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HomeMy WebLinkAbout2008-01-22 City Council Agenda Packet 1 01/22/08 Agenda posted according to PAMC Section 2.04.070. A binder containing supporting materials is available in the Council Chambers on the Friday preceding the meeting. Special Meeting Council Chambers January 22, 2008 6:00 p.m. ROLL CALL STUDY SESSION 1. Opportunity to Replace & Enhance Cubberley Facilities CMR:125:08 ATTACHMENT ORAL COMMUNICATIONS Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications APPROVAL OF MINUTES November 26, 2007 December 03, 2007 CONSENT CALENDAR Items will be voted on in one motion unless removed from the calendar by two Council Members. 2. Approval of Request to Initiate a Preliminary Review of a Planned Community (PC) Application for a 3-Story Mixed Use Office/Retail Development at 2180 El Camino Real (College Terrace Center) CMR:111:08 3. This Item Number Has Been Intentionally Left Blank 4. Finance Committee Recommendation to Adopt an Ordinance Authorizing the Closing of the Budget for the Fiscal Year 2006-07 and Approval of Comprehensive Annual Financial Report (CAFR) from Finance Committee Meeting of December 11, 2007 CMR:105:08 ATTACHMENTS 5. Utilities Advisory Commission Recommendation to Utilize the Electric 01/22/08 2 Supply Rate Stabilization Reserve to Cover Increased Supply Cost In Fiscal Year 2007-08 Instead of a Mid-Year Rate Increase CMR:122:08 ATTACHMENTS 6. Adoption of a Resolution Summarily Vacating a Portion of the Abandoned Embarcadero Road Right-of-Way and Reserving a Public Utilities Easement Adjacent to the Town & Country Village Shopping Center, 855 El Camino Real CMR:124:08 ATTACHMENTS 7. Introduction of an Ordinance Amending Chapter 2.11 of Title 2 of the Palo Alto Municipal Code to Establish a Fee to Support Public, Education, and Government Access that Will Apply to Comcast as it Provides Service Under its State Video Franchise CMR:119:08 ATTACHMENT AGENDA CHANGES, ADDITIONS, AND DELETIONS HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of five minutes per speaker unless additional time is granted by the presiding officer. The presiding officer may reduce the allowed time to less than five minutes if necessary to accommodate a larger number of speakers. UNFINISHED BUSINESS 8. Public Hearing: Approval of a Tentative Map and a Record of Land Use Action to Subdivide the Elks Lodge Site into Two Lots for a New Lodge and a Multi-Family Residential Project, Located at 4249 and 4251 El Camino Real CMR:100:08 ATTACHMENT PUBLIC HEARINGS 9. Introduction of an Ordinance Amending Section 9.04.010 (“Streets, Sidewalks, Highways, Alleys – Consumption of Alcoholic Beverages Prohibited”) of Chapter 9.04 (“Alcoholic Beverages”) to Title 9 (“Public Peace, Morals and Safety”) of the Palo Alto Municipal Code to Allow Consumption of Alcohol Within Legally Permitted Eating Establishment Seating Areas Subject to a Conditional Use Permit CMR:121:08 ATTACHMENT REPORTS OF COMMITTEES AND COMMISSIONS 01/22/08 3 ORDINANCES AND RESOLUTIONS REPORTS OF OFFICIALS 10. Municipal Compost Facility Study: Preliminary Results and Approval of Staff Work Plan CMR: 116:08 ATTACHMENT * * * * * * * * * * * * * * * AT THIS POINT IN THE PROCEEDINGS, THE CITY COUNCIL WILL ADJOURN TO A SPECIAL MEETING AS THE PALO ALTO REDEVELOPMENT AGENCY * * * * * * * * * * * * * * * COUNCIL MATTERS COUNCIL COMMENTS, ANNOUNCEMENTS, AND REPORTS FROM CONFERENCES Members of the public may not speak to the item(s). CLOSED SESSION This item may occur during the recess or after the Regular Meeting. Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. ADJOURNMENT Persons with disabilities who require auxiliary aids or services in using City facilities, services, or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact 650-329-2550 (Voice) 24 hours in advance. CMR:125:08 Page 1 of 1 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: City Manager’s Office DATE: JANUARY 22, 2008 CMR: 125:08 SUBJECT: STUDY SESSION ON THE OPPORTUNITY TO REPLACE AND ENHANCE CUBBERLEY FACILITIES DISCUSSION At the City Council meeting of January 22, 2008, staff will hold a study session with the City Council on the opportunity to replace and enhance Cubberley facilities. The Foothill/DeAnza Community College District, which is currently a major tenant at Cubberley, has approached the City with the opportunity to invest