HomeMy WebLinkAboutStaff Report 231-07City of Palo Alto
City Manager’s
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
SUBJECT:
MAY 14, 2007 CMR:231:07
APPROVAL OF RESOLUTION APPOINTING A COUNCIL MEMBER
TO THE BOARDS OF THE BAY AREA WATER SUPPLY AND
CONSERVATION AGENCY AND THE SAN FRANCISCO BAY AREA
REGIONAL WATER SYSTEM FINANCING AUTHORITY
RECOMMENDATION
Staff recommends that Council approve a resolution appointing a member of the City Council as
a director of the Bay Area Water Supply and Conservation Agency and as a director of the San
Francisco Bay Area Regional Water System Financing Authority.
BACKGROUND
In January 2000, the City’s primary water supplier, the San Francisco Public Utilities
Commission (SFPUC), released a report indicating that its regional water system is vulnerable to
damage from a large earthquake and that water supplies could be Cut off to the users, including
Palo Alto, for up to 60 days. On July 10, 2000, the City Council adopted a resolution
recommending that the SFPUC take prompt action to improve regional water supply reliability
and quality [CMR:311:00].
The 28 agencies that purchase water from the regional system are members of the Bay Area
Water Users Association (BAWUA), which was organized to represent the agencies’ collective
interests in their interactions with the SFPUC. As an additional response to the risk of failure of
the regional water system and the lack of action by the SFPUC, BAWUA sponsored three bills,
all of which were signed into law in September 2002.
Senate Bill 1870 (Speier) created a financing agency, the San Francisco Bay Area Water System
Financing Authority, to allow the suburban retail water agencies to finance their share of the
SFPUC’s capital program to repair and improve the reliability of the regional water system.
Assembly Bill 1823 (Papan) requires SFPUC to complete certain key projects in its capital
program. Assembly Bill 2058 (Papan) allowed the creation of the Bay Area Water Supply and
Conservation Agency (BAWSCA), an agency with broad water planning and financial
authorities.
CMR:231:07 Page 1 of 4
DISCUSSION
Regional Financin,~ Authority
The San Francisco Bay Area Regional Water System Financing Authority (RFA), has the
anthority to issue revenue bonds to improye the reliability of the regional water system. There is
no limit to the amount of bonds the anthority could issue, but if the RFA is used to finance the
wholesalers’ "share" of the costs of SFPUC’s Water System Improvement Program (WSIP), it
could be as high as $2 billion. December 31, 2020 is the last day that the Anthority can issue
revenue bonds.
Tile RFA’s Board of Directors consists of appointees from the 25 public entities which purchase
water from Sail Francisco, plns a resident of the Stanford University service area and a resident
of the California Water Service Company service area, each appointed by the appropriate county
board of supervisors. San Francisco is also a member of the RFA.
Each director is granted one vote on any ordinance, resolution, or motion. An affirmative vote of
a majority of directors is sufficient to carry any motion, resolution, or ordinance, except for
issuance of debt. The RFA may borrow money and issue notes and bonds, including revenue
bonds, without the approval of voters. It may issue revenue bonds upon the adoption of an
ordinance by a two-thirds vote of the directors.
Palo Alto’s City Council made its initial appointment of Council Member Bern Beecham to the
RFA Board of Directors in February 2003 [CMR:121:03]. Terms on the board are four years,
except for half of the initial appointees, who had two-year terms initially. Council Member
Beecham’s initial tei-m expires in June 2007 and the City Council must appoint a representative
to the RFA’s board of directors prior to July 1, 2007.
Bay Area Water Supply and Conselvation Agency
Assembly Bill Number 2058 allowed the formation of BAWSCA, the Bay Area Water Supply
and Conservation Agency. The eligible agencies successfully completed the process in May
2003 to form BAWSCA. BAWSCA can: acquire water and water rights; develop, store and
transport water; provide, deliver, and sell water at wholesale to certain entities; and acquire,
construct, operate and maintain facilities to cm:ry out the agency’s purposes. It is also able to
exercise the right of eminent domain and issue revenue bonds to finance the construction,
reconstruction, or improvement of any required facilities.
BAWSCA lnay borrow money and issue notes and bonds, including revenue bonds, without the
approval of voters, upon the adoption of an ordinance by a two-thirds vote of the directors
presem and voting which also represents at least 51% under the weighted voting method. The
proceeds of the revenue bonds can be used for the construction, reconstruction, or improvement
of facilities or public works, including facilities of the Sail Francisco regional system, subject to
nlutually satisfactory agreement.
The BAWSCA’s Board of Directors consists of appointees from the 25 public entities which
purchase water from San Francisco, plus appointees of the Boards of Supervisors of San Mateo
CMR:231:07 Page 2 of 4
and Santa Clara Counties (for CalWater and Stanford University, respectively). San Francisco
may apply to become a melnber of BAWSCA, subject to approval by BAWSCA’s board.
