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HomeMy WebLinkAboutC03400 PS Desert Resorts CVA ReorganizationCITY OF PALM DESERT Office of the City Manager Staff Report REQUEST: REQUEST FOR CITY COUNCIL DIRECTION RELATIVE TO CVA REORGANIZATION SUBMITTED BY: Carlos L. Ortega, City Manager DATE: October 13, 2005 CONTENTS: 1. Draft verbatim minutes from City Council Meeting of August 25, 2005 2. Councilmember,Jean Benson's Memorandum of August 23, 2005 3. Ranch Mirage City Councilman Dana Hobart's Letter of August 9, 2005 4. City Attorney Memorandum Dated 09/14/05 entitled, "CVA Reorganization of the Executive Committee to Include Private Sector Voting Members" RECOMMENDATION: By Minute Motion, provide the City Council liaison to Palm Springs Desert Resorts Convention & Visitors Authority with an official position on the CVA reorganization. DISCUSSION: As the Council is aware, after Mike Fife left the CVA, an ad hoc committee was appointed to look into both organizational issues and internal issues of the CVA. The committee submitted a recommendation to the CVA covering both of these areas. With regard to the internal administrative issues, those have begun to be implemented. One of the recommendations of the committee was that the CVA double its membership on the Executive Committee so that it would include non -elected members. The idea would be that each city would be given two seats as opposed to the current one and that the second vote would be reserved for other than elected officials. There has been a lot of discussion about this, and the Attorney General has been asked to provide an opinion as to whether or not a public agency has the authority to delegate its, fiduciary responsibility to community members. CITY COUNCIL STAFF REPORT OCTOBER 13, 2005 RE: REQUEST FOR CITY COUNCIL DIRECTION RELATIVE TO CVA REORGANIZATION The other recommendation that came forth from the committee was that the CVA should keep its current name. I had discussed this previously with Council, and although there has been discussion, the Council has not provided official guidance on how to proceed on this matter. Another issue that will be presented to the CVA Executive Committee at its meeting of October 181h is one that you may have read about in the newspaper. Palm Springs is requesting that the CVA hire a sales person to be responsible for booking conventions and meetings for the new Palm Springs Convention Center. I have spoken with Councilmember Benson, and she would like to have Council's input on this request as well. CARLOS L. ORTEGA CITY MANAGER 2 The following is a verbatim transcript of Item XIV-E1 (Update on the Palm Springs Desert Resorts Convention & Visitors Authority) from the City Council meeting of August 25, 2005: Key BAC Mayor Buford A. Crites JMB Councilmember Jean M. Benson RSK Councilman Richard S. Kelly RAS Councilman Robert A. Spiegel JF Mayor Pro Tern Jim Ferguson BAC Councilwoman Benson? JMB Well, you have the report of whero I've spent my summer. If you have any comments, I'd be happy to relay them when we meet again in September. (Inaudible) some of the actions that were taken that I've outlined in this meeting, it does look like the expansion of the Executive Committee is a foregone conclusion (inaudible) most people wanted it. There was some discussion on whether by doing and quitting the various committees 'Nas going to disband (inaudible) the HIBC... RSK You're a long way from the microphone. BAC Yeah JMB What? BAC He can't hear you down there. JMB Oh, I'm sorry. I said there was some -discussion amongst the members whether by incorporating these various committees, the Audit, the Finance, the Personnel, into the Executive Committee and the Marketing (which has yet to be decided how the Marketing Committee is going to work) will disband the HIBC, but that will come up again at the 16`h meeting. RAS Dick Kelly had a comment. BAC Yes sir, Mr. Kelly. RSK I just ... I made that comment to Jean before, but I want to make it again because there was a comment in your report that we didn't say anything, so I want to emphasize I am definitely opposed to anybody who's not responsible to the voters being on the Executive Board and making decisions to spend public funds, so on the record, I am very much opposed to non -elected officials being on the Board. JMB And there is probably a split. Have you read Dana Hobart's letter that said he agrees with that, and there are ... there is support amongst some of the other Page 1 of 3 members, too. And I think it's all coming down really as to what the Attorney General says, whether it is or is not illegal. RSK Whether he says it's legal or not, 