SR-8-B (28)
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APR 1 4 ~98-t
CA:SSS:bl
Councll Meetlng 4/14/81
Sdnta Monlca, Callfornla
STAFF REPO~T
TO: Mayor and Clty Councll
FROM: Clty Manager and Clty Attorney
SUBJECT: Emergency Ordlnance Apporplratlng Reglstratlon Fee
Revenue to the Rent Control BQard
On Aprll 9, 1981, the Clty Attorney 15sued an oplnlon
relatlng to the status of the Rent Control Board and lts relatlon
to the Clty government. ThlS oplnlon concluded, among other thlngs,
that the Clty Councll could not delegate ltS authorlty over the
apprO?rlatlon of funds to the Rent Control Board.
In order to
contlTIUe the operatlon of the Pent Control Board, lt 15 necessary
for the Councll to make that approprlatlon.
The records of the Clty reveal that the estlrnated amount
of recelpts fro8 annual Rent Control reglstratlon fees 18 51,622,011.
The attached ordlnance approprlates thlS amount to the Rent Control
Board and Adwlnlstratlon for the purpose of flnanclng necessary
and reasonable expenses.
It 15 respectfully recommended that the Clty Councl1 adopt
the attached ordlnance.
Prepared by: Charles Kent NcClaln, Cl ty ~1anager
Stephen Shane Stark, Actlng Clty Attorney
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APR 1 4 : '1
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Councll Heetlng 4/14/81
Santa ~onlca, Callfornla
ORDINANC:C NO.
1 204
(Clty Council Serles)
AN EMERGENCY ORDINANCE OF THE CITY
COUXCIL OF THE CITY OF SANTA MONICA
APPROPRIATING $1,622,011 FOR THE
REASONABLE AND NECESSARY EXPE~SES
OF THE RENT CONTROL BOARD AIm
ADMINISTRATION
THE CITY COUNCIL OF THE CITY OF SANTA HONICA HEREBY
ORDAINS:
SECTION 1. The sum of $1,622,011, belng the estl~ated
recelpts derlved from the annual rent control reglstratlon fees
for the flscal year 1980-1981, lS hereby approprlated for the
necessary and reasonable expenses of the Rent Control Board and
Admlnlstratlon.
SECTION 2. ThlS ordlnance lS hereby declared to be an
emergency ordinance pursuant to Sectlon 615 and 619(d) of the Clty
Charter, dnd shall become effectlve immedlately upon adoptlon.
The Mayor shall sign and the Clerk shall attest to the tas~a~e of
thlS ordinance, and thereafter It shall be In full force and effect.
APPROVED AS TO FORM:
~~~l
STEPH N SH.1\NE STARK
Actlng Clty Attorney
"~"~...c:.
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ADOPTED AND APPROVED THIS
OF April J 1981.
14th
DAY
Yr' ~.fr !;JaU~~
( I JJrOR
,~
I HEREBY CERTIFY THAT THE FOR~GOIMG ORDINANCE)
no. 1204 J HAS JULY Arm REGULARLY aHRODUCED AT ^ ~4EETING
OF THE CITY COUfJC I L ON THE. 14th Di\Y OF Apr il ) 1981;
THAT THE SAID O~J) I NANCE HAS THEREAFTER DULY ADOPTED AT A
t1EETING OF THE CITY COUNCIL DrJ THE 14th DAY OF April 1981
BY THE FOLlOH HJG COUfJCI L VOTE:
AYES: (OUNC I U1E~BERS: Yanna tta Golduay, Jennings, Seo tt
Rhoden, Reed and Mayor Baflbrick
!WES: (OU~JC I U1E:1BER: ~one
ABSENT: COurK I L "1Ef1BERS: None
ATTEST:
~(TJ~
CITY CLERK
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D1 STfU BUT I O)j or RESQLUT 101\ ~
Co un ell }.! e e t 1 n g D..l t e '1/1 ,f-
!\genda I tem If 5 -6
ORDI\i\:-ICt ii / 2f!)Y!
Introduced: -':;:;;7' (i/ '" L.k"-'
Adopted: Lf~/ r//f; ~ ~
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\\'a SIt amended 7
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\'0 TE . A [f 1 YJ1\d t 1 V e .
.\eg.ltIVe"
Abstain"
Absent:
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L.1! C:~
ORIGINAL to be sIgned, sealed dnd filed in
U/f:1t.-."L 2 r {11'/
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Department origJn:ltlog staff report ( ~,~
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NIh'SI'APER PURL ICATIO\ (Da te:
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City Attorney
Agency mentIoned Hi doctlmen t 01 :" t~t [[ 1 eport
(cer!~fl eJ?)
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Subject file (agenJa packet)
Counter fiI e
Others.
Airport
PJrklng Auth.
Aud 1 to rU11\
Personnel
BUlldlng l1ept.
Plannlng
Lnv 1 ron. Sen.'.
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PolLce (en-
t' 0 r' c e OJ en t :>)
Purchclslllg
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CenclJl Selv.
TransportatIon
LIbrary
lre3surer
J>.lanage r
SI!\lJ TWO COPIES OF ALL ORDJ:.J"AI\CES
TO CODED SYSTDfS Attn Peter Mi'l61earJ c
PROrISSIO~AL tENT~R ~ lotal
ROIl IE 71
BRrELtE, K[W JERSEY 08730
Others.
TOTA L COPIT:S
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PROOF OF PUBLICATION
(2015 see p )
STATE OF CALIFORNIA,
County of Los Angeles,
I am a citizen of the United States and a
resident of the County aforesaId, I am over
the age of eighteen yei')rs, and not a party to
or Interested In the above-en1ltled matter I
am the pnnClpal clerk of the printer of the
.................................. ..... ............+......
E'lmING OtlTLOOK
a newspaper of general circulation, prll1ted
'and puhllshed ... ~.~~~y. .-:~~~.~~. .~~~~....
In th~ City of ....... .~~~~A ~,?N.~~~........
