HomeMy WebLinkAbout05-06-2014 Agenda & Backup i
City of San Bernardino
Volunteer Citizen-Based Charter Committee
Agenda
Time: 5:30 p.m. to 9 p.m.
Date: Tuesday, May 06, 2014
Place: EDA Board Room 201 N. E Street, San Bernardino, CA 92418
The City of San Bernardino recognizes its obligation to provide equal access to public services to those
individuals with disabilities. Please contact the City Clerk's Office (909) 384-5102) one working day prior to
the meeting for any requests for reasonable accommodation,to include interpreters.
Anyone who wishes to speak on an agenda item will be required to fill out a speaker slip. Speaker slips should be turned
in to the City Clerk,who will relay them to the Committee Chair person. Public comments for agenda items are limited to
three minutes per person.
ROLL CALL
PLEDGE OF ALLEGIANCE
CHAIR'S COMMENTS
PUBLIC COMMENT (LIMIT 30 MINUTES)
ACTION ITEMS
1. Approval of minutes from meeting four
2. Input from the department heads, city commissioners, employee groups and City Manager on
Charter changes that will most help the City financially.
• Allen Parker, City Manager, Human Resources and Police Officers Association regarding
mutually agreeable language modifications in Charter Section 186
• San Bernardino Professional Firefighters Association presentation on Section 186
3. Entertain additional specific proposals from Committee members for Charter review
4. Discuss and deal with"now" vs. "later" categorization and priority of consideration of Charter
change topics amongst the "now" category.
5. Discussion and consideration of the Charter discussion topics in order of their priorities
• Charter Section 186
ADJOURN
The next meeting of the Volunteer Citizen-Based Charter Committee will be 5:30 p.m., Tuesday, May 13, 2014
in the EDA Board Room, 201 N. D. Street. Attendees are encouraged to park on the top floor of the City Hall
parking structure and access the EDA building from there.
Volunteer Citizen Based Charter Committee
Meeting 4—Tuesday, April 29, 2014
DRAFT Minutes
The meeting came to order at 5:30 p.m. in the EDA board room, with Committee members
Dennis Baxter, Gary Walbourne, Hillel Cohn, Michael Craft, Hardy Brown, Phil Savage, Tom
Pierce and Gloria Harrison Present. Committee member Casey Dailey was absent. Also in
attendance were City Attorney Gary Saenz, City Manager Allen Parker, and City Clerk Gigi
Hanna.
Committee chairman Phil Savage called the meeting to order, Clerk Hanna read the roll call and
the group recited the pledge of allegiance.
Chair Savage restated the committee's function and obligation to the City Council is to consider
any and all possibilities for Charter change and making recommendations to the body by May
19. He said that the committee has made no decisions about what it will recommend to council,
despite some concerns expressed to him and others that the committee would be focusing on
Charter Section 186.
Additionally, Savage advised Steve Tracy, the fire labor group representative who passed out a
document entitled San Bernardino City Charter Section 186 A Fire Department Perspective, and
was prepared to give a presentation,that he would prefer that the presentation be specifically
agendized for the May 6 meeting to give Tracy sufficient time for his presentation,the
committee time to review his report, and the community clear notice that the presentation would
take place. The Committee asked that the item will be placed on the May 6 agenda and the Chair
also invited those who were in attendance to speak on the topic that they could speak during
Public Comment as well. (Tracy's document is attached).
Three people requested to speak at Public Comment:
James Smith, of San Bernardino, said many of have been here for previous ballot measures and
the track record hasn't been all that good. As a city we just went through a recall election where
the city moved forward and the perception out there of what is happening in the city is positive.
He said it was his strong feeling that what this committee needs to do is a campaign to recall the
Charter and start from scratch with a basic three or four page Charter, given the timeline.
Kenneth Conver, a firefighter/paramedic with the SBFD for about eight years, said Committee
member Walbourne had seen the information he'd put out on social media and invited him to
speak to the committee. He said he was there to introduce the committee to the Fire Department
employee perspective on Section 186. He said San Bernardino City doesn't exist in a vacuum;
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the city competes with local cities, such as Redlands and Rialto, for qualified public safety
employees. He said that was the very issue city policymakers were addressing in 1939 when they
added Section 181a, for police, and in 1959, when Section 186 was added, to address attrition of
fire personnel. He said that one of the points of Section 186 was to remove the politics from the
issue of salary, to base pay on research and facts rather than someone's opinion or political
agenda. He asked the committee to keep an open mind when reviewing the information and
develop questions for the fire department employee group for next week, so that the group can
answer all of the issues in the proper context and the city doesn't end up spending a lot of time
and money to end up back where we were 60 years ago.
Steve Tracy, executive board member of the San Bernardino Professional Firefighters
Association, said they had planned to do their presentation that night and questioned whether it
was allowed under Action Item#3. He said he wanted to respond to the City Manager's
comment at the April 22 meeting that the fire union had not come to the table or been
cooperating with the city in negotiations. He said his group wants to help the city get through the
fiscal crisis, that members are concerned and care about the citizens of the city and are willing
able and ready to work with the city, but the process has to be transparent, fair and equitable.
Action Item #1: Approval of the minutes for meeting three.
The committee unanimously approved the minutes of meeting three.
Action Item #2: Follow-up on Committee Requests to City Manager from 4/22 meeting.
One speaker asked to speak on item 2:
Scott Olson: said that if members of the public are going to speak on an agenda item, they
should have the advantage of knowing where the committee members stood on an agenda item
before speaking, but with the public comments listed before the items, they cannot do that. He
also said that the idea of switching from odd-numbered election year to even to save money may
sound great on paper, but that local candidates will get lost at the end of a ballot full of federal,
state, and county races. The benefit of odd numbered years is you get to interact with residents of
your city about those issues related to San Bernardino—you don't have to worry about who is
running for president, taking precedent over what you want the voters to consider, he said. He
said there is potential to lose even more interest in local elections by such a move and said that if
(the elections of) 2013 showed you anything, it is that you have the ability to get citizens
involved.
City Manager Parker passed out a packet of information addressing committee requests for
information at the previous meeting: Fire Department Incident Counts; Section 186 Salary
Survey Comparison Cities (2006-Current); Summary of Charter City Provisions Establishing
Employee Salaries and Benefits; 10 year Attrition Report for Police and Fire Sworn Staff; 10-
2
year History of Salaries for General Fund Departments (Budgeted vs. Actual); Calendar Year
2013 description of Fire and Police Safety Overtime (Documents attached).
Action Item#3: Input from department heads, city commissioners, employee groups, and City
Manager on Charter changes that will most help the City financially.
• Regarding Human Resources and Police Officers Association mutually agreeable
language modifications in Charter Section 186:
Parker said that as late as this afternoon,there had been no agreement as to specific language.
The situation is complicated he said because the City is in mediation in the group, and there is a
gag order from mediator. At the same time,the City is in in contract negotiations/collective
bargaining procedure, making it difficult for the POA to accede to a language change without
understanding what else is on the table in negotiation and mediation. He said he may have
mutually agreeable language prepared for the next Charter committee meeting,but there may be
no proposal from police and he said he was reluctant to unilaterally give the committee his
opinion on the matter.
• Regarding clean-up language concerning the school district:
Saenz said the school district is no longer governed by the city although Charter language would
indicate otherwise. The committee's concern regarding that sections specifically, Article 11,
indicates that the school district is governed by the council and the city are outdated and
inappropriate. That's the info to that section, but there are a number of sections also outdated,
including section 40 (1) hospitals, pest houses and slaughter and provide for their removal and
discontinuance. They are numerous, a section regarding the ex officio assessor and tax collector,
at certain times (sales and property taxes)to be collected by the city clerk,the chief of police will
act as property tax collector. A number of sections are outdated and obsolete, but I don't believe
this committee has enough time to study those and place them on the November ballot. He said
he'd go through them and provide a report on them, but it is something the committee should
consider in the later category.
The entire section on the school district could probably be wiped out completely, Saenz said.
Savage said that it was previously thought that the section would be easy to get rid of,but
wanted to know if the school district had any reason that it should not be removed. A call to
school district officials seeking input had not been returned by the time of the meeting.
Michael Craft asked if the city had any ability to receive a report from the school district listing
the graduation rate,trends, etc., because he would want that information and wonder why the
city didn't have an input since it owns the building, could we have a report from the school
district to the mayor and council? Committee member Brown said you could request the
information,but cannot demand it.
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Pierce said the clean-up language for the school board is in the committee's "now" bucket and
asked if the information from the school district could be provided prior to the May 19 deadline.
Savage said that taking the clause in or out of the Charter does not meet the committee's criteria
of saving money and questioned whether it should be placed in the "later"bucket for
consideration.
Saenz agreed to generate a list of all the antiquated language in the Charter to present to the
committee.
• Regarding Civil Service clean-up language to Section 254:
Parker passed out a document with the current language of Section 254, and options for two
proposed changes to the language to the section. (Document attached), as forwarded to him by
Civil Service. In the Charter today,the language does not allow an employee to be terminated or
reduced in rank without a hearing before the appeals board, which can take as long as six
months,with the employee receiving pay, even if the decision is ultimately upheld, Parker said
Option One removes the language from Section 254; Option two revises the language.
Pierce asked the difference between the two options and asked which option dealt with the
previously stated problem in Section 254. Craft said he preferred Option 1 because it sets forth
that steps the city and the employee must take, and asked what the Civil Service board response
was to the proposals.
Rebekah Kramer, chief examiner for Civil Service, said the Civil Service board had not had a
chance to go through the Charter to make specific recommendations for change, but that either
option presented essentially say the same thing, although Option Two is more abbreviated.
Brown said it was important for employees to understand fully what was happening before being
terminated or disciplined. Kramer said she was in absolute agreement.
Walbourne asked Parker how much the change to that Charter section would save, but he said he
could not quantify it at this time.
• Regarding the issue of elections, Clerk Hanna said it is unclear that a move to even-year
elections would save any more money than has already been saved with efficiencies put in
place over the past three years at the County Registrar of Voters level.
The issue may be more about increasing voter turnout than saving money, she said.
By scheduling local elections that have had traditionally low turnout on the same date as
statewide primaries or general elections with their much higher voter turnout, there is reason to
believe that the number of local ballots cast could almost immediately increase to levels nearly
on par with these broader elections, although there is likely to be some voter roll-offfor voting in
local elections, according to several studies published on the subject. (Report attached)
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Hanna said the researchers also named some potential consequences of moving to even year
elections:
• On-cycle local elections might mean that more citizens with only limited knowledge of
and interest in local elections would vote in local contests;
• Coupling of local elections with national or statewide contests would also lead to longer,
more complex ballots that might increase voter confusion.
• On-cycle contests could draw attention away from local politics.
• Coupling local elections with national contests could lead to partisan politics playing a
larger role in local elections.
Locally, an issue to consider is whether the County Board of Supervisors would allow the city to
consolidate with its even-year elections, she said. The city must ask permission to consolidate
with the County on even-year elections, and the County Board of Supervisors could refuse,
which is did recently, when a special district asked to do the same. The issue, according to the
County Registrar of Voters, is having a ballot so complex it goes to a three-card ballot,
something the county has been trying to avoid(It takes ballots to be printed from 1.2 million
pieces to 1.8 million pieces).
Additionally, she had found no studies regarding the effect of even-year elections on local
candidates' races or bond measures—which was requested by the committee. Based on these
factors, Hanna said she could not recommend language changes regarding even or odd year
elections without further study.
She said the idea of keeping the primary municipal election in the same year as the general,
something she thought might address the issue of voter fatigue, would require moving the
primary election from November to earlier in the year in order to meet the state election code
requirements. This could happen, but the matter would take more study and Hanna suggested
that this, too, be considered later.
Hanna said she'd asked the City Attorney's office to draft potential Charter language that would
have the City of San Bernardino follow the Elections Code for initiatives,referendum and
recalls. She said the need for alignment between the city documents and the state election code
became painfully clear during the recall campaign last year,when the language in the Charter,
the Election Code and the Municipal Code made it impossible to meet the requirements of all.
The result was a costly court case wherein the city's outside legal counsel lost, largely based on
its interpretation of the unclear Charter language. The city's legal bill for that was more than
$200,000.
The language in the Charter is already based on the California Elections Code, of 1966. While
the Elections Code has been updated many times since then,the City Charter has not. Hanna said
it would behoove the city to include the state election Code language used by other Charter
Cities, specifically the City of Anaheim, for the same purpose.
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She passed out the recommended language change for Section 120, which would need to be
amended, and Sections 121 and 121 would need to be repealed:
Section 120. Initiative,Referendum and Recall.
There are hereby reserved to the electors of the City the powers of the initiative and referendum
and of the recall of municipal elective officers. The provisions of the Elections Code of the State
of California, as the same now exist or hereafter may be amended, governing the initiative and
referendum and the recall of municipal officers, shall apply to the use thereof in the City so far
as such provisions of the Elections Code are not in conflict with the provisions of this Charter.
She said the, under the proposed language,the City would be replacing three sections in the
current Charter with ambiguous language about initiatives,referendum and recalls with a
paragraph that essentially says the city will follow the state's election code.
Chair Savage asked for a motion to broaden the language on the committee's topics list section
regarding elections to include consideration of the language change for Section 120. Dennis
Baxter made the motion, seconded by Craft and the motion passed unanimously.
Action Item #4: Entertain additional specific proposals from Committee members for
Charter review
A memo provided to the committee by member Brown was read into the record by his grandson:
As a continuation of last meeting where we set our agenda topics for priority
setting, I have the following thoughts. But before I give those I want to thank you
as a committee, Councilman Rikke Van Johnson and the public for your patience
and understanding of my speech disability as a result ofALS better known as Lou
Gehrig Disease. That is why I am taking the time to study our agenda and
reducing my thoughts to paper. I also want to thank my son and grandson for
assisting me to and during the meetings.
While thinking of people with a disability I have identified some things the city
will need to address so people with disabilities can move about the city with
minimum help. Many sidewalks in our city need sloping for wheel or power chair
access and the restroom across the hallway needs modification. I mention the
disable because our elected policy makers need as much independency and not be
locked in by a Charter that ties their hand such as section 186 I want to address
in reverse order than we have them listed on the agenda because of my limited
speaking ability.
6 Another reason for repealing Section 186 is it does not give equal opportunity
of salary consideration to all city employees, in my opinion. And, if we have a
problem with recruiting people in our public safety positions, I would like to hear
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that from our HR staff and the reasons as to why. This is not the function of any
employee association. While they can act in an advisory role to the city it is the
responsibility of HR to give the evidence,from my experience as a recruitment
manager at Kaiser. Let me ask you a question as a taxpayer; are you willing to
give all employees this section]86 provision? I know that Mr. Parker is to give us
some language to amend section 186 that has been negotiated between him and
the association but is that fair to all of the other employee groups that would like
to do the same for their members. It is our responsibility to provide some
guidance to the council and citizens in the city.
We just went through an election that the voters said they wanted a change in our
direction and 186 was a part of that change at least from the people I have
interacted with. Not to amend or change but repeal.
In my humble opinion other service such as well-lit streets, trash being removed
from our streets, timely trimmed trees, clean parks for families and children to
play, library's for research, a positive image that keeps and attract other
businesses are equally important to reducing and combating crime. This is only
possible if our elected officials can act in their decision making capacity without
a Charter tying their hands.
The city of Los Angeles recently was starring a$10 million dollar law suit in its
face because of its failure to comply or making an effort to meet its legal
obligation under Disability federal law. This is another example of why our
Charter must not contain automatic pilot salary guarantees without negotiation.
From my personal, education and professional work experience as a Human
Resource Manager for 25 years, a school board trustee for 12 years, a volunteer
of 4 year on the county civil service commission, nine years on the school district
classified personnel commission, a city police commissioner,plus a
discrimination law certificate from the University of Southern California School
of Law and a certificate on California Merit System gives me a broad
understanding of these issues.
5. In addition I have also managed a few city and statewide elections in this city
and am familiar with voter turn-out during odd and even years. That is why I am
in favor of even years for election.
4. Based on last week's presentation I see value to transferring the sewer
collection and rate setting over to the water board.
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3. Unless I misunderstood the information of last week presented to us on the civil
service board the commissioners through adopting new policies and procedures
can correct the problems that were presented.
2. The Charter view committee should be an on-going established committee,
since changes to the Charter is regulated by laws established in our state
constitution.
When I served on the school board I do not recall any impact on its decision came
from the city.
One last thing that 1 want to bring as a cost saving item to the city, over the past
15 years I have had to use 911 for medical emergency care. Each time they would
send afire engine with three or four fire fighters that do nothing as related to
performing care to me as a patient. It was so noticeable last time that one of the
Medical Emergency Technician in the ambulance commented to the other, why
are they here to get in the way. I even had the Tech tell my wife of his concern. I
do not know if this is something that goes with 186 in the Charter or some cost
saving item the council should look into with their policy.
Again I want to thank you for being patience and understanding with my situation
as a member.
Hardy Brown
Savage asked if other members had specific proposals for review and Craft submitted a proposal
for Continuous Charter Review, which was included in the Committee Members' packets:
The Mayor and City Council shall appoint a volunteer based committee in
January of odd- numbered years to review and suggest revisions to the Charter
for the City of San Bernardino. The purpose of assembling the committee in
January of an odd numbered year is to allow the committee sufficient time to
consider the whole Charter, create recommendations to the Mayor and Common
Council, and allow the Mayor and Common Council the opportunity to
discuss/debate the proposals and vote on them for the even number year
November ballot.
The committee shall be comprised of one person representing each ward of the
city; while the mayor shall appoint two citizens to the San Bernardino City
Charter Committee.
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Upon the first meeting of the committee, a chairperson will be elected by the
committee. The chairperson will not vote, except in the event of a tie vote. The
chair will guide the group's discussions and keep them on topic and on schedule.
The committee will comply with all open meeting laws for the State of California.
They also will utilize Robert's Rules of Order as they conduct their meetings.
Savage said he appreciated the language and it is on the bucket list and will be discussed.
Savage said, under Topic One, Priority Six, Discussion of Section 186, there is language saying
we should deal with allowing cross-training of police and fire. That issue goes way beyond 186
and he asked that they segregate that out of the discussion of 186.
Savage suggested adding the following items to the topics list for discussion and the committee
concurred:
• Interpretation language that enables the Council rather than restrict it in using its
f discretion,to be listed as priority Item 1A.
• The two petitions filed with the city regarding citizen-led initiatives for Charter change;
one using a similar formulas as the one in Section 186 to determine employee benefits;
and the other to add anti-corruption language to the Charter, listed as priority items 29
and 30.
• A proposal for private economic zones, received from Upland Attorney Brian G.
Hannemann. (Document attached)
Walbourne said that a section of the Charter should include that pension increases only be
allowed after a vote of the people.
