Supplemental Memorandum - Corrections and/or additions to the City Council Agenda as of 12:00 noon, Friday, May 13, 2022.
Thank you. Now we're moving on to item 22, which is the charter committee recommendation. Report from city manager recommendation or request the mayor to convene the Charter Amendment Committee of the City Council within 30 days to discuss placing a city charter amendment before the voters to merge the existing water, sewer and gas utilities into a single publicly owned utility citywide. Mr. Modica. Yes. So this is the very start of a process that's going to have a lot of discussion. We are proposing that you begin the process of a charter amendment to explore this concept of moving together to a different utilities that are in two different departments into one consolidated. We have a short presentation for you. We will be getting much more into the detail on this when we start having the Charter Amendment Committee hearings. But I will turn it over to Chris Gardner to walk us through it. Thank you, Tom. What we're proposing tonight is a concept that the leaders of the utilities have contemplated for over 75 years the consolidation of the water, sewer and natural gas utilities within one city department. Tonight's vote would formally start the lengthy public process to consider putting this concept before the Long Beach voters in November of this year . Today, the city charter separates the operation, management and oversight of the natural gas utility from that of the water and sewer utilities. Article 14 governs the water utility and Article 15 governs the gas utility. In California, Long Beach is the only large city with multiple utilities that separately operates, manages and oversees the utilities. Some examples of cities with consolidated utilities taking full advantage of economies of scale and flexibility. Resource sharing include. Los Angeles. San Francisco. San Diego. Pasadena. Glendale, Burbank. Anaheim, Riverside and Palo Alto. Two important actions that brought us to this point tonight. The Board of Water Commissioners last week unanimously approved a request of the city, the city council, to consider seeking voter approval of a charter amendment to consolidate the city's utilities. Secondly, the staff has successfully completed the necessary meet and confer process with the impacted labor associations. If eventually approved by the voters in November, the charter would be changed to create a single article in the charter governing water, sewer and natural gas service. It would move the gas references of Article 15 into Article 14, which governs the water department, and would thirdly provide that the utilities would be all overseen by the existing five member Board of Water Commissioners, likely renamed as the Board of Utilities Commission. As mentioned earlier, tonight's vote would be only the first step of several before any final decision is made to place this concept on the November ballot. Tonight is an action to refer this to the Charter Amendment Committee for consideration. The committee would convene two public hearings, one in mid-June and one in mid-July, at which time staff will provide a much more detailed presentation and at which time the public can participate and provide input. After the second hearing, the City Council would then vote in August regarding the possible placement of the utility consolidation on the November 8th ballot for the voters to make the final determination. That concludes my report. I'll be happy to answer any questions. Thank you. Thank you. I need a motion in a second on this item, please. I do have Councilman Pryce. Thank you, Mr. Mayor. I'm happy to motion it. And I do have a couple of questions for Mr. Gardner. So, you know, we've gotten a lot of public input over the last week on this item. And can you talk a little bit about the cost? Are there efficiencies to be had with this? And can you expand on those? Certainly, there's any time you could mine the utilities. What you have to do is respect the differences because there's obviously differences between water and natural gas. But you also want to take full advantage of the like services and operations that we have. So we both have many operations that are duplicative. We have pipeline replacement. We have engineering. We have accounting, admin, human resources, payroll, all duplicated between the two different departments. And so the idea, as with every other major city in California that has dual utilities, we combine the two under one roof and take advantage of those economies of scale. And with that, you would save money and do things much more efficiently. We would have similar policies to that. We have different policies between gas and water. You would have the and I'll talk a little bit more about this later on when we go through the process, but you'll have much more transparency with the board of Commissioners taking a look at a utility focused take on everything related to the utilities. Okay. So is there going to be a cost saving? We had an independent study done in 2020. It was done by a company called Beebe, and he headed by Marci Edwards, who you may be familiar with. She was the city manager of the city of Anaheim. She also led the utilities, the consolidated utilities in Anaheim and Los Angeles. Her group did a study, and they estimated the first year about two and a half million dollars in savings escalating to about six and a half million by year five. Now, obviously, that that there's a lot of work has to be done before those savings can be materialized. But it was very encouraging. We increase that? Do we expect any increase in costs in while we build up the process to have cost efficiencies realized. We shouldn't from the standpoint that the the demand for services stays the same between the gas and water and sewer utilities. But we would certainly try and resource things. So we would be taking a look at doing what water does. Will we do? I'll make sure that gas follow suit and vice versa. And so there may be areas where we could expand, if appropriate, is a way that we could improve services to the customers. We would expand, but for the most part, we'd be looking at being more efficient and trying to reduce costs. Okay. Are there any job losses associated with this consolidation? No. What we've promised to the labor unions is that no one would lose their job. Any current city employee through this consolidation, what we'd be looking at doing is reducing any positions over time through through normal attrition. So just like today, when we have a vacancy that materializes because of a retirement or a transfer or someone goes to another job, we take a look at that position. We decide whether to fill it as it was filled before, repurpose it or eliminate the position. And so we would do the same thing over time, but no one would regard. Okay. Thank you. And in regards to the timing of this, you know, some folks have reached out, whether accurate or not, but but tying this proposal and the timing of it to the measure and lawsuit, is there any correlation at all between the two? No. As as I've said, we've looked at this and talked about it for at least four years. Seriously. It was looked at probably about ten years ago. I know it