30 LEAGUE OF CALIFORNIA CITIES: CHARTER CITY TOOL KIT
CHAPTER 3: DRAFTING, ADOPTING, AMENDING AND CHALLENGING A CHARTER Thereafter, if the council determines to move forward with a proposed charter measure, it may proceed under either Government Code section 34458 or Elections Code section 1415. A council proposed charter and a charter commission proposed charter must be placed before the voters “at the next established statewide general election” under Elections Code section 1200, if there are least 88 days prior to the election.27
A charter (or charter amendment) proposed by a charter commission, once signed by a majority of the commissioners and filed with the city clerk, is required to be placed before the voters for consideration. If proceeding under Government Code section 34450 et seq., section 34457 requires submission of the measure at the next established statewide general election under Elections Code section 1200, if there are at least 95 days prior to the election.28 Public funds may not be used to advocate in favor of the passage or the defeat of any ballot measure, including a proposed charter measure. Informational materials are allowed.29 The description of the ballot measure proposing the charter must enumerate the new city powers that result from the adoption of the charter, including whether the city council will have the power to raise its own compensation and the compensation of other city officials without voter approval.30
The charter must be approved by a majority vote of the city’s voters.31 Following certification of the election results, the charter does not take effect until it is filed with and accepted by the Secretary of State in accordance with Government Code section 34460.32 After a charter is adopted by the voters, three copies of the adopted charter are signed by the mayor and city clerk. One copy is recorded with the county recorder, one is retained in the city archives, and the third is filed with the Secretary of State. Those recorded and filed in the city’s archives must include certified copies of all publications and notices required by law relating to the calling of the election and the charter process, certified copies of arguments for and against the measure, and a certified abstract of the vote.33 A charter is also published in the State Statutes at Large.34 H. Procedures for Amended or Repealed Charter
The procedure for amending, revising, and repealing a charter is essentially the same as the adoption of a charter, with some exceptions.35 First, unlike adoption of a charter, an amendment, revision or repeal of a charter can be proposed by initiative.36 Second, certain types of amendments must be presented at statewide general elections, while others may be placed on municipal or state primary election ballots. Charter amendments must be placed before the voters “at the next established statewide general election” under Elections Code section 1200, if there are least 88 days prior to the election37 unless the proposed amendment (or repeal) falls into one of two categories: (1) one which does not alter a procedural or substantive employment right of an employee or retiree; or (2) one which is proposed to amend the charter to comply with an injunction, consent decree or state or federal voting rights laws. These two types of charter amendments may be scheduled for “the next regularly scheduled general municipal election … or at any established statewide general or statewide primary election” at least 88 days away.38 This amendment was designed to preclude consideration of charter amendments affecting employee rights from being considered other than at a statewide general election.
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A Case Study: Los Angeles Dueling Charter Revision Committee and Commission39 In the opinion of some, Los Angeles’ 1925 charter provided for a weak form of mayor-council government because the mayor needed council concurrence to appoint and dismiss department heads and shared some of the administrative functions. In the mid-to-late 1990s, charter reform was championed as a way of solving Los Angeles’ problems by seeking to strengthen the mayor’s role.
At the same time, a secessionist movement in the San Fernando Valley, San Pedro and Hollywood was gaining momentum and charter reform was seen as a method to stymie that movement. The Los Angeles City Charter had not been extensively revised since 1925, although there were amendments through the years. Unfortunately, the mayor and city council could not agree on how to proceed.
In 1996, the council rejected the idea of an elected charter commission and instead appointed a charter committee. Other interests sponsored an elected charter commission initiative, which was approved by the voters in April 1997. For the next year and a half, both the charter committee and charter commission worked independently and held separate hearings. In November 1998, both the committee and commission formed a subcommittee to attempt to mediate and propose a unified charter.
A comprehensive proposal was reached. This unified charter proposal was sent back to the committee and commission for their review and approval. The compromise did not give the mayor complete authority to fire department heads but rather allowed an appeal to the council, which could reinstate a department head by two-thirds vote. The charter committee approved the unified charter but, the charter commission rejected it. After a ground swell of public outcry, the charter commission reversed itself and approved the unified charter. Thereafter, the city council approved it unaltered for the June 1999 election.
Even though the council placed the unified charter on the ballot, the council and others opposed its passage. The mayor, city attorney, city controller, secessionist’s leaders, Chamber of Commerce, NAACP, churches, other nonprofits, three leading newspapers and chairs of the committee and commission endorsed the unified charter. The unified charter passed by 60 percent of the vote.
The unified charter created a system of neighborhood councils and area planning commissions. These changes gave residents more decision making authority in land use matters, delivery of services and the budget process. The new charter took much of the structure of government out of the charter and into administrative and municipal codes. And as mentioned, the charter made the mayor stronger than under the previous charter. Lastly, the revised charter focused on general principles, so as not to be so prescriptive.
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32 LEAGUE OF CALIFORNIA CITIES: CHARTER CITY TOOL KIT
CHAPTER 3: DRAFTING, ADOPTING, AMENDING AND CHALLENGING A CHARTER I. Challenging Adoption, Amendment or Repeal of a Charter Once a proposed charter adoption, amendment, or repeal takes effect (i.e., it is approved by the voters and filed with the Secretary of State), the only way to challenge its procedural regularity, such as whether the city council was required to meet and confer prior to submitting the measure to the voters, is through a quo warranto action pursuant to Code of Civil Procedure section 803 et seq.40 In determining whether to grant a private party the authority to file an action in quo warranto, the Attorney General’s office looks to whether the application thereof would present a substantial issue of fact or law that would warrant resolution by the courts, and whether such an action would ultimately be in the public’s interest.41
ENDNOTES
1 Cal. Const., Art. XI, §3, subd. (a).
2 Id.; Elec. Code, § 9255, subd. (b).
3 Id.
4 People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach (1984) 36 Cal.3d 591, 598-99. 5 The procedure for submitting a charter to the voters by a charter commission or the city council itself is found at Government Code sections 34450-34462. The procedure for a city council-appointed charter committee is found at Elections Code sections 9255-9268. 6 Gov. Code, § 34458.5.
7 Gov. Code, § 34452, subd. (a).
8 Gov. Code, § 34452.
9 Ibid. (citing Elec. Code, §§ 1000 & 10403).
10 See Gov. Code, § 34452.
11 Gov. Code, § 34462, subd. (a).
12 Gov. Code, § 34462, subd. (b)
13 Gov. Code, § 34452, subd. (b).
14 Gov. Code, § 34456.
15 Gov. Code, § 34457.
16 Cal. Code Regs., tit. 14, § 15378, subd. (b)(3); Stein v. City of Santa Monica (1980) 110 Cal.App.3d 458. 17 CEQA review is not required before direct adoption of an initiative. Tuolumne Jobs & Small Business Alliance v. Superior Court (2014) 59 Cal.4th 1029.
18 Native American Sacred Site & Environmental Prot. Assn. v. City of San Juan Capistrano (2004) 120 Cal.
App.4th 961.
19 Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4th 165, 191 (finding that initiatives placed on the ballot by a city are subject to CEQA).
20 Cal. Code. Regs., tit. 14, § 15061, subd. (b)(3).
21 People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach (1984) 36 Cal.3d 591. 22 Gov. Code, § 3505.
23 People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach, supra, 36 Cal.3d at p. 601. 24 Ibid.
25 Gov. Code, § 6066.
26 Gov. Code, § 34458, subd. (b).
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27 Gov. Code, §§ 34457 & 34458, subd. (a); Elec. Code, § 1415, subd. (a)(1). In an interesting, but perhaps minor, quirk of the law, it appears that if a council acts to submit without revision a charter proposed by a charter commission that is appointed by the council, such a charter proposal would be subject to the 95-day time period pre-election rather than the 88-day period for charters proposed by the governing body. See Elec. Code, § 9255, subd. (a) (providing for charter or amendment proposed by either elected or appointed commission to be submitted at statewide election held at least 95 days away); cf. Elec. Code, § 9255, subd. (b) (charter proposals of governing board submitted at statewide general election held at least 88 days away).
28 Gov. Code, § 34457.
29 Vargas v. City of Salinas (2009) 46 Cal.4th 1; Stanson v. Mott (1976) 17 Cal.3d 206. 30 Gov. Code, § 34458.5. Copies of the proposed charter must be printed in at least 10-point type. Gov.
Code, § 34456.
31 Cal. Const., art. XI, § 3, subd. (a). If more than one conflicting charter measures are on the same ballot and both receive a majority vote, the one receiving the highest affirmative vote is the one which is deemed passed. Cal. Const. art. XI, § 3, subd. (d).
32 Cal. Const., art. XI, § 3, subd. (a); Gov. Code, § 34459. 33 Gov. Code, § 34460.
34 Cal. Const., art. XI, § 3, subd. (a).
35 Ibid.
36 Cal. Const., art. XI, § 3, subd. (b).
37 Elec. Code, § 1415, subd. (a)(1).
38 Elec. Code, § 1415, subd. (a)(2); Gov. Code, § 34458, subd. (a). 39 Information for this case study came from League of Women Voters of Los Angeles, “Los Angeles:
Structure of City Government” by Ralph J. Sonenshein, Ph.D. (2006) and “Richard Riordan & Los Angeles Charter Reform” by Matthew J. Parlow & James T. Keane (2002). 40 95 Ops.Cal.Atty.Gen. 31 (2012); International Assn. of Fire Fighters, Local 55, AFL-CIO v. City of Oakland (1985) 174 Cal.App.3d 687.
41 96 Ops.Cal.Atty.Gen. 1 (2013).
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CHAPTER 4: CHARTER CITY ORGANIZATION AND ELECTIONS
Chapter 4
CHARTER CITY ORGANIZATION AND ELECTIONS
Charter cities may create their own governmental structure and establish procedures for local elections. This chapter describes the different types of governmental structures available to charter cities and discusses the organizational issues that must be addressed when varying from the typical general law city structure. This chapter also discusses different election systems and summarizes the California Voting Rights Act, a state law being used to attack the traditional “at large” voting structure in local governments across California.
A. Form of Government
State law vests authority to manage a general law city in a city council of at least five members, a city clerk, a city treasurer, a police chief, a fire chief, and any subordinate officers or employees provided by law. However, all general law cities may elect to be governed by the city manager (or council-manager) form of government that is established by an ordinance adopted by the council or voters. Such an ordinance must define the powers and duties of the city manager, which may include the power to hire and fire city employees except the city attorney. When the offices of city clerk and city treasurer are appointive, appointments to such offices are made by the city council unless the city council vests such power in the city manager by ordinance. The ordinance may also fix the city manager’s compensation or the minimum amount he or she is to receive.
As stated in Chapter 2, a charter city is not limited by the general laws and, therefore, can provide for any form of government, including the council-manager and strong mayor and other forms.
This means that a charter city may adopt, for example, a city manager form of government that looks and operates quite differently from a general law city because the charter city is not limited by the provisions of the Government Code described in the above paragraph.
1. Council-Manager Form of Government
Born out of the United States progressive reform movement at the turn of the 20th century, the council-manager form of government was designed to combat corruption and unethical activity in local government by promoting effective management within a transparent, responsive, and accountable structure. Since its establishment, the council-manager form has become the most popular structure of local government in the United States.
In the council-manager form of government, the elected city council is the policy making, governing body of the city. The council hires the professional manager to carry out the policies it establishes.
VOTERS
COUNCIL
MANAGER
DEPARTMENT HEADS
Council-Manager
Organizational Structure
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The council provides legislative direction while the manager is responsible for day-to-day administrative operations of the city based on the council’s policy input. The mayor and council collectively set policy and approve the budget. The manager serves at the pleasure of the council, as the council’s chief management advisor and is responsible for preparing the budget, directing day-to-day operations, and hiring and firing personnel. The city attorney reports directly to the council as the council’s chief legal advisor.
In a council-manager form of government, the mayor is recognized as the political head of the municipality, but is a member of the legislative body who does not have special authority such as the power to veto legislative actions. In some cities, the mayor is directly elected by the voters. In other cities, the mayor is appointed by the city council often on a rotational basis.
2. Strong Mayor Form of Government
The strong mayor-council form of government is the form that most closely parallels the federal government (and California government) with an elected legislature and a directly elected executive. It is called strong mayor because the mayor has more authority than the mayor in a city manager form of government.
The mayor is designated as the head of the executive branch of the city government and the extent of his or her authority can range from purely ceremonial functions to full scale responsibility for day-to-day operations. The duties and powers can include: hiring and firing department heads, preparation and administration of the budget, and veto power (which may be overridden) over council actions. The office of mayor in such a circumstance is typically a full-time job, and the mayor is therefore more involved in the dayto-day management of the city. The council has the following responsibilities: adoption of the budget,
passage of legislation, auditing the performance of the government, and adoption of general policy positions.
In some cities, however, the mayor may assume a
larger policy-making and political leadership role, and responsibility for day-to-day operations is delegated
to a manager or chief administrator appointed by and
responsible to the mayor.
In California, five charter cities have adopted the strong mayor-council structure: San Francisco (population 837,442), Fresno (population 509,924), Los Angeles (population 3.9 million), Oakland (population 406,253), and San Diego (population 1,355,896).
DEPARTMENT HEADS
COUNCIL
VOTERS
MAYOR
Strong Mayor-Council Organizational Structure
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B. Organization Considerations
1. Council Size
General law cities must have at least five council members.8 If the council is elected by or from districts (see section C below), the number of districts must be five, seven or nine, unless there is an elected mayor, in which case the number is four, six or eight.9 Charter city councils are not limited by the state law size requirements and council size can be set by charter or ordinance.
2. Elected Mayor
The mayor of a general law city is generally selected by a vote of the members of the city council.10 However, upon a vote of its citizens, a general law city may establish a system for direct election of the mayor by voters and whether an elected mayor serves for two or four years.11 Charter cities have authority to determine the procedures for selecting a mayor and such charter provisions override any conflict in state law.12
3. Term Limits
For general law cities, state law gives the voters the option to impose (or repeal) term limits on council members, an elected mayor, or both.13 Prior case law held that charter cities can establish term limits either by charter or ordinance.14 The statute enacted in 1995 specifically refers to charter cities.15 As of publication, there were no cases determining that this statute is applicable to charter cities.
4. Compensation
The California Constitution gives charter cities plenary authority to establish the salaries of its officials, including council members and employees. California Constitution, article XI, section 5, subdivision (b) provides:
… (4) plenary authority is hereby granted, subject only to the restrictions of this article, to provide … the manner in which, the method by which, the times at which, and
the terms for which the several municipal officers and
employees whose compensation is paid by the city shall
be elected or appointed, and for their removal, and for their compensation, and for the number of deputies,
clerks and other employees that each shall have, and for the compensation, method of appointment, qualifications, tenure of office and removal of such deputies, clerks and other employees.
Case Studies: Two examples of the strong mayor form of
government are found in the cities of San Diego and Fresno. The San Diego City Charter makes the mayor the chief executive officer of the city.1
He or she has the authority to execute and enforce all laws, ordinances, and policies of the city, including the right to promulgate and issue administrative regulations that give controlling direction to the administrative service of the city.2
He or she has the sole
authority to appoint the city manager (subject to council confirmation), exercises direct control over the city manager, and may dismiss the city manager, chief of police or chief of the fire department.3 The
mayor has the sole authority to appoint most city representatives to boards, commissions, committees and governmental agencies.4 In
Fresno, the mayor has the sole authority to appoint and remove the chief administrative officer and exercises control over him or her.5 In both cities, the mayor may veto any legislation passed by the city council.6
In both cities, the mayor prepares the annual city budget to submit to the council, and in Fresno, he or she and may veto a particular budgetary line item.7
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For general law cities, council member compensation is prescribed by state law unless otherwise approved by vote of the electors.16 The maximum monthly compensation level depends upon the city’s population. These monthly rates range from $300 (for cities with populations up to 35,000) to $1,000 (for cities with populations over 250,000).17 Further, these amounts may be increased by ordinance; however, the amount of the increase may not exceed an amount equal to 5 percent for each calendar year from the operative date of the last salary adjustment in effect when the ordinance was enacted.18 Furthermore, increases may only take effect upon the seating of newly elected council members.19
The compensation limit that applies to general law cities includes any compensation a council member receives for serving on any city board or commission and for the most part such compensation is limited to a stipend of up to $150 per month for each commission or board.20 Compensation does not include payments by a city for retirement, health and welfare, and federal social security benefits. For general law cities, salary of appointed officers and employees is set by the city council.21
Scandals regarding excessive salaries for elected and some other officials in the City of Bell, a charter city, led to the passage of several general laws regarding compensation. Among the new rules that purport to apply to charter cities, as well as general law cities, is a section of the Brown Act requiring that any decisions regarding compensation be made at a regular meeting in open session.22 Additional sections prohibit both an automatic renewal of a contract that provides an automatic increase in level of compensation that exceeds a cost of living adjustment and a maximum cash settlement that exceeds levels set in the Government Code.23 As of publication, no cases have analyzed whether these statutes apply to charter cities.24 Other legislation adopted as a result of the Bell scandal requires any new proposal to adopt a charter include in the ballot description an enumeration of new city powers as a result of the adoption of the charter, including whether the city council will have the power under the new charter to raise its own compensation without voter approval.25 Lastly, the Brown Act was further modified to require that, prior to holding a serial or simultaneous meeting, the clerk or a member of the legislative body must verbally announce the amount of compensation that members of the legislative body will receive for attending the serial or simultaneous meeting.26 The Brown Act applies to charter cities.
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5. Council Qualifications
For general law cities, council member qualifications are:
Be a United States citizen;
Be at least 18 years old;
Be a registered voter;
Be a resident of the city at least 15 days prior to the election and throughout his or her term; and
If elected by or from a district, be a resident of the geographical area comprising the district from which he or she is elected.27
Charter cities can establish their own qualifications for holding city office provided they do not violate the federal Constitution.28 However, the most common eligibility requirements are residency within the city (or district as appropriate) at the time of the election.29 C. Elections
In general law cities, municipal elections are conducted in accordance with the California Elections Code.30 The Constitution grants charter cities plenary authority over how the city council and other officers are elected.31
1. At-Large vs. By-District vs. From-District
There are three primary ways in which council members are elected. The first is at-large where candidates live anywhere within the jurisdiction of the city, and all voters vote for all councilmembers. The second is by-district where candidates live in a particular district and are elected only by voters in that district. The third is from-district where candidates live in the district, but are elected by voters citywide.
2. Other Election Processes
a. Instant Runoff or Ranked Choice
Four charter cities in California currently use some form of instant runoff or ranked-choice voting: San Francisco, Oakland, San Leandro and Berkeley. In instant runoff voting, voters rank the candidates in order of preference. The ballots are initially counted as one vote for the voter’s first choice candidate. If a candidate secures a majority of votes cast, that candidate wins. If no majority is achieved, the candidate with the fewest votes is eliminated, and a new round of counting takes place, with each ballot counted as one vote for the highest ranked candidate that has not been eliminated. The process continues until the winning candidate receives a majority of the votes against the remaining candidates. b. Cumulative Voting
Voters may vote for separate candidates or cast all of their votes for a single candidate.
Cumulative voting can help minority candidates because their supporters can single-shot all their votes behind one candidate, while majority voters may be more likely to spread out their votes among several candidates. Cumulative voting is a form of at-large voting.
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c. Seat-Based Voting
Under a seat-based system, council positions remain at-large, however, candidates are allowed to designate which particular seat they are running for, depending on which seats are open. Seats are often denominated by number. Voters are allowed to vote for a candidate for each available seat. Such a method arguably allows candidates a greater chance of being elected because they are running only against other candidates for that same seat; however, there is no assurance of how many candidates may choose to run for particular seats. d. Limited Voting
Regardless of how many seats are open, voters only cast one vote.
3. Timing and Method of Municipal Elections
In general law cities, the timing and method of local elections are conducted in accordance with the Elections Code.32 While the Legislature recently passed two laws significantly limiting the timing of elections relating to certain charter changes, charter cities may still establish their own election dates (other than elections relating to certain charter changes) and may still adopt their own election rules and procedures.33 Another recently-passed bill that goes into effect on January 1, 2018 (AB 415) requires cities to hold general elections on a statewide election date if an election held on a non-statewide election date in the past four elections had less than a 25 percent voter turnout. On its face, the bill does not directly state that it applies to charter cities.
Furthermore, charter cities may conduct all mail-in ballot elections, rather than the traditional polling place method of voting. The City of Burbank has its own election code and has conducted all mail-in ballot elections since 2001.34 The Santa Barbara City Charter allows the city council to conduct all mail-in ballot elections.35 Both cities use all mail-in ballot elections, in part, as a way to contain municipal election costs.
4. Campaign Reform
In Johnson v. Bradley, the Supreme Court considered the City of Los Angeles’ amendments to the city charter that adopted a comprehensive campaign, election and ethics reform plan (Measure H), which included direction to the city council to adopt a system of using public funds to fund campaigns under certain specified circumstances. A lawsuit was brought challenging Measure H arguing it was in conflict with state law imposing various campaign contribution restrictions.36 The California Supreme Court upheld Measure H. First the court found that the city’s public financing system was a municipal affair and then determined that although state law reflected a statewide concern regarding the integrity of the electoral process, its ban on public financing was not reasonably related to this concern.37
5. California Voting Rights Act Challenges
a. Violations
The California Voting Rights Act (CVRA) was enacted to implement the equal protection and voting guarantees of the California Constitution. The Act sets forth the circumstances where an at-large electoral system may not be imposed to dilute or abridge a protected class’s opportunity to elect candidates.38 Protected class means a class of voters who are members of a race, color or language minority group, as defined in the federal Voting Rights Act.39 Agenda Item 12 CC Agenda 01-07-20 Attachment 1 Agenda Item 12 Page No. 227 CC Agenda 01-07-20
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When at-large or from-district voting dilutes the vote of a protected class in California, the CVRA provides a private right of action.40 To prove a CVRA violation, the plaintiffs must show that the voting was racially polarized.41 However, they do not need to show either that members of a protected class live in a geographically compact area or demonstrate a discriminatory intent on the part of voters or officials.42 b. CVRA Applicability to Charter Cities
The CVRA, purports to apply to cities without making any explicit distinction between general law or charter cities.43 The City of Palmdale, a charter city, was sued for violating the CVRA in its at-large elections. Although the city raised as a defense its charter status, both the Superior Court and the Court of Appeal held that the CVRA applied to charter cities. The Superior Court found that Palmdale’s at-large system violated minority voting rights. The Court found that Palmdale’s system was designed to protect current incumbents and that the city had a history of racially polarized voting. As a remedy the court issued an injunction prohibiting the city from certifying the results from its at-large election of council members, ordered by-district elections, and required new elections for all existing council members who were deemed unlawfully elected.44
The Court of Appeal began its analysis of whether the CVRA applies to a charter city by acknowledging that how city council members are elected is the “essence of a municipal affair.”45 Then it noted that since Palmdale’s system of at-large elections diluted minority voting rights, it was in conflict with the CVRA that prohibited such dilution. The Court analyzed whether there was a basis for the Legislature to act in what otherwise was a local affair — city council elections — and concluded that implementing the equal protection and voting rights provision of the California Constitution was a matter of statewide concern.46 c. Standing
Any voter who is a member of a protected class and who resides in a political subdivision where a violation of the CVRA is alleged may file a lawsuit.47 d. Remedy
Upon finding a violation of the CVRA, a court must implement appropriate remedies, including the imposition of district-based elections tailored to remedy the violation.48 The fact that members of a protected class are not geographically compact or concentrated, while not supporting a violation of the CVRA, may be a factor in determining an appropriate remedy.49 The scope of the court’s ability to fashion a remedy will likely be the subject of future litigation and legislative efforts.
e. Attorney’s Fees
A successful CVRA plaintiff is entitled to reasonable attorney’s fees and litigation expenses, including expert witness fees and expenses. A prevailing city, by contrast, is not entitled to recover any costs unless the court finds the action to have been frivolous, unreasonable or without foundation.50
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f. District Elections
The CVRA does not apply to by-district elections in which the council member candidate resides within an election district and is elected only by voters residing within that district.
California’s counties and most of its largest cities, including Los Angeles, San Diego and Long Beach, elect council members by geographic district.51 The CVRA does not mandate the abolition of at-large election systems, but makes the use of at-large election systems more susceptible to a legal challenge.
ENDNOTES
1 San Diego City Charter, art. XV, § 265, subd. (b)(1). 2 San Diego City Charter, art. XV, § 265, subd. (b)(2). 3 San Diego City Charter, art. XV, § 265, subds. (b)(7), (b)(8), (b)(9) & (b)(10). 4 San Diego City Charter, art. XV, § 265, subd. (b)(12). 5 Fresno City Charter, § 400, subds. (b) & (c).
6 San Diego City Charter, art. XV, § 265, subd. (b)(5); Fresno City Charter, § 400, subd. (e). 7 San Diego City Charter, art. XV, § 265, subd. (b)(14); Fresno City Charter, § 400, subds. (d) & (f). 8 Gov. Code, § 36501. Prior to January 1, 2001, a general law city could only have 5 members. The law was changed in 2000 to provide for “at least five members.” The vast majority of general law cities were incorporated prior to 2000 and therefore have only five members. 9 Gov. Code, § 34871, subds. (a)-(d).
10 Gov. Code, § 36801.
11 Gov. Code, §§ 34900-34906.
12 Rees v. Layton (1970) 6 Cal.App.3d 815.
13 Gov. Code, § 36502, subd. (b).
14 Cawdrey v. City of Redondo Beach (1993) 15 Cal.App.4th 1212 (term limits are a municipal affair). 15 Gov. Code, § 36502, subd. (b).
16 Gov. Code, § 36516.
17 Gov. Code, § 36516.
18 Ibid.
19 Gov. Code, § 36516.5
20 Gov. Code, § 36516.
21 Gov. Code, § 36506.
22 Gov. Code, § 54596, subd. (b).
23 Gov. Code, §§ 3511.1, 3511.2.
24 Government Code section 3511.1, subdivision (c) defines “local agency” to include “charter city.” However, as explained in Chapter 2, the courts, not the Legislature, make the final determination of whether this is a matter of statewide concern or a municipal affair. The analysis would begin with the clear statement found in article XI, section 5, subdivision (b) that a charter city has plenary authority over establishing compensation for its officers and employees. However, the courts give “great weight” to the intent of the Legislature that the statute applies to charter cities. 25 Gov. Code, § 34458.5.
26 Gov. Code, § 54952.3.
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27 Elec. Code, § 321; Gov. Code, §§ 34882, 36502; 87 Ops.Cal.Atty.Gen. 30 (2004). 28 Cal. Const., art. XI, § 5, subd. (b); 82 Ops.Cal.Atty.Gen. 6, 8 (1999). 29 See, e.g., Riverside City Charter, §401; San Jose City Charter, § 404; Santa Barbara City Charter, § 501. 30 Elec. Code, § 10101.
31 Cal. Const., art. XI, § 5, subd. (b). Just as in other municipal affairs, a charter city’s enactments may not violate other provisions of the California or federal Constitution such as the First Amendment, or the equal protection clause. Note that in some cases the courts are reluctant to rely on the “plenary” authority granted for these “core” areas. For example, in Johnson v. Bradley (1992) 4 Cal.4th 389, a case challenging the City of Los Angeles’ charter provisions regarding election campaign finance reform, the California Supreme Court relied on section 5, subdivision (a) to determine that how a city spends its tax dollars was a “municipal affair” rather than finding that election campaign finance reform was related to a “core” area under section 5, subdivision (b). 32 Elec. Code, § 10101.
33 Cal. Const., art. XI, § 5, subd. (b); Elec. Code § 10101 et seq. 34 Burbank City Charter, § 800 and Burbank Municipal Code, T. 2, Ch. 3. 35 Santa Barbara City Charter, § 1306.
36 Gov. Code, § 85300 (“No public officer shall expend and no candidate shall accept any public moneys for the purpose of seeking office.”)
37 Johnson v. Bradley (1992) 4 Cal.4th 389.
38 Elec. Code, §§ 14026, subd. (a), 14027.
39 42 U.S.C. § 1973 et seq.
