1 STAFF REPORT
DAT
E: August 7, 2020
TO: T
he Honorable Mayor and Members of the City Council
FR
OM: Zizette Mullins, City Clerk
Amy Albano, City Attorney
SUBJECT: Receive §9212 Preliminary Report on the 2020 Burbank Just Cause Eviction and Rent Regulation Measure and Council Consideration of Options under Elections Code Section 9215
RECOMMENDATION
1. Note and file Elections Code §9212 Preliminary Report on the impacts of the 2020 Burbank Just Cause Eviction and Rent Regulation Measure (Measure); and direct staff to return at a later date with a more in- depth report, if the Measure is placed on the ballot. The report should consider the Measure’s fiscal effects, impacts on land use, housing, regional housing needs, use of vacant land, and effects on business retention.
2. Pur
suant to Elections Code §9215 take either of the following actions:
a. Adopt the Measure/ordinance, without alteration, by adopting the proposed ordinance (Attachment 1); or
b. Submit the Measure/ordinance, without alteration, to the voters for the November 3, 2020 election by adopting the Resolution calling for the election (Attachment 2) and the Resolution Requesting Consolidation and Services of Los Angeles County (Attachment 3).
BACKGROUND
Please see Staff Report from July 28, 2020 concerning Certification of 2020 Burbank Just Cause Eviction and Rent Regulation Measure Petition and Council Consideration of Options under Elections Code Section 9215 ( Attachment 4) and a copy of the Measure (Attachment 5).
The
proponents of the Measure, the City Council and the City of Burbank are in ongoing litigation concerning the Measure, as referenced above. During the first court hearing on July 23, 2020, the Court ruled in favor of the proponents and issued an order , in part, directing Burbank City Council to decide either to adopt the Measure or place it on the ATTACHMENT 1
ATTACHMENT 1-1
2 November 3, 2020, ballot on or before August 7, 2020. This is the last day to place a measure on the November 3, 2020, ballot. The hearing on the City’s cross-complaint pre- election challenge to the Measure is scheduled for the morning of August 7, 2020.
A
t the July 28, 2020 meeting , the City Council directed staff to complete a prliminary Elections Code §9212 Report on the proposed Measure’s apparent conflicts with the City Charter and State law and on the effects of the City’s pending cross -complaint on the proposed Measure to be presented at a Special City Council meeting scheduled for 2:00 p.m. on August 7, 2020. The Report should also consider the Measure’s fiscal effects, impacts on land use, housing, regional housing needs, use of vacant land, and effects on business retention to the extent there is time for staff to address these matters before the August 7, 2020, City Council meeting.
DISCUSSION
§9212 Preliminary Report
The Measure
The Measure proposes changes to the Burbank Municipal Code adding just cause eviction provisions, rent regulations and an updated Landlord Tenant Commission (Commission) with expansive authority.
W
hich units are exempt from Just cause Eviction and R ent Stabilization provisions? Certain types of housing are exempt such as units restricted as affordable, or owned by a government entity or non- profit, or subsidized by government including Section 8, or units where the owner shares a bathroom or kitchen with a renter.
W
hich units a re exempt from Rent Stabiliza tion but subject to J ust Cause provisions? R esidential units, such as those that received a certificate of occupancy (built) after February 1, 1995, single- family homes or condominiums , are exempt from rent regulations, but subject to just cause eviction provisions.
H
ow many rental units are subject to the rent stabilization p rovisions of the Measure? Approximately 2 2,292 units. This number may be lower based on the exemptions in the Measure.
H
ow many rental units are subject to the just cause eviction provisions of the Measure? Approximately 24,285 units. This number may be lower based on the exemptions in the Measure.
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ho administers the provisions? The Measure is to be implemented and administered by an updated 5-member Commission appointed by the City Council with expansive and autonomous authority, as discussed in greater detail below. The Commission will be comprised of no fewer than two tenants and no more than two residential rental property owners. An alternate shall also be appointed by the City Council. All current members of the Commission shall remain through their existing terms.
ATTACHMENT 1-2
3 What is the cost to administer the Measure? Below is a table comparison of the cost for Santa Monica, Berkley and estimates for Burbank to administer a rent stabilization program.