County of Los Angeles, and which
newspaper has been adludged a newspaper
of general circulation by the Superior Court
of the County at Los Angeles, State of
California, under the date of.~~'="..~~ 19. ~;,
Case Number.. ~~!t3?-:~...,., that the notice,
of which the annexed IS a printed copy (set
In type not smaller than nonpareil), has
been published In each regular and entire
rssue of saId newspaper and not In any
supplement thereof on the following dates,
to-wIt
April 28
all In the year J 98 1
I certify (or declare) under penalty of
perl ury that the foregOing 15 true and
correct
Dated at
SANTA MONICA
California, thiS April 28 1981
.....~~;:L......
Signature
Fr.. COllIes of tllil blAflk form m.y bl.,cured Iram
CALIFORNIA NEWSPAPER SERVICE
BUREAU, INC.
Legal AdvertISing Clearing House
South Sprmg St , Los Angeles, Calif 90012
Telephone: 625-2141
/ -. Plu.e reQue.' GENERAL Prool of P.ullllc.tlon
I " _ ./ wtl.n ora'rln, tilt. 'orlll
i C;:/(~r~,
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I ThiS space Is for the County Clerk's Filing Stamp
Proof of Publication of
A.I...~...............6...~...............................
.................................-....-...................
...
ORDINANCE NO 1204
(CIty Council Serjes)
AN EMERGENCY ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF SANTA MONICA
APPROPRIATING $1,62%,011 FOR THE
REASONABLE AND NECESSARY EXPENSES
OF THE RENT CONTROL BOARD AND
ADMINISTRA nON.
THE CITY COUNCIL OF THE CITY OF SANTA
MONICA HEREBY ORDAINS
SECTION 1 The sum or $1,622.011, bemg the
estunated rilCelpts derived from the annual rent
control regIStratlOD fees for the fiscal year
198(}.1981, IS hereby appropriated ror the necessary
and reasonable expenses of the Rent Control Board
and AdministratIon.
SECTION 2 ThiS ord1l1ance IS hereby declared to
be an emergency ordmance pursuant to Section 615
and 619 (d) of the CJty Charter, and shall become
effectIve immediately upon adoption. The Mayor
shall Sign and the Clerk shall attest to the passage
of thIS ordmMee. and thereafter It shall be m full
force and effect
Adopted and approved thiS 14th ddY of Apnl, 1981.
JOHN J BAMBRICK
Mayor
I hereby certify that the foregomg ordinance, No
1204, was duly and regularly mtroduced at a meet-
ing of the Cuy Councir on the 14th day or April, 1981 t
that the said ordmance was thereafter duly adoptea
at a meeting of the CIty Councll on the 14th day of
ApIjll981 by the followmg Council vote
AYES' COUNClLMEMBERS' Vannatta Goldway,
Jennmgs, Scott Rhoden, Reed and Mayor Bam~
brick.
NOES: COUNCILMEMBERS' None
ABSENT: COUNCILMEMBERS None.
A TrEST
ANN M SHORE
City Clerk
_.Pub 2.E!'ll~l~!.
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J{J 1~11l ST TO PUfH [Sf! t [(;"\L r~UJ1l!
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Oll
Thdnk~ lor your l~"lstanc~,
Cl, Jr;;.ff'
LIlliS 11.1[(.-,]".111, CIty CLClh':o. SecletulY
. - - - -...l. ----- __.....~............I....LAJ..L'-
""-"-t-'cuo:>e;:, UL L~le .Ken"!: LontrOl Board and
Adrnlnlstratlon.
SECTION 2. ThlS ordlnance 1.5 hereby declared to be an
e~ergency ordlnance pursuant to Sectlon 615 and 619(d) of the Clty
Charter, and shall beco~e effectlve ln~edlately upon adoptlon.
T~e ~ayor shall slgn and the Clerk shall attest to the l'asr,ase 0=
thlS ordlnance, and thereafter It shall be In full force and e~fEct.
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Status of Rent Control Board
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80-150, 80-190 .,
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CITY ATTO~~EY OPINION NOS.
Within Structure of City Government
INTRODUCTION
Sectlon 100 of the Santa Monica City Charterl
declares
the C1ty of Santa Monlca to be "a body politic and corporate."
The Santa Monlca Rent Control Board ("Board") was established by
1nitlat1ve charter amendment on April 10, 1979, now cod1f1ed as
Article XVIII of the Clty Charter. Article XVIII does not
establish the Board as an independent corporate entity, but
57-at.es that it shall be "1n the City of Santa Monica" (Sectlon
1803(a)).
The Board is authorized to "finance its reasonable and
necessary expenses by charging landlords annual registration fees
in amounts deemed reasonable by the Board . . . [and] "to request
and rece1ve funding when 1f necessary. from any available source
for its reasonable and necessary expenses" (Section 1803(n)). It
has the power to and shall "issue and follow such rules and
regulatlons . . . as will further the purposes of the Article,"
(Section 1803(9)), and "employ and pay such staff
. as may be
necessary to perform its functlons efficiently in order to
fulflll the purposes of thlS Artlcle" (Section 1803(p)).
On Marc~ 25, 1980, the Clty Council amended the Ioea:
ordinance 1nple~entlng Article XVIII to provide, in essence, for
1) Unless otherwise indicated, all references hereafter to lithe
Charter" are to the Santa Monlca Clty Charter, and all references
to "Sectlons" are to sectlons of the Charter.
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the 1ndependent authority of the Board over its financ1al,
purchas1ng and personnel affairs (Santa Monica Mun1cipal Code
(SMMC) ~~ 4601-4613).
The City Manager, Purchasing Agent, and Personnel Board
have requested opinions interpreting the relationship of Artlcle
XVIII to the sections of the Charter specifying the powers and
dutles of several C1ty agencies over budgetary, purchaslng, and
personnel functlons. There are three basic questions:
1. w~at author1ty does Artlcle XVIII confer on the Board
w1th respect to ltS budgetary, purchasing and personnel affalrs.