40 Sanchez v. City of Modesto (2006) 145 Cal.App.4th 660, 667. 41 “Racially polarized voting” is defined in the California Voting Rights Act (CVRA) to mean voting in which there is a difference, as defined in case law under the federal Voting Rights Act (FVRA), in the choice of candidates or other electoral choices preferred by voters in a protected class, as compared to the rest of the electorate. The methodologies for estimating group voting behavior that may be used to prove that elections are characterized by racially polarized voting are those approved in federal cases enforcing the FVRA. Elec. Code, § 14026, subd. (e).
42 Id.; Rey v. Madera Unified Sch. Dist. (2012) 203 Cal.App.4th 1223, 1228-29. “Protected class” is defined in the CVRA to mean a class of voters who are members of a race, color or language minority group, as referenced and defined in the FVRA. Elec. Code, § 14026, subd. (d). 43 Elec. Code, § 14026, subd. (c).
44 The court did not order a new election for the City’s directly elected mayor. 45 Jauregui v. City of Palmdale (2014) 226 Cal.App.4th 781 (2014). 46 Id. at p. 798.
47 Elec. Code, § 14032.
48 Elec. Code, § 14029.
49 Elec. Code, § 14028, subd. (c).
50 Elec. Code, § 14030.
51 Merl, Voting Rights Act leading California cities to Dump At-large Elections (September 14, 2013) L.A.
Times <http://www.latimes.com/local/la-me-local-elections-20130915,0,295413.story> [as of Apr. 20, 2016].
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Chapter 5
COMMON CONCERNS ABOUT CHARTER CITIES
Considering adopting a charter can become a charged and controversial proposal.
Proponents tout the potential for more local autonomy from the state and considerable budgetary savings. Opponents are concerned about the expense to adopt a charter, the risk of councilmembers running amok in paying themselves excessive salaries, employee unions taking control of the budget, higher taxes, and even bankruptcy. Additionally, some may argue that becoming a charter city does not really change a city’s status because of the growth of the statewide concern doctrine. This chapter discusses some of the most common concerns raised about becoming a charter city or being a charter city, to help frame the issues and the law.
A. Growth of Statewide Concerns
One often hears that there has been a loss of local control or home rule for California cities and that the state has taken more and more control over local government autonomy. There is an argument that this is true for both general law and charter cities.1 For example, the loss of fiscal
control by all cities in the state is well documented. It occurred through a series of actions and events that started with Proposition 13, later followed by Proposition 218, and most recently by Proposition 26 and the state’s dissolution of redevelopment agencies.2
Some argue that charter cities are more protected from a loss of local control.3 Others argue that,
at least for purposes of protecting local revenue or creating revenue, there is no real benefit to being a charter city.4
There are still a number of advantages to being a charter city, but there is no question that the Legislature will continue to enact legislation that purports to apply to charter cities and that the judicial response to these enactments will be difficult to predict.
1. What Does Growth of Statewide Concerns Mean?
As described in Chapter 2, the measure of a charter city’s autonomy from the state, and thus the real benefit to being a charter city is captured by the phrase municipal affairs.5 A charter
city’s authority over municipal affairs, free from conflicting state statutes and regulations, is the difference between a charter city and a general law city. However, a matter of statewide concern developed as the conceptual limitation on the scope of municipal affairs and thus the supremacy of charter city measures over conflicting state legislative enactments. The courts have not made an attempt to define municipal affairs but rather have endeavored to adopt a judicial procedure to follow in analyzing whether a challenged ordinance adopted as a municipal affair must defer to a matter of statewide concern.
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Therefore, when growth in statewide concerns is discussed, it means more cases in which the courts have struck down a charter city’s local enactment because the matter was of statewide concern. Examples are included in the chart below:
1948 Regulation of Trades Court ruled that licensing of a trade or profession was a matter of statewide concern. Court overturned a San Francisco
ordinance requiring every contractor to obtain a business certificate or license and also included additional regulation as to the quality and character of installations. Court found local ordinance conflicted with State Contractor’s Laws (Bus. & Prof.
Code, § 7000 et seq.) and was not a municipal affair.6
1957 Eminent Domain Court held that power of eminent domain was not a municipal affair but a matter of statewide concern and charter cities only had the power if given by the Legislature.7
1959 Regulation of Telephone
Systems
Court ruled that regulation of telephone system was a matter of statewide concern.8
1961 Telephone Franchises Court held that regulation of telephone communication was a matter of statewide concern, and a city cannot require a telephone company to obtain a franchise from the city.9 1963 Labor Court held that the organizational rights of firefighters are a statewide concern.
1976 Labor Court held that charter cities are subject to the Meyers-MiliasBrown Act.10 Court found that even though the general rule is that the fixing of compensation for city employees is a municipal legislative function, local legislation may not conflict with statutes such as the Meyers-Milias-Brown Act, which are intended to regulate the entire field of labor relations of affected public employees throughout the state.
1982 Labor Court found that Public Safety Officer’s Procedural Bill of Rights applies to charter cities.11
1991 Taxing of Financial
Institutions
Court ruled that charter city’s tax on savings and loan institutions was not a municipal affair.12
1995 Public Contracting Court found that, although a public works contract was a municipal affair, a provision in a bid specification did enter into an area of statewide concern related to minority and women’s outreach programs.
1998 Utility Liens Court ruled that an ordinance allowing the city to create and record a super-priority lien on property for unpaid utility charges was not a municipal affair.13
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2. A New Try with an Old Tactic
There has always been a tug-of-war between the state and charter cities over local control. The Legislature often attempts to stake out its authority in an area by stating a matter is of statewide concern, and as such, controlling on charter cities.14 The California Supreme Court has stated that the Legislature does not have the power to transform a municipal affair into a statewide concern,15 by its own declaration. However, historically the courts give great weight to the Legislature’s stated intent.16 The Legislature usually prefers that a particular policy to be followed uniformly throughout the state. Usually this is accomplished by enacting a law that the Legislature asserts applies to charter cities because it is a matter of statewide concern. A lesser-used technique is for the Legislature to tie the receipt of state funds to charter city’s compliance with a state law that otherwise intrudes into an area that has been determined to be a municipal affair.
In 1978, the Legislature bailed-out cities and counties with state surplus funds to make up for the significant decrease in property taxes caused by Proposition 13. However the distribution of state surplus funds was prohibited to any local public agency granting to its employees a cost-ofliving wage or salary increase for the 1978–79 fiscal year that exceeded the cost-of-living increase provided for state employees. Long Beach and Santa Clara challenged the statute as interfering with their autonomy as charter cities. The court recognized that a charter city’s right to determine how much to pay its employees was a core municipal affair over which a charter city has plenary authority. The court rejected the state’s argument that compensation of city employees was a matter of statewide concern because of the fiscal emergency occasioned by Proposition 13.17 A more recent example of this tactic can be found in the area of prevailing wage law. Charter cities are not required to pay prevailing wages on public works projects that are not funded by state or federal funds and that serve the municipality rather than a regional project.18 What this means in practical effect is that the charter city and its city council and voters have the ability to determine if and when to pay prevailing wage on local public works contracts. Charter cities have taken a variety of approaches on this issue and based the decision on what they believe best meets the needs of their community. Some charter cities have express provisions in their charter opting out of prevailing wage rate law and others have a local ordinance, resolution, or other policy expressly opting out of prevailing wage rate law. However, it is not necessary for a charter city to have a charter provision or local ordinance to not be subject to prevailing wage rate law; it is an inherent part of home rule granted by the state constitution.19 Consequently, a charter city can elect to not be subject to prevailing wage rate law by not requiring it in its public works contracts, so long as the project does not use state or federal funds20 and only serves local versus regional interests.21 In 2012, the California State Supreme Court held that payment of prevailing wages by a charter city is a municipal affair, regardless of the language in the statute.22 In 2013, the Legislature enacted Senate Bill 7 (SB 7) adding section 1782 to Labor Code to:
Prohibit a charter city from receiving or using state funding or financial assistance for a construction project if the city has a charter provision or an ordinance that authorizes a contractor to not comply with state prevailing wage rate law. Prohibit a charter city from receiving or using state funding or financial assistance for a construction project if the city has awarded within the prior two calendar years a public works contract without requiring the contractor to comply with the State prevailing wage rate law.23
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Allow a charter city to receive or use state funding or financial assistance for a construction project if the charter city has adopted an ordinance that includes requirements that in all respects are equal to or greater than state prevailing wage rate law.
The legality and constitutionality of SB 7 was challenged in court by a group of cities (El Centro, Carlsbad, El Cajon, Fresno, and Vista). The Court of Appeal concluded that SB 7 was constitutional, finding that SB 7 “does not conflict with these charter city laws as it does not mandate or require that charter cities do anything, such as paying prevailing wages for its public works projects.
Rather, [SB 7] provides the Cities with a choice, to meet the requirements set forth in [SB 7] to obtain state funding or financial assistance on its public works projects, or forgo eligibility for those funds.”24
3. Uncertainty and Ambiguity
Charter cities and general law cities considering becoming charter cities live with the reality of the Legislature continuing to apply new laws to charter cities based upon legislative declarations and findings that the matter is of statewide concern. Some of these laws do not get challenged in court. A charter city must then make a decision about whether to follow the state law or adopt a local ordinance in conflict with the state law based upon its city attorney’s legal opinion that a court would ultimately determine that the area was a municipal affair that did not require deference to the legislative enactment.
For example, state law has extensive regulatory schemes limiting cities’ ability to adopt regulations for the retrieval of shopping carts.25 It requires a city that retrieves a shopping cart to hold it for the owner for 30 days. The city cannot collect its costs or fine the owner as long as the owner retrieves the cart. The state statute expressly provides that “The Legislature hereby finds that the retrieval by local government agencies of shopping carts … is in need of statewide regulation and constitutes a matter of statewide concern.”26
It seems arguable that the Legislature could demonstrate the retrieval of a shopping cart “under the historical circumstances” indicates “the state has a more substantial interest in the subject than a charter city.” 27 The legislative analysis for the bill identified the rationale for making it applicable to charter cities:
Cart owners are concerned that a multiplicity of local cart retrieval regulations, along with expensive fees, are bad for business and fail to acknowledge their diligent retrieval efforts. Grocers want state law to limit local officials’ cart retrieval regulations.28 There are no published cases where a court has determined that shopping cart retrieval is a matter of statewide concern on the basis that local regulations may be bad for business. Therefore, a charter city must weigh the legal risks, benefits, and consequences of adopting an ordinance in conflict with this state law and act accordingly.
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4. It Is About More than the Growth of Statewide Concerns As hopefully has been made clear by now, being a charter city does not mean complete autonomy from the Legislature nor does it mean that areas that are now considered municipal affairs will be considered municipal affairs forever. Being a charter city is not only about how much autonomy the city has from state control. Being a charter city also means providing the city’s voters with a vehicle and forum for proposing their vision for how the city should provide services and regulate conduct. It is an opportunity for the voters to clearly identify what is most important to the community, the types of issues that make the community different from its neighbors, and how they would like to see the city governed.
B. Compensation of Elected Officials
The California Constitution gives plenary authority for charter cities to establish the salaries of its officials and employees. By contrast, the salaries of general law cities’ officials and employees are controlled by the provisions of the Government Code. For a more in-depth discussion, see the Compensation section of Chapter 3.
1. Concerns about Excessive Compensation
The scandal in the City of Bell raised the issue of compensation of city officials in charter cities.29 The small City of Bell, where part-time council members paid themselves salaries of $100,000 per year and their city manager was paid at least $800,000 per year, has made many ask if part of the issue was the city being a charter city.30 Some have used what happened in the City of Bell to help defeat proposals for charter adoptions.
In 2012, the voters of the City of Auburn rejected a ballot measure to make the city a charter city. The second most often cited reason for opposing the charter amendment in the voter guide was that council members could pay themselves thousands of dollars in extra compensation.31 Opponents of the measure argued the charter would open the door to corruption and even possibly bankruptcy.32
The Legislature responded to concerns about council members in charter cities paying themselves excessive compensation by adopting a state law that requires a proposal to amend or adopt a charter to include whether the city council will, pursuant to the adopted charter, have the power to raise its own compensation and the compensation of other city officials without voter approval.33 Of course, salaries only tell part of the story and often not the largest part of the city’s outlay.
Benefit packages can create the larger liability for a city. The Los Angeles Times in 2011 looked at reported salary and benefit information for the councils of charter cities and general law cities and found that, if the salary and benefits were combined, almost 50 percent of charter cities were paying over the salary cap set by state law. In contrast, less than a third of the general law cities were paying, combined in salary and benefits, over what the state law caps for salaries.34 As noted above, the state law does not include benefits in the compensation caps.35 The Los Angeles Times also found that generally most cities, including charter cities, paid under the state cap set in the Government Code. But charter cities tended to pay their council members higher salaries than general law cities and were more likely to exceed the state law cap.36 Agenda Item 12 CC Agenda 01-07-20 Attachment 1 Agenda Item 12 Page No. 235 CC Agenda 01-07-20
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In response to the Bell scandal, the State Controller in 2010 required all cities, including charter cities, to disclose all salary information in their financial reports to the state and posted the results on the state’s website.37 The program referred to as the Government Compensation in California Program is intended to capture the salary, compensation, and benefit information for every compensated employee in any city, county, or independent special district who receives a W-2. The website is:
http://publicpay.ca.gov.
2. Inadequate Salaries
As charters may only be amended by a vote of the electors, some cities’ compensation for elected officers can be locked in at amounts that might limit who can afford to serve. For example, the City of Needles provides in their charter that council salaries are limited to $1 per month.38 In less affluent communities where city council compensation is nominal, the expenses associated with service, as well as the potential loss of income from the council member’s regular business and occupation, may skew the composition of the council toward those citizens that can afford it.
C. Bankruptcy
Declaring bankruptcy for a city comes at a heavy cost. The initial transaction costs, which can run into the millions, are only the start. Filing can bring a stigma to the city.40 A city’s credit rating will likely be suspended or downgraded. Borrowing costs can increase for years to come. Businesses will be dissuaded from locating in the community, resulting in fewer jobs and a decline in the real estate market.41 In the last thirty years, only fortynine cities or counties in the nation declared bankruptcy.42 Since 2008, three of those have been California cities: Vallejo (2008), Stockton (2012) and San Bernardino (2012). All three cities are charter cities.43 Some have asked if this were more than a coincidence.44 The answer suggests that while being a charter city was not the sole or principal reason these cities went bankrupt, provisions in each of the cities’ charters played a role in placing the city on a fiscally unsustainable path.
More specifically, the problematic charter provisions (1) acted to limit the authority of the city councils to reduce police and fire salaries and benefits, and (2) placed restrictions on city council authority that could not have been placed on a general law city.
San Bernardino has a charter provision that ties public safety employees’ salaries to an average of similar employees’ salaries paid by 10 other, mostly, more affluent cities. In 2014 the voters rejected a ballot proposal to amend the charter to remove this provision.45 Additionally, San Bernardino had an unusual government structure that diffused executive authority between the council, the mayor, and the city manager and arguably made it difficult to change the status quo even when the status quo could lead to financial ruin. When the city filed for bankruptcy, the budget for public safety salaries alone was $10 million more than the city’s expected revenues. Police and fire employee salaries made up 72 percent of the budget.46
TIPS FOR CHARTER CITIES ABOUT
CITY COUNCIL COMPENSATION
When drafting a charter proposal, consideration might be given to the following regarding city council compensation:
• Review the state law schedule for council compensation to gauge whether city council compensation will be in
line with general law cities of the same size.
• Review the limitation in state law on the amount of
compensation the city council can receive for service
on other city boards, commissions, and authorities
and determine whether a limitation on this amount is
appropriate.
• Consider whether adjustments to city council salary
should require voter approval; should be made
automatically through an annual cost of living
adjustment; or may be adopted by city council
ordinance.39
• Consider whether council compensation should be
established by another method or point of comparison.
For example, section 407 of the San Jose City Charter
provides for council salary setting by the Council Salary Setting Commission. Section 24 of the San Bernardino
City Charter provides that the mayor’s salary shall be 50 percent of the salary of a Superior Court Judge in San
Bernardino County.
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Stockton’s charter, until recently, allowed for binding arbitration for fire fighters’ compensation. This tied the city’s hands when the city and employees’ associations could not come to an agreement on reductions. Public Safety employee salaries and benefits made up 76 percent of the city’s budget.47 In November 2010, this charter provision was repealed by the voters. 48
Vallejo’s charter mandated binding arbitration for all of its unions.49 Employee salaries made up 85 percent of the city’s budget, with the largest share going towards police and fire employees. Between 2006 and 2008 (the year Vallejo declared bankruptcy), salaries of public safety employees had scheduled increases of over 21 percent, while all other employees had scheduled increases of approximately 10 percent.50 On June 8, 2010 voters repealed this charter provision. 51
Only three of the 121 California charter cities have declared bankruptcy. Being a charter city does not necessarily mean a city will be fiscally unsustainable and being a general law city does not necessarily save a city from potential bankruptcy.52
Additionally, some argue that being a charter city can help a city maintain a stronger financial footing.53 Historically, some charter cities have saved money by not paying prevailing wages54 and by contracting out for municipal services.55 On the other hand, some cities’ charters restrict such authority.
Employment costs can get out of control in general law cities as well as charter cities. However, if provisions of a charter affect the financial stability of a city, then voter approval is required to amend or repeal them. Changing identical provisions in a general law city may simply require a vote by the majority of the city council, or a renegotiation of an MOU under the Meyers-MiliasBrown Act.
D. Labor Relations
A common concern about becoming a charter city centers on the effect on labor relations.
However, in many ways, charter cities are subject to the same or similar requirements as general law cities in the area of labor relations. For example, the major public sector labor relations statute applicable to local government, i.e., the Meyers-Milias-Brown Act (MMBA)56 applies to charter cities.57 In addition, the Public Safety Officers Procedural Bill of Rights (POBR)58 has been found to apply to charter cities.59 Similarly, the Firefighters Procedural Bill of Rights (FFBOR)60 also applies to charter cities.61
1. Wages and Benefits
A concern about becoming a charter city is that the charter itself can circumvent the collective bargaining process. This can include items like binding arbitration as well as limiting wages and benefits based on a survey of comparable cities.62 These items are usually the subject of negotiations under the MMBA, but can be added to city charters by either a city councilsponsored initiative or by a petitioned initiative. However, this same process can work both ways.
For example, the City and County of San Francisco successfully defended its charter provision requiring increases or decreases in employee benefits to be approved by the voters. The court found in favor of San Francisco by determining that nothing in the MMBA prohibited the San Francisco Board of Supervisors from executing an agreement changing employee benefits and making final approval subject to approval by the voters as required by the charter.63
TIPS FOR AVOIDING
BANKRUPTCY FOR CHARTER
CITIES
Those drafting a charter may want
to consider whether the following
provisions/language should or
should not be included in your
charter:
• Salary formulas. If salary
formulas are included,
consider provisions that
allow the city council
flexibility to adjust during
times of financial crisis.
• Requiring a balanced budget.
• Requiring a two-year budget.
• Requiring a reserve
percentage of the
general fund budget as a
minimum unless there is
a super majority vote of
the city council.
• Reserving the authority to
contract out for general
services.
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City charters can also be used as vehicles to set salaries of some (like public safety) or all city employees based upon those salaries provided to employees of similarly-sized cities (or any other criteria). Such charter provisions take the salary-setting authority from the city council and place it into a formula that may or may not consider the overall financial condition of the city in the short or long term. Charter provisions might constrain the financial flexibility of the city council.64 The City of Fresno was able to amend its charter to delete a provision requiring a survey of specified cities as the basis of the city’s opening bargaining position. This was accomplished during the window between when all collectively bargaining units had a memorandum of understanding (MOU) and before the time the city and the bargaining units opened collective bargaining for subsequent MOU’s. This allowed the city to avoid violating the MMBA’s meet and confer requirements because the provision merely set the city’s initial bargaining position and not wages.65
Another city provided an additional management benefit (3 percent of salary) to a group of management employees electing not to be in an employee association, but denied this benefit to those in the same job classifications electing to be in the employee association. The court determined this management benefit discriminated against employees electing to exercise their rights to collectively bargain with the city and being a charter city did not prevent this outcome.
The court directed the city to take one of two actions to remedy the situation — either extend the additional management benefit to those employees who otherwise qualify but who are in the employee association or discontinue the management benefit for those declining to join the employee association.66
City charters can also be utilized to adopt agreements with employee associations that conflict with provisions of the Labor Code. For example, the County of Los Angeles adopted a MOU with its probation officers’ association that provided a different method to compensate employees for meal periods and working through meal periods than provided under the Labor Code. The Court denied the probation officer’s legal challenge, indicating that the charter county’s status coupled with an MOU provision covering the same issue was sufficient for the county to prevail.67
2. Pension Benefits
A number of charter cities have been exploring the ability to alter the pension benefits offered to their employees, including both those vested in the system and new hires. Notably both San Diego (Initiative Proposition B passed in June 2012 with 65 percent approval) and San Jose (Council Submitted Measure B passed in June 2012 with 69 percent approval) have had initiatives designed to change the pension benefit allocation between the employer and employee and to reduce the benefits long-term.68 Legal challenges have been made to both efforts, including by the Public Employment Relations Board (PERB) for failure to collectively bargain the changes. San Diego won its pre- and post-election court challenges by PERB,69 but it faced additional charges of unfair labor practices in connection with the measure by PERB. In proceedings against San Jose, PERB also found the city failed to bargain in good faith under the MMBA before putting the measure on the ballot. Those proceedings are still pending. In a separate lawsuit by employee unions challenging Measure B, a superior court judge held that invalidated the parts of the measure that required higher contributions from current employees but upheld other parts of the measure.70 The city has appealed the ruling.
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Similarly, in the City of Bakersfield, the police officer association was also given authority by the California Attorney General to sue in the name of the People of the State of California to challenge a charter amendment and implementing ordinances. The amendment and ordinances resulted in a different pension benefit formula and contribution level for new police department hires, as well as providing that the new formula and contribution level could only be changed by the voters. The legal challenge alleges that this charter amendment violates the meet-and-confer obligations of the MMBA.71
3. Binding Arbitration
The Legislature cannot require binding arbitration for charter or general law cities.72 This limitation applies even when the legislation allows the general law city, charter city, county, or city and county to bypass the arbitrator’s decision by a unanimous vote of the governing body.73 General law cities and charter cities have the authority to agree to binding arbitration as part of a MOU with labor organizations. The voters in a charter city have the authority to adopt binding arbitration as a part of a city charter. As reported earlier, some cities’ voters are repealing such provisions under threat of bankruptcy (cities of Vallejo and Stockton.74) and others are doing this as a proactive measure to ensure city council control over labor relations.75 E. Cost to Become a Charter City
In addition to weighing the policy costs and benefits of becoming a charter city, there are a significant number of transactional costs associated with becoming a charter city that cities are advised to factor in as well. Although the amount of those costs will vary depending on the particular situation, general law cities considering becoming charter cities should expect to incur the following transactional costs:
1. Becoming a Charter City
The process to become a charter city is typically a multi-year process with significant resources expended. There are costs associated with all of the following activities:
Legal, administrative and staffing costs to draft the charter. » Costs can vary depending upon the charter process used. For example, the use of a formal charter commission with direct authority to place something on the ballot can be higher based on the complexity and time such a process can take. » If subjects impacting wages, hours or other terms and conditions of employment are included in the proposed charter, there may be a cost to meet and confer with employee associations under the MMBA.
» Costs may also be necessary under the California Environmental Quality Act. Public education outreach.
Holding an election.
» The cost can vary greatly depending on whether the city holds a stand-alone election or consolidates with another election, such as a statewide election, which may be required in light of new legislation.76 Consolidating with another election can save a substantial amount of money.
» Election cost estimates by cities have ranged from $5,000 and higher.
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» Associated costs can include hiring election consultants, purchasing election supplies, labor costs for election workers, and paying the county registrar or election official to hold the election.
2. After Becoming a Charter City
There are also many costs that will be incurred above those a general law city would incur after charter adoption. These include costs associated with the following:
Training staff on new processes and procedures and what it means to be a charter city. Implementing required procedural changes, including adopting ordinances and amending the municipal code to take advantage of new charter authority. If the charter is drafted with flexibility in mind, these changes can be made over a number of years to spread the cost of the changes and staff retraining, so that it is manageable given other city priorities. » If public contracting is addressed in the charter and new bid thresholds are established, contract documents and bid packets will also need to be updated. » Any financial or accountability procedures included in the charter will require implementing procedures by the city finance department, including a review to ensure that proper internal and external controls are in place. » Any personnel, civil service, or labor relations changes will require changes to existing processes, procedures, and rules and may require a meet and confer process with recognized employee associations.
Lawsuits arising from exercising charter powers.
» Gray areas in the law invite lawsuits. As charters can be different and may vary in their provisions, there is no case law on how to interpret specific charter provisions.
However, a charter city is typically aware of these gray areas and can legislate based upon an analysis of risks and benefits.
All charter amendments and repeal, including those mandated by changes in the law, require an election. Often, consolidation with regularly-scheduled elections will reduce the cost.
ENDNOTES
1 For a discussion of the loss of home rule for general law cities, see Albuquerque, California and Dillon:
The Times They Are A-Changing (1998) 25 Hastings Const. L.Q. 187, 191. 2 See, e.g., Strauss & Coleman, Waiting for the State to Get Its House in Order: The Origin of Cities’ Fiscal Relationship with the State (1998) <http://www.californiacityfinance.com/HouseWC9811.pdf> [as of Apr. 20, 2016]; see also Hogen-Esch, Fragmentation, Fiscal Federalism, and the Ghost of Dillon’s Rule:
Municipal Incorporation in Southern California, 1950-2010 (2011) Vol. 3, No. 1 Cal. Journal of Pol. & Policy; Coleman & Colantuono, The Origin & Devolution of Local Revenue Authority (June 2003) Western City, at page 22; Saxton, Hoene, & Erie, Fiscal Constraints and the Loss of Home Rule: The Long-Term Impacts of California’s Post-Proposition 13 Fiscal Regime (2002) Vol. 32, No. 4 Am. Rev. of Pub. Admin. 423-454.
3 Albuquerque, supra note 1, at p. 190 (arguing that recent cases have given new life and vibrancy to the constitutional powers of charter cities).
4 Miadich & Daniels, The Illusion of Autonomy: Why Charter City Status Does Not Protect Local Revenue (June 18, 2013) <http://www.smartcitiesprevail.org/resources/Illusion_of_Autonomy_full_report. pdf> [as of Apr. 20, 2016].
5 Grodin et al., The California State Constitution: A Reference Guide (1993) p. 188.
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LEAGUE OF CALIFORNIA CITIES: CHARTER CITY TOOL KIT 53
6 City and County of San Francisco v. Boss (1948) 83 Cal.App.2d 445. 7 Wilson v. Beville (1957) 47 Cal.2d 852, 856.
8 Pacific Tel. & Tel. Co. v. City of Los Angeles (1955) 44 Cal.2d 272, 280. 9 Pacific Tel. & Tel. Co. v. City and County of San Francisco (1961) 197 Cal.App.2d 133, 148. 10 San Leandro Police Officers Assoc. v. City of San Leandro (1976) 55 Cal.App.3d 553. 11 Baggett v. Gates (1982) 32 Cal.3d 128, 140 (“There must always be doubt whether a matter which is of concern to both municipalities and the state is of sufficient statewide concern to justify a new legislative intrusion into an area traditionally regarded as ‘strictly a municipal affair.’ Such doubt, however, ‘must be resolved in favor of the legislative authority of the state.’”) 12 Cal. Fed. Savings & Loan Assn. v. Los Angeles (1991) 54 Cal.3d 1. 13 Isaac v. City of Los Angeles (1998) 66 Cal.App.4th 586, 600. 14 Grodin, supra note 5, at p. 190.
