December 29, 2000

Meeting Information

MINUTES

Special Meeting

Friday, December 29, 2000, 3:00 P.M.

City Hall, Room 263

Chairperson: Commissioner Eisenberg

Members: Commissioners Ammiano, Bierman, Yaki, Choden

Clerk: Gregoire Hobson

SPECIAL AGENDA

(There will be public comment on each item)

1. Call to Order and Roll Call

The meeting was called to order by Chair Eisenberg at 3:01 P.M.

Members Present: Commissioners Bierman, Choden, and Chair Eisenberg

Members Absent: Commissioners Ammiano and Yaki

2. Approval of Minutes dated November 21, 2000 and November 28, 2000

Chair Eisenberg inquired if there were any comments regarding the minutes. The Commissioners held no discussion, and there was no public comment. The Commission adopted the minutes without objection.

3. Discussion and possible action on December 20, 2000, request by Coalition on Affordable Public Services for S.F. LAFCo to reconsider its action of November 28, 2000, adopting the Rule proposed by The Coalition for Lower Utility Bills that the Municipal Utility District Petition be referred directly to the Board of Supervisors to call an election on the MUD Petition and to divide the proposed District into Five Wards for purposes of electing directors.

Public Comment

Proponents:

James R. Sutton, San Francisco Coalition for Affordable Public Services, stated that he submitted a letter dated December 20, 2000, outlining the procedural requirements in state law that LAFCo should follow before a MUD can be placed on the ballot. The procedural requirements include (1) holding public hearings, (2) doing analyses of the fiscal impact of the proposed MUD, and (3) doing analyses of the economic and potential environmental impact. He indicated that it is premature to send the matter to the Board of Supervisors and to place the matter on the ballot when these procedural steps established by state law have not been performed.

Chair Eisenberg stated that the Executive Officer responded to Mr. Sutton in her letter dated December 21, 2000, that all this Commission did was to propose and pass a generic rule to direct the MUD petition back to the Board of Supervisors. As he understands both the positions of the Executive Officer and the City Attorney, Mr. Sutton is contending that the Commission made a determination and is requesting a rehearing. Because a determination was not made, the advice of the City Attorney and the Executive Officer is that Mr. Sutton’s request for rehearing be returned to him and not accepted as an appropriate request.

Mr. Sutton stated that he received correspondence from the Executive Officer dated December 21. The letter did not refer to their request for a rehearing not being accepted. The Executive Officer did not ask for any action, did not tell them that they had to resubmit an application, or that there was a problem with their request-the letter was to simply point something out. He stated that the Executive Officer is making a distinction in the wording used in their letter, and the Coalition is drafting a letter in response. If there is a problem with their request for reconsideration, he would like it addressed.

Gloria L. Young, Executive Officer stated that Mr. Sutton’s letter of December 20 indicated that the Commission approved the formation of a MUD in San Francisco and Brisbane pursuant to Government Code Section 56857. She clarified in her December 21 letter to Mr. Sutton that the Commission did not take action to approve the MUD petition pursuant to the Code. Rather, the Commission adopted a Rule proposed by Angela Alioto, Attorney for the Coalition for Lower Utility Bills (CLUB), that the general provisions of the Cortese-Knox Act pertaining to district formation do not apply to the formation of MUDs. The Commission had directed that the Clerk transmit the MUD petition in accordance with the Public Utilities Code to the Board of Supervisors to place on the ballot. In terms of LAFCo reconsidering the issue, it is a policy matter for the Commission.

Dorji Roberts, Deputy City Attorney stated that the Commission at its November 28 meeting adopted the Rule that was proposed by CLUB’s attorney to the effect that the general provisions regarding district formation that are set forth in the Cortese-Knox-Act do not apply. Staff then referred the MUD petition to the Board of Supervisors pursuant to the Commission’s Rule that was adopted at the meeting.

Chair Eisenberg stated that it is his understanding that PG&E is asking the Commission to reconsider a determination, yet it is his opinion and the City Attorney’s opinion that a determination was not made. What the Commission did was pass a Rule.

Dorji Roberts, Deputy City Attorney stated that the Commission at its November 28 meeting adopted a Rule that the Cortese-Knox Act pertaining to district formation does not apply. The Commission did not adopt a Resolution approving, disapproving, or taking any action on a MUD petition except to ask that staff direct the petition to the Board of Supervisors.

