Rialto Refuses To Schedule Referendum On Water Department Outsourcing

RIALTO—The city of Rialto will move ahead with the outsourcing of its water and sewer operations to New Jersey-based American Water Works Co. Inc., despite outsourcing opponents’ successful gathering of sufficient petitions to force a referendum on the takeover.
City officials, guided by city attorney Jimmy Gutierrez, are referencing what they claim is a technical glitch in the circulation of those petitions for the referendum as grounds deny the request for the citywide vote.
After more than two years of contemplating an arrangement by which American Water Works Co., Inc. would take over maintenance, operation and administration sans ownership of the city’s dilapidated water and wastewater system for 30 years, the city council on March 27 voted to do just that.
Under the terms of the deal, American Water Operations and Maintenance, Inc., a division of American Water Works, was to function as a local company known as Rialto Water Services and take over operation and maintenance of the water district. The city was to retain the district’s water rights.
The for-profit company would take on all aspects of operations, maintenance and billing, effectively running both the water and sewer utilities for the next three decades.
Some water and wastewater division employees were to be allowed to transfer into the city’s engineering or public works divisions, remaining as city employees with their public pension plans intact. Others would go to work with American Water, which was to be required to guarantee those employees will remain employed for at least a year-and-a-half with salary and benefits equal to those offered by the city. That guarantee was to sunset after 18 months.
According to city officials, the company had agreed to make somewhere in the neighborhood of $45 million in upgrades to the water system. American Water has also agreed to assume all debt owed by the city’s water utility division.
In return, city officials agreed to a 114.8 percent increase in water and wastewater rates by 2016, such that the average water bill of Rialto households utilizing 17,000 gallons per month will jump from the current rate of $26.27 per month to $64.14 monthly and increase the wastewater treatment fee from $25.97 to $61.46 as of January 1, 2016.
Members of the Utility Workers of America together with citizens irate at the prospect of the rate hikes organized a signature drive to require that the outsourcing be approved by the city’s voters. The city council’s 4-1 vote with councilman Joe Baca, Jr. dissenting was an unpopular one, and a capacity crowd attended the March 27 meeting to lodge protests.  The petitions collected in April and early May requesting the referendum were handed off to the Rialto city clerk’s office on Saturday May 12,  The union submitted 6,379 signatures to meet the threshold of 3,800 valid signatures of registered voters needed to force the matter to a vote. According to the city clerk’s office, 1,545 of the signatures were determined to be invalid during a certification process conducted by the county Elections Bureau, leaving 4,834 valid signatures, which seemingly qualified the call for a referendum.
On June 26, however, the city council voted against scheduling the referendum on the outsourcing agreement to coincide with the November November 6 general election.

Jimmy Gutierrez

The council’s rationale was based upon city attorney Gutierrez’s rendered opinion that the referendum applicants had failed to include with the signed petitions when the signatures were being gathered a copy of the ordinance authorizing the deal with American Water, including the several-hundred-page-long concession agreement between the city and the New Jersey-based company.
Gutierrez’s citation appears to be to California Elections Code Section 9238, which states, “(a) Across the top of each page of the referendum petition there shall be printed the following: ‘Referendum Against an Ordinance Passed by the City Council’ [and] (b) Each section of the referendum petition shall contain (1) the identifying number or title, and (2) the text of the ordinance or the portion of the ordinance that is the subject of the referendum.”
Petition circulators did offer a copy of the city council resolution to city residents before they signed the petition. There is a legal question as to whether that inclusion would have provided the signers with enough context and information upon which to make an informed endorsement of the petition or if, as Gutierrez is suggesting, voters needed to be provided with the full text of the agreement with American Water as was approved by the council on March 27.
Utility Workers spokesman Mark Brooks told the Sentinel that the union is now contemplating legal action to force the city to conduct the referendum.
“We are studying what the city did before determining what action we will take,” Brooks said. Without getting into specifics, Brooks said “It appears the council acted on very bad advice with regard to whether the referendum qualified. We are examining all of our options.”
Brooks said the union was mindful that there is a deadline for items to appear on the November ballot that will elapse later this summer, requiring timely action in challenging the council’s decision.

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