15 Bishop v. City of San Jose (1969) 1 Cal.3d 56, 64.
16 Grodin, supra note 5; Baggett v. Gates (1982) 32 Cal.3d 128. 17 Sonoma County Organization of Public Employees v. County of Sonoma (1979) 23 Cal.3d 296. 18 State Building and Construction Trades Council of California v. City of Vista (2012) 54 Cal.4th 547. 19 Minor v. City of Sacramento (1977) 66 Cal.App.3d 863, 867-868; City and County of San Francisco v.
Callanan (1985) 169 Cal.App.3d 643, 647-648.
20 Young v. Superior Court of Kern County (1932) 216 Cal. 512; Southern California Roads Company v.
McGuire (1934) 2 Cal.2d 115.
21 Wilson v. City of San Bernardino (1960) 186 Cal.App.2d 603; Pacific Telephone and Telegraph Company v. City and County of San Francisco (1959) 51 Cal.2d 766. On November 1, 2013, the Department of Industrial Relations determined that a charter city’s use of state gasoline sales tax revenues, in whole or in part for a project, subjects the entire project to the payment of prevailing wages. 22 City of Pasadena v. Charleville (1932) 215 Cal. 384, 389; State Building and Construction Trades Council of California v. City of Vista, supra, 54 Cal.4th at p. 557. Note that the basis of the City of Vista decision — that a charter city should be able to determine the best use of its tax dollars — is very similar to the basis used in the decision upholding the Los Angeles City Charter provision allowing City of Los Angeles funds to be contributed to local election campaigns. 23 This prohibition does not apply to contracts awarded or advertised for bids prior to January 1, 2015.
Lab. Code, § 1782, subd. (f).
24 City of El Centro v. Lanier (March 29, 2106, D066755) __ Cal.App.4th __ [2016 WL 1221948]. 25 Bus. & Prof. Code, § 22435 et seq.
26 Bus. & Prof. Code, § 22435.7.
27 C.f., Pac. Tel. & Tel. Co. v. City and County of San Francisco, supra, 51 Cal.2d at p. 771. 28 Sen. Local Gov. Com., Bill Analysis on Assem. Bill No. 317 (1995-1996 Reg. Sess.) (June 26, 1996) <http://www.leginfo.ca.gov/pub/95-96/bill/asm/ab_0301-0350/ab_317_cfa_960624_173000_sen_ comm.html> [as of Apr. 20, 2016].
29 St. John, California Cities Shift to Charters, Raising Questions About Officials’ Salaries. (August 6, 2010) KPBS <http://www.kpbs.org/news/2010/aug/06/officials-salaries-charter-cities/> [as of Apr. 20, 2016]. 30 See, e.g., Gang & Begley, Inland Charter Cities Offer Similar Pay to Managers, Council (August 1, 2010) The Press Enterprise <http://www.pe.com/local-news/local-news-headlines/20100802-inland-chartercities-offer-similar-pay-to-managers-council.ece> [as of Apr. 20, 2016]. 31 Placer County Ballot Guide, Special Elec. (June 5, 2012) analysis of Measure A by county counsel <http://www.placerelections.com/uploads/documents/06052012/06052012_Measure_A-City.pdf> [as of Apr. 20, 2016].
32 Ibid.
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54 LEAGUE OF CALIFORNIA CITIES: CHARTER CITY TOOL KIT
CHAPTER 5: COMMON CONCERNS ABOUT CHARTER CITIES
33 Gov. Code, § 34458.5.
34 California City Council Compensation Scorecard (Aug. 1, 2011) LA Times <http://spreadsheets.latimes. com/city-council-salaries/> [as of Apr. 20, 2016].
35 Gov. Code, § 36516, subd. (d).
36 California City Council Compensation Scorecard, supra note 34; Henry, Berkeley City Council Paid More Than State Guideline. (Aug. 3, 2011) Berkeley Patch <http://berkeley.patch.com/groups/politics-andelections/p/berkeley-city-council-paid-more-than-state-guideline> [as of Apr. 20, 2016]. 37 Cal. State Controller’s Office, Press Release, Controller Requires Cities, Counties to Report Salaries of Government Officials (Aug. 2010) <http://www.sco.ca.gov/eo_pressrel_controller_requires_salary_ reporting.html> [as of Apr. 20, 2016].
38 Gang, supra note 30.
39 For example, section 402 of the Newport Beach City Charter provides for an annual cost of living adjustment for council compensation.
40 Watkins, Note: In Defense of Chapter 9 Option: Exploring the Promise of Municipal Bankruptcy as Mechanism for Structural Political Reform (2012-2013) 39 J. of Legis. 89, 94. 41 Ibid.; see also Knox & Levinson, Municipal Bankruptcy: Avoiding and Using Chapter 9 in Times of Fiscal Stress (2009)
<http://www.orrick.com/Events-and-Publications/Documents/1736.pdf> [as of Apr. 20, 2016]. 42 Watkins, supra note 40.
43 A fourth California city, Mammoth Lakes, also filed for bankruptcy during this period of time.
However, the Mammoth Lakes case was somewhat unusual, as the small town with a budget of $19 million filed bankruptcy seeking protection from a developer lawsuit seeking $43 million in damages.
The city won a dismissal of the bankruptcy case after it settled the lawsuit. Church, Mammoth Lakes Bankruptcy Case Ends After Accord in Suit (November 19, 2012) Bloomberg <http://www.bloomberg. com/news/2012-11-19/mammoth-lakes-bankruptcy-case-ends-after-accord-in-suit.html> [as of Apr. 20, 2016].
44 Audi, White & Traves, California’s ‘Charter’ Cities Are Under the Microscope (July 18, 2012) Wall Street Journal <http://online.wsj.com/article/SB10001424052702303612804577531181167707276.html> [as of Apr. 20, 2016]; see also Rozansky, The Problem and Promise of Charter Cities (August 22, 2012) City Journal <http://www.city-journal.org/2012/cjc0817jr.html> [as of Apr. 20, 2016]. 45 Ballotpedia, City of San Bernardino Public Safety Employees Salary Charter Amendment, Measure Q (Nov. 2014) <http://ballotpedia.org/City_of_San_Bernardino_Public_Safety_Employees_Salary_ Charter_Amendment,_Measure_Q_(November_2014)> [as of Apr. 20, 2016]. 46 George Mason University, State and Local Government Leadership Center, San Bernardino Full Case Study (2012) <http://psc.gmu.edu/wp-content/uploads/GMU_San_Bernardino_9.13.pdf> [as of Apr. 20, 2016].
47 Evans, Kosenko & Polyakov, How Stockton Went Bust: A California City’s Decade of Policies and the Financial Crisis that Follows (May 24, 2012) <http://uscommonsense.org/research/how-stocktonwent-bust-a-california-citys-decade-of-policies-and-the-financial-crisis-that-followed/> [as of Apr. 20, 2016].
48 Ballotpedia, City of San Bernardino Public Safety Employees Salary Charter Amendment, Measure Q (Nov. 2014) <http://ballotpedia.org/City_of_Stockton_Binding_Arbitration_for_Fire_Department_ Employees,_Measure_H_(November_2010)> [as of Apr. 20, 2016]. 49 George Mason University, San Bernardino Full Case Study supra note 46. 50 Evans, Kosenko & Polyakov, supra note 47.
51 Ballotpedia, City of Vallejo Repeal of Binding Arbitration, Measure A (June 2010) <http://ballotpedia. org/City_of_Vallejo_Repeal_of_Binding_Arbitration,_Measure_A_(June_2010)> [as of Apr. 20, 2016].
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LEAGUE OF CALIFORNIA CITIES: CHARTER CITY TOOL KIT 55
52 Compare Welch, These California Cities Could Be Next in Bankruptcy (May 15, 2013) USA Today <http://www.usatoday.com/story/news/nation/2013/05/15/ten-california-cities-in-distress/2076217/> [as of Apr. 20, 2016] (naming five general law cities in California that may be facing bankruptcy); with Moore, 20 Cities That May Face Bankruptcy After Detroit (August 8, 2013) Newsmax <http://www. newsmax.com/Newsfront/cities-bankruptcy-after-detroit/2013/08/06/id/519081> [as of Apr. 20, 2016] (citing to three California cities that may be facing bankruptcy, all of them charter cities). 53 Vo, Costa Mesa Charter Issue to be Decided by Voters (Aug. 1, 2012) Orange County Register. 54 This may change with the enactment of SB 7 in 2013.
55 Vo, supra note 53.
56 Gov. Code, § 3500 et seq.
57 International Association of Firefighters, Local 230 v. City of San Jose (2011) 195 Cal.App.4th 1179, 1187; People ex. Re. Seal Beach Police Officers Association v. City of Seal Beach (1984) 36 Cal.3d 591, 597. 58 Gov. Code, §§ 3300-3311.
59 Baggett, supra note 11.
60 Gov. Code, §§ 3250-3262.
61 International Association of Firefighters, Local 230 v. City of San Jose (2011) 195 Cal. App.4th 1179, 1206.
62 City of Auburn, Report to City Council, Pros and Cons of Adopting a City Charter (June 28, 2010) at page 3.
63 United Public Employees, Local 390/400, SEIU, AFL-CIO v. City and County of San Francisco (1987) 190 Cal.App.3d 419, 426.
64 Audi, White & Traves, supra note 44.
65 76 Ops.Cal.Atty.Gen Gen. 169 (1993); City of Fresno v. the People ex. rel. Fresno Firefighters, IAFF Local 753 (1999) 71 Cal.App.4th 82.
66 San Leandro Police Officers Association v. City of San Leandro (1976) 55 Cal.App.3d 553. 67 Dimon v. County of Los Angeles (2008) 166 Cal.App.4th 1276, 1283. 68 See San Jose City Charter, § 1501-A; San Diego City Charter, art. IX, §§ 140-151. 69 Clingen, Pension Reform: San Jose and San Diego Voters Weigh In (Oct. 15, 2013) Ballotpedia <http:// ballotpedia.org/Pension_reform:_San_Jose_and_San_Diego_voters_weigh_in> [as of Apr. 20, 2016]. 70 Mendel, San Jose Pension Reforms Ruled Violation of Rights (Dec. 30, 2013) Calpensions <http:// calpensions.com/2013/12/30/san-jose-pension-reforms-ruled-violation-of-rights/> [as of Apr. 20, 2016].
71 95 Ops.Cal.Atty.Gen. 31 (2012); see also 95 Ops.Cal.Atty.Gen. 50 (2012) (regarding challenge to City and County of San Francisco).
72 County of Riverside v. Superior Court (Riverside County Sheriff’s Association, R.P.I.) (2003) 30 Cal.4th 278.
73 County of Sonoma v. Superior Court (2009) 173 Cal.App.4th 322. 74 Audi, supra note 44.
75 In 2011, San Luis Obispo and Palo Alto voters removed binding arbitration from their charters. 76 Stats. 2013, ch 184 (SB 311).
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56 LEAGUE OF CALIFORNIA CITIES: CHARTER CITY TOOL KIT
CHAPTER 6: CONCLUDING THOUGHTS
Chapter 6:
CONCLUDING THOUGHTS
Each city has its unique culture and set of issues. This makes it difficult to generalize about whether any particular general law city should or should not become a charter city. With this in mind, the following is offered for your consideration:
1. Each city’s unique culture and set of issues. A review of a variety of charter provisions reiterates the variety of issues facing cities statewide and the unique culture of each city. Charters include provisions varying from height limits to offshore drilling to red-light camera enforcement to pension reform. A charter is a forum for expressing the voters’ wishes on issues they wish to reserve for themselves (by limiting city council discretion).
2. Times change. The extent of a charter city’s authority is directly related to whether or not an area that otherwise is a municipal affair is deemed a matter of statewide concern.
The courts determine whether an area is a matter of statewide concern. As times change, matters of statewide concern change. To be a charter city means to be a city that lives with change.
3. More or less? As discussed in Chapter 2, the provisions of a charter are a limitation on the authority of a charter city, not a grant of authority. This has led some cities to adopt a “short-form” charter that includes very few limitations. Other cities have decided to adopt more comprehensive charters that provide detailed provisions with respect to the city’s exercise of its municipal affairs. Ultimately, the decision of how much limitation to include in a charter is a policy question that will be answered based on the input and recommendations received during the public drafting and review process.
4. Words don’t mean what they say. Section 5, subdivision (a) of article XI of the Constitution grants a charter city authority over municipal affairs. Section 5, subdivision (b) grants plenary authority over four specific municipal affairs sometimes called core municipal affairs. The courts’ decisions do not necessarily seem to be influenced by whether a charter city is relying upon section 5, subdivision (a) or section 5, subdivision (b) and have not been influenced, historically, by whether charter city was acting with plenary authority under section 5, subdivision (b).
5. Some things seem pretty certain. A few areas seem to consistently withstand a challenge:
» Municipal organization: The form of government and sub-government; » Spending local funds: How a charter city decides to use its own tax dollars; » Elections: Timing, qualifications, balloting, etc.;
» Salary and benefits (including retirement): City council, other officers and employees.
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1400 K Street, Suite 400, Sacramento, CA 95814
Phone: (916) 658-8200 | Fax: (916) 658-8240
www.cacities.org | www.cacities.org/events | www.westerncity.com Agenda Item 12 CC Agenda 01-07-20 Attachment 1 Agenda Item 12 Page No. 246 CC Agenda 01-07-20
4 EXHIBIT A
Characteristic General Law City Charter City
Ability to Govern
Municipal Affairs
Bound by the state’s general law, regardless
of whether the subject concerns a municipal
affair.
Has supreme authority over “municipal
affairs.” Cal. Const. art. XI, § 5(b).
Form of Government State law describes the city’s form of government For example, Government
Code section 36501 authorizes general law
cities be governed by a city council of five
members, a city clerk, a city treasurer, a
police chief, a fire chief and any subordinate
officers or employees as required by law.
City electors may adopt ordinance which
provides for a different number of council
members. Cal. Gov’t section 34871. The
Government Code also authorizes the “city
manager” form of government. Cal. Gov’t
Code § 34851.
Charter can provide for any form of
government including the “strong mayor,”
and “city manager” forms. See Cal. Const.
art. XI, § 5(b); Cal. Gov’t Code § 34450 et
seq.
Elections Generally Municipal elections conducted in accordance with the California Elections Code. Cal. Elec.
Code §§ 10101 et seq..
Not bound by the California Elections Code.
May establish own election dates, rules, and
procedures. See Cal. Const. art. XI, § 5(b);
Cal. Elec. Code §§ 10101 et seq..
Methods of Elections Generally holds at-large elections whereby voters vote for any candidate on the ballot.
Cities may also choose to elect the city
council “by” or “from” districts, so long as the
election system has been established by
ordinance and approved by the voters. Cal.
Gov’t Code § 34871. Mayor may be elected
by the city council or by vote of the people.
Cal. Gov’t Code §§ 34902.
May establish procedures for selecting
officers. May hold at-large or district
elections. See Cal. Const. art. XI, § 5(b).
City Council Member
Qualifications
Minimum qualifications are:
1. United States citizen
2. At least 18 years old
3. Registered voter
4. Resident of the city at least 15 days
prior to the election and throughout
his or her term
5. If elected by or from a district, be a
resident of the geographical area
comprising the district from which he
or she is elected.
Cal. Elec. Code § 321; Cal. Gov’t Code §§
34882, 36502; 87 Cal. Op. Att’y Gen. 30
(2004).
Can establish own criteria for city office
provided it does not violate the U.S.
Constitution. Cal. Const. art. XI, § 5(b), 82
Cal. Op. Att’y Gen. 6, 8 (1999).
5 Characteristic General Law City Charter City
Public Funds for Candidate
in Municipal Elections
No public officer shall expend and no
candidate shall accept public money for the
purpose of seeking elected office. Cal. Gov’t
Code § 85300.
Public financing of election campaigns is
lawful. Johnson v. Bradley, 4 Cal. 4th 389
(1992).
Term Limits May provide for term limits. Cal. Gov’t Code § 36502(b).
May provide for term limits. Cal. Const. art.
XI, § 5(b); Cal Gov’t Code Section 36502 (b).
Vacancies and Termination
of Office
An office becomes vacant in several
instances including death, resignation,
removal for failure to perform official duties,
electorate irregularities, absence from
meetings without permission, and upon nonresidency. Cal. Gov’t Code §§ 1770, 36502, 36513.
May establish criteria for vacating and
terminating city offices so long as it does not
violate the state and federal constitutions.
Cal. Const. art. XI, § 5(b).
Council Member
Compensation and
Expense Reimbursement
Salary-ceiling is set by city population and
salary increases set by state law except for
compensation established by city electors.
See Cal. Gov’t Code § 36516. If a city
provides any type of compensation or
payment of expenses to council members,
then all council members are required to
have two hours of ethics training. See Cal.
Gov’t Code §§ 53234 - 53235.
May establish council members’ salaries.
See Cal. Const. art. XI, § 5(b). If a city
provides any type of compensation or
payment of expenses to council members,
then all council members are required to
have two hours of ethics training. See Cal.
Gov’t Code §§ 53234 - 53235.
Legislative Authority Ordinances may not be passed within five days of introduction unless they are urgency
ordinances. Cal. Gov’t Code § 36934.
Ordinances may only be passed at a regular
meeting, and must be read in full at time of
introduction and passage except when, after
reading the title, further reading is waived.
Cal. Gov't Code § 36934.
May establish procedures for enacting local
ordinances. Brougher v. Bd. of Public Works,
205 Cal. 426 (1928).
Resolutions May establish rules regarding the
procedures for adopting, amending or
repealing resolutions.
May establish procedures for adopting,
amending or repealing resolutions. Brougher
v. Bd. of Public Works, 205 Cal. 426 (1928).
Quorum and Voting
Requirements
A majority of the city council constitutes a
quorum for transaction of business. Cal.
Gov’t Code § 36810.
All ordinances, resolutions, and orders for
the payment of money require a recorded
majority vote of the total membership of the
city council. Cal. Gov't Code § 36936.
Specific legislation requires supermajority
votes for certain actions.
May establish own procedures and quorum
requirements. However, certain legislation
requiring supermajority votes is applicable to
charter cities. For example, see California
Code of Civil Procedure section 1245.240
requiring a vote of two-thirds of all the
members of the governing body unless a
greater vote is required by charter.
6 Characteristic General Law City Charter City
Rules Governing
Procedure and Decorum
Ralph Brown Act is applicable. Cal. Gov’t
Code §§ 54951, 54953(a).
Conflict of interest laws are applicable. See
Cal. Gov’t Code § 87300 et seq..
Ralph Brown Act is applicable. Cal. Gov’t
Code §§ 54951, 54953(a).
Conflict of interest laws are applicable. See
Cal. Gov’t Code § 87300 et seq..
May provide provisions related to ethics,
conflicts, campaign financing and
incompatibility of office.
Personnel Matters May establish standards, requirements and procedures for hiring personnel consistent
with Government Code requirements.
May have “civil service” system, which
includes comprehensive procedures for
recruitment, hiring, testing and promotion.
See Cal. Gov't Code § 45000 et seq.
Meyers-Milias-Brown Act applies. Cal. Gov't
Code § 3500.
Cannot require employees be residents of
the city, but can require them to reside within
a reasonable and specific distance of their
place of employment. Cal. Const. art. XI, §
10(b).
May establish standards, requirements, and
procedures, including compensation, terms
and conditions of employment for personnel.
See Cal. Const. art. XI, § 5(b).
Procedures set forth in Meyers-Milias-Brown
Act (Cal. Gov't Code § 3500) apply, but note,
“[T]here is a clear distinction between the
substance of a public employee labor issue
and the procedure by which it is resolved.
Thus there is no question that 'salaries of
local employees of a charter city constitute
municipal affairs and are not subject to
general laws.'” Voters for Responsible
Retirement v. Board of Supervisors, 8
Cal.4th 765, 781 (1994).
Cannot require employees be residents of
the city, but can require them to reside within
a reasonable and specific distance of their
place of employment. Cal. Const. art. XI,
section 10(b).
Contracting Services Authority to enter into contracts to carry out necessary functions, including those
expressly granted and those implied by
necessity. See Cal. Gov't Code § 37103;
Carruth v. City of Madera, 233 Cal. App. 2d
688 (1965).
Full authority to contract consistent with
charter.
May transfer some of its functions to the
county including tax collection, assessment
collection and sale of property for nonpayment of taxes and assessments. Cal.
Gov't Code §§ 51330, 51334, 51335.
7 Characteristic General Law City Charter City
Public Contracts Competitive bidding required for public works contracts over $5,000. Cal. Pub. Cont. Code
§ 20162. Such contracts must be awarded to
the lowest responsible bidder. Pub. Cont.
Code § 20162. If city elects subject itself to
uniform construction accounting procedures,
less formal procedures may be available for
contracts less than $100,000. See Cal. Pub.
Cont. Code §§ 22000, 22032.
Contracts for professional services such as
private architectural, landscape architectural,
engineering, environmental, land surveying,
or construction management firms need not
be competitively bid, but must be awarded
on basis of demonstrated competence and
professional qualifications necessary for the
satisfactory performance of services. Cal.
Gov't Code § 4526.
Not required to comply with bidding statutes
provided the city charter or a city ordinance
exempts the city from such statutes, and the
subject matter of the bid constitutes a
municipal affair. Pub. Cont. Code § 1100.7;
see R & A Vending Services, Inc. v. City of
Los Angeles, 172 Cal. App. 3d 1188 (1985);
Howard Contracting, Inc. v. G.A. MacDonald
Constr. Co., 71 Cal. App. 4th 38 (1998).
Payment of Prevailing
Wages
In general, prevailing wages must be paid on
public works projects over $1,000. Cal. Lab.
Code § 1771. Higher thresholds apply
($15,000 or $25,000) if the public entity has
adopted a special labor compliance program.
See Cal. Labor Code § 1771.5(a)-(c).
Historically, charter cities have not been
bound by state law prevailing-wage
requirements so long as the project is a
municipal affair, and not one funded by state
or federal grants. Vial v. City of San Diego,
122 Cal. App. 3d 346, 348 (1981). However,
there is a growing trend on the part of the
courts and the Legislature to expand the
applicability of prevailing wages to charter
cities under an analysis that argues that the
payment of prevailing wages is a matter of
statewide concern. State currently prohibits
construction funding (SB 7) if prevailing
wage not used.
8 Characteristic General Law City Charter City
Finance and Taxing Power May impose the same kinds of taxes and assessment as charter cities. See Cal. Gov't
Code § 37100.5.
Imposition of taxes and assessments subject
to Proposition 218. Cal. Const. art.XIIIC.
Examples of common forms used in
assessment district financing include:
Improvement Act of 1911. Cal. Sts.
& High. Code § 22500 et seq..
Municipal Improvement Act of 1913.
See Cal. Sts. & High. Code §§
10000 et seq..
Improvement Bond Act of 1915. Cal.
Sts. & High. Code §§ 8500 et seq..
Landscaping and Lighting Act of
1972. Cal. Sts. & High. Code §§
22500 et seq..
Benefit Assessment Act of 1982.
Cal. Gov't Code §§ 54703 et seq..
May impose business license taxes for
regulatory purposes, revenue purposes, or
both. See Cal. Gov't Code § 37101.
May not impose real property transfer tax.
See Cal. Const. art. XIIIA, § 4; Cal. Gov't
Code § 53725; but see authority to impose
documentary transfer taxes under certain
circumstances. Cal. Rev. & Tax. Code §
11911(a), (c).
Have the power to tax.
Have broader assessment powers than a
general law city, as well as taxation power as
determined on a case-by case basis.
Imposition of taxes and assessments subject
to Proposition 218, Cal. Const. art. XIIIC, §
2, and own charter limitations
May proceed under a general assessment
law, or enact local assessment laws and
then elect to proceed under the local law.
See J.W. Jones Companies v. City of San
Diego, 157 Cal. App. 3d 745 (1984).
May impose business license taxes for any
purpose unless limited by state or federal
constitutions, or city charter. See Cal. Const.
art. XI, § 5.
May impose real property transfer tax; does
not violate either Cal. Const art. XIIIA or
California Government Code section 53725.
See Cohn v. City of Oakland, 223 Cal. App.
3d 261 (1990); Fielder v. City of Los
Angeles, 14 Cal. App. 4th 137 (1993).
Streets & Sidewalks State has preempted entire field of traffic control. Cal. Veh. Code § 21.
State has preempted entire field of traffic
control. Cal. Veh. Code § 21.
Penalties & Cost Recovery May impose fines, penalties and forfeitures, with a fine not exceeding $1,000. Cal. Gov’t
Code § 36901.
May enact ordinances providing for various
penalties so long as such penalties do not
exceed any maximum limits set by the
charter. County of Los Angeles v. City of Los
Angeles, 219 Cal. App. 2d 838, 844 (1963).
9 Characteristic General Law City Charter City
Public Utilities/Franchises May establish, purchase, and operate public works to furnish its inhabitants with electric
power. See Cal. Const. art. XI, § 9(a); Cal.
Gov't Code § 39732; Cal. Pub. Util. Code §
10002.
May grant franchises to persons or
corporations seeking to furnish light, water,
power, heat, transportation or
communication services in the city to allow
use of city streets for such purposes. The
grant of franchises can be done through a
bidding process, under the Broughton Act,
Cal. Pub. Util. Code §§ 6001-6092, or
without a bidding process under the
Franchise Act of 1937, Cal. Pub. Util. Code
§§ 6201-6302.
May establish, purchase, and operate public
works to furnish its inhabitants with electric
power. See Cal. Const. art. XI, § 9(a); Cal.
Apartment Ass’n v. City of Stockton, 80 Cal.
App. 4th 699 (2000).
May establish conditions and regulations on
the granting of franchises to use city streets
to persons or corporations seeking to furnish
light, water, power, heat, transportation or
communication services in the city.
Franchise Act of 1937 is not applicable if
charter provides. Cal. Pub. Util. Code §
6205.
Zoning Zoning ordinances must be consistent with
general plan. Cal. Gov't Code § 65860.
Zoning ordinances are not required to be
consistent with general plan unless the city
has adopted a consistency requirement by
charter or ordinance. Cal. Gov’t. Code §
65803.
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GOVERNMENT CODE - GOV
TITLE 4. GOVERNMENT OF CITIES [34000 - 45345] ( Title 4 added by Stats. 1949, Ch. 79. ) DIVISION 2. ORGANIZATION AND BOUNDARIES [34400 - 34906] ( Division 2 added by Stats. 1949, Ch. 79. ) PART 1. ORGANIZATION [34400 - 34906] ( Part 1 added by Stats. 1949, Ch. 79. ) CHAPTER 2. City or City and County Charters [34450 - 34462] ( Chapter 2 repealed and added by Stats. 1988, Ch. 357, Sec. 10. )
Any city or city and county may enact, amend, or repeal a charter for its own government according to this article or Article 3 (commencing with Section 9255) of Chapter 3 of Division 9 of the Elections Code. (Amended by Stats. 1994, Ch. 923, Sec. 63. Effective January 1, 1995.) The charter may be proposed by a charter commission chosen by the voters of the city or city and county, at any general or special election, but no person shall be eligible as a candidate for the commission unless he or she is a registered voter of the city or city and county. (Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
(a) An election for choosing charter commissioners may be called by a majority vote of the governing body of a city or city and county, or on presentation of a petition signed by not less than 15 percent of the registered voters of the city or city and county. The petition shall be verified by the authority having charge of the registration records of the city or city and county and the expenses of the verification shall be provided by the governing body thereof. The governing body shall call an election pursuant to Sections 1000 and 10403 of the Elections Code. (b) If any vacancy arises in a charter commission established for a city or city and county pursuant to this chapter, the vacancy shall be filled by an appointment by the mayor of the city or city and county. (Amended by Stats. 1994, Ch. 923, Sec. 64. Effective January 1, 1995.) At an election the voters shall vote first on the question “Shall a charter commission be elected to propose a new charter?” and, secondly, for the candidates of the office of charter commissioner. If the first question receives a majority of the votes of the qualified voters voting thereon at the election, the 15 candidates for the office of charter commissioner receiving the highest number of votes shall forthwith organize as a charter commission.
However, if the first question receives less than a majority of the votes of the qualified voters voting thereon at the election no charter commission shall be deemed to have been elected. (Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
Candidates for the office of charter commissioner shall be nominated either in the same manner provided for the nomination of officers of the municipal or city and county government, or by petition substantially in the same manner provided by general laws for the nomination by petition of candidates for public offices to be voted for at general elections.
(Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
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The charter commissioners shall propose a charter and may propose amendments to a charter, for the government of the city or city and county. The charter so prepared shall be signed by a majority of the charter commissioners and shall be filed in the office of the clerk of the governing body of the city or city and county. (Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
In any city or city and county, the governing body shall cause copies of the charter to be printed in type of not less than 10-point. If the governing body causes copies of the proposed charter to be mailed to the voters, the text of the proposed charter may show the difference from existing provisions of law by the use of distinguishing type styles.
(Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
After the charter prepared by the charter commission has been filed in the office of the clerk of the governing body of the city or city and county pursuant to Section 34455, the proposed charter shall be submitted to the voters of the city or city and county at the next established statewide general election pursuant to Section 1200 of the Elections Code, provided there are at least 95 days before the election. (Amended by Stats. 2013, Ch. 184, Sec. 4. (SB 311) Effective January 1, 2014.) (a) As an alternative to the procedure provided for in Sections 34450 to 34457, inclusive, the governing body of a city or city and county, on its own motion may propose or cause to be proposed, amend or cause to be amended, or repeal or cause to be repealed, a charter, and may submit the proposal for the adoption, amendment, or repeal thereof, to the voters at the next established statewide general election pursuant to Section 1200 of the Elections Code, provided there are at least 88 days before the election, or, for a proposal described in paragraph (2) of subdivision (a) of Section 1415 of the Elections Code, at an election specified in that paragraph. (b) Prior to approving the submission to the voters of a proposal to adopt a charter, the governing body shall hold at least two public hearings on the matter of the proposal of a charter and the content of the proposed charter.
Notice of the public hearings shall be given by publication pursuant to Section 6066, in a newspaper designated by the governing body and circulated throughout the city, and by posting the notice in three public places within the jurisdiction at least 21 calendar days prior to the date of each public hearing. The second public hearing shall be held at least 30 days after the first public hearing. At least one of the public hearings shall be held outside of normal business hours to facilitate public participation. The governing body shall not conduct a vote on whether to approve the submission to the voters of the proposal to adopt a charter until 21 days after the second public hearing.
(Amended by Stats. 2013, Ch. 184, Sec. 5. (SB 311) Effective January 1, 2014.) A proposal to adopt or amend a charter, whether submitted to the voters pursuant to Section 34457 or 34458, shall include in the ballot description an enumeration of new city powers as a result of the adoption of the charter, including, but not limited to, whether the city council will, pursuant to an adopted charter, have the power to raise its own compensation and the compensation of other city officials without voter approval. (Added by Stats. 2011, Ch. 692, Sec. 6. (AB 1344) Effective January 1, 2012.) If the voters vote in favor of the charter proposal, amendment, or repeal, it shall be deemed to be ratified, but shall not take effect until accepted and filed by the Secretary of State pursuant to Section 34460. (Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
Three copies of the complete text of a charter proposal or of any amended or repealed section ratified by the voters of a city or city and county shall be certified and authenticated by the chairperson and the clerk of the governing body and attested by the city clerk, setting forth the submission of the charter to the voters of the city, and its ratification by them. One copy shall be recorded with the recorder of the county in which the city is located, and one filed in the archives of the city. In the case of a city and county, one copy shall be recorded with the recorder thereof, and one filed in the archives of the city and county. The third copy shall be filed with the Secretary
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of State. Each copy recorded with the recorder of the county or city and county and filed in the archives of the city or city and county shall be filed with the following:
(a) Certified copies of all publications and notices required of the city by this chapter or by the laws of this state in connection with the calling of an election to propose, amend, or repeal a city charter. (b) Certified copies of any arguments for or against the charter proposal, amendment, or repeal that were mailed to voters pursuant to Sections 9281 and 13303 of the Elections Code. (c) A certified abstract of the vote at the election at which the charter proposal, amendment, or repeal was approved by the voters.
(Amended by Stats. 2012, Ch. 330, Sec. 5. (SB 1090) Effective January 1, 2013.) A charter proposal, amendment, or repeal by the voters of a city or city and county and submitted to the Secretary of State in compliance with this chapter shall be accepted and filed by the Secretary of State. The charter proposal, amendment, or repeal shall be published in the statutes in a charter chapter series under the designation “Statutes of ____ (year), Charter Chapter ____. ” Under the chapter number, the date of the ratification election and the date of filing with the Secretary of State shall be indicated.
After a charter proposal, amendment, or repeal is accepted and filed by the Secretary of State, the courts shall take judicial notice thereof.
(Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
(a) A charter commission established for a city and county pursuant to this chapter shall complete a proposed or amended charter and submit the charter to the voters of the city and county within two years of the date of the election of the charter commissioners, and at the expiration of that period is abolished. (b) A charter commission may submit portions of the proposed or amended charter to the voters periodically. (Repealed and added by Stats. 1988, Ch. 357, Sec. 10.)
SAMPLE CHARTER
TOWN OF ATHERTON
PREAMBLE
The Town of Atherton was incorporated as a general law city in 1923 by residents seeking the right to manage local affairs. The authority of general law cities has diminished as a result of increasing State mandates and involvement in local matters. In order to reclaim the local autonomy sought through incorporation and to preserve the right of the people to present grievances to the most responsive level of government, we, the citizens of the Town of Atherton, enact this Charter.
ARTICLE 1
Acceptance of Home Rule
Except as restricted by this Charter, the Town shall have all powers allowable under the Constitution of the State of California to adopt ordinances, establish rules, grant franchises, structure Town government, and in every way to govern the municipal affairs of the Town.
Municipal affairs encompass all matters of local concern as determined by the City Council consistent with the meaning of "municipal affairs" under the constitutional, statutory, and judicially defined law of the State of California.
Nothing in this Charter is intended to restrict the Town in exercising any right, power or authority granted under the general laws of the State of California. However, the provisions of this Charter shall prevail in the event of any conflict with general law.
ARTICLE II
Structure of City Government
The Town shall continue to be governed by a council of five members, four Councilmembers and a Mayor, elected at large. The City Council shall appoint a City Manager and a City Attorney. The City Manager, as the chief administrative officer of the Town, shall appoint all department heads other than the City Attorney. Involvement in administrative matters by the Council or by any individual Councilmember shall occur only by direction of the City Manager.
ARTICLE III
Selection of Mayor and Vice Mayor
The Mayor and Vice Mayor shall be elected from among the Councilmembers by a majority vote of the members of the Council. They serve for a one-year period and at the pleasure of the Council.
The City Council shall adopt and regularly affirm all policies applicable to the role of members of the City Council.
ARTICLE IV
Public Contracting
The City Council, by ordinance, shall establish the procedures, including any competitive bidding requirements, to be followed by the Town in awarding public contracts of any nature, including those for construction of public works.
ARTICLE V
Continuation of Existing Law
All ordinances, resolutions, rules, policies and regulations of the Town in effect as of the effective date of this Charter shall continue in effect until repealed or amended.
ARTICLE VI
Interpretation
The provisions of this Charter shall be interpreted broadly to favor the exercise of home rule. If any provision is found by a court to be invalid, the remaining provisions of the Charter shall remain in full force and effect.
DRAFT CHARTER – TOWN OF ATHERTON
PREAMBLE
We the people of the Town of Atherton declare our intent to restore to our community the historic principles of self-governance inherent in the doctrine of home-rule. Sincerely committed to the belief that local government has the closest affinity to the people governed, and firm in the conviction that the economic and fiscal independence of our local government will promote the health, safety and welfare of all the citizens of this City, we do hereby exercise the express right granted by the Constitution of the State of California to enact and adopt this Charter for the Town of Atherton.
Article I - MUNICIPAL AFFAIRS: GENERALLY
Section 100. Municipal Affairs. The Town shall have full power and authority to adopt, make, exercise, and enforce all legislation, laws, and regulations and to take all actions relating to municipal affairs, without limitation, which may be lawfully adopted, made, exercised, taken or enforced under the Constitution of the State of California. Without limiting in any manner the foregoing power and authority, each of the powers, rights, and responsibilities set forth and described in this Charter, and as established by the Constitutional, statutory, and judicially defined law of the State of California, is hereby declared to be a municipal affair or concern, the performance of which is unique to the benefit and welfare of the citizens of the Town of Atherton. Additionally, an intent of this Charter is to allow the City Council and the voters to exercise the maximum degree of local control over land use matters within the Town.
Section 101. Interpretation. The language contained in this Charter is intended to be construed broadly in favor of the exercise by the Town of its power to govern with respect to any matter which is a municipal affair.
Section 102. Residential Character of Town. The provisions of this Charter shall recognize and require preservation of the Town’s character as a scenic, rural, thickly wooded predominantly residential community with abundant open space.
Article II – FORM OF GOVERNMENT
Section 200. Council-Mananger. The municipal government established by this Charter shall be in the form of a “Council-Manager” form of government. The City Council shall establish the policies of the City and the City Manager shall carry out such policies.
Section 201. City Council. The Council shall be comprised of five (5) Councilmembers and shall be the legislative body of the Town. Councilmembers shall serve without compensation, except that they be reimbursed for expenses arising from Town business, such as attendance at approved out-of-town meetings or conferences. No former Councilmember may hold any compensated appointed Town position or regular Town employment until at least one (1) year after the being out of the office of Councilmember.
Section 202. Mayor, Vice Mayor. The City Council shall, at its first regular meeting in December succeeding its election, elect from its members a Mayor to preside at meetings of the Council and to be recognized as head of the Town government for all ceremonial purposes, and a Vice Mayor to act as Mayor in the absence of or disability of the Mayor. Other than administrative duties set forth in the Municipal Code, the Mayor and Vice Mayor shall have no additional powers or authority different from other members of the City Council.
Section 203. Legislation. In addition to other acts required by law to be done by ordinance, acts which provide for the following shall be done by ordinance:
(a) Provide for a criminal or civil penalty, or adopt any rule or regulation violation of which results in a criminal or civil penalty.
(b) Levy any tax.
(c) Regulate the use of property or regulate conduct of persons.
No ordinance shall be passed without receiving the affirmative vote of at least three (3) Councilmembers.
Ordinances and resolutions need not be read either in whole or part prior to their adoption unless otherwise required by law.
Section 204. City Manager. There shall be a City Manager who shall be the chief administrative officer of the Town. The Council shall choose the City Manager without regard to political consideration and with reference solely to qualifications for the office. The procedure for appointment and removal of the City Manager, and the scope of authority and the job duties and responsibilities shall be as set forth by Ordinance in the Atherton Municipal Code.
Section 205. Interference with City Manager. Neither the Mayor nor any Councilmember shall interfere with the execution of the powers and duties of the City Manager, and the City Manager shall take his or her direction from the City Council as a whole and based on policy created in a public meeting. Except for purposes of inquiry, the Mayor and Councilmembers shall deal with the Town employees, contractors, and staff solely through the City Manager, and neither the Mayor nor any Councilmember shall give any order or instruction to any subordinate of the City Manager.
Section 206. City Attorney. There shall be a City Attorney appointed by the City Council. The City Attorney shall have been licensed to practice law in California for at least 5 years next preceding appointment and shall have been in actual practice in the field of public agency law, preferably municipal law, for at least the last 3 years. The City Attorney shall be the legal advisor to the City Council, all other Town officials, boards and commissions Article III – REVENUE AND FINANCE
Section 301. Public Financing. The Town shall have the power to establish standards, procedures, rules or regulations related to financing of public improvements and services.
Section 302. Utility Franchises. The Town shall have the power to adopt any ordinance providing for the acquisition, development, or operation by the Town of any public utility, or any ordinance providing for the granting of a franchise to any public utility not owned by the Town which proposes to use or is using Town streets, highways or other rights-of-way.
Section 303. Enterprises. The Town shall have the power to engage in any enterprise deemed necessary to produce revenues for the general fund or any other fund established by the City Council to promote a public purpose.
Section 304. Contracts. The City Council shall have the power to establish standards, procedures, and rules or regulations pertaining to all aspects of the award and performance of contracts, including contracts for the construction of public works and public improvements, including, but not limited to, compensation paid for performance of such works. The provisions of the Public Contract Code shall not automatically apply to Town contracts unless specified by ordinance or unless called for in bid specifications or request for proposals. The Town shall have the power to establish standards, procedures, rules or regulations to regulate all aspects of the bidding, award and performance of any public works contract, including, but not limited to, the compensation rates to be paid for the performance of such work.
Section 305. Reductions Prohibited. Any revenue raised or collected by the City Council shall not be subject to subtraction, retention, attachment, withdrawal or any other form of involuntary reduction by any other level of government.
Section 306. Mandates Limited. No person, whether elected or appointed, acting on behalf of the Town shall be required to perform any function which is mandated by any other level of government unless and until funds sufficient for the performance of such function are provided by the mandating authority.
Section 307. Financial Resources. It shall be the duty, obligation, and responsibility of the City Council to develop plans and programs, provide adequate financial resources for, and to implement fully such plans and programs as are necessary to accomplish the duties and obligations set forth in this Charter and in State and Federal laws.
Section 308. Prevailing Wages. Unless required by law, the Town retains the right to not require payment of prevailing wages on public works projects when the City Council finds it is in the best interests of the Town and the project in question constitutes a municipal affair and is not funded by state or federal grants.
Article IV - General Laws
Section 400. General Law Powers. In addition to the power and authority granted by the terms of this Charter and the constitution of the State of California, the City shall have the power and authority to adopt, make, exercise and enforce all legislation, laws and regulations and to take all
actions and to exercise any and all rights, powers, and privileges heretofore or hereafter established, granted or prescribed by any law of the State of California or by any other lawful authority. In the event of any conflict between the provisions of this Charter and the provisions of the general laws of the State of California, the provisions of this Charter shall control.
Article V - Interpretation
Section 500. Construction and Interpretation. The language contained in this Charter is intended to be permissive rather than exclusive 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.
Section 501. Severability. If any provision of this Charter should be held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law.
Item No. 9
Town of Atherton
CITY COUNCIL STAFF REPORT – REGULAR AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL
GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT BARRON III, FINANCE DIRECTOR
DATE: SEPTEMBER 18, 2024
SUBJECT: REVIEW AND APPROVE THE RESPONSE TO GRAND JURY REPORT:
“ASSESSING AND REPORTING INTERNAL CONTROLS IN SAN
MATEO COUNTY AGENCIES AND SCHOOL DISTRICTS”
RECOMMENDATION
Review and approve the attached response to the San Mateo County Grand Jury Report on their report entitled “Assessing and Reporting Internal Controls in San Mateo County Agencies and School Districts.”
BACKGROUND
The Superior Court of California, of the County of San Mateo Civil Grand Jury issued a report on June 27, 2024, entitled, “Assessing and Reporting Internal Controls in San Mateo County Agencies and School districts.” The Grand Jury report notes that in 2015, the California State Controller’s Office issued “Internal Control Guidelines-California Local Agencies” covering the need for internal controls in government agencies to comply with California Government Code section 12422.5. The State refers to the “Green Book” which sets the standards for internal control in the Federal Government issued by the General Accounting Office of the U.S. Government. The State guidelines refer to the Green Book and guidelines include a section on Accountability for Performance which includes:
• establishing mechanisms for holding individuals accountable for internal control responsibilities, which naturally include the oversight body and management • establishing performance measures for all levels of the organization • performing timely evaluations and aligning incentives with the fulfillment of internal control responsibilities.
The report further states that “All governing bodies and its management have basic responsibilities regarding internal controls, even if State Guidelines do not specifically refer to those basic responsibilities. Those responsibilities naturally include:
Grand Jury Report on Internal Controls
September 18, 2024
• Oversight boards must demonstrate its oversight of management’s internal controls, such as clear and timely reporting on its review of internal controls • Management’s reports on internal controls should be clearly and readily available to the public
• Management must be evaluated for its assessments of internal controls and its external reporting.”
The Grand Jury surveyed 75 entities, that included municipalities, school districts, independent special districts and joint powers authorities. They received responses from 54 entities. They looked into how government entities assess their internal controls and how the results are reported to the governing board. The Civil Grand Jury focused on the responses to the following questions from the survey:
1. Do you have an established process in place to identify organizational risks (also known as Enterprise Risk Management, or ERM)?
2. Other than outside audits of your organization's financial statements, have you or your organization performed an assessment of your organization's "internal controls" within the last 18 months?”
3. Was a written report of the assessment produced?
From the survey eighteen entities responded that they had performed an assessment of internal controls in the prior 18 months. Four entities responded that they prepared a report on assessments of internal controls. The Grand Jury Report is included as Attachment 1. Agencies must submit comments within 90 days after the Grand Jury submits a report regarding the operations of any public agency, as California Penal Code §933(c) provides the “Governing body of the public agency shall comment to the presiding judge of the Superior Court on the findings and recommendations pertaining to matters under the control of the governing body…” It requires any agency that is the subject of such a report to reply in writing at a public meeting. Our response is due no later than September 25, 2024.
The Finance Director has prepared the attached reply (Attachment 2) to the Grand Jury Report for Council consideration and approval.
FINDINGS | ANALYSIS
Overall, the report provides a general overview of internal controls, including regulatory history, and includes recommendations on how to strengthen internal controls. The report cites the government faces risks, including fraud and waste. It lists some examples of fraud and waste found in some government agencies. Internal controls are vital and in place for reasonable assurance that an agency will safeguard its assets and achieve its objectives with reliability of financial reporting, efficiency and effectiveness of operations, and compliance with laws. It was discussed that all agencies aim to control risks appropriate for its staffing and operations while implementing internal controls based on its agency profile. From the survey it was discovered that all agencies have established internal controls and published audit reports. At the forefront of the Grand Jury report is that agencies do not assess their internal controls and do not communicate with governing
Grand Jury Report on Internal Controls
September 18, 2024
boards regarding management of internal controls. It recommends for timely documented assessments of internal controls, reports from management to governing boards on assessments in an effort to reduce risks of failed internal controls, promote confidence in government agency operations and improve efficiencies of external audits. Those agencies that responded to the survey were then interviewed to confirm their survey responses.
The Grand Jury focus during the interviews was on whether the agencies have a process to identify organizational risks, periodically assess internal controls, and reporting of the results of these assessments. Following the interviews the Grand Jury compiled a report that presents three findings and makes three recommendations. The report identifies each jurisdiction and corresponding response requirements. The following are the Findings from the report:
F1. When an entity does not have a process to identify organizational risks, and the entity does not demonstrate how its internal controls address identified risks, the likelihood of a failure in internal controls that results in fraud or waste increases.
F2. When an entity does not periodically assess its internal controls and the entity cannot demonstrate that it is monitoring its internal controls, the likelihood of a failure in internal controls that results in fraud or waste increases.
F3. When management does not report the results of its assessments of internal controls to its governing board and the entity has not communicated externally, the likelihood that others see this as an opportunity to commit fraud or waste increases.
The Report concludes with three Recommendations to which each jurisdiction must respond.
R1. Beginning by no later than December 31, 2024 and at least annually thereafter, each entity will document its organizational risks and address those risks in its annual Assessment of Internal Controls.
R2. Beginning by no later than March 31, 2025 and at least annually thereafter, each governing board will require its management to complete its annual assessments of internal controls.
R3. Beginning by no later than June 30, 2025 and annually thereafter, each governing board will require management to report the results of its annual assessment of the entity’s internal controls.
The report instructs many agencies to respond to all of these. The Town of Atherton is instructed to only respond to Findings 2 and 3 and Recommendations 2 and 3. Staff has reviewed these Findings and Recommendations and has prepared a letter for the City Council’s consideration that responds to the report.
POLICY FOCUS
The Grand Jury requires that the Town respond to the findings and recommendations in the report.
Staff has provided responses for the City Council’s consideration. Staff has agreed with findings, partially agreed with others, and provided feedback on the recommendations.
Grand Jury Report on Internal Controls
September 18, 2024
FISCAL IMPACT
The development and preparation of an annual report on internal controls will require staff time and resources not fully identified. This additional requirement is anticipated to fall to executive leadership and department staff. There is potential expense if the Town chooses to hire an external provider or consultant to conduct assessment of our internal controls.
GOAL ALIGNMENT
This report and its contents are in alignment with the following Council Policy Goals:
• Goal A – Maintain Fiscal Responsibility
• Goal F – Be Forward-Thinking, Well-Managed, and Well-Planned
COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item ____ has or __X___ has not been before a Town Committee or Commission. ____ Audit/Finance Committee (meets every other month)
____ Bicycle/Pedestrian Committee (meets as needed)
____ Civic Center Advisory Committee (meets as needed)
____ Environmental Programs Committee (meets every other month) ____ Park and Recreation Committee (meets each month)
____ Planning Commission (meets each month)
____ Rail Committee (meets every other month)
____ Transportation Committee (meets every other month) ____ Tree Committee (meets each month)
ATTACHMENT
1. Grand Jury Report-Assessing and Reporting Internal Controls in San Mateo County Agencies and School Districts
2. Response to Grand Jury Report “Assessing and Reporting Internal Controls in San Mateo County Agencies and School Districts.”
1 2023-2024 San Mateo County Civil Grand Jury
Assessing and Reporting Internal Controls
in San Mateo County Agencies and School Districts
“FAILURE OF ANY CONTRIBUTES TO PUBLIC DISTRUST OF ALL”
ISSUE
San Mateo County, Cities, Special Districts, Joint Power Authorities, or Schools are not assessing internal controls and are not reporting the results of assessments to governing boards and the public.
SUMMARY
Our government faces risks, including fraud and waste.
Internal controls are put in place by an entity's oversight body, management, and other personnel to provide reasonable assurance that the entity will achieve its objectives. Internal controls in our government are key to ensuring that goals are met without fraud and waste and are critical to the public trust. An example of an internal control is having separate people approve a transaction before paying the bill for that transaction.
Internal controls hit the public eye back in the 1990s, after the scandals at Enron, WorldCom and other organizations, all of which served as examples of fraud and waste. The United States Congress reacted in 2002 by enacting the laws known as Sarbanes–Oxley that impact publiclytraded companies. In 2015, the State of California issued “Internal Control Guidelines - California Local Agencies” covering the need for internal controls in government entities.
Given the enormity of the challenge of reviewing individual controls at any one agency, the Civil Grand Jury looked into the way government entities in San Mateo County assess their internal controls and how the results of those assessments are reported to governing boards and to the public. Assessments and reporting should follow the State of California guidelines and the underlying referenced guidelines from the Green Book and the Committee of Sponsoring Corporations. Management’s assessment of internal controls and communication, both internally within an entity and externally to the entity’s constituents, are key principles of internal controls.
2 2023-2024 San Mateo County Civil Grand Jury
Too many examples of lack of or failed internal controls exist, including recent news stories about taxpayer money used for constructing personal residences in train stations in Burlingame and San Mateo that are referenced in the attached Appendix.
The Civil Grand Jury learned from survey respondents that all of them do have established internal controls and publish external audit reports. Most of them, however, do not assess internal controls and do not communicate with governing boards or the public regarding management of internal controls. Of the few entities that do assess internal controls, they do not report those results.
The Civil Grand Jury recommends timely and documented assessments of internal controls with clear, appropriate reports from management to governing boards and to the public to reduce the risk of failed internal controls, to enhance public confidence in our government and to improve the efficiency of external audits.
By rule of the Civil Grand Jury, the recommendations included in this report can only be sent to entities that participated in interviews with the Civil Grand Jury. While the Civil Grand Jury could not efficiently interview all entities that participated in surveys, common sense suggests that these recommendations are applicable to all entities within San Mateo County. The current Civil Grand Jury encourages future civil grand juries to investigate the recommendations in this report as appropriate, to help optimize trust in the integrity of internal controls in San Mateo County government.
GLOSSARY
Assessment and Evaluation
Assessment for the purpose of this report is defined in the Green Book as follows: “To determine if an internal control system is effective, management assesses the design, implementation, and operating effectiveness of the five components and 17 principles.” Examples in an internal control assessment include to confirm and document that all requisitions are properly approved and that payments for goods or services are made by authorized individuals. This process helps management and stakeholders have confidence in the reliability of financial reporting, compliance with laws and regulations, and the overall integrity of the organization's operations.
In general, Assessment and evaluation can be used interchangeably.
Committee of Sponsoring Organizations of the Treadway Commission (COSO) The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is an organization that develops guidelines for businesses to evaluate internal controls, risk management, and fraud deterrence.
Enterprise Risk Management (ERM)
Enterprise risk management is an entity-wide strategy to identify and prepare for hazards with the entity’s finances, operations, and objectives.
3 2023-2024 San Mateo County Civil Grand Jury
Entity
An Entity for this report is San Mateo County, Cities, Special Districts, Joint Power Authorities, or Schools.
External Auditor
An external auditor is a public accountant who conducts audits, reviews, and other work for its clients. An external auditor is independent, and so is in a good position to make an impartial evaluation of the financial statements and systems of internal controls of those clients.
Green Book
Standards for internal control in the Federal Government issued by the General Accounting Office of the U.S. Government.
Internal Auditor
An internal auditor is responsible for reviewing a company’s processes, identifying anomalies, and reporting any issues found to management. An internal auditor is an employee of a company, so is not independent of the company.
Internal Controls
A process effected by those charged with governance, management, and other personnel that is designed to provide reasonable assurance about the achievement of the entity’s objectives with regard to the reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations. Internal control over safeguarding of assets against unauthorized acquisition, use or disposition may include controls relating to financial reporting and operations objectives.
Management
Management consists of those individuals directly responsible for all activities of an entity, including design, implementation and operation of an internal control system.
Oversight Body
The oversight body is the group responsible for overseeing the strategic direction of the entity and obligations related to the accountability of the entity, including management’s design, implementation and operation of an internal control system. The oversight body may include elected or appointed officials and employees of the Entity.
BACKGROUND
Internal controls help an entity’s management achieve its objectives. Also, internal controls help an entity run its operations efficiently and effectively, report reliable information about its operations and comply with applicable laws and regulations.
The need for internal controls applies to all entities, regardless of size. Large complex entities have different risk profiles than small, less-complex entities. All entities seek to control risk appropriate for its operations, designing and implementing internal controls for its own particular risk profile. Even small, less-complex entities face risks that demand related internal controls.
4 2023-2024 San Mateo County Civil Grand Jury
Whether an internal control is followed or not is not a matter of materiality. A failure in what might seem to someone to be a trivial control is the same as a failure in what everyone might consider to be a very important control. There are no big or small controls, just controls. Failure in any contributes to public distrust of all.
The Green Book, which sets the standards for an effective internal control system for federal agencies, identifies five components of an internal control system:
● Control Environment
● Risk Assessment
● Control Activities
● Information and Communication
● Monitoring
Each of these components applies to different levels of an organizational structure, such as a Parks and Recreation Department within a City Government.
The Green Book summaries 17 Principles of Internal Control for these five components as:
Each entity’s oversight body is specifically responsible for oversight of internal control. Each entity’s management is responsible for the design, implementation and maintenance of internal controls.
Each entity’s internal controls are its own – no one would expect all entities to have the same internal controls, because all entities are different.
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The Civil Grand Jury found examples of fraud and waste in government listed in the appendix.
Each of these examples likely reflects a failure of internal controls to prevent or detect fraud and waste. In other words, you ordinarily can’t have a problem with fraud and waste without a failure in internal controls.
Focus on the Control Environment, Information and Communication and Monitoring principles
The Civil Grand Jury focused on the control environment, information and communication and monitoring principles of internal control, seeking information about:
● Control Environment Principle - how governing boards oversee internal controls, such as a review of management’s report on its assessment of internal controls. ● Information and Communication Principle - how management reports to the governing board regarding its assessment of internal control and how management’s assessment of internal controls is communicated to the public, such as through an agenda item in a public meeting of the governing board. ● Monitoring Principle - information about how management monitors its internal control systems, such as management's assessment of internal controls.
It is of note that this investigation did not evaluate the quality of any entity’s internal control or the effectiveness of an entity’s internal controls.
The Civil Grand Jury sent a survey, received responses and confirmed survey responses via interviews with the 28 entities from whom it requests responses. However, common sense suggests each of the recommendations included in this report apply to all entities in the County.