1'rr still... JMB You're still against it. RSK ...still opposed. JMB Right, I've noted that. BAC I might add in that comment that if the CVB wishes to give cities two votes per city and then let each city decide how they choose to allocate those, I think that would be acceptable to us, and Palm Desert could have... RSK Not to me. BAC No, Palm Desert could have two Councilmembers... RSK But I'm not...l don't agree with any city... BAC Having that. RSK ...putting on the Board there (inaudible) who don't answer to the voters because they'll influence decisions, and it's our money.. BAC Alright. Okay, so noted. And...you know, I certainly would be opposed to anything that forced cities to have one non -elected person on that. I think at the very minimum that's the City's business, not the CVA's business. And I know I've said this a lot of times, and I'll say it once more, I think the name "Palm Springs" is great for our advertising and great for a lot of the promotions and things, but we are way past time for the entire Visitors and Convention Authority to be called the "Palm Springs Desert Resort." It simply needs to be called the "Desert Resorts Convention and Visitors Authority," and then we use names of cities and such where they're appropriate to help in publicizing that. So my vote, at least, is going to be to have that name changed as a part of any kind of vote of approval for being part of the Authority. So... RSK I concur with that also. RAS I do too. It's got to be changed so it doesn't look like everything is Palm Springs. If they won't go along with that, maybe it can say the "greater Palm Springs." RSK Well (inaudible) the same thing. JF (inaudible) been there JMB That was defeated quite a while ago on the "greater" one when we first started. Page 2 of 3 Nobody wanted that. But it also has to be decided which of these changes have to come back, whetherthey're bylaw changes orJPA changes, and whetherthey have to come back to the Councils or not BAC We could certainly pass along that at least some of the members of this Council have a... JMB Right, I will do that. BAC ...very pointed, very real concern with that issue and the other ones that we've expressed as well. Are there other items to forward back through Jean to her colleagues on the CVA? With, again, our thanks for spending the summer doing things that have been for the value of all of us that we haven't had to do. Thank you. Page 3 of 3 Memorandum City of Palm Desert Office of the Assistant City Manager Community Services Division To: Honorable Mayor and Members of the City Council From: Councilmember Jean M. Benson Subject: Palm Springs Desert Resorts Convention & Visitors Authority Update Date: August 23, 2005 I am writing this report as Palm Desert's representative to the Palm Springs Desert Resorts Convention & Visitors Authority (CVA) and to give you an update on the activities of the CVA. Last month, I distributed a copy of the Ad Hoc Committee's proposal for reorganization; I received few comments back. Since then, this report was presented to the Executive Committee of the CVA at its meeting of August 16, 2005. While the report addresses and proposes solutions to many of the current needs of the CVA, I still have concerns with specific areas of the proposal. First and fore'nost is the lack of a firm legal opinion that the Executive Committee can be reorganized to include private sector, non-public voting members. While three similar legal opinions were distributed at the beginning of the meeting, all saying that that process would be legal, none of us had time to review them, nor did we have the opportunity to take them back to our own City Attorneys for review, opinion, and recommendation. I think the Executive Committee was in an awkward position, since this information was lacking. The Executive Committee did approve directing legal counsel to come back with a proposed motion which increases "the ex- officio membership from three (3) to nine (9) without prejudice to the three (3) current members for a total of twelve (12) until the end of the year. The nine (9) members are appointed one each by the cities and the county." The City Manager and I have discussed whether or not changing the Executive Committee membership requires an amendment to the Joint Powers Agreement (JPA); both of us agree that it does. The Executive Committee clearly has the authority to create committees at its discretion to provide for the organization and administration of the Bureau, and this can be done with Executive Committee action only. A JPA amendment would require that each member city and the County take appropriate action on whether or