Chair Eisenberg stated that they were a new Commission struggling with their procedures and what was in front of them was the MUD petition. The Commission received at the last minute a request by CLUB through their attorney to consider a Rule. PG&E and their proponents said there was a violation of the Brown Act because the agenda only called for consideration of the MUD petition and that there was a new matter in front of the Commission. As a result, the Commission concluded that there was or might be a new matter within the terms of the Sunshine Ordinance and therefore continued the matter for a week. The Chair indicated that two separate issues were talked about--a Rule that the Commission passed and because the Rule was passed, they never got to the determination of the MUD petition.

Dorji Roberts, Deputy City Attorney stated that there was discussion at the November 21 meeting whether the proposed Rule had been properly agendaized and was therefore continued to the November 28 meeting. At that meeting, the Rule that was proposed by CLUB was adopted and the public hearing, which was on the agenda, was never discussed.

Chair Eisenberg stated that it is the City Attorney’s opinion that the Commission did not make a determination on the MUD petition. Therefore, it is up to Mr. Sutton to convince the Commission that there is anything to reconsider, or that the LAFCo statute specifically allows the Commission to accept a request from an outside party to reconsider a rule of this Commission.

Mr. Sutton stated that the San Francisco Coalition for Affordable Public Services did not raise the issue about the Brown Act or the agenda problem. They are opposed to the fact that this Commission has decided that by adopting the Rule that they do not have to adhere to the law that requires a formal application, public hearings, and studies be done before going to the Board of Supervisors and scheduling an election. The law also requires that the Executive Officer prepare a comprehensive analysis of the merits and demerits of a MUD, none of which have been done. A Superior Court ruling found that MUD is governed by Cortese-Knox, not by the MUD law. This is what the request for reconsideration is about. He asked why the Commission decided not to have a full public hearing on the merits and demerits of the MUD and the issues he stated before sending it to the Board. What is the point of a LAFCo if the Commission does not follow the statute in reviewing the technicalities of when new cities, agencies, or counties are created?

Chair Eisenberg asked Mr. Sutton to assume that the Commission would do an analysis of the MUD through the funds that have been appropriated to them. Would Mr. Sutton object to an analysis in the future?

Mr. Sutton stated that he would object if the Commission were to send the MUD petition to the Board of Supervisors to call for an election before doing the studies and hearings that are required by law. The State of California envisions going through a LAFCo before going to the Board and recognizes that setting up a new district or agency requires answers to technical questions. The Board of Supervisors and the voters will not have the benefit of a LAFCo analysis to make a determination. With a technical analysis, the voters would know that the State of California has protected their interests and studied the issue.

Chair Eisenberg stated that they are in disagreement about one point. The MUD Act does require the Executive Officer to provide an objective analysis, and it is incorrect to say that LAFCo will not have a role in further proceedings. The difference is that Mr. Sutton would prefer to proceed under Cortese-Knox, and this Commission prefers to proceed under the MUD Act. He stated that after the Board of Supervisors calls for an election, they would forward the petition to this Commission, and the Executive Officer should be prepared to issue an objective analysis.

Mr. Sutton stated that the disagreement is about timing and procedures. The study should be done before going to the Board. In addition, there has been no formal application from the proponents. The proponents have submitted a petition signed by 24,000 voters, and there should be an election, but the formalities of an application have not been submitted to the LAFCo.

Commissioner Choden stated that there is a rush in resolving the problems of power rates, power shortage, and power quality. PG&E shares this problem. He stated that LAFCo has the power as a County agency, not a City agency, to bring up the question of efficiency, efficacy, cost, and environment in regard to any City operation within its purview. Therefore, the issue of power and its possible venues regardless of who delivers that power are being studied. They know it is going to be expensive and time consuming, but it does not have to be. Commissioner Choden asked Mr. Sutton if he would support (1) sufficient funding to proceed expeditiously to an expert review of energy (2) the City’s operation into energy in one venue or the other as possible joint powers, and (3) operation with the state or under the La Follette Act (which said in 1972 that leases were supposed to revert to public ownership).

Mr. Sutton stated that the San Francisco Coalition for Public Services would support LAFCo in obtaining sufficient funding to do what it is required by law to do. As a state agency, LAFCo is required to conduct these studies on the potential environmental impact of a MUD, the potential fiscal impact, demography, rates, and to show merits and demerits of a MUD before it goes to the Board of Supervisors and to the voters.

Commissioner Choden asked to put MUD aside and forget the process. It is agreed that LAFCO has specific duties regarding any government operation including the delivery of energy. We can have a study dealing with energy regardless of the specific venue and regardless of anybody else’s proposal. He proposes that they proceed with the study and ask for PG&E’s support.

