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HomeMy WebLinkAbout03.C- Progress Report for Charter Review Committee 3.0 DOC ID: 4312 A CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION Report/Information From: Georgeann "Gigi" Hanna M/CC Meeting Date: 02/29/2016 Prepared by: Georgeann "Gigi" Hanna, Dept: City Clerk Ward(s): All Subject: Progress Report of the Charter Review Committee (At Meeting of February 16, 2016, Item Continued to February 29, 2016) (#4312) Current Business Registration Certificate: Not Applicable Financial Impact: None Motion: Receive and file. Synopsis of Previous Council Action: The Mayor and Common Council established the Volunteer Citizen-Based Charter Committee ("Charter Committee") in March 2014. The Charter Committee was originally asked to develop initial recommendations for amending the City's charter in time for the November 2014 general election. The authorizing resolution contains no ending date for the Charter Committee. In May 2015, San Bernardino filed a Plan of Adjustment with the U.S. Bankruptcy Court in an effort to emerge from bankruptcy. The Plan of Adjustment (or bankruptcy recovery plan) identified the City's charter as a barrier to efficient, effective government because it is overly complex, hard to understand, and contains elements that are inconsistent with best practices for modern municipal government. Subsequently, the Charter Committee has continued its work to develop recommendations for a new or substantially revised charter that reflects the principles of good governance and meets the needs of the community. The Charter Committee has been meeting approximately twice per month since May 2015 with the goal to provide recommendations to the Mayor and Common Council by April or May of this year. The Charter Committee provided a progress report to the Mayor and Common Council on September 21, 2015. The progress report included information on the need for charter reform, the role of the Charter Committee, the Committee's approach to its work, and several preliminary recommendations. The Committee also reviewed the timeline for completing its work. This progress report contains an update on the Charter Committee's actions since September. Backqround Public Education and Outreach Efforts Beginning in July and continuing through September 15, 2015, the Charter Committee 3.0 4312 sought public input through a survey made available online and in print. A total of 440 complete responses to the survey were submitted. Although the survey gauged public opinion, it was not a randomized sampling of voters, and did not contain any background or educational information about charter issues and concerns. The summary results are as follow. • 92% of respondents indicated the charter should be revised (51%) or replaced (42%). Only 8% indicated the charter should remain unchanged. • 53% of respondents indicated support for San Bernardino remaining a charter city. • 46% indicated preference for a council-manager form of government where the City Council sets policy and the policy is implemented by the City Manager as the chief executive officer. However, approximately 30% reported they were unsure. • A majority of respondents favored retaining the City Attorney, City Clerk and City Treasurer as elected positions (62%, 58% and 57%, respectively). • 79% of respondents favored having the Mayor directly elected by voters, instead of being selected by the City Council. • 65% of respondents indicated the Mayor should be responsible for intergovernmental relationships and be recognized as the head of the City government for ceremonial and other purposes, but that the City Manager should be responsible for administrative functions of the City. • 74% of respondents favored consolidating City elections with those for state and federal offices. In November 2015 the Charter Committee held three public forums in three different wards. The purpose of the public forums was to provide education about San Bernardino's charter reform efforts and engage participants in sharing their opinions on the preliminary recommendations presented to the Mayor and Common Council on September 21, particularly those related to governance. A cumulative total of approximately 85 participants attended the three forums, not counting Charter Committee members, staff or School District personnel. Common themes aggregated from input received during the three public forums include the following. • The Mayor should be allowed to vote. • The Mayor should continue to be elected at large. • To avoid tie votes, changing the number of wards is preferable to adding a Council member elected at large • More participants favored reducing the number of wards over increasing them • The City Attorney, City Clerk and City Treasurer should be appointed, not elected. • There was consensus that charter reform is necessary. The Charter Committee has scheduled additional public forums to be held in the remaining four wards on February 10 (Ward 3), February 22 (Ward 5), February 24 (Ward 2) and February 25 (Ward 7), and appreciates the collaboration with the San Bernardino Unified School District in providing locations and staff support at these events. The additional public forums will follow a similar format and seek input on the same questions as those held in November. 