Savage passed out a document entitled San Bernardino Charter Reform Principle & Objectives
412912014 (Document attached) and said it should be on the committee's topics list as part of the
now bucket. He said that previous Charter committees had worked without guidelines for
specific direction and he thought the committee could recommend to the Council that these are
the principles the committee wishes to follow, to get the council to approve that and put it in
front of the public, as a sort of plebiscite, to see if the public thinks it makes sense. He said he
feels the structure of the city's government is its biggest issue and needs to be revised, with the
city moving toward a strong manager/council form of government. He said his document is
based on the Anaheim Charter Review Guidelines (passed out at the first meeting), modified for
San Bernardino.
Walbourne said that the Charters they had reviewed, specifically the Anaheim and the Riverside
Charters, had a weak mayor and suggested that changing from the city's strong mayor to a
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council/manager form of government would save the city the mayor's salary. Craft said that what
he likes in the Anaheim and Riverside Charters are that the responsibilities of the City Manager,
Mayor and City Attorney are clearly stated and is something San Bernardino needs to do. He
also expressed his concern that the committee hadn't yet made a decision about what to
recommend to the council. He doesn't need to pile more onto the now bucket and move forward.
Savage said he appreciated the thought, but would suggest that the last item be placed in the now
bucket so that the committee can get something to the public, then we would have a lot more
certainty from the public about the way the committee should be going in the future. He
suggested that the group get topics on the list and prioritize them later.
There was discussion among the committee members about the shortness of time left before they
are due to make a presentation and the lack of decisions made yet, although there is expectation
from the community that they do so. There was agreement that the committee could take actions
on issues besides Section 186, which the committee had already agreed they would not vote on
until the employee groups had a chance to make their presentations, on May 6.
Baxter asked if there was any sense among the group about the need to dump the entire Charter.
Mathis said there was a certain way to move forward, and that is to put a motion on the table.
Brown suggested not lessening the power of the mayor because in the times of crisis, people will
call on the mayor, not the city manager, for answers.
Parker said if the group decides to throw out the Charter,that there would need to be a
replacement Charter in place to avoid anarchy. He said there were some issues to consider if the
city where to go to a general law city, including the loss of utility users tax.
5. Discuss and deal with "now" vs. "later" categorization and priority of consideration of
Charter change topics amongst the "now" category.
Savage suggested adding the following items to the topics list for discussion and the committee
concurred:
• Broaden Topic 2 to include simplifying the language regarding recall, referendum and
initiative and keep it in the Now bucket.
• Put Topic 1, Priority 6 (Section 186) over to the May 6 meeting for consideration. The
motion was made by Craft, seconded by Baxter, and passed unanimously.
• Add language to deal with combining the fire department and police department training
and add to Topic 1,priority 6 (Section 186).
• Add the interpretation language from the City Attorney office that enables the Council
rather than restrict it in using its discretion, to be listed as priority Item I A, and prioritize
it in the Now bucket.
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• The two petitions filed with the city regarding citizen-led initiatives for Charter change;
one using a similar formulas as the one in Section 186 to determine employee benefits;
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and the other to add anti-corruption language to the Charter, listed as priority items 29
and 30 and added to the Now bucket.
• A proposal for private economic zones, received from Upland Attorney Brian G.
Hannemann (Document attached), to be listed as priority item 31.
• Pension increases can only take place via vote of the people, to be listed as priority item
32.
6. Discussion and consideration of the Charter discussion topics in order of their priorities
One person asked to speak during public comment for this item.
Scott Olson: The recall and everything connected with it was political. For the committee to
come up with Section 186 as the number one item on its priority list puts the committee in
danger of being accused of being political. The committee cannot substantiate or document that
the City will save money (in altering Section 186) because you have no idea what the police and
fire unions are going to do when it comes to negotiations. The city could very easily find itself
negotiated into higher salaries and lose money; At least 186 there is a benchmark. Why in the
middle of mediation and bankruptcy would the committee get into such a political mess when it
is not the stated goal of any here? The last Charter changes on the ballot were political in nature.
All revolved around giving the mayor more power, by giving him the ability to appoint the city
attorney, clerk and treasurer. He said the proposed suggested change to the referendum, recall
and initiative language in the Charter is preferable because it is basic clean-up and shows the
public that Charter change is not political.
The committee voted to:
• Endorse removing the language from the Charter regarding the school district. The
motion was made by Cohn, seconded by Baxter and passed unanimously. (Topic 17,
Priority 1).
• Approve the language submitted by the City Attorney to enable rather than restrict the
council in its interpretation of the Charter. The motion was made by Cohn, seconded by
Craft and passed unanimously. It was added to the topic list as Item IA.
• Recommend ongoing review by the city Charter committee and make it a city council
policy to have ongoing Charter review. The motion was made by Baxter, seconded by
Walboume and passed unanimously
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• Accept Option 2 of the proposed revision to Civil Service language in concept (Topic 27,
priority 3). The motion was made by Walbourne, seconded by Baxter and passed
unanimously.
• Defer consideration of Topic 28, priority 4 (Water Department), to a future meeting. The
motion was made by Cohn, seconded by Baxter and passed unanimously.
• Accept the proposed language change on Charter Section 120, and elimination of sections
121 and 122. The proposed language was added to Topic 2, Priority 5 (Elections). The
motion was made by Pierce, seconded by Harrison and passed unanimously.
• Defer discussion of Section 186 until the May 6 meeting. The motion was made by Craft,
seconded by Baxter and passed unanimously.
• To recommend the principles passed out by Phil Savage be adopted by the Council as a
policy to be applied for future Charter review. The motion was made by Harrison,
seconded by Baxter.
There was extensive discussion of this item before the vote: Savage reintroduced the subject of
his handout and asked whether the committee agreed that the city should be moving toward a
manager/council form of government, Item One on his list of principles. Pierce said he was not
confortable making a recommendation to the council about the form of government without
having studied the issue more extensively. Harrison said she agreed with the principles and
suggested the committee adopt Items 2-7, removing Item One. She read items 2-7:
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2. Flexibility. To the greatest degree possible,the City Manager&Council should have the
flexibility to make decisions and to govern the City under the Charter. Removing
excessive limitations on that flexibility should be opportunities to improve governance.
3. Economy. The Charter should be as economical in wording as possible while keeping
the meaning and legal parameters clear.
4. Future Orientation. The Charter should be worded so as to apply to future City
administrations,not just to deal with current issues.
5. Contemporary Standards. Language,such as gender neutrality,should be in
conformance with contemporary standards.
6. Transparency. The Charter should be clear to the well-informed layperson,not
excessively legalistic. The Charter is to be a way that the public can understand how the
City operates,and the powers and limitations of those who govern it.
7. Charter Reform Process. The Charter Review Committee working to advise the City
Council should utilize the following principles:
7.1 Input from those working within the City family should be sought out as those
who work in city government have a unique perspective on the Charter.
7.2 San Bernardino's Charter should be uniquely adapted for this City and it's needs.
7.3 Charters of other Cities should be reviewed and taken into account. Other cities
have weighed,considered and analyzed many of the same issues as those
confronting San Bernardino.
7.4 The Committee should seek wide and diverse input and evoke debate and
welcome disagreement in its deliberations;however,it should attempt to obtain
wide consensus for it's recommendations. Charter changes should be able to draw
wider support from the community than is normally required to win an election.
7.5 Ongoing,frequent,regular reviews of San Bernardino's Charter should be made
to the end that it will be,and continue to be an effective,well written,and well
organized document.
The City Manager suggested that the language under Item 2 (Flexibility),be altered to include
"...the Mayor, City Manager and Council should ..." Harrison agreed and amended her original
motion to include the change: To recommend principles 2-7 be adopted by the Council, with the
addition of the word"Mayor" be added to Item 2, as a policy to be applied for future Charter
review. It was seconded by Baxter and passed unanimously.
Committee members asked the City Manager to make a recommendation about the city
manager/council form of government.
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Fire Department Incident Counts
2012 Incident Counts
25,000
20,000
15,000
10,000 - - -�
5,000
863
0
Fire EMS Other*
2013 Incident Counts
30,000
25,866
25,000
20,000 __ _ �__ _ --__-_.___._.
15,000 ---- �`
10,000
5,000
1,030
Fire EMS Other*
*Other includes tech rescue, hazardous materials,false and normal alarms, citizen assist,etc.
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186 SALARY SURVEY COMPARISON CITIES (2006-CURRENT)
.ai;` .Y.',K"•''r.:•,'•:;F--�.;.i; eta"�'r7yfl: %:7Fksti'l4k'sb` i /.1.
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FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
COSTA MESA CONCORD BURBANK BURBANK
DOWNEY GARDEN GROVE COSTA MESA CONCORD
DALEY CITY FAIRFIELD FAIRFIELD DOWNEY
ELK GROVE DOWNEY FULLERTON ESCONDIDO
GARDEN GROVE IRVINE GARDEN GROVE MORENO VALLEY
HAYWARD ELK GROVE IRVINE PASADENA
PASADENA OXNARD ORANGE POMONA
SALINAS SIMI VALLEY OXNARD SIMI VALLEY
SIMI VALLEY THOUSAND OAKS SIMI VALLEY TORRANCE
TORRANCE RICHMOND THOUSAND OAKS THOUSAND OAKS
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FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
COSTA MESA ANTIOCH COSTA MESA CARLSBAD
DOWNEY CONCORD PALMDALE CONCORD
DALY CITY DALY CITY MODESTO DOWNEY
ELK GROVE DOWNEY SANTA CLARITA FONTANA
GARDEN GROVE ELK GROVE IRVINE FULLERTON
FAIRFIELD FAIRFIELD POMONA IRVINE
PASADENA GARDEN GROVE DOWNEY MORENO VALLEY
ROSEVILLE HUNTINGTON BEACH WEST COVINA PASADENA
SANTA ROSA RICHMOND ELK GROVE POMONA
TORRANCE SANTA ROSA BURBANK SAN BUENA VENTURA
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FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
COSTA MESA ANTIOCH ANTIOCH DALY CITY
ELK GROVE BURBANK BURBANK FAIRFIELD
DALY CITY CONCORD DOWNEY GLENDALE
GARDEN GROVE DALY CITY ELK GROVE MORENO VALLEY
PASADENA FAIRFIELD GLENDALE ONTARIO
SALINAS GARDEN GROVE OXNARD ORANGE
SANTA ROSA OXNARD POMONA PASADENA
SIMI VALLEY PASADENA SIMI VALLEY POMONA
THOUSAND OAKS RICHMOND THOUSAND OAKS SAN BUENA VENTURA
TORRANCE SIMI VALLEY WEST COVINA THOUSAND OAKS
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FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
ELK GROVE POMONA ANTIOCH LANCASTER
FAIRFIELD SANTA CLARITA FONTANA MISSION VIEJO
GARDEN GROVE SOUTH GATE LANCASTER NORWALK
PASADENA COSTA MESA NORWALK PALMDALE
SALINAS SALINAS OXNARD PASADENA
SANTA ROSA GARDEN GROVE PALMDALE SANTA CLARITA
SIMI VALLEY WEST COVINA SAN BUENA VENTURA SUNNYVALE
THOUSAND OAKS ROSEVILLE SANTA CLARITA THOUSAND OAKS
TORRANCE BURBANK SIMI VALLEY VALLEJO
WEST COVINA VENTURA THOUSAND OAKS WEST COVINA
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FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
ELK GROVE ANTIOCH ANTIOCH ANTIOCH
FAIRFIELD CONCORD CONCORD CONCORD
HAYWARD COSTA MESA FONTANA FONTANA
HUNTINGTON BEACH DALY CITY MISSION VIEJO MISSION VIEJO
PASADENA GARDEN GROVE ORANGE ORANGE
ROSEVILLE ONTARIO OXNARD OXNARD
SALINAS PASADENA SAN BUENAVENTURA SAN BUENAVENTURA
SANTA ROSA SALINAS SANTA CLARITA SANTA CLARITA
SIMI VALLEY SAN BUENAVENTURA THOUSAND OAKS THOUSAND OAKS
VALLEJO WEST COVINA WEST COVINA WEST COVINA
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FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
ELK GROVE BURBANK CONCORD CONCORD
HAYWARD COSTA MESA FONTANA FONTANA
HUNTINGTON BEACH DALY CITY IRVINE IRVINE
IRVINE GARDEN GROVE LANCASTER LANCASTER
ORANGE ONTARIO NORWALK NORWALK
PASADENA ORANGE OXNARD OXNARD
ROSEVILLE PASADENA PALMDALE PALMDALE
SALINAS SAN BUENAVENTURA SAN BUENA VENTURA SAN BUENAVENTURA
SANTA ROSA TORRANCE SANTA CLARITA SANTA CLARITA
VALLEJO VALLEJO THOUSAND OAKS THOUSAND OAKS
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FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
DALY CITY BURBANK CONCORD COSTA MESA
ELK GROVE COSTA MESA FONTANA FULLERTON
GARDEN GROVE DALY CITY FULLERTON HAYWARD
HUNTINGTON BEACH GARDEN GROVE IRVINE HUNTINGTON BEACH
IRVINE ONTARIO LANCASTER MURRIETA
ORANGE ORANGE NORWALK POMONA
PASADENA PASADENA OCEANSIDE ROSEVILLE
ROSEVILLE RIALTO OXNARD SAN BUENAVENTURA
SALINAS SAN BUENA VENTURA PALMDALE SUNNYVALE
VALLEJO TORRANCE SANTA CLARITA THOUSAND OAKS
I ?+�J{'�.''�•�t:,.\t .4\.'�J��' l ... ? - 1,'�slra �t.l"' T��A�.�r� � x + .. .: ,.. i - i !
FIRE SAFETY FIRE MGMT POLICE SAFETY POLICE MGMT
DALY CITY ANTIOCH FAIRFIELD COSTA MESA
ELK GROVE CORONA FULLERTON FAIRFIELD
GARDEN GROVE COSTA MESA GARDEN GROVE FULLERTON
HUNTINGTON BEACH GARDEN GROVE IRVINE HAYWARD
IRVINE ONTARIO LANCASTER HUNTINGTON BEACH
ORANGE ORANGE NORWALK MURRIETA
PASADENA OXNARD OCEANSIDE POMONA
ROSEVILLE SALINAS PALMDALE ROSEVILLE
SALINAS SAN BUENAVENTURA POMONA SAN BUENAVENTURA
VALLEJO TORRANCE SANTA CLARITA SANTA ROSA
f.
SUMMARY OF CHARTER CITY PROVISIONS ESTABLISHING
EMPLOYEE SALARIES AND BENEFITS
Request for information: During the April 22, 2014 meeting of the San Bernardino
Charter Committee, Committee Member Pierce requested information concerning
whether 186 Salary determination methodology was used by other Charter Cities to
establish salaries and other working conditions. In response to Committee Member
Pierce's request, staff reviewed applicable provisions of 22 comparable Charter cities
including those that had been used in previous 186 safety surveys. Those cities
included the following: Adelanto; Burbank; Downey; Fresno; Glendale; Hayward;
Huntington Beach; Irvine; Modesto; Pasadena; Pomona; Richmond; Riverside;
Roseville; Salinas; Santa Ana; Santa Rosa; Stockton; Sunnyvale; Torrance; Vallejo;
and, Ventura.
Summary of Review
1. None of the City Charters reviewed included extensive methodology for
determining salaries. All of the Charters reviewed provided language
wherein the "compensation of all City officers and employees shall be fixed by
the Council by ordinance or resolution."
• One City Charter provided that the City could "provide by ordinance or
resolution for the assignment and reassignment of functions, duties,
and compensation of all officers and employees, consistent with this
Charter."
• Another Charter provided that "It shall be the duty of all department
heads, whether-appointed-or-elected, to-assist arid-cooperate-w+th-the-
City Manager in administering the affairs of the City in the most
efficient, fiscally responsible, and harmonious manner consistent with
the duties as prescribed by law, City Charter, or by ordinance."
• Finally, one Charter set forth the following: "The Council shall by
ordinance provide the form of organization, through which the functions
of the City are to be administered. Any combination of duly authorized
duties, powers and functions which in the judgment of the Council will
provide the most efficient and economical service possible, consistent
with the public interest and in keeping with accepted principals of
municipal administration, may be authorized by such ordinance."
1
1'
2. Only two of the Charters reviewed (City of Stockton and City of Fresno)
provided any standards for establishing salaries. Section 186 of the City of
San Bernardino's Charter provides that salaries for safety personnel shall be
set at the arithmetic average of the survey agencies and further establishes
specific benchmarks for motor cycle officer pay, working out of class, and
overtime requirements for fire safety employees. The Stockton Charter
provides standards for setting starting salaries for firefighters, while the
Fresno Charter provides that"city employees shall be paid not less than the
prevailing wage paid in private employment in the City of Fresno . . .".
Conclusions: Generally, for most cities, salaries, benefits, and other terms and
conditions of employment are established through the adoption of an ordinance or
resolution by the City Council following the collective bargaining process. In most public
agencies, salaries and benefits are established through surveys with other comparable
agencies. Comparable agencies are identified as those competing for employee
applicants from the same labor pool. Under State law, Cities are required to "meet and
confer" over compensation and terms and conditions of employment. The agreements
reached as a result of the collective bargaining process are then ratified by the
employee unions and adopted by resolution by the City Council. Consequently, most
Charters only provide "enabling" language, i.e., "the salaries shall be fixed by the
Council by resolution", deferring to the negotiation process to establish salaries,
benefits, and other terms and conditions of employment.