not to add private sector voting members. I know Carlos has asked Dave Erwin to review this subject and make a recommendation to the City Council as to how it should proceed. Memorandum to City Council August 23, 2005 RE: Palm Springs Desert Resorts Convention & Visitors Authority Update Agency Counsel was also directed to bring back to the Executive Committee at its meeting of September 20, 2005, the following: 1) Bylaws amendment that would incorporate the Audit Committee, Finance Committee, and Personnel Committee; 2) How to implement the Sales and Marketing Committee under the current JPA Bylaws structure recommended in the plan. The Executive Committee also approved the goal that private sector funding would equal half of public sector funding within five (5) years. The final action taken was to adopt the interial organization recommendations as well as the recommended performance standards as general policies that are embraced by the Executive Committee. While that motion carried, I opposed it because the proposed plan includes language which states "CVA and Palm Springs Convention Center will explore consolidating sales efforts to achieve efficiency designed to increase sales and reduce expenses." I have strong concerns about this consolidation effort in that I do not believe, nor does the Marriott Corporation believe, that this addresses the needs of cities otherthan Palm Springs, which is about ready to open its new convention center. In my opinion, augmenting the Palm Springs staff with CVA. staff in an effort to keep the new convention center and Palm Springs hotel rooms filled is in conflict with the best interests of the other member cities. While Palm Springs will say there will be a trickle down effect, I disagree, and so does Doug Watson of the Marriott. Planning site visits specific to one venue or one city is not, in my opinion, in the best interests of all Valley cities. I am also concerned that the proposed plan delegates a tremendous amount of administrative responsibility to the new committees which it recommends. The success of the proposed plan lies heavily on the effort of those appointed to the new committees. In my experience, I have found that it is difficult to get the level of participation that would be required to run the CVA, which is what the plan proposes. I know that publicity surrounding the CVA has created a desire to fix things now, and I am concerned that we are not taking the time for proper investigation and review. I am in favor of anything that will make the CVA stronger for the whole Coachella Valley. I do not want to rush the process, however, just to meet the demand created by the publicity. We have a wonderful opportunity to address specific areas of need, and it should be done with as much information as can be gathered and as much thought and discussion as necessary. Memorandum to City Council August 23, 2005 RE: Palm Springs Desert Resorts Convention & Visitors Authority Update l am attaching a copy of a letter, presented to the Executive Committee by Councilman G. Dana Hobart of Rancho Mirage, which offers his assessment of the proposed reorganization plan. I have to say that I share his concerns in slowing the process and allowing us to investigate whether or not these concerns are founded or unfounded. I hope you will take the time to let me know your concerns, suggestions, and/or input. The City of Palm Desert needs to be very careful as it proceeds through this process, and I want to be as confident as possible that I am representing the views of my colleagues. JEAN M. BENSON, JMB:srg:mpg COUNCILMEMBER :J/�_fV. _ i• I� _/ I I� .. i./: ../.� •I� /� ll �� ,)I ,l -, I� � - ��, �f I' I l� �-��i -i�t•./ I��.. � C August 9, 2005 Dear Colleagues: It is altogether uncertain to me that anv drastic: change in the make-up of the JPA Executive Board is warranted. The steam driving the engine for change came from the recent exposures surrounding Michael Fife (and others). I was not on the board during that period. Fife was terminated in March 2005, shortly before my May 2005 arrival. However, I have examined much of what occurred leading up to the storm and the termination of Mr. Fifz% What I observe is that the JPA Board dealt swiftly and appropriately with Mr. Fife. The Board hired an Interim CEO who has done a superb job in the most trying of circumstances. The Board and Steve Morris have put in place new policies meeting all of the finance department shortcomings noted in the Conrad & Associates audit. It is clear to me that if the finance department leadership had earlier brought to the Board's attention the problems concerning Fife and the procedural