3.0 4312 Since July, members of the Charter Committee also have provided presentations to a variety of community groups, and are continuing to respond to requests for such presentations. Charter Development On December 29, 2015 the Charter Committee completed its work on the charter "skeleton." The charter skeleton is an outline of the key elements, ideas and principles to be addressed in the City's charter, including an overall governance structure. The Charter Committee discussed the advantages and disadvantages of becoming a general law city, and determined that remaining a charter city is in the best interests of the community. The Committee also discussed whether the charter should be substantially modified or completely re-written. In order to recommend a charter that reflects best practices consistent with modern municipal governance, the Charter Committee has decided to propose a completely new charter instead of recommending numerous amendments to the existing charter. The Charter Committee continues to use a variety of resources in developing recommendations for a new charter. These include: • A Model Charter prepared by the National Civic League (NCL) • Research on best practices for modern-era charters • Charters of 17 other California charter cities with populations between 150,000 and 400,000 (peer agencies) • San Bernardino's "Charter Reform Principles and Objectives," "Operating Practices for Good Government," and strategic plan, as adopted by the Mayor and Common Council • Public input at forums and Charter Committee meetings • Input from elected and appointed officials, department directors and board and commission representatives. • Research and guidance provided by the City attorney, City Clerk and a professional consultant (Management Partners) The attached table summarizes the substantive elements of the charter skeleton and the Charter Committee's rationale for recommending them. Like the recommendations reported by the Charter Committee in September, those presented in the table should be considered preliminary recommendations at this time, and subject to change based on additional input from the Common Council and public. Conclusion The Charter Committee's preliminary recommendations for the charter result in a governance structure that looks fundamentally different than the existing governance structure. The existing governance structure as documented in the City's bankruptcy recovery plan is provided as Attachment A. The proposed governance structure, presented as Attachment B, reflects the Charter Committee's preliminary recommendations at this time. It shows an organizational structure with greater clarity in roles, responsibilities and reporting relationships, with all Boards and Commissions appointed by and accountable to the City Council, and all departments accountable to 3.0 4312 the City Manager. This structure is consistent with best practices for council-manager forms of government, as well as the provisions of modern-era charters. The Charter Committee appreciates any input the Mayor and Common Council can provide on these preliminary recommendations, as well as the recommendation to propose a completely new charter to the voters in November 2016. Supporting Documents: Table 1_CharterRecommendations and Rationale (PDF) Attachment A_charterReport (PDF) Feb 29 Committee Progress Report_AttachmentB (PDF) Feb 29 16 Progress Report to Common Council (PPTX) 3.C.a Table 1: Charter Committee Preliminary Recommendations and their Rationale Preliminary Recommendation Rationale Council-manager form of government • Most common form of city government in • City Council shall be composed of the Mayor and California and in peer agencies 4) Council members • Helps the Mayor and Council function as one E • Mayor elected at large governing body E • Council members elected by ward • Consistent with NCL Model Charter U • Same four-year terms as current model • Consistent with Operating Practices for Good • City Council powers limited to legislative and policy Government(OPGG)and Charter Reform Principles making • City Manager functions as chief executive officer, responsible for daily operations Mayor • Consistent with NCL Model Charter j • Has a full vote with the City Council • Consistent with OPGG • Continues to be presiding officer at meetings,and • In 15 of 17 peer agencies, Mayor has full voting c may fully participate in discussions rights 0 • Continues to be the City's key face and chief • Mayor voting rights,election at large,and full-time G CL spokesperson status supported by majority of public forum d W • Continues to be essentially full time participants H • Continues to represent the City in i intergovernmental relations,establish and p maintain partnerships and regional leadership a roles,although may delegate such roles to other N members of the Council M • No longer has independent administrative, �- appointment or removal powers City Council(including the Mayor) • Consistent with NCL Model Charter c • Shall ensure fundamental municipal services are • Consistent with best practices provided to protect and promote public health, • Consistent with practices of most peer agencies safety and