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CHAPTER 1
BASIC FORMS OF MUNICIPAL GOVERNMENT
There are four basic forms of municipal government:
council -weak mayor, council- strong mayor, commission, and
council- manager.
A. COUNCIL -WEAK MAYOR FORM
The original form of municipal government in America was
the council -weak mayor form, which was near - universal in the
nineteenth century. It is still widely used, particularly in
small towns. In most weak -major systems, the office of mayor
is simply rotated among the elected council members on an
annual basis. The council retains collective control over
administration, including appointment and dismissal of
municipal employees and appointments to boards and
commissions. Control of some functional areas (e.g., parks,
library) may be delegated by charter or ordinance to
semi - independent boards and commissions. In general, the
mayor's- authority is little, if any, greater than that of the
othef council members. Department heads- -e.g., the clerk,
police chief, public works director -- report to the council as
a whole or to the mayor in his capacity as spokesman for the
council. Sometimes the municipal clerk functions as a de
facto chief administrator.
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B. COUNCIL - STRONG MAYOR FORM
The council- strong mayor form gradually evolved from the
council -weak mayor form. It provides for a distinct division
of powers between the council and the mayor. The mayor
actually is the chief executive, that is, the office of mayor
has substantial influence in the policy- making process and
substantial control over administration. The mayor holds
important budgetary and appointing powers, along with the
power to veto legislative actions of the council.
Administrative authority is not shared with a number of
independent boards and commissions. The mayor enjoys general
power to appoint people to boards and commissions.
Some large cities with a strong mayor have established
the position of chief administrative officer under the mayor
to handle the day -to -day operations of the government, thus
leaving the mayor free to concentrate on policy formulation
and ceremonial tasks. In this way, professional management by
a hired assistant to the mayor may be combined with strong
political and policy leadership by the mayor.
C. COMMISSION FORM
The commission form combines both executive and
legislative powers in a governing board, the commission.
There is'no single chief executive; rather, the commissioners,
who serve collectively as the policy- making body, also serve
individually as heads of the principal departments. In the
basic commission form, there is neither a mayor nor a city
. manager.
Early advocates of the commission form hoped that the
concentration of power in the hands of a few elected council
members would make administration more effective and would
enhance accountability to the public.
The commission plan was first employed in Galveston,
Texas, after a disastrous hurricane almost destroyed the city
in 1900. It enjoyed widespread popularity for about two
decades. Since 1920, however, its use has declined greatly.
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Although offering more integration of policy and
administration than the council -weak mayor form, the
commission form tends to provide inadequate coordination,
insufficient internal control, and amateur direction of
administration.
It should be noted that, in Florida, municipalities use
the terms "council" and "commission" without reference to the
distinction between the commission form and other forms of
municipal government. Many Florida municipalities designate
their legislative bodies as the "commission" but do not employ
the commission form of government. One should not presume
that a Florida municipality employs the commission form merely
because its policy- making body is labeled "commission."
D. COUNCIL- MANAGER FORM
One of the key elements in twentieth- century municipal
reform has been the proposition that a strong and
non - political executive office should be the administrative
centerpiece of municipal government. This concept has been
implemented in thousands of American cities in the twentieth
century by the adoption of the council- manager form of
government. This form parallels the organization of the
business corporation: voters (stockholders) elect the council
(board of directors), including the mayor (chairman of the
board), which, in turn, appoints the manager (chief
administrative officer). Unlike the two council -mayor forms,
where the emphasis is on political leadership, the prevailing
norms in the council- manager form are administrative
competence and efficiency.
Under the council- manager form, the manager is the chief
administrative officer of the city. The manager supervises
and coordinates the departments, appoints and removes their
directors, prepares the budget for the council's
consideration,.and makes reports and recommendations to the
council. All department heads report to the manager. The
manager is fully responsible for municipal administration.
The mayor in a council- manager form is the ceremonial
head of the municipality, presides over council meetings, and
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makes appointments to boards. The mayor may be an important
political figure, but has little, if any, role in day -to -day
municipal administration. In some council- manager cities, the
office of mayor is filled by popular election; in others, by
council appointment of a council member or some other
prominent citizen (e.g. Pensacola).
The council- manager plan, first used in 1908 in Staunton,
Virginia, received nationwide'attention six years later when
Dayton, Ohio, became the first sizable city to adopt it.
Thereafter, the plan's popularity enjoyed steady but not
spectacular growth until after World War II. At that time,
many municipalities were confronted with long lists of needed
services and improvements that had backlogged since the
Depression years of the 1930s. Faced with such challenges,
many municipalities adopted the council- manager form. The
plan has been especially attractive to small and medium -sized
localities. It is used in a majority of American
municipalities with populations of 25,000 to 250,000. It has
been strongly promoted since the 1920s by the National
Municipal League.
The council- manager form is widely viewed as a way to
take politics out of municipal administration. The manager
himself is expected to abstain from any and all political
involvement. At the same time, the council members and other
"political" leaders are expected to refrain from intruding on
the manager's role as chief executive. Of course, the
manager, who is hired and fired by the council, is subject to
the authority of the council; but council members are expected
to abstain from seeking to individually interfere in
administrative matters, including actions in personnel
matters. Some city charters provide that interference in
administrative matters by an elected city official is grounds
for removal of the elected official from office.
E. MUNICIPAL- GOVERNMENT FORMS IN FLORIDA
In Florida, a municipality is free to adopt any of the
basic municipal - government forms identified above or any
variation thereof. State law does not prescribe one or more
permissible forms, nor does it prohibit any. The Florida
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Constitution requires only that "each municipal legislative
body shall be elective" (art. 8, sec. 2(b), Const.); state
statutes require only that an acceptable proposed municipal
charter is one which "prescribes the form of government and
clearly defines the responsibility for legislative and
executive functions" (s. 165.061(1)(e), F.S.).