shortcomings of that department, the Board would have acted that rauch sooner. CVA's Reaction to the Storm Now we have, as a consequence of the hullabaloo surrounding the former staff, a reorganization committee formed to offer sucl to correct or mitigate the financial and personnel problems that led to the storm. The 12-member Reorganization Committee had six public members and six private members, mostly from the hotel and restaurant conununity. The Committee had four people from Palm Springs alone, while Rancho Mirage and some of the other cities had none. While we appreciate the dedication and tirne devoted by our colleagues, the end product must still be examined closely by each council member. Each city is required to ratify any structural change in the JPA that is approved by the Executive Board. ADMINK T RA T ION COMCIUNITY DCVCLOPMEf{T HPIANCE h-OUSING AUT4.ORITY PUBLIC LIDRARY PUBLIC WORICS Tel (760) 324-4511 Tel. (760) 328-2266 Tel. (760) 770-3207 Tel. (760) 770-3210 Tel. (780) 34 ) -7323 Tel. (760) 770-3224 Fax. (760) 324-8830 Fax. (760) 324-9851 Fax. (750) 324-0528 Fax. (760) 770-3261 Fax. (760) 341-52-13 Fax. (760) 770-3261 69-825 H-)G14VIAY i -1 1 / RANCH-0 MIRaGC, CA 92270 nr�aiby.ci.ranch o-mirage.ca.us August 9, 2005 Page 2 We are particularly pleased by the Committee's oversight recommendations, which we consider essential. On the other hand, we do not believe the Chairperson of the Executive Board should ever be someone other than a public member. Who Will be in Charge of Public Funds? The recommendation that concerns Rancho Mirage most is that which deals with the question, Who will be in charge of the public funds which comprise about 85% of the CVA's (currently 55,000,000) budget? And who will control the .IPA internally? The Committee has recommended that each Member City (plus the County) appoint t1Xo representatives to the Board: One from the City and one from the business community, with each such member having one -vote. This translates into 9 public votes and 9 private sector votes, on an 18-member board that wot:.ld essentially control millions of dollars of public monies. The Committee also recommended that a new committee be established to devise a plan whereby, within 5-years, the Hospitality Industry Business Council will try to increase its dues or contributions to a sum equal to 1/2 of the collective contributions of the cities. Using current operating budget figures, the HIBC side would have to contribute approximately S2.5M as the cities collectively contribute about SSM. Serious Legal Issues Raised First, however, we must deal with some serious lep-al questions this recommendation raises. Under the California Joint Exercise of Powers Act (Government Code section 6500 et seq.) it must be determined whether public agencies can legally delegate their basic authority over expenditures of public funds to the private sector. Another question is raised. Does such an act, if legal, require that, where public votes were held, city residents who voted to approve the use of tax dollars for developing tourism business, while assuming it would be under public control, require another vote of the public to authorize or ratify giving the private sector joint authoritv over these tax dollars? The Act speaks in terms of Joint Power Authorities being formed between "two or more public agencies by agreement..." Does this preclude the private sector- from becoming voting members of the JPA with equal power to disburse public funds? The JPA Board of Directors should obtain adequate legal guidance before embarking on this unprecedented move. Before the proposed voting structure modification is permitted to move forward in the slightest dejeree we must at least secure an Opinion issued by the California Attorney General. If we err- in this decision it will be an expensive mistake and we will be held responsible by our electorate. August 9, 2005 Page 3 Should the Private Sector Control Spending of Public Funds? Ignoring the legal questions for the moment, an equally fundamental issue concerns the propriety of public entities structuring the JPA Board in such a manner as to place control or virtual control of public funds in the hands of the private sector. Business people owe Fiduciary duties to their boards of directors aril to their stockholders, but most assuredly not to the public. If mistakes are made, who among the private sector is responsible to the tax paying public? Right, we remain responsible. Rancho Mirage currently contributes about S725,000 annually to the operation of the CVA, and that figure rises annually. Our city believes it is both unwise and contrary to