"I cannot undertake to lay my finger on that article of the Constitution, which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."
-- James Madison
It is not unusual for cities and towns to be asked to contribute money to individuals or entities. These requests run the gamut from contributions to beauty pageants to traditional charities, and raise legal as well as policy issues for members of the governing body.
Utah law limits the appropriation of money (the term appropriation includes gifts or donations) to municipal corporate purposes only, but provides that it is considered a corporate purpose to appropriate money for any purpose that, in the judgment of the city council, provides for the safety, health, prosperity, moral well being, peace, order, comfor, or convenience of the inhabitants of the municipality (Utah code 10-8-2(3) ) subject to the governing body first holding a public hearing on the matter of the donation.
The exception to the public hearing requirement is if the appropriation of the money for the purpose was included in the adopted budget of the city or town. If it was, then the matter is considered heard at the city's budget hearing and further consideration is not necessary.
The answer for civic leadership is clear. Donations or gifts can only be made if there is a statute which authorizes the city or town to make the gift. The law allows appropriations of money for 'corporate purposes,' but only after following the proper procedure.
The key to avoiding problems is for the city council to consider the proposed donations as part of the annual budget and make clear findings for the recorded minutes when a gift is authorized. The finding should contain a clear statement of how the gift promotes the city's corporate purpose.
Although there are many projects and organizations that need financial help, as a general rule, the gifting of money or property is not a good idea for a governing body to do. The temptation for organizations to ease their fundraising burden by indirectly using the taxing authority of a city is natural, but the city needs to steer clear of donating.
A municipality's power to tax comes with a duty to use tax dollars only for valid purposes. It is the responsibility of elected officials to evaluate requests for donations with the interests of the taxpayer being foremost.
Steve Curtis has worked as a business consultant and communication specialist. He is currently mayor of Layton. He can be reached at email@example.com.