The Civil Grand Jury recognizes that for a variety of reasons, management may not want to publicly report its controls and results of investigations. For example, an internal report might include details of needs for improving controls that might be considered a roadmap for fraud until the improvements are in place. Management reports available to the public through public release or materials for a public meeting could exclude such details, while the report available to the public could include an appropriate summary of information from an assessment.
METHODOLOGY
Preliminary Research
The Civil Grand Jury reviewed the websites of San Mateo County public entities and public media related to fraud and waste in government.
Preliminary Interview
To better understand, as a baseline, how the County Controller’s Office oversees its internal controls, the Civil Grand Jury interviewed the Controller’s Office of the County of San Mateo.
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Survey and Survey Response Analysis
The Civil Grand Jury designed a survey focused on an entity’s assessment of its internal controls, reporting, training and risk evaluation. See Appendix A for the survey. The Civil Grand Jury sent the survey to 75 entities.
The Civil Grand Jury reviewed and analyzed the responses.
Interviews with Entities
By rule, the Civil Grand Jury must interview an entity to use that entity’s responses to a survey as a matter of fact. The Civil Grand Jury interviewed 28 entities, mostly focusing on entities that did not conduct an assessment of its internal controls in the last 18 months.
The Civil Grand Jury also interviewed a Certified Public Accountant with experience serving as external auditor of entities within San Mateo County.
DISCUSSION
Regulatory History
In 2013, our California Assembly approved Bill No. 1248, to require the state controller to establish internal controls for California local agencies. Bill No. 1248 applies to the County of San Mateo and the cities, special districts and other local government entities, except school districts. Bill No.1248 appears in the California Government Code section 12422.5.
In 2014, The General Accounting Office (GAO) of the U.S. Government issued the Green Book.
The U.S. Comptroller General prescribes internal control standards in the Green Book for the federal government. The Green Book says that state, local and quasi-governmental agencies and not-for-profit organizations may adopt the Green Book as a framework for an internal control system.
In 2015, the California State Controller’s Office issued “Internal Control Guidelines - California Local Agencies” to comply with California Government Code section 12422.5. The State Guidelines refer to the Green Book, among other resources.
The State Guidelines refer to the same structure of internal controls in the Green Book as well as the Committee of Sponsoring Organizations of the Treadway Commission (COSO) publications, both of which refer to the Governing Board’s responsibility to ensure completion of periodic risk assessments and to oversee internal controls.
Schools in San Mateo County are governed by the California Education Code (EDC). The county superintendent of schools may review or audit internal controls of any school district in its county per the California Education Code section 1241.5. The guidance in the Green Book and the State Guidelines naturally apply.
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Tone at the Top
The oversight body and management set the tone at the top and throughout the organization by its example. Tone at the top is fundamental to effective internal controls. The tone at the top helps ensure:
● the entity’s risk identification is complete
● risk responses are appropriate
● control activities are appropriately designed or implemented ● information and communication are effective
● results of monitoring are understood and acted upon.
Accountability for Performance
The State Guidelines include a section on Accountability for Performance, including:
● establishing mechanisms for holding individuals accountable for internal control responsibilities, which naturally include the oversight body and management ● establishing performance measures for all levels of the organization ● performing timely evaluations and aligning incentives with the fulfillment of internal control responsibilities.
All governing bodies and its management have basic responsibilities regarding internal controls, even if the State Guidelines do not specifically refer to those basic responsibilities. Those responsibilities naturally include:
● Oversight boards must demonstrate its oversight of management’s internal controls, such as clear and timely reporting on its review of internal controls ● Management’s reports on internal controls should be clearly and readily available to the public
● Management must be evaluated for its assessments of internal controls and its external reporting.
Role of the External Auditor
External auditors are not considered a part of an entity’s internal controls. While management may look into and use recommendations by external auditors, management owns the entity's internal controls. Management may communicate with and get quality information from its external auditors as it monitors and maintains internal controls.
Management may hire an external service provider to conduct assessments of internal controls.
Data from these assessments can aid management ensuring that the entity’s internal controls are appropriate for that entity. In conducting an audit, external auditors may rely on these assessments, which could result in a more efficient and less expensive external audit.
The Civil Grand Jury found through its research that audits uncover only about 4% of fraud.
Several entities we interviewed stated that they rely on or interact with its external auditors as part of its internal controls. Comments from respondents included:
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● We have been using the external auditors and have been reviewing the internal controls with them annually.
● This is done with the regular annual audit. We do not have reasons to justify an additional assessment.
● Annually, the internal controls are updated as part of our external audit, not separately from the external audit process.
The reports from external auditors include limitations on the results of its review of internal controls they conduct in connection with an audit. These limitations include statements like “we did not identify any deficiencies in internal control that we consider to be material weaknesses” and “material weaknesses may exist that have not been identified.” The external auditor reports are clear that they do not express an opinion on the effectiveness of internal controls.
The Civil Grand Jury interviewed a Certified Public Accountant who audits local governments and agencies and confirmed that management should assess its internal controls independently of the external auditor’s work, noting management can separately refer to the independent auditor’s work in its report to its governing board regarding internal controls.
Furthermore, the Certified Public Accountant and interviewees generally agreed that if management performed its own assessment of its internal controls, the results of that assessment can be shared with the external auditor and the auditor may use those results in designing audit work, increasing efficiency. Increases in efficiency in external audits likely at least partially offset any incremental staff work in conducting management’s assessment.
Survey Responses
Survey requests were sent to 75 entities, including municipalities, school districts, independent special districts and joint power authorities. Responses were received from 54 entities.
Given the enormity of the challenge of reviewing individual controls at any one agency, the Civil Grand Jury looked into the way government entities in San Mateo County assess its internal controls and how the results of those assessments are reported to governing boards and to the public. This assessment and reporting should follow the State of California guidelines and the underlying referenced guidelines from the Green Book and the Committee of Sponsoring Corporations. Management’s assessment of its internal controls and communication, both internally within an entity and externally to the entity’s constituents, are key principles of internal controls.
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The Civil Grand Jury focused on responses to three questions from the survey:
1. Do you have an established process in place to identify organizational risks (also known as Enterprise Risk Management, or ERM)? The tables below refer to this question as ‘ERM?’.
2. Other than outside audits of your organization's financial statements, have you or your organization performed an assessment of your organization's "internal controls" within the last 18 months? The tables below refer to this as ‘Assessment?’.
3. Was a written report of the assessment produced? The tables below refer to this as ‘Report?’.
Identifying risks to an entity is a critical part of effective internal controls. See Principle 7 in the Green Book Principles of Internal Controls Table above.
Eighteen entities responded that they had performed an assessment of internal controls in the prior 18 months. Each entity must assess its internal controls. State guidelines require established mechanisms to hold management responsible for internal control responsibilities and to align incentives with the fulfillment of internal control responsibilities.
Four entities responded that they prepared a report regarding assessments of internal controls.
Each governing board must oversee its entity’s internal controls. State guidelines require established mechanisms to hold management responsible for internal control responsibilities and to align incentives with goals and objectives. Management should both internally and externally communicate the results of its assessments of internal controls. If management does not communicate the results of its assessments of internal controls, others may see this as an opportunity to commit fraud or waste government assets. Management should communicate the results of its assessments of internal controls in writing to its governing board.
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These data led the Civil Grand Jury to conduct interviews with selected entities that responded to the survey.
Interviews with Selected Entities
By rule of the Civil Grand Jury, the findings and recommendations included in this report can only be sent to entities that responded to the survey and participated in interviews with the Civil Grand Jury. In other words, the survey responses do not suffice to be considered a matter of fact and be used to come to a conclusion or make a recommendation.
The 28 Entities we interviewed are listed below in the section titled “Request for Responses.” Of the Entities interviewed to confirm survey responses:
● Seven Entities reported that they did not have an established process in place to identify organizational risks.
● Twenty-six entities reported that, other than outside audits, its organization had not performed an assessment of its internal controls in the last 18 months. ● Two entities that did perform an assessment of its internal controls did not produce a written report of its assessment.
Identifying risks
Identifying risks in an organization is a critical part of effective internal controls - see Principle 7 in the Green Book Principles of Internal Controls (Table above).
When an entity does not have a process to identify organizational risks, the entity does not demonstrate how its internal controls address identified risks, and the likelihood of a failure in internal controls that results in fraud or waste increases.
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Assessing Internal Controls
Entities must assess its internal controls. State guidelines require established mechanisms to hold management responsible for internal control responsibilities and to align incentives with the fulfillment of internal control responsibilities.
When an entity does not periodically assess its internal controls, the entity cannot demonstrate that they are monitoring its internal controls, and the likelihood of a failure in internal controls that results in fraud or waste increases.
Reporting Results of Assessments
Each governing board must oversee its entity’s internal controls. State guidelines require established mechanisms to hold management responsible for internal control responsibilities and to align incentives with goals and objectives.
Management should both internally and externally communicate the results of its assessments of internal controls. If management does not communicate the results of its assessments of internal controls, others may see this as an opportunity to commit fraud or waste government assets.
Management should communicate the results of its assessments of internal controls in writing to its governing board.
When management does not report the results of its assessments of internal controls to its governing board and the entity has not communicated externally, the likelihood that others may see this as an opportunity to commit fraud or avoid waste increases.
FINDINGS
F1. When an entity does not have a process to identify organizational risks, and the entity does not demonstrate how its internal controls address identified risks, the likelihood of a failure in internal controls that results in fraud or waste increases.
F2. When an entity does not periodically assess its internal controls and the entity cannot demonstrate that it is monitoring its internal controls, the likelihood of a failure in internal controls that results in fraud or waste increases.
F3. When management does not report the results of its assessments of internal controls to its governing board and the entity has not communicated externally, the likelihood that others see this as an opportunity to commit fraud or waste increases.
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RECOMMENDATIONS
R1. Beginning by no later than December 31, 2024 and at least annually thereafter, each entity will document its organizational risks and address those risks in its annual Assessment of Internal Controls.
R2. Beginning by no later than March 31, 2025 and at least annually thereafter, each governing board will require its management to complete its annual assessments of internal controls.
R3. Beginning by no later than June 30, 2025 and annually thereafter, each governing board will require management to report the results of its annual assessment of the entity’s internal controls.
REQUEST FOR RESPONSES
The following responses from governing bodies are required pursuant to Penal Code sections 933 and 933.05:
Entity Findings Recommendations
Belmont-Redwood Shores SD F1, F2, F3 R1, R2, R3
Brisbane School District F1, F2, F3 R1, R2, R3
City of Burlingame F1, F2, F3 R1, R2, R3
City of East Palo Alto F1, F2 R1, R2
City of Half Moon Bay F1, F2, F3 R1, R2, R3
City of Menlo Park F1, F2, F3 R1, R2, R3
City of Redwood City F2, F3 R2, R3
Coastside Fire Protection District F1, F2, F3 R1, R2, R3 Colma Fire Protection District F1, F2, F3 R1, R2, R3
Jefferson Union High School District F1, F2, F3 R1, R2, R3 La Honda-Pescadero USD F1, F2, F3 R1, R2, R3
Menlo Park City School District F2, F3 R2, R3
Menlo Park Fire Protection District F1, F2, F3 R1, R2, R3 Mid-Peninsula Water District F2, F3 R2, R3
North Coast County Water District F1, F2, F3 R1, R2, R3 Pacifica School District F1, F2, F3 R1, R2, R3
Portola Valley School District F1, F2, F3 R1, R2, R3
Ravenswood City School District F1, F2, F3 R1, R2, R3
Redwood City School District F1, F2, F3 R1, R2, R3
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San Mateo County Libraries F1, F2, F3 R1, R2, R3
San Mateo Foster City School District F1, F2, F3 R1, R2, R3 San Mateo Union High School District F1, F2, F3 R1, R2, R3 Sequoia Healthcare District F2 R2
Silicon Valley Clean Water F2, F3 R2, R3
South Bayside Waste Management
Authority F1, F2, F3 R1, R2, R3
Town of Atherton F2, F3 R2, R3
West Bay Sanitary District F1, F2, F3 R1, R2, R3
Woodside School District F1, F2, F3 R1, R2, R3
RESPONSE REQUIREMENTS
California Penal Code Section 933.05 provides: For purposes of subdivision of Section 933, as to each Civil Grand Jury finding, the responding person or entity shall report one of the following:
(1) The respondent agrees with the finding.
(2) The respondent disagrees wholly or partially with the finding; in which case the response shall specify the portion of the disputed finding and shall include an explanation of the reasons.
For purposes of subdivision of Section 933, as to each Civil Grand Jury recommendation, the responding person or entity shall report one of the following actions:
(1) The recommendation has been implemented, with a summary regarding the implemented action.
(2) The recommendation has yet to be implemented but will be implemented in the future, with a timeframe for implementation.
(3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This time frame shall be at most six months from the Civil Grand Jury report's publication date. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefore.
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APPENDIXES
Appendix A - Form of Survey
Appendix B - Examples of Fraud and Waste
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Appendix A
Form of Survey
1. Please list your name, title and organization
2. Other than outside audits of your organization's financial statements, have you or your organization performed an assessment of your organization's "internal controls" within the last 18 months? (Yes/No)
3. If your organization has not performed an assessment of its internal controls or has not completed one in the last 18 months, why?
4. What was the date of your internal controls assessment?
5. What type of tool was used to assess your internal controls? If "Other", please provide a brief description of the tool. (Checklist/Guided questions/Other)
6. Was a written report of the assessment produced? (Yes/No)
7. Was this assessment report shared with your governing board? (Shared/Not shared/Written assessment report was not produced)
8. Does your governing board require or suggest that your organization periodically review its internal controls?
9. Have the personnel in your organization received training specific to building effective internal controls?
10. If your organization has received training in building effective internal controls, who provided the training?
11. Do you have an established process in place to identify organizational risks (also known as Enterprise Risk Management or "ERM")?
12. When substantial risks are identified, does your process require changes or improvements to the applicable internal controls?
13. Have you shared the organizational risk assessment findings with your governing board?
14. Internal controls assessment tool:
15. Internal controls assessment report:
16. Risk assessment report:
17. Other links, please describe and include link(s):
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Appendix B
Examples of Alleged Fraud and Waste
Broadmoor Police Protection District Fraud
https://www.chronline.com/stories/outrageous-pension-double-dipping-triggers-criminalinvestigation-into-california-cops,281359 San Mateo County Pay to Play Prosecution
https://www.almanacnews.com/news/2023/02/10/community-college-district-lawsuit-alleges-payto-play-in-construction-projects-under-former-chancellor/ Reporting of Personal Residences paid for with government funds. https://www.nbcbayarea.com/news/local/former-caltrain-manager-secret-apartments-bay-areatrain-stations/3496068/ Release Date: June 27, 2024
2023-2024 San Mateo County Civil Grand Jury
80 FAIR OAKS LANE | ATHERTON, CALIFORNIA 94027 | PH: (650) 752-0500 www.ci.atherton.ca.us
September 19, 2024
Honorable Amarra A. Lee
Judge of the Superior Court
c/o Bianca Fasuescu
Hall of Justice
400 County Center, 2nd Floor
Redwood City, CA. 94063-1655
Re: San Mateo County Civil Grand Jury Report titled: “Assessing and Reporting Internal Controls in San Mateo County Agencies and School Districts” issued on June 27, 2024.
Dear Judge Lee:
The Town of Atherton received the San Mateo County Civil Grand Jury Report titled, “Assessing and Reporting Internal Controls in San Mateo County Agencies and School Districts” on June 27, 2024. The report instructed the Town to respond to Findings 2 and 3 and Recommendations 2 and 3.
Pursuant to Penal Code § 933, the following response to the Grand Jury was reviewed and approved by the City Council at its meeting on September 18, 2024:
Findings
F2. When an entity does not periodically assess its internal controls and the entity cannot demonstrate that it is monitoring its internal controls, the likelihood of a failure in internal controls that results in fraud or waste increases.
Response: The Town agrees with the finding. However, the Town regularly assesses its internal controls and monitors its processes and procedures. The Town conducts an annual audit that includes a high-level review of internal controls by an outside auditing firm.
F3. When management does not report the results of its assessments of internal controls to its governing board and the entity has not communicated externally, the likelihood that others see this as an opportunity to commit fraud or waste increases.
Response: The Town agrees with the finding. However, the Town assesses and reports its internal controls process through its Fiscal Year end Memorandum of Internal Controls reporting with its reporting of
TOWN OF ATHERTON
OFFICE OF THE MAYOR
80 FAIR OAKS LANE
ATHERTON, CALIFORNIA 94027
(650) 752-0500
80 FAIR OAKS LANE | ATHERTON, CALIFORNIA 94027 | PH: (650) 752-0500 www.ci.atherton.ca.us
Annual Basic Financial Statements. The Town conducts an annual audit that includes a high-level review of internal controls monitoring of it processes and procedures by an outside auditing firm.
Recommendations:
R2. Beginning by no later than March 31, 2025 and at least annually thereafter, each governing board will require its management to complete its annual assessments of internal controls.
Response: Staff will strive to schedule annual reporting of assessment of internal controls by March 31, 2025 or a future date in 2025.
R3. Beginning by no later than June 30, 2025 and annually thereafter, each governing board will require management to report the results of its annual assessment of the entity’s internal controls.
Response: Staff will strive to report results of its annual assessment of internal controls by June 30, 2025 or a future date.
With respect to all recommendations, the Town believes that its current process to review and plan for its internal controls is adequate for our agency profile. The Town does have procedures to help prevent fraud and waste, including separation of duties, limit on access to financial software, public reporting of all warrants, IT overview assessment, risk management, and routine reconciliations. In addition, the City prepares an Annual Basic Financial Statement Report that is audited by an independent auditor using generally accepted government auditing standards and performs internal control environment review and questionnaires on Town accounting processes and procedures. A Memorandum of Internal Controls report is produced and reviewed during review of the Audited Basic Financial Statements.
Should you have any questions concerning the response, please contact City Manager, George Rodericks at (650) 752-0504.
Sincerely,
Diana Hawkins-Manuelian, Mayor
TOWN OF ATHERTON
Item No. 10
Town of Atherton
CITY COUNCIL STAFF REPORT- REGULAR AGENDA
TO: HONORABLE MAYOR and CITY COUNCIL
FROM: GEORGE RODERICKS, CITY MANAGER
BRITTANY BENDIX, TOWN PLANNER
DATE: SEPTEMBER 18, 2024
SUBJECT: REVIEW AND APPROVE RESPONSE TO GRAND JURY REPORT:
“RESTAURANT EXTERIORS: THE NEGLECTED SPACE”
RECOMMENDATION
Staff recommends to approve the Town of Atherton’s Response Letter to the San Mateo County Civil Grand Jury Report entitled “Restaurant Exteriors: the Neglected Space” and authorize the Mayor to execute the letter response.
BACKGROUND
On July 9, 2024 the San Mateo County Civil Grand Jury released a Report entitled “Restaurant Exteriors; The Neglected Space” (Attachment 1). The purpose of the Report is to address issues related to exterior trash areas of food service businesses that are often unsightly and unsanitary, and to offer recommendations that offer a more proactive approach to handling the garbage and parklet sanitation problems associated with restaurant exteriors in San Mateo County, while offering suggestions for preventative maintenance. California Penal Code Section 933.05 requires any agency that is the subject of a Grand Jury Report to reply in writing and to consider such a reply at a public hearing.
Within the Report, the Grand Jury developed seven findings and four recommendations requesting response applicable to all jurisdictions in San Mateo County, including the Town of Atherton. The findings and recommendations are listed below. The Town is required to respond to all seven findings (#F1 through #F7) and only one recommendation (# R4).
Findings (All Findings F1 – F7, Required for Response):
F1: Sanitary conditions of the exterior of restaurant facilities fall outside current inspections of the County Health Department. The varying unsatisfactory conditions in the waste removal areas of the facilities shows something is lacking in the regulatory process.
F2: Sanitary conditions of parklets fall outside of current inspections by the County Health
September 18, 2024
Item No. XXX, Town of Atherton Town Council
2 Department or Vector Control.
F3: Sanitary conditions of exterior areas used for waste storage and disposal fall outside current inspections by local jurisdictions; local jurisdictions are, by and large, only reactive to an actual complaint.
F4: Most restaurant exterior areas are “out of sight” of the public and as a result complaints are less frequent.
F5. Because they lack oversight, unacceptable conditions in restaurant trash areas are likely not to be rectified.
F6. Waste water from the cleaning of trash areas and from rain flow into the storm drain systems.
F7. Effective inspection of parklet sanitation can be severely hampered by closed skirting and lack of under floor access. Spacing between planking and lack of solid flooring can lead to accumulation of organic debris and possible infestation by vermin.
Recommendations (Only Recommendation #R4, Required for Response) Per Grand Jury Report Instructions, the Councils of all 20 cities and towns in the County are to respond to Findings F1 – F6, and Recommendation R4. The San Mateo County Board of Supervisors are to respond to all Findings and Recommendations.
R1. By June 30, 2025, the County should amend its Food Facility Checklist to include the condition of trash area flooring, bins, dumpsters and enclosures, and note any needed repair, replacement or cleaning.
R2. By June 30, 2025, the County should amend its Food Facility Checklist to include the entire exterior waste storage area, retention areas and parklets, including flooring and under floor areas.
R3. By June 30, 2025, the County should require operators/owners of restaurants to have a written diagram of their approved waste storage/retention area posted so the inspector can evaluate the condition of the facilities.
R4. By June 30, 2025, inspectors for all jurisdictions with restaurants should be empowered to require owners/operators to add receptacles or increase the frequency of pick-ups.
The Grand Jury is not able to recommend changes to building codes or planning criteria to cities or the County. The Town’s responses to each finding and recommendation are due to the Grand Jury no later than ninety days following the issuance of the Report, with the Town’s response due no later than October 7, 2024.
FINDINGS | ANALYSIS:
Staff has reviewed the findings and recommendations and has prepared a response letter for Council approval attached to this report (Attachment 2). While public and private institutions (including the various elementary schools, Menlo-Atherton High School, Menlo School, Menlo
September 18, 2024
Item No. XXX, Town of Atherton Town Council
3 College, and Menlo Circus Club) in the Town may have dining rooms and cafeterias available for their students/members, the Mademoiselle Collette Cafe at the Town Library is the Town’s only public-facing food service restaurant. Food and baked goods at Mademoiselle Collette Café are not cooked or prepared on site, and waste disposal is managed by the Public Works Department and is shared with the Town Center. In this way, staff has largely concluded that the Town does not agree or disagree with the various required findings and will not be implementing the recommendation related to requiring owners/operators to add receptacles or increasing the frequency of pick-ups.
POLICY FOCUS
The Grand Jury requires that the Town respond to the findings and recommendations in the report.
Staff has provided responses for the City Council’s consideration.
FISCAL IMPACT
There is no fiscal impact associated with this agenda item.
PUBLIC NOTIFICATION
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders – to include, but be not limited to, media outlets, school districts, Menlo Park Fire District, service provides (water, power, and sewer), and regional elected officials. To date, the Town has no received comments from the public.
COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item ____ has or __X___ has not been before a Town Committee or Commission. ____ Audit/Finance Committee (meets every other month)
____ Bicycle/Pedestrian Committee (meets as needed)
____ Civic Center Advisory Committee (meets as needed)
____ Environmental Programs Committee (meets every other month) ____ Park and Recreation Committee (meets each month)
____ Planning Commission (meets each month)
____ Rail Committee (meets every other month)
____ Transportation Committee (meets every other month)
ATTACHMENT
1: San Mateo County Grand Jury Report, “Restaurant Exteriors: the Neglected Space” 2: Response to San Mateo County Grand Jury Report “ Restaurant Exteriors: the Neglected Space”
1 2023-2024 San Mateo County Civil Grand Jury
RESTAURANT EXTERIORS: THE NEGLECTED SPACE
ISSUE
The exterior trash areas of food service businesses are often unsightly and unsanitary. How can this issue be addressed?
SUMMARY
Restaurant garbage and food waste is not always contained in designated exterior bins, and may overflow, attracting animals and other undesirable pests. While restaurant interiors are subject to County of San Mateo Health System standards and inspections, restaurant building exteriors are subject to a variety of standards and inspection programs, because each local jurisdiction has its own regulations for sanitation and safety for exteriors. For restaurant exteriors, responsibility for enforcement of local code and for inspection schedules varies from city to city. Generally, inspections are done when complaints are received. The extent of the issues may vary based on the municipality or district, day of the week (garbage collection day), or whether the building backs are visible to the public.
Grand Jury members conducted interviews with County officials, city officials, and waste handlers and performed their own spot checks (admittedly not scientific). A written survey (Appendix B) was sent to all twenty cities and towns in the County.
The Grand Jury found a significant number of restaurant exterior waste storage areas and areas below parklets had clearly deficient, unsanitary, unsightly and odorous conditions. The investigation found that the “standards” for these areas, i.e., how these conditions were monitored, and how codes and policies were enforced, to be inconsistent at best and non-existent in some instances. A quantification of the waste storage area problem proved difficult as many sites and their condition were dependent on the day of the week and their garbage pick-up days.
This Grand Jury report includes recommendations for a more proactive approach to handling the garbage and parklet sanitation problems around restaurant exteriors in San Mateo County, and suggestions for preventive maintenance.
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BACKGROUND
People spent 20.7% more money at restaurants than on groceries in 2022. That figure rose to
29.5% in the first two months of 2023 according to Commerce Department data.1 This
significant increase in use of restaurants and “micro” and “mobile” food services, not surprisingly, resulted in an increase in organic (food stuff) waste, paper, glass and general garbage.
Members of the Civil Grand Jury initiated this review of the health and safety conditions surrounding the immediate areas designated for waste removal after observing an increase in rodents around parklets. Initial walkthroughs behind restaurants determined that the problem related to waste management in general as well as to the parklets. Photos contained in Appendix A depict some of the disturbing findings.
The Grand Jury found a significant number of restaurant exterior waste storage areas and areas below parklets had clearly deficient, unsanitary, unsightly and odorous conditions. The investigation found that the “standards” for these areas, i.e., how these conditions were monitored, and how codes and policies were enforced, to be inconsistent at best and non-existent in some instances. A quantification of the waste storage area problem proved difficult as many sites and their condition were dependent on the day of the week and their garbage pick-up days.
This Grand Jury report includes recommendations for a more proactive approach to handling the garbage and parklet sanitation problems around restaurant exteriors in San Mateo County, and suggestions for preventive maintenance.
REGULATORY FRAMEWORK
California Health & Safety Code, Chapter 7 known as the “Retail Food Code” regulates, at the State level, the protections required for public health and safety of a “Food Facility”.2 The Code
1 https://www.census.gov/retail/marts/www/marts_current.pdf 2 H&S Code 113789 (a) “Food facility” means an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level, including, but not limited to, the following:
(1) An operation where food is consumed on or off the premises, regardless of whether there is a charge for the food.
(2) A place used in conjunction with the operations described in this subdivision, including, but not limited to, storage facilities for food-related utensils, equipment, and materials. (b) “Food facility” includes permanent and nonpermanent food facilities, including, but not limited to, the following: (1) Public and private school cafeterias.
(2) Restricted food service facilities.
(3) Licensed health care facilities, except as provided in paragraph (12) of subdivision (c). (4) Commissaries.
(5) Mobile food facilities.
(6) Mobile support units.
(7) Temporary food facilities.
(8) Vending machines.
(9) Certified farmers’ markets, for purposes of permitting and enforcement pursuant to Section 114370.
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has extensive requirements for the handling of food, preparation and service of patrons. They can best be described as affecting the “inside” of the Food Facility.
The exterior or waste disposal areas are only mentioned in Article 4, Section 114245.4. “If provided, an outdoor storage area or enclosure used for refuse, recyclables, and returnables shall be constructed of nonabsorbent material such as concrete or asphalt and shall be easily cleanable, durable and sloped to drain.”3 Refer to Appendix C for the California Health & Safety Code Article 4.
