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This letter responds to public statements made by Mayor Arreguin and those of various city council members (collectively the “Council”), concerning the recent settlement agreement (SA) with the University of California, Berkeley (“UCB”) in which the City waived all objections to UCB’s expansion plans. Those statements substantially misrepresented both the content and legal effect of that agreement and the power of the Council to endorse the settlement. Notably, the Council admitted in these statements that it failed to oversee the proper collection of city taxes and fees from UCB and the tenants of UCB. That failure is a direct violation of the City of Berkeley Charter and state law, and cost the City millions of dollars that should have flowed to the City’s General Fund.

The Council must immediately set aside its approval of the SA, work cooperatively with Chancellor Christ to remove the illegal clauses of the SA in a new or amended SA, and then follow the legally mandated public process before your Council approves a new SA. We do not envision that this should be a problem given the Mayor’s representations that the SA is an “historic agreement” that “paves the way for a new era of cooperation between the City of Berkeley and UC Berkeley.” Surely, under these circumstances, UCB will fully cooperate with the Council in removing the provisions that are illegal and unauthorized under the Berkeley Charter or involve improper “predetermination.” We anticipate that UCB will also cooperatively leave its financial obligations in place although they do not come close to compensating Berkeley’s taxpayers for UCB’s utilization of public infrastructure and services. 

Your Council’s view that people reading the SA or comments about it must be “confused” is an interesting rationalization. The fact is that there have been several clear-thinking commentators who have pointed out just how “bad a deal” the SA is for Berkeley. Mr. Metzger, for example, went through the numbers of the SA and showed in great detail how the residents of Berkeley are losing out, despite the meaningless and unproven claim by your Council that UC is paying more money to Berkeley than any other host city. 

Contrary to your Council’s dismissive attitude toward Berkeley’s residents, they are very clear about the SA and their concerns are well justified. The SA reflects that our current Council members and mayor are progressives by convenience, not values. When the opportunity came along to make some (not much) money and partner with UCB, suddenly your progressive values disappeared. Your former Resolution supporting the tenants of 1921 Walnut from being evicted by the university, the CEQA litigation your Council entered over environmental abuses by UCB, the refusal to settle short of obtaining the annual $21 million desperately needed for public services, including caring for the disenfranchised and homeless persons in Berkeley, and concerns about the students having lower cost housing – all disappeared. 

With the exception of Kate Harrison, when the pretenses fell, you and your Council appeared through the SA as elected officials who were pro-development for money, anti-rent control, anti-environmental safeguards, against preserving Berkeley’s unique historic resources, and fine with students being over-charged for rent by UCB through use of luxury apartments, instead of standard dorms. The turnaround was shocking and the video of the mayor and the Chancellor congratulating each other did nothing but bolster the image of opportunists the voters inadvertently elected to handle the City’s affairs. Put another way, your Council includes only Kate Harrison “with the heart of a public servant.” 

That is why your Council is hearing such a flood of valid criticisms about the SA and your performance. The tens of thousands of dollars your Council recently approved out of taxpayer money for public relations gimmicks will not solve the problems. The courts also cannot fix many of the problems reflected in the SA. As appellate courts have explained over the years in written decisions to litigants unhappy with the decisions of their elected officials, the solution is not to look in the courthouse for help but instead “throw the bums out.”  

The Council’s statement that the SA “brings the University into compliance with the City’s Parking Space Rental Tax provisions in a way that treats similarly situated entities (the University, the City, and BART similarly” is untrue. The SA makes clear that the only way UCB will make efforts to collect parking taxes is if the City first collects from its own parking lots and requires BART to pay parking taxes as well: 

4.8 The University will cooperate in good faith with City efforts to collect and 

remit the City Parking Space Rental Tax from University-owned lots. The University will make best efforts to collect the tax from users by the date that the City begins collecting the tax from City-owned lots and demands collection by BART. The City acknowledges that the administrative processes between the City and the University related to collection of the tax must be established and that such establishment could preclude collection of the tax on behalf of the 

City prior to January 1, 2022. (Emphasis added.) 

The terms “cooperate in good faith with City efforts to collect” the taxes and the City acknowledging that there first needs to be “administrative processes” established between the City and UCB are vague and unenforceable requirements. Further, this strange arrangement violates the City Charter’s requirement that the City collect taxes it is owed. Berkeley’s Charter does not authorize the Council to dilly-dally around with UCB over taxes it owes for its parking lots. It requires collection. 

Article X, section 51 of the Charter states: “Tax system. The Council shall by ordinance provide a system for the assessment, levy and collection of all City taxes not inconsistent with the provisions of this Charter.” The ordinance for collecting parking taxes, pursuant to the Charter is section 7.48.070 of the municipal code. It requires that “for the privilege of occupancy of any space for the parking of a motor vehicle in a parking station, each occupant is subject to and shall pay a tax in the amount of ten percent of the rent charged by the operator of the parking station.” The section continues by describing exactly how the taxes are to be collected and paid. 

The Council’s statement that the City has very little local control over UC does not extend to collecting parking taxes. We have repeatedly provided your Council with the recent California Supreme Court case in which the Court required UC to pay parking taxes to the City of San Francisco. (City and County of San Francisco v. Regents of University of California (2019) 7 Cal.5th 536.) Therefore, SA section 4.8 should be stricken and the Council should immediately start collecting the parking taxes. 

SA section 4.9 also runs afoul of Berkeley’s Charter. This section leaves it up to UCB to “determine in good faith whether a [building] space is leased to carry out its programs or exclusively to generate income.” Only then, will UCB have to obtain permits and pay impact fees. While in this section, the City can disagree with UCB, there is no provision for how the disagreement will get resolved. Like all city charters, the idea is to collect taxes so that the City’s expenses listed in its annual budget can get paid. The Berkeley Charter makes that purpose clear in its requirements for an annual budget and how to balance it. Accordingly, SA sections 4.8 and 4.9 must be deleted or rewritten to require UCB to pay the impact taxes it owes. 

Illegal “predetermination” occurs when a city council makes a decision today that locks in how it will use its discretion in the future, that is, before appropriate process or review. It is an abuse of discretion to enter contracts, such as the SA, that make budgetary, and environmental litigation decisions for the future, which is exactly what occurred here. ( Redevelopment agency of the City of Huntington Park v. Norm’s Slauson (1985) 173 Cal.App.3d 1121.) 

Here in the matter of the SA, Council member Kate Harrison objected to the SA and voted against it, in part, she has reported, because it has the City collecting money from UCB and then committing to, at a later time, giving the money back to UC for wildfire prevention on its own property. (SA 3.6.2 – “Amount to be determined for wildfire risk management and fuel reduction on UC owned property” as part of sections directing how the City will spend the money it receives from UCB. That is an example of both violating the Charter and predetermination. Charter Article X, sections 52-54 state in detail how the City is to prepare its budget and handle its expenditures. Nowhere does it authorize the Council to hand over any part of this function to an outside agency such as UCB. Accordingly, sections 3.4 – 3.8 must be deleted from the SA. 

SA section 6.4 also is a form of predetermination. There, the City contracts not to litigate or oppose a host of future projects for which there is not even an application pending before the Board of Regents. This section also must be stricken. 

These examples are by no means the only problems with the SA but they are sufficient to make clear the many important shortcomings of the document. We look forward to the City setting aside its approval of the SA, and working with Chancellor Christ to revise or remove the illegal sections of it. Afterwards, the Council must hold a public hearing and take a vote in open session, not in a closed and clandestine meeting.