the spirit of our taxing authority to take these tax dollars and virtually surrender their control to a valley -wide collection of hoteliers and restaurateurs. Under the proposed change, even a 9-to-9 tie vote would cause affirmative motions to lose. With one defection by any member city, control of Rancho Mirage's public funds would then lie in the hands of private entrepreneurs, without recourse. The same is true with your city's contributions to the CVA. What happens if the Committee's proposal is adopted and one or more years later the cities conclude a mistake was made by endorsing the Committee's recommended changes? If the cities determined that they wanted to return to the rules in place now (August 2005), or if they wished to implement any different degree of control over the many millions of tax dollars being spent, could it be achieved? Probably not. Even if the cities unanimously supported returning to the "old rules" or any other modification, a motion to do so could be defeated by the private sector alone. Under our Joint Powers Agreement such votes take a 2/3 .majority. Meanin(-,, it would oniv take 7 of the 9 private members to defeat anv future proposed Amendment to the Joint Powers Agreement. Any city that felt aggrieved by having its vie\,,,s stymied by a block of private sector votes would have but one alternative. Thev could leave the organization. Even this is onerous because under the Joint Powers Agreement this requires the departing city to continue to fully fund the CVA for a minimum of one-year beyond the date they filed notice to leave. Other Solutions Are Available Rancho Mirage supports the hospitality industr/ being better represented oil the JPA board. Currentiv there are three non-votinu. ex offcio members. We suaaest thev be increased to a total of five ex officio members. This would give the business community substantial input on every conceivable issue that comes before the Executive Board. August 9, 2005 Page 4 Do not forget that under the JPA By-laws the; HIBC (comprised of 17 appointed hospitality industry members) is already auff.orized to "(1) Develop annual budget, marketing plan, and other related activities for submission to Executive Committee for approval. (2) Develop measurable performance criteria to evaluate CVA perfonnance. (4) Meet monthly with President and staff to review performance, revenues and expenditures. (5) Approve monthly financial reports for distribution to Executive Committee," and much more. Rancho Mirage opposes any change in the voting composition of the JPA Board. If we are in the minority on this question, we would re,uctantly consider other approaches. First, at the August 16th CVA Board meeting, Rancho Mirage will offer a Motion to amend the by-laws, Section 2, to allow expansion of the HI.BC membership on the JPA Board to include an additional two ex offtcio members with all rights except that of voting. If this alternative to the Committee recommendation fails to obtain majority support from the Executive Board, Rancho Mirage will then offer a Motion to require the CVA, before it considers any reorganization scheme that involves giving the HIBC voting rights on the Board, to first obtain an opinion from the California Attorney General concerning the legal issues raised. If the Attorney General motion fails Rancho Mirage would continue to participate, but under protest with the understanding that if any reorganization occurs that alters the voting authority of the JPA Executive Board our City reserves the right to seek an injunction to halt implementation of the plan until the courts resolve the legal issues. If, at the August 16tr meeting the Committee's recommended reorganization plan is offered in the form of a motion, Rancho Mirage will offer an amendment that, if passed, would reduce the number of proposed HIBC members from nine, to the current three; the motion would include a provision that would allow them a half -vote now. The motion would also include a provision that the half -vote level would continue until such time as the HIBC reaches the financial contribution level of 50% of the cities' collective contributions to the CVA general fund. At that time, under this motion, the three HIBC members would each receive a full vote, for a total of three votes on the Executive Board, which would then have 12 voting members. Further, the motion will also provide that the fill -vote level of votinu would continue only so long as the private sector contribution remains at or above 50% of the public sector contribution of monies. It would be our intent that all but ten percent of the 50% contribution be in the form of