2
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Salary/Benefit Annually
Base Salary $21,932,484.00
Bilingual Pay ($50 mo.) $13,800.00
Motor Officer Pay(Hazard)($50 mo.) $6,000.00
Post Basic ($200 mo.) $156,000.00
Post Advanced ($250 mo.) $327,000.00
Post Supervisory ($275 mo.) $79,200.00
Uniform Allowance $296,452.00
Pension/Retirement Benefit $6,117,528.00
Cafeteria/Health Benefit $2,216,286.00
Health Insurance Stippend $42,500.00
Medicare $340,452.00
Police Vacancies $1,740,641.00
Total Salary/Benefits $33,268,343.00
Information is based on 246 employees
1%w/o benefits=$230,986
1%w/ benefits =$332,683
Fire Safety
Salary/Benefit Annually
Base Salary $11,482,260
Bilingual Pay $6,829
8%Admin Captain Pay $11,078
Lead Paramedic Pay $109,810
FF II Cert $17,452
Fire Officer Pay $132,031
Chief Officer $26,558
Arson Investigator $6,070
Haz Mat Specialist $5,312
Breathing Apparatus Pay $759
Uniforms* $64,401
Pension/Retirement Benefit $3,121,199
1959 Survivors Benefit $6,240
Cafeteria/Health Benefit $1,218,588
Health Insurance Stippend $10,000
Medicare $219,144
Vacancies $1,212,305
Total Salary/Benefits $17,650,036
Information based on 127 employees
1°%w/o benefits=$124,214
1%w/benefits=$176,475
* 1 shirt/2 pants/work boots
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Article XiII
Miscellaneous
C-44
CURRENTLANGUAGE
Section 254. Discharge or Reduction of Compensation. No employee in
the classified service shall be discharged or reduced in rank or compensation until
he/she has been presented with reasons for such discharge or reduction in rank or
compensation specifically stated in writing and has been given an opportunity to be
heard before the Board in his/her own defense. The reason for such discharge or
reduction and any reply thereto by such employee, shall be in writing and filed with
the Civil Service Board. Verified written charges may be filed by any qualified
elector of the City of San Bernardino under such rules and regulations as may be
prescribed by the Civil Service Board. All charges shall be heard and trials had
under such rules as the Civil Service may prescribe. PROVIDED, that the
provisions of this section are at all times subject and subordinate to the provisions
of Section 256. (City Attorney Opinion No. 97-1; City Attorney Opinion No. 96-9; City Attorney
Opinion No. 96-5, City Attorney Opinion No. 95-11;City Attorney Opinion No. 95-10; City Attorney
Opinion No. 94-7; City Attorney Opinion No. 94-5.;City Attorney Opinion No. 93-8; City Attorney
Opinion No. 93-7; City Attorney Opinion No. 92-1; CityAttorney Opinion No. 91-14; City Attorney
Opinion No. 91-8; City Attorney Opinion No. 91-4; City Attorney Opinion No. 90-32;City Attorney
Opinion No. 90-12; City Attorney Opinion No. 88-9)
Section 255. Appeal of Suspension. Any employee of any department in
the City in the classified service who is suspended, reduced in rank, or dismissed
from a department by the City Manager or by the Head of the Department, or by
any other authorized supervisor, may appeal from the decision of such officer to
the Civil Service Board, and such Board shall define the manner, time and place by
which such appeal shall be heard. The judgment of such board shall be final;
PROVIDED that the provisions of this section are at all times subject and
subordinate to the provisions of Section 256. (Livingstone v. MacGillivray(1934) 1 Cal.2d
546, 552, 553-554; City Attorney Opinion No. 96-9; City Attorney Opinion No. 95-10; City Attorney
Opinion No. 92-27; City Attorney Opinion No. 92-1; City Attorney Opinion No. 91-14; City Attorney
r Opinion No. 9.1-8; City Attorney Opinion No. 88-9.)
PROPOSEDLANGUAGE
OPTION I — Removal of Language
Section 254. Discharge or Reduction of Compensation. No employee in the
classified service shall be discharged or reduced in rank or compensation until he/she
has been presented with reasons for such discharge or reduction in rank or
compensation specifically stated in writing
heard before the Board in his/her own defense. The reason for such discharge or
reduction and any reply thereto by such employee, shall be in writing and filed with the
Civil Service Board. Verified written charges may be filed by any qualified
elector of the City of San Bernardino under such rules and regulations as may be
prescribed by the Civil Service Board. All charges shall be heard and trials had under
such rules as the Civil Service may prescribe. PROVIDED, that the provisions of this
section are at all times subject and subordinate to the provisions of Section 256,
OPTION 11 — Revised Language
Section 254. Discharge or Reduction of Compensation. No employee in the
classified service shall be suspended, discharged or reduced in classification for
disciplinary reasons until the employee has been presented with the reasons for such
action specifically stated in writing. The reason for such discharge or reduction and any
reply thereto by the employee, shall be filed in writing with the Civil Service Board.
Academic Research Reviewed
Even-versus-Odd-Year Elections
1
Presentation by Gigi Hanna to Charter Review Committee 4/29/14
• According to a survey of California City Clerks, average turnout in city council elections
was about 48 percent of registered voters and only 44 percent for mayor in those cities
which directly elect a mayor. Measured as a percentage of the voting age population,the
turnout was even lower—32 percent in the average council election and 28 percent in the
average mayoral election.l
• Presidential elections are associated with turnouts in city elections that are 36 percent
higher than off-cycle elections and midterm congressional elections and presidential
primaries are associated with 26% and 25% greater turnout respectively.
• (San Bernardino's voter turnout since 2004 has been between 15 percent and 21 percent).
• Turnout for municipal elections consolidated with other local elections is not affected by
consolidation.
• A study published in the Journal of Politics suggests that off-cycle election reform
appears to be the best tool for expanding representation of African Americans in city
government.2
• The same study found that lower turnout for Latinos and Asian Americans results in less
equitable racial and ethnic representation on city councils and less success in the mayor's
office.
• A research brief by the Greenlining institute, which looked at case studies of cities in
California, found that voter turnout in each even-year election was considerably higher
than turnout in off-year elections, even when controlling for down-ballot voter drop-off.
A move to concurrent elections raises several concerns among researchers:
• On-cycle local elections might mean that more citizens with only limited knowledge of
and interest in local elections would vote in local contests.
• Coupling of local elections with national or statewide contests would also lead to longer,
more complex ballots that might increase voter confusion.
'Hajnal,Zoltan;Lewis,Paul G.;and Louch,Hugh. (2002)."Municipal Elections in California:turnout,tiing and
competition."Public Policy Institute of California
2 Hajnal,Zoltan and Trounstine,Jessica(May 2005)."Where turnout matters: The consequences of uneven turnout
in city politics."The Journal of Politics,Vol. 67,No.2,pp 515-535
• On-cycle contests could draw attention away from local politics.
• Coupling local elections with national contests could lead to partisan politics playing a
larger role in local elections.3
Research Conclusion:
• By scheduling local elections that have had traditionally low turnout on the same date as
statewide primaries or general elections with their much higher voter turnout,there is
reason to believe that the number of local ballots cast could almost immediately increase
to levels nearly on par with these broader elections, although there is likely to be some
voter roll-off for voting in local elections.
• Consolidating with the gubernatorial election may increase turnout and if expanded
participation is the primary goal,the best tool for the job is peak-cycle elections.
Local considerations:
The city must ask to consolidate with the County on elections, and the county Board of
Supervisors could say no. It did recently, when a special district asked to consolidate with even-
year elections. The issue, according to the registrar of voters, is having a ballot so complex it
goes to a three-card ballot, something the county has been trying to avoid. It takes its printing
from 1.2 million pieces to 1.8 million pieces.
Recommendation: to move the subject of even-year elections to the later bucket to allow for
greater discussion with the county Board of Supervisors, more study on the effect of long ballots
on local candidates and the effect on bonds of stand-alone elections.
3 Hajnal,Zoltan and Lewis,Paul G.(May 2003)."Municipal Institutions and Voter Turnout in Local Elections."
Urban Affairs Review,Vol.38,No.5,pp 645-668
Private Economic Zones - "PEZ"
A Proposal for the City of San Bernardino, to Revive
Economic Activity
Created by Brian G. Hannemann
Attorney at Law
1042 N. Mountain Ave., #B-222
Upland, CA 91786
(909) 980-7878
Executive Summary:
The basic framework for a workable, immediate and long term solution to economic
malaise is to penalize corruption, and reward honest effort.
First,political power must be dispersed. Second, competition, honest competition(as
opposed to crony-capitalism and too-big-to-fail kleptocracy) must be encouraged with proper
incentives. Third, the financial reward structure must be reformed to eliminate the present
property-tax/sales-tax systems, in favor of a pure merit/profit-based economically efficient
system. Fourth, proper political reforms must occur, or else the system will once again
degenerate back into cronyism and kleptocracy.
The creation of Private Economic Zones ["PEZ"] can produce guaranteed revenue for the
City. The concept is that the City will grant an exclusive license to the high bidder, for use of a
block of City-owned land, one square mile [640 acres], for a duration of ten years, allowing the
PEZ owner to engage in commerce, whether commercial, retail, industrial or agricultural, within
the PEZ, such economic activity largely free from governmental red tape. Traditional laws will
apply, such as restrictions upon vice, or other illegal activity.
The City earns guaranteed revenue, and shares in the upside of the economic activity with
the PEZ. The trade off is that the City cannot meddle and force the PEZ owner to engage in
endless red tape, delays, and blindly stumbling within an indecipherable bureacratic maze. This
frees the PEZ owner to engage in commerce, immediately, to produce economic activity,
including much-needed jobs, while the PEZ owner enjoys streamlined operation free from
meddlesome bureaucracy, with its attendant delays, fees, and economically stifling red tape.
The City's many interested constituency groups, such as police, fire, public workers,
CalPers, and other secured creditors enjoy a guaranteed income stream, for no outlay of any
public funds whatsoever.
As a test concept, if it fails, nothing has been lost,because the land was sitting idle
anyway. At least this way there is a chance for improvement, where none exist now.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 1 of 15
If the concept proves successful, then it can be replicated, and lead to an economic
recovery.
L Introduction
"San Bernardino is a city located in the Riverside-San Bernardino metropolitan area
(sometimes called the Inland Empire), and serves as the county seat of San Bernardino County,
California,United States. As one of the Inland Empire's anchor cities, located 65 miles east of
Los Angeles, San Bernardino spans 81 square miles (2 10 km2) on the floor of the San
Bernardino Valley, and has a population of 209,924 as of the 2010 census.[3] San Bernardino is
the 17th largest city in California, and the 99th largest city in the United States.
The California State University, San Bernardino is located in the northeastern part of the
city. The university also hosts the Coussoulis Arena. Other attractions in San Bernardino include
the Fox Performing Arts Center, the McDonald's Museum,which is located on the original site
of the world's first McDonald's (at 34.1255°N 117.2946°W), the California Theatre,the San
Bernardino Mountains and The San Manuel Amphitheater, the largest outdoor amphitheater in
the United States. In addition, the city is home to the Inland Empire 66ers of San Bernardino
baseball team, they play their home games at San Manuel Stadium in downtown San
Bernardino.[4]
In July 2012, San Bernardino became the second-largest city ever to file for protection
under Chapter 9 of the U.S. Bankruptcy code, exceeded only by Stockton, California, which filed
earlier that same month.[5] San Bernardino is the poorest city of its population size in California,
and the second poorest in the US next to Detroit."
(From Wiki: http://en.wikipedia.org*iki/San Bernardino, California)
II. Dearth of Economic Activity
San Bernardino is the poorest city of its size in California; and second poorest in the
entire United States, next to Detroit. Wow, notoriety in a big way. Almost as poor as Detroit.
What, if any, are the significant commonalities,then, between the cities of San
Bernardino and Detroit, and what are the major differences? Let me say the obvious, and try to
draw cultural and economic conclusions.
Demographics of San Bernardino show non-hispanic whites declined from 65%to 19%
in 40 years. Correlation does not equal causation. But, the demographic changes show a
dramatic shift in racial composition.
The cop-out answer is to blame racism as a reason for economic malaise, and conjure up
a grandiose government-based solution. This always involves forced taxpayer re-distribution
lorded over by corrupted, elected and appointed bureaucrats. This inevitably fails miserably and
which everyone KNOWS will fail miserably,but yet the same trite and tired"government-based,
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 2 of 15
taxpayer-funded "solutions" are tried time and time again. Why? Why not something different?
Power, that is why. Getting elected to a government position in a poor community is a
golden ticket to unimaginable wealth, through corruption, kickbacks,bribes, graft, glad-handing,
extortion,what have you. The news stories are so regular, that when a new corruption scandal
breaks, no one bats an eye. Why is that?
Not many citizens will fight"the man" of"City Hall," so it is easy to garner enough
critical mass of voters to influence the outcomes. Look at the corruption that has so thoroughly
infiltrated San Bernardino politics. Lawsuits are still pending, states' evidence has been
unearthed, immunity waivers have been granted,but still, the corruption exists.
Have racial demographics been constant for 40 years? No.
Have other demographics been constant for 40 years? No.
Have business conditions been constant for 40 years? No.
Then what HAS been constant for 40 years?
What is a solid indicator, then, showing why economic activity has declined steadily over
the past 40 years?
Simple: government intrusion (lack of freedom to pursue and engage in productive
economic opportunities) coupled with rampant corruption.
Government intrusion is far-reaching and never, ever pulls back save for revolution.
Government red-tape and mind-numbing regulations and ordinances have killed business
creation. Private business and private jobs create tax revenues. Government jobs and
government regulations kill private business and decrease government revenues. Why is that so
impossible to articulate or understand by those in power? Umm, simple. Admitting it means
that those in charge are hopelessly corrupt. So here we are.
Corruption has poisoned the system from top to bottom, for a generation. Corruption has
killed a once thriving, vital city like San Bernardino. Others will follow soon, more later. Who
is to blame? Ask who benefits from the corruption and the answer is obvious.
Who benefits from corruption, the people in charge of the local government offices, or
the honest folks, like employers, businesses and tax payers?
Corruption enriches the few, at the expense of the many. The system will not change
until the incentives are changed. Change the incentives and corruption will disappear like a bad
dream at sunrise. For the citizens of San Bernardino, rooting out and eliminating corruption is
now imminently possible, thanks to the courageous vote to seek bankruptcy protection from
decades of financial mismanagement and corruption.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 3 of 15
Before any praise is heaped upon those currently in office who voted to file bankruptcy,
remember that had the city simply defaulted,those in charge would be blamed and may have
been charged with crimes. Recognizing the imminent financial collapse,those in office did what
politicians normally do: they voted to save their own skins at the expense of others. In this case,
thankfully, no more can-kicking could avoid the financial collapse, and they had no choice but to
vote for bankruptcy. The only game left is now who to blame for the collapse. Stay tuned as
litigation develops on that issue.
So, the solution, as I see it, starts with the question of how to reduce government
intrusion, and its effect, corruption. So, the question simplifies itself: What can be done to fix
or change the system which rewards corruption and penalizes honest effort? Change the
incentives, that's what.
III. The Solution
The basic framework for a workable, immediate and long term solution to economic
malaise is to penalize corruption, and reward honest effort. It seems obvious,but how to
implement such a system?
First, political power must be dispersed. Second, competition,honest competition(as
opposed to crony-capitalism and too-big-to-fail kleptocracy)must be encouraged with proper
incentives. Third, the financial reward structure must be reformed to eliminate the present
property-tax/sales-tax systems, in favor of a pure merit/profit-based economically efficient
system. Fourth, proper political reforms must occur, or else the system will once again
degenerate back into cronyism and kleptocracy. I address each of these in order.
A. First, political power must be dispersed.
What do I mean? Easy. Open up the city charter to a convention. Let all the people have
input on amending the governing documents. My proposal will create dozens of neighborhood
political units, each with a single representative. The representative must actually LIVE in the
neighborhood to be eligible to represent it. The entire assembly of neighborhood representatives
will then, once every four years, vote on board of governors, containing at least eight but not
more than 15 governors,who themselves will face the voters in a retention election every year.
Each voter gets to vote for no more than the actual number of sitting governors. Anyone can run
to be elected to the board of governors, too. The winners are the ones with the most votes,
simple as that. There are no term limits.
Once elected, the members of the board of governors themselves vote for an executive
board, which has a succession plan: President, President-Elect,Vice President, Treasurer,
Secretary. An executive board member is first elected to the position of secretary, and the
succession plan is then Treasurer, VP, Pres-Elect then Pres., whereby one starts on the executive
board as the secretary, then each year,provided they are re-elected by the board, each executive
board member rotates upwards into a new position. The outgoing president is then not eligible
for reelection to the executive board,but can stay on the board of governors or resign. Past
presidents are entitled to vote on the executive committee.
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Transparency is also critical. The executive board alone hires various city government
heads, at their own sole discretion. For example, if they want a police chief, funded by tax payer
dollars, then the executive board can hire one. Same for fire, sewer, etc. If they want simply an
executive director in charge of all administration, then the executive board can hire someone and
some staff. Simply that.
The executive board alone approves all contracts, for all city-funded expenditures. All
proposals and contracts are published on the internet. Any individual or company receiving tax
payer funds must be listed on the internet, including name, telephone number, address, email
address, and service or product provided, and contract to which the tax payer funds have been
authorized, as well as the contract duration and terms. Names, dates,places, all information not
of a trade secret are required to be published on the internet There is no municipal borrowing on
a secured basis allowed. Any borrowing at all, for any reason at all, if pursued, is purely
unsecured, non-recourse, privately funded and competitively bid. No more encumbering current
taxpayers with bond payments. No borrowing on a secured basis means that the city must live
within its means. This fixes the chronic problem of overspending. The city now has the choice to
increase revenues or decrease spending to fund projects or services expenditures. Wow,what a
radical concept? Living within one's means, simple as that.
The executive board alone is responsible for management, retention and disposition of all
city-owned assets. If the executive board wants to sell an asset,they alone can do so. Same for
buying or leasing.
All funding for current services is from current revenues. If revenues decline, then
services must be cut, or revenues will have to be increased. Long term capital projects must
require a revenue stream, funded with current revenues. All contracts for routine services are
short, one year duration maximum. All contracts are competitively bid. There are no public
employee unions. Those public employee unions that still exist are allowed to bid just like any
other group. There are no publicly-funded retirement pensions.
This solution provides a steady governing body, with enough transparency to be
workable. Runaway spending is curtailed, as there in no incentive to do it. Politicians are not
able to trade votes for money,because there are too many others in the voting scheme. If there is
corruption, all of the board members face expulsion in the next election. There are checks and
balances. It is not perfect, but what is? It eliminates the graft, corruption and vote-buying. That
solves most of the problems right there.
The solution is so simple, yet radical: open up ALL government-provided services to
private bidding, with elimination of all wage, hour,union or any other restrictions upon bidding.
Is it not obvious?
B. Second, competition, honest competition, as opposed to crony-capitalism and too-big-to-
fail kleptocracy must be encouraged with proper incentives.
This solution naturally follows from elimination of cronyism and secretive,back-room
deal making with public funds. Public employee unions must be forced to compete. If the public
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employee unions cannot win a competitively bid contract, then so be it. That goes for the police,
fire, district attorneys,public defenders, all of them. How can it be that government jobs are so
miserable and undesirable that no one wants one, yet there are no job postings at all? If public
employee pensions are eliminated altogether, and the existing ones are dumped into 401k style,
with no employer match, with no lifetime health care, with benefits payable as defined
contribution as opposed to defined benefit, with early, lump sum payouts for anyone who wants
one now,the costs would plummet, solving the problem overnight. Why has this not been tried?
Easy, public unions are too powerful, and only a bankruptcy judge can match and defeat the
unions' massive, perpetual power. So,bankruptcy is the first step in the right direction.
If the existing public employee union manages to win a contract, then the union dues
must not be forcibly withdrawn from the paycheck. The employee must instead voluntarily pay
the union separately. This would gradually diminish the strength of the unions, and would lead
to reforms all over the state, since they would no longer have the ability to buy politicians who
pay back their union-based benefactors with sweetheart deals that only drain the public coffers.