Fiscal Impacts
The Measure provides the Commission shall finance its reasonable and necessary expenses, including engaging any staff as necessary to ensure implementation, by charging Landlords an annual Rental Housing Fee. During the initial implementation period, the Measure requires the City to advance all necessary funds to ensure the effective implementation of the Measure, until the Commission has collected Rental Housing Fees sufficient to support the implementation. In the future, t he City may seek reimbursement of any advanced funds from the Commi ssion after the Rental Housing Fee has been collected. There is no requirement that the Commission repay the City.
S
ince the money collected from Landlords will be prospective and likely not available during the initial implementation, the City’s general fund may be obligated to advance all the funds necessary to implement the program during the first year. Otherwise, the rental fees collected will never catch- up to fund future years of operating expenses. The City currently expends approximately $325,000 a year to administer its affordable housing monitoring program which includes monitoring 1,600 units at a per unit cost of $203 a year. Given the cost to administer the Measure based on the information in the above Table, the City’s general fund may have to advance anywhere from two to five million dollars during the initial implementation period including startup costs such as office space, equipment, office furniture, and supplies. This initial period will likely need to cover the first year of operations.
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taff will have to return in the future for a more in- depth analysis of the fiscal effects of the Measure on the City’s finances.
Conflicts with the City Charter
The Measure provides for an updated five-member Commission appointed by the City Council, which will oversee the implementation of all provisions of the Measure. This ATTACHMENT 1-3
4 includes adopting rules and regulations ; setting rents and the annual per unit fee Landlord’s must pay; determining the annual rent adjustment; adjudicating disputes and issue decisions; establishing penalties; holding hearings; conducting studies, surveys and investigations; producing informational materials and publiciz ing the provisions of the Measure; and reporting annually to the City Council (see generally Section 9-5-13, F).
Besides implementing the substantive provisions of the Measure, the Commission has administrative duties such as establishing a budget; hiring of necessary staff including legal counsel or outside counsel, as well as initiating litigation or intervening in litigation.
T
he Measure provides in part in Section 9-5-13 (emphasis added except for section titles):
“N. Integrity and Autonomy of Landlord-Tenant Commission. The Landlord-Tenant Commission shall be an integral part of the government of the City, but shall exercise its powers and duties under this Chapter independent from the City Council, City Manager, and City Attorney , except by request of the Landlord- Tenant Commission. The Landlord-Tenant Commission may request the services of the City Attorney, who shall provide them pursuant to the lawful duties of the office in Section 320 of the Burbank City Charter.
O. C
ommission Legal Work. The Landlord- Tenant Commission
may, in its sole discretion, and without approval of the City Council, retain private attorneys to furnish legal advice or representation in particular matters, actions, or proceedings.” T
he City of Burbank is governed by a Charter pursuant to the California Constitutio n, which was adopted by Burbank voters and has been amended over the years by the voters. The City Council can recommend amendments to the Charter ; however, the voters of the City must approve any such amendments. The Charter may also be amended by initiative, but unlike an initiative measure enacting an ordinance, which needs 10% of register voters ’ signatures to qualify for the ballot , a charter amendment requires 15%.
Th
e City’s adopted Charter prescribes the powers of the City Council, the City Manager, and the City Attorney.
U
nder the Charter, the City Council may “provide for” City commissions “as may be deemed necessary,” and “prescribe their respective powers and duties” (Charter § 300).
Further, City commissions are advisory to the Council (Charter § 700). Pursuant to its Charter authority, the City Council established a Landlord-Tenant Commission (Burbank Municipal Code (“BMC”), § 2-1-417).
By
establishing and empowering a new Commission, with duties well beyond an advisory role, t he Measure conflicts with the Council’s authority to establish commissions and prescribes their duties. The numerous powers granted to the Commission to be exercised independent of the Council’s authority and the express language that the Commission is “autonomous” of the Council, City Manager and City Attorney also conflicts with the Charter.