The enforcement of these State Regulations is assigned to “Enforcement Officers”4 of an
“Enforcement Agency”5
which is delegated to more local organizations at the county or other local level. Section 1143906
gives the power to inspect facilities, take samples and prepare a written report of deficiencies.
HEALTH DEPARTMENT INSPECTIONS
The San Mateo County Health Department is primarily responsible for the inspection of restaurants and enforcement of the Health Codes related to them. The Inspection checklist (Appendix D) has 60 categories for inspection and only one (FO42) relates to waste disposal or garbage. In interviews, the Grand Jury found the Health Inspector does not generally inspect the areas behind the facility and does not inspect areas not immediately adjacent to the facility at all.
The County relies on the individual cities for enforcement of their nuisance laws in these areas.
As part of its Municipal Code, each City or jurisdiction maintains provisions for enforcement actions against properties (and operators) that maintain unhealthy, noxious, or dangerous conditions under their police powers to abate public nuisances. (See Bibliography)
LAND USE / USE PERMITS
It is beyond the scope of this investigation to analyze the municipal codes of each of the twenty jurisdictions in San Mateo County which have restaurant uses. Most cities require “use permits” (10) Farm stands, for purposes of permitting and enforcement pursuant to Section 114375. (11) Fishermen’s markets.
3 Sections 114244 to 114245.3 inclusive speak only to the Food Facility which is defined as the interior of the facility.
4 113774. “Enforcement officer” means the director, agents, or environmental health specialists appointed by the Director of Health Services, and all local health officers, directors of environmental health, and their duly authorized registered environmental health specialists and environmental health specialist trainees.
5 113773. “Enforcement agency” means the department or the local health agency having jurisdiction over the food facility.
6 114390 :
https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=HSC&division=104.&title=& part=7.&chapter=13.&article=2
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(conditional or otherwise) for restaurants in certain locations. As part of the building permit process, cities have the ability to require and specify the type, location, and frequency of waste disposal. More importantly, all have a general requirement that these areas be maintained at the owner/operator expense in a good and sanitary manner.
WASTE HAULERS / SANITATION COMPANIES
By far the biggest recipient of waste and disposal in the County is Recology San Mateo County serving the cities of Belmont, Burlingame, East Palo Alto, Foster City, Menlo Park, Redwood City, San Carlos, and San Mateo, the town of Hillsborough, County of San Mateo, North Fair Oaks, and West Bay Sanitary District. Recology of the Coast provides service to Pacifica.
GreenWaste provides service to the town of Atherton.
South San Francisco Scavenger Company (SSFSC) serves businesses and residents in South San Francisco, Millbrae, Brisbane and San Francisco International Airport. Half Moon Bay, Daly City and the unincorporated North County has an agreement with Republic Services, Inc. to provide recycling, compost and garbage collection services.
Each hauler negotiates independently on rates and pick-up policy. The Grand Jury reviewed the Franchise Agreement used by Recology. The agreement provides that the hauler shall replace or repair bins, dumpsters and other containers as needed or upon request.
DISCUSSION
SURVEY
The Grand Jury sent a survey to twenty jurisdictions (see Appendix B). Five jurisdictions relied solely on the County Health Department for enforcement of regulations related to restaurant waste facilities; two inspected and enforced only at the permit renewal stage; and nine assigned the duty to their code enforcement mechanism generally through Planning, Public Works or dedicated Code Enforcement personnel. Only three of the jurisdictions conducted inspections independent of a complaint. The majority, nine of fourteen, only inspected upon receipt of a complaint. (See Appendix B for the tabulated Survey results).
In summary, survey responses demonstrate that the Cities rely on the County Health Department for inspections of restaurant interiors and, in general, only respond to exterior conditions upon receipt of a complaint.
OBSERVATIONS
The condition at any one site is dependent on the frequency of trash removal. The site may be fine right after removal but, as the week goes on, the situation worsens. There does not appear to be any site-specific requirements (or at least any that are enforced) for residual cleaning such as power washing. Few sites inspected had any method of controlling wash down or steam cleaning waste from flowing into the storm sewers. The type of restaurant also impacts its output, e.g., some generate grease, oil and animal fat, which require special containers.
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The current requirements for trash enclosures by local jurisdictions are applied only to new applications, resulting in many outdated, legacies facilities and, without regular inspection, there is no monitoring of maintenance or repair. These areas are high impact areas and the enclosures and bins, dumpsters and cans are subject to heavy use. The Grand Jury found many bins, dumpsters and cans to be in damaged and filthy condition.
Economic forces impact maintenance and overflow conditions. An operator of a restaurant pays for disposal service by volume (size and number of containers) and frequency (number of pickups in one week). Increases in business generate higher volumes so what was working in the past may not be sufficient for the current or future situation. It is logical that operators of food facilities would see added frequency of pickups or added containers as a negative and an expense. This is a financial impact question.
IMPACTS ON THE COMMUNITY
Normal sanitation issues apply; smell, unsightliness and vermin7. Vector Control does not inspect trash or similar areas unless specifically requested. The Grand Jury interviews revealed instances of the presence of rats, mice and raccoons in trash areas and parklets. Insect infestation is also of concern. All this presents a health hazard to the public, the workers at these restaurants, and the trash collectors.
ENFORCEMENT OF EXISTING REQUIREMENTS
The County Health Department inspections do not include the areas outside of the building. The enforcement of the nuisance provisions by local jurisdictions is reactive and only called into play upon a complaint. Oversight of the condition of receptacles (dumpsters, bins, cans) is minimal, at best, and often non-existent.
SPECIAL CASES
Mobile Food Facilities (Food Trucks): The Permit Checklist for food trucks does not mention waste disposal. Food Truck regulation is an evolving body of regulation and should be reviewed at a later date.
https://www.smchealth.org/sites/main/files/file-attachments/20170915_mff_selfinspectionche cklist.pdf?1536778880
Farmer’s Markets: Several markets were visited by Jurors. Only the Farmer’s Market in San Carlos was the subject of an interview. This particular market occurs on a Sunday. It is organized 7 H&S Code 113939. “Vermin” means cockroaches, mice, rats, and similar pests that carry disease.
H&S Code 13939.1. “Vermin infestation” means the presence of vermin within the food facility as evidenced by actual live bodies, fresh droppings or vomitus, urine stains, or gnaw marks, that could result in contamination to the food, equipment, packaging, or utensils.
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by a private company (a community-based organization, CBO) which recruits and manages the individual Farmers and Vendors. The company polices the area at the breakdown of the Market on Sunday afternoon. The city of San Carlos has a street sweeper go over the area on Monday morning. These actions appear to be sufficient as the area was observed to be clean and free from refuse.
Parklets: Like Food Trucks, parklet regulation is evolving and should be reviewed in more detail at a later date. There are currently no separate inspection line items for parklets in the County Health Department checklist. Parklets increased significantly as a result of the Covid-19 pandemic, which have proven efficient and desirable in many areas. At the outset, their construction was not heavily regulated and there were no specific building code requirements for inspection and cleaning under floors. As these facilities have become permanent, building permit requirements have increased. Problem areas identified in our investigation are:
1. Open floor segments can permit food and other waste falling under the floor of the parklet to the street;
2. Many have open side(s) permitting vermin to go under the parklet to feed on scraps;
3. Street drainage (from road crown and gutter flow) can exacerbate the problems of waste under the floor, including leaves and other refuse.
METHODOLOGY
The Jurors made several site visits over a period of eight months and took photographs. The Grand Jury conducted interviews with some officials of some cities and with several San Mateo County officials including the Health Department and Vector Control. A survey was sent to each city/town in San Mateo County.
FINDINGS
F1: Sanitary conditions of the exterior of restaurant facilities fall outside current inspections of the County Health Department. The varying unsatisfactory conditions in the waste removal areas of the facilities shows something is lacking in the regulatory process.
F2: Sanitary conditions of parklets fall outside of current inspections by the County Health Department or Vector Control.
F3: Sanitary conditions of exterior areas used for waste storage and disposal fall outside current inspections by local jurisdictions; local jurisdictions are, by and large, only reactive to an actual complaint.
F4: Most restaurant exterior areas are “out of sight” of the public and as a result complaints are less frequent.
F5. Because they lack oversight, unacceptable conditions in restaurant trash areas are likely not to be rectified.
F6. Waste water from the cleaning of trash areas and from rain flow into the storm drain systems.
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F7. Effective inspection of parklet sanitation can be severely hampered by closed skirting and lack of under floor access. Spacing between planking and lack of solid flooring can lead to accumulation of organic debris and possible infestation by vermin.
RECOMMENDATIONS
R1. By June 30, 2025, the County should amend its Food Facility Checklist to include the condition of trash area flooring, bins, dumpsters and enclosures, and note any needed repair, replacement or cleaning.
R2. By June 30, 2025, the County should amend its Food Facility Checklist to include the entire exterior waste storage area, retention areas and parklets, including flooring and underfloor areas.
R3. By June 30, 2025, the County should require operators/owners of restaurants to have a written diagram of their approved waste storage/retention area posted so the inspector can evaluate the condition of the facilities.
R4. By June 30, 2025, inspectors for all jurisdictions with restaurants should be empowered to require owners/operators to add receptacles or increase the frequency of pick-ups.
Note: The Grand Jury is not able to recommend changes to building codes or planning criteria to cities or the County. However, in our review we did find the City of Palo Alto has a publication with clear and comprehensive regulations/recommendations for these areas. “Comprehensive Guidelines for Commercial Trash Enclosures:
https://www.cityofpaloalto.org/files/assets/public/v/1/planning-amp-development-services/paloalto-trash-enclosure-area-guidelines-march-2017.pdf”
REQUEST FOR RESPONSE
Pursuant to Penal Code Section 933.05, the Grand Jury requests responses as follows:
From the San Mateo County Board of Supervisors, to all Findings and Recommendations.
From the councils for all 20 cities and towns in the County, to Findings 1, 2, 3, 4, 5, and 6 and Recommendation 4.
The governing bodies indicated above should be aware that the comment or response of each governing body must be conducted subject to the notice, agenda, and open meeting requirements of the Brown Act.
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RESPONSE REQUIREMENTS
California Penal Code Section 933.05 provides (emphasis added):
(a) For purposes of each subdivision (b) of Section 933, as to each grand jury finding, the responding person or entity shall report one of the following:
(1) The respondent agrees with the finding.
(2) The respondent disagrees wholly or partially with the finding; in which case the response shall specify the port of the finding that is disputed and shall include an explanation of the reasons, therefore.
(b) For purposes of subdivision (b) of Section 933, as to each grand jury recommendation, the responding person or entity shall report one of the following actions:
(1) The recommendation has been implemented, with a summary regarding the implemented action.
(2) The recommendation has not been implemented, but will be implemented in the future, with a timeframe for implementation.
(3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report.
(4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation, therefore.
BIBLIOGRAPHY
California Health and Safety Code:
https://leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=HSC&tocTitle=+Heal th+and+Safety+Code+-+HSC
The following is a representative selection of Municipal Codes relevant to the investigation:
Daly City:
https://library.municode.com/ca/daly_city/codes/code_of_ordinances?nodeId=TIT8HES A
Belmont:
https://library.municode.com/ca/belmont/codes/code_of_ordinances?nodeId=CICO_CH1 1HESA
Hillsborough:
https://library.municode.com/ca/hillsborough/codes/code_of_ordinances?nodeId=TIT8H ESA
San Mateo (City): https://law.cityofsanmateo.org/us/ca/cities/san-mateo/code/7 East Palo Alto Code Enforcement: https://www.cityofepa.org/building/page/codeenforcement
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San Carlos:
https://www.codepublishing.com/CA/SanCarlos/#!/SanCarlos08/SanCarlos0827.html#8. 27 South San Francisco:
https://library.qcode.us/lib/south_san_francisco_ca/pub/municipal_code/item/title_8- chapter_8_16 and
https://library.qcode.us/lib/south_san_francisco_ca/pub/municipal_code/item/title_8 Burlingame: https://library.qcode.us/lib/burlingame_ca/pub/municipal_code/item/title_8 Pacifica Food Establishments:
https://library.municode.com/ca/pacifica/codes/code_of_ordinances?nodeId=TIT6SAHE _CH5GACORE
Pacifica Garbage:
https://library.municode.com/ca/pacifica/codes/code_of_ordinances?nodeId=TIT6SAHE _CH5GACORE_ART1GACO
Redwood City: RWC has multiple segments of their code that would apply to this topic.
The link to the Code in General is:
https://library.municode.com/ca/redwood_city/codes/city_code?nodeId=REDWOOD_C
ALIFORNIAMUCO
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APPENDIX A
Photographs of exteriors
Figure 1: San Mateo, September 2023
Figure 2: Millbrae, September 2023
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Figure 3: Millbrae, September 2023
Figure 4: Millbrae, September 2023
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Figure 5: Millbrae, September 2023
Figure 6: Millbrae, September 2023
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Figure 7: San Carlos, December 2023
Figure 8: San Carlos, November 2023
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Figure 9: San Carlos, December 2023
Figure 11: San Carlos, October 2023
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APPENDIX B
Survey
1. Please list your name, title or job description and the city/town you represent.
Surveys were sent to managers of the twenty cities and towns in San Mateo County.
Responses were as follows:
City/Town Response Received
Atherton No
Belmont Yes
Brisbane No
Burlingame Yes
Colma No
Daly City Yes
East Palo Alto Yes
Foster City Yes
Half Moon Bay No
Hillsborough Yes
Menlo Park Yes
Millbrae No
Pacifica Yes
Portola Valley No
Redwood City Yes
San Bruno Yes
San Carlos Yes
San Mateo No
South San Francisco Yes
Woodside Yes
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2. What sanitation standards are applied to the garbage/trash areas of restaurants, bars and food services?
Respondents cited the County ordinance code and various municipal codes and standards. One entity had no response and another responded their city/town has no restaurants.
3. What standards are applied to sanitation, trash and street cleaning related to the "parklets" or other outdoor areas used for food service? Most respondents cited state, county or municipal standards. One city noted they have specific regulations for parklets. Another city said they have no standards because parklets are the responsibility of restaurants.
4. What department(s) of the City enforce these standards? Enforcement of standards may be done by:
County Health
Building/Fire/Public Works
Planning & Building, Dept of Water & Wastewater Resources Planning
Public Works
Police, Code Enforcement
Engineering Division
Community & Economic Development. Department
5. Are regular inspections made or is inquiry only made upon complaint? Most responded inspections are complaint-based. A few municipalities conduct regular, periodic inspections.
6. Upon inquiry by the City (either by inspection or complaint) what standards are applied to determination of a violation, or recommendation to an owner? Standards listed included:
County Health
Parklet Standards
Municipal Codes
California Building Code, California Fire Code, Americans with Disabilities Act (ADA)
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7. What agencies or organizations outside of the City are involved in maintaining standards, such as Recology, Republic Services or South San Francisco Scavenger? Recology
Recology of the Coast
Greenwaste Recovery
Republic
County Health
No response, but noted there is a city contract with a power washing service and that information is made available to parklet owners
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APPENDIX C
California Health & Safety Code Article 4
Health and Safety Code - HSC, DIVISION 104. ENVIRONMENTAL HEALTH [106500 - 119406] , PART 7. CALIFORNIA RETAIL FOOD CODE [113700 - 114437] , CHAPTER 7.
Water, Plumbing, and Waste [114189 - 114245.7]
https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=HSC&division=104. &title=&part=7.&chapter=7.&article=4
ARTICLE 4. REFUSE
114244.
(a) Each food facility shall be provided with any facilities and equipment necessary to store or dispose of all waste material.
(b) Waste receptacles shall be provided for use by consumers. (c) A receptacle shall be provided in each area of the food facility or premises where refuse is generated or commonly discarded, or where recyclables or returnables are placed.
114245
(a) An area designated for refuse, recyclables, returnables, and a redeeming machine for recyclables or returnables shall be located so that it is separate from food, equipment, utensils, linens, and single-service and single-use articles and a public health hazard or nuisance is not created.
(b) Receptacles and waste handling units for refuse, recyclables, and returnables shall not be located so as to create a public health hazard or nuisance or interfere with the cleaning of adjacent space.
114245.1
(a) All refuse, recyclables, and returnables shall be kept in nonabsorbent, durable, cleanable, leakproof, and rodent proof containers and shall be contained so as to minimize odor and insect development by covering with close-fitting lids or placement in a disposable bag that is impervious to moisture and then sealed. (b) Refuse containers inside a food facility need not be covered during periods of operation.
(c) All refuse shall be removed and disposed of in a sanitary manner as frequently as may be necessary to prevent the creation of a nuisance. (d) Storage areas, enclosures, and receptacles for refuse, recyclables, and returnables shall be maintained in good repair.
(e) Refuse, recyclables, and returnables shall be removed from the premises at a frequency that will minimize the development of objectionable odors and other conditions that attract or harbor insects and rodents.
114245.2. Cardboard or other packaging material that does not contain food residues and that is awaiting regularly scheduled delivery to a recycling or disposal site may be
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stored outside without being in a covered receptacle if it is stored so that it does not create a rodent harborage problem.
114245.3. If located within the food facility, a storage area for refuse, recyclables, and returnables shall meet the requirements for floors, walls, ceilings, and vermin exclusion as specified in this part.
114245.4. If provided, an outdoor storage area or enclosure used for refuse, recyclables, and returnables shall be constructed of nonabsorbent material such as concrete or asphalt and shall be easily cleanable, durable, and sloped to drain.
114245.5. Receptacles and waste handling units for refuse and recyclables shall be installed so that accumulation of debris and insect and rodent attraction and harborage are minimized and effective cleaning is facilitated around and, if the unit is not installed flush with the base pad, under the unit.
114245.6.
(a) Receptacles and waste handling units for refuse, recyclables, and returnables shall be thoroughly cleaned in a way that does not contaminate food, equipment, utensils, linens, or single-service and single-use articles, and wastewater shall be disposed of as specified under Section 114241.
(b) Soiled receptacles and waste handling units for refuse, recyclables, and returnables shall be cleaned at a frequency necessary to prevent them from developing a buildup of soil or becoming attractants for insects and rodents.
114245.7.
(a) Except as specified in subdivision (b), suitable cleaning implements and supplies such as high-pressure pumps, hot water, steam, and detergent shall be provided as necessary for effective cleaning of receptacles and waste handling units for refuse, recyclables, and returnables.
(b) If approved, off-premises-based cleaning services may be used if on-premises cleaning implements and supplies are not provided.
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APPENDIX D
San Mateo County Inspection Checklist
https://www.smchealth.org/sites/main/files/file-attachments/297097foodestab.pdf Environmental Health
Services Food Program
2000 Alameda
de las Pulgas
Suite #100
San Mateo,
CA 94403
(650) 372-6200 FAX
(650) 627-8244
smchealth.org/food
FOOD FACILITY CHECKLIST
The goal of food safety is to promote health and prevent food-borne disease through education, training and regulation. This checklist reflects areas that are evaluated during a routine inspection. Use this as a guide to improve your facility’s sanitation and compliance with the requirements from the California Retail Food Code.
FOOD RECEIVING YES NO N/A
Raw or frozen raw molluscan shellfish (e.g. clams, mussels, scallops, oysters) properly labeled and labels maintained on site for at least 90 days.
Temperature of live molluscan shellfish at or below 45ºF.
Food only from approved sources.
Potentially hazardous foods delivered at a temperature of 41°F Frozen foods delivered in frozen condition with no evidence of thawing or refreezing.
Food at improper temperature or in unacceptable condition rejected.
Foods, especially refrigerated and frozen foods, placed in proper storage locations promptly.
FOOD STORAGE YES NO N/A
Foods protected from contamination, dirt, vermin, insects, chemicals, etc.
Prepackaged and bulk foods properly labeled.
Food stored at least 6 inches above floor in approved locations within the facility.
Returned and damaged goods stored separate from other items.
Raw meat and fish inside refrigerators and freezers stored below and away from ready-to-eat foods (e.g. salads, produce, beverages).
Foods kept covered while in storage.
Food which becomes contaminated or adulterated is discarded.
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FOOD PREPARATION YES NO N/A
Frozen foods thawed by one of the following methods:
Under cold running water
In a refrigerator
In a microwave
As part of the cooking process
Hot potentially hazardous foods cooled as quickly as possible by one or more of the following methods prior to placement in a refrigerator or freezer:
In an ice bath with stirring
With a rapid cool stirring device
In a blast chiller
By adding ice
In shallow heat conducting pans on ice
Separating food into smaller or thinner portions
YES NO N/A
Food preparation sinks used only for preparation activities, and not hand washing, janitorial activities, or other uses.
Sulfites not added to potentially hazardous foods.
Potentially hazardous foods shall be thoroughly cooked to a minimum internal temperature of:
165°F for poultry, comminuted poultry, game birds, stuffed meats, stuffed pasta, and reheated foods.
157°F for ground beef, other comminuted meats, and foods containing comminuted meat. (Or 155°F for a minimum of 15 seconds)
155°F for pork.
145°F for eggs, food containing raw eggs, and other cooked potentially hazardous food.
FOOD SERVING YES NO N/A
Prepackaged foods properly labeled with common name, list of ingredients, net weight, name and address of manufacturer, etc.
Uneaten food returned from customer is discarded and not reused or reserved.
Self-serve buffets, salad bars, snack counters, bulk food dispensers, and selfserve units. Provide adequate protection for food and utensils from contamination by customers (e.g. sneezing, coughing, and handling).
Tongs, ladles, spoons, etc. used for food service rather than direct contact with hands.
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TEMPERATURE CONTROL/THERMOMETERS YES NO N/A
Potentially hazardous foods kept at or below 41°F, or at or above 135°F.
When cooling or heating potentially hazardous foods, the time spent in the DANGER ZONE (41 °F - 135°F) is kept to a minimum.
Easily readable thermometers (accurate to + 2°F) in the warmest part of each refrigeration and freezer unit.
Metal probe-type thermometer on premise if potentially hazardous food served.
Thermometers are sanitized before and after use, and periodically calibrated. (Employees should be able to demonstrate that they know how to calibrate a probe thermometer)
UTENSIL WASHING/STORAGE YES NO N/A
Utensils protected from contamination, dirt, vermin, insects, chemicals, etc.
Multi-service customer utensils (e.g. plates, glasses, silverware) sanitized by mechanical dish machine as per manufacturer specifications, or if manually washed, sanitized by one of the following methods:
100 ppm chlorine for 30 seconds
25 ppm iodine for 60 seconds
200 ppm quaternary ammonium for 60 seconds
180°F water for 30 seconds
Test strips or thermometer available for measuring the method of sanitizing utensils.
YES NO N/A
Three- compartment sink with dual integral drain boards available for utensil washing (except where 2 compartment exemptions is applicable).
Compartments are large enough to accommodate the largest utensil in use.
Utensils are clean and in good repair.
Kitchen and serving utensils are routinely cleaned and sanitized.
Utensils are commercial-grade and meet applicable National Sanitation Foundation (NSF) at CAL CODE standards.
All mechanical dishwashers are provided with dual integral drain boards.
Proper sanitizer and chemical levels, and temperature maintained at all times during operation of dish machines.
Single-service customer utensils used only once and disposed of in a sanitary manner.
Serving utensils (e.g. scoops, spoons, ladles, etc.) for potentially hazardous foods, while in use are kept at or below 41°F or above 135°F, or in a dipper well continually provided with clean water.
TOILET FACILITIES YES NO N/A
Employee toilet facilities provided.
Customer toilet facilities provided where required.
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Tight-fitting self-closing doors provided.
Food, utensils, equipment, supplies, etc., not stored in toilet facilities.
Toilet paper, single-use sanitary towels (or air dryer) and hand cleanser provided from approved dispensers.
Hot and cold water, under pressure, provided from a mixing faucet (or combination faucet) at hand sink.
Ventilation provided.
HANDWASHING FACILITIES YES NO N/A
Within or adjacent to restrooms and kitchens.
Provided with single service sanitary towels (or air dryers) and hand cleanser from and approved dispensers.
Hot and cold water, under pressure, provided from a mixing faucet (or combination faucet) at hand sink.
Kept readily accessible at all times
Facilities provided exclusively for hand washing in food prep areas that are sufficient
in number and conveniently located. (construction/remodels on or after January 1, 1996)
CHEMICALS/PESTICIDES YES NO N/A
Properly labeled.
Stored away from food and utensils. Stored in separate enclosure if stored in food preparation area.
Pesticides specifically approved for use within food facilities.
Chemicals, pesticides, hazardous materials properly used. MSDS data available for employees.
JANITORIAL FACILITIES YES NO N/A
Area provided for storage of cleaning supplies and equipment which is separate from food preparation, food storage, utensil cleaning, and utensil storage areas.
Janitorial sink or basin provided with hot and cold water.
Backflow prevention device provided for sink.
Cleaning equipment (e.g. mops, buckets, brooms, etc.) kept away from food and utensils.
LIGHTING YES NO N/A
Minimum intensity of 20 foot-candles (ftc) in food preparation and utensil cleaning areas.
Minimum intensity of 10ftc elsewhere but intensity of at least 20 ftc available during cleaning operations.
Shatter-proof light covers in food preparation, food storage (except where food is in unopened, original containers), and utensil cleaning areas.
24 2023-2024 San Mateo County Civil Grand Jury
VERMIN/INSECTS YES NO N/A
Facility free of rodents and insects.
Harborage and entrances eliminated. Droppings and dead insects cleaned up.
Facility kept fully enclosed. Entrances protected by tight-fitting, self-closing doors or air curtains. Openable windows protected by screens.
Pest control performed by licensed pest control operator.
GARBAGE/REFUSE DISPOSAL YES NO N/A
Facilities provided for garbage disposal and storage.
Containers are leak proof and rodent proof with tight-fitting lids.
Garbage placed in securely fastened plastic bags before placement in dumpster.
Garbage removed frequently.
WATER SUPPLY YES NO N/A
Water supply from an approved source.
Hot and cold water provided in adequate amounts.
EMPLOYEE HABITS YES NO N/A
Employees wash hands before beginning work, between working with raw food and ready-to- eat foods, after coughing or sneezing, after touching soiled equipment or utensils, after using restrooms, and after engaging in any other activity that contaminates the hands.
Employees wear clean garments or uniforms.
Employees do not use tobacco products where food is prepared, served, or stored, or where utensils are cleaned or stored.
Employees do not work if ill.
Employees have been instructed in safe food handling practices.
Employees routinely check temperatures of potentially hazardous foods during storage, preparation and serving, and check utensil cleaning chemical levels, water temperatures, and water pressures.
EMPLOYEE CHANGE/STORAGE FACILITIES YES NO N/A
Area provided for employee changing which is separate from toilets, food storage, food preparation, utensil cleaning, and utensil storage areas.
PLUMBING YES NO N/A
All sewage and wastewater disposed of to an approved sewer or septic system.
Indirect waste drainage via a floor sink or funnel drain provided for all equipment that discharges wastes (e.g. prep sinks, utensil sinks, steam tables, salad bars, Chinese ranges, ice machines, ice storage bins, beverage machines, steamjacketed kettles, display cases, refrigeration/freezer units, etc.)
Indirect waste receptacles readily accessible for cleaning and inspection, and not located inside cabinets.
25 2023-2024 San Mateo County Civil Grand Jury
Floor drains absent from food storage areas.
Plumbing kept clean, fully operative, and in good repair.
Grease interceptors and septic tanks regularly cleaned out by licensed plumbers.
EQUIPMENT YES NO N/A
Equipment clean and in good repair.
Equipment easily cleanable and meets applicable NSF and the California Retail Food Code standards.
Unused equipment removed from premises.
Approved ventilation/exhaust equipment provided over cooking equipment and high temperature dish machines.
WALLS, FLOORS, CEILINGS YES NO N/A
Floors are smooth, durable, non-absorbent, and easily cleanable in areas where:
food prepared, packaged, or stored;
where utensils are cleaned or stored;
where garbage is stored;
where janitorial facilities are located;
in toilet and hand washing facilities;
in employee change and storage areas.
Floor material extends up the walls and toe kicks at least 4 inches with a minimum of 3/8 inch radius at the wall/floor and wall/toe-kick junctures in all areas mentioned above except where exempted (e.g. where foods are stored in their unopened original containers.