2. Does the Charter, construed as a unified whole,
spec~flcally confe~ on the Clty COUDCll, the Clty Manager and ~~e
Personnel Board powers and dut1es with respect to budgetary,
purchasing and personnel matters which cannot be delegated by
ordlnance to the Board.
3. To the extent that powers ln the specified areas may be
delegated to the Board by ordinance, does the Councll's
delegatlon of such powers to the Board constitute a lawful
delegatlon.
We conclude the Board is not an entity independent of the
City; accordingly, it is subJect to those personnel, budgetary
ane pcrchasing provislons which, under the Charter, are
appllcable to all boards, departments, offices and agencles of
the City. The powers given the Board under Artlcle XVIII to nake
rules, flnance its necessary activities and hire necessary
perso~nel may be har~onized w1th the general procedures specifie~
lD ~he Char~er and approprlate to a Council-Manager forT. of
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government. The C1ty Council, as the repository of all powers in
the City (Section 605), may delegate to the Board certain
additional functlons in the areas of personnel, purchasing and
budget, so long as the delegation contains adequate safeguards
agalnst the total abdication of the Council's fundamental
responsib1lities. However, the Council may not delegate those
functions which are specifically assigned by the Charter to other
City officers or agencies.
We recommend that the Council, before the adoptlon of the
1981-82 budget, consider amendments to SMMC Sect10ns 4601 et ~~.
to reflect Charter l1witatlons on the Board's control of its
budgetary, personnel and purchasing affairs. E~ergency
legislation may be required to assure the continulty of Board
functions prior to approval of the new budget and to protect the
rights of existing employees.
The remainder of this op1nion will discuss in detail the
relevant provlsions of the Charter and the ordinance implementing
Article XVIII 10 the context of each of the three subject areas
involved. The opinion begins with an overview of the Charter and
a discussion of the general legal prlnciples governlng
constructlon of a city charter.
OVERVIEW OF THE CHARTER
In 1948, the voters of the city adopted a Charter WhlCh
established the City of Santa Monica as a body politlc and
corporate (Sectlon 100) wlth power to make and enforce all laws
in respect to munlclpal affairs and such other powers as may be
exercised by a char~ered city sUbJect only to the limitatlons of
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the Californ1a Constltution and paramount state law (Section
400). The Charter establishes a "City-Manager" form of
government (Section 500), under which the City Council is vested
with all powers of the City except as limited by the_~harter and
the State Constitution (Section 60S); the City Manager is
designated the chief executive officer and head of the
adn~nistrative branch of the City government, responsible to the
Council for the proper administration of all affairs of the City
(Section 704).
The Charter establishes an overall budgetary process under
which the City Manager is to prepare and transmit to the Council
a proposed budget based on est1mates of revenue and expend~tures
received from each of the various departments of the City.
(Sections 1502-1503). The Council is then to consider the
proposed budget, make appropriate revisions and, fOllowing public
hearing, adopt a budget; adopt1on of the budget constitutes an
appropriation to the several offices, departments and agencies of
the City of the_aMounts included in the budget as proposed
expenditures (Sections 1503-1506).
The Charter establishes under the control and direction of
the City Manager, a centralized purchasing systeM for all City
departments and agencies to be implemented under rules proposed
by the Manager and adopted by the Council, with specif~ed duties
reposed 1n a purc~aslng agent (Section 1507); cowpetltive b~dding
is required wlth such exceptlons as the Councll may prescribe
(Section 1508).
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The Charter also establishes a civil service system based
on the merlt principle and intended to insure to all persons an
equal opportunlty to obtain and hold employment and advance
therein from or within any board, department, officer or agency
provided for in the Charter.
(Sections 110Q-ll01). The Charter
specifies positlons within the unclassified service and provides
that all other positions not speciflcally enumerated are to be
within the c1assif1ed service (Section 1102). positions in the
clasSlfled service must be filled by the appointing authority
from candidates selected on the basis of competitive examlnations
(Sectlon 1108); classlfled employees have the substantive and
proced~ral rights guaran~eed by Sectlon 1110. The Councl~ has
the power to determine the number of employees in a given
department (Section 1305), and to abolish a position or to reduce
the number of employees in a given class in the classified
service (Sectlon 1109).
The Charter recognizes the rights of employees to petition
the City Councilor the board, officer or commission havlng
]urisdlction of such matters wlth regard to wages, hours or
condltlons of employment (Section 1101); however, the Charter is
silent as to the negotiation and execution of emploYMent
contracts and the dete~ination of wages, hours and conditions of
e~ploynent. ThlS sUbJect is covered by Ordinance No. 801, WhlCh
deslgnates the City Manager to negotiate employment contracts
subject to Clty Council approval.
ArtiCle XVIII does not expressly change or limit the
appllcatlcn of any of the above-described provisions of the
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Charter. It provides for the estab11shment of an elected Rent
Control Board and assigns to it dut~es including the registration
of all controlled rental units, the establishment and adJustment
of fair and equitable rent levels for those units, and the
issuance of permits for the removal of controlled units (Section
1803). The Board is expressly given the power to 1ssue necessary
rules and regulatlons, and to hire and pay necessary staff
(Sections IB03(f)(6), l803{g)). The Board is empowered and
required to charge landlords annual registration fees in amounts
it deems reasonable in order to finance its reasonable and
necessary expenses (Section l803(n)).
On June 29, 1979, the Council adopted OrClnance ~o. 1127 ~o
COdlfy, clarify and implement Article XVIII and "to integrate it
into the whole of the City, its government, law and plans."
Ordinance No. 1127 provided, inter alia, that the Board 1S an
integral part of the City government and the City Manager ane
City Staff were to administer and supervise its financial,
personnel and purchasing affairs. Ordinance No. 1127 did
recognize the Board's final appointing authority over its
employees. Moreover, while the Board was required to submlt a
budget in the same manner as other City departments, its budget
was to be approved as transmitted except the Council reserved
power to disapprove itens requiring the expendlture of general
funds or involving "a manlfestly unreasonable use of publlC
resources or manifestly unreasonable rlsk of loss to the Clty".
