CITY OF SAN DIEGO OFFICE OF COUNCIL PRESIDENT ANTHONY YOUNG FOURTH COUNCIL DISTRICT

DATE: TO: FROM: SUBJECT:

September 13, 2012 Honorable Members of the Rules Committee Council President Anthony Young

Ten Fundamental Principles for an Effective, Cooperative and Transparent Mayor-Council Form of Government ________________________________________________________________________ In November of 2004 the voters of the City of San Diego made it known that they were ready to test a change in the form of government for our City, from the current City Manager form to a Mayor-Council form of government. At that time the voters approved a Charter amendment that would implement a Mayor-Council form of government for a five-year trial period. In June of 2008, prior to the end of the trial period, voters affirmed their continued support for the new form of government by approving a Charter amendment making the Mayor-Council form our ongoing governance structure. The City Council has been committed to implementing the new form of government in the most effective, cooperative and transparent manner since it took effect. As with any significant organizational change, questions and issues emerged regarding the respective roles and responsibilities of the Executive and Legislative branches under the new structure. Through extensive discussions and cooperation between the Mayor and City Council and the advice of our City Attorney, most of these issues have been effectively addressed through resolutions and ordinances adopted by the Council, or processes agreed upon by the Mayor and Council, which have helped to clarify for the public the roles and responsibilities under the new Mayor-Council form of government. In the next several months, this City will be experiencing its first change in Mayoral administrations since implementation of the Mayor-Council form of government. Many lessons have been learned from issues of the past and new issues will inevitably emerge. It is our desire, as the Citys Legislative body, to ensure that future Mayors are committed to a governance structure that is guided by the overriding principles of effectiveness, cooperation and transparency and that also work within the parameters of our Citys Charter.

It is requested that the Rules Committee review and consider the attached Resolution and forward it to City Council for adoption. The first part of this Resolution contains numerous recitals from the City Charter which outline respective roles of the Mayor and City Council under the Mayor-Council form of government. The second part presents Ten Fundamental Principles for an Effective, Cooperative and Transparent MayorCouncil Form of Government as described in more detail below: 1. Cooperate with the Council to create annually a Statement of Budgetary Principles. The Statement of Budgetary Principles was first created in FY 2008 as a working agreement between the Mayor and Council, and it has been renewed annually upon agreement by both parties ever since. The Statement of Budgetary Principles clarifies respective roles and sets guiding principles regarding budgetary authority, implementation and communication between the two branches following adoption of the Citys annual budget. 2. Adhere to the Structural Budget Deficit Principles adopted by Council in 2010 to ensure the City maintains a structurally balanced budget. The Structural Budget Deficit Principles were adopted by Council in February of 2010 by resolution (R-305615). These principles are a compilation of best financial practices that have guided the Executive and Legislative branches over the last several years as the City worked to eliminate the Citys structural budget deficit. Commitment to these principles remains vital to prevent a structural budget deficit situation from reoccurring in our City. 3. Adhere to the Mid-Year Budget Authority Ordinance adopted by Council in 2011. The Mid-Year Budget Authority Ordinance (O-20084) was adopted by Council in July of 2011 to allow the Council to exercise its legislative authority to set spending priorities while respecting the Mayors obligation to balance City-wide priorities with available resources within the context of the City Charter. This Ordinance addresses these issues by requiring the Mayor, in the event of a projected budget deficit or surplus at mid-year, to recommend changes to the Citys adopted General Fund budget which the Council can adopt or revise. It also requires the Mayor to provide written notification to the Council prior to making any significant reductions to programs or services provided to the community.

4. Publicly report performance results for core City services periodically throughout the fiscal year and publish annual results and future goals in the Mayors Proposed and Final Budgets. Consistent and timely measurement of the performance of City services is critical to informing budgetary and policy decisions of both the Executive and Legislative branches. It assists in monitoring how wisely tax dollars are being spent, determining whether goals are being achieved as originally intended and helping to identify if programmatic or policy changes are necessary. Performance measures are also a valuable tool for incorporating accountability for performance throughout the City organization and communicating expectations and results of City programs and services to the public. 5. Present to Council no later than November of each fiscal year a financial outlook that includes projected revenues and committed expenditures for a five-year outlook period. Multi-year financial planning allows policymakers to make decisions within the greater context of the annual budget process and facilitates understanding of the long-term impact of todays decisions. Understanding the total financial picture is critical in evaluating whether the funding priorities in the Mayors Proposed Budget are consistent with the Citys short and long term priorities, funding obligations and projected available resources. Providing the Council with a FiveYear Financial Outlook by November of each year will continue to assist the Council as it works to develop its Budget Priorities Resolution which is presented to the Mayor each year in advance of release of the Mayors Proposed Budget. 6. Address the Citys deferred capital backlog by implementing funded projects in a timely and cost effective manner and working with the Council to identify resources necessary to address remaining unfunded deferred capital as well as new infrastructure needs. On March 20, 2012 the Council adopted the Citys first Five-Year Deferred Capital Program Funding Plan (Enhanced Option B) which includes a combination of lease revenue bonds and pay-as-you-go funding totaling $721 million to be expended through FY 2013-2017. $129 million of this amount is budgeted to be expended in the current fiscal year. This is a major step toward addressing the Citys deferred capital backlog but does not address the full problem.