welfare • Reducing number of wards to enable Mayor voting c • Shall operate as a single governing body rights was preferred alternative of a majority of N = • Will appoint the city manager,city attorney and public forum participants p city clerk • Will establish clear expectations for city manager = and conduct periodic performance evaluations to E ensure accountability E • Will develop and implement norms(or a Code of Conduct),including measures to hold each other accountable r L • Will not interfere with the judgement and discretion of management staff,such as the Ui appointment, removal and supervision of subordinate staff • Shall perform duties and exercise powers to serve best interests of entire City, rather than a particular geographic area or special interest • May establish departments and assign s departmental functions to meet the needs of the w community in the most effective and efficient Q manner • May establish advisory or independent boards or Prelim,inary Recommendation Rationale commissions • Based on 6-ward system to eliminate possibility of tie votes m City Manager • Consistent with council-manager form of • Will be sole authority for managing City operations government E and appointing and directing City staff, unless • Consistent with OPGG 0 otherwise specified by the charter • Consistent with best practices V • Will make business and policy recommendations • Consistent with practices of peer agencies d based on independent professional judgement and • Consistent with NCL Model Charter best practices in the interests of the City • Shall strictly guard against interference with the 4) performance of his or her duties t • Will be accountable for implementing Council goals U and policies and the overall performance of the City • Will be responsible for ensuring the City Council is o kept fully informed on important emerging issues, V_ and will fully brief the Council at Council meetings Q, on business matters before them. Compensation for Mayor and City Council • Most peer agencies do not specify a salary amount H • Shall be set by Mayor and City Council following a for elected official compensation in the charter 2 public hearing itself. Instead,they either follow general law o • Shall be based on recommendations of an advisory provisions or establish the amounts by ordinance (- commission charged with the periodic review of following a public hearing ci compensation for City elected officials • Current Council compensation is significantly lower • Mayor's compensation shall be commensurate with than the peer agencies studied that for a full-time position • Setting the Mayor's salary based on the salary of a • Effective date of approved increases to be deferred superior court judge is an antiquated practice that c to commence with the terms of council members only one peer agency follows(Chula Vista) elected in next regular election • Following compensation provisions for general law cities would result in improved compensation for C Council members, but reduced compensation for N Mayor 0 • Some peer agencies appoint advisory commissions M to provide independent review compensation • Deferring compensation increases reduces E perception that such increases are self-serving E 0 City Treasurer will not be referenced in charter • 10 of 17 peer agency charters make no reference to • City's municipal code would either reference City Treasurer. Instead they assign treasury Treasurer as an appointed position delegate functions to professional staff in the finance treasury functions to professional staff in the department t Finance Department • Only 3 peer agencies have elected treasurers U • Public forum participants support appointed treasurer and/or delegation to professional staff • Consistent with NCL Model Charter �- • Current City Treasurer supports the position being c appointed instead of elected E E Duly qualified City Clerk shall be appointed by City • 14 of 17 peer agencies have an appointed City Clerk Q Council as a whole,not elected. • City lerk is a *° y appointed by Mayor and Council in 14 of 17 peer agencies Q • Appointed City Clerk is consistent with NCL Model 3.C.a Preliminary Recommendation Rationale Charter, although Model Charter recommends appointment by city manager • Public forum participants support appointed city clerk °' • Current City Clerk supports the position being E appointed instead of elected E Duly qualified City Attorney shall be appointed by City 9 16 of 17 peer agencies have an appointed city U Council as a whole,not elected. attorney. • City Attorney shall function as chief legal officer to 0 Appointed City Attorney is consistent with NCL > provide legal advice to Mayor, Council and City Model Charter, although Model Charter L Manager recommends the appointment be made by city W • City Attorney shall not be involved in formulation manager or by the city manager with confirmation t of policy by the city council. V • Appointment of the city attorney by the city council t as a whole is common practice in California — • Most public forum participants support appointed r_ city attorney Q. • Current City Attorney supports the position being W appointed instead of elected N N City Departments shall not be referenced in the • 9 of 17 peer agency