SUlts against the Board were to be considered suits against the
C1ty and defende~ by the City Attorney.
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On April 14, 1980, Ordinance No. 1127 was extenslvely
a~ended by Ordinance No. 1153, codified as Sections 4601-4613 of
the SMMC. This ordinance, although declaring the Board to be an
integral part of the City government (Section 4606), also
declares the Board's independent power to determine its own
personnel, financial and budgetary po11cies (Sect1on 4609), and
authorizes the Board's adwinistrative staff to admin~ster and
supervise the Board's financial, personnel and purchasing affairs
(Sectlon 4606). Specifically, the Ordinance recognizes the
Board's authority to hlre, pay, promote and flre such employees
as it deems necessary, including its own legal staff, and to
deter~lne WhlCh of these posltlons are unclasslfled purs~a~~ ~o
Section 1102 of the Charter (Sections 4607, 4611). The Board is
further authorized, following public hearing, to adopt a budget,
and the amounts stated therein are thereby appropriated by the
Board to the Rent Control Administration (Section ~608).
GE~ERAL PRINCIPLES
The City of Santa Monica is a charter city under the
provlsions of the state constitution. Cal. Canst. Art. 11,
Sectlon 5. The City's charter is its local constltutloni it is
the supre~e organic law af the City, subJect only to conflictlng
prov~sions in the Unlted States and California Constltutlons and
to preerp~ive state law. San Francisco Fire Fishters v. C1ty ar.d
Count. of San Francisco, 68 Cal.App.3d 896, 898, 137 Cal.Rptr.
607, 608 (1977); Brown v. Clty of Berkeley, 57 Cal.App.3d
223,231, 129 Cal.Rptr. 1,4 (1970).
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Under settled rules of statutory interpretation, " .
Sections of the Charter must be construed together, giving effect
and meaning so far as possible to all parts thereof, with the
purpose of harmonizing-them and effectuating the legislative
intention as therein expressed." Hanley v. Murphy, 40 Cal.2d
572, ,255 P.2d 1,3 (1953). Where it is imposs1ble to
reconcile conflicting prov1sions, special provisions control more
general provisions, Diamond International Corp. v. Boas, 92
Cal.App.3d 1015,1041,155 Cal.Rptr. 616, 626 (1979)7 later enacted
provisions control those earlier in time. City of petaluma v.
Paciflc Telephone & Telegraph Co., 44 Cal.2d 284, , 282 P.2d
43,46 (l955).
Section 605 of the Charter vests all powers of the City in
the C1ty Council, sUbJect, however, to the provisions of the
Charter and the State Constitution. Although the Council is the
repository of all powers of the City not expressly conferred by
the Charter, it may not exercise its plenary powers in a manner
which implnges on powers or duties vested by the Charter in some
other agency of the City gover~~ent. Hubbard v. City of San
Diego, 55 Cal.Ap.3d 380, 388, 127 Cal.Rptr. 587, 592 (1976)7 San
Francisco Flre F1ghters v. City of San FranC1SCO, supra, at 609,
610. Indeed, Sectlon 1303 of the Charter provides that while
"the C1ty Counc11 by ordinance may assign addltional functlons or
dutles to offices, departments or agencles establlshed by thlS
Charter, [it] may not discontinue or assign to any other offlce,
departwent or agency any function or duty assigned by this
Charter to a partlcular offlce, department or agency." An
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ordinance which conflicts with the Charter is invalid. Brown v.
City of Berke1ez, supra.
~~ere is a general rule that leg1slative power cannot be
delegated. However, the California Courts have limited the scope
of this doctr1ne to permit delegation "so long as the truly
fundamental issues are resolved by the legislative body of the
municipality and the delegation of power is accompanied by
safeguards adequate to prevent its abuse." Bock v. Lompoc Clty
Council, 109 Cal.App.3d 52, , 167 Ca1.Rptr. 43, 45 (1980),
citing Kugler v. Yocurr, 69 Cal.2d 371, 71 Ca1.Rptr. 687 (1968).
This principle must be understood in light of the fundamental
ob11gatlon of a municipal government to protect the pub11c good
and, as trustee for the citizens and taxpayers, to act to prevent
the waste of public funds. E. McQuillin, 1 Municipal
Corporations ~1.56 at pp. 80-81, 2 Municipal Corporat1ons ~lO.31
at pp. 818-819.
The three questions presented are derived from th~s
theoretical framework. We must look first to Article XVIII to
dete~ine what powers are expressly or impliedly granted to the
Board. These must be harmon1zed, if posslble, with the rest of
the Charter: in the event of an irreconcilable confllct, Article
XVIII, being later and more speclf~c, would prevail. Where
Artlcle XVIII 1S silent or amb1guous, it must be determined
whether the Board's delegated author1ty under Ordlnance No. 1153
conflicts with provisions of the Charter. If so, the confllcting
prov1s10ns of the ord1nance and the purported delsgation are
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invalid.
If there is no confl1ct. nor total abdication of the
council's fundamental responsibilities. the delegation is valid.
RELATION OF BOARD TO THE CITY
A board. agency or department of a city may be created by
charter or pursuant to a grant of authorIty from the state. It
is general rule that a city agency which derives its power from
the city charter is not an entity separate from the
munIcipality.
A munIcipal board or department,
such as a board of education or a board
of health. may ordinarily be created by
the state or by the municipal corporation,
and may be a public corporation disconnected
with the gover~ent of the municipal corpor-
at10n or it may be merely a department of
the city. If the department or board is
created by the legislature as a state agency
it is generally. but not always. consIdered
a separate entlty~ but a department of a
city, created by its charter, is not an
entIty separate from the munICIpality. even
thou9h a dlstinct city department. However.
corporate agencIes created by a municipality
pursuant to an enabling statute are usually
considered to be independent public corporatIons.
E. McQuillin, 1 Municipal Corporations ~2.30 at 176. See
~.q~ State ex reI. v. Mowser v. UnderWOOd. 61 Ohio App.
103. 22 N.E.2d 424 (1939).
