Oh the holidays! The season of giving is upon us. It is within the human spirit to give. This is the time of year OML receives numerous inquiries regarding giving employees a Christmas bonus, providing a turkey/ham or giving city/town councilmembers a gift. Although the intent is good, it can cause a great deal of confusion for city employees and members of the governing body.
OK Const. Article 10 Section 14. A “Except as otherwise provided by this section, taxes shall be levied and collected by general laws, and for public purposes only, et al” Basically this prohibits gifts or donations of public funds directly by the payment of money, including providing free rent, utilities or other services, or indirectly by lending public equipment or the labor of public employees when the primary benefit goes to a private corporation, association or individual.
Oklahoma State Laws have strict regulations about changing an elected official’s salary while he/she is in office. What about giving a turkey or a ham? It seems harmless, but if the turkey or ham was purchased with public funds, it would be considered an emolument (fringe benefit). Laws in Oklahoma prohibit an elected or appointed official’s salary or emolument to be changed after his or her election and/or appointment.
Municipal employees may receive a Christmas Bonus or a turkey/ham as compensation, but this is a matter of policy. A Christmas bonus or free turkey/ham is not a gift when they are used as payment in exchange for service to the public as a whole. The value of the compensation must be figured as income for reporting purposes under state and federal laws. For a non-cash item to be a true payment, it must be recorded as a real part of one’s salary.
It is important to consult with your city attorney when implementing a policy for the expenditure of public funds. Relying and acting upon the advice of your municipal attorney offers a measure of protection that otherwise you would not have if you act without consultation.
OML wishes you and your families a very Merry Christmas and blessed New Year!