Each director is granted one vote on any ordinance, resolution, or motion. An affirmative vote of
a majority of directors is sufficient to carry any motion, resolution, or ~ordinance, except when
weighted voting is called for. Any director may call for weighted voting on any item, which is
based on the average deliveries of water during the 2000-01 fiscal year. When weighted voting
is in effect, the affirmative vote of directors representing both the majority of the members of the
board present and voting, and a majority of the weighted vote is necessary to carry any motion,
resolution, or ordinance. This is different fi’om the voting protocols for the RFA where each
director is granted one vote and a majority vote is required to pass any ordinance, resolution, or
motion.
Palo Alto’s City Council made its initial appointment of Council Member Bern Beecham to the
BAWSCA Board of Directors in May 2003 [CMR:204:03]. As with the RFA, terms on the
BAWSCA Board are four years, except for half of the initial appointees, who had two-year terms
initially. Council Member Beecham’s initial term expires in June 2007 and the City Council
must appoint a representative to the BAWSCA’s Board of Directors prior to July 1, 2007.
New Appointment for BAWSCA and RFA
For the boards of both BAWSCA and the RFA, the only requirement is that appointees frolI1
public entities must be registered voters residing within the boundaries of the member public
entity whose governing board appoints him or her. Once appointed, directors serve for the entire
four-year term. Changes in directors can occur if the appointee is no longer a resident registered
voter or if he or she voluntarily resigns.
Staff recommends that Palo Alto’s City Council appointee be a City Council Member since
elected officials will give the agencies greater stature in their dealings with San.Francisco,
regulatory agencies, and legislators. In addition, the agencies consider policy matters with which
elected officials are experienced. Some of the issues that may come before the boards include:
1) how best to finance a large stream of capital projects over an extended period of time; 2)
whether to accept a particular agreement between the authority and San Francisco for the use and
management of the funds; 3) how the costs of projects should be split with San Francisco; and 4)
whether to enter into binding fiscal obligations with bond buyers. Staff further recommends that
the appointee to the boards be the same person since the agencies will be addressing the same or
similar policy issues. Almost all of the BAWSCA agencies have chosen to appoint a Council
Member to the Boards of Directors of BAWSCA and the RFA.
RESOURCE IMPACT
Appointing directors for BAWSCA and the RFA does not have staff resource impacts as existing
staff that monitor SFPUC and BAWSCA activities will continue to perform the same functions.
Additional support for a new appointee may be required in the short-term while that director is
educated in the issues facing BAWSCA and the SFPUC, but this is anticipated in staff resource
assignments.
CMR:231:07 Page 3 of 4
POLICY IMPLICATIONS
The recommended action does not create any new policy. Appointing representatives
BAWSCA and the RFA is consistent with City policies and directives.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act.
to
ATTACHMENTS
A. Resolution
PREPARED BY:
JANE RATCHYE ~"
Senior Resource Plalmer
DEPARTMENT APPROVAL:
CITY MANAGER APPROVAL:
VALe. FONG
Director of Utilities
EMI"E"57 HA~S ON
Assistant City Manager
CMR:231:07 Page 4 of 4
** NOT YET APPROVED**
A TTACHMENT A
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
APPOINTING A COUNCIL MEMBER TO THE BOARD OF
DIRECTORS OF THE SAN FRANCISCO BAY AREA REGIONAL
WATER SYSTEM FINANCING AUTHORITY AND TO THE
BOARD OF DIRECTORS OF THE BAY AREA WATER SUPPLY
AND CONSERVATION AGENCY
WHEREAS, the California Legislature, in enacting SB 1870 (Statutes 2002, Chapter
849), the San Francisco Bay Area Regional Water System Financing Authority Act (the "FA
Act"), created the San Francisco Bay Area Regional Water System Financing Authority (the
"Authority"), and identifies the City of Palo Alto (the "City") as a member public entity;
WHEREAS, the FA Act provides that the Authority will be governed by a board of
directors whose members are appointed by the governing body of each member public entity;
WHEREAS,. the California Legislature enacted the Bay Area Water Supply and
Conservation Agency Act (the "CA Act") (AB 2058 [Water Code sections 81300, et se__¢.]), that
establishes the Legislature’s intent to enable eligible local govermnents to establish the Bay Area
Water Supply and Conservation Agency (the "Agency");
WHEREAS, on May 19, 2003, the California Secretary of State certified that the
eligible local agencies, including the City, formed the Agency; and
WHEREAS, the CA Act provides that the Agency will be governed by. a board of
directors whose members are appointed by the governing body of each member public entity;
follows:
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as
SECTION 1.That Council Member is appointed the
City of Palo Alto’s voting melnber to the board of directors of the San Francisco Bay Area
Regional Water Systeln Financing Authority, established pursuant to California Water Code
Section 81600 et seq., for a term of four years, commencing July 1, 2007, as provided in
California Water Code Section 8163 l(b), and that the Council Member is also appointed the City
of Palo Alto’s voting melnber to the board of directors of the Bay Area Water Supply and
Conservation Agency, established pursuant to California Water Code Section 81300 et seq., for a
term of four years, commencing July 1, 2007, as provided in California Water Code Section
81338(a).
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** NOT YET APPROVED**
SECTION 2. The Council finds that this is not a project under the California
Envirolmaental Quality Act and, therefore, no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
AB S TENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
Senior Asst. City Attorney City Manager
Director of Utilities
Director of Administrative
Se~wices
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