Mr. Sutton stated that he is there on behalf of the San Francisco Coalition for Affordable Public Services. PG&E is one member and other members include public businesses and citizens. He disagreed with Commissioner Choden on the role of the LAFCo. LAFCOs in the state are set up to process applications most commonly when cities want to expand, when cities want to take in unincorporated territory in its boundaries, or when a new district is proposed. The bounds of what the LAFCo can do are to study and spend public funds on what has been proposed to it.

Mr. Choden stated that he recommends that Mr. Sutton look at the alterations that have been made to LAFCo in the past two years. LAFCo has been broadened to deal with the streamlining of government and its operations. Mr. Sutton can then come back and agree that there is a joint and common purpose. LAFCo can initiate action without a proposal.

Commissioner Bierman asked if Mr. Sutton is representing PG&E as one of his proponents.

Mr. Sutton stated that he is representing a coalition of which PG&E is a member.

Commissioner Bierman asked if someone else is representing PG&E.

Mr. Sutton stated that PG&E had submitted a separate request for reconsideration on separate grounds that he believes is included in the agenda packet.

Commissioner Bierman stated that she believes that if Mr. Sutton is using PG&E’s name as one of those he is representing, then he is representing them.

Chair Eisenberg stated that both Mr. Sutton’s and PG&E’s letter is regarding the same matter. He stated that the Commission would take joint testimony on both Items 3 and 4.

4. Discussion and possible action on possible appeal(s) or requests(s) for reconsideration that may be submitted to S.F. LAFCo prior to the December 29, 2000, meeting regarding its Rule, adopted November 28, 2000, that the MUD Petition be referred directly to the Board of Supervisors to call an election on the MUD Petition and to divide the proposed District into Five Wards for purposes of electing directors.

Lester Olmsted-Rose, representative of PG&E stated that he is not an attorney, but his letter was written to the Commission with the input of attorneys. State law has been set up to follow a process of openness in government, public participation, and for the Sunshine Ordinance. He does not feel that the Commission is following this process. LAFCo receives and studies applications to take action, and the Executive Officer reviews the matter. When that process is done, the Commission makes an independent public policy. He understands that LAFCo has a responsibility to respond to the citizens who have submitted a petition, but he does not know what the rush is. He does not understand why LAFCo has to circumvent state law in processing the application, and they are asking LAFCo to follow the procedures set forth in state law.

Commissioner Bierman asked the City Attorney if the Commission is circumventing something that should not be circumvented.

Dorji Roberts, City Attorney stated that there are two differing views with respect to whether this Commission must go through the substantive review set forth in the Cortese-Knox Act which Mr. Sutton referred to, or the view that the Commission took at the November 28 meeting that the provisions of the MUD Act set forth in the Public Utilities Code govern the formation of a MUD. He is not allowed to disclose in open session the confidential advice that he has given to the Commission on this matter.

Chair Eisenberg stated that he has combined Items 3 and 4 and has allowed the Coalition for Affordable Public Services and PG&E to state their position. He asked if there is someone on the other side that would like to state their position, and if Mr. Sutton had completed their side’s testimony at this time.

Mr. Sutton stated that the court had ruled that the Cortese-Knox Act governs the MUD formation despite this Commission’s adoption of a Rule that it is not Cortese-Knox, but the MUD law. As Chair Eisenberg and he have mentioned, there is a provision in the MUD law, which says that the Executive Officer of LAFCo shall submit to the Commission for its approval and modification an Impartial Analysis to propose district formation. Even the MUD law, which is not what state law requires, has a requirement for an Impartial Analysis, although it does not go into the specifics of what the Impartial Analysis should entail.

Chair Eisenberg stated that it is a timing question. Mr. Sutton believes the Impartial Analysis should be done now, and the Commission has a Rule that says it should be done later. He asked for testimony from those who oppose the reconsideration.

Richard Ow, Coalition for Lower Utility Bills (CLUB) stated that the 24,000 people who have signed the petition foresee that electric rates are going up. Most of the members of the new Board of Supervisors support the MUD petition. The State Municipal Commission held a hearing that thousands of people attended and watched on television and listened to on radios. The San Francisco citizens are well informed and disgusted with the 26% increase that PG&E is going to add to the electric bills. There are too many poor people in this City that cannot afford the current rate. He is urging the Commission to speed this ahead so the Board of Supervisors will call an election date to settle this problem.

