Table of Contents
Uses of Public Funds
All public financing payments received from the City and County of San Francisco must be deposited into the committee’s Campaign Contribution Trust Account. A candidate can use public funds only to pay for qualified campaign expenditures or to repay loans used to pay for qualified campaign expenditures.
What is a qualified campaign expenditure?
A “qualified campaign expenditure” is any expenditure that a candidate committee makes for the purpose of influencing or attempting to influence the actions of the voters for the candidate’s election to the City office specified in their filed declaration of intention. Qualified campaign expenses also include administrative and overhead costs such as consultant and treasurer fees, and costs associated with operating a campaign office.
Examples of Qualified Campaign Expenditures
- Printed literature, mailings, and other campaign ads/communications.
- Campaign consultant fees and expenses.
- Rent and utility expenses for a campaign office (up to 30 days after the election date).
- Staffing expenses related to campaign activities.
Public funds that remain in a candidate’s account after the election date can be used to pay for a limited range of expenses associated with an audit such as bank fees and expenses related to the audit and the filing of post-election campaign disclosure reports.
What are non-qualified campaign expenditures?
Candidates may not use public funds to pay for several types of expenditures, including, but not limited to, the expenses listed below. Candidates must instead use private contributions to pay for these types of expenses:
- Expenses incurred in connection with an administrative or judicial proceeding.
- Expenses to pay administrative, civil or criminal fines, including late filing fines.
- Expenses to pay for inaugural activities or officeholder expenses after the election date.
- Costs incurred after the election date that did not directly affect the outcome of the election.
Reminder: If a candidate uses any portion of a loan to pay for non-qualified campaign expenditures, that portion of the loan may not be repaid with public funds.
What happens if a candidate uses public funds for non-qualified campaign expenditures?
If the Ethics Commission determines that a candidate used any amount of public funds for something other than qualified campaign expenditures, the candidate must pay to the Ethics Commission an amount equal to the improper expenditure, in addition to any other penalties.
Individual Expenditure Ceilings
Candidates who participate in the Public Financing Program are subject to an Individual Expenditure Ceiling (IEC). The IEC is a limit on the total amount of expenditures (both made and accrued) that a candidate may make during their campaign. The IEC only applies to candidates who are certified to receive public financing or have a Qualifying Request pending review.
For Supervisor candidates, the initial IEC is $350,000.
For Mayoral candidates, the initial IEC Is $1,700,000.
Adjusting Individual Expenditure Ceilings
During the campaign, Commission staff may make adjustments to each candidate’s IEC based on the amount of supportive funds a candidate’s opponent has received, third-party spending in support of any opponents, and any third-party spending made in opposition to the candidate. Candidates may only exceed their current IEC after they are notified by the Commission that their IEC has been adjusted.
For Supervisor candidates, the IEC may be adjusted in increments of $50,000.
For Mayoral candidates, the IEC may be adjusted in increments of $250,000.
Publicly financed candidates are always bound by an IEC, including after the election. Because IEC limits are adjusted on an individual basis, candidates in the same race may have different IEC limits or have their IEC adjusted at different times or intervals.
Factors used to determine IEC adjustments
Ethics Commission staff will monitor and review candidate and third-party filings to determine the following for each candidate in a race:
- Candidate Supportive Funds (CSF):The sum of all funds received by a candidate (i.e., monetary contributions, loans, in-kind contributions, and public funds). This amount is capped at the candidate’s current IEC.
- Third-Party Supportive Funds (TPS):Any expenditures made by any person/committee (other than a candidate) to support a specific candidate.
- Total Supportive Funds (TSF): The sum of Candidate Supportive Funds plus Third-Party Supportive Funds supporting that candidate.
- Total Opposition Spending (TOS): The sum of all expenditures made by any person/committee (other than a candidate) to oppose a specific candidate.
What happens if candidates exceed the IEC?
Once certified to receive public funding, a candidate may not make or incur any expenditures that would cause their total reported expenditures to exceed their current IEC amount. If, at any time during the campaign, the sum of the committee’s expenditures (both paid and accrued) exceeds the current IEC by 10 percent or more, candidates may be required to return all public funds received, in addition to any other penalties.