Walls and ceilings smooth must be durable, non-absorbent, and easily cleanable in all areas except where exempted (e.g. dining areas, closed food storage areas, and certain portions of bar areas).
Walls and ceiling finishes light colored in food preparation, utensil cleaning areas, and inside walk-in refrigeration units.
SIGNS YES NO N/A
Official Food Placard must be posted and clearly visible at the entrance of facility.
Valid health permit posted in a conspicuous location.
No Smoking signs posted in food preparation, food storage, utensil cleaning, and utensil storage areas.
YES NO N/A
Hand washing signs posted in toilet rooms.
If facility has sit-down dining, Choking First Aid poster placed where it is readily accessible to employees.
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ADDITIONAL INFORMATION YES NO N/A
Any construction, remodeling, alterations, and the installation of new equipment must be approved by the Health Department before commencing work.
Applicable building and fire codes are met.
Manager certification/ Food handler certifications are available on site.
Tobacco permit available if applicable
COMMENTS/OBSERVATIONS:
Release Date: July 9, 2024
2023-2024 San Mateo County Civil Grand Jury
TOWN OF ATHERTON
OFFICE OF THE MAYOR
80 FAIR OAKS LANE
ATHERTON, CALIFORNIA 94027
(650) 752-0500
September 19, 2024
Honorable Amarra A. Lee
Judge of the Superior Court
c/o Bianca Fasuescu
Hall of Justice
400 County Center; 2nd Floor
Redwood City, CA 94063-1655
Re: San Mateo Civil Grand Jury Report titled: “Restaurant Exteriors: The Neglected Space” issued on July 9, 2024
Dear Judge Lee:
The Town of Atherton received the San Mateo County Civil Grand Jury Report titled, “Restaurant Exteriors: the Neglected Space” on July 9, 2024. The report instructed the Town to respond to Findings F1-F7 and Recommendation R4.
Pursuant to Penal Code § 933, the following response to the Grand Jury was reviewed and approved by the City Council at its meeting on September 18, 2024.
Findings:
F1: Sanitary conditions of the exterior of restaurant facilities fall outside current inspections of the County Health Department. The varying unsatisfactory conditions in the waste removal areas of the facilities show something is lacking in the regulatory process.
The Town of Atherton does not agree or disagree with this finding. The Town has one public facing restaurant that is located on property owned by the Town. As the entity that would receive complaints relative to the restaurant’s operations, as well as the landlord, the Town is not aware of any unsatisfactory sanitary conditions in the waste removal areas. As the Town does not inspect conditions in other jurisdictions, it has no knowledge their respective regulatory processes.
F2: Sanitary conditions of parklets fall outside of current inspections by the County Health Department or Vector Control.
Grand Jury Response – Restaurant Exteriors: The Neglected Space September 18, 2024
80 FAIR OAKS LANE | ATHERTON, CALIFORNIA 94027 | PH: (650) 752-0500 www.ci.atherton.ca.us
Response: The Town of Atherton does not agree or disagree with this finding. The Town does not have any parklets within its jurisdiction, nor does it have knowledge regarding the sanitary conditions and inspection requirements of parklets in other jurisdictions.
F3: Sanitary conditions of exterior areas used for waste storage and disposal fall outside current inspections by local jurisdictions; local jurisdictions are, by and large, only reactive to an actual complaint.
Response: The Town of Atherton does not agree or disagree with this finding. The Town has one public restaurant that is located on property owned by the Town and provides food for takeaway. As the entity that would receive complaints relative to the restaurant’s operations, as well as the landlord, the Town is not aware of any unsatisfactory sanitary conditions in the waste removal areas. As the Town does not inspect conditions in other jurisdictions, it has no knowledge their respective regulatory processes.
F4: Most restaurant exterior areas are “out of sight” of the public and as a result complaints are less frequent.
Response: The Town of Atherton does not agree or disagree with this finding. The single public restaurant in the Town is integrated into a public outdoor gathering space on Town property. It is highly visible and not “out of sight.” While this seems to contradict the finding, it is a unique case in the Town and the Town has no knowledge regarding the sightliness of restaurant exterior areas in other jurisdictions.
Finding F5. Because they lack oversight, unacceptable conditions in restaurant trash areas are likely not to be rectified.
Response: The Town of Atherton does not agree or disagree with this finding. The Town has unique oversight over its one public restaurant as a landowner and is not aware of the conditions of restaurants in other jurisdictions.
Finding F6. Waste water from the cleaning of trash areas and from rain flow into the storm drain systems.
Response: The Town of Atherton does not agree or disagree with this finding. As the Town is unique in that its single public facing restaurant does not cook or prepare food on site and shares trash facilities with the Town Center and Town Library, there is minimal impact to existing wastewater generation from the cleaning of trash areas and from rain flow into the storm drain systems than what was provided before the restaurant was established on the Town’s property. The Town is not aware of conditions of restaurants in other jurisdictions.
Finding F7. Effective inspection of parklet sanitation can be severely hampered by closed skirting and lack of under floor access. Spacing between planking and lack of solid flooring can lead to accumulation of organic debris and possible infestation by vermin.
Grand Jury Response – Restaurant Exteriors: The Neglected Space September 18, 2024
80 FAIR OAKS LANE | ATHERTON, CALIFORNIA 94027 | PH: (650) 752-0500 www.ci.atherton.ca.us
Response: The Town of Atherton does not agree or disagree with this finding. The Town does not have any parklets within its jurisdiction. The single public restaurant in the Town is integrated into a public outdoor gathering space on Town property and does not provide guests dining access to outdoor street eating within a sidewalk extension or roadside parking space. The Town does not have knowledge regarding the sanitary conditions and inspection requirements of parklets in other jurisdictions.
Recommendations:
Recommendation R4: By June 30, 2025, inspectors for all jurisdictions with restaurants should be empowered to require owners/operators to add receptacles or increase the frequency of pick-ups.
Response: This recommendation will not be implemented, as the Town’s single public-facing restaurant is located on property owned by the Town, and waste services are managed directly by the Town and occur at a regular/frequent schedule. The Town does not intend on implementing a policy change to address this recommendation.
The responses provided above to the Grand Jury were approved by the Town of Atherton City Council at a public hearing on September 18, 2024. Please feel free to contact City Manager George Rodericks at 650-752-0504 or [email protected] should you have any questions.
Best,
Diana Hawkins-Manuelian, Mayor
Town of Atherton
CITY COUNCIL STAFF REPORT – PUBLIC HEARING
TO: HONORABLE MAYOR AND CITY COUNCIL,
GEORGE RODERICKS, CITY MANAGER
FROM: CHRISTABEL SORIA MENDOZA, MANAGEMENT ANALYST I
DATE: SEPTEMBER 10, 2024
SUBJECT: RESPONSE TO GRAND JURY REPORT: “THE STATE OF
COMPLIANCE IN SAN MATEO COUNTY”
RECOMMENDATION
Review and consider the Town’s response to the San Mateo Civil Grand Jury on their report entitled "The State of Compost Compliance in San Mateo County," and if appropriate, authorize the Mayor to sign the response letter.
BACKGROUND
On July 15, 2024, the San Mateo County Civil Grand Jury released a report entitled "The State of Compost Compliance in San Mateo County" (Attachment 1). The report focuses on assessing the effectiveness of composting efforts across San Mateo County, especially in light of California's SB 1383 mandate, which requires the separation of compostable materials from regular waste to reduce methane emissions. It addresses compliance challenges, contamination issues, and the availability of information on waste diversion and participation rates.
The Grand Jury’s investigation revealed several key areas where improvements are necessary, particularly regarding the management of organic waste by multi-family dwellings and businesses. Additionally, the report highlighted the lack of readily accessible data on diversion rates, which hampers public awareness and accountability.
The Town of Atherton, along with other municipalities, is required to respond to the findings and recommendations of the Grand Jury by October 14, 2024.
ANALYSIS
The Grand Jury’s report included multiple findings and recommendations aimed at improving compost compliance and reducing contamination in San Mateo County. Key recommendations include the need for cities to publish waste diversion reports and to improve the granularity of data related to waste tonnage by property type.
The Town of Atherton’s response addresses these findings and recommendations as follows:
Findings: The Town agrees with most of the Grand Jury’s findings, particularly the challenges associated with contamination in green bins and the significant organic waste contributions from multi-family dwellings and businesses. However, the Town disagrees with the finding that waste
diversion and participation rates are not accessible, as this information is regularly included in the Refuse & Recycling Committee’s meeting packets.
Recommendations: The Town has committed to implementing several of the Grand Jury’s recommendations, including publishing quarterly waste reports with detailed diversion and participation rates starting November 30, 2024, and working towards separating waste tons by property type in collaboration with GreenWaste Recovery by December 31, 2024. Additionally, the Town is prepared to conduct more frequent route audits and analyze contamination trends as needed.
The attached response letter (Attachment 2) provides detailed feedback on each finding and recommendation, outlining the Town’s planned actions and timelines for implementation.
FISCAL IMPACT
There are no immediate fiscal impacts associated with the Town’s response to the Grand Jury report. However, future costs may arise related to enhanced waste evaluations, route audits, and data collection efforts.
GOAL ALIGNMENT
This report aligns with the following Council Policy Goals:
• Goal Area D – Enhance Environmental Sustainability: By addressing compost compliance and contamination issues, the Town is taking steps to promote sustainable waste management practices.
• Goal Area E – Strengthen Community Engagement and Transparency: Publishing detailed waste diversion reports will enhance transparency and community engagement on environmental issues.
POLICY FOCUS
The Grand Jury requires that the Town indicate agreement or disagreement with specific findings and respond to each recommendation, indicating whether it has been implemented, will be implemented, requires further analysis, or will not be implemented. This response is crucial for ensuring compliance with state and county waste management mandates and for improving the Town’s overall environmental sustainability efforts.
ATTACHMENTS
1. Civil Grand Jury Report: "The State of Compost Compliance in San Mateo County"
2. Draft Response Letter to the Civil Grand Jury
2023-2024 SAN MATEO COUNTY
CIVIL GRAND JURY
THE STATE OF COMPOST COMPLIANCE IN
SAN MATEO COUNTY
1 2023-2024 San Mateo County Civil Grand Jury
ISSUE
California regulations adopted pursuant Senate Bill 1383 (2016) mandate separating compostable materials like food waste from garbage to reduce methane emissions. How effective has San Mateo County been at meeting composting goals, and what can be done to improve?
SUMMARY
Starting January 1, 2022, regulations adopted pursuant Senate Bill 1383 (2016) required California businesses and residents to participate in organic waste collection. According to a 2022 San Mateo Daily Journal article, 70% of Burlingame’s businesses and multi-family dwellings did not have organic waste collection services. San Bruno had 86% of businesses and 45% of multi-family dwellings without organic waste collection (Browning 2022). From December 2023 to April 2024, officials were interviewed and data was collected from the County, cities, the RethinkWaste Joint Powers Authority (JPA), and haulers to assess current compliance.
A statewide goal is to reduce 75% of organic waste disposal from 2014 levels by 2025. Disposal means sending all waste, organic, recyclable, or trash, to the landfill. Diversion means sending organic waste or recyclables to conversion centers, where they become compost, mulch, or consumer recycled content, as opposed to sending them to landfills. Any stand-alone references to diversion in this report refers to converted organic waste and recycling combined. “Organic waste diversion” only refers to only converted organic waste. This report’s goal is to identify where consumers and producers are failing to fully contribute to organic waste diversion consistent with their abilities.
The report’s recommendations are that the responsible local public entities implement solutions to increase organic waste participation and diversion rates. Notably, jurisdictions should have begun penalizing generators for non-compliance beginning January 1, 2024 (California Public Resources Code § 42652.5 (2022)). Most multi-family dwellings and businesses in San Mateo County have lower organics collection enrollment compared to single-family homes. High enrollment rates for all three property types, however, do not necessarily result in high diversion rates and more organic waste in the waste stream. For example, in 2023, Foster City’s multifamily dwellings had a 98.81% participation rate; but, organics made up only 5.49% of total waste (Recology San Mateo County 2024, 2023).
There are several reasons behind multi-family dwellings and businesses having low participation and diversion rates. Green cart enrollment costs, and insufficient space for the three-cart system are the largest factors. Contamination brought about by improperly sorting organics into bins
2 2023-2024 San Mateo County Civil Grand Jury
also plays a role. In some multi-family dwellings, trash chutes do not offer an opportunity to sort and appropriate bins are not conveniently located. Further, local governments cannot reliably assess their progress on Senate Bill (SB) 1383 compliance because JPAs, haulers, and cities have different data reporting formats. And residents and the press must retrieve waste statistics from haulers because most cities do not have or post them.
To address these problems, the Grand Jury recommends that:
1. Cities, the County, and RethinkWaste should host monthly in-person green cart enrollment summits for non-compliant businesses and landlords and develop and implement other compliance strategies.
2. Jurisdictions should develop and implement new ways to make green bins usable in multi-family dwellings’ and businesses’ narrow or small waste enclosures.
3. To increase transparency and accountability, cities and the County should regularly publish waste reports with diversion and participation rates on their government websites.
BACKGROUND
On September 19, 2016, Governor Jerry Brown signed Senate Bill 1383 to reduce California’s methane emissions. This law classifies any person or entity responsible for creating organic waste as an “organic waste generator” (Short-Lived Climate Pollutants, Cal. Code Regs. tit. 14, § 18982 (2020)). Generators must comply with the law by subscribing to their jurisdiction’s organic waste collection service or self-hauling organic waste (§ 18984.9 (2020)). If residents or businesses do not subscribe or self-haul, “a jurisdiction shall impose penalties for violations” ranging from $50-$500 depending on one or more infractions (§ 18997.2 (2020)). SB 1383 defines jurisdictions as “a city, county, a city and county, or a special district that provides solid waste collection services.” (§ 18982 (2020)).
The new law builds on previous solid waste management legislation. Assembly Bill 939 was the first law of its kind to provide a solid waste diversion goal for cities and counties. Each jurisdiction had to divert 50% or more of solid waste from the landfill starting January 1, 2000 through source reduction, recycling, and composting (Cal. Pub. Res. Code § 41780 (1989)). SB 1016 later replaced Assembly Bill (AB) 939 with a per capita disposal rate equivalent to the 50% annual diversion rate (§ 41780.05 (2008)). In 2011, lawmakers directed businesses that generate four or more cubic yards of commercial solid waste weekly and multifamily dwellings of five units or more to recycle (§ 41780.05).
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Equation 1. Diversion Rate
[(R+O)/(R+O+S)] * 100 = Diversion Rate %
R: Recycling tons, O: Organic tons, S: Solid Waste tons (Sources: Republic Services 2024a and 2024b, Recology San Mateo County Q4 2023 Report, GreenWaste 2023)
California passed SB 1383 to tackle the pervasiveness of organic and recyclable waste in landfills. In 2021, CalRecycle estimated landfill composition to be 28.4% organic waste (11,305,710 tons), 15.5% paper (6,193,825 tons), and 13.7% plastic (5,445,299 tons) (2022a).
Failing to divert the majority of reusable materials has polluted the environment Californians share. From August 2016 to October 2018, landfills were the largest source of methane, contributing 41% of point source emissions (California Air Resources Board 2019). California’s track record on recycling and waste emissions has not improved over the years either, as emissions have increased by 24.4% since 2000 (CARB 2023). If mandatory organic waste collection successfully diminishes landfill emissions, it will support the struggle against climate change.
SB 1383 aims to reduce 75% of organic waste disposal from 2014 levels by 2025 (Cal. Health & Safety Code § 39730.6 (2016)). Signing up for a green composting bin is a key to achieving this goal. Jurisdictions that do not have the standard three-cart system of garbage (usually gray, brown, or black cart), recyclables (blue cart), and organics (green cart) can still participate under certain conditions. For example, a two-cart system with only blue and gray carts can have the latter contain organics and garbage. Haulers must deliver the mixed waste gray carts “to a facility that meets or exceeds the organic waste content recovery requirements…” (Cal. Code Regs. tit. 14, § 18984.2 (2020)).
Of the 20 cities in San Mateo County, the state orders 18 to comply with SB 1383. CalRecycle issued a low-population waiver to Colma and Portola Valley on January 1, 2022 (n.d1.). They are exempt from enforcing both laws, and were not interviewed for this report.
An earlier investigation on the conditions of landfill capacity inspired this report. In the 2018- 2019 Grand Jury year, jurors released the report “Planning for the County’s Waste Management Challenges.” They used data from a 2014 CalRecycle analysis to note that organic waste comprised 71% of all waste sent to the landfill in the County (SMC Civil Grand Jury 2019).
Additionally, Republic Services, which operates Ox Mountain Landfill, projected that the landfill would close by 2034 based on disposal rates (2019). Although the report highlighted the connection between SB 1383 and landfill capacity, jurors geared their recommendations predominantly on revising the County Integrated Waste Management Plan. This 2023-2024 report: “The State of Compost Compliance in San Mateo County” is different. It examines how
4 2023-2024 San Mateo County Civil Grand Jury
increasing composting participation in multi-family dwellings and businesses can contribute to solving the landfill problem.
Economic Factors Impacting SB 1383 Progress
On September 8, 2022, Shereen D’Souza, former CalEPA (California Environmental Protection Agency) Deputy Secretary, told the Milton Marks Commission that the state missed its 2020 recycling goal. Ms. D’Souza referred to the 50% reduction in organic waste disposal from 2014 levels by 2020 under Health & Safety Code § 39730.6 (2016). This goal was the precursor to the current 75% organic waste disposal reduction from 2014 levels by 2025 described above. The Deputy Secretary remarked, “Until this year, CalRecycle’s regulations to meet the organic waste reduction targets were not enforceable” (D’Souza 2022). She adds, “So, it makes sense that the 2020 diversion rate required in 1383 was not met” (2022).
In the same interview, former CalRecycle Director, Rachel Machi Wagoner, described how far California missed the mark. Ms. Wagoner said, “As a matter of fact, in 2020, we were roughly a million tons over our 2014 baseline” (2022). Businesses and residents sent more organics to landfills in 2020 than six years prior. It might be assumed that the COVID-19 pandemic pushed Californians to consume more than usual at home given the lockdowns. Yet, 2020 was also a recessionary year, which decreased some workers’ incomes.
Industrial production and civilian consumption rates are the most consequential causes of landfill pollution. CalRecycle observed that “a strong correlation between disposal and economic growth” prevails (2020). In 1989, California’s GDP “was $0.72 trillion” and “statewide traditional landfill disposal was 44 million tons” (CalRecycle 2020). In 2018, California’s GDP “rose to $3 trillion” (CalRecycle 2020), while landfill and “disposal-related activities” (see Glossary) climbed to 46,255,505 tons (CalRecycle 2024).
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Source: Real Gross Domestic Product: All Industry Total in California (CARGSP) | FRED | St.
Louis Fed
During the Great Recession (2007-2009), landfill disposal plummeted by 20.7% in California (CalRecycle 2020). In 2020, the state’s overall disposal (landfill added to disposal-related activities) tonnage fell by 7.46% when compared to the 2019 peak (CalRecycle 2024). Per capita disposal rates, and by extension overall disposal, have risen in the state since 2014 (2024). As the chart and table below illustrates, the timing of SB 1383 enforcement appears to not have a significant impact on California reaching its 2020 objective. Curiously, the 2020 surge of organic waste in landfills occurred while overall disposal fell.
6 2023-2024 San Mateo County Civil Grand Jury
Sources: 2018 State of Disposal and Recycling in California, State of Disposal and Recycling Report 2021, State of Disposal and Recycling Report 2022; note, values are found in Appendix 1, Figure 2 or 3 on each report
Table 1. State Compost Tonnages and Percentage of Overall Waste 2018-2022 2018 2019 2020 2021 2022
% of total
waste
12% 12.28% 12.3% 12.41% 14.73%*
Compost
Tons
≈9,312,000 9,522,164 9,522,164 9,522,164 ≈11,200,00
0*
Sources: 2018 State of Disposal and Recycling in California, 2019 State of Disposal and Recycling and Exports in California, State of Disposal and Recycling Report 2020, State of Disposal and Recycling Report 2021
*Jurors could only find evidence of this number through an Associated Press (California is forging ahead with food waste recycling. But is it too much, too fast?) article, which cited Rachel Wagoner. The State of Disposal and Recycling Report 2022 offers a combined amount for “Source Reduction, Recycling, and Composting,” but not for its individual components.
7 2023-2024 San Mateo County Civil Grand Jury
Overall disposal tonnages throughout the 2006-2022 period have not increased alongside the population. Again, waste deposited at landfills fell 20.7% during the Great Recession in spite of the population growing by 1.56% (CalRecycle 2020; California Department of Finance 2012).
Even more peculiar is that overall disposal hit rock bottom in 2012, shedding 2.58% of its 2009 volume (2020). Nonetheless, the state’s 2012 population rose by 2.59%, an inverse of landfill trends, from its 2009 value (California Department of Finance 2022, 2012). Since population growth and SB 1383 implementation inadequately explain waste patterns, macroeconomic events are the significant factor governing waste generation. A former CalRecycle executive has expressed concern over this fact and opined which economic actors spawn the most waste.
Sources: 2018 State of Disposal and Recycling in California, State of Disposal and Recycling Report 2021, State of Disposal and Recycling Report 2022, E-4 Population Estimates for the State, 2001–2010, E-4 Population Estimates for the State, 2011–2020, E-4 Population Estimates for the State, 2021–2024
Note: Population figures are for January 1 of each year according to the California Department of Finance
Former CalRecycle Director Rachel Machi Wagoner issued an urgent warning in the agency’s “State of Disposal and Recycling in California for Calendar Year 2020” report. Ms. Wagoner blamed “an economy driven by resource extraction and single-use disposable products” for California being on track to miss its 75% recycling goal by 2025 (CalRecycle 2021). She
8 2023-2024 San Mateo County Civil Grand Jury
claimed, “Consumers placing items in the right bin alone will not solve systemic problems like unrecyclable product designs and a lack of end markets for complex materials” (2021). A solution the Director proposes is getting “local and private partners” to efficiently collect and remanufacture the goods “California produces and uses” into new commodities (2021).
Wagoner’s call for reaching the 2025 target focuses on getting manufacturers to sell goods with recyclable content. Annual reports from CalRecycle partially support this statement because manufacturers generate the highest proportions of refuse.
Businesses and multi-family dwellings with five or more units produce more landfill waste than residential properties statewide. For the last three and a half years, 47% to 50% of all refuse in the state originated from the commercial sector (CalRecycle 2024). Self-haulers contributed 20% of garbage. Residential properties contributed 30% to 33% (2024). An important distinction is that the California Code of Regulations labels multi-family dwellings of less than five units as residential areas (§ 18982 (2020)). Multi-family dwellings with five or more units, then, fall under the commercial category.
Source: State of Disposal and Recycling Report 2022; * = Data from Q3 and Q4 2019 only
9 2023-2024 San Mateo County Civil Grand Jury
METHODOLOGY
Interviews
The Civil Grand Jury interviewed officials from nine cities: Atherton, Brisbane, Daly City, Half Moon Bay, Millbrae, Pacifica, San Bruno, South San Francisco, and Woodside.
Instead of interviewing the nine remaining cities directly, the Grand Jury spoke with an official from the RethinkWaste JPA. Each city has one council member on the Board of Directors (RethinkWaste n.d. (no date)). Jurors interviewed San Mateo County twice to gather information on unincorporated areas outside and inside the RethinkWaste service area. Lastly, three haulers were interviewed (Republic Services, Recology of the Coast, and Recology San Bruno) because their cities had incomplete data.
Online Public Documents
The CalRecycle and California Air Resources Board websites provided the state’s most recent recycling rates and landfill composition. RethinkWaste was the only public entity that disseminated diversion rates for cities and a few unincorporated areas on their agency website.
This jurisdiction provided calendar year quarterly records and diversion rates separated by the three property types (single-family, multi-family dwellings, and businesses). This makes comparing performance across cities straightforward.
Private Electronic Documents
During the investigation, various documents unavailable online were collected. These resources included diversion rate tables, participation rate tables, sample citations, waivers, and noncompliance notices from 2022 to 2023. The Grand Jury asked haulers, city governments, and the County government permission to use this data. Some differences were noted in the ways cities ask haulers to collect data, which made it difficult to compare jurisdictions. A few haulers combine multi-family dwellings’ participation rates with either single-family homes or commercial properties. Other haulers furnish quarterly reports over fiscal years instead of calendar years.
DISCUSSION
The County’s political, legal, and economic organization largely account for the contrast in diversion and participation rates among the three property types. Based on the 2022 1-Year American Community Survey, 729,181 people live in San Mateo County, down 4.61% from 2020 (U.S. Census Bureau 2022a). Yet, U.S. Census Bureau population estimates for Woodside
10 2023-2024 San Mateo County Civil Grand Jury
and several unincorporated areas were unavailable in 2021 and 2022. California’s Department of Finance includes these jurisdictions for its January 1, 2024 estimates, putting the total County population at 741,565 people. 61,538 of these residents live in unincorporated communities, and they could be the County’s fifth largest city (2024). This large number of unincorporated residents poses a challenge to County waste management.
Source: E-1 Cities, Counties, and the State Population and Housing Estimates with Annual Percent Change — January 1, 2023 and 2024
Two special districts and one JPA unite geographically adjacent public agencies to coordinate and plan for waste management. The South Bayside Waste Management Authority (SBWMA), known as RethinkWaste, has 11 member agencies spanning from Burlingame to East Palo Alto.
Each city and grouping of unincorporated areas share a single hauler and transfer facility despite having separate franchise agreements. On the coast, the Granada Community Services District (GCSD) and the Montara Water and Sanitary District (MWSD) follow a similar pattern for unincorporated areas exclusively. Jurors will cover these institutions in the next subsection.
Multi-family dwellings and single-family homes have unequal responsibilities for organics collection enrollment and proper waste disposal. Residents of single-family homes and multifamily complexes of less than five units individually subscribe to their jurisdiction’s organic waste collection service. In contrast, multi-family dwellings owners or managers are
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responsible for enrolling in organic waste collection services on behalf of tenants and employees.
Multi-family dwelling and business owners “must supply and allow access to an adequate number, size, and location of containers” with the correct labels or colors (CalRecycle n.d3.).
Furthermore, they must annually educate tenants and employees on proper organic waste sorting.
Lastly, owners or managers must distribute information to new tenants within 14 days of occupying the premises (n.d4.).
Cities have pursued a policy of maximizing single-family homes’ participation rates.
Homeowners in every San Mateo County city benefit from having blue and green carts included in the price of garbage collection (Table 2 links). Unfortunately, tenants countywide do not have green carts included in the price of garbage collection, except in San Bruno (Table 2 links).
Hence, rental property owners or managers must add a green cart for the same or discounted price as their gray cart. This barrier to participation poses another threat to the county’s waste diversion efforts.
San Mateo County’s tenants play a decisive role in diverting as much waste as possible. In 2022, renters in San Mateo County made up 38.77% (278,126 out of 717,387) of the total population in occupied housing units (U.S. Census Bureau 2022b). Five cities have an owner-occupied population proportion less than the current state baseline of 58.27%. Another seven cities have an owner-occupied population proportion less than the national average of 68.37% (U.S. Census Bureau 2022b). The County’s substantial renter population indicates their waste disposal practices and green cart participation can either enhance or counteract homeowners’ or businesses’ diversion endeavors. Although cities can be commended for expediting green cart enrollment for homeowners, they could have worked with haulers to make tenant organic waste collection easier.