Ernestine Weiss stated that she agreed with the former speaker’s comments. It is important that the Commission act now because of the pressure of the increase in PG&E rates. It is frightening to the seniors who are faced with huge bills that they cannot afford. The rents are high enough, and they cannot absorb anymore. PG&E has all the money in the world--it is inappropriate for them to say that they are losing money when they are hiding the money in the parent-corporation. MUD is a better way-Sacramento, Los Angeles, and other cities have benefited by it. She recommended going ahead with the MUD expeditiously.

Don Paul, Coalition for Lower Utility Bills and Housing as a Human Right stated that there has been plenty of time for public input since the petition passed with more than 24,000 signatures. There have been several public hearings where the public could freely speak. There is a window of two weeks before the first Board of Supervisors meeting, and he would think that the Executive Officer could probably prepare a report to inform the Board of Supervisors before then. It could then move forward as the public wishes. In order to answer the question as to why there is an urgency in processing the petition, you have to read the newspaper or look at your public utilities bill.

Paul Goerke, previous Brisbane Mayor and previously on the Brisbane City Council stated that he went through experiences with LAFCo while in these previous positions. The reference was made by another speaker that it was LAFCo’s job to study the areas to be involved, not the issues of all the effects of the changes excepting to do with the additional properties that have to be added in unincorporated areas. It is that area that LAFCo involved itself, not all the details as to who or how much it would cost. He recommended that LAFCo follow the MUD Rule that refers to LAFCo and what it is supposed to do. Let any other details follow and go parallel until the time of the election that will give the Commission time to do any studies anyway.

Marie Harrison stated there has been enough in the papers and the news and enough people that are well informed in order for the MUD to move forward. What is happening here is that you have an entity (PG&E) that has long been in the community that has been in charge too long. She recommended that the Commission proceed with the process.

Bruce Brugman, Editor and Publisher of the Bay Guardian stated that he has been working on this issue since 1969, and he wanted to thank Supervisor Bierman for an outstanding career in public service. It is particularly fitting that she is from the State of Nebraska that has public power, and that one of her last meetings is here in LAFCo deciding whether PG&E or the public would use the power system in the City and County of San Francisco. The PG&E attorney stated that LAFCo is acting as an outlaw worried about rushing this item through. PG&E is suddenly crying for Sunshine. This issue has been on the table since 1913, and PG&E has moved again to keep San Francisco from having its own Hetch Hetchy public power system which was mandated by federal law, by the US Supreme Court, and by the City Charter. Bruce Brugman recommended that the Commission proceed.

David Dauty stated that Mr. Sutton represents the Coalition for Affordable Public Services. By affordable, he assumes that Mr. Sutton is opposed to an increase by PG&E. He would like the Chair to ask him if he is opposed to the rate increases or not. Because the question of legality has been raised, he read the Raker Act and asked whether PG&E believes in obeying the law.

Public Comment Closed on Items 3 and 4

Chair Eisenberg proposed a Resolution to direct the Executive Officer to return the correspondence received from the Coalition on Affordable Public Services and PG&E to the authors informing them that their request for reconsideration is not accepted in view of California law. The findings for that Resolution are as follows and they are taken from the report of the Executive Officer.

1. The Commission did not take action to approve the MUD petition pursuant to Government Code Section 56857. Rather the Commission adopted Rules proposed by Angela Alioto, Attorney for the Coalition for Lower Utility Bills to the effect that the general provisions in the Cortese-Knox Act pertaining to district formation do not apply to the formation of MUDS. In addition, the Commission directed staff to transmit the MUD petition to the Board of Supervisors to call an election for the formation of MUD and to divide the proposed districts into five wards from which to elect directors.

The additional finding will be the statement of the City Attorney:

2. The prior action of this Commission did not constitute a determination, but rather constituted a Rule within the rule-making powers of this Commission. Therefore, it is not appropriate to accept either request for reconsideration.

Commissioner Bierman stated that she is prepared to approve this Resolution. She made a few comments about the weather, people’s health, and all things she is not sure PG&E have at the top of their agenda. There are many people who will be in danger of having their heat shut off in this City because they won’t be able to absorb the rate increase. As Mr. Brugman stated, she comes from Nebraska and they had public power. It was a shock to her that anybody else was so unlucky to not have public power. She does support the MUD petition, and it will be her displeasure that she will not be here to work on the Board of Supervisors. Luckily, some of the new members are as involved in caring about people’s lives.

