POLICY AND PROCEDURES 1-18
Revised: October 1, 2014
Effective: December 1, 1989
GIFTS AND DONATIONS TO THE CITY OF PALO ALTO
POLICY STATEMENT
The purpose of this policy is to:
• Establish uniform procedures for the recei pt of gifts to the City of Palo Alto; • Cultivate and maintain an environment where residents and businesses want to contribute to the City's programs and facilities;
• Promptly acknowledge and expr ess appreciation for the gifts; • Assure the gifts are pr operly inventoried, and
Comply with the Political Reform Act and Fair Political Practices Commission Regulations.
It is essential that gifts be properly repor ted and reviewed carefully for impact on the City's resources and for consistency with C ity policies and procedures concerning cash handling and inventory.
City employees are prohibited from accepting personal gifts (see Section 1301, Merit System Rules and Regulations). Gifts to el ected and appointed City officials and “designated” City employees (see Palo Alto Municipal Co de, Chapter 2.09) are also regulated by the State of California Fair Political Practices Commission.
Applicability of this Policy
The procedures stated in Sec tion A apply to gifts offered or given to the City, gifts actively solicited by the City, and gifts from community groups that support various City operations (e.g. Friends of the Library, th e Recreation Foundation, etc.). They do not apply to minor individual c ontributions which will be qui ckly consumed in a City- sponsored event, work contributed by individual vo lunteers, sponsorship of a City activity, or donations of advertising, public ity, graphics, etc. in exchange for City acknowledgment. The procedures are consistent with those applicable to grants and other funding requests (see Policy and Procedures 1-12).
The Fair Political Practices Commission has adopted requirements (2 Cal.Code Regs. § 18944.2) for reporting payments made to agenci es that would otherwise constitute gifts to public officials. Payments may be consider ed gifts to the City wh en the City receives and controls the payment, uses the paymen t for official business, and identifies the recipient. Such payments must be reported as provided in section B of this policy.
Table 1 summarizes acknowledgement and reporting requirements for gifts.
PROCEDURES
A. City Requirements for Acce pting and Acknowledging Gifts
Department heads, including Council Appointed Officers, are authorized to accept gifts tendered by cash or cash equiva lents or by electronic funds transfers (e.g., ACH transfer, credit card payment or online gifts) on behalf of the City. The City Clerk’s Office will report on behalf of the City Council. Implementation of this policy is the responsibility of the department head, including Council Appointed Officers.
Thresholds for implementation of the procedur es vary with the category of the gift, as shown in Table 1.
The estimated value of a gift is based on the donor's estimate. The City will not independently assign a value to the gift unless it is cash.
Gifts accepted by the City become the property of the City of Palo Alto and are to be used for public benefit. Unless a special agreement concerning the ultimate disposition of the gift is entered into at th e time the gift is accepted, it is understood that the City has sole authority to determine the use, transfer, handling, or disposition of the gift.
Gifts made to officials directly or for whic h the donor donors designates by name, class, or other title the official who may use the pa yment are not gifts to the City, but rather individual gifts that may be required to be reported on FPPC Form 700. Employees may not accept individual gifts.
Department heads should review material gifts to:
• determine what the estimate d costs to the City will be for any related installation, maintenance, operation, storage or liability that may be incurred by acceptance of the object;
• ensure that the gift is properly document ed, catalogued, and/or inventoried in the department and division records;
• prepare and install an appropriate sign or nameplate consistent with the City’s naming policy;
• ensure that the object will be satisfactorily maintained.
Acknowledgment of Gifts
The manner in which a gift is acknowledged must be appropriate to the nature of the gift and consistent with the donor's wishes.
1. Within thirty (30) days of receipt of a gift, the department head must send an acknowledgment letter if the gift is worth $100 or more, thanki ng the donor on behalf of the City of Palo Alto.
a. The letter should clearly identify the gift and confirm the placement of the object that has been given to the City, or the use to which the gift will be devoted.
b. Gifts to a governmental entity are trea ted similarly to char itable contributions for purposes of tax deduc tions. However, the donor w ill be responsible to the Internal Revenue Service a nd Franchise Tax Board for s ubstantiating his or her own tax deduction. The City will not provide any tax services to donors.
c. Except for gifts of cash or cash equivalents, where the donor amount is apparent, no dollar amount should be stated in the letter. Instead, the letter should contain the following paragraph:
Your gift may be tax deductible . To determine the amount you may properly deduct for tax purposes, you should consult your tax preparer or tax attorney.
d. The department head or his/her desi gnee will sign the letter and forward a copy to the ASD Director.
e. For a particularly significant gift ( over $5,000), recipient department head in consultation with the ASD Director may ask that a letter be prepared for the Mayor's signature.