It is critical that future Mayors be committed to timely implementation of the projects funded in FY 2013 and thereafter; and fully addressing the Citys total deferred capital backlog. Additionally, resources have not yet been identified for new infrastructure requirements such as fire stations, police equipment and parks and recreation facilities. It is the Councils expectation that future Mayors will work with Council to develop funding options for addressing the Citys remaining backlog of deferred capital and to begin to address the Citys new infrastructure needs as well. 7. Work cooperatively and timely with the City Attorney, Independent Budget Analyst, and Council to effectively carry out the Citys labor relations policies and duties under State and local law if the Council chooses to designate the Mayor as the Citys Chief Labor Negotiator. As a public agency employer, the City must engage in collective bargaining with its represented employee organizations as required by State law under the Meyers, Milias, Brown Act (MMBA). Under the MMBA, the City, through its legislative body or designated representatives, must meet and confer with the Citys recognized employee organizations on wages, hours, and other terms and conditions of employment. By Charter and the Citys negotiated employeeemployer relations policy (Council Policy 300-06), the Council has responsibility for approval of any memorandum of understanding reached between the City and any recognized employee organization and for resolving any impasses. These Council actions are subject to the veto power of the Mayor and Council override of the veto. To ensure a good faith approach to labor negotiations, all officers of the City, as a public agency employer under the MMBA, must work together and communicate with the employee organizations with a united voice. To date under the Mayor-Council form of government, the Council has designated the Mayor to serve as Chief Labor Negotiator. If the Council chooses to designate the Mayor as the Citys Chief Labor Negotiator, in the future, it is critical the Mayor recognize the Councils authority in this arena by communicating and working cooperatively with Council on all labor relations matters and continuing to include the City Attorney and Independent Budget Analyst in all labor negotiations processes. If this communication and interchange does not occur, the City runs the risk of not approaching labor negotiations with the requisite good faith required by state law. 8. Participate with Council in developing a Comprehensive City of San Diego Economic Development Strategy to ensure continued economic growth and prosperity for our community. It has been ten years since the City last adopted a Community and Economic Development Strategy. Such a strategy is necessary to guide the Citys policies and activities for retaining, attracting and supporting our businesses. The Council

established an Economic Development and Strategies Council Committee in 2012 that meets monthly and is comprised of four Council members. This Committee provides a new and valuable forum for small and large businesses/industries to provide information, suggest areas for regulatory relief and discuss opportunities/challenges. Anticipating the change in mayoral administration, the Committee has developed agendas to support the requested development of a new Community and Economic Development Strategy. It will be imperative for the Mayor to support this Committee and work jointly with the Council in the development of this important strategy. 9. Communicate in a timely and effective manner with the Independent Budget Analyst, City Attorney and Council, including participating in monthly Council meetings to ensure that Council has the information it needs to make well-informed decisions and that City contracts conform to Charter and Municipal Code requirements. As the Chief Executive Officer of the City, the Mayor is responsible for managing all day-to-day City operations and carrying out Council policy directives. It is vital for the Mayor as the Chief Executive Officer to keep the Legislative branch informed of all significant financial and operational issues that impact the integrity of the City and the community at large. This includes ensuring that the Mayor and his staff follow City contracting requirements set forth in the City Charter and Municipal Code including the proper execution of city contracts, obtaining Council approval for certain contracts, competitively bidding contracts, and verifying funding of contracts as more fully described in the City Attorneys Memorandum of Law dated December 18, 2009, ML-2009-20. This also includes providing timely Council docket materials for both City Council and Council Committee meetings in accordance with open meeting law requirements and City procedures; and regular Mayoral participation in Council meetings on a monthly basis to update Council and the public on significant public projects, programs or initiatives proposed by the Mayor that has fiscal impacts on the City such as Plaza de Panama, deferred capital projects status, future of the Chargers, Convention Center expansion and other budget/financial matters. 10. Work cooperatively with the Independent Budget Analyst, City Attorney, and Council to carry out Council-initiated policy directives, services and programs that have been included in the annual adopted budget. As the CEO of the City, the Mayor is responsible for executing and administering the citys annual budget as adopted by the Council. Consistent with City Charter authority, the Council may include funding in the annual budget for new or

improved services or programs that are determined to be priorities of the community. The Mayor is expected to implement these services or programs in a timely manner working in consultation with the Council and keeping the Council apprised of implementation status throughout the year.

Attachment:

1. Resolution Establishing Ten Fundamental Principles for an Effective, Cooperative and Transparent Mayor-Council Form of Government

cc:

Honorable Mayor Jerry Sanders Honorable Members of the City Council Jan Goldsmith, City Attorney Andrea Tevlin, Independent Budget Analyst