Example IEC Adjustments
Example: Board of Supervisors race
A Board of Supervisors district race features three candidates, Alvin, Biao, and Carla. Candidates Biao and Carla have been certified to receive public financing (“PF”), but Candidate Alvin has not (“NP”). The IEC limit for Candidates Biao and Carla is initially set at $350,000. On this day, two third-party expenditures were reported and all three candidates reported new fundraising amounts on Threshold Notices:
Candidate Alvin (NP)
Recently reported total funds received: $340,000
Candidate Biao (PF)
Recently reported total funds received: $320,000
Candidate Carla (PF)
Recently reported total funds received: $370,000
Third-Party Committees
$15,000 in spending opposing Candidate Biao
$20,000 in spending supporting Candidate Carla
No spending for/against Candidate Alvin
| Candidate Name | Initial IEC | Candidate Supportive Funds | Third-Party Supportive Funds | Total Supportive Funds (TSF) | Total Opposition Spending (TOS) | Opponent’s TSF + TOS | New IEC |
|---|---|---|---|---|---|---|---|
| Candidate Alvin (NP) | N/A | $340,000 | $0 | $340,000 | $0 | $370,000 | N/A |
| Candidate Biao (PF) | $350,000 | $320,000 | $0 | $320,000 | $15,000 | $385,000 | $400,000 |
| Candidate Carla (PF) | $350,000 | $350,000 | $20,000 | $370,000 | $0 | $340,000 | $350,000 |
Explanation of the IEC adjustment in District 1:
Candidate Alvin has raised $340,000 and has not received any Third-Party Supportive Funds. Candidate Alvin’s Total Supportive Funds (TSF) = $340,000
Candidate Biao has raised $320,000 and has not received any Third-Party Supportive Funds. Candidate Biao’s Total Supportive Funds (TSF) = $320,000
Candidate Carla has raised $370,000 and has received $20,000 in Third-Party Supportive Funds. Even though Carla raised $370,000 in funds, only $350,000 (an amount equal to their current IEC) is counted towards their Total Supportive Funds. Candidate Carla’s Total Supportive Funds (TSF) = $370,000.
Commission staff will adjust the IEC of the candidates as follows:
- For Candidate Alvin, there will be no adjustment.
Explanation: Candidate Alvin is not a publicly financed candidate and is not subject to an IEC. - For Candidate Biao, their IEC will be adjusted to $400,000.
Explanation: The highest Total Supportive Funds among Candidate Biao’s opponents is $370,000 (for Candidate Carla). There was also $15,000 in Total Opposition Spending against Candidate Biao. Candidate Biao’s Opponent Total Supportive Funds + Total Opposition Spending = $385,000. Because this amount exceeds Candidate Biao’s current IEC, an adjustment is required. IEC adjustments are made in increments of $50,000, and Candidate Biao’s IEC is raised to $400,000. - For Candidate Carla, there will be no adjustment.
Explanation: The highest Total Supportive Funds among Candidate Carla’s opponents is $340,000 (for Candidate Alvin). Because there has been no opposition spending against Carla, their Opponent Total Supportive Funds + Total Opposition Spending ($340,000) is less than her current IEC ($350,000).
Example: Mayoral race
The mayoral race features three candidates, Alvin, Biao, and Carla. Candidates Biao and Carla have been certified to receive public financing (“PF”), but Candidate Alvin has not (“NP”). The IEC limit for Candidates Biao and Carla is initially set at $1,700,000. On this day, two third-party expenditures were reported and all three candidates reported new fundraising amounts on Threshold Notices:
Candidate Alvin (NP)
Recently reported total funds received: $1,560,000
Candidate Biao (PF)
Recently reported total funds received: $1,620,000
Candidate Carla (PF)
Recently reported total funds received: $1,770,000
Third-Party Committees
$35,000 in spending opposing Candidate Biao
$40,000 in spending supporting Candidate Carla
No spending for/against Candidate Alvin
| Candidate Name | Initial IEC | Candidate Supportive Funds | Third-Party Supportive Funds | Total Supportive Funds (TSF) | Total Opposition Spending (TOS) | Opponent’s TSF + TOS | New IEC |
|---|---|---|---|---|---|---|---|
| Candidate Alvin (NP) | N/A | $1,560,000 | $0 | $1,560,000 | $0 | $1,740,000 | N/A |
| Candidate Biao (PF) | $1,700,000 | $1,620,000 | $0 | $1,620,000 | $35,000 | $1,775,000 | $1,950,000 |
| Candidate Carla (PF) | $1,700,000 | $1,700,000 | $40,000 | $1,740,000 | $0 | $1,620,000 | $1,700,000 |
Explanation of the IEC adjustment in race:
Candidate Alvin has raised $1,560,000 and has not received any Third-Party Supportive Funds. Candidate Alvin’s Total Supportive Funds (TSF) = $1,560,000
Candidate Biao has raised $1,620,000 and has not received any Third-Party Supportive Funds. Candidate Biao’s Total Supportive Funds (TSF) = $1,620,000
Candidate Carla has raised $1,770,000 and has received $40,000 in Third-Party Supportive Funds. Even though Carla raised $1,770,000 in funds, only $1,700,000 (an amount equal to their current IEC) is counted towards their Total Supportive Funds. Candidate Carla’s Total Supportive Funds (TSF) = $1,740,000.
