Council approves proxy authority for mutual water companies despite objections about delegation

The Riverside City Council voted unanimously Dec. 2 to confirm shareholder proxy authority for the city’s interests in several mutual water companies, including the Gage Canal Company.

Public Utilities General Manager David Garcia told the council the action regularizes a three-step process for the city’s representation on mutual water company boards: designation of proxy authority, nomination of board representatives, and assignment/recall of stock certificates when necessary. Garcia recommended council confirm the eligibility list for nominees and delegate authority to designate proxies and execute documents necessary for assignments.

Jason Hunter, a Ward 1 resident who identified himself during public comment, criticized the staff recommendation and argued that delegating the city’s 60% Gage Canal share to a staff proxy would be an "unlawful delegation of municipal legislative power," citing separation-of-powers and state constitutional provisions. Hunter urged the council to direct the general manager whom to vote for at shareholder meetings and warned that the delegation could prompt litigation.

Councilmember Mill moved to adopt staff’s recommendation; the motion carried unanimously after brief discussion confirming that council members may attend mutual water company meetings as guests with notice. The council therefore authorized the city manager and public utilities general manager to solicit nominees from an eligibility list and granted the mayor authority to execute related documents to effectuate shareholder proxy authority.

The transcript records no immediate staff rebuttal to Hunter’s legal arguments and no change to the staff recommendation. The city attorney reported no reportable action from the closed session later in the meeting.