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Sources: 2022 1-Year ACS Data: U.S. Occupied Housing Unit Populations, 2022 1-Year ACS Data: California Occupied Housing Unit Populations, 2022 5-Year ACS Data: City Occupied Housing Unit Populations
* = ACS 1-Year Estimate; all other values are from vintage year 2022 from the ACS 2018-2022 5-Year Estimate. See the link for explanation: When to Use 1-year or 5-year Estimates Note: Again, Woodside does not appear on either the 1-Year or 5-Year ACS San Mateo County’s Waste Management Landscape
Most haulers currently have franchise agreements with JPAs, cities, and the County to collect, transport, and dispose of waste. Franchise areas consist of municipalities or special districts that use their bulk purchasing power to negotiate waste collection rates with a hauler (SMC Sustainability Department n.d. (no date)). Each of the franchised haulers also operate in unincorporated areas as part of or apart from existing agreements. Kunz Valley Trash has a nonexclusive franchise agreement with San Mateo County (n.d2.), and alongside Peninsula Sanitary Service, Inc., operates solely in unincorporated communities. The following table lists the six haulers operating in San Mateo County, along with their properties. All haulers offer the full range of waste collection; Kunz Valley Trash clients do not have bins and instead must place their waste in bags (n.d1.).
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Table 2. Haulers Serving San Mateo County Cities
Legend: * = Unincorporated areas or Special Districts; Bold = Haulers’ local affiliates Haulers Areas Served* Properties Franchise Agreements
(Sources: SMC
Sustainability
Department:
Curbside Collection,
GreenWaste Service
Areas)
Atherton
Portola Valley
Woodside
Los Trancos Woods*
Sky Londa*
Our Facilities -
GreenWaste
Atherton 2020
Woodside 2019
Kunz Valley Trash
(Sources: Kunz
Valley Trash:
Services, Kunz
Valley Trash
Service Guide)
La Honda*
Loma Mar*
Pescadero*
San Gregorio*
Each place is exempt
from SB 1383 because
of a low-population
waiver for census tract
6138 (San Mateo
County 2021)
Non-Exclusive with San Mateo
County (Pending Publication)
(Sources: SMC
Sustainability
Department:
Curbside Collection,
PSSI: What Belongs
in Each Container)
Stanford Lands*
(includes the SLAC
National Accelerator
Lab)
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(Sources: SMC
Sustainability
Department:
Curbside Collection,
About The Program
– RethinkWaste)
Coast:
Granada Community
Services District*
Montara Water &
Sanitary District*
Pacifica
San Bruno:
San Bruno
San Mateo:
Ladera*
RethinkWaste JPA*
San Bruno
Transfer
Station
Granada Community Services
District 2018
San Bruno 2023
Montara Water and Sanitary
District 2013
RethinkWaste Agreements
(Sources: SMC
Sustainability
Department:
Curbside Collection,
Republic Services
Daly City:
Recycling and
Trash)
Daly City:
Broadmoor*
Colma
Daly City
Olympic Country Club*
San Bruno Mountain
Park*
Unincorporated Colma*
Half Moon Bay:
Half Moon Bay
Corinda Los
Trancos
Landfill
Newby Island
Daly City 2015
Half Moon Bay 2017
(Sources: SMC
Sustainability
Department:
Curbside Collection,
South SF Scavenger
Residential)
Brisbane
Brisbane Quarry*
California Golf Club*
Country Club Park*
Millbrae
South San Francisco
SFO*
SFO - Census tract
9843 - is exempt from
SB 1383 (San Mateo
County 2021)
Blue Line
Transfer
Station
Brisbane 2019
South SF 2013
RethinkWaste covers the most area and population out of all County entities dedicated to waste management. The organizational chart below names the 11 member agencies. The West Bay
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Sanitary District provides waste collection to a handful of accounts in Atherton, East Palo Alto, Menlo Park, Woodside, and Portola Valley (n.d.). RethinkWaste and San Mateo County are the only public entities that own transfer stations - Shoreway Environmental Center and Pescadero Transfer Station, respectively (RethinkWaste n.d., SMC Sustainability Department n.d.).
Chart 1. RethinkWaste Member Agencies and Contractors
Sources: About – RethinkWaste, Curbside Collection - SMC Sustainability Department Cities and their Properties’ Organic Waste Streams
Historically, businesses have generated more refuse than homeowners in the County, even though the latter produces more waste overall. During and after the COVID-19 pandemic, however, single-family homes made more refuse and overall waste than businesses. From 2011- 2019, homeowners in the RethinkWaste JPA diverted more organic waste tons than garbage tons sent to the landfill (Recology San Mateo County 2024, 2023, 2021). The bar chart below also demonstrates that homeowners have continuously recycled more than businesses. In 2020 and subsequent years, though, residences still diverted more waste in spite of overtaking businesses Member Agencies
Contractors
County Franchised Area
Baywood Park (Crystal Springs area),
Burlingame Hills, Devonshire Canyon, San
Mateo Highlands, Sequoia Tract, Trailer
Rancho, Emerald Lake Hills, Harbor
Industrial, Kensington Square, Oak Knoll,
Peninsula Golf Club, and Palomar Park
County Service Area 8 (North Fair
Oaks)
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in trash sent to landfill. Employees from Republic Services and RethinkWaste were interviewed to explain why this area of the County has this trend and how it differs from other regions.
Sources: Recology San Mateo County Q4 2023 Report, Recology San Mateo County Annual Report 2022, Recology San Mateo County Annual Report 2020 Note: Atherton was a member of RethinkWaste until January 1, 2021; years before 2021 include their tonnages.
RethinkWaste homeowners have higher diversion rates and refuse tons compared to businesses because of takeout and yard waste tonnages. A RethinkWaste representative explained, “We still have a lot of people working from home. We have a lot of businesses that continue to be remote and… are not fully staffed in the way that they were pre-pandemic” (2023). This comment partly reflects two phenomena shown on the chart above. First, it aligns with businesses diverting increased amounts of organic waste throughout the 2010s, only for tonnages to fall in 2020.
Second, it accounts for the record organic waste diversion homeowners contributed in 2020.
Expanding on the RethinkWaste view, businesses constantly diverted more organic waste throughout the 2010s because people ate at restaurants more often. Similarly, falling unemployment rates during the period (U.S. Bureau of Labor Statistics 2024) meant more workers ate lunch at their jobs. Once more, the chart displays both factors at work because businesses have been steadily increasing their tons of diverted organic waste post-pandemic. As for the homeowners, the unprecedented organic waste diverted in 2020 probably came from
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increased takeout from eateries and bulk purchases from grocery stores. It is obvious these activities existed before the pandemic, but food consumption alone does not explain why singlefamily homes eclipse businesses in regard to organic waste.
Yard trimmings inflate the weight of organic waste for single-family homes in the RethinkWaste JPA and other cities on the bay compared to coastal communities. This was noted by an official from Republic Services - a hauler covering Daly City, Colma, and Half Moon Bay. The official noted, “Even though more residents are participating in recycling, ... [Daly City does] not have the yards that, let’s say, a San Mateo or a Redwood City house [does]” (2024). The interviewee resumed, “Because diversion is calculated based on weights, they don’t have that yard waste, the grass clippings and stuff that add a lot of weight to the material” (2024). Daly City’s 2023 waste statistics support this claim, as recycling, rather than organics, is the majority of diverted material. Half Moon Bay’s single-family homes probably have greater lawn space than Daly City since the opposite is true.
Sources: Republic Services Half Moon Bay Q4 2023 Report, Republic Services Daly City Q2 FY 2023-2024 Report
*Daly City’s data is from Q1 and Q2 of fiscal year 2023-2024 (July 1, 2023 to January 30, 2024) Note: Data for both cities are not publicly available. Jurors received the information from Republic Services.
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A lack of lawns, gardens, or yards among certain single-family homes does not mean they are stuck with low diversion rates. The Republic Services official made an observation that can apply to all property types, regardless of green space dimensions. Our interviewee stressed that cities “can throw [green] carts out at everybody,” but residents may not use them or contaminate the cart “so much that it becomes trash” (2024). Single-family homes can improve their current organic waste diversion practices just like their counterparts in multi-family dwellings.
Nevertheless, Atherton, Portola Valley, and Woodside have an easier job hitting higher diversion rates because of their huge green spaces. Moreover, they are the only cities with a high diversion organic waste processing facility thanks to their hauler’s two-cart system (GreenWaste n.d.).
The table below, however, shows that neither green spaces nor a two-cart system recover all organics. Each city has 100% participation in commercial and residential accounts due to the two-cart system, which allows food and refuse in gray carts. An employee from the town of Woodside acknowledged that people “... could be putting food waste into the yard trimmings,” but if they follow the process, “there shouldn’t be contamination” (2024). Likewise, the composting facility may have “residuals that don’t compost and those go to the landfill” (2024).
A similar scenario would be waste at the materials recovery facility (MRF) that is not recyclable or compostable, which also gets sent to the landfill.
Table 3. Diverted Organic Waste and Trash: Atherton, Portola Valley, and Woodside 2023 Atherton Portola Valley Woodside
Trash 1,232.14 tons 1,996.72 tons 2,112.81 tons
Food Waste
Composted
1,581.16 tons 2,649.88 tons 2,799.38 tons
Trash 94.77 tons 1.24 tons 20.35 tons
Yard Waste
Composted
9,381.98 tons 123.4 tons 2,014.71 tons
Source: GreenWaste Annual Summary 2023
Legend: Green = Green Cart Contents, Gray = Gray Cart Contents The exact percentage of yard trimmings or food waste that became trash due to contamination is unknown. But, improper waste sorting is a possibility even in communities with predominantly single-family housing. Atherton, Portola Valley, and Woodside only have 20, 36, and 51 commercial accounts within their boundaries respectively (GreenWaste 2023). Still, these minute figures, compared to the thousands of residential accounts, drastically affected diversion rates.
Atherton’s total diversion rate stood at 87.39%, while Portola Valley and Woodside had 60.37% and 69.69%, respectively (GreenWaste 2023). After looking at these statistics, it could be
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deduced that contamination exists in single-family homes and businesses, though one setting may encourage this behavior more than the other.
Yard waste may not be the sole determinant of the differences between cities' organic waste diversion. Cities in the northern part of the county have participation rates and waste streams not entirely influenced by yard waste. Daly City and the five cities in the chart below have owneroccupied housing populations above the state average (U.S. Census Bureau 2022a, 2022b). As a result, they have more single-family waste management accounts than commercial and multifamily dwellings combined (South SF Scavenger 2024, San Bruno 2024, Pacifica n.d.). Still, four out of five cities have diversion rates below 45% even though their single-family participation rates are above 90% (South SF Scavenger 2024, San Bruno 2024, Pacifica n.d.).
If homeowners truly separate waste better than renters or restaurant clientele, then their efforts should have raised overall diversion rates closer to 50% at least. These cities do not separate waste streams by property type to identify if their single-family homes generate more waste than businesses or multi-family dwellings.
Sources: San Bruno - Data on Waste and Recycling Categories 2023, South SF Scavenger 2023 Participation and Diversion Rates, and Pacifica FY 2022-2023 Diversion and Participation Rates * = Pacifica published data based on their fiscal year, which ran from May 2022 to April 2023
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Indeed, giving everyone a green cart or adopting a two-cart model does not mean more organic waste will escape the landfill. Supplying homeowners, renters, and businesses with equal green cart access, and appropriate waste separation, is still important. These fixes are in our Findings and Recommendations sections. The broader point is that SB 1383 compliance works well if cities and counties modify their outreach and recordkeeping practices to bolster organic waste diversion. If San Mateo County and its cities consistently track businesses’ and multi-family dwellings’ waste trends, and base their outreach around this data, then organic waste diversion should be straightforward.
Data Discrepancies
While not a primary focus of the investigation, the Grand Jury learned of a major discrepancy in the way South San Francisco Scavenger and its client cities compile tonnage data. Brisbane’s 2022 Electronic Annual Report (EAR) to CalRecycle, which measures several compliance activities, puts the diversion rate at 64% (Edgar and Associates 2023a). The hauler contracted a consulting firm, Edgar and Associates, to prepare the report (Interview with Brisbane 2022).
When the hauler gave the Grand Jury its diversion rate report for 2023, the metric stood at
39.11% (South SF Scavenger). South San Francisco’s 2022 EAR had dual diversion rates of 74% and 66% (Edgar and Associates 2023b), while the hauler’s 2023 document recorded 42.91% (South SF Scavenger 2024). This report based each cities’ tons and diversion rates, shown in the chart above, on the hauler’s data.
Inconsistent diversion rate reporting continued in other cities and communication channels.
Brisbane’s “Waste and Recycling” page on its official website asserts that the city diverts “76% of the waste generated by residents and businesses” (n.d.). South San Francisco Scavenger also provided conflicting data with Millbrae’s 2023 diversion rates. The fourth quarter report the hauler sent the city listed a 37.65% diversion rate, but the version they gave to jurors read
54.14% (South SF Scavenger 2023). Cities in the South San Francisco Scavenger area exemplify the risks of relying on haulers too much for data collection. Having conflicting figures for waste diversion does not help cities accurately assess the progress they have made for SB 1383 compliance.
Brisbane, Millbrae, and South San Francisco should reconcile tonnage reports with their haulers to verify which figures are correct. Assuming the cities did experience a massive decline in waste diversion in a year, this occurrence would still be unusual. An investigation into diversion rates does not adversely affect the per capita disposal rates these cities send to the state. Fixing these errors is important so city governments know what proportion of all waste is organics, recycling, or garbage over time. It is highly likely these mistakes come from the sophisticated way Edgar and Associates converts the per capita disposal rates to regular diversion rates. They present their equation below.
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Equation 2. Edgar and Associates Diversion Rate Conversion from Per Capita Disposal Rates (Source: Edgar and Associates 2023a)
Republic Services, Recology of San Mateo County, and GreenWaste have a much simpler equation that does not involve converting the per capita disposal rate. These haulers merely add the total tons of recycling, organics, and rubbish they collect to get a diversion rate. [(R+O)/(R+O+S)] * 100 = Diversion Rate %
R: Recycling tons, O: Organic tons, S: Solid Waste tons (Sources: Republic Services 2024a and 2024b, Recology San Mateo County Q4 2023 Report, GreenWaste 2023)
If the difference in calculations explains the unequal diversion rates, the simpler diversion rate formula would be preferable. Cities should negotiate with their haulers to have them compute these percentages in quarterly or annual reports separate from the EAR. Such a change reduces Edgar and Associates’ EAR workload and leaves cities with one reliable waste diversion
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measure. Brisbane, Millbrae, and South San Francisco will also have the opportunity to compare their metrics with fellow governments that use the same methods. The simpler method, using Scavenger’s tons, should yield the same diversion rates jurors obtained in the last chart.
If diversion rates are unequal because of varying tonnage measurements from the hauler, cities should investigate Scavenger’s transfer station scales. Scavenger’s 2023 fourth quarter report to Millbrae had 1,116.78 tons more in its total tonnage than in the annual report it gave to jurors.
Another scenario would be that the hauler gave the Grand Jury and Millbrae different data.
Either way, Millbrae (and its sister cities, if applicable) should scrutinize weights measured at the transfer station to pinpoint if Scavenger furnishes contradictory data.
In the previous graph, five cities were included as not dividing their waste streams by property type. Atherton, Portola Valley, and Woodside are similar in this regard because they only divide recyclables by single-family homes and businesses (GreenWaste 2023). We recommend cities of the GreenWaste, South San Francisco Scavenger, Recology of the Coast, and Recology San Bruno areas begin dividing their data by the three property types. The County cannot continue having contradictory forms of waste generation reporting. Aggregate waste reports prevent local governments from seeing how severely economic turmoil causes businesses’ diversion rates to tumble. On the same note, South San Francisco, Recology of the Coast, and Recology San Bruno cities do not know how serious renter turnover might affect multi-family diversion rates.
Cities in these hauler areas should have a comfortable transition into segregating organics, recycling, and solid waste streams by three property types. Pacifica, Atherton, Portola Valley, Woodside, and Brisbane have owner-occupied housing populations larger than the national average. Meanwhile, South San Francisco, San Bruno, and Millbrae have owner-occupied housing populations larger than the state average. In other words, these cities are mostly residential, and their haulers can discern where refuse and organic tons originate. If haulers have the technical and infrastructural capabilities to portray a waste management story, cities should not be in the dark. Jurors and cities had to ask haulers for either participation rates or diversion rates throughout the investigation.
If haulers and cities do not have the resources necessary to split waste into three property types, they can come up with a long-term plan to do so. Currently, jurisdictions must conduct “annual visual inspections” called “route reviews,” in which they randomly inspect “containers for contamination on all collection routes” (CalRecycle n.d2.). Following these inspections, jurisdictions must “notify all generators on the sampled hauler routes and provide education on proper material separation” (n.d2.). In San Mateo County, Republic Services, Recology of the Coast, and South San Francisco Scavenger “lid flip” bins to check for contamination (Interviews 2024). Republic Services leaves tags on contaminated residential bins and calls businesses and multi-family dwellings about it (Interviews 2024).
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Waste evaluations are conducted at least in two distinct seasons of the year [per 14 CCR section 18984.5(c)]” (CalRecycle n.d2.). If jurisdictions find more than 25% contamination in any container type, they can perform “a targeted route review of containers… to determine sources of contamination (n.d3.). Later, they notify and provide education to those generating contamination” (n.d3.). Local governments should increase the frequency of waste evaluations, specifically on routes with high levels of contamination. Jurisdictions will use their outreach capabilities more efficiently this way.
All documentation of route reviews must be stored in the state’s Implementation Record (CalRecycle n.d2.). Some of the information included are Notices of Violation and penalty order copies. These documents must be accompanied by a list of dates acknowledging entities have complied with warnings or sanctions (CalRecycle n.d2.). Jurisdictions must include “a description of the hauler route and addresses covered by a route review” (n.d2.).
Instead of simply preserving time sensitive data, the Grand Jury suggests jurisdictions analyze past and current contamination trends in problem routes. Cities that struggle splitting diversion rates and waste tons by property type can use this method to track their progress at minimizing organic waste contamination. Perhaps cities will improve their organic waste diversion results if they implement these changes.
Local governments cannot leave their residents in the dark as well. If citizens pay for waste collection service, they have the right to know how well each property type separates waste.
None of the entities interviewed, except RethinkWaste, had copies of annual or quarterly waste reports on their government websites. Brisbane, Woodside, and Pacifica are some examples of cities that had no idea why their haulers do not separate waste by three property types (2024).
Jurors propose cities publish any past, present, and future waste statistics on their government websites following this report’s release.
The Civil Grand Jury recommends setting a waste reporting standard across the County. Without a common measurement, cities might not reduce 75% of organic waste disposal from 2014 levels by 2025. Jurors understand the state imposed this goal on itself and not on individual jurisdictions. Nonetheless, if the County adopts a mentality of consistently increasing diversion rates, citizens will reap the social savings. If cities keep increasing the price of garbage collection (DiNapoli 2024, Mata 2024) for the same amount of landfill tons, then methane emissions will not abate.
Barriers Exclusive to Businesses and Multi-Family Dwellings Multi-family dwellings and businesses cannot match the participation and diversion rates of single-family homes due to socioeconomic and infrastructural problems. One Sustainability
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Department official said since “tenants sometimes cycle in and out every year… the resources involved to do… outreach [for] a multi-family building” is very “intensive” (2024). Another important component is that residents who live in apartments with trash chutes “have to find different ways to compost or set up bins in separate areas” (2024). Meanwhile, businesses may welcome irregular clients who “don’t know what the rules are” (2024). In spite of these disadvantages, multi-family dwellings in the RethinkWaste area have steadily increased their compost and recycling tons over the last decade (Recology San Mateo County 2024, 2023, 2021). Some city governments have even worked around these problems altogether.
Sources: Recology San Mateo County Q4 2023 Report, Recology San Mateo County Annual Report 2022, Recology San Mateo County Annual Report 2020 Rising recycling and organic tons for multi-family dwellings over the years indicate that tenants strive to segregate waste properly. Unlike businesses, waste generation in multi-family dwellings does not rise and fall based on economic booms or busts. Crucially, renter turnover has not created drastic ebb and flow patterns for tonnage. Aside from landlord willingness, building age is very likely to be multi-family dwellings’ greatest barrier to increasing green bin participation.
According to the U.S. Census Bureau, 65.36% of existing renter-occupied housing units are from before 1980 (2022c). Cities must consider the difficulty of setting up green bins among older apartment buildings using trash chutes.
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San Bruno pursues a novel strategy for multi-family dwellings’ organic waste collection compared to other cities. A Recology of San Bruno official finds that larger apartment complexes have a harder time complying. The hauler works with landlords to find the best location for green carts “to make it very simple for the residents” (2024). Better yet, the local government treats “multi-family as residential, and there is no cost for the multi-families in San Bruno to participate” (2024). Including green bin service in the price of standard refuse collection has brought 73% of multi-family dwellings in compliance with SB 1383 (San Bruno 2024). As of March 13, 2024, 109 multi-family dwellings remain non-compliant (Recology of San Bruno).
Interviews with several cities confirm that they require new property developments to provide enough space for the three-cart system. Pacifica, Daly City, Millbrae, and all RethinkWaste cities have their planning departments partner with haulers to review building plans (2024). A South San Francisco city employee stated that the city and hauler reviews waste enclosure spaces for new businesses but not multi-family dwellings (2024). Given that Woodside does not have multifamily dwellings, the city scrutinizes building plans for new commercial properties only (2024).
City officials from Brisbane and Half Moon Bay were uncertain about how municipal departments handle new development reviews (2024).
If cities can prepare future infrastructure with the waste enclosures they need, it should be possible for them to start doing the same for existing, non-compliant multi-family dwellings.
RethinkWaste is already ahead of the curve on this front and hopes to build on the San Bruno model. On March 14, 2024, RethinkWaste’s Technical Advisory Committee (TAC) announced that Recology of San Mateo “was open to a town hall format” to increase participation. At the next TAC meeting, the agency declared it will send invitational emails to businesses and multifamily dwellings for “virtual or in-person” SB 1383 compliance presentations held in June (2024). It is unknown at this point if any landlords or business owners have accepted such invitations or if the agency has begun holding these meetings.
RethinkWaste presently makes phone calls and letters to non-compliant property types (2024).
City employees from Brisbane, South San Francisco, and Daly City have disclosed that outreach activities include releasing newsletters, emails, and social media posts (2024). A Half Moon Bay staff member reported that the city received a grant from CalRecycle to give non-compliant businesses green bins across downtown (2024). A Recology of the Coast official says they distribute flyers and mailers and work with a compliance officer in Pacifica (2024).
The Civil Grand Jury appreciates the massive resource and labor mobilization from haulers and cities to perform these activities. Yet, these actions have consumed significant time in relation to meaningful effects. The scatter plots and tables below for jurisdictions inside and outside the RethinkWaste area describe the unfinished participation progress for multi-family dwellings and
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businesses. Even if the visual data included properties with waivers, hauler data reveals that many properties are still without organics collection. Daly City, Half Moon Bay, and their hauler, Republic Services, did not give the Grand Jury reliable participation rate data.
Sources: Recology San Mateo County Q4 2023 Report, Recology San Mateo County February 2024 Participation Rate Tables (see Appendix)
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Sources: Recology San Mateo County Q4 2023 Report, Recology San Mateo County February 2024 Participation Rate Tables (see Appendix)
Both scatter plots affirm the assumption that high participation rates to organic waste collection does not increase the share of organic waste in total tonnages. The weak coefficients of determination (R2) tell us that green bin enrollment explains less than 50% of changes in organic waste proportions for businesses and multi-family dwellings. Multi-family dwellings in the RethinkWaste area have the most alarming statistic: less than 10% of their total waste tons are organic waste. It would appear that cities may have consciously or unconsciously prioritized one property type over another. For instance, San Mateo County enrolled twice as many multi-family dwellings for green cart service in the County Franchised Area (CFA) than its businesses.
The scatter plots also reveal that San Mateo County has stranded North Fair Oaks in the SB 1383 compliance process. Businesses and multi-family dwellings in the community have the lowest participation rates and organic waste proportions in the entire RethinkWaste JPA. It is unacceptable for a County tract with a compact area to have less resources than its neighbors. At the Discussion’s onset, the hurdles unincorporated regions pose for compliance were described.
North Fair Oaks has similar participation statistics like its coastal counterparts in the Granada Community Services District (GCSD) and Montara Water and Sanitary District (MWSD).
RethinkWaste and San Mateo County can combine their resources to level the playing field within the JPA.
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Table 4. Recology San Bruno Participation Rates 2023
Source: Recology of San Bruno Interview
Table 5. Brisbane, Millbrae, and South San Francisco Participation Rates Source: Source: South SF Scavenger 2023 Participation and Diversion Rates
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Table 6. Recology of the Coast Participation Rates FY 2022-2023 Source: Recology of the Coast Interview
One recommendation is that RethinkWaste and non-JPA cities have a mass enrollment summit for multi-family dwellings and businesses. Solving the problem means holding these meetings at regular intervals until there is 100% green cart participation rate for both property types. On-site enrollment, rather than virtual presentations, holds property managers and business owners accountable. Public agencies need to receive input from the parties to address the troubles keeping them from enrolling. Cities, the County, and RethinkWaste can advise these individuals on cost-effective green cart adoption. Jurisdictions should explicitly state that monetary penalties are inevitable unless they attend these green bin enrollment summits.
If renters perfectly segregated their waste, a high percentage of the stream would be organic material, much like that of homeowners. Daly City’s multi-family dwellings, surprisingly, were the only ones in the County to have higher diversion rates than single-family homes thanks to thousands of diverted tons of organic waste. Multi-family dwellings diverted 57% of their waste while single-family homes diverted 48% (Republic Services 2024a). When interviewed, a representative from Republic Services said that an arduous program explained the phenomenon.
Presently, the hauler pulls “organics out of the trash,” which is “not a very good” and “costly system” (2024). The representative predicted the “program is likely going… away, so we’ll be doing something different with our multifamily” (2024).
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Sources: Republic Services Half Moon Bay Q4 2023 Report, Republic Services Daly City Q2 FY 2023-2024 Report
*Daly City’s data is from Q1 and Q2 of fiscal year 2023-2024 (July 1, 2023 to January 30, 2024) Note: Data for both cities are not publicly available. Jurors retrieved the information by requesting it from Republic Services.
Despite this inefficient system causing high diversion rates for multi-family dwellings, it proves that tenants generate more organic waste than rubbish. Jurisdictions should not consider getting renters to sort waste properly a lost cause, for this data proves that contamination is responsible for low diversion rates. High subscription rates for green cart service and apartment buildings with distant waste enclosures contribute to low participation rates. The Sustainability Department interviewee remarked, “Sometimes these landlords…vary in how easy they are to implement things like [organic waste collection]” (2024). The official added, “especially if it hits their bottom line about increased costs for adding compost to recycling service” (2024). It is highly recommended that haulers put signage on green carts if they do not have this practice already.
31 2023-2024 San Mateo County Civil Grand Jury
Sources: Recology San Mateo County Q4 2023 Report
Sources: Recology San Mateo County Q4 2023 Report
32 2023-2024 San Mateo County Civil Grand Jury
FINDINGS
F1. High green cart enrollment costs and insufficient bin space are the dominant contributors to low participation rates among multi-family dwellings and businesses.
F2. Green bin contamination among compliant multi-family dwellings and businesses prevents them from diverting more organic waste.
F3. City, County, and RethinkWaste compliance outreach efforts for multi-family dwellings and businesses could improve because a significant portion of these properties remain non-compliant.
F4. Multi-family dwellings and businesses produce a significant amount of the County’s organic waste.
F5. Citizens cannot conveniently access reliable diversion and participation rates because JPAs and cities do not make the information available on their government websites.
F6. Assessing progress on organic waste diversion in Atherton, Brisbane, Millbrae, Pacifica, San Bruno, South San Francisco, and Woodside is difficult because they and their haulers do not separate waste tons by property type on their annual or quarterly reports.
F7. An alternate and reliable method to separating waste tons by property type would be analyzing contamination statistics from route audits and waste evaluations.
F8. Brisbane, South San Francisco, and Millbrae cannot properly track their waste trends since their hauler and contractor have contradictory diversion rate formulas and tonnage measurements.
RECOMMENDATIONS
R1. Beginning March 1, 2025, cities, the County, and RethinkWaste should host regular inperson green cart enrollment summits for non-compliant businesses and multi-family dwellings, and identify other new compliance strategies.
R2. Beginning January 1, 2025, Brisbane, South San Francisco, and Millbrae should investigate their Electronic Annual Report contractor’s diversion rate conversion formulas and their hauler’s waste scales.