The incentive structure works perfectly. Since there is open, and I mean internet-based,
open to the world transparency, contracts that get awarded will be fair for the world to see. If
some competitor thinks they can do it better, or cheaper,then they can submit a bid and compete
fairly, for a maximum of one year. If someone fails, or drops out, or fails,then the next bidder
steps right on up, and so on.
For example, if the local county sheriff thinks his organization can do a better job of
policing the city, then let the sheriff post a competitive bid. Let a competing jurisdiction bid for
it. Let a private company, comprised of POST-certified employees bid. Open it up to
competition. Won't competitive pressures upon the actual police officers lead to a more civilized
patrol force? Who says this system will not work? Has it been tried anywhere else? If not,why
not? If it was,why did it not succeed? Maybe the solution is to have a small,permanent staff of
paid, salaried officers, supplemented by contract employees on an as needed basis? Why cannot
a private company bid to staff-up during periods of overtime needs, instead of the public
employees getting two and three times their annual salary worth of overtime (and additionally
getting huge, lottery-style size lodestar amounts added to their pensions)?
Why cannot the fire department use volunteers, like the old days? Why are firemen
making$100's of thousands of dollars every year when they fight not a single fire or respond to
not a single call? Which private company would not bid HALF this amount to staff up DOUBLE
the number of firefighters? Is it so radically difficult to be a fireman? Then why are there not
TONS of job openings if the job is so damn difficult and miserable? Why are there plenty of job
openings for soldiers, who risk their lives in a combat zone, living in tents and subsisting out in
the elements, but none for fireman who live and sleep in air conditioned fortresses, and yet
firemen get paid orders of magnitude more than soldiers?
Privatization and competitive bidding for year-long contracts are the solutions on this
point.
C. Third, the financial reward structure must be reformed to eliminate the present
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property-tax/sales-tax systems,in favor of a pure merit/profit-based economic efficiency
system.
Quite a mouthful here, I know,but this IS a radical idea.
Why can't the city create a special economic zone. I call it a Private Economic Zone
("PEZ"). I liken them to the fiefdoms of old. One square mile, at least in size, 640 acres,
preferably larger. San Bernardino is 81 square miles. I have personally seen at least ten square
miles of junk yards littering the landscape, so this is an easy start. The city converts an existing
parcel of land to a PEZ,using one of the old junk yards, or dilapidated industrial building, or an
abandoned,tax-lien encumbered lot, or an old unused, forgotten parking lot, one of those things
will do nicely.
There should be a simple start, and nothing grandiose. There should not be an oversized
attempt at gargantuan reform, such as eminent domain of the poverty-stricken, dilapidated
downtown area. Eminent domain could be used later, after the concept is proven effective.
There could be a PEZ zone for agricultural use, one for industrial, etc., depending upon
the wishes of the executive board. More PEZ's could be created for other needs as the executive
board deems necessary. Remember,the citizens vote for individuals to sit upon the board of
governors. The board of governors elects the executive board, which then determines which type
PEZ's and how many to create. The public gets input on the PEZ's by way of voting.
Here is the rationale. Cities have grown too dependent on taxing productive economic
activity, (sales tax,business tax, hotel tax, etc.) to the point that no sane businessperson will open
up in the city, and also to the extent that as economic conditions deteriorate, existing businesses
leave.
That only ratchets up the tax pressures on existing businesses, who leave, and the cycle
worsens. If anyone doubts this premise, then please explain why San Bernardino filed
bankruptcy? Was it because as taxes increased that revenues increased, or was it that as
businesses fled, tax revenues decreased,prompting city officials to increase taxes, forcing more
business to flee, etc.?
Or was it because the tired, worn out model of taxing the productive to pay for expensive
public services, expenditures not challenged by private, competitive bidding, including public
employees who enjoy excessive compensation,benefits and job protections, finally pushed
expenses beyond revenues and thereby bankrupting the city? Go look at the bankruptcy filings
before sounding off with something stupid.
It is obvious that the former tax model is broken and needs to be revisited.
What is the harm of trying something new, in a small way, and see if it works?
Here is how it works. The PEZ is set up by the city executive board. The city exempts
the PEZ from ALL local ordinances, every single one. There are no zoning restrictions. Any and
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all land use restrictions, limitations of any kind, are waived. The city's governing documents are
amended to reflect these protections. The city is tasked to and must obtain county and state
waivers in similar fashion,before any other steps can be taken with respect to the PEZ. The city
guarantees to defend and indemnify the PEZ against state or federal intrusion of any kind, either
by lawsuit or otherwise. Any federal challenges to the PEZ's are rejected out of hand by the
Tenth Amendment, state sovereignty arguments. The city actively protects the perimeter of the
PEZ's from intrusion by the feds, or any others. The PEZ's are,basically sovereign zones, free
from disruption by anyone.
Once the PEZ concept is in place, and protections from federal intrusion are in place, then
the real miracle can occur. There maybe only one PEZ, or multiples, depending upon how much
real property there is available for use for a PEZ. There are no mineral rights allowed on a PEZ.
The real property belongs to the city in fee simple. Real property taxes are paid on the PEZ by
the city.
The right to operate a PEZ is given to an individual, called a Director,by way of license,
valid for ten years, non-revocable except for nonpayment of license fees. To obtain a a PEZ
license, one must be the high bidder. The PEZ license is put up for auction, competitively bid, in
person, solely by individuals. Entities are not allowed to bid. The winner is named the Director
of the PEZ.
The winner of the PEZ license is listed in public, on the internet, including name, address,
telephone number. The entire list and ranking of PEZ bids is posted on the internet. Any winner
of an auction for a PEZ must immediately renounce and waive any public pension,benefit or
position. Anyone holding a public office, whether elected or appointed or a board position is
ineligible from bidding for a PEZ license for 20 years after leaving public office or a board
position. Anyone receiving a public pension must renounce and forever waive any further
benefits, for life, or be ineligible to hold a PEZ license. The winner is forbidden from thereafter
holding any public office within the City, from serving on the board of governors, from bidding
upon any city-awarded contract or holding an interest, at all, in any entity filing or winning a bid
for any city-awarded contract, forever.
The winner of a PEZ auction is not allowed to hold more than one PEZ license at a time.
The winner can bid again at the end of 10 years. A PEZ license cannot be encumbered, sold,
loaned or hypothecated. If the holder of the PEZ license becomes incapacitated for any reason,
death included, the PEZ license is revoked automatically and is awarded to the next bidder in
line.
The holder of a PEZ license [the Director] is solely obligated to pay the yearly license fee.
The payment can occur in any lawful currency, or physical gold or silver priced in terms of
lawful currency, the currency of which is to be determined solely by city. (Any risk of deflating
currency can be hedged by payment of the fee in ounces of physical gold or silver, thus allowing
the holder of a PEZ license to manage risk of currency deflation, or collapse, or hyperinflation).
The yearly license fee amount is set at a sliding scale, with a minimum amount per year
set by the city, such amount to be determined and announced before the commencement of the
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PEZ auction. Bidders at the auction bid to pay the minimum yearly license fee, which remains
fixed at the minimum for the duration of the license. The yearly license fee amount is due and
payable one month after the completion of the calendar year.
The PEZ license holder is obligated to pay the city a percentage of revenues generated
within the PEZ zone, at a rate set by the city before commencement of the PEZ auction, to be
offset against the minimum license fee amount bid at auction. (Example: the yearly license fee is
bid and awarded to the high bidder at $10,000 per year. The PEZ rate is set by the City before
the auction at 2%. If economic activity within the PEZ was $20,000,the license fee for that year
would be $10,000. If the following year, the economic activity was $2,000,000, then the license
fee for that year would be $40,000). The City could further agree,before the commencement of
the auction,to incentivize the Director and to create economic activity,by placing either a cap on
the license fee, or a performance-bonus diminishing rate structure.
Economic activity within the PEZ is regulated solely by the Director, and no one else.
All economic activity occurring within the PEZ is public record, and all merchants and
individuals must post their balance sheets, income statement, and payment history of all fees to
the Director on line. All records are open and available to public inspection at any time.
Any workers hired to work within the PEZ must pay hourly income taxes to the City at
the rate of 2%. All paychecks are posted on line and are public record.
Workers are all deemed employees, subject to mandatory w-2 wage withholding, payable
hourly to the IRS. All workers are at will,hourly employees, with no minimum wage rules, or
hourly limits or restrictions, meal and rest breaks, or overtime or wage and hour laws. There is
no workers' compensation system, or laws which apply in the PEZ, except at the sole discretion
of the Director. There are no labor unions. There is no collective bargaining. There are no
sexual harassment laws, discrimination laws, disability or accommodation laws, except at the
sole discretion of the Director.
Think of the incentives. The workers enjoy the ability to work, at a straight 2%rate.
Everyone knows what everyone else makes, so wage competition will be fair. Performers will be
rewarded with good pay, and will be sought after, creating upward mobility and pay raises.
Promotions will leave vacancies, which will need to be filled, and those competing for the open
positions will know the prior position pay rate so competition can fill the jobs,not cronyism and
connections.
The federal government will still get their pound of flesh(render unto Caesar, after all),
but there are no other taxes, such as state, county, sales, etc. The Director can spur economic
activity within the PEZ by luring businesses to the PEZ by offering a lower tax rate environment,
free of burdensome rules and red tape. There are no building permits or fees. Any structures
must only be approved by the Director.
There are no government bureaucracies intermeddling, slowing things down. There are
no power hungry government workers looking to enforce silly,job-killing rules or regulations. If
workers do not like it there, they can leave. However, all payroll information is public record. If
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an employer is not paying a fair wage, everyone will know it. If employers do not like it there
they can leave. If business owners do not like it there they can leave. One can invest capital,
create an asset, and rent it to a productive business. The Director can establish rents, leases, etc.,
at the Director's sole discretion.
This creates the incentive for the Director to provide a proper environment for the capital
investments,businesses and the workers. The Director still has to pay a license fee to the City,
and the Director needs economic activity to occur within the PEZ in order to fund the license fee,
so the Director has every incentive to address and meet all the needs of the workers and the
businesses within the PEZ.
Since there is no local government red tape, or delays, or committees, or DMV-like
indifference, and since there is but one person ultimately responsible to pay the license fee, the
Director can cut through the red-tape and solve problems without delay, decisively, and run the
PEZ however he or she sees fit.
Within the PEZ, no one can tell the Director what to do, or how to do it, or issue any
regulations or taxes of any kind. Only the Director can set such rules within the PEZ. No liens
can attach to any economic activity within the PEZ. No rule enforcement of any nature at all
can occur within the PEZ, save for legal dispute procedures as enforced by the
Commission. (More on this below).
There is no private banking within the PEZ. There is no fiat creation, or loans. The
Director alone is empowered to set the legal tender, whether it be currency, gold or silver coins
within the PEZ. Anyone wishing to conduct business within the PEZ, whether business or
employees within the PEZ, or customers who come into patronize the businesses within the PEZ,
can use the currency or gold and silver at the Director's sole discretion.
Currency for payment of employee wages is determined at Director's sole discretion. To
the extent wages are paid in physical gold or silver, the City agrees to indemnify and defend the
Director for all IRS actions of any nature whatsoever and to make good upon for any IRS claim
of withholding should then existing legal currency be devalued, collapse or hyperinflate.
The Director alone is responsible to measure economic activity in a manner determined
by the city prior to commencement of the auction. For example, if the PEZ is deemed a physical
product manufacturing zone by the city, then the economic value could be measured in gross
sales priced in then existing legal currency. If the PEZ were an agricultural zone, then the
economic activity could be measured in standard agricultural output terms, for example. Only
productive output is deemed economic activity. Any economic activity that is in turn invested
within the PEZ as a capital improvement is not subject to the licensing fee. There is no fee to be
levied upon capital investment,building of structures, construction of works of improvement,
etc. All works of improvement belong to the City at the completion of the PEZ. The bidder
would know this in advance of the commencement of the auction.
Again, think of the incentives. If the Director is sitting on a huge cash position from the
economic activity within the PEZ, some of the cash can be put to use for capital improvement,
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i
thus minimizing the licensing fee owed to the City. The decision to engage in a capital
improvement rests solely with the Director, and not with elected, public officials who are corrupt
and will steer projects to cronys or otherwise enrich themselves at the public's expense. The
Director can either pay the license fee, or invest in a capital improvement. Either way,the
City gets the licensing fee, or the capital improvement. The economic benefit devolves to
the City, and does not leave the PEZ or the City.
The failure to pay the PEZ license fee in a timely fashion results in revocation of the
license without further notice or hearing. To the extent the PEZ license fee is unpaid, for any
reason at all, the next incoming PEZ license holder is obligated to pay forthwith the prior year
license fee or relinquish the PEZ license to the next highest bidder.
The PEZ license holder is not allowed to encumber the PEZ in any way shape or form to
pay the license fee.
So,why would one want to win a PEZ auction? Simple. Economic freedom. What
if Apple's CEO put up an Apple factory within one of the PEZ's? What if GM or Ford, or
Chrysler put up a factory within the PEZ?
What if a restaurant operator put up a restaurant within the PEZ? A movie theatre?
What if the Director was libertarian? Sure, there are constraints on vice, but what if the
Director allowed businesses to come pouring in, like a medicinal marijuana shop? Or an
internet-based college with minimal admission requirements? Or a drug and alcohol in-patient
rehab facility? Or a nursing home?
What if the Director allowed for controversial things, like a gay wedding chapel? Or a
Mosque? Or an Anti-American, hatred spewing, overthrow the government free speech think
tank?
Who cares? Is this not about economic activity, pursued with the desire for
freedom, as the Declaration of Independence and the US Constitution supposedly
guarantee? Why not let the market place sort it out, by creating a profit incentive free
from corrupt politicians?
Would not the City and thereby, the citizens, gain from many PEZ's? From the revenues
of the PEZ's, the City could then fund services to help the citizens„ right? If any of the citizens
of the City did not like the activity that was occurring within the PEZ, the citizen would be free
from going there, so what is the harm? The citizen could move away to another city and not be
bothered at all, too.
The citizens stand to gain the benefits from the economic activity occurring within the
PEZ. Is it not time we give some freedoms to the productive instead of incessantly focusing
upon the downtrodden and unproductive who only stand to benefit and not lose at all from
increased economic activity anyway?
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The PEZ license holder basically gets to operate the PEZ as a sovereign economic zone,
with the upside economic benefits shared by the PEZ license holder and the City. Whatever
happens in the PEZ is free from all taxation of any form. That,I am certain,is the only
method to stimulate both job creation and increased productive economic activity.
The Director would also have to obtain a suitable police presence, and could either pay
for outside forces, or do it in house, or bid it out. What's wrong with that? Same for fire
protection,utilities, etc. All costs for the PEZ would be paid for by the Director. Hence the
Director would have every incentive to keep costs low, rather than the bloated system we now
have. If the Director was too cheap, and did not provide suitable services,business would either
flee, or not come in the first place. If there were crimes committed,the Director would have to
make good for the losses, or suffer revenue loss when the business owner left the PEZ, of from
decrease in economic activity occasioned by the public's perception of the increase in crime.
The PEZ's are one solution, radical I know,but still, something worth looking at.
D. Fourth,proper political reforms must occur, or else the system will once again
degenerate back into cronyism and kleptocracy.
This one is easy. Remove the revolving door between private enterprise and government.
Those drawn to private enterprise should stay where they thrive. Those who wish to serve,
should have no Eve-like enticements to stray from their choice to work in the public sector.
For those who chose government service, fine. But there will be no get-rich-quick
method to turn those years of government service into lucrative slush funds or a cushy private
position after leaving government service.
Similarly, those who wish to run a PEZ have to renounce all government benefits. There
is no way to double dip. Public pension retirees should retire,period. If they can work,then they
should not retire. Or if they do retire, they should not ask the taxpayers to fund their lavish
lifestyle while others are struggling. Enough is enough. Public pension retirees can still work
somewhere else besides the PEZ's if they wish.
Since there is transparency to all contracts, and all economic activity within the PEZ,
there should be no corruption, or almost none. If it emerges,then the citizens can vote the
governors out, and redo the offending contract where the corruption exists, since contracts are
limited to one year terms. Long term deals are only possible in the PEZ's, where maximizing
profit is the order of the day, not rewarding crony politicians and their enablers. No one is forced
to do business within the PEZ, so if there is corruption within the PEZ, the businesses and
employees will leave. No one gets to keep their capital improvement, so there is no incentive to
overdo things, with lavish, luxurious furnishings or wasteful expenditures. The City benefits
from the capital improvement no matter what. The graft, corruption,wasteful prevailing wage
schemes are eliminated. Union employees must produce value, or find that they have no work.
Those that are skilled, can freely engage in their craft, free from restrictive union bullying and
arcane,unproductive work rules.
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To the extent that the PEZ's prove workable, then they will increase in number and size,
based on eminent domain takings under the 5'Amendment and the Kelo case. Where is the harm
in this? Turning unproductive land into productive land, employing the able-bodied, creating
revenue for the City, what is not to like? Fairness? Screams that the system will unfairly hinder
the downtrodden? How? More revenue to the City is like a big hit of crack,to a junkie. The City
will spend and spend so long as revenue streams in. So what? If revenue keeps coming in, then
do not the citizens deserve to have more and better services, including to the downtrodden?
Raising revenues by increasing the incentives to the productive is what the USA is all about.
Who said a rising tide lifts all boats? Why not truly embrace the concept then?
Notably what will be occurring, is economic freedom. Freedom from corrupt
governments. The kind of freedom that only scares the elites, entrenched solely due to the
manipulations and class warfare. Freedom from stealth taxes like inflation, or fraud-like fiat
fractional reserve legal tender laws that only enrich the banker overlords.
Since there is no private banking allowed in the PEZ's, all merchants and businesses have
to survive based on provable methods and operations, and not from speculation or risk taking. If
lending occurs, it will be unsecured, non-recourse. Thus, there will be risk to the lenders. As
such, the lenders will have some skin in the game,but they will have no rights to seize property
or collateral. Who will lend then for capital formation, and deployment? Why, that is easy:
entrepreneurs, that's who. They will lend at higher rates, to reap a reward for the risk taken.
What is wrong with that? The alternative is that a business owner can deploy his or her own
capital, realize a reward, and not watch it all get confiscated and redistributed to the
unproductive.
The lenders will have to rely upon their own skill in selecting and managing risk, and not
from crony first-access-to-conjured-fiat schemes.
Where there is risk, there is reward. One need not take any risk, and one is free to do
business outside of the PEZ with all the attendant rules and regulations, and so-called
"protections"of the law. One can run to the safety of the government bosom. No one is forced
to transact within the PEZ. It is purely voluntary. If the PEZ proves unmeritorious, that is, the
Director fails to pay the license fee, and no one else wants in, then the whole concept can be shut
down in only one year with minimal loss.