actual dollars coming into the CVA's general fund. Offsets, and other credits could not exceed 10% of their financial quota. August 9, 2005 Page Under this alternate formula the control of the Executive Board would substantially remain in the control of the public sector. Exienditures, by-law changes, and general motions require a majority vote. Amendments to the Joint Powers Agreement require a 2/3`d vote of the voting members. If sharing spending authority over public funds is legally permissible, at least when the HIBC's 50% contribution to the CVA budget is achieved it would be somewhat more palatable to increase their participation to a fi.1l vote. But please do not misunderstand: Rancho Mirage believes the appropriate and most prudent course is to add two ex ofTcio HIBC ineinhers and make no chanze at all in the voting .structure. Conclusion An argument is advanced by the business corr.munity, "Since we spend so much money already to get people into our businesses so that the cities can get their sales and TOT taxes, this spending, together with dues and other credits should be sufficient financial contribution from us." The reality is that all businesses advertise because they know it is necessary to achieve the profitability their shareholders demand. They do it to make money for themselves. Cities had to decide if they would support the services of their communities by property taxes or TOT and sales taxes. Most chose the latter. Make no mistake about it, these monies we provide the CVA are tax dollars fi-om our general funds. One does not see Congress turning over their control of the purse strings to the private sector, even though it was the private sector that paid the taxes and created the means for others to pay yet more taxes. That is not how government works; we should not be sharing control over tax dollars with anyone. We were elected to guard the public treasurv. Rancho Mirage is presently the 3rd highest contributor to the funding of the JPA. Some argue for proportional voting, which would give due deference to our significant contribution to the CVA. In other words, voting which would give Rancho Mirage and all other cities the number of votes their proportionate financial contributions warrant. Historically, however, Rancho Mirage has beer keenly aware of the camaraderie and synergy obtained by keeping the cities unified 2.nd the Coachella Valley marketing effort seen as a "single unit." That remains our preference. The Committee's recommendation further dilutes each city's authority over its own funds. Under the Committee's plan, if one city joined -, ith a unified private side, as a voting block they could completely control the public :-unding of the CVA. Even with the eight other public bodies in opposition. August 9, 2005 Page 6 If we are required to vote August 16th on sotric restructuring of the Executive Board voting rights, which 1 hope we are not, we urc;e you to consider Rancho Mirage's motion to secure an Attorney General Opinion. If that fails, please consider our proposed alternatives. Respectfully, t ` Dana Hobart L: C MEMORANDUM To: David Erwin CLIENT -MATTER No.: 72500.00001 FROM: Elizabeth S. Kim DATE: September 14, 2005 RE: CVA Reorganization of the Executive Committee to Include Private Sector Voting Members. BACKGROUND You have asked whether it is legal for public agencies to delegate or share their joint powers agreement ("JPA") authority to spend tax dollars with private parties. The Palm Springs Desert Resort Convention and Visitors Authority ("CVA") has proposed reorganizing the CVA's Executive Committee to include private sector voting members. Last July, a copy of the Ad Floc Committee's proposal for reorganization was circulated to the Executive Committee of the CVA and various City Attorneys of the cities comprising the CVA. While three legal opinions have stated that the proposal would be legal, many members are concerned that the reorganization would constitute an unlawful delegation of municipal authority over expenditure of public funds to the private sector. ANALYSIS A. Prohibition on Delmation of Municipal Authoritv First, as demonstrated by the differing legal opinions submitted on this matter, there is no general consensus on whether such a reorganization would constitute an illegal delegation of municipal authority over public funds. Although the provisions of Cal. Const. art. XI, § 1 I prohibit the legislature from delegating to a private person or body power to control. appropriate, supervise. or interfere with public funds, the prohibition does not apply where it is the local agency. not the legislature, that is Going the delegation.' Delegation of municipal authority by a city itself. while not governed by the provisions of Cal. Const. art. XI, § 11 is subject to the settled rule against delegation of legislative power. Generally, a city may delegate specific administrative power to subordinate boards orFersons subject to imposition of standards that constrain the discretion of the board or person. The power delegated must be in fact administrative and not legislative (e.g., power to grant a conditional use permit as opposed to a change in zone classification) and the standards which guide the administrative official must be California Association of Retail 'Tobacconists v. State. 