Commission staff will adjust the IEC of the candidates as follows:
- For Candidate Alvin, there will be no adjustment.
Explanation: Candidate Alvin is not a publicly financed candidate and is not subject to an IEC. - For Candidate Biao, their IEC will be adjusted to $1,950,000.
Explanation: The highest Total Supportive Funds among Candidate Biao’s opponents is $1,740,000 (for Candidate Carla). There was also $35,000 in Total Opposition Spending against Candidate Biao. Candidate Biao’s Opponent Total Supportive Funds + Total Opposition Spending = $1,775,000. Because this amount exceeds Candidate Biao’s current IEC, an adjustment is required. IEC adjustments are made in increments of $250,000, and Candidate Biao’s IEC is raised to $1,950,000. - For Candidate Carla, there will be no adjustment.
Explanation: The highest Total Supportive Funds among Candidate Carla’s opponents is $1,620,000 (for Candidate Alvin). Because there has been no opposition spending against Carla, their Opponent Total Supportive Funds + Total Opposition Spending ($1,620,000) is less than her current IEC ($1,700,000).
24-Hour Threshold Notices
Candidates for Mayor or the Board of Supervisors must file Threshold Notices (Form SFEC-152) within 24 hours when their total funds received (including public financing) or total expenditures made (including paid and unpaid expenses) reach certain levels.
Important Note: The date a contribution is received is the date the committee obtains possession of the written instrument or cash, not the date it is deposited into the bank account. The date an expenditure is made is either when goods or services are received or when payment is made, whichever occurs first.
Initial Threshold Notice
Every candidate for Mayor or the Board of Supervisors must file the Threshold Notice once they have either received funds (including loans, nonmonetary contributions, and public financing) or made/accrued expenditures that equal or exceed the initial threshold amount noted below:
For Supervisor candidates, an initial Threshold Notice must be filed after receiving or spending $10,000.
For Mayoral candidates, an initial Threshold Notice must be filed after receiving or spending $100,000.
The initial Threshold Notice must be filed within 24 hours of reaching this threshold. All candidates who reach the threshold must file the initial Threshold Notice regardless of their public financing status.
Supplemental Threshold Notices
If at least one candidate in a race has been certified as eligible to receive public funds, every candidate running for the same seat must begin to file supplemental Threshold Notices within 24 hours after reaching the threshold amounts described below:
Supplemental Threshold Notice requirements for Supervisor candidates
- When the candidate receives contributions (including loans, nonmonetary contributions, and public financing) that total $100,000 or more, or makes expenditures (both accrued and paid) that total $100,000 or more.
- Thereafter, when the candidate receives additional contributions, or makes additional expenditures, at every increment of $10,000 (e.g., at $110,000, $120,000, $130,000). For example, after filing an initial Threshold Notice and reporting $105,000 in total funds received, a candidate raises an additional $21,000 in one day. The candidate must file a Threshold Notice to indicate that they have reached the $120,000 threshold and to disclose $126,000 in total funds raised.
Supplemental Threshold Notice requirements for Mayoral candidates
- When the candidate receives contributions (including loans, nonmonetary contributions, and public financing) that total $1,000,000 or more, or makes expenditures (both accrued and paid) that total $1,000,000 or more.
- Thereafter, when the candidate receives additional contributions, or makes additional expenditures, at every increment of $50,000 (e.g., at $1,050,000, $1,100,000, $1,150,000). For example, after filing an initial Threshold Notice and reporting $1,035,000 in total funds received, a candidate raises an additional $21,000 in one day. The candidate must file a Threshold Notice to indicate that they have reached the $1,050,000 threshold and to disclose $1,056,000 in total funds raised.
Reporting Public Funds on Campaign Statements
Publicly financed candidates should report each disbursement of public funds received on Schedule I (Miscellaneous Increases to Cash) of the Campaign Statement (FPPC Form 460). The full name of the source should be disclosed as “City & County of San Francisco” and the description should be disclosed as “Public financing,” or substantially similar.