However, if the PEZ concept proves workable, that is, the license fee is timely paid,
businesses are created and hire workers, who make money and then buy things and
support their families,while the City's coffers fill with 2% of the wages generated by the
yearly license fee and from the labor of the productive, then why not support even more of
these throughout the City?
Public union employees can still find work, but they will have to compete for it. If what
they do for a living adds value, then there will be a ready place for them to work in the system. If
not, oh well. Get on public benefits, then. Let the productive work in the PEZ's and support the
idle then. At least this system is something that it sustainable rather than the broken tax system
in place now that punishes productive economic activity.
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Since there is no effective means for the cronyism to survive, it will die off, once and for
all. The kleptocracy will also fail,because only meritorious businesses will survive. There will
be no government subsidies, or government choosing winners and losers. The Director can do
that, if he or she wishes,but only for those that choose to participate in that particular PEZ. If the
Director chooses to subsidize a business, fine. Who cares? The Director can make that choice,
but the Director is still responsible to pay the licensing fee. Again, it is a win/win for all
concerned.
If someone feels slighted, or that it is unfair in a particular PEZ, then they can ask the
board of governors to open a new PEZ for public bidding, and then make a run at winning their
own bid where they can be the Director of their very own PEZ. What's wrong with that?
E. The Commission
As for the Commission,this concept is critical to the success of the PEZ. Any system
of governance to succeed must have due process in place and provide the perception of fairness.
Otherwise, the productive will choose another location to take risk. Why take risk if there is no
guarantee of fairness based on due process?
The Commission is established as a dispute resolution tool. It is essential to the
perception of fairness and the right to due process for a grievance. While the profit motive is
powerful, those involved in the PEZ's must have a means to address inter-PEZ grievances.
The system I envision is modeled upon swift,yet fair process, from neutral, yet wise
judges. It starts with the jurisdiction of the Director who exercises jurisdiction over the entirety
of the PEZ, from top to bottom, including upon each and every person located within the PEZ.
All persons and businesses physically present within the PEZ consent to jurisdiction by the
Director and the Commission. No exception.
The Director sets rules and enforces them at his or her own discretion. If anyone inside
the PEZ disagrees with a rule, or enforcement activity by the Director,the Director and all
participants within the PEZ agree to resolve ALL disputes, of any nature whatsoever before the
Commission.
The Commission is comprised of five Sworn Judges, each of which has to have not less
than ten years of judicial experience as a bench officer. The costs of the salaries of the members
of the Commission are to be paid by the PEZ, offset against the license fee (part of the license fee
includes the costs for paying the Commission expenses, including salaries of the judges on the
Commission). The presiding judge in the County has sole discretion to appoint the five judges
who sit on the Commission. The five judges who sit on the Commission vote once a year to
establish a presiding justice of the Commission, who sits as presiding justice for one year. The
presiding justice determines the order of deciding disputes,which Commission member will
preside over the dispute, and in the event of disagreement, in any manner whatsoever, the
decision of the presiding justice controls. There are no appeals whatsoever. All Commission
hearings, meetings, of any nature whatsoever, will be open to the public and will be streamed in
real time, to the internet.
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All disputes must be in writing, and must be stated on a single sheet of paper, double
spaced, no exceptions. All disputes are posted on line, with no confidentiality provisions at all
allowed. All oppositions must be in writing, and stated on a single sheet of paper, double spaced,
no exceptions. All oppositions are posted on line, with no confidentiality provisions at all
allowed. The dispute will be set for hearing within one week of filing. All hearings will be
conducted in public, with no limitations as to attendance or use of cameras or technology. The
hearings will be streamed real time to the internet and a public viewing monitor, open to the
public and for which there is no charge at all to view. There is a one month statute of limitations.
If the dispute is not formally presented to the Commission in timely manner, it is deemed waived
forever with no recourse. There are no rules relative to lawyers, or admission to practice before
the Commission. A party to a dispute may retain a lawyer if desired. A non-lawyer may
represent a party before the Commission.
At least one, and as many as five members of the Commission will hear oral argument,
which is limited to fifteen minutes per side. The oral argument will be scheduled to be heard
within sixty days maximum from the date of submission of the dispute. The Commission will
render written judgment within one week from the oral argument. All decisions are final, with
no right of appeal. A dispute may be settled before a decision is rendered by the Commission;
however, all terms of settlement must be in writing and are published on line and part of the
public record.
The Commission is empowered to render any and all legal remedies, including payment
of money damages, or expulsion from the PEZ. In the event that the Commission adjudicates
that a criminal act occurred, then the guilty party will be taken into custody by the Director,
expelled from the PEZ, and remanded in custody to the San Bernardino County Sheriff, subject
to criminal prosecution in State Court at the discretion of the District Attorney. If the guilty party
is physically absent from the PEZ, the Commission can render judgment notwithstanding the
failure to appear by the absent party. All decisions will be posted on line, maintained by the
Director for viewing by the public.
The Director, in his or her sole discretion, may remove any person from the PEZ at any
time, for any reason or no reason at all, subject to review by the Commission pursuant to the
dispute procedure.
IV. Conclusion
So, there you have it. My proposed solution to the economic malaise stagnating any
economic growth in San Bernardino.
This is the framework, and subject to revision, and is a work in progress. Maybe we can
solve this mess together.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 15 of 15
Private Economic Zones - "PEZ"
A Proposal for the City of San Bernardino, to Revive
Economic Activity
Created by Brian G. Hannemann
Attorney at Law
1042 N. Mountain Ave., #B-222
Upland, CA 91786
(909) 980-7878
Executive Summary:
The basic framework for a workable, immediate and long term solution to economic
malaise is to penalize corruption, and reward honest effort.
First, political power must be dispersed. Second, competition, honest competition(as
opposed to crony-capitalism and too-big-to-fail kleptocracy) must be encouraged with proper
incentives. Third, the financial reward structure must be reformed to eliminate the present
property-tax/sales-tax systems, in favor of a pure merit/profit-based economically efficient
system. Fourth, proper political reforms must occur, or else the system will once again
degenerate back into cronyism and kleptocracy.
The creation of Private Economic Zones ["PEZ"] can produce guaranteed revenue for the
City. The concept is that the City will grant an exclusive license to the high bidder, for use of a
block of City-owned land, one square mile [640 acres], for a duration of ten years, allowing the
PEZ owner to engage in commerce, whether commercial, retail, industrial or agricultural, within
the PEZ, such economic activity largely free from governmental red tape. Traditional laws will
apply, such as restrictions upon vice, or other illegal activity.
The City earns guaranteed revenue, and shares in the upside of the economic activity with
the PEZ. The trade off is that the City cannot meddle and force the PEZ owner to engage in
endless red tape, delays, and blindly stumbling within an indecipherable bureacratic maze. This
frees the PEZ owner to engage in commerce, immediately, to produce economic activity,
including much-needed jobs, while the PEZ owner enjoys streamlined operation free from
meddlesome bureaucracy, with its attendant delays, fees, and economically stifling red tape.
The City's many interested constituency groups, such as police, fire, public workers,
CalPers, and other secured creditors enjoy a guaranteed income stream, for no outlay of any
public funds whatsoever.
As a test concept, if it fails, nothing has been lost, because the land was sitting idle
anyway. At least this way there is a chance for improvement, where none exist now.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 1 of 15
If the concept proves successful, then it can be replicated, and lead to an economic
recovery.
I. Introduction
"San Bernardino is a city located in the Riverside-San Bernardino metropolitan area
(sometimes called the Inland Empire), and serves as the county seat of San Bernardino County,
California, United States. As one of the Inland Empire's anchor cities, located 65 miles east of
Los Angeles, San Bernardino spans 81 square miles (210 km2) on the floor of the San
Bernardino Valley, and has a population of 209,924 as of the 2010 census.[3] San Bernardino is
the 17th largest city in California, and the 99th largest city in the United States.
The California State University, San Bernardino is located in the northeastern part of the
city. The university also hosts the Coussoulis Arena. Other attractions in San Bernardino include
the Fox Performing Arts Center, the McDonald's Museum, which is located on the original site
of the world's first McDonald's (at 34.1255°N 117.2946°W ), the California Theatre, the San
Bernardino Mountains and The San Manuel Amphitheater, the largest outdoor amphitheater in
the United States. In addition, the city is home to the Inland Empire 66ers of San Bernardino
baseball team, they play their home games at San Manuel Stadium in downtown San
Bernardino.[4]
In July 2012, San Bernardino became the second-largest city ever to file for protection
under Chapter 9 of the U.S. Bankruptcy code, exceeded only by Stockton, California, which filed
earlier that same month.[5] San Bernardino is the poorest city of its population size in California,
and the second poorest in the US next to Detroit."
(From Wiki: http://en.wikipedia.org/wiki/San Bernardino, California)
II. Dearth of Economic Activity
San Bernardino is the poorest city of its size in California; and second poorest in the
entire United States, next to Detroit. Wow, notoriety in a big way. Almost as poor as Detroit.
What, if any, are the significant commonalities, then, between the cities of San
Bernardino and Detroit, and what are the major differences? Let me say the obvious, and try to
draw cultural and economic conclusions.
Demographics of San Bernardino show non-hispanic whites declined from 65%to 19%
in 40 years. Correlation does not equal causation. But, the demographic changes show a
dramatic shift in racial composition.
The cop-out answer is to blame racism as a reason for economic malaise, and conjure up
a grandiose government-based solution. This always involves forced taxpayer re-distribution
lorded over by corrupted, elected and appointed bureaucrats. This inevitably fails miserably and
which everyone KNOWS will fail miserably,but yet the same trite and tired "government-based,
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 2 of 15
taxpayer-funded "solutions" are tried time and time again. Why? Why not something different?
Power, that is why. Getting elected to a government position in a poor community is a
golden ticket to unimaginable wealth, through corruption, kickbacks, bribes, graft, glad-handing,
extortion, what have you. The news stories are so regular, that when a new corruption scandal
breaks, no one bats an eye. Why is that?
Not many citizens will fight"the man" of"City Hall," so it is easy to garner enough
critical mass of voters to influence the outcomes. Look at the corruption that has so thoroughly
infiltrated San Bernardino politics. Lawsuits are still pending, states' evidence has been
unearthed, immunity waivers have been granted, but still, the corruption exists.
Have racial demographics been constant for 40 years? No.
Have other demographics been constant for 40 years? No.
Have business conditions been constant for 40 years? No.
Then what HAS been constant for 40 years?
What is a solid indicator, then, showing why economic activity has declined steadily over
the past 40 years?
Simple: government intrusion(lack of freedom to pursue and engage in productive
economic opportunities) coupled with rampant corruption.
Government intrusion is far-reaching and never, ever pulls back save for revolution.
Government red-tape and mind-numbing regulations and ordinances have killed business
creation. Private business and private jobs create tax revenues. Government jobs and
government regulations kill private business and decrease government revenues. Why is that so
impossible to articulate or understand by those in power? Umm, simple. Admitting it means
that those in charge are hopelessly corrupt. So here we are.
Corruption has poisoned the system from top to bottom, for a generation. Corruption has
killed a once thriving, vital city like San Bernardino. Others will follow soon, more later. Who
is to blame? Ask who benefits from the corruption and the answer is obvious.
Who benefits from corruption, the people in charge of the local government offices, or
the honest folks, like employers, businesses and tax payers?
Corruption enriches the few, at the expense of the many. The system will not change
until the incentives are changed. Change the incentives and corruption will disappear like a bad
dream at sunrise. For the citizens of San Bernardino, rooting out and eliminating corruption is
now imminently possible, thanks to the courageous vote to seek bankruptcy protection from
decades of financial mismanagement and corruption.
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Before any praise is heaped upon those currently in office who voted to file bankruptcy,
remember that had the city simply defaulted, those in charge would be blamed and may have
been charged with crimes. Recognizing the imminent financial collapse, those in office did what
politicians normally do: they voted to save their own skins at the expense of others. In this case,
thankfully, no more can-kicking could avoid the financial collapse, and they had no choice but to
vote for bankruptcy. The only game left is now who to blame for the collapse. Stay tuned as
litigation develops on that issue.
So, the solution, as I see it, starts with the question of how to reduce government
intrusion, and its effect, corruption. So,the question simplifies itself: What can be done to fix
or change the system which rewards corruption and penalizes honest effort? Change the
incentives, that's what.
III. The Solution
The basic framework for a workable, immediate and long term solution to economic
malaise is to penalize corruption, and reward honest effort. It seems obvious, but how to
implement such a system?
First,political power must be dispersed. Second, competition, honest competition(as
opposed to crony-capitalism and too-big-to-fail kleptocracy) must be encouraged with proper
incentives. Third, the financial reward structure must be reformed to eliminate the present
property-tax/sales-tax systems, in favor of a pure merit/profit-based economically efficient
system. Fourth,proper political reforms must occur, or else the system will once again
degenerate back into cronyism and kleptocracy. I address each of these in order.
A. First,political power must be dispersed.
What do I mean? Easy. Open up the city charter to a convention. Let all the people have
input on amending the governing documents. My proposal will create dozens of neighborhood
political units, each with a single representative. The representative must actually LIVE in the
neighborhood to be eligible to represent it. The entire assembly of neighborhood representatives
will then, once every four years, vote on board of governors, containing at least eight but not
more than 15 governors, who themselves will face the voters in a retention election every year.
Each voter gets to vote for no more than the actual number of sitting governors. Anyone can run
to be elected to the board of governors, too. The winners are the ones with the most votes,
simple as that. There are no term limits.
Once elected, the members of the board of governors themselves vote for an executive
board, which has a succession plan: President, President-Elect, Vice President, Treasurer,
Secretary. An executive board member is first elected to the position of secretary, and the
succession plan is then Treasurer, VP, Pres-Elect then Pres., whereby one starts on the executive
board as the secretary, then each year, provided they are re-elected by the board, each executive
board member rotates upwards into a new position. The outgoing president is then not eligible
for reelection to the executive board, but can stay on the board of governors or resign. Past
presidents are entitled to vote on the executive committee.
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Transparency is also critical. The executive board alone hires various city government
heads, at their own sole discretion. For example, if they want a police chief, funded by tax payer
dollars, then the executive board can hire one. Same for fire, sewer, etc. If they want simply an
executive director in charge of all administration,then the executive board can hire someone and
some staff. Simply that.
The executive board alone approves all contracts, for all city-funded expenditures. All
proposals and contracts are published on the internet. Any individual or company receiving tax
payer funds must be listed on the internet, including name, telephone number, address, email
address, and service or product provided, and contract to which the tax payer funds have been
authorized, as well as the contract duration and terms. Names, dates,places, all information not
of a trade secret are required to be published on the internet There is no municipal borrowing on
a secured basis allowed. Any borrowing at all, for any reason at all, if pursued, is purely
unsecured, non-recourse,privately funded and competitively bid. No more encumbering current
taxpayers with bond payments. No borrowing on a secured basis means that the city must live
within its means. This fixes the chronic problem of overspending. The city now has the choice to
increase revenues or decrease spending to fund projects or services expenditures. Wow,what a
radical concept? Living within one's means, simple as that.
The executive board alone is responsible for management, retention and disposition of all
city-owned assets. If the executive board wants to sell an asset,they alone can do so. Same for
buying or leasing.
All funding for current services is from current revenues. If revenues decline,then
services must be cut, or revenues will have to be increased. Long term capital projects must
require a revenue stream, funded with current revenues. All contracts for routine services are
short, one year duration maximum. All contracts are competitively bid. There are no public
employee unions. Those public employee unions that still exist are allowed to bid just like any
other group. There are no publicly-funded retirement pensions.
This solution provides a steady governing body,with enough transparency to be
workable. Runaway spending is curtailed, as there in no incentive to do it. Politicians are not
able to trade votes for money,because there are too many others in the voting scheme. If there is
corruption, all of the board members face expulsion in the next election. There are checks and
balances. It is not perfect,but what is? It eliminates the graft, corruption and vote-buying. That
solves most of the problems right there.
The solution is so simple, yet radical: open up ALL government-provided services to
private bidding, with elimination of all wage, hour,union or any other restrictions upon bidding.
Is it not obvious?
B. Second, competition, honest competition, as opposed to crony-capitalism and too-big-to-
fail kleptocracy must be encouraged with proper incentives.
This solution naturally follows from elimination of cronyism and secretive,back-room
deal making with public funds. Public employee unions must be forced to compete. If the public
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employee unions cannot win a competitively bid contract, then so be it. That goes for the police,
fire, district attorneys,public defenders, all of them. How can it be that government jobs are so
miserable and undesirable that no one wants one, yet there are no job postings at all? If public
employee pensions are eliminated altogether, and the existing ones are dumped into 401k style,
with no employer match, with no lifetime health care, with benefits payable as defined
contribution as opposed to defined benefit, with early, lump sum payouts for anyone who wants
one now, the costs would plummet, solving the problem overnight. Why has this not been tried?
Easy,public unions are too powerful, and only a bankruptcy judge can match and defeat the
unions' massive,perpetual power. So,bankruptcy is the first step in the right direction.
If the existing public employee union manages to win a contract, then the union dues
must not be forcibly withdrawn from the paycheck. The employee must instead voluntarily pay
the union separately. This would gradually diminish the strength of the unions, and would lead
to reforms all over the state, since they would no longer have the ability to buy politicians who
pay back their union-based benefactors with sweetheart deals that only drain the public coffers.
The incentive structure works perfectly. Since there is open, and I mean internet-based,
open to the world transparency, contracts that get awarded will be fair for the world to see. If
some competitor thinks they can do it better, or cheaper, then they can submit a bid and compete
fairly, for a maximum of one year. If someone fails, or drops out, or fails, then the next bidder
steps right on up, and so on.
For example, if the local county sheriff thinks his organization can do a better job of
policing the city, then let the sheriff post a competitive bid. Let a competing jurisdiction bid for
it. Let a private company, comprised of POST-certified employees bid. Open it up to
competition. Won't competitive pressures upon the actual police officers lead to a more civilized
patrol force? Who says this system will not work? Has it been tried anywhere else? If not, why
not? If it was, why did it not succeed? Maybe the solution is to have a small,permanent staff of
paid, salaried officers, supplemented by contract employees on an as needed basis? Why cannot
a private company bid to staff-up during periods of overtime needs, instead of the public
employees getting two and three times their annual salary worth of overtime(and additionally
getting huge, lottery-style size lodestar amounts added to their pensions)?