The most common form of city government in Florida today
is the council- manager form. 'A second common form, found in
many smaller municipalities, is the council -weak mayor form,
with the city clerk functioning as the chief administrative
officer. In Florida, in recent years, most changes of
municipal- government form have been from some other form to
the council- manager form. Approximately 250 Florida cities
(out of nearly 400) have a position of manager or a similar
position, such as "administrator" or 'administrative
assistant."
In all Florida cities, members of the council or
commission are elected by the voters of the city. The mayor
may be simply a member of the council, elected by the council
to serve as mayor; may be a separate office (that is, not a
member of the council), elected by the people; or, in a few
cities, may be a citizen appointed by the council to serve as
mayor. Certain administrative positions are filled by
elections in a few cities. These include the offices of
clerk, police chief, and fire chief.
REFERENCES
Florida Constitution Article 8, Section 2 (b) . Florida
Statutes Section 165.061. 1994 Officials of Florida
Municipalities Florida League of Cities. Also see Getting
Together: The Forming and Reshaping of Local Gove rnment in
Florida (prepared by S. K. Lowe for the Florida House of
Representatives, Committee on Community Affairs, 1988.)
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JA
JONES
FOSTER
JOHNSTON
& STUBBS, P.A.
Attorneys and Counselors
Memo
To: Scott G. Hawkins, Michael Couzzo and Joanne Forsythe
From: Brian D. Kennedy
Date: April 2, 2007
Subject: Village of Tequesta Withholding Tax Issue
The Village of Tequesta has been paying its publicly elected Council Members monthly
fee based payments of $250.00. The Village has asked us whether or not they need to
withhold any amounts from these payments for taxes.
All government entities that employ workers are subject to employment taxes on wages,
except where the law provides specific exceptions. Taxes under the Federal Insurance
Contributions Act (FICA) consist of Old -Age, Survivors and Disability Insurance (Social
Security) and Medicare Hospital Insurance (Medicare) taxes. The Internal Revenue
Code section 3101 imposes FICA tax on the employee, and section 3111 imposes this
tax on the employer. The state or local entity must withhold and pay over the
employee's part of the taxes and must pay the employer's part. Section 3301 imposes
Federal Unemployment Tax (FUTA) on employers and, in addition, employers are
generally required under section 3402 to withhold Income tax from wages. Thus, there
are three different taxes that can be withheld (FICA [Social Security and Medicare],
Income and FUTA).
Government entities are exempted from the FUTA tax under IRC §3306(c)(7). To be
subject to the FICA (i.e., Social Security or Medicare) or Income tax withholding, a
worker must be an employee of the organization paying them. There are several
common law rules that courts will use to determine if a worker is in fact an employee.
These criteria revolve around financial control, behavioral control and the relationship
between the parties. Without getting into an exhaustive recitation of the elements
required to be considered when determining whether someone is an employee, the
general nature of a Council Member's work (as described to us) when compared to the
aforementioned criteria leads me to the determination that a Council Member is not an
employee. This would lead me to believe that the Village would also not be required to
April 6, 2007
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withhold for FICA or Income tax. FICA withholding is expressly excluded under
§3121(b)(7) of the Internal Revenue Code. However, the statute with respect to
withholding of Income tax defines the term employee as including a publicly elected
official. See §3401(c). Because the statute specifically defines employee to include a
publicly elected official, the withholding of income tax will be required on fee based
payments made to Village of Tequesta Council Members.
In conclusion, the Village of Tequesta will have to withhold Income tax from payments
made to the Council Members. FICA (social security and medicare) and FUTA will not
have to be withheld.
P: \DOCS\ 13153 \00001 \M EM \1114736. DOC
PUBLIC EMPLOYERS OUTREACH GUIDE
Please review Employment Tax Notice 2000 -38 issued in Internal Revenue Bulletin 2000 -33
for more information on this subject. This is available at www.irs.gov.
4. FEE -BASED PUBLIC OFFICIALS
In general, if an individual performs services as an official of a public entity (city, state, town,
village, water district, library, etc.) and the remuneration received, is paid out of governmental
funds, the official is an employee and the wages are subject to Federal employment taxes.
Examples of public officials include, but are not limited to, the President, a governor, mayor,
county commissioner, judge, justice of the peace, sheriff, constable, registrar of deeds,
building and plumbing inspectors, etc. The only exception to this rule is a public official who
receives his /her remuneration in the form of fees directly from the public with whom he /she
does business. However, if the fee service is covered by a Section 218 agreement, the
services would be covered as employment, as discussed in Publication 15, Employer's Tax
Guide (Circular E).
If a public official receives his or her remuneration or salary directly from or through a
government fund on the basis of a fixed percentage and no portion of the monies collected
belongs to or can be retained by him /her as compensation, then the remuneration is not fees,
but salary subject to all employment taxes.
If an individual performs services in more than one position, each position is treated separately
for purposes of determining whether the compensation for the service meets the fee based or
wage criteria.
For detailed information on this subject, please review the information in Publication 963,
Federal -State Reference Guide, and Revenue Ruling 74 -608, 1974 -2 C.B. 275.
5. BARTER EXCHANGES
Bartering between municipalities and individuals has a tax consequence. Examples of
bartering include having a contractor demolish a building in exchange for land, or engaging an
individual to perform work in exchange for relief from property taxes.
The relevant forms and provisions of the law are as follows:
a) Form 1099 -MISC: Regulation 1.6041 -1 Return of Information as to payments of $600
or more.
Paragraph (e) Payment made in medium other than cash
If any payment that is required to be reported on Form 1099 is made in property other
than money, the fair market value of the property at the time of payment is the amount to
be included on such form.
Paragraph (f) When payment deemed made
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