was looked at 20 years ago. Has been talked about for 75 years. This is something that we've wanted to do for many, many years. It's just a quirk that the city charter has it under two different governance. And so it made it much more difficult to combine the two. But we've been working with the city manager and his team to try and make this happen. So it has absolutely nothing to do with the measure in lawsuit. Okay. And then just finally, I know it's mentioned in the agenda item itself, but what are we exactly voting on tonight so that it's clear? So this would just be an item for the city council to refer this to the Charter Amendment Committee for consideration. And then the Charter Amendment Committee would take it up and decide whether to have the two public hearings in June and July. And then from that point, the amendment committee would take it to the city council in August for a final determination whether to place it on the ballot in November. So this is tonight's really just the first step. Okay. And so ultimately the consolidation issue is not going to be decided by this council. Ultimately, if it goes through the process, it'll be decided on by the voters. Absolutely. It's a charter amendment. Great. Thank you so much, Mr. Gardner. Appreciate it. Thank you, Mr. Mayor. Thank you. Thank you for having motion by Councilwoman Pryce. And consider your anger comes from your anger. Thank you, Mary. And I want to thank you, Chris, for bringing this forward. It's been a long time coming. As a former city employee who used to work in civil service, I was always wondering why did I have to conduct two different tests, which is basically the same for two different departments? And that really brings up the issue about consolidation re necessary and where they both basically do cross each other in regards to the work that they do. You left off customer services, the service reps who do the exact same work. So I see that the time is well, there's never a good time. I mean, timing is everything. But, you know, there's always an opportunity for bringing this forward. And I think it is about time that we are looking at this consolidation. I'm glad to support it. Thank you. Thank you. Thank you. Vice Mayor Richardson. Thanks. I just want to note and thanks for brief my office a number of times and I got the answers to a number of my questions. I'm glad to hear that the current workforce won't be laid off as a part of this process. That's important and I think efficiencies are certainly important. I will raise today what I raised with you in our discussion is that as we do see savings, it's important to understand how you plan to reinvest those savings. Are we going to put more money into ensuring that our our infrastructure is strong in the utilities? Are we going to put money back into the pockets of ratepayers? Are we going to invest in community benefits? San Francisco does the community benefits program and their utility and the number of other municipal utilities sort of reimagine what their commitment to the community is. And it's not just providing utilities. Sometimes it's job pipelines, training pipelines into STEM jobs for schools and education. So if we have savings, we should think about how we can completely re-imagine the role of this this new department. So I look forward to additional conversations at the charter committee. Thank you. Thank you. All right. So is there any public comment on this item. At this time, if you'd like. On this item, Governor Richardson. I could as well, but I didn't do that. Okay. Yeah, you just got to hand it over to me right now. Council Member. No, I actually want to add to the comments that you made about the event that I spoke with Chris Gardner last week. And one of the areas I see of opportunity is that with this consolidation, when development is happening in our city and any user added or new construction is added. I would love to see a program where now that gas and water are consolidated. We want people to conserve water and we want people in low income communities to have low gas and water bills. And one of the ways that we can support that is by metering every unit. When you meet your every unit, you're incentivizing everyone to. Be be cautious of the utilization and usage. And so with that, I just hope that when we find these things, we'll find those apexes where it makes a lot of sense to reinvest in our low income communities and in the renter population and invest in so that the landlords are really in a position to make those allowances available, to add those additional opportunities at each facility so that renters can own their own destiny and not be on the food, water and fuel meter. So I look forward to that opportunity as well and I'm very supportive of that. I'm glad we're finding a way to save money and save resources while still maintaining our workforce and reducing the burden on our employees of overtime so they can spend quality time with their families. Fantastic. Thank you. Councilmember Sugano, I think you just said one question for Mr. Garner. An article over the weekend stated that the commission would be called the Public Utilities Commission, and that's not what was indicated in your presentation. Has that decision been made or is that still up for grabs or what's the latest that's still up for grabs? I think there may be some confusion with the California Public Utilities Commission, so we want to be careful about that. So we have to consider that when we do the naming of the commission. So that's certainly up in the air and open for suggestions. Okay. Thank thank you. Thank you. That satisfies council comment. Is there any public comment. At this time? If you'd like to speak on this item, please line up and from the podium. And if you're in the Zoom meeting, please use the recent feature or they'll start now and that will begin with in person. You have 3 minutes so I can face six district residents with respect to Mr. Garner's presentation of the three cities that he mentioned. There is not a single study that statistically proves what he's talking about. Consolidation and economies of scale do not. There is no proof that a consolidated public utilities has been led to cost saving, and there's no studies in the public, to my knowledge. We don't want monopolization of our public utilities. There needs to be an independence and disconnect between them. There's a reason that that was in the charter. When this comes to the ballot, I will vote against it just like many people will. If we live literally 20 miles away from the DWP gangsters and the transparency, the countless tens of millions and hundreds of millions of dollars that they've cost the city of Los Angeles and countless lawsuits, I don't know why we would see the model of that Chinatown and Cadillac Desert and all the pop culture references to why this is a bad idea and then say, hey, let's do that here. Like it. It doesn't work. It doesn't work. The stats the statistics show that it doesn't work. There is no proof that it leads to cost saving. When you consolidate in this in this had this hybridization of the utilities, when you consolidate them in, it actually works against, you know, there's momentary cost increases that then become perpetual.