Donations

Q: What should cities know about donations and fundraisers?

LMC: Donating and fundraising nurture cites’ cooperative spirit and community. However, there are important requirements cities must follow to ensure that these activities serve to foster transparency.

Cities can accept donations (gifts of money) that are not for religious or political purposes if the council adopts a resolution by a two-thirds majority vote, accepting both the donation and the donor’s terms. Cities can accept donations for the benefit of their residents; accepting donations, like making donations, must be done for a public purpose.

In most circumstances, cities cannot give away public funds as donations. Donations are treated as expenditures of public funds. To spend money, cities must have statutory or charter authority and the expenditure must be for a public purpose.

Although cities (including city departments, like fire departments) generally do not have authority to fundraise or solicit donations, there are two exceptions.

Cities can, by resolution, allow officials and staff to solicit donations for National Night Out events that build positive relationships between law enforcement and the community. Cities can, by resolution, allow full-time firefighters employed by the city and while on duty, or volunteer firefighters serving the city while not on duty, to solicit contributions from motorists for another charitable organization, most commonly the Muscular Dystrophy Association’s Fill the Boot program.

Whenever there are questions about donating and fundraising, it is always recommended that cities consult their city attorney for their opinion and guidance. For more information, see the LMC information memo at lmc.org/donation.

Answered by Staff Attorney Josie Rosene: [email protected].

Wage Reporting

Q: I’ve heard there is an October deadline for submitting wage reports for Minnesota’s paid family medical leave program. What is due and when?

LMC: Minnesota’s paid leave program is leveraging the process that employers already use to submit quarterly wage detail for unemployment insurance (UI). This means that in October when you submit your normal wage detail for July through September 2024, you will be meeting both your UI and paid-leave wage reporting requirements.

You may have some employees, like elected officials or election judges, who are not covered by the UI law. These wage records will need to be kept separate from those that are covered by UI. The UI program is not quite ready to accept those records yet, so it is important that you do not include them in your regular wage detail submission until paid leave and UI provide more instructions on handling this population.

Payroll deductions for paid leave will not begin until Jan. 1, 2026, and the first paid leave premiums will be due in April 2026. Additional reporting wage details can be found at bit.ly/reporting-wages.

Answered by Assistant Human Resources Director Joyce Hottinger: [email protected].

Insurance Coverage

Q: Is it true that the League of Minnesota Cities Insurance Trust (LMCIT) can provide coverage for nonprofit corporations?

LMC: Yes. LMCIT can provide coverage for some nonprofit corporations that are deemed to be an “instrumentality” of a city. Although there is no precise definition of “instrumentality,” the key criteria are whether the corporation serves a city purpose, and whether the corporation’s articles of incorporation, bylaws, and other documents such as contracts between the city and the nonprofit corporation, give a city a reasonable degree of control over the corporation’s activities.

Common examples include nonprofit firefighting corporations, historical societies, and community festival organizations. If LMCIT determines that a nonprofit corporation is an instrumentality of a city, LMCIT can provide coverage in either of two ways:

• By adding the corporation as a covered party on the city’s existing LMCIT coverage.
• By issuing separate coverage to the corporation in its own name.

If the nonprofit corporation does not meet the criteria for an instrumentality regarding control by the city, LMCIT may be able to suggest changes to the supporting documents that would establish the nonprofit corporation as an instrumentality of the city and be eligible for LMCIT coverage. Your city can have its documents reviewed for coverage determination by submitting them to LMCIT Risk Management Attorney Chris Smith at [email protected].

Answered by Risk Management Attorney Chris Smith: [email protected].