Chair Eisenberg stated in simple language that this Resolution means that there has been disagreement as to what happens when someone puts a petition before the Board of Supervisors. Different courts have ruled in different ways. Reasonable people can disagree. What has happened is that the MUD petition was sent to this Commission, and this Commission ruled that the election would proceed without delay. Pursuant to state law, had there been a determination by this Commission, anyone would have had the right to ask for a request for reconsideration. However, there wasn’t a determination--there was a Rule determining the legal method of how a MUD would proceed. He would like the Executive Officer to emphasize to the Board of Supervisors that thirty days ago this Commission stated to proceed without delay. The LAFCo has said to call an election and put it on the ballot. The Commission would now clear the last legal hurdle in proceeding with the election by approving this Resolution.

VOTE:

AYES: Commissioners Bierman and Choden and Chair Eisenberg

NOES: None

ACTION: Resolution with findings as stated passes unanimously without objection.

Chair Eisenberg stated that the Commission would ask the Executive Officer to transmit the information of the passage of the Resolution with a statement to the Commission that there are no further procedural barriers to the election at this time pending before LAFCo.

Chair Eisenberg announced that today was Commissioner Bierman’s last meeting with LAFCo because this was her last term in office. He read a poem in her honor and commended her for the magnificent work she has done for the Commission.

Commissioner Choden stated that he would not be a member of LAFCo after this year. State law requires one public member, and he deferred to Chair Eisenberg. He thanked everyone and stated that he would continue to support the goals of the Commission. He read a memorandum as to where he thought LAFCo should go.

1. He thinks the service boundaries need to be changed in an additional ballot to exclude a time-delaying inclusion of San Mateo County and its entities. There is the possibility of voluntary inclusion and joint power agreement. He does not think it is crucial, but it is challengeable in court and could delay implementation.

2. The La Follette Act is a federal act that required the dam leases enjoyed by PG&E and Southern Consolidated Edison to revert their leases back to public ownership back in 1972. Those leases may have been illegally renewed without much opposition. There is a question whether one can sell leases that one does not own. Now, they are facing a crucial power shortage, rate increases, and quality of power. He has nothing against the continuance of PG&E as an entity. It would seem now that this is a question of discourse and discussion between everyone to deal with the dam leases for the purpose of generating public power in a repaired condition that is more environmentally respectful.

3. LAFCO’s power has been broadened beyond the question of petition and application. It is a streamlining agency that deals with efficiency, efficacy, costs, and the environment. It has the power to review all local government entities, and it can initiate the review. It can do so for MUD, for the Airport, and for MUNI. There is no entity in the City’s government that coordinates plans for the operation of City government in an efficacious manner. Therefore, LAFCo is a state-created agency for the County, not the City, and has the power to oversee and evaluate the operations of City government.

4. Planning. He suggests that LAFCo have a permanent evaluation and Planning staff and a consultant budget. The purpose is for providing the Supervisors and the Administration or any other city within their purview with the constant evaluation and long-term planning to guide the City’s operation and capital funding. You cannot have a planning agency within an administration that both plans and enforces the laws. It is a professional and moral conflict of interest. That is one reason there is a permit-staffing agency with no planning expertise

Chair Eisenberg asked Commissioner Choden if he is tendering his resignation at this time.

Commissioner Choden stated that he would be resigning effective December 31, 2000.

5. Public Comment on Items Not on the Agenda.

Richard Nee stated that he speaks without prejudice on the discussion today. He is representing San Franciscans for Sunshine, the organization whose initiative resulted in 58% passage last year of a strengthening of the City Sunshine Ordinance. He is also the past president of the Society of Professional Journalists in the Northern California Chapter. He was president of the Chapter when the drafting of the original Sunshine Ordinance was begun and that was at the chapter’s behest. San Franciscans for Sunshine were pleased when it was noticed at the last meeting that there would be a Resolution to abide by the San Francisco Sunshine Ordinance, and they are puzzled as to why it is not on today’s agenda. He urges the Commission to act as soon as possible to declare in strong definitive language that the Sunshine Ordinance is a policy for the LAFCo members and staff. Big government is not the problem, secret government is.

Chair Eisenberg stated that they have adopted the policies informally.

Richard Nee recommended adopting the policies formally.

Chair Eisenberg stated that the Sunshine Ordinance should be adopted formally and had asked the Executive Officer to place the item on the next agenda.

Gloria L. Young, Executive Officer recommended the meeting be held on January 23, 2001, at 3:00 p.m. and that it may have to be moved to February. The new Supervisors as well as the reelected Supervisors are in the process of being surveyed with respect to their desire to serve on LAFCo, and that process needs to go through the Rules Committee. It will take some time before there is an appointment to LAFCo by the Board of Supervisors.

5. Adjournment. The meeting adjourned at 4:12 p.m.