charters give city council the a� charter,unless there is a compelling reason to do so authority to establish departments, while 8 are o • City Council shall ensure fundamental municipal silent on the issue a services to protect and promote public health, • 11 of 17 peer agency charters make no reference to N r safety and welfare are provided. specific departments. Instead, specific information • City Council has the authority to create, modify or about departments is found in the municipal code change departments as needed to ensure efficiency . Consistent with NLC Model Charter,which makes and effectiveness no reference to specific departments or functions p • Consistent with council-manager form of government -a Charter shall provide for department responsible for • Most peer agencies make no reference to a water = water,wastewater and sewer functions,with an department, board or commission in the charter. c oversight Board of Commissioners However,the Charter Committee recognizes the 0 • Board to be appointed by the City Council. importance of water,wastewater and sewer as an • Board shall recommend rates for water, essential City function. wastewater and sewer services to the Council. • 12 of 17 peer agencies have a city-operated water E • The City Manager shall have responsibility and department. Of these 12 agencies,8 have a water E 0 supervision of the department board or commission. a0i • 5 of 8 city-operated water boards have members appointed by the City Council. The Mayor appoints water board members in the remaining three peer agencies UI • Of the 8 peer agency water boards, none have the m independent authority to set rates or hire staff. In fact,there is not a single public water/wastewater F- utility in California that does not vest rate setting authority in an elected body(other than San 0 E Bernardino) t U • None of the peer agency water boards or commissions has independent authority to retain or Q remove department staff. The executive responsible for water/wastewater operations is 3.C.a Preliminary Recommendation Rationale appointed by and reports to a city manager. Charter shall provide for a Library Board of Trustees, • Of 11 peer agencies operating a city library, only 8 with its specific powers and authority to be have a Library Commission or Board of Trustees determined by the City Council • However,the Charter Committee recognizes the importance of libraries as a community asset. E • Of these 8 peer agencies, only two have the 0 authority to hire or remove the Library director. U • The Library Director reports to the City Manager in 8 of the peer agencies,consistent with the council- y manager form of government L • Delegating authority to City Council to determine °' t advisory or independent authority of boards and commissions is consistent with NCL Model Charter U The City shall establish a personnel system • Most peer agencies make reference to a civil w • Details of the system would be provided in either service or personnel system in the charter. In some - the City's municipal code, or through adopted cases the reference merely authorizes the City o policies and procedures and negotiated labor Council to establish such a system a. agreements • Most modern-era charters do not include specific • Reference to the Civil Service Board and its duties personnel rules, policies or procedures. Instead, y would be addressed in the municipal code these are found in the municipal code, negotiated labor agreements and/or adopted personnel o policies and procedures. C- • Reference to a personnel or civil service board,as c11 well as its specific authorities is more commonly found in the municipal code. In most cases,the board is appointed by the City Council as a whole. The City shall continue to own,possess and control all • This ensures succession of the City's rights and 0 rights and property of every kind a nature,owned, controls assuming a new charter is adopted possessed or controlled by it at the time the new charter is approved,and shall be subject to all its debts,obligations and liabilities N Municipal elections shall be consolidated with the • Consolidated elections are less expensive due to 0 cycle for state and federal elections(i.e., November of greater economies of scale a even-numbered years) 0 Public forum participants expressed support for changing the timing of elections as a strategy for E increasing voter turnout C • Consolidating municipal elections with federal and y state elections has had a positive impact on voter L turnout in other cities i ca t U f T d I- 4+ C d E Z 0 R i.+ Q D.�n4e4 Dn 440 (aa;;iwwoO nnaina�j aa:peyo ayl}o:podaa ssaJ6oad Z MI) podabjapey —y luawyaeUv :Iu8wy3el;y c ,p N T U ri IL Q ca CL I , Z° -2 og i` o la I- I-- mE in m:: > E > A E E 3 1 8 = I U 0 m m o t o O 0 I U J U U V m , �" v V off ' d o N 2 N O w L U c C m Am qE` gym¢ wd O O Wm o N o o iJ CJ E O O a _ate p > v of 42 v r1'� E Ol t Q v L O 8 a _ In 4 h O ,I is 32 Q) 'sgN -° GJ v m a° ° W g> r L°E c am°'3'0`0 �n ._W�m� � p vn'_°y E:° E' p O CJ (n �"'yi�y�«nE Uv ="m2U"N O O ++ °a�NaEt @�Eo < ��vamo c Q O p oU i �U d .Z 3 u n Q 2 Q L �. v U OUR., 1 O p U v I � .61 1 moEo> LT I v U vo d c 4 h C OJ , p o L) h a�» `_m�da.g 8C)a y + C y t i p oa -E b� aZ a -S? 