 406, -ft Is Ake v 11mary L If it ia- �. R go�rerttr- seatal as n or pnbli o pvir�My' i� daes Wt aratts r that saw FKva*4 iatex*wta a Tat setts incident ° 1 ' - '.' c• • • :dart `4t1� s he "X^S dlgW p@ 't of oap"srs bor pwias of public funds ii c. -oO, �Orr- at of. mot; ho, l,sw�ered'Y�a paar�111�1t• oar ii- �`� of '& public pgr•Fosel that 1 � ��,160. &*ice• atrMqttpelrnd .4tq +r+►!'.r rtvuisMa by of �!i Md . st VM44 OM that abe of the beat tests ' atMrh 1,b P '!� ' ` - 1i ' ti elir +A►; i1t . am* 43POW4 tares 3s aaiMll�i � �� �' �n;�i1il�r. '`s tllp� �' -� � t�oup�S l . o? t!w► drys , tip' Ssd� Mill t� �A �1i`I ► } ttY+sct to big et a O•M4�44 Od tip tdthoat s*Ward to t� 0066"" •t •+IMta.'1Ijj sa* .qslqmses last be e ire a vat �►� le• +safe as to ' 1�t a tied 'ws 1�• �tbli,c taei pASe r' l . • 6 2U f mr. JosrPh J. WI tdA*3 t - #.. Karch I g, 1961 Tow bird grstloet 03. If im aoowrr to 1%16W two lit its, wovid an a6dsis#ratiw ordtm e- givermirg *is matter be in e46w7s. .. -tN,f, v.•1•% �f.4'� t� � �' �� � Yet � i,na�►lsablre � r , Ei �� r •1 •� , �,� � t � try i..F o: a' ,..,cM could but r►lter• t tr .-or n lax governing such expendl tur -P u►d• woul.d not alielwato, the nocesc i iy ' th• A70r Ot jet im •asb•Ud Vjdlal NM wborein an wxpemao 4dabssd iie haw Wir IMM I is belts Lf 44 4W'1% eoieoettaa with► the v � City s bvsimoo. Apart Oran ihr or zabool v t ditt'i caltieo in "W sarttor of draftemad ip red dedrItA, 4194 its iAaidU* tr adr4uat �• treat all posrdble ocoaslons hem the probles miiht,arise, the Winenee sus MabIr inndrisabl• broame it will not i• mW Wr aswist your olfies in aakiag for requi mile. jndgnwtal, d*Urw&UO%Uoea pf °' kho .publie character ai!' ire rxp�eses imrotnd. ., • '�, . �,,;,.,� redal�! ..fp. f It �wrr flat you un -'Fr: tend � Vat, � rr or 1� kiwi =is abort to *cqm r mere ir•�tV in +►orr j &p*rtmmts than in ot4one C1 r '9i�+ � � r duties and rQepont i t iti t$ of the dLftermt deps 4.ii ip so f�; as ,the public end .other offic '-F1s k" oenoer�neA. But vhe�.d! � �;'iiis *O'AtN'he problem df, thip nro..rietf of their ; mou* fros pub }it �►N�:� ;o�duuar. �. tch must be velim*d �)y y,; to order. to too -rhother thef •� eir tho . de.nandl''ot thr 1 -�+ thRf th�� 'inal"' M for a public, as distIjRru1ahed fx+br(s priv,tr, ?urnpoae. I tm-t th,t %Mia annrere .four to.uiry of January �. IONZO TV27 tv%IYF ' ,y,. ,;. ♦� .'+ 'ili ; %• f .x'11! t�. �f'..Ir++•;MIG•'i�.,i .: !' 1 •!''. '1 r' � t > ' T +s J. OOMAV • tsaisten# �poration �ounrrl � .A • •• ,� • � nil � - � _ • ,` � ' 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.