October 30, 2012 – Special Meeting

Bayer Development Agreement 20 year anniversary

Biotech Sites are in Berkeley and in Emeryville because of hematology research and University.

Bayer asked to negotiate a development agreement.  City was looking for community benefits and a large employer.  The site has been here over 100 years and were very important in WWI.  One of leading facilities
New portion not covered by DA
got twice space
higher building
streamlined admin use permits

Put 300 Million in the site

Opened child care facility this year  150 kids from 6 weeks to kindergarden ready also open to community.
Impacts, Mitigations and Negotiated Benefits
Every negative impact were provided significant mitigations
More employees than expected.  Amended agreement and now only midway toward high level.
Contributions to Housing Trust Fund
40% of employees participate in alternative transportation
Awards for environmental.  Bayer started a collaboration of companies and cities to participate in CO2 reductions
Stringent Risk management and reporting.  All previous risks have been removed
Science Education programs. middle school and Biotech Partners for high school programs and goes through Community College.  Bayer started from scratch.
Child care subsidies to Bananas will end except for well child care education subsidies.
West Berkeley Foundation.  Launched campaign for Rosa Parks School improvements
Preserve history of West Berkeley social and art history.  Donated Cutter memorabilia to UC Bancroft Library.
Avoided animal research.  All animals removed from Berkeley site.
Support Peace and Justice and diversity

Beyond BioTech Partners

Want to expand program and establish regional programs and create a model that could move out into other schools.

Future of site

Competitive industry
Bayer doing well and expanding well selling products
Working to achieve excellence in all products.

Moore:  Honor to have Bayer in our town.  Great working with them they are a great corporate partner.  Proud of daycare center, solar panels  Wish more companies would follow the lead.  Bayer has been very pleased and this has been a much better relationship than anticipated.
Wozniak:  Struck by the number of jobs going to Berkeley residents.  Would it help Bayer if there was more bio-tech in Berkeley?  Is synergy a good thing? Impressive improvement in recycling.  It would be helpful if we had some idea of how well major manufacturers are doing against our climate action plan instead of consolidating it with all commercial companies/buildings.
Anderson:  Echo praise that has been expressed here tonight in the success of this development agreement.  It is a joy to know that the largest employer in the city is setting the bar at a high level that should be applied to future projects.  Thank you for your continued adherence and exceeding requirements.
Maio:  There seems to be a culture in Bayer that there is an institutional commitment to give back to the community.  It was interesting to me to hear about the BioTech model.  How did it begin?  Aimed at students that are struggling with science – not the AP students.  How much does the stipend contribute to the students staying in the program?
Capitelli: The remarkable part of the report shows how Bayer has gone well beyond the development community – you embrace the community and I hope you feel you are embraced by us.  This is way beyond a development agreement.
Wengraf:  What Bayer does is one of the best kept secrets in Berkeley.  This has been a very successful development agreement.  What an accomplishment.  Thank you.
Bates: We want your management to know how much we appreciate him.  The continuity has been great and important.  I believe it is a union plant and one of only 3 in the country and in bio-tech it is the only union facility in the country.  And you pay 23 million a year in taxes?  Could we enter into or expand the agreement into the other parcel owned by Bayer.  There was a time when you thought of leaving?  I am pleased we were able to keep you by expanding the enterprise zone and opened up new opportunities in West Berkeley.  Lastly, I want to indicate that we want to continue to build on this relationship so we do want to talk about post agreement.  I want to work out bringing the Emery-go-round into West Berkeley to help Bayer and the neighborhood.

Auditors Report
Almost everything that has been put out there that has been completed.  Policy was set to follow through on audit recommendations – especially fraud and control the risk due to further budget cuts.
Developed 3 questions to ask upon audit recommendations.
Open audit recommendations:
14 open would increase efficiency
14 are fraud opportunities
3 grant money at risk
15 open government and transparency

When making budget and best practice decisions:

Determine level of service and determine oversight
Need specific info to make decision to cut oversite and accept risk
Is it too expensive to address the risk

Councilmember Comments:
Wengraf:  Why are some of these recommendations not being implemented.  Would it be too onerous to ask what the delay is for each of these items?  Fraud,  I know there were a couple of instances.  Are we at greater risk than other cities due to our structure?
Moore:  A couple of clarifications.  Does one that is open apply to all of them when relating to grant funding.  I still want to see progress in paper format.  How much of these could be contributed to our arcane financial management system?
Wozniak:  I appreciate the work of the auditor especially the work on the streets.  If response to our economic progress we have downsized the city tremendously, of all the things we have to address what is our business model going to look like with less employees and oversight?
Anderson:  I know there is much tension about dealing with our long term and immediate needs of the city.  I would ask you if you could give us some insight about how you would address these unfunded liabilities. The levels of collaboration and cooperation has to do with the way you present these issues to council and staff.
Capitelli:  We are talking about outside agency fraud – not internal fraud?  When we look at your recommendations we need to look at the cost benefit analysis.  Do we have to audit all the outside agencies we fund?  Looks like if we consolidated community agencies then we could have some efficiencies.
Arreguin:  The audit of unfunded liabilities and our streets were great help.  The budget decisions we make and the impacts to fraud.  Seems like there are other impacts – such as workers comp fees, service levels.  How can we continue to provide the level of service we do under the budget process?
Bates:  What is the largest fraud that has been uncovered?  The police evidence room fraud? I think we look at fraud more diligently than other cities.