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V O E Q0> V) r--1 c6 4-j � O O . . x Y =a 10 Alm aa:peyo ayj to nodal{ ssaaBoad Z4£O I!aunoo uowwoo of:podoU ssaaBoad 94 6Z Qad :;uawyae;;d v � a r d �a a • w CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT BOARD OF WATER COMMISSIONERS �N gE STACEY R.ALDSTADT h'r1r General Manager TONI CALLICOTT p4 yp ROBIN L.OHAMA President ,�, O Deputy General Manager F• Z MIGUEL GUERRERO,P.E. Commissioners V p Director of Water Utility JUDITH VALLES JOHN A.CLAUS LOUIS A.FERNANDEZ Director of Water Reclamation WAYNE HENDRIX JENNIFER SHEPARDSON DAVID E.MLYNARSKI 9 7 R `�� Director of Environmental& Regulatory Compliance TERRI WILLOUGHBY Director of Finance "Trusted, Quality Service since 1905" February 24,2016 Mayor R. Carey Davis 300 N. "D" Street, Sixth Floor c San Bernardino, CA 92418 Q. -n City Council 300 N. "D" Street,Mezzanine Floor cN.n San Bernardino, CA 92418 y,• = Gary Saenz,City Attorney f 300 N. "D" Street, Sixth Floor p San Bernardino, CA 92418 Gigi Hanna,City Clerk 300 N. "D" Street, Second Floor San Bernardino, CA 92418 Re: Recommendations by the Charter Review Committee Honorable Mayor, City Councilmembers, Mr. Saenz, and Ms. Hanna, The Board of Water Commissioners respectfully submits the following letter for consideration by the Mayor and Common Council,regarding the recommendations made by the Charter Review Committee,brought forward on the city's agenda on February 29,2016. Although we have not yet seen the agenda item,we believe that it will remain the same as it was on February 19, 2016. Background: In 2015, the Charter Review Committee was formed to assess whether the charter of San Bernardino should be abandoned altogether or whether it should be revised. The Charter Review Committee was assisted by a consultant, Cathy Standiford, of Management Partners. Ms. Standiford met with the Water Department General Manager once to discuss the topic of governance. 300 North "D" Street, San Bernardino, California 92418 P.O. Box 710, 92402 Phone: (909) 384-5141 FACSIMILE NUMBERS: Administration:(909)384-5215 Engineering:(909)384-5532 Customer Service:(909)384-7211 Corporate Yards:(909)384-5260 Water Reclamation Plant:(909)384-5258 A3L 4. Honorable Mayor, City Councilmembers,City Attorney,and City Clerk February 24,2016 Re: Recommendations by the Charter Review Committee Page 2 -------------------------- During that meeting,which lasted less than an hour,the only subject discussed at length was her recommendation,which was already written,to merge the Water Department into the city. The General Manager was asked to appear before the Charter Review Committee,which she did, and answered all of the questions that were posed.This lasted less than an hour. The Charter Review Committee held a subsequent meeting at which the Charter Review Committee listened to presentation from two people on the Water Department. The General Manager did not have notice of the meeting. The Water Department has functioned as an autonomous board since 1905. It is currently solvent, current with its audits, funding its liabilities, and functioning well in an extremely challenging climate. The Water Department is a partner in several joint power agencies,including the joint power agreement with East Valley Water District (EVWD) and Loma Linda,the joint power agreement for tertiary water treatment with Colton and the Institutional Controls Settlement Agreement among San Bernardino,Riverside,Western Municipal Water District, San Bernardino Valley Water District, EVWD, Colton,and Riverside Highland.The department is also a party to the two water rights judgments rendered in 1969 for the San Bernardino Area Basin and the Santa Ana River.As a party to the Santa Ana River judgment, the department is required to discharge a certain amount of flows to the river to meet an objective set forth in a portion of the judgment. The Water Department is the operator for a federal Superfund site,governed by a consent decree that expressly requires that the Water Department perform to certain standards or face potential fines and penalties. The water system itself is operated through elevated zones,with the majority of production generated by the well system that is part of the Superfund site.Those wells are subject to treatment for volatile organics.The Water Department successfully navigated through a very tumultuous time,when a third of the municipal wells in our service area were impacted by those volatile organics. The consent decree negotiated by the department provides for reimbursement by the federal government for treatment costs arising from the contamination. Water rates for customers of the Water Department pay an average of$35.59 a month,lower than Redlands, Colton,Rialto, East Valley Water District, Cucamonga Valley Water District and Fontana Water. Riverside is in the process of raising its rates beyond San Bernardino's shortly. The waste water facilities operated by the Water Department are designated"large and complex" operations,with the requirement for a Grade V waste water treatment operator as the operator-in- charge. There are more waste water facilities requiring a Grade V operator than there are Grade V operators. Waste water treatment operators are in huge demand and