2. The recipient department head, in c onsultation with the ASD Director, will determine if the gift warrants a public a nnouncement and in what manner it should be made. The donor will be notified in advance of any announcement, and has the right to request anonymity.
3. The ASD Director is responsible for:
a. maintaining a record of all gifts that are accepted, including a description of the gift, the donor’s name and address (unless anonymous), the date the gift was received, and the disposition of the gift.
b. reporting annually any si gnificant gifts over $5,000 to the City Council regarding the gifts that have been accepted on behalf of the City.
4. Each department should also maintain a record of all gifts that are accepted, which includes a description of the gift, the do nor's name and address, the date the gift was received, and the disposition of the gift.
B. Fair Political Practices Commi ssion Requirements for Accepting and Reporting Gifts to the City
In addition to the requ irements listed above, departments receiving gifts to the City must comply with Title 2 of the California Code of Regulations section 18944.2, summarized below:
Payments or similar gifts that are controlle d by the City and used for official City business may be considered gifts to the agency rather than gifts to an individual although the individual may receive a personal benefit from the paymen t, if all of the following requirements are met:.
(1) City controls use of payment: The city manager or designee must determine and control the City’s use of a payment. The donor may identify a purpose for the payment, but may not designate by name, title, class, or otherwise, the official/employee wh o may use the payment. The City Manager or designee shall select the individual(s) who will use the payment any may not select himself or herself as the user.
(2) Official City business. The paym ent must be used for official City business.
(3) Reporting. Within 30 days after use of the payment, the head of the department of the official/employee who used the gift must report the payment on the Form 801 and forward it to the City Clerk. Form 801 is available at the Fair Political Pr actices Commission website online at http://www.fppc.ca.gov/forms/801.pdf. The City Clerk shall post a copy of the form or the informa tion in the form on the City website, and shall maintain the forms for a period of not less than four years.
(4) Limitations on paymen ts for travel. Payments for travel, including transportation, lodging, and meals, are not gifts to the City but are considered personal gifts or income th at the official or employee may be required to report on his or her FPPC Form 700 (a) if the donor designates by name, title, class, or otherwise, the official or em ployee who may use the payment, (b) if the City Manage r or designee has not preapproved the travel in writing by signing the Form 801 or other travel pre-approval in advance or the trip, and/or (c) to the extent that such pa yments exceed the City’s reimbursement rates for travel, meals, lodging, and other actual and necessary expenses.
NOTE: Questions and/or clar ification of this policy sh ould be directed to the Administrative Services Department. Questi ons and/or clarification of the Form 801 reporting requirements should be directed to the City Clerk or City Attorney’s Office.
Attachments:
Attachment A: Table 1- Summary of Gift Categories and Reporting Requirements
Attachment A
Table 1
Summary of Gift Categories and Reporting Requirements
Gift Category
Acknowledge‐
ment Letter
Copy of
acknowledge‐
ment to ASD?
Account
information re
deposit to ASD?
Form 801 to City
Clerk? Other Requirements
Cash or cash equivalent that
will be used for official City
business over $100 (cash,
check, money order, travelers
check, cashier’s check or
online donation)
X X X
Cash or cash equivalent that
will be used by an individual
employee for official city
business
X X X X
For payments used for official travel, see
limitations set forth in policy section B(4).
Stocks, other securities
X X
Contact ASD re deposition of this type of
gift. The City’s investment policy (1‐39)
precludes purchase of stocks, but the City
may accept them as gifts if sold within a
reasonable amount of time and ASD
Director determines that cost of sale will
not exceed cost of stock.
Services (skilled services
performed by a business or
professional firm) X X
Department head evaluates services to
determine impact to department’s
operating budget or CIP.
Contact City’s Risk Manager to determine
potential liability exposure.
Material Gifts (Objects of art,
equipment, property, other
tangibles) X X
If item has a value of $5,000 or more, also
provide ASD Director with documentation
regarding value of gift for fixed assets
accounting.
Real Property (Privately
owned land and/or land
improvements)
All gifts require approval from ASD Real Estate Division and should be referred there. Real Estate/ASD will submit a written recommendation to the City Council for acceptance or rejection of the gift.