Even in cases where a state enabling act exists. a body
d1scharging duties priroarily resting upon a municipality and
which cannot be made solely responsible for damages resultlng
fro~ any act in performance of its duties. cannot be deene~ a
corporate entity separate and d1stinct from the City. Brownlee
v. Dalton Board of Water etc. COM~1ssion. ___Ga.App. . 1
S.E.2d 599, 600 (1939).
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Municipal departments, commissions
and boards possess those powers expressly
conferred by charter, general statute,
ordinance, or those necessarily implied.
In the discharge of these powers, the
department, commission, or board acts
as the agent of the municipality.
Eddy, Inc. v. Clty of Arkadelphia, 303 F.2d 473, 476 (8th
C~r. 1962), quoting Rhyne's treatise on Municipal Law (1957 ed.)
at Section 6-2 pp. 92-93.
The Board, in performing its duties under Article XVIII
exercises the munlc1pal police power. Its actions in the control
and regulation of land use create a potential liabi11ty for
damages from wh~ch the City can not be insulated. See Aglns v.
Clty of Tlburon, 24 Cal.3d 366 (1979), aff'd 447 u.s. 255 (1980);
Greater Westchester HOMeowners Assn. v. City of Los Angeles, 26
Cal. 3d 86, cert. denied,
u.s.
, 66 L.Ed.2d 22 (l980). While
the Board is empowered to charge fees to finance its necessary
and reasonable expenses, damages resulting from acts of the Board
determined to constitute a "taking" of property or involving
other constitutional violations could not constitutionally be
assessed against the landlords by way of fees. Thus, the City
could be requlred to use its general revenue funds to conpe~sate
persons agg~ieved by improper acts of the Board. Owen v. City of
, 63 L.Ed.2d 673 (1980).2
Inde?encence,
U.s.
2) A land-use regulation does not constitute a taklng or
prlvate property unless the owner has been deprived of
substantially all use of the property. Aglns v. City of T~buron,
supra. The Un1ted States Supreme Court has reserved Judgrent on
the questlon of whether a property owner is automatically
entltled to damages fro~ the time the taking occurred until the
tlme the offendlng regulation is rescinded, or whether equitable
rellef, without damages, will suff~ciently compensate the owner.
San Diego Gas & Electric Co. v. City of San D1ego, 49 L.W. 4317,
u.s. ll9Bl}.
11
It
tit
Whether or not the Board could have been established as an
independent corporate entity, see-Hubbard v. City of San Diego,
supra, 127 Cal.Rptr. at 594, it is clear that it was not so
established. Nothing in Article XVIII establishes the Board as a
corporate entity, independent or otherwise, or specifically
confers upon it the power to enter binding contracts or to sue or
to be sued in its own name, or to aSSUMe liability for damages as
a result of its action. On the contrary, Article XVIII provides
slmply that "the Board shall be in the City of Santa Monica .
"
(Section 1803(a)).
Because the Boara is not an entlty independent of the City,
It 15 subJect to all the provlslons of the City Charter, and
. ...
-'<
partlcular, except to the extent of powers expressly granted it
by Artlcle XVIII, to all provisions of the Charter applicable to
boards, departments, offlces and agencies in the City.
BUDGET
Section 1803(n) makes the Board responsible for financlng
its actlvities:
The Board shall finance its reasonable and
necessary expenses by charging landlords annual
registratlon fees in amounts deemed reasonable by
the Board. The first annual registration fee
shall be set by the Board within thirty days
after ass~~ing office. The Board is also em-
powered to request and receive funding when
if necessary, from any available source for
its reasonable and necessary expenses. Notwith-
standing the preceding provisions of this
paragraph, the City Councll of the City of Santa
Monica shall appropriate suff~cent funds for the
reasonable and necessary expenses of the InteriW
Board and Board during the SiX month perlod
following adoptlon of this Article.
12
-.--~...- - - --- ~- - ----- -- - - - ~-~---
, '
-
e
However, nothing in Article XVIII expressly or impliedly gives
the Board the power to apvropriate money or exempts the Board
from the general budgetary process described in Article XV of the
Charter.
The Board's power to finance is in no way inconsistent with
the duty vested by the Charter in the City Council to adopt a
general budget for the City and to appropriate the budgeted
amounts to the several offices, departments and agencies of the
City. The concepts of financing and appropriation are legally
and logically distinct. Financing has to do with raising or
providing funds, as by the collection of fees, for a particular
purpose. Approprlation is a fornal or gove~~ental actlon by
which funds are set aside or assigned to a particular use. See
Webster's Third International Dictionary (1961 ed.).
The fees collected by the Board create a special fund which
may only be used to finance the Board's operations~ these funds
are not to be commingled with the general fund and may not be
drawn on for general City purposes. E. McQuillin, 15 Municipal
Corporations S39.45 at 131. However, the Board is not a special
district, established pursuant to enabling legislation, but a
part of the City. Therefore, the funds generated by the Board
frorr. reglstration fees, like all other funds of the City, must be
deposited in the City Treasury and can be expended only pursuant
to the appropriation process expressly prescribed in the Charter.
See Commlssioner of Woburn Cenetery v. Treasurer, Mass. ,64
N.E.2d 627 (1946) (distingulshing between creation of special
fund and power to approprlate moneys from the fund). Any other
13
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procedure would give the Board a financial autonomy inconsistent
with its status as an agency of the City established pursuant to
- City Charter~ it would result in the de facto creatio~ of an
independent corporation without beneflt of the substantive and
procedural safeguards which would normally accompany creation of
a special district as an agency of the state. See generally 63
Cal.Jur.3d ~~847,863 (irrigat1on districts).