Why cannot the fire department use volunteers, like the old days? Why are firemen
making $100's of thousands of dollars every year when they fight not a single fire or respond to
not a single call? Which private company would not bid HALF this amount to staff up DOUBLE
the number of firefighters? Is it so radically difficult to be a fireman? Then why are there not
TONS of job openings if the job is so damn difficult and miserable? Why are there plenty of job
openings for soldiers,who risk their lives in a combat zone, living in tents and subsisting out in
the elements,but none for fireman who live and sleep in air conditioned fortresses, and yet
firemen get paid orders of magnitude more than soldiers?
Privatization and competitive bidding for year-long contracts are the solutions on this
point.
C. Third, the financial reward structure must be reformed to eliminate the present
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property-tax/sales-tax systems,in favor of a pure merit/profit-based economic efficiency
system.
Quite a mouthful here, I know,but this IS a radical idea.
Why can't the city create a special economic zone. I call it a Private Economic Zone
(`PEZ"). I liken them to the fiefdoms of old. One square mile, at least in size, 640 acres,
preferably larger. San Bernardino is 81 square miles. I have personally seen at least ten square
miles of junk yards littering the landscape, so this is an easy start. The city converts an existing
parcel of land to a PEZ, using one of the old junk yards, or dilapidated industrial building, or an
abandoned,tax-lien encumbered lot, or an old unused, forgotten parking lot, one of those things
will do nicely.
There should be a simple start, and nothing grandiose. There should not be an oversized
attempt at gargantuan reform, such as eminent domain of the poverty-stricken, dilapidated
downtown area. Eminent domain could be used later, after the concept is proven effective.
There could be a PEZ zone for agricultural use, one for industrial, etc., depending upon
the wishes of the executive board. More PEZ's could be created for other needs as the executive
board deems necessary. Remember, the citizens vote for individuals to sit upon the board of
governors. The board of governors elects the executive board, which then determines which type
PEZ's and how many to create. The public gets input on the PEZ's by way of voting.
Here is the rationale. Cities have grown too dependent on taxing productive economic
activity, (sales tax,business tax, hotel tax, etc.)to the point that no sane businessperson will open
up in the city, and also to the extent that as economic conditions deteriorate, existing businesses
leave.
That only ratchets up the tax pressures on existing businesses, who leave, and the cycle
worsens. If anyone doubts this premise, then please explain why San Bernardino filed
bankruptcy? Was it because as taxes increased that revenues increased, or was it that as
businesses fled, tax revenues decreased,prompting city officials to increase taxes, forcing more
business to flee, etc.?
Or was it because the tired,worn out model of taxing the productive to pay for expensive
public services, expenditures not challenged by private, competitive bidding, including public
employees who enjoy excessive compensation,benefits and job protections, finally pushed
expenses beyond revenues and thereby bankrupting the city? Go look at the bankruptcy filings
before sounding off with something stupid.
It is obvious that the former tax model is broken and needs to be revisited.
What is the harm of trying something new, in a small way, and see if it works?
Here is how it works. The PEZ is set up by the city executive board. The city exempts
the PEZ from ALL local ordinances, every single one. There are no zoning restrictions. Any and
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all land use restrictions, limitations of any kind, are waived. The city's governing documents are
amended to reflect these protections. The city is tasked to and must obtain county and state
waivers in similar fashion,before any other steps can be taken with respect to the PEZ. The city
guarantees to defend and indemnify the PEZ against state or federal intrusion of any kind, either
by lawsuit or otherwise. Any federal challenges to the PEZ's are rejected out of hand by the
Tenth Amendment, state sovereignty arguments. The city actively protects the perimeter of the
PEZ's from intrusion by the feds, or any others. The PEZ's are,basically sovereign zones, free
from disruption by anyone.
Once the PEZ concept is in place, and protections from federal intrusion are in place,then
the real miracle can occur. There may be only one PEZ, or multiples, depending upon how much
real property there is available for use for a PEZ. There are no mineral rights allowed on a PEZ.
The real property belongs to the city in fee simple. Real property taxes are paid on the PEZ by
the city.
The right to operate a PEZ is given to an individual, called a Director,by way of license,
valid for ten years,non-revocable except for nonpayment of license fees. To obtain a a PEZ
license, one must be the high bidder. The PEZ license is put up for auction, competitively bid, in
person, solely by individuals. Entities are not allowed to bid. The winner is named the Director
of the PEZ.
The winner of the PEZ license is listed in public, on the internet, including name, address,
telephone number. The entire list and ranking of PEZ bids is posted on the internet. Any winner
of an auction for a PEZ must immediately renounce and waive any public pension,benefit or
position. Anyone holding a public office, whether elected or appointed or a board position is
ineligible from bidding for a PEZ license for 20 years after leaving public office or a board
position. Anyone receiving a public pension must renounce and forever waive any further
benefits, for life, or be ineligible to hold a PEZ license. The winner is forbidden from thereafter
holding any public office within the City, from serving on the board of governors, from bidding
upon any city-awarded contract or holding an interest, at all, in any entity filing or winning a bid
for any city-awarded contract, forever.
The winner of a PEZ auction is not allowed to hold more than one PEZ license at a time.
The winner can bid again at the end of 10 years. A PEZ license cannot be encumbered, sold,
loaned or hypothecated. If the holder of the PEZ license becomes incapacitated for any reason,
death included, the PEZ license is revoked automatically and is awarded to the next bidder in
line.
The holder of a PEZ license [the Director] is solely obligated to pay the yearly license fee.
The payment can occur in any lawful currency, or physical gold or silver priced in terms of
lawful currency,the currency of which is to be determined solely by city. (Any risk of deflating
currency can be hedged by payment of the fee in ounces of physical gold or silver, thus allowing
the holder of a PEZ license to manage risk of currency deflation, or collapse, or hyperinflation).
The yearly license fee amount is set at a sliding scale, with a minimum amount per year
set by the city, such amount to be determined and announced before the commencement of the
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PEZ auction. Bidders at the auction bid to pay the minimum yearly license fee, which remains
fixed at the minimum for the duration of the license. The yearly license fee amount is due and
payable one month after the completion of the calendar year.
The PEZ license holder is obligated to pay the city a percentage of revenues generated
within the PEZ zone, at a rate set by the city before commencement of the PEZ auction, to be
offset against the minimum license fee amount bid at auction. (Example: the yearly license fee is
bid and awarded to the high bidder at$10,000 per year. The PEZ rate is set by the City before
the auction at 2%. If economic activity within the PEZ was $20,000,the license fee for that year
would be $10,000. If the following year, the economic activity was $2,000,000,then the license
fee for that year would be $40,000). The City could further agree,before the commencement of
the auction, to incentivize the Director and to create economic activity,by placing either a cap on
the license fee, or a performance-bonus diminishing rate structure.
Economic activity within the PEZ is regulated solely by the Director, and no one else.
All economic activity occurring within the PEZ is public record, and all merchants and
individuals must post their balance sheets, income statement, and payment history of all fees to
the Director on line. All records are open and available to public inspection at anytime.
Any workers hired to work within the PEZ must pay hourly income taxes to the City at
the rate of 2%. All paychecks are posted on line and are public record.
Workers are all deemed employees, subject to mandatory w-2 wage withholding, payable
hourly to the IRS. All workers are at will, hourly employees, with no minimum wage rules, or
hourly limits or restrictions, meal and rest breaks, or overtime or wage and hour laws. There is
no workers' compensation system, or laws which apply in the PEZ, except at the sole discretion
of the Director. There are no labor unions. There is no collective bargaining. There are no
sexual harassment laws, discrimination laws, disability or accommodation laws, except at the
sole discretion of the Director.
Think of the incentives. The workers enjoy the ability to work, at a straight 2%rate.
Everyone knows what everyone else makes, so wage competition will be fair. Performers will be
rewarded with good pay, and will be sought after, creating upward mobility and pay raises.
Promotions will leave vacancies, which will need to be filled, and those competing for the open
positions will know the prior position pay rate so competition can fill the jobs, not cronyism and
connections.
The federal government will still get their pound of flesh(render unto Caesar, after all),
but there are no other taxes, such as state, county, sales, etc. The Director can spur economic
activity within the PEZ by luring businesses to the PEZ by offering a lower tax rate environment,
free of burdensome rules and red tape. There are no building permits or fees. Any structures
must only be approved by the Director.
There are no government bureaucracies intermeddling, slowing things down. There are
no power hungry government workers looking to enforce silly,job-killing rules or regulations. If
workers do not like it there, they can leave. However, all payroll information is public record. If
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an employer is not paying a fair wage, everyone will know it. If employers do not like it there
they can leave. If business owners do not like it there they can leave. One can invest capital,
create an asset, and rent it to a productive business. The Director can establish rents, leases, etc.,
at the Director's sole discretion.
This creates the incentive for the Director to provide a proper environment for the capital
investments,businesses and the workers. The Director still has to pay a license fee to the City,
and the Director needs economic activity to occur within the PEZ in order to fund the license fee,
so the Director has every incentive to address and meet all the needs of the workers and the
businesses within the PEZ.
Since there is no local government red tape, or delays, or committees, or DMV-like
indifference, and since there is but one person ultimately responsible to pay the license fee,the
Director can cut through the red-tape and solve problems without delay,decisively, and run the
PEZ however he or she sees fit.
Within the PEZ, no one can tell the Director what to do, or how to do it, or issue any
regulations or taxes of any kind. Only the Director can set such rules within the PEZ. No liens
can attach to any economic activity within the PEZ. No rule enforcement of any nature at all
can occur within the PEZ, save for legal dispute procedures as enforced by the
Commission. (More on this below).
There is no private banking within the PEZ. There is no fiat creation, or loans. The
Director alone is empowered to set the legal tender, whether it be currency, gold or silver coins
within the PEZ. Anyone wishing to conduct business within the PEZ, whether business or
employees within the PEZ, or customers who come into patronize the businesses within the PEZ,
can use the currency or gold and silver at the Director's sole discretion.
Currency for payment of employee wages is determined at Director's sole discretion. To
the extent wages are paid in physical gold or silver, the City agrees to indemnify and defend the
Director for all IRS actions of any nature whatsoever and to make good upon for any IRS claim
of withholding should then existing legal currency be devalued, collapse or hyperinflate.
The Director alone is responsible to measure economic activity in a manner determined
by the city prior to commencement of the auction. For example, if the PEZ is deemed a physical
product manufacturing zone by the city,then the economic value could be measured in gross
sales priced in then existing legal currency. If the PEZ were an agricultural zone, then the
economic activity could be measured in standard agricultural output terms, for example. Only
productive output is deemed economic activity. Any economic activity that is in turn invested
within the PEZ as a capital improvement is not subject to the licensing fee. There is no fee to be
levied upon capital investment,building of structures, construction of works of improvement,
etc. All works of improvement belong to the City at the completion of the PEZ. The bidder
would know this in advance of the commencement of the auction.
Again, think of the incentives. If the Director is sitting on a huge cash position from the
economic activity within the PEZ, some of the cash can be put to use for capital improvement,
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 10 of 15
0
thus minimizing the licensing fee owed to the City. The decision to engage in a capital
improvement rests solely with the Director, and not with elected, public officials who are corrupt
and will steer projects to cronys or otherwise enrich themselves at the public's expense. The
Director can either pay the license fee, or invest in a capital improvement. Either way, the
City gets the licensing fee, or the capital improvement. The economic benefit devolves to
the City, and does not leave the PEZ or the City.
The failure to pay the PEZ license fee in a timely fashion results in revocation of the
license without further notice or hearing. To the extent the PEZ license fee is unpaid, for any
reason at all, the next incoming PEZ license holder is obligated to pay forthwith the prior year
license fee or relinquish the PEZ license to the next highest bidder.
The PEZ license holder is not allowed to encumber the PEZ in any way shape or form to
pay the license fee.
So,why would one want to win a PEZ auction? Simple. Economic freedom. What
if Apple's CEO put up an Apple factory within one of the PEZ's? What if GM or Ford, or
Chrysler put up a factory within the PEZ?
What if a restaurant operator put up a restaurant within the PEZ? A movie theatre?
What if the Director was libertarian? Sure, there are constraints on vice, but what if the
Director allowed businesses to come pouring in, like a medicinal marijuana shop? Or an
internet-based college with minimal admission requirements? Or a drug and alcohol in-patient
rehab facility? Or a nursing home?
What if the Director allowed for controversial things, like a gay wedding chapel? Or a
Mosque? Or an Anti-American, hatred spewing, overthrow the government free speech think
tank?
Who cares? Is this not about economic activity, pursued with the desire for
freedom, as the Declaration of Independence and the US Constitution supposedly
guarantee? Why not let the market place sort it out, by creating a profit incentive free
from corrupt politicians?
Would not the City and thereby, the citizens, gain from many PEZ's? From the revenues
of the PEZ's, the City could then fund services to help the citizens„ right? If any of the citizens
of the City did not like the activity that was occurring within the PEZ, the citizen would be free
from going there, so what is the harm? The citizen could move away to another city and not be
bothered at all, too.
The citizens stand to gain the benefits from the economic activity occurring within the
PEZ. Is it not time we give some freedoms to the productive instead of incessantly focusing
upon the downtrodden and unproductive who only stand to benefit and not lose at all from
increased economic activity anyway?
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 11 of 15
The PEZ license holder basically gets to operate the PEZ as a sovereign economic zone,
with the upside economic benefits shared by the PEZ license holder and the City. Whatever
happens in the PEZ is free from all taxation of any form. That,I am certain,is the only
method to stimulate both job creation and increased productive economic activity.
The Director would also have to obtain a suitable police presence, and could either pay
for outside forces, or do it in house, or bid it out. What's wrong with that? Same for fire
protection,utilities, etc. All costs for the PEZ would be paid for by the Director. Hence the
Director would have every incentive to keep costs low, rather than the bloated system we now
have. If the Director was too cheap, and did not provide suitable services,business would either
flee, or not come in the first place. If there were crimes committed, the Director would have to
make good for the losses, or suffer revenue loss when the business owner left the PEZ, of from
decrease in economic activity occasioned by the public's perception of the increase in crime.
The PEZ's are one solution,radical I know,but still, something worth looking at.
a
D. Fourth,proper political reforms must occur, or else the system will once again
degenerate back into cronyism and kleptocracy.
This one is easy. Remove the revolving door between private enterprise and government.
Those drawn to private enterprise should stay where they thrive. Those who wish to serve,
should have no Eve-like enticements to stray from their choice to work in the public sector.
For those who chose government service, fine. But there will be no get-rich-quick
method to turn those years of government service into lucrative slush funds or a cushy private
position after leaving government service.
Similarly, those who wish to run a PEZ have to renounce all government benefits. There
is no way to double dip. Public pension retirees should retire,period. If they can work, then they
should not retire. Or if they do retire, they should not ask the taxpayers to fund their lavish
lifestyle while others are struggling. Enough is enough. Public pension retirees can still work
somewhere else besides the PEZ's if they wish.
Since there is transparency to all contracts, and all economic activity within the PEZ,
there should be no corruption, or almost none. If it emerges, then the citizens can vote the
governors out, and redo the offending contract where the corruption exists, since contracts are
limited to one year terms. Long term deals are only possible in the PEZ's, where maximizing
profit is the order of the day, not rewarding crony politicians and their enablers. No one is forced
to do business within the PEZ, so if there is corruption within the PEZ,the businesses and
employees will leave. No one gets to keep their capital improvement, so there is no incentive to
overdo things, with lavish, luxurious furnishings or wasteful expenditures. The City benefits
from the capital improvement no matter what. The graft, corruption, wasteful prevailing wage
schemes are eliminated. Union employees must produce value, or find that they have no work.
Those that are skilled, can freely engage in their craft, free from restrictive union bullying and
arcane,unproductive work rules.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 12 of 15
To the extent that the PEZ's prove workable, then they will increase in number and size,
based on eminent domain takings under the 5t"Amendment and the Kelo case. Where is the harm
in this? Turning unproductive land into productive land, employing the able-bodied, creating
revenue for the City, what is not to like? Fairness? Screams that the system will unfairly hinder
the downtrodden? How? More revenue to the City is like a big hit of crack to a junkie. The City
will spend and spend so long as revenue streams in. So what? If revenue keeps coming in, then
do not the citizens deserve to have more and better services, including to the downtrodden?
Raising revenues by increasing the incentives to the productive is what the USA is all about.
Who said a rising tide lifts all boats? Why not truly embrace the concept then?
Notably what will be occurring, is economic freedom. Freedom from corrupt
governments. The kind of freedom that only scares the elites, entrenched solely due to the
manipulations and class warfare. Freedom from stealth taxes like inflation, or fraud-like fiat
fractional reserve legal tender laws that only enrich the banker overlords.
Since there is no private banking allowed in the PEZ's, all merchants and businesses have
to survive based on provable methods and operations, and not from speculation or risk taking. If
lending occurs, it will be unsecured, non-recourse. Thus, there will be risk to the lenders. As
such, the lenders will have some skin in the game,but they will have no rights to seize property
or collateral. Who will lend then for capital formation, and deployment? Why, that is easy:
entrepreneurs, that's who. They will lend at higher rates, to reap a reward for the risk taken.
What is wrong with that? The alternative is that a business owner can deploy his or her own
capital,realize a reward, and not watch it all get confiscated and redistributed to the
unproductive.
The lenders will have to rely upon their own skill in selecting and managing risk, and not
from crony first-access-to-conjured-fiat schemes.
Where there is risk, there is reward. One need not take any risk, and one is free to do
business outside of the PEZ with all the attendant rules and regulations, and so-called
"protections" of the law. One can run to the safety of the government bosom. No one is forced
to transact within the PEZ. It is purely voluntary. If the PEZ proves unmeritorious, that is, the
Director fails to pay the license fee, and no one else wants in, then the whole concept can be shut
down in only one year with minimal loss.
However, if the PEZ concept proves workable, that is, the license fee is timely paid,
businesses are created and hire workers,who make money and then buy things and
support their families, while the City's coffers fill with 2% of the wages generated by the
yearly license fee and from the labor of the productive, then why not support even more of
these throughout the City?
Public union employees can still find work, but they will have to compete for it. If what
they do for a living adds value, then there will be a ready place for them to work in the system. If
not, oh well. Get on public benefits, then. Let the productive work in the PEZ's and support the
idle then. At least this system is something that it sustainable rather than the broken tax system
in place now that punishes productive economic activity.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 13 of 15
Since there is no effective means for the cronyism to survive, it will die off, once and for
all. The kleptocracy will also fail,because only meritorious businesses will survive. There will
be no government subsidies, or government choosing winners and losers. The Director can do
that, if he or she wishes,but only for those that choose to participate in that particular PEZ. If the
Director chooses to subsidize a business, fine. Who cares? The Director can make that choice,
but the Director is still responsible to pay the licensing fee. Again, it is a win/win for all
concerned.
If someone feels slighted, or that it is unfair in a particular PEZ, then they can ask the
board of governors to open a new PEZ for public bidding, and then make a run at winning their
own bid where they can be the Director of their very own PEZ. What's wrong with that?