there is a relatively small supply of state certified operators.The waste water treatment facility must meet all of the requirements of its National Pollutant Discharge Elimination System (NPDES) permits,which permits are issued by the Regional Water Quality Control Board. There have been no major violations of any of the numerous NPDES permits the Water Department manages,nor have there been any major violations of the many South Coast Air Quality Management District permits. Sewer treatment rates (as opposed to sewer collection rates that are collected for the city) have consistently remained among the lowest in the region. Again,Loma Linda, Colton, Riverside,East Valley Water District and Rialto have higher rates. In addition to the regulatory requirements specified above,the Water Department is in the middle of important negotiations with the United States'Fish and Wildlife Service over a threatened species Honorable Mayor,City Councilmembers, City Attorney,and City Clerk February 24, 2016 Re: Recommendations by the Charter Review Committee Page 3 -------------------------- found in the waste water discharge. The department is a partner in a regional,county-wide Habitat Conservation Plan aimed at providing for take permits and ensuring protection of the various species included. For the last seven years,the Water Department has been doing a feasibility study,a financial assessment,and environmental studies for the purpose of constructing a recycled water facility. The ongoing drought and predictions of more prolonged droughts in the future,because of climate change,is foremost in our planning horizons. The state project water that we have taken in the past to replenish our groundwater basin is not reliable and subject to fluctuations in climate. Recycled water will be the replenishment supply for the future. The Water Department staff participates in all of the region's initiatives involving water and waste water. There are a number of committee meetings at the Santa Ana Watershed Project Authority. We are active members of the Basin Technical Advisory Committee,which determines when and how much to recharge the groundwater basin. A proposal to move to a Sustainable Groundwater Management Act council has been floated,which would create a water master structure for the first time in our basin. Currently,the Water Department has 245 people. Of that number, at least half are required to have some type of state certification, either for water treatment,water distribution or waste water treatment. It is exceedingly hard to recruit for these positions. Since the city of San Bernardino declared bankruptcy, the Department has great difficulty filling critical positions that require certification. The Water Department does not have union representation. The employees have an association that operates to participate in collective bargaining. The department has successfully secured five- and ten-year agreements with its employees that provide for merit-based raises (as opposed to step increases).The Water Department negotiated having its employees participate in paying their portion of the PERS contribution two years before the city. At one time, the Water Department received services from the city, for which it paid under a Master Services Agreement. Although the department was charged for a portion of the city's human resources department,in fact,the city could not adequately administrate the department's Memoranda of Agreement with water employees. Two people in the water department administer all of the job interviews,personnel action forms,worker's compensation claims, disciplinary packages, and water industry-specific training. At one time,the city charged the Water Department for IT management. When that was in effect, the water department still solely managed its SCADA (Supervisory Control and Data Acquisition) systems and its GIS (Geographical Information System) program. Prior to the declaration of bankruptcy, the service from the city IT department was minimal through no fault of the people in IT. They simply did not have any resources to provide service. Once bankruptcy was declared, the City could not provide any IT services and the water department was forced to form a small IT management section. It currently manages all servers,including the billing system server. Loss of the billing system server would result in no revenue. The Water Department's finance section has been maintained separately for at least 30 years. Because the Water Department has different MOUs with its employees,payroll is not the same as the city's. The Water Department operates under a cost accounting structure,much like a Honorable Mayor, City Councilmembers,City Attorney,and City Clerk February 24,2016 Re: Recommendations by the Charter Review Committee Page 4 -------------------------- construction company. Projects are charged to different construction orders.This financial structure is completely different from the city's.At one point, city finance (under Barbara Pachon) offered to do the payroll function for the Water Department.The city gave that function back to the Water Department a couple of years later.The burden of doing the payroll for the Water Department was too heavy. All rates proposed and