Under the well established principle that a Charter must be
construed as a unified whole and harmon1zed whenever possible,
the Board's power to finance its operatlons must, if possible, be
harmonized with the Cityts express power to appropriate and its
plena~y powe~ a~d duty to retain control of the financial affa1rs
of the mun~cipality. Nothing in the language of Section 1803{n}
can be construed--either expressly or by necessary implicat1on--
to overr1de the fundamental power vested in the City Council with
respect to the Clty's budgetary affairs.3
Tne City Council cannot delegate absolutely its budgetary
respons1bilties. As the repository of all powers of the City,
~
the Council bears the ultlmate responsibllity to the citizens of
Santa Monica to avoid the waste of public funds. The burdens of
this responsibillty are further increased by the limitatlons
imposed on cities to raise taxes (Cal.Const.Art.13A) and to spe~d
money (Cal.Const.Art.13B). In the event that the fees which can
3) Section 1803(n) provides that the C1ty Council shall
appropriate sufflcient funds for the reasonable and necessary
expenses of the Board durlng the six months following the
adoptlon of the Amendment. Th~s does not suggest that the
Councll wtll not thereafter appropr1ate runds for the Board's
expenses, but only that, prior to the Board's raislng funds
through reglstration fees, the Council will be requlred to wake
the approprlations from the general fund.
14
~
~
.
~--...
.
reasonably be assessed against landlords are not suffic~ent to
cover the Board's actual expenditures or unforeseen liabilities,
the d~fference would ultimately have to be borne by the City
through its general fund. Thus, in exercising its duty to
prevent waste of public funds and to maintain the City's total
spendlng limltation, the Council cannot abdicate totally ~ts
ability to review and to modlfy the Board1s budget to the extent
that its proposed expenditures exceed fees WhlCh can reasonably
be assessed or expose the Clty to an unreasonable risk of loss.
Moreover, although Article XVIII entrusts to the Board the
pri~ary responsibillty to enforce the rent control law, the Clty
also has a responslbllty to assure that laws enactec pursuant to
its police power are properly implemented. Thus, if the Board
fails to assess sufficient fees to cover the necessary costs of
full and fair enforcement, the City would again be obliged to
approprlate additional monies to assure the rights of all persons
entitled to the lawls protection.
In this respect. too, its
independent obligation to the public precludes its total
abdication of all budgetary controls.
At the same tlme, the Council cannot usurp or unduly burde~
the power vested in the Board inltially to determine and f~nance
the reasonable and necessary expenses of implementing the rent
control law. It is suggested that the standard of budgetary
review in Ordlnance No. 1127 is a reasonable means of harmoniz~ng
the mutual dutles and powers of the Board and the Council, l.e.
15
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system~ nor do these controls impinge upon or frustrate the Board
ln carrY1ng out its dut1es. See Diamond International Corp. v.
Boas, 92 Cal.App.3d 1015, 1035, 155 Cal.Rptr.616, 629 (1979).
The City Council may not by ordinance grant to the Board
autonomy with respect to purchasing.
The purported delegation
of this power un~er Ordlnance 1153 is invalid because it
duplicates dutles delegated by the Charter to the Clty Manager
and the Purchasing Agent and thus, v10lates the express
provislons of Sect10n 1303 WhlCh prohlb1ts the Counc1l fro.
"asslgn[lng] to any other office, department or agency any
funct~on or duty assigned by this Charter to a particular off1ce,
cepar~~e~~
O~
".4
agen~y. -
PERSONNEL
Artlcle XVIII gives the Board the power to "employ and pay
such staff . . . as may be necessary to perform its functions
efficiently in order to fulfill the purposes of this Article"
(Section IB03(p)).5 These words, i~precise in any event,
cannot be read in lso1at1on, but must be construed and, lf
possible, harmonized with all other relevant provisions of the
Charter.
The Charter provides in Article XI for the estab11shment of
a Civ1l serV1ce system. A merit princ1ple is adopted 1n Sect10n
1100 wh1ch expressly provldes that "[a]pPolntments and promotions
4) Pursuant to Sectlon 1508, the City Council may, by
ord~nance, prescr~be such exceptions as it dee~s approprlate to
the general COITpetlt~ve bldding requlrement contalned In that
sectlon. ~~us, In approprlate cases, the Board could be relleved
frou the competitlve blddlng aspects of the purchasing syste~.
5) Sectlon 1803(f) (6) also speclfles that the Board shall have
the duty and power to "hlre and pay necessary staff".
17
e
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in the admin1strative service of the City shall be made according
to mer~t and fltness, to be ascertained, so far as practicable,
by compet1tive examination." To this end, the Charter provides
that the Personnel Director shall hold competitive examinations
for all positions in the classif1ed service (Section 710), and
that positions shall be filled by the department heads, as
appolnting author1ty, from eligible candidates chosen on the
basis of competitive testing (Section 1108). Classified
employees are entitled to spec~fied protect1on against arbltrary
suspensions, demotlons or dism1ssals, including the right of
appeal to the Personnel Board (Section 1110). The Clty Manager
is desis~ated the head of the admlnlstratlve brancn of the Clty
govern~ent (Sectlon 704) and the City Council is expressly
required to "deal with the administrative service under the City
Manager solely through the C1ty Manager. "(Section 610).
Section 1101 makes the principle of equal Job opportunity
applicable to posltions within "any board, department, office or
agency 1n the Charter enumerated or provided for. . ." The
Board is a City agency established by Charter: therefore,
notwlthstanding the power granted to the Board to h1re necessary
employees, these ewployees, as well as persons seeklng ernploynent
frOM the Board, are entitled to the protection of the CiVl1
serVlce syste~ and the Board must exercise 1ts power conslstent
wlth C1Vl1 serVlce provisions. See Hanley v. Murphy, 255 P.2d
1,4 (1953). It does not detract from the Board's authority to
hlre and pay necessary staf~ to require that Board staff
pos~t1ons be c1asSlfled by the Personnel Board: that, in making
18
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appointments, the Board hire from candidates deemed eligible on
the basis of civil service testing; and that employees fired,
suspended, or demoted by the Board be afforded the right to an
appeal hearing in accordance w~th Section 1110 of the
Charter. 6
Section 1102, which defines the positions in the class1fied
and unclassified serV1ces, on its face would appear to make all
Board employees part of the classified service.? However,
because of the unique role of the Board's attorneys, it is our
oplnio~ that these positions Must be treated comparably to those
of city attorneys and not included in the classified service.