109 Cal. App. 4th 792. 828-29 (2003). See, e.e., Pacific Lecal Foundation v. Brown, 29 Cal. 3d 168, 201, 172 Cal. Rptr. 487 (1981). Baalev v. Manhattan Beach, 18 Cal. 3d 22, 132 Cal. Rptr. 668 (1976); Kuiler v. Yocum, 69 Cal, 2d 371, 71 Cal. Rptr. 687 (1968). RVPUBTSK'.700532 I sufficiently definite and certain to ensure the action taken will not be left to the uncontrolled discretion of that official or board.3 In this case, California Gov't Code §§ 6500 el seq. specifically allow public agencies to form joint powers authorities to exercise common powers. The guidelines for such delegation of power are set forth in the joint powers agreement, which must "provide for the method by which the purpose [of the JPA] will be accomplished or the manner in which the power will be exercised."4 B. Joint Powers Authority Under Cal. Gov't Code § § 6500 et seq., public agencies may enter into agreements to jointly exercise common powers. A joint powers agreement may establish a joint powers agency to administer or execute the agreement. As l have previously stated, it is my opinion that such agencies may include private, non -elected persons as voting members. The Gov't Code permits individual cities, through a joint powers agreement, to delegate any of their common powers to a joint powers agency. That joint powers agency —in this case, the Executive Committee —is its own separate public entity under the law. Accordingly, each of the officers of the joint powers agency will be public officials of that agency, and will be subject to the same legal obligations (e.g., Political Reform Act, Brown Act, etc.) that the member agencies are subject to. In this case. all of the cities comprising the CVA have common authority over expenditure of aublic funds. Under the plain language of the government code, the cities, through a JPA, may delegate their common authority to a joint powers agency (i.e., the Executive Committee). Furthermore, there is no legal requirement that the Executive Committee be comprised exclusively of elected public officials. On the contrary, Cal. Gov't Code § 6506 specifically provides that such agencies may be one or more of the parties to the agreement or a person, firin or corporation designated in the agreement. Moreover, Cal. Gov't Code § 6508 provides that a joint powers agency "may" be composed exclusively of officials elected to one or more of the governing bodies of the parties to the JPA. It must be emphasized that the authority is permissive and not mandatory. Accordingly, it is my opinion that the reorganization of the CVA to include private sector members is legal and would not constitute an unlawful delegation of municipal authority over public funds. T'he Burbank -Glendale -Pasadena Airport Authority is a good example of this type of organization in practice. C. Burbank -Glendale -Pasadena Airport Authority: A Case Studv In June of' 1977, the cities of Burbank, Glendale, and Pasadena formed an airport authority to acquire and operate the Burbank airport. In 1991, the Joint Powers Agreement See Kuler Yocum, 69 Cal. 2d 371, 375-76, 71 Cal. Rptr. 687 (1968); Ba2lev v. Manhattan Beach. 18 Cal. 3d 22, 132 Cal. Rptr. 668 (1976); Count- of Riverside v. Su_nerior Court, 30 Cal. 4th 278. 132 Cal. Rptr. 713 (2003). Cal. Gov't Code § 6503. RVPUIi'TSK'%700532 I created an agency known as the Burbank -Glendale -Pasadena Airport Authority ("the Airport Authority"). Under the RA, each joint powers city appoints three commissioners to the nine - member commission that governs the Airpo:-t Authority. There is no requirement that the Airport Authority be comprised of elected public officials. Although council members have been appointed to the Airport Authority in the past, the usual practice is for the city council to appoint former council members or other non -elected individuals of their respective cities. In 2000, the Airport Authority was involved in a lawsuit over whether it could, through a joint powers agreement, delegate its eminent domain