Primary Finance: Working with SOS Texas Secretary of State Elections Division 5/21/2018 Primary Finance: Working with SOS Dan Glotzer and Amanda Grossman 18th Biennial Election Law Seminar Texas Secretary of State Elections Texas Secretary of State Elections Division

How is the Primary Election funded? Texas Secretary of State Elections Division 5/21/2018 How is the Primary Election funded? State appropriated funds (covers approx. 75 to 80 percent of the costs). Estimate payments to county chairs and county election officers. Final payments to county chairs and county election officers. Candidate filing fees collected by the county chair. Candidate filing fees collected by the state chair. Miscellaneous contributions. 18th Biennial Election Law Seminar Texas Secretary of State Elections Division Texas Secretary of State Elections Division

Texas Secretary of State Election Division Who pays whom, here? HB 1735 in the 85th Texas Legislature now requires SOS to pay county election officers directly for contracted services and voting system vendors directly for their services. SOS will also issue payments to county chairs for non-contracted election day costs and administrative costs. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How does that change things for me? If a county party enters into a contract for election services with the county election officer, county chairs will no longer pay a county election officer. SOS will pay them directly. If a county party is ordering services or items from a voting system vendor, county chairs will no longer pay a voting system vendor. SOS will pay them directly. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about chair compensation? Chair compensation is a minimum of $300 or 5% of the non-contracted costs, not to exceed $8,000. Chair compensation is paid by SOS through the Online Primary Finance System. Vendor items and services ordered by the county chair will still be factored in when calculating chair compensation. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Do I need to set up a Primary Fund? Yes! If a bank account dedicated to the use of primary election expenses does not already exist, you must set one up. Banks may require a letter of appointment from the state chair. Use the EIN number, not your social security number. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Tell me more about this, “Primary Fund.” Accounts should be styled: “_______ County Democratic/Republican Primary Fund”. Checks should be issued from the primary fund to pay primary expenses. All checks must be printed or stamped with the statement “Void After 180 Days”. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How can I expedite payments? Follow the instructions listed on the direct deposit form included in your packet. For your convenience, Secretary of State is already indicated as the paying agency. Fax to 512-463-7552 or email to EFMAdmin@sos.texas.gov. This is not required, but is recommended. It WILL NOT generate a payment. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How will Vendor costs be estimated? Vendors provide data to SOS SOS provides estimates using “prepop” and vendor data County chairs and county election officers submit estimate* *County election officer only required to submit estimate if the election will be contracted 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How do I submit an estimate? SOS will provide “prepopulated” estimates based on 75% of the final approved costs for the most recent comparable election for which data is available. The chair has the option to accept the prepopulated estimate or amend the data using the online primary finance system. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How do I submit an estimate? (cont’d) **Refer to your packet for in-depth instructions on accessing the Primary Finance System 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How does the election services contract work? Chairs are encouraged to contract with the county. SOS will pay the county a 10% “general supervision fee” based on the overall contract amount. SOS will pay counties directly for contracted expenses. Counties will submit contracted expenses to SOS. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Which services are not contractible? Filing of Title 15 reports. Custodian of election records. Conducting early voting (ballots, programming and EVBB expenses are reimbursable). Precinct by precinct reporting required under §67.017 of the Texas Election Code. Anything the county election officer is required to perform by law. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Does SOS provide a model contract? Yes! The model contract can be found in the “Forms” section on the Primary Finance page. Changes should be made to the contract to reflect the duties your county election officer will be performing on behalf of the party. The model contract should be signed by both the county chair and county election officer. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What may be included in the contract? Printing of paper ballots, test ballots and sample ballots. Preparing, programming and transporting voting equipment. Ordering election supplies. Notification of election judges. Arranging polling locations. Operating a central counting station. Conducting election schools (compensation to attend and materials provided by SOS not reimbursable). 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about arranging polling locations? If this service is not contracted, a county precinct map should be obtained from the commissioner’s court along with the list of designated county polling locations. Persons responsible for the sites to be used as polling locations should be contacted, preferably in writing, to arrange for the use of the facilities. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about arranging polling locations? (cont’d) Refer to previous locations used for guidance on the poll rental expenses expected. Charges for the use of a public building as a polling place on a day when that building is normally open are not allowed. This means charges for custodial services and utilities for public buildings which are open on election day are not allowed, whether they occur before or after business hours. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about election workers? SOS will reimburse up to $8 per hour for election workers for actual time spent at the polling location. The precinct judge is responsible for delivering to the county chair the Statement(s) of Compensation and Oaths after the polls close. These forms are used to calculate the amounts due to each worker. Checks for poll workers should be mailed to each worker as soon as possible after the election. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about pickup and delivery of supplies? A clerk or election judge from each polling location may receive $15 as a delivery fee for picking up and delivering election supplies. If two workers choose to deliver supplies, the $15 delivery should be split. A separate check need not be issued for deliveries, but a notation should be made on the stub and bookkeeping records of the delivery payment. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What types of costs are not payable? Costs not necessary for or directly related to the conduct of the primary election. Expenses incurred in connection with a convention of a political party. Any food or drink items. Stationery not related to the conduct of the primary election. Costs associated with voter-registration drives or get-out-the-vote campaigns. Election notices, except for public testing announcements. Early voting costs, except for ballots and early voting ballot board costs. A public building used as a polling place or central counting station if the building is normally open for business during the time of use. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What types of costs are not payable? (cont’d) Election worker compensation to attend training. Costs for training material available through the SOS. Duties a county election officer is statutorily required to perform as well as salaries of county personnel during regular business hours. Voting by mail kits and postage related to mail ballots. Purchases of MBBs/PEBs or other voting system items transferable to other elections. Voting booths and ballot boxes owned by the county. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Texas Secretary of State Election Division What is payable, then?? B1 – The cost of printing balloting material. B2 – The cost of programming the voting equipment. B3 – The cost of publishing legal notices for the logic and accuracy testing of the electronic voting equipment. B4 – Vendor or county technical support required for election day. B5 – Non-ballot election materials given to all precincts (i.e. kits, stamps, distance markers, indelible markers, tape, pens, etc.) 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Texas Secretary of State Election Division What else is payable? B6 – The cost of renting county-owned electronic voting system election equipment. B7 – The cost of renting non-county-owned electronic voting system election equipment. This must be approved by SOS prior to acquisition. B8 – The cost of preparing and transporting election equipment for election day and central count. B9 – The cost of renting polling places. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about election day personnel? B10/B11 – Election day judges’ and clerks’ hourly compensation ($8/hour) and delivery fees ($15/location). B12-B14 – Central counting station manager, tabulation supervisor, and assistant tabulation supervisor at rates set by commissioners court. B15 – Central counting station judges and clerks at the rate of $8 per hour. B16 – Early voting ballot board personnel at the rate of $8 per hour B17 – Provisional/late ballot board clerks at the rate of $8 per hour. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What other election day costs are payable? B18 – The cost of any supplies required for the conduct of the election. B19 – Communication costs at the polling location (i.e. go-phones, internet connectivity, etc.). B20 – Postage necessary for the conduct of the election, such as the mailing of election worker compensation checks. B22 – Security costs for polling location or central counting station. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Texas Secretary of State Election Division What about legal fees? B21 – Reimbursement for legal fees is allowable in a lawsuit against the chair which seeks to include a candidate’s name on the Primary Election ballot after the chair either rejected the candidate’s application or declared the candidate ineligible OR which seeks to exclude a candidate’s name from the ballot after the chair declined to do so. SOS shall not provide reimbursement for legal expenses arising as a result of negligent or wrongful acts of the party. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

When do I need to notify SOS of a lawsuit? The party chair must notify SOS of a pending lawsuit within 30 business days following service of process. The party chair must notify the Director of the Elections Division of the SOS in writing via mail, fax or email. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What should the legal fee notification include? The style and cause number of the lawsuit for which the party chair seeks to retain legal counsel. The name of the attorney he or she wishes to retain and the attorney’s hourly rate. A brief summary of the facts that are the subject of the lawsuit. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Does SOS reimburse for administrative costs? Yes! While maintaining an office and personnel for the conduct of the election is not mandatory, SOS will reimburse for these costs as necessary. Receipts and invoices for these costs must be retained in order for SOS to reimburse. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What are the categories for administrative costs? C1 – Office Rental. C4 – Office Supplies. C2 – Office Personnel. C5 – Printing. C3 – Telephone and Utilities. C6 – Computer. C7 – Bank Fees. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Are there limitations on Administrative Costs? SOS implements administrative cost caps based on the number of registered voters in each county. Only costs which are deemed reasonable and/or necessary will be allowed. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Will SOS reimburse for office rental? Yes. While office space is not required, SOS will reimburse for rental of an office space when necessary. Reimbursement may be made for an office space no earlier than November immediately preceding the primary election and ending not later than the last day of the month in which the primary or runoff, if applicable, is held. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What are the limitations on office rental? Rent shall not exceed the fair market rate for comparable office space. Office space must be in a regularly rented commercial building. Unless required by lease, SOS will not reimburse for janitorial services, parking or signage. The county party may not lease office space in which the party, the county chair, the county chair’s spouse, or the county chair’s family has financial interest. Even if the space is offered at a discounted rate. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What if the party maintains a lease already? If the party maintains a lease longer than the duration of the primary (November to March or May, if runoff), the cost of the lease will not be reimbursed in excess of 30% of the monthly rental cost, including utilities. In addition, if the party maintains a lease unrelated to the primary, SOS will not reimburse for a second lease for use during the primary. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What documentation is sufficient for office space? In order to approve reimbursement for an office space, SOS will need a signed copy of the lease agreement showing the duration of the lease and the monthly rent. If an office is rented solely for use during the primary, the county chair shall provide three competitive bids obtained prior to renting the office space. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Is office personnel reimbursable? Yes. While hiring office personnel is not required, SOS will reimburse the party for administrative personnel whose duties pertain to the conduct of the primary. If the county chair contracts with a third party or the county for election services, the reimbursement may not include administrative personnel for duties conducted by the third party or county election officer. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What are the limitations on office personnel? Office personnel wages are payable not earlier than November 1st immediately preceding the primary and not later than the last day of the month in which the primary, or runoff, if applicable, is held. No member of the county chair’s family may be paid an administrative salary from primary funds. The county party must provide SOS with a list of duties and the wage of any administrative personnel before SOS will consider reimbursement. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Are utilities for the office space reimbursable? Yes, if the county party is renting an office space. SOS will reimburse for necessary telephone, internet and electricity for an office space maintained by the party. If the party maintains a lease longer than the duration of the primary (November to March or May, if runoff), the cost of the utilities will not be reimbursed in excess of 30%. SOS will NOT reimburse for personal cell phones for the county chair or personnel or for landlines in the homes of the county chair or party personnel. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Is office equipment reimbursable? Yes! While the rental of office equipment is not required, SOS will reimburse for rental of equipment deemed reasonable and necessary for the conduct of the primary. SOS will not reimburse the county party for equipment rental in which the party, the county chair or a member of the county chair’s family has a financial interest. The county chair shall only rent equipment from an entity established for at least 18 months, which is registered with SOS or locally and which has at least three other bona fide clients. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about office supplies? SOS will reimburse for office supplies as long as they are reasonable and/or necessary for the administration of the primary. Receipts and invoices must be retained in order to be reimbursed. The county chair may not use primary funds to purchase any single office-supply item or equipment valued at over $1,500. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Is printing of the supporting documentation reimbursable? Yes, in fact, SOS will not only reimburse for the printing of supporting documentation but also the postage to mail these documents, should you choose to send them by mail. Just make sure you retain postage receipts and receipts for paper and toner if applicable. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Is a computer reimbursable? Yes, the party may purchase one (1) computer if one was not purchased for the previous primary. Serial numbers must be reported to SOS to ensure the asset may be tracked. Any computer purchased with primary funds is to be used for primary-related functions. It is property of the county party and must be transferred to the incoming chair when the new chair takes office. SOS will reimburse up to $1,500 for the computer. This cost will not be included in the administrative cost cap. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Texas Secretary of State Election Division What about bank fees? The primary bank account may be retained with a sufficient minimum balance, generally $50. This must be reported in C7 for SOS to include reimbursement for this as an expenditure. County chairs are encouraged to find an account without monthly, low balance or transaction fees. However, if the chair has exhausted all bank options, SOS may approve reimbursement for part or all of the bank fees, as appropriate. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Can you tell me about paying the bills? The primary find must only be used to pay for expenses directly related to the conduct of the primary election. Checks made out to “cash” or to bearer are prohibited except in cases of establishing a petty cash fund, reimbursing the county chair for seminar travel, personal loans to the primary fund or county chair compensation (paid after approval of the Final Cost Report). 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What else do I need to know about paying the bills? The chair is required to authorize all expenditures. This should be evidenced by his or her signature and “OK” on the invoice. The chair should be sure to maintain a current balance on the primary fund. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Texas Secretary of State Election Division What about sales tax? The purchase and rental of election supplies and equipment are not subject to sales tax. Please use the Texas Sales and Use Tax Exemption Certificate enclosed in your packet. Complete the certificate and present to the vendor. The reason portion of the form should read, “used to conduct the ________ county _________ party primary election.” 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How do I prepare the Final Cost Report The Final Cost Report should be prepared using the bookkeeping system kept by the chair. Make sure to categorize bookkeeping records so they align with the aforementioned cost categories. Maintain organized supporting documentation so entering the costs into the online system will run more smoothly. Marking supporting documents with cost categories (i.e. B1, B2, etc.) is recommended. All expenses must be accompanied by a document identifier. The online system will ask for this information. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

Texas Secretary of State Election Division Who reports what? Remember, per HB 1735 passed in the 85th Texas Legislature, entities incurring costs are required to report to SOS and be paid directly by SOS. This means county chairs report all non-contracted expenses, including administrative costs. County election officers report all expenses for duties or services performed as part of a contract for election services (excluding voting system vendor costs). Voting system vendors report actual costs directly to SOS. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What supporting documentation do I submit? Submit the following: Public notice of L/A testing notice (copy of ad and invoice). Invoices, bills and receipts for each item/services. Election workers compensation sheets. Job description and wage of office personnel. Lease agreement for office rental. Monthly bank statements from November to March or May, if runoff. Competitive bids for office rental. Electronic bookkeeping records if available. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How do I submit supporting documentation? Upload electronic versions of scanned documents when you submit the Final Cost Report. Email documents to EFMAdmin@sos.texas.gov. Fax documents to 512-463-7552. Mail documents to: Texas Secretary of State Election Funds Management PO Box 12060 Austin, TX 78711-2060 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What about the county chair compensation? Keep in mind, a separate check will not be issued for chair compensation. The chair compensation shall be paid with a check drawn on the county party’s primary fund account. If there is a surplus in the primary fund, the final cost report should be approved before funds are sent back to SOS, to ensure the appropriate amount of chair compensation is retained. If a report is submitted after August 31, 2018, SOS may disallow chair compensation. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What are the key primary finance dates? Nov. 1, 2017: earliest date costs may be incurred. Dec. 21, 2017: deadline for state chair to notify count chairs names to be on the ballot have been certified. Mar. 16, 2018: deadline to file primary runoff cost estimate. May 22, 2018: primary runoff election. Early Dec., 2017: recommended deadline for commissioner’s court to vote on approval of joint resolution. June 11, 2018: County chair term begins. Jan. 20, 2018: deadline to file primary cost estimate. July 11, 2018: records must be transferred to new chair. Dec. 19, 2017: deadline to submit candidate filing information. Mar. 6, 2018: primary election day. Aug. 31, 2018: Final Cost Report deadline. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How do I close out the primary fund? If a surplus is due back to SOS, funds shall be returned at the time of SOS approval of report. SOS shall notify chairs via email that funds are to be returned. After all primary expenditures have been paid, the primary bank account may be kept open with a minimum balance (if required) assuming sufficient funds are available in the primary fund. In order to minimize check printing costs, the account should remain open and should be used for the next primary, if feasible. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

What do I need to transfer to the new chair? Not later than the 30th day after the date the term of office of a new county chair begins, the outgoing chair shall transfer bank accounts and the following records: Precinct chair and county chair canvass results. Candidate applications. Paperwork related to the primary election. Other documents pertaining to party affairs. The outgoing chair is authorized to make copies of these records and retain such materials prior to transferring the records. 18th Biennial Election Law Seminar Texas Secretary of State Election Division

How do I get ahold of the EFM team? Dan Glotzer: 512-463-9861 Amanda Grossman: 512-463-3362 Mary Eliasen: 512-463-9869 OR EFMAdmin@sos.texas.gov THANK YOU! 18th Biennial Election Law Seminar Texas Secretary of State Election Division