The role of a staff attor~ey dl=fers fron that of any other Soarj
eMployee in that the employer is also the client. As a
consequence of this dual relationship, the attorney/employee
'~mployee has overriding professional obligations, see e.g.
Business and Professions Code ~6068, which may not be ident1cal
with the employer's interest, and the employer, as client, should
retain the freedom to dismiss its attorney.
The Clty Council has the power under Section 70Bb to hire
attorneys other than the C1ty Attorney to conduct the legal
buslness of the Clty. SMMC Section 4611 constitutes a proper
delegation of authorlty to the Rent Board to hire its necessary
6) We recognlze that most Board employees were not hired
through the civil service system. As discussed in the
"Impl.J..cations" sectlon of the opinion, some actl.on will be
requlred to protect the rights of these employees.
7) In 11ght of this provlslon of the Charter, the Council's
purported delegation to the Board of power to determine wh1ch of
its positions are unclassif1ed (S.M.M.C. ~4607) is clearly
inval.J..d.
19
--- - -------------- -~- ----- -~--~ - - ~---~ -- --
----- ---
,
~
J,e
e
legal staff outside the clvil service system. 8
Requiring the Board to comport with civil serv~ce
requirements does not conflict with its authority to hlre and pay
necessary staff. However, certain other personnel provlsions of
the Charter would, if applied, infringe upon the power vested in
the Boardi accordingly, under settled rules of constructlon, the
later enacted and more specific provisions of Article ~JIII must
be deemed controlling. Thus, the Board has the power to
determine the Slze and make-up of its staff, unlike the city
departments for which the City Council determines staffing needs
{s " '3"'-'
eC~lOr. ..... U:>,.
Rent Board appo~ntroents, again unll~e those ~ade
by department heads, need not be approved by the City Manager
(section 704(a), 1305). Finally, except insofar as it retalns
power to disapprove unreasonable budget expenses, the City
Council may not abollsh positions in the Rent Control
Administration (Section 1109).
In addltion to the power to hire staff it dee~s necessary
to effectuate its duties under Article XVIII, the Board also is
authorized "to pay" such staff. Giving the word "pay" its common
and accepted meanlng, the Board is empowered to determine and to
finance from registratlon fees the amount of staff wages and
frlnge beneflts wnlch together constltute an employee's
8} The council's powe~ to hire or to delegate the hirlng of
attorneys under Sectlon 708b is limited to C1Vl1 matters.
Crlmlnal prosecutlons are undertaken in the naMe of the people of
the state and, thus, do not const1tute the legal bus1ness of the
Clty. Section 708g glves the City Attorney the power and the
duty to prosecute all crlmlnal matters. Thus, SMMC Sect10n 4611
is lnvalid to the extent it purports to delegate to the Board the
authorlty to hire attorneys to represent it in crimlnal matters.
20
i~e
e
compensation. CitY,and County of San Francisco v. Cooper, 13
Cal.2d 898,923 at n.13, 120 Cal. Rptr. 707,713 (1975).
The Board's power to determine its payroll is limited only
in that the Council retains the right to reVlew budget items
WhlCh involve an expenditure from or risk of loss to general Clty
funds. Again, this limitation is mandated by the inherent power
of the City Council with respect,to its budgetary affalrs.
"Indeed, lf J.t is assumed that the most important functJ.on of the
municlpal leglslatlve body, the Clty Councll, is to oversee the
expe~ditures of publlC funds entrusted to it, it is hard to
imaglne bow lt can do so effectively unless it has full control
ove:::- its largest expenditure ltem - the publlC payroll." J.Wl::'::',
"State Regulation of Local Labor Relations: the Demise of HO'TIe
Rule in California?", 23 Hastings L.Rev. 809 (1972); see also
Fitzaerald v. Badaracco, 202 Cal.18,
---"-
, 258 P.937,938 (1927).
A further questlon remains as to the Board's power to
negotiate with its employees and to enter into binding contracts
of employnent. While the Board's power to "hire and pay" would
see~ to co~prehend the power to negotiate wages and benefits, it
does not e~power the Board to set or negotiate hours or other
condltions of e~ployment. Nor is the Board empowered to execute
a me~orandu~ of understandlng WhlCh would constitute a binding
contractl Chula Vista Pollce Officers' ASSoc1ation v. Cole, 107
Cal.App.3d 242, 246, 165 Cal.Rptr. 598, 601 (1980), enforceable
against the Clty.
The Charter does not enpower any department or agency of
the Clty to negotiate labor contracts. Therefore, pursuant to
21
f_
e
Section 605, this power resides in the City Council. Pursuant to
Ordlnance No. 801, which was adopted to implement the
Meyers-Millas-Brown l\.ct (MMB), Government Code ~~ 3500 et seg: by
providing orderly procedures for the admlnistration of
e~ployer-employee relations, the City Manager or hlS delegee is
a~thorlzed to negotiate employment contracts to be approved by
the Clty Councll.
Ordlnance No. 1153 may be read as a valid delegation to the
Board of the power to negotlate with its staff regarding the
terms and co~ditions of employment. However, the Council cannot
delegate to the Board the power to ultimately execute a binding
e~p:o~~e~t cont~act.
MMB recognizes the right of all public employees to join
organlzations to represent them in their employment relationships
and imposes upon all public agencies, including chartered cities,
the obligation to bargain with such employee organizations with
respect to wages, hours and condltlons of employment. Government
Code S~3500, 3501(c); See Professlonal Fire Fighters, Inc. v.
Clty of Los Angeles, 60 Cal.2d 276, , 32 Cal.Rptr. 830, 841
(1963); ~untin9ton Beach Police Officers' Assoc. v. City of
Huntington Beach, 58 Cal.App.3d 492, 129 Cal. Rptr. 893 (1976).
h~lle not intended to preempt all aspects of labor relations In
the publlC sector, M~B has been construed to prohlb~t local
regulations which would frustrate 1ts declared pu~poses and
policies. Huntinston Beach ,!:;upra I 58 Cal.App. 3d at 501-02 t 129
Cal.Rptr. at 899.