power to a joint powers authority for the ownership and operation of an airport.5 Under the Gov't Code, cities have a general power over eminent domain. However, defendant property owners argued that the three individual cities could not delegate their municipal power over eminent domain to a joint powers agency (i.e., the Airport Authority). Although conceding that the cities had the right to form a joint powers agency, the defendants argued that the cities did not have the power to transfer their eminent domain power to that agency. In particular, the defendants attempted to draw a distinction between a joint exercise of the eminent domain power by elected officials, and a transfer of that power to a entity —such as a joint powers agency —that is not publicly accountable. Moreover, defendants argued that no statutes expressly give the Airport Authority eminent domain power, and that the Airport Authority cannot grant the power of eminent domain to itself. The California court held that the joint powers cities can delegate their municipal authority over eminent domain to a joint powers agency. The Court reasoned that Gov't Code § 6502 authorized cities, acting together, to exercise their powers jointly.6 The predecessor statute to Government Code § 6502 originally granted no new powers and merely created a new procedure for public agencies, such as cities, to exercise their existing powers jointly. However, the Legislature later enacted statutes allowing contracting parties (i.e., local governmental entities entering into a joint powers agreement) to create a separate joint powers agency `'to exercise on their behalf powers they hold in common."' Therefore, under Gov't Code § 6506, the agency administering the joint powers agreement may be either: (1) a party to the agreement, or (2) a public agency or other entity constituted pursuant to or designated by the agreement. In the latter case, as Gov't Code § 6507 states, "the agency is a public entity separate from the parties to the agreement." The court went on to quote the language of Gov't Code § 6506, which states that "the agency or entity provided by the agreement to administer or execute the agreement may be one or more of the parties to the agreement or a person, firm, or corporation, including a nonprofit corporation, designated in the agreement. Gov't Code § 6508 then provides that "if the agency is not one or more of the parties to the agreement, but is a public entity... pursuant to the ' Burbank -Glendale -Pasadena Airport Authority v. Hensler, 83 Cal. App. 4th 556 (2000). `' Cal. Government Code § 6502 states, in relevant part: -If authorized by their legislative or governing bodies, two or more public agencies by agreement may jointly exercise any power common to the contracting parties... It shall not be necessary that any power common to the contracting parties be exercisable by each such contracting party with respect to the geographical in whicl- such power is to be jointly exercised." Burbank -Glendale -Pasadena Airport Authoritv v. Hensler, supra, 83 Cal. App. 4th at 562, quoting Rider v. Citv of San Die,o (1998) 18 Cal. 4°' 1035, 1050: Stats. 1947, ch. 1045. pp. 2446-2447; stats 1949, ch. 84, � 1. pp. 329-330, adding Gov. Code §5 6500-6512. RVPUB',FSK%700532 I agreement... said agency shall have the power to sue and be sued in its own name." Thus, the Airport Authority will be publicly accountable as its own separate legal entity. The court concluded that the cities of Glendale, Pasadena, and Burbank had the power to create a separate joint powers agency to exercise the powers the;, hold in common. Similarly, in this case, the CVA. has the power to create a joint powers agency — that may or may not be composed exclusively of elected officials to exercise any powers that the member cities hold in common including their basic authority over expenditure of public funds. As with the power of eminent domain, there is no statute that specifically gives public agencies the power to delegate their authority over the expenditure of public funds to the Executive Committee. However, such authority may be inferred by the language of the Government Code. CONCLUSION Although it is my understanding that a reorganization of the CVA will not constitute an unlawful delegation of municipal power over public funds. the fact of the matter is that there is no firm legal authority on the issue. In light of the recent controversy surrounding the CVA. as well as strong dissenting opinions from individuals such as councilmember Dana Ilobart of Rancho Mirage, it may be prudent to secure an Attorney General opinion on this matter. RVPtJBA SK\700�32.1