ATTACHMENT 1-4
5 T
he City Council has plenary power over the City’s budget (Charter § 1005). And the City Manager is responsible for preparing and submitting a proposed annual budget to the City Council, as well as responsible for its administration (Id. And §315.) The Measure, however, empowers the Commission to set its own budget, as well as prescribe fees for its own revenues. Since the Charter vest s budget authority in the City Council, this Measure cannot grant such powers to the Commission without violating the Charter. The Measure’s budget provisions also violate the duties prescribed to the City Manager.
Further, the Measure requires the City to advance City funds, in some unspecified amount, for the initial funding of the Commission’s implementation of the programs called for by the Measure. This requirement is also in direct contravention of the Budget Section of the Charter by mandating the City Council expend funds for this purpose.
T
he City Council—and only the City Council— has “the power to direct and control the prosecution and defense of all suits and proceedings to which the City is a party, or in which it is interested …” ( Charter § 320(b). ) The City Council is authorized to retain outside legal representation, “upon the recommendation of the City Attorney,” to assist the City Attorney’s prosecution or defense of suits to which the City is a party, or in which it is interested (§320 (b)). Furthermore, per the City’s Charter, the City Attorney shall “direct and oversee” any special counsel the City Council employs to assist the City Attorney’s representation (§320 (b)).
Th
e Measure purports to grant the Commission the power to initiate lawsuits , intervene in pending suits, hire their own in- house attorneys or outside attorneys, all without the City Council’s approval or benefit of the City Attorney’s oversight. Currently, any action brought by the Commission is a lawsuit in the name of the City – this Commission is not a separate legal entity from the City; as such any litigation involving the Commission is subject to Section 320 (b) of the Charter. The Measure as written brings itself outside of this subsection of the Charter, and consequently is in violation of the Charter.
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lso the Measure provides the Commission may request the services of the City Attorney, who shall provide the duties pursuant to Charter §320. This Charter section is broad and outlines the duties and obligation of the City Attorney, as well as the subsection discussed above on litigation. By the Measure giving authority to the Commission to require the City Attorney to provide legal services to the Commission, puts the Commission in the middle of the City Attorney’s relationship to the City Council. The City Attorney is appointed by the City Council and accountable to the City Council; not some lesser body. This causes another inherent conflict with the Charter.
T
he City Manager is the executive head of the City and is responsible to the City Council for the proper administration of all affairs of the City (Charter §315). As the administrator of the City, the City Manager may “appoint” and “remove” City employees, except as otherwise provided by the Charter (§315). Creating a separate bureauc racy in the Commission with the ability to hire and fire independent of the City Manager is in contravention of the City Manager’s powers granted by the Charter.
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n the one hand the Measure states the Commission is an integral part of the City and on the other hand its states the Commission is auton omous. As written, it can’t be both ATTACHMENT 1-5
6 things. It is correct that the Commission is part of the City since a separate legal entity was not created. The Commission would be part of the City just like Burbank Water and Power and Burbank Police Department are part of the City. Neither of these departments operates independently of the City Council. And more importantly no part of the City operates independently of the City Manager except for the appointed City A ttorney and elected City Clerk and City Treasurer as explicitly provided in the Charter. The City of Burbank operates under the City Council - City Manager form of government. To insert a Commission not accountable to anyone in the City’s hierarchy and operating outside the purview of the City Manager is the antithesis to the City’s basic form of government established in the Charter.
The Measure’s vision for the Commission and implementation of the provisions could have been accomplished without violating the fundamental basis of the City ’s form of government and allocation of duties and responsibilities among its appointed and elected officials as dictated by the Charter . An initiative could have been brought to amend the Charter to grant all the enumerated powers to the Commission as provided for in the Measure. An initiative proposing a charter amendment, however, requires signatures of 15% to qualify for the ballot , rather than 10% for an initiative ordinance. For example, both Berkley and Santa Monica’s programs were created through their respective charters.
The Ellis Act
The Measure conflicts with Government Code Section 7060.5, which states that a city may adopt regulations relating to the withdrawal of rental accommodations from the rental housing market, as set forth in Government Code Sections 7060.2 and 7060.4, if such regulations are adopted by an “elected” body after notice and public hearing.
The Measure states that the Commission, a body composed of members appointed by the Council, shall adopt all regulations pursuant to S ections 7060.2 and 7060.4. Since the Commission is not elected, it may not enact such regulations under the Ellis Act.