22
I , ~
At
e
Mt-1B at Section 3505 imposes on "the governing body of a
public agency, or such boards, commissions, admin~strative
officers or other representctives as may be properly designated
by law or by such gover:ning body," an obligation to "meet and
confer in good faith regarding wages, hours and other terms and
cond~tions of employment with representatives of [ ] recognized
employee organizatlons." However, pursuant to Section 3505.1,
only the "governing body or its statutory representatlve" may
conclude a b~nding contract:
If agreement 1S reached by the
representative of the pub11C agency
and a recognized employee organiza-
tion or recognlzed employee organ~za-
tions, they shall Jo~ntly prepare a
written memorandum of such understan-
ding which shall not be bindlng, and
present it to the governing body or
its statutory representative for deter-
mination.
"As a general rule, powers conferred upon public agencies
and offlces which involve the exercise of judg~ent or dlscretion
are 1n the nature of public trusts and cannot be surrendered or
delegated to subordinates in the absence of statutory
author1zation." Ca1J.fornia School Employees Association v.
Personnel Commlssion, 3 Cal.3d 139, 144, 89 Cal.Rptr. 620, 623
(1970). See E. MCQull11n, 2 Municlpal Corporatlons, ~lO.39.
In Ba91ey v. City of Manhattan Beach, 18 Ca1.3d 22, 132
Cal.Fptr. 668 (1976), the Supreme Court held that beca~se
sections of the Govern~ent Code, lnc1uding ~3505.1 of MME,
speciflca11y delegate to local governing bod~es the power to flX
er.p~oyee corr.pensatlon, that power and duty cannot be delegated.
See also City and County of Sa~ Francisco v. Cooper, 13 Ca1.3d
..
23
\ '\: II"
(e
e
898, 929-30, 120 Cal.Rptr. 707,728 (1975) (construing ~l3088 of
the Education Code, since repealed, to preclude the School Board
from delegating power specifically granted to it by the State).
~agley, supra, involves a general law city; however, insofar as
the decision relies on ~3505.l of MME, which applies to chartered
clties as well as general law cities, the r~asoning of Bagley
would appear to preclude delegation by the City council of the
duty specifically imposed on it by ~3505.l to itself approve and
thereby make binding, emploYMent contracts. See Glendale C~ty
EnE19yees Assoc., Inc. v. City of Glendale, 15 Cal.3d 328, 337,
124 Cal.Rptr. 513,517 (1975), cart. denied 424 U.S. 943
(~erorand~~ of u~derstanding beco~es blnding contract upo~
approval of the govern1ng body).
Accordingly, wh~le the Board's delegated power under
ordinance 1153 authorizes it to "meet and confer" with its
employees as the representative of the public agency, any
negotiated agreement must be approved by the City council 1n
order to be binding. In view of the Board's charter power to set
employee salaries, the Council's review of wage and benefit
provislons in the proposed memorandum of understandlng is I1mited
to a determlnation that these terms are consistent with the
Board's approved budget.
IMPLICATIONS
ThlS opinlon atte~pts to address novel and extremely
cor.plex questior.s concern~ng how to integrate into the
preexisting structure of Santa Mon~ca's gover~~ent a large agency
wnlch was created by ~nltiative charter amendment to adm1~lster
24
.. IE II: 41
tit
e
an ambitious and pervasive rent control law and which has
operated for nearly two years in a largely autonomous manner.
This opinion responds to specific questions whic~ have arisen.
We have attempted to set out a framework within which to address
these issues. We recognize, however, that myriad other issues,
in the context of these questions, as well as those not yet
asked, wlll undoubtedly arise which will requ1re further
research. Hopefully, the fraMework of this opinion will provlde
guidance ~n answering the~.
Ordinance 1153, adopted by the C~ty Council on Aprll 14,
1980 declared the "independent power of the Rent Control Board to
deterrrllne 1 ts own personnel, flnanclal and budgetary pc l::.. C :lES. "
wblle much of Ordinance 1153 constitutes a valid delegation to
the Board and/or a proper recognition of its authority under
Article XVIII, it is our opinion that certain provisions of the
Ordinance cannot be construed in a manner consistent w~th the
Charter and with the City Council's undelegable legislative
responsibilities. Specifically, the following prov1sions are
considered invalid:
--- Section 4607 to the extent that 1t purports to g~ve the
Board the power to determine which of its positions are
classl.fl.ed;
Sectlon 4608 in its entlrety;
Section 4609 to the extent that the Board's independent
authority to determine its own personnel, f1nancial and budgetary
policies infringes upon powers expressly granted by the Charter
to the Personnel Board and the C~ty Manager and upon
25
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of the 1981-82 budget;
(c) consider adoption of legislation to protect the
rights and continued employment of existing Board employees
within the civil service system.
j6Lu,_S~(t<I~ S"k<k
Stephen Shane Stark.
Act~ng City Attorney
,~
\ / ..r:. ~ . _. 4 ,
r-O';.....v)~ ~
Susan L. Carroll,
Deputy Clty Attorney
. -7
rj) /"
,b} L"[1;.://;-I....-' ~'P./~-I-
Bettylou Borovay, J
Deputy City Attorney
27
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DATE
TO'
FROM
SlJBJECT
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CITY OF SANTA MONICA
INTER-DEPARTMENT MEMO
September 29. 1980 ~
Shane Stark, Acting City Attorney @
R. N. Aronoff, Director Administrative servi' ~
Expenditures for Rent Control Administration
----- - -- - - ----
Purchasing has been processing requisitions from Rent Control
based upon the premise that the Rent Control Board is an
autonomous agency not subject to the City Council's budgetarv
control.
Please advise this office of the appropriatenffis of such a
process. Specifically can the Purchasing Agent purchase goods
and services for the Ren~ Control Board without followi~g
Council policy and proceedures established for other City
functions!
R..'lA fmj
CC' Rent Control (Ref. Furch .Req _ 4ft 99045 & 99046)
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