E. The Commission
As for the Commission, this concept is critical to the success of the PEZ. Any system
of governance to succeed must have due process in place and provide the perception of fairness.
Otherwise,the productive will choose another location to take risk. Why take risk if there is no
guarantee of fairness based on due process?
The Commission is established as a dispute resolution tool. It is essential to the
perception of fairness and the right to due process for a grievance. While the profit motive is
powerful, those involved in the PEZ's must have a means to address inter-PEZ grievances.
The system I envision is modeled upon swift,yet fair process, from neutral,yet wise
judges. It starts with the jurisdiction of the Director who exercises jurisdiction over the entirety
of the PEZ, from top to bottom, including upon each and every person located within the PEZ.
All persons and businesses physically present within the PEZ consent to jurisdiction by the
Director and the Commission. No exception.
The Director sets rules and enforces them at his or her own discretion. If anyone inside
the PEZ disagrees with a rule, or enforcement activity by the Director, the Director and all
participants within the PEZ agree to resolve ALL disputes, of any nature whatsoever before the
Commission.
The Commission is comprised of five Sworn Judges, each of which has to have not less
than ten years of judicial experience as a bench officer. The costs of the salaries of the members
of the Commission are to be paid by the PEZ, offset against the license fee (part of the license fee
includes the costs for paying the Commission expenses, including salaries of the judges on the
Commission). The presiding judge in the County has sole discretion to appoint the five judges
who sit on the Commission. The five judges who sit on the Commission vote once a year to
establish a presiding justice of the Commission, who sits as presiding justice for one year. The
presiding justice determines the order of deciding disputes,which Commission member will
preside over the dispute, and in the event of disagreement, in any manner whatsoever,the
decision of the presiding justice controls. There are no appeals whatsoever. All Commission
hearings, meetings, of any nature whatsoever,will be open to the public and will be streamed in
real time,to the internet.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 14 of 15
All disputes must be in writing, and must be stated on a single sheet of paper, double
spaced, no exceptions. All disputes are posted on line, with no confidentiality provisions at all
allowed. All oppositions must be in writing, and stated on a single sheet of paper, double spaced,
no exceptions. All oppositions are posted on line,with no confidentiality provisions at all
allowed. The dispute will be set for hearing within one week of filing. All hearings will be
conducted in public, with no limitations as to attendance or use of cameras or technology. The
hearings will be streamed real time to the internet and a public viewing monitor, open to the
public and for which there is no charge at all to view. There is a one month statute of limitations.
If the dispute is not formally presented to the Commission in timely manner, it is deemed waived
forever with no recourse. There are no rules relative to lawyers, or admission to practice before
the Commission. A party to a dispute may retain a lawyer if desired. A non-lawyer may
represent a party before the Commission.
At least one, and as many as five members of the Commission will hear oral argument,
which is limited to fifteen minutes per side. The oral argument will be scheduled to be heard
within sixty days maximum from the date of submission of the dispute. The Commission will
render written judgment within one week from the oral argument. All decisions are final,with
no right of appeal. A dispute may be settled before a decision is rendered by the Commission;
however, all terms of settlement must be in writing and are published on line and part of the
public record.
The Commission is empowered to render any and all legal remedies, including payment
of money damages, or expulsion from the PEZ. In the event that the Commission adjudicates
that a criminal act occurred,then the guilty party will be taken into custody by the Director,
expelled from the PEZ, and remanded in custody to the San Bernardino County Sheriff, subject
to criminal prosecution in State Court at the discretion of the District Attorney. If the guilty party
is physically absent from the PEZ, the Commission can render judgment notwithstanding the
failure to appear by the absent party. All decisions will be posted on line, maintained by the
Director for viewing by the public.
The Director, in his or her sole discretion, may remove any person from the PEZ at any
time, for any reason or no reason at all, subject to review by the Commission pursuant to the
dispute procedure.
IV. Conclusion
So, there you have it. My proposed solution to the economic malaise stagnating any
economic growth in San Bernardino.
This is the framework, and subject to revision, and is a work in progress. Maybe we can
solve this mess together.
Private Economic Zones-A Proposal for the City of San Bernardino,to Revive Economic Activity,by Brian G.Hannemann,Esq. Page 15 of 15
i
Fire Safety
Salary/Benefit Annually
Base Salary $11,482,260
Bilingual Pay $6,829
8%Admin Captain Pay $11,078
Lead Paramedic Pay $109,810
FF II Cert $17,452
Fire Officer Pay $132,031
Chief Officer $26,558
$6,070
Arson Investigator
Haz Mat Specialist $5,312
Breathing Apparatus Pay $759
Uniforms* $64,401
Pension/Retirement Benefit $3,121,199
1959 Survivors Benefit $6,240
Cafeteria/Health Benefit $1,218,588
Health Insurance Stipend $10,000
Medicare $219,144
Vacancies $1,212,305
Total Salary/Benefits $17,650,036
Information based on 127 employees
1%w/o benefits= $124,214
1%w/benefits=$176,475
* 1 shirt/2 pants/work boots
FIRE SAFETY:
Special Assignment Pay
All employees assigned to the following duty shall receive special assignment pay at the
rate of $50 per month. The number of employees eligible to receive such pay shall be
determined by the City.
Eligible personnel:
1. Shift Arson Investigators
2. Certified Hazardous Material Specialists
3. Certified Breathing Apparatus Technicians
4. FLSA Statistician
The number of employees assigned to the positions at the time of the signing of the new
MOU is: (9) Shift Arson Investigators; (12) Certified Hazardous Material Specialists; (9) Certified
Breathing Apparatus Technicians; (1) FLSA Statistician.
Administrative Captain Assignment
Any employees in the job classification of Fire Captain shall be entitled to compensation
in the amount of eight percent(8%)over the assigned rate for his or her classification when
permanently assigned by the Fire Chief to a forty-hour administrative assignment work week.
Educational Incentive Pay
All members shall be entitled to receive in addition to their regular salary and as may be
appropriate, one of the levels of incentive pay as set forth below;
A. $50 additional compensation per month shall be paid each member who has a
Firefighter 11 Certificate issued by the State of California; or,
B. $150 additional compensation per month shall be paid each member who has a
Fire Officer Certificate issued by the State of California; or,
C. $250 additional compensation per month shall be paid any member who has a
Chief Officer Certificate issued by the State of California.
Bilingual Pav
Each full-time employee who meets the City's bilingual certification and eligibility
requirements shall be compensated at the rate of$50/month. The City shall reserve the right to
determine languages for which testing will be conducted.
Health Insurance Stipend
The City of San Bernardino agrees to provide full-time eligible employees who waive health
benefits an annual "Health Insurance Waiver Stipend" of$2,500 each December 151'.
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Police Safety
Salary/Benefit Annually
l
Base Salary $21,932,484.00
Bilingual Pay ($50 mo.) $13,800.00
Motor Officer Pay (Hazard)($50 mo.) $6,000.00
Post Basic ($200 mo.) $156,000.00
Post Advanced ($250 mo.) $327,000.00
Post Supervisory ($275 mo.) $79,200.00
Uniform Allowance $296,452.00
Pension/Retirement Benefit $6,117,528.00
Cafeteria/Health Benefit $2,216,286.00
Health Insurance Stipend $42,500.00
Medicare $340,452.00
Police Vacancies $1,740,641.00
Total Salary/Benefits $33,268,343.00
Information is based on 246 employees
1%w/o benefits=$230,986
1%w/benefits =$332,683
'Y
POLICE SAFETY:
QPeace Officer Standards Training (POST)
All police officers shall be entitled to receive in addition to.their regular salary and as
may be appropriate, one of the levels of incentive payment as outlined below:
A. $200 additional compensation per month shall be paid each police officer who
has obtained a POST Intermediate Certificate; or,
B. $250 additional compensation per month shall be paid each police officer who
has obtained a POST Advanced Certificate; or,
C. $275 additional compensation per month shall be paid to each police officer who
has obtained a POST Supervisory Certificate.
Bilin ual Pa
Each full-time employee who meets the City's certification and eligibility requirements
shall be compensated at the rate of $50/month. The City shall reserve the right to determine
languages for which testing will be conducted.
Uniform Allowance
F
Once each fiscal year, each employee in the bargaining unit shall receive an annual
uniform allowance of$950 to be paid in a lump sum amount during the first pay period of March.
`i New employees must wait until the first pay period of March to receive their
annual uniform allowance.
Health Insurance Stipend
The City of San Bernardino agrees to provide full-time eligible employees who waive health
benefits an annual"Health Insurance Waiver Stipend" of$2,500 each December 15`h.
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ALTERNATIVES CONCERNING SECTION 186
I
• Take no action concerning 186
• Act to defer taking action on 186 until after Committee's initial report to the Council
• Recommend that the Council retain section 186 without change.
• Recommend to the Council that the existing language of 186 be retained,adding one or
both of the following as section 187 under Article X of the Charter:
• 187 The provisions of section 186 are all subject to the provisions of California Labor
Law.
• 187 Until such time as San Bernardino has a 20%reserve,all provisions of section
186 shall be suspended and the salaries of police, fire,and emergency safety
personnel in shall be fixed by the Council by resolution after collective bargaining
under California labor law as appropriate.
• Recommend to the Council that section 186 be retained,but remove all provisions concerning
details of overtime pay,work periods,work week,,& special compensation, leaving these up to
resolution by the Council following collective bargaining under California labor law as
appropriate
• Recommend to the Council that section 186 be replaced with a provision such as either of
the following:
• The salaries of police, fire,and emergency safety personnel in shall be equal to the
arithmetic average of the monthly salaries,paid or approved for payment to local safety
members of like or most nearly comparable positions of the police and fire(and/or public
safety)departments of ten cities of California with populations between 100,000 and
250,000. These 10 cities shall be those remaining after the names of cities are stricken on
an alternative basis by a representative of the city on one side and a representative of the
employee organizations on the other. The details of this procedure and for any additional
special salary shall be as fixed by the Council by resolution after collective bargaining
under California labor law as appropriate.
• The salaries of police,fire,and emergency safety personnel in shall be fixed by the
Council by resolution after collective bargaining as appropriate under California labor
law as appropriate.
• Recommend to the Council that section 186 be repealed.
X&P-
5/6/2014 Proposed Additions to
San Bernardino Charter Reform Principles&Objectives
1. Flexibility. To the greatest degree possible,the City Manager&Council should have the
flexibility to make decisions and to govern the City under the Charter. Removing
excessive limitations on that flexibility should be opportunities to improve governance.
2. PRINCIPLES & STANDARDS. THE CHARTER SHOULD SET FORTH GUIDING
PRINCIPLES AND STANDARDS,NOT DETAILED RULES AND PROCEDURES.
3. ENABLING. THE CHARTER SHOULD BE DESIGNED TO ENABLE THE CITY
TO OPERATE IN AN EFFICIENT,BUSINESSLIKE MANNER.
4. Economy. The Charter should be as economical in wording as possible while keeping
the meaning and legal parameters clear.
5. Future Orientation. The Charter should be worded so as to apply to future City
administrations,not just to deal with current issues.
6. Contemporary Standards. Language, such as gender neutrality, should be in
conformance with contemporary standards.
7. Transparency. The Charter should be clear to the well-informed layperson,not
excessively legalistic. The Charter is to be a way that the public can understand how the
City operates,and the powers and limitations of those who govern it.
8. Charter Reform Process. The Charter Review Committee working to advise the City
Council should utilize the following principles:
a. Input from those working within the City family should be sought out as those
who work in city government have a unique perspective on the Charter.
b. San Bernardino's Charter should be uniquely adapted for this City and it's needs.
C. Charters of other Cities should be reviewed and taken into account. Other cities
have weighed,considered and analyzed many of the same issues as those
confronting San Bernardino.
d. The Committee should seek wide and diverse input and evoke debate and
welcome disagreement in its deliberations;however,it should attempt to obtain
wide consensus for it's recommendations. Charter changes should be able to draw
wider support from the community than is normally required to win an election.
e. Ongoing,frequent,regular reviews of San Bernardino's Charter should be made
to the end that it will be, and continue to be,an effective,well written,and well
organized document.
CONSTRUCTION AND INTERPRETATION
(Add Section)
The language contained in this Charter is intended to be permissive and enabling rather
than restrictive or limiting, and shall be liberally and broadly construed in favor of the
exercise by the City of its power to govern with respect to any matter which is a
municipal affair.
F'
1
V
1 STATEMENT ON PRINCIPLES OF CHARTER REVIEW -REV. 1
2
3 We affirm that our city must provide the full array of services that make it a place
4 where all residents can experience and enjoy physical and emotional safety,
5 cultural and educational enrichment, recreational and entertainment opportunities.
6 We also affirm that our city must provide a climate for economic well-being and
7 growth which includes attracting new business and new residents.
8
9 To that end we affirm that our city must treat all of its residents and institutions
10 with fairness and equality. We place high value on the loyalty and service of all
11 city employees and believe that they must be treated fairly and equitably.
12
13 We firmly believe that for city employees to enjoy a sense of security in the
14 immediate and long-term future our city must emerge from bankruptcy as soon as
15 possible and restructure its fiscal position. Thus, no individual or employee
16 association or labor group should be accorded preferential treatment in the Charter
17 or in practice.
18
19 Rabbi Hillel Cohn
f 20 May 6, 2014
21
List of Some Section 186 Issues
5/3/2014
1. §186 assures the citizens of San Bernardino that safety employee salaries will not be lower than
10 similar sized cities.
2. The"average salary"certainty of§186 may assist the City in hiring and retaining quality safety
employees and minimize San Bernardino being just a training ground for safety employees who
then go to other cities.
3. §186 may help keep"politics" out of safety employee salary determinations.
4. Any repeal or substantial amendment of section 186 may have the following consequences:
a. Major battle by safety employees to its repeal being adopted by the public;
b. Adverse consequences on the moral of safety employees;&/or
C. Affirmative consequences on the moral of other city employees.
5. §186 significantly decreases the amount of flexibility the Mayor,City Manager& Council would
otherwise have to make decisions and govern the City under the Charter. This conflicts with the
Charter Reform Principles&Objectives this Committee established,
6. §186 may require payment of salaries when the City has insufficient funds to do so taking into
consideration all of the other needs of the City;however,the actual dollar impact of§186 on the
City's finances may not have been too great over the past few years. (Fire budget has increased
from 22.12%of total city budget in 2009 to 25.47% in 2014; and total public safety expenditures
have increased from 64%of the total in 1994/95 to 68%in 2013/14-which figures appear to
exclude what would have been paid to PERS in 2012/13 but for SB stopping paing PERS for that
year because of it's financial situation.
7. §186 sets forth in great detail rules and procedures relative to safety employees which no other
City in California has in it's charter. These rules&procedures can only be changed by a vote of
the public.
8. No other California city has a charter provision which sets by formula, or manner of calculation,
the salaries of it's safety employees. The only California city charters which have any specific
public safety employee salary standards are as follows:
(a) Stockton's charter requires that firefighters starting salaries shall be at the step higher than
that received from the fire district. (I'm not sure what that means.)
(b)Fresno's charter requires that city employees be paid not less than the prevailing wage paid in
private employment in Fresno.
9. Collective bargaining is the proceddure used for determining safety employees salaries in all
other cities in California.
VEY
D
Correspondence to
Charter Committee
D
CRITICAL THINKING
C N
F T S t l TIN 1 AT THE CRITICAL TIME"
May 12, 2014
City of San Bernardino, California
Honorable Mayor Carey Davis
City Manager Allen Parker
City Attorney Gary Saenz
Charter Review Committee members
(Delivered through the City Clerk, Gigi Hanna)
Re: Follow up on a Request from the Charter Review Committee Chairperson for Additional
Comments Regarding the San Bernardino City Charter reform
We understand that the Charter Review Committee, through its Chairperson, has requested further input
from FTI Consulting and our clients regarding City Charter revisions. Our comments are summarized
below.
• Section 186: We have been informed that the Charter Review Committee, at its May 6, 2014
meeting, voted to recommend to the City Council that Section 186 of the City Charter be
eliminated. We support this recommendation.
• Water department: As our May 2, 2014 letter states, we believe that the City Charter currently
creates restrictions on any potential outsourcing, privatizing or public-private ownership or
management of the Water Department. If the City concurs that revisions to the Charter are
warranted in this area, the City Attorney is best suited to draft specific language changes.
We further encourage the City to start exploring alternative ownership and/or management
structures for the Water Department now, as it develops its long-term financial strategy and a
bankruptcy exit plan.
We appreciate this opportunity to provide further feedback.
Sincerely—
(/,7 t/,a1�ll
FTI Consulting, Inc.
Ar-
kw)
About FTI Consulting
FTI Consulting,Inc.is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal,regulatory
and economic environment. FTI Capital Advisors conducts business as a registered municipal advisor under the name Public Sector Solutions.www.fticonsultina.com.
D
Minutes Packet
(Draft Minutes and handouts
from 5/6/ 14 meeting)
Volunteer Citizen Based Charter Committee
Meeting 5—Tuesday, May 6, 2014
DRAFT Minutes
The meeting came to order at 5:30 p.m. in the EDA board room, with Committee members
Casey Dailey, Dennis Baxter, Gary Walbourne, Hillel Cohn, Michael Craft, Hardy Brown,Phil
Savage,Tom Pierce and Gloria Harrison Present. Also in attendance were City Attorney Gary
Saenz, City Manager Allen Parker, Facilitator Bill Mathis (arrived late) and City Clerk Gigi
Hanna.
Committee chairman Phil Savage called the meeting to order, Clerk Hanna read the roll call and
the group recited the pledge of allegiance.
Chair Savage said that he had a few more items to add to the Principles and Objectives list the
committee had adopted at its April 29 meeting:
• PRINCIPLES & STANDARDS. The Charter should set forth guiding principles and
standards,not detailed rules and procedures
• ENABLING. The Charter should be designed to enable the City to operate in an
efficient,businesslike manner.
II
He asked that the matter be agendized for reconsideration at the May 13 meeting.
i He discussed the procedures the committee would be following in the remaining two meetings.
He said the May 13 meeting would be where the committee would be finalizing its
recommendation for the Council and that the group may need an additional meeting to work on
the presentation. The committee decided that if it needed an additional meeting, Saturday, May
17 at 1 p.m. would be the preferred day.
After questions from committee members, the City Attorney advised the committee that May 19
is the deadline for the committee to make a recommendation to the council, that specific
language(for any proposed Charter amendments) does not need to be finalized by that date.
There were no requests to speak under Public Comment.
ACTION ITEMS
1. Approval of Minutes.
1
The committee approved the minutes from Meeting Four, with minor changes on page 9 and
page 11.
2. Input from the department heads, city commissioners, employee groups and City Manager
on Charter changes that will most help the City financially.