The Pending Legal Challenge
The City filed a cross-complaint against the Measure, as a pre-election challenge, which is scheduled to be heard by the Court the morning of August 7, 2020. The City asked the Court to rule the Measure should not be placed on the ballot because the Measure is beyond the power of the voters to enact as an initiative ordinance; instead the Measure should have been brought as a Charter amendment. The City’s pre-election challenge is similar to a recent pre -election challenge by the City of Sacramento concerning a rent control initiative measure, where the court held the proposed Charter amendments were beyond the direct initiative powers because of the extensive revisions to the Sacramento Charter. That court kept the Sacramento proposed rent control measure off the November ballot.
Conclusion
If the proposed Measure is placed on the November 2020 ballot, staff will return to Council at a later date with a more in- depth analysis concerning the Measure’s: fiscal impact ; effect on the use of land; impact on the availability and location of housing, and the ability of the City to meet its regional housing needs; impact on the community's ability to attract ATTACHMENT 1-6
7 and retain business and employment; impact on the uses of vacant parcels of land; or on any other matters the City Council requests.
E
lections Code §9215
Based on the Court’s July 23rd ruling, the City Council must decide on or before August 7th whether to adopt the initiative ordinance or place it on the ballot unless the Court rules otherwise on August 7. Pursuant to Elections Code Section 9215 the City Council must do one of the following:
• A
dopt the ordinance, without alteration (Attachment 1), or • Submit the ordinance, without alteration, to the voters for the November 3, 2020, election by adopting the attached resolutions calling for the election and requesting election services from Los Angeles County (Attachment 2).
I
f the City Council places the Measure on the ballot, then staff suggests the Council decide if it wants to author arguments against the Measure as provided in Elections Code Section 9282, which provides : “(a) For measures placed on the ballot by petition, the persons filing an initiative petition pursuant to this article may file a written argument in favor of the ordinance, and the legislative body may submit an argument against the ordinance.”
FISCAL IMPACT
If the M easure is placed on the ballot, then a more in- depth §9212 report may require retention of a consultant to further analy ze the Measure’s fiscal effects and impacts on land use and housing. If the City Council decides to place the proposed Measure on the ballot the approximate incremental cost to election expenses is $20,000 since the City is already paying the bulk of the cost for the Council and City Treasurer elections.
CONCLUSION
Staff is recommending City Council not e and file the §9212 preliminary report. The City Council after receiving the report must either adopt the Measure, as is, or place it on the November 3, 2020 ballot. If Council places it on the ballot, then staff recommends the City Council direct a further in-depth analysis of the Measure.
ATTACHMENT
Attachment 1 - AN ORDINANCE OF THE COUNCIL OF THE CITY OF BURBANK ADOPTING AN INITIATIVE MEASURE AMENDING TITLE 9 OF THE
BURBANK MUNICIPAL CODE BY ADDING CHAPTER 5 ENTITLED
“BURBANK RENT STABILIZATION AND TENANT PROTECTION ACT”
(Exhibit A is Attachment 5 to this Staff Report)
Attachment 2 – A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURBANK
CALLING FOR THE HOLDING OF A GENERAL MUNICIPAL ELECTION FOR TUESDAY, NOVEMBER 3, 2020, FOR THE PURPOSE OF
SUBMITTING THE 2020 BURBANK JUST CAUSE EVICTION AND RENT REGULATION MEASURE TO THE VOTERS FOR APPROVAL (Exhibit A is Attachment 5 to this Staff Report)
ATTACHMENT 1-7
8 Attachment 3 – A Resolution Requesting Services of the County of Los Angeles Registrar-Recorder/County Clerk (Exhibit A is Attachment 5 to this Staff Report)
Attachment 4 - Staff Report from July 28, 2020 concerning Certification of 2020 Burbank Just Cause Eviction and Rent Regulation Measure Petition and Council Consideration of Options under Elections Code Section 9215 ( without attachments)
Attachment 5 - 2020 Burbank Just Cause Eviction and Rent Regulation Measure – initiative ordinance
ATTACHMENT 1-8