adopted by the Water Department must go through the approval process set forth in the California Constitution (Articles XIII C and D).There is,therefore,public participation in the rate-setting process. All revenues collected for the benefit of operating the water utility are reserved in the water utility fund. All revenues collected for the benefit of operating the waste water utility are reserved in the sewer fund. It is illegal to use enterprise funds designated for water and sewer for general fund obligations. Based on recommendations from Management Partners, currently, the city of San Bernardino collects a$3.3 million"franchise fee" (which represents $3.00 on the ratepayer's bill) from the Water Department.Prior to the franchise fee,the Water Department was required,by charter, to provide 10% of the revenues of the water utility to the city. When the governor of California declared emergency drought regulations, the Water Department was required to come into compliance within one month,and did so. Absolutely none of the foregoing information was collected by Management Partners prior to its recommendation in the memorandum it provided to the Charter Review Committee in October of 2015. That memorandum served as the basis for the Charter Review Committee's apparent decision to fundamentally change how the Water Department operates. In a recent meeting with the Mayor and Ms. Standiford and Mr. Belknap,we were assured that there is no intention to merge the Water Department immediately.The city expressed that it should not happen until the city is financially sound, among other things. Although we respect the Mayor's assurances,we believe that the merger of the Water Department into the city is not in the best interests of the citizens we serve. Management Partners' Recommendations: 1) Charter shall provide for department responsible for water,wastewater and sewer functions,with an oversight Board of Commissioners. 2) Board to be appointed by the City Council. 3) Board shall recommend rates for water,wastewater and sewer services to the Council. 4) The City Manager shall have responsibility and supervision of the department. Projected Consequences of the Recommendation: If the recommendation is to put the Water Department under the City Council,with management by the City Manager,how would the City Manager absorb enough information on water and waste water to provide competent leadership?Water policy is extremely complicated,as one can see from the selection of issues outlined above. It is also very unlikely that the Council could pivot as quickly as possible to address crises such as the new drought regulations. Honorable Mayor, City Councilmembers,City Attorney, and City Clerk February 24,2016 Re: Recommendations by the Charter Review Committee Page 5 The Water Department has operated outside of the political arena for over one hundred years. Because it was non-political,it was able set water rates based upon the regulations and the physical condition of the system. There is,in fact,public participation through the notice and hearing process outlined in the California Constitution. In contradiction, the city,which is responsible for maintaining the sewer collection system, has not kept up with regulations and the sewer collection system needs millions of dollars of improvements. The city used the sewer collection funds for other reasons. The sewer collection rates that were assessed were completely inadequate to fund any of the assessments or fixes for the system,because the process for getting rates increased was political. One only has to look at what is happening in Flint,Michigan to see what can happen when politics drives decisions affecting health and safety. The governor of Michigan,who was elected on a platform of consolidating municipal services (The Ann Arbor News, posted on October 31,2010) and budget cuts put in place an "emergency manager" for the city of Flint. That manager,whose mandate was to reduce services,made the decision to use the alternate source of water that corroded lateral pipes, causing lead poisoning. There was a preventive to corrosion,but it was not utilized. At this time,we don't know why it wasn't implemented,but the message put out by the emergency manager was that this would reduce costs. According to all reports by Management Partners, the Water Department has been well-run,with sufficient revenues to fulfill its fiscal and safety missions. Again, rates are among the lowest in the region. Even so, the Water Department has kept repairing, replacing and building new infrastructure. It does not make sense to change the governance structure of the Water Department at this time. We ask that you consider this information and decline to place the Water Department's governance structure on the ballot for November 2016. At such time as the city has implemented all of the changes necessitated by the bankruptcy and is fiscally sound,it would be appropriate to conduct another review of the issue, taking into account feedback from our regional partners and the Board of Water Commissioners. The issue deserves a more thorough analysis. Resp ctfully submitted, F cot r t es,Vice-President Dr uis Ferna e ,Board Member W e He drix,Bo d Member David Ml narski,Bo r Member