Allen Parker,passed out documents that had been requested at the previous meeting to explain
the benefits for fire and police. (Documents attached). He said the documents were self-
explanatory and provided no further report on them.
Parker said police and management are still negotiating and have not resolved any language to
present to the committee, which he hoped to have something to present to the committee at its
next meeting.
Regarding Presentation by the Firefighter's Association on Charter Section 186. Kenneth
Konior said he was not at the meeting to represent Local 891, the Firefighter's Association,but
rather at the request of Committee Member Gary Walbourne, who wanted him to comment on
some of the data Konior has released via social media. Konior said he had analyzed Section 186,
using numbers he obtained from publically available documents available on the city web site,to
counter what he said described as one-sided media coverage of the topic. He said one reason that
Local 891 was unable to make a presentation was pending litigation and the gag order placed on
parties involved in the bankruptcy.
Konior said his findings were in the document handed out by Steve Tracy, Firefighter
Association President, at the committees April 29 meeting, entitled. Charter Section 186;A
Fire Department Perspective."
Konior then discussed various aspects of the document. He said that since the bankruptcy,no one
in public safety has received any kind of a raise. Any fractional percentage of increase or
decrease in salary under the auspices of Section 186,there's also been a significant concession to
offset what that was,he said. He said that despite media coverage highlighting the$1 million
raise given to public safety,his part of that amount was 17-cents-per-hour and this year it was 6-
cents-per-hour, offset by a 14 percent concession. Konior said the same had been true for the past
four years. He said it isn't always a raise, that in 2010/11,his position received a pay cut.
He said that since 2009,the fire budget, like the City's,has steadily declined while call volume
has increased. Dailey asked what he attributed the 25 percent increase in calls over the short
period of time to and Konior said it was unclear. He mentioned the Citygate Associates analysis
of the department, and said that he believed the answers would be in that study, due to the
Council in June.
2
He said that 186 does not tie management's hands, and that the increases received over the last
few years, offset by concessions defeats that argument. Dailey pointed out that of the 56 cities
used in the Section 186 salary-setting process, eight are in the Inland Empire and asked if it was
fair to assume that San Bernardino would need to compete with Bay Area cities to attract
employees?
Konior said he did a local total comp study and that compares San Bernardino with other local
cities. That considers not just salary,but fringe benefits,health benefit,post-employment health
benefits—benefits that other local cities provide that San Bernardino does not. He said he did a
study based on his position and he came out near the bottom,when compared to similar positions
in local cities. Did it for himself and said he come out near the bottom when compared to local
departments.
Craft asked for clarification about the formula for determining the cities used in the salary
survey.
Helen Tran, Human Resources Division Manager, said the city uses a list of cities with 100,000
to 250,000 populations,with 57 cities meeting that criteria this year. Once the City completes its
survey of the 57 cities, the 10 in the middle are chosen to determine the Section 186 salary level.
Konior said he had analyzed and compared the hourly wage for entry level positions for local
cities, and added San Bernardino's EPMC concession into the equation. Harrison questioned
why the numbers did not include the median income for city and county. Pierce said the numbers
do not discuss what the average firefighter earns,just entry level, and no discussion of overtime.
i
In response to a question by Brown regarding whether the hourly wages were based on a 40-hour
or a 56-hour work week, Konior said it was the latter and explained that cities use the total
monthly hours to determine hourly wages.
He discussed back-fill vs. overtime costs and said that overtime involves cost recovery
opportunities; that back fill is what the department does to maintain daily operations.
Pierce asked if backfill is paid at standard rate and Konior said that depends on the work period
versus work week. Committee members asked if backfilling was common in the industry and
Konior replied that it is.
He said a work period can be anywhere from 7 to 28 days, and the City went to a 24-day work
period about five years ago; for any hours worked in excess of 182 hours, fire personnel incur
premium pay. The issue is currently in litigation,he said. He explained how firefighters' shifts
work in the city. He said it is more cost effective to back fill rather than hire more people.
3
Harrison asked what concessions
included. Konior said it included in the 2009/10 year, a 10
percent negotiated concession, and the next year it was imposed, leading to a$1,432-per-month
salary deduction from February through June 2011.
Konior explained the reason for specific staffing levels and response times within four minutes.
He said he doesn't know how often the City department meets that time factor,but expected that
the Citygate report will cover that. He pointed out several (NFPA 17 10)benchmarks for proper
fire response times.
Baxter asked how many cities local cities pay the full 9 percent employee share of PERS. Konior
said Redlands,Riverside, Corona and Colton. Redlands Fire agreed a few years ago to the pay
the employee share,but it was introduced incrementally over several years, in exchange for
longevity pay. Baxter asked if that agreement had come via collective bargaining and Konior
said it had.
Craft discussed an incident in his neighborhood from five years ago,when a young boy was
trapped on the second floor of the home and said he is struggling with a way to get the extra
firefighter on the truck to avoid similar situations. Konior said that in a life-safety situation,
whether there are three or four people on scene,they will go into the house.
Cohn asked what the appropriate number of stations are for the city; Konior said he expected the
Ic Citygate study to have that estimate and he anticipates that the consultant will recommend more
stations. There was discussion of the staffing levels of the city's twelve stations.
Craft asked about whether the city could forecast where the need for fire service is, and Konior
said there is no way to anticipate that.
He closed his presentation questioning the goal is for repealing Section 186. He questioned the
consequences of such a move and said he doesn't believe it will cause the city to become solvent,
get potholes filled, street lights working, improve the organizational structure of the city or make
employee negotiations simpler.
Parker said he wanted to respond to the presentation from a manager's perspective, and said that
fire suppression is risk management and,risk management always comes down to what one can
afford. He has asked the consultant to look at what the minimum number of stations the
community can supply. He said the city cannot afford the ideal model in any budgetary
circumstances and it is because the city has been dealing with ideal models that it finds itself in
its current fiscal situation.
He said one difficulty with this particular department is the number of EMS/medical service calls
received, about 30,000 calls annually and about 85 percent of the department workload. He said
offering the option for others to bid on providing EMS service would free up the fire personnel
to do fire suppression.
C 4
There is a lot of spectrum to look at this through,not just a Section 186 issue, except that 186
constrains us from contracting for services. It is beyond what people get paid, the overtime being
paid,he said. It needs to be put in the context of what you can afford; it is a much broader picture
than what level of raise they got over the years.
Dailey asked if the Charter forces the emergency service to be under the auspices of the FD.
Parker said legal opinions from the previous City Attorney maintain that the Charter language
precludes the city's ability to contract out, or even ask for an RFP to do so. It also restricts the
length of the shift. He said he has encouraged city fire to go to a 72-hour shift, such as that
implemented by CalFire, which would reduce staffing from 133 to 106,just on the basis of the
shift. He said that is a management decision, and something to be negotiated,but that the legal
opinions about Section 186 preclude him from even bringing the subject up.
Dailey said that collective bargaining in other cities offers the same kind of negotiation based on
salary surveys and asked whether modification or removal of Section 186 would do anything to
not make San Bernardino average anymore.
Konior said he is assuming that there is negotiation going on. He said his understanding of how it
has worked in the past 7 years is that one side hires lawyers to push a piece of paper at the other
side, and say this is what we're taking from you this year. There is a fear that if we lose that
Charter protection,we'll be the lowest paid fire department anywhere.
Walbourne asked if 14 more firefighters and got rid of all the overtime,but Konior said there are
several considerations and it is not an easy answer.
Parker said there are ways to end up at the same place and that salary levels can be handled in
negotiation it does not need to be cemented in the Charter.
Baxter said he was struck by how miniscule the raise Konior had mentioned receiving and noted
that Section 186 had not benefited him. Konior countered that it had benefited him in the sense
that it kept salaries average and stable,whether times are good or bad.
Cohn asked if surrounding agencies worked with city fire and if it is figured into response times.
Konior said there are Mutual Aid Agreements and referred more questions to the fire chief.
There was a question about the acceptable level of risk and Parker said it is a matter of the
community deciding what it wants and what it can afford. He said is comes out in a political
process, and a community process,with risk management informing management decisions.
He said in his personal opinion fire is best presented on a regional basis. He said there are several
deployment models that can be considered.
5
Craft asked Parker if in the Ci tYg ate study would consider paramedics-only response for medical
emergencies. Parker said there was already a recommendation that if the city decided to stay in
the EMS business, the city needs to go back to two-man trucks with smaller vehicles for those
kind of calls because 30,000 annual EMS calls are wearing out fire trucks.
Pierce said what the average total income of a firefighter was in 2013. Parker said he would
provide that, with the names removed. He later passed out a document with that information.
(Document attached)
3. Entertain additional specific proposals from Committee members for Charter review
Nothing was proposed by Committee members.
4. Discuss and deal with"now"vs. "later"categorization and priority of consideration of
Charter change topics amongst the "now"category.
Nothing was changed regarding prioritization of Charter change topics.
5. Discussion and consideration of the Charter discussion topics in order of their priorities
• Charter Section 186
Savage suggested no one put a motion on the floor regarding 186 until everyone had had a
chance to present their comments. He passed out a list (entitled List of Some Section 186 Issues,
attached) of what he considered were benefits and drawbacks of Section 186.
Brown's grandson read a prepared statement regarding repealing or suspending Section 186 for
four year:
Ever since this committee was put into place the BIG ELEPHANT in the room has been
Section 186 To use the elephant as a metaphor for 186, when we brought it into the
house many years ago it was small and seen as a remedy to our public safety problems in
the city for recruitment, retention, and fair compensation for our neighbors who were
putting their life on the line everyday they left home for us the citizenry of San
Bernardino. As the years went by we have seen this elephant/186 grow to eat up 68%to
72%of the budget. This has reduced our ability to fairly allocate resources to other
services that we expect our city government to provide. It has forced us to cut down on
other employee services and compensation just to feed the elephant. It has not made us
safer nor improved moral to the staff as evident of many past votes by the association
members against former chiefs and the city elected officials.
As a matter of fact the elephant 1186 has caused our other employees to be treated in a
disparate manner. I do not want to place policies into law that has the effect of
discriminating against an employee population that is comprised of mostly women,
Blacks, and Latinos.
6
I
None of these other employees in our city get their compensation placed on automatic
pilot with the highest income cities in the state. Are our other employees less valuable
than them?
This elephant/186 has outgrown our ability to be managed by the elected leaders we elect
to run our city. I saw this firsthand when the council was wrestling with reductions in the
budget for the city and had to by the Charter allocate $1 million dollars to public safety.
It made no sense to me then and not now. They wanted to do the right thing for the city
but we the voters had brought this elephant/186 into the Charter and they could do
nothing. We tied their hands.
We even recalled some people from office because of their inability to manage this city so
in my mind, we have an obligation to remove or suspend this elephant/186from the
Charter before it destroys the city. Let us return employee associations rights to negotiate
for these 186 provisions with our paid management staff with council oversight and
approval.
I am not advocating and never will call for reductions in employee pay, if we can pay, but
that is something our elected officials must consider based on the economic conditions of
the city's ability to pay and the economic conditions of the current times.
I must say the police association, if my information is correct, is to be applauded for their
understanding of the financial situation of the city and state and making concessions
when they had no legal obligation to do so. Their position could have been,your
bankruptcy is your problem,just give me what is legally mine under the Charter passed
by the citizens. As a former member of International Brotherhood of Electrical Workers
and United Steel Workers of America I know that is the position I would have advocated.
It is my position to let the voters in on this conversation on whether to repeal or suspend
this section of the Charter. If they repeal then our elected officials will sit down at the
negotiation table with the association for these same issues found in Section 186
If it were suspended for four years it will allow our elected officials to sit at the
negotiation table with the association to discuss the same issues in 186 and we would
then see how much the public associations understand the city's financial crises.
The current situation has produced villains on both sides of this issue. I think this will
provide us with a win-win opportunity for the taxpayers and those we elect. There is
mistrust on both sides and we must give our newly elected leaders an opportunity to lead
and build trustworthy relationships with our support
7
Baxter said he agrees that the elephant in the room has been fed until we are no longer able to
g p g
feed it,but he thinks something needs to be done on a permanent basis. He said it sounds t him
like Section 186 doesn't do much for fire and said he thinks collective bargaining is the tool to be
utilized in order to keep employees.
Pierce said he is uncomfortable with determining salaries differently for different groups of city
employees. He called San Bernardino the outlier, which of the 22 charter cities reviewed,none
have a 186-like automatic adjustment system for salaries.They all use collective bargaining, and
they are average,he said. It is hard to envision a circumstance where police and fire wouldn't
effectively negotiate. People have said they like being a charter city because they like control
over the decisions,but essentially we cede control to others through Section 186.
Pierce said that having reviewed earlier budgets,he does not believe that Section 186 was the
major factor in the city's financial problems,but rather generally weak budgetary practices. He
said the Council needs to manage the budget more effectively and needs more flexibility to do
SO.
Harrison said the Council and Mayor needs as much flexibility as possible because they are the
ones we elect and are supposed to keep accountable. As a city, we have to determine what our
priorities are and I don't think we've had that conversation, at least not lately. I am encouraged
by the activity in the city right now, of neighborhood organizations talking about what is needed
in the community and they are basically saying what they want is services; I see Section 186 as a
deterrent to that. She said the language of the Charter and legal opinions that have constrained
the city need to be studied.
Craft said San Bernardino can create revenue by being a safer city. He said they do what they
can to increase public safety and get the procedure out of the Charter. He said he wanted to think
about the opportunities on the table and said he was not inclined to repeal 186 in its entirety. He
said he believes it can be modified and made more acceptable to everyone.
Cohn said the committee needed some kind of framework for their decision making and read his
Statement in Principle of Charter Review:
We affirm that our city must provide the full array of service that make it a place where
all residents can experience and enjoy physical and emotional safety, cultural and
educational enrichment, recreational and entertainment opportunities. We also affirm
that our city must provide a climate for economic well-being and growth which
includes attracting new business and new residents.
To that end we affirm that our city must treat all of its residents and institutions with
fairness and equality. We place high value on the loyalty and service of all city
employees and believe that they must be treated fairly and equitably.
8
We firmly believe that for city employees to enjoy a sense of security in the immediate
and long-term future our city must emerge from bankruptcy as soon as possible and
restructure its fiscal position. Thus, no individual or employee association or labor
group should be accorded preferential treatment in the Charter or in practice.
Cohn said he is not sure whether Section 186 is a service to public safety employees or not,but
he is concerned that all city employees have equal opportunity and be treated equally in the
collective bargaining process. He said some would fare better than others in that process,but that
that is the nature of collective bargaining. Tying the hands of elected officials on something that
has such tremendous financial implications,by not allowing for an open negotiating process,
does the employees and citizens a disservice, he said.
Walbourne questioned whether taking out Section 186 would save the city money. He said he'd
like to see the Citygate report first because it may have insights into what they need to know to
make an informed decision.
Dailey said he agreed the council should have full responsibility for the budget and that is what
they were put there to do. Public safety plays an important role in attracting business,but so do
school districts,parks, streets, and libraries in improving the quality of life. He said there is too
much procedure in the Charter. He said he has not yet heard how removal of Section 186 would
have a tremendously detrimental effect on public safety. This is focused around salaries,but
when looks at the it from a management standpoint, there are other tentacles that extend Section
186 into other areas that were never anticipated when it was first adopted. He said the only way
to get to a level playing ground is for there to be a clean removal of Section 186 and replacing it
with collective bargaining.
Savage said he is convinced that Section 186 has very little to do with the current financial woes
of the city and may or may not have financial consequences. He said the city should be run
effectively as a business with management control, a problem under Section 186. Section 186
does not just fix the salaries,but it has extensive detail on staffing hours and that kind of detail
does not belong in the charter he said. He said that the committee had adopted the principle that
the Charter should be flexible, and Section 186 does not offer that. He passed out some
alternatives the committee could consider, in a document entitled Alternatives Concerning
Section 186(attached).
Those alternatives ranged from taking no action, deferring action until later, or recommending
the council retain 186 with no change,to recommending adding a new section(187)to the
Charter; to repealing it.
Brown made a motion that the city council place the repeal of Section 186 before the voters on
the November 2014 ballot. The motion was seconded by Baxter.
0 9
Walbourne said he didn't see why the committee couldn't wait until the Citygate report is
complete.
Craft said the first paragraph of Section 186 could be modified to meet the needs of the majority,
rewording it to get the procedures out of the process and give the council and city manager the
flexibility needed. He said he still was not leaning toward repeal.
Craft suggested new wording: "There hereby established for the City of San Bernardino a basic
standard for fixing salaries, classifications and working conditions of the employees of the city
of San Bernardino. The Mayor,the City Manager and the Common Council will have the
responsibility over these department heads."He said he would work on the language and provide
it to Hanna to distribute to the committee in time for the next meeting.
Dailey asked the city attorney how much the legal opinions bound to 186 are affected by tweaks
in the language. Saenz said to the extent that a section is in the charter, it is subject to
interpretation and reinterpretation and that the way to change that is to eliminate it or to try to
redraft it in the clearest terms that are not subject to so many various interpretations.
Walbourne asked if repealing Section 186 would save the city money. Parker said the
constraining part of Section 186 is whether the city has an ability to contract for similar services
and, as previously interpreted, the city does not. He said that, as example, if the city contracted
with AMR for emergency medical services, it might not save money but there would be a freeing
up of fire personnel to fight fires, which addresses the issue of risk management. He also said
that he is constrained from asking for a proposal for fire suppression service from county fire or
CalFire,based on interpretation of Section 183.
Savage asked if the flexibility Parker said he needed would require repeal of both Section 186
and Section 183. Saenz said there may be other sections in Article 10 other than 186 that may
need to be dealt with as well.
Parker said that it was the staffs desire that all ambiguity be removed from the Charter so that no
one has to refer to anyone's legal opinions. To that end,he suggested that the committee look at
Charter Section 180 et. seq. to give management the greatest flexibility.
Dailey asked if the city had been sued over collective bargaining and Parker said yes—most
recently by fire fighters in connection with the unilateral take of benefits and requiring fire to pay
a greater degree of their retirement costs. Fire personnel sued, claiming it was a violation of the
Charter and won. The issue is currently tied up in the bankruptcy case.
Cohn said that the charters of Anaheim and Riverside make no mention at all of police and fire
services. He suggested that Article 10 could simply state that the provision of police, fire and
emergency medical services should be determined by Mayor and Common Council.
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Savage said Article 10 could be agendized for discussion at the next meeting.
After further discussion about getting suggested verbiage from the City Attorney for replacement
sections, Harrison called for the question. The committee voted 7-2,with Craft and Walbourne
voting no, to recommend that the City Council place the repeal of Section 186 before the voters
on the November 2014 ballot.
The meeting adjourned at 8:45 p.m. The next meeting is set for 5:30 p.m. Tuesday, May 06,
2014 in the EDA board room.
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