bond monies in constructing a new state-of-the-art Educational Center, including joint-use community facilities, on the City-owned portion of Cubberley. The purpose of the study session is to explore this opportunity, specify City goals in evaluating the proposal, and identify issues and concerns as we work with Foothill/DeAnza Community College District. CITY MANAGER _______________________________________ Frank Benest, City Manager CMR:111:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: January 22, 2008 CMR:111:08 SUBJECT: APPROVAL OF REQUEST TO INITIATE A PRELIMINARY REVIEW OF A PLANNED COMMUNITY (PC) APPLICATION FOR A 3-STORY MIXED USE OFFICE/RETAIL DEVELOPMENT AT 2180 EL CAMINO REAL. RECOMMENDATION Staff recommends that the City Council approve the applicant’s request for a preliminary review and direct the Planning and Transportation Commission (PTC) to conduct a preliminary review of a project at 2180 El Camino Real. Commission preliminary review is tentatively scheduled for February 13, 2008. BACKGROUND Chilcote Family Trust is proposing a project that would include the redevelopment of the city block bounded by College Avenue, Oxford Avenue, El Camino Real, and Staunton Court. The proposal would include construction of a three story retail/office building, a neighborhood market, a two story below-grade parking structure, and a landscaped park space open to the public. The applicant wishes to have preliminary Council review of the project for a Planned Community and needs approval from Council to schedule the preliminary review. DISCUSSION Palo Alto Municipal Code (PAMC) Section 18.79.030(b) states that concurrence of the City Council is necessary to conduct a preliminary review. The purposes of a preliminary review, as stated in PAMC Section 18.79.010, are: a) To maximize opportunities for meaningful public discussion of development projects, at the earliest feasible time, for the guidance of the public, project proponents, and City decision makers. b) To focus public and environmental review of development projects on the issues of greatest significance to the community, including but not limited to planning concerns, neighborhood CMR:111:08 Page 2 of 3 compatibility, Comprehensive Plan consistency, economics, social costs and benefits, fiscal costs and benefits, technological factors, and legal issues. These procedures are not intended to permit or foreclose debate on the merits of approval or disapproval of any given development project. c) To provide members of the public with the opportunity to obtain early information about development projects in which they may have an interest. d) To provide project proponents with the opportunity to obtain early, non-binding preliminary comments on development projects to encourage sound and efficient private decisions about how to proceed. e) To encourage early communication between elected and appointed public officials and staff with respect to the implementation of City policies, standards, and regulations on particular development projects. f) To facilitate orderly and consistent implementation of the City’s Comprehensive Plan and development regulations. ALTERNATIVES TO STAFF RECOMMENDATION The Council may choose the following alternatives in accordance with Section 18.79.040(b): 1) The Council may direct the study session to be conducted solely by the City Council, or 2) The Council may direct that the study session be conducted solely by the Planning Commission, or 2) The Council may direct staff to arrange a joint meeting of the City Council and Planning and Transportation Commission and any other City boards whose participation is deemed desirable. RESOURCE IMPACT Applicants for any preliminary review submit a fee deposit, against which staff time expended to process the application is charged, as a part of the City’s cost recovery program. POLICY IMPLICATIONS Policy implications of the project would be discussed during the preliminary review before Council. ENVIRONMENTAL REVIEW Appropriate environmental review will be conducted for this project, however it is not required at the time of preliminary review. Environmental issues would be highlighted for the Council during the preliminary review of this project. CMR:111:08 Page 3 of 3 PREPARED BY: _____________________________________ RUSS REICH Planner DEPARTMENT HEAD REVIEW: _________________________________________ STEVE EMSLIE Director of Planning and Community Environment CITY MANAGER APPROVAL: _________________________________________ EMILY HARRISON Assistant City Manager COURTESY COPIES: Patrick Smailey, The Chilcote Trust Linda Poncini, Carrasco and Associates Robin Kennedy, manatt | phelps | Phillips William D. Ross CMR:105:08 Page 1 of 1 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: JANUARY 22, 2008 CMR: 105:08 SUBJECT: FINANCE COMMITTEE RECOMMENDATION TO ADOPT AN ORDINANCE AUTHORIZING THE CLOSING OF THE BUDGET FOR THE 2006-07 FISCAL YEAR AND APPROVAL OF COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FROM FINANCE COMMITTEE MEETING OF DECEMBER 11, 2007 RECOMMENDATION Based on a 4-0 vote at Finance Committee meeting of December 11, 2007, the Finance Committee recommends that Council adopt the attached ordinance and associated Exhibits to: close the 2006-07 Budget and authorize re-appropriation of 2006-07 funds into the 2007-08 Budget; close completed capital improvement projects; and transfer remaining Capital Improvement Project balances to the appropriate reserves. In addition, the City’s Comprehensive Annual Financial Report (CAFR) is being transmitted for approval. PREPARED BY: _______________________________________________________ TRUDY EIKENBERRY Accounting Manager DEPARTMENT HEAD APPROVAL: ___________________________________ LALO PEREZ Director, Administrative Services CITY MANAGER APPROVAL: ___________________________________ EMILY HARRISON Assistant City Manager ATTACHMENTS Attachment 1: CMR 437.07 CMR: 122:08 Page 1 of 4 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: JANUARY 22, 2008 CMR: 122:08 SUBJECT: UTILITIES ADVISORY COMMISSION RECOMMENDATION TO UTILIZE THE ELECTRIC SUPPLY RATE STABILIZATION RESERVE TO COVER INCREASED SUPPLY COST IN FISCAL YEAR 2007-08 INSTEAD OF A MID-YEAR RATE INCREASE RECOMMENDATION Staff and the Utilities Advisory Commission (UAC) recommend utilizing the Electric Supply Rate Stabilization Reserve (E-SRSR) to cover increased supply cost in Fiscal Year (FY) 2007-08 instead of a mid-year rate increase. The incremental amount to be withdrawn from the E-SRSR will be determined as part of the mid-year Budget Amendment Ordinance process in March 2008. BACKGROUND As part of the FY 2007-08 budget process, staff developed a 5-year Financial Plan (Plan) in December 2006 which showed costs steadily increasing over the next five years as a result of higher commodity, renewable energy, transmission, regulatory, and distribution costs. Further, retail revenue was projected to be insufficient to cover costs and the Plan included a series of rate increases designed to recover costs. In accordance with the Plan, on June 18, 2007, Council approved a five-percent electric retail rate increase, or $4.4 million in additional revenue, effective July 1, 2007, to cover distribution- related expenses; and an in-concept 10-percent electric retail rate increase, ($9.2 million in additional revenue), for FY 2008-09 [CMR 202:07] to cover distribution-and supply-related expenses. The need for a rate increase in FY 2007-08 to cover supply-related expenses was not warranted as the projected end of FY 2007-08 E-SRSR was expected to be above the minimum guideline level. 5 CMR: 122:08 Page 2 of 4 DISCUSSION Supply Projections and Cost Projections developed during the FY 2007-08 budget process (prior to updated hydrologic conditions being available) assumed hydroelectric supply from the Western Base Resource and the Calaveras hydroelectric project would be average for FY 2007-08 and FY 2008-09. The adopted budget for FY 2007-08 calls for a drawdown of the E-SRSR of $11 million in FY 2007- 08 and $8.4 million in FY 2008-09. Given the dry conditions actually experienced, generation from both hydroelectric resources is now projected to be below average and a total of 233 Gigawatt-hour of hydroelectric supply will need to be replaced. The cost increase over budget associated with the dry conditions is estimated at $7.5 million in FY 2007-08 and $8 million in FY 2008-09. Alternatives to Address Increased Costs Staff evaluated and presented to the UAC several alternatives to address the impact of the increased drought-related costs on the electric fund as discussed briefly below. 1. FY 2007-08 Mid-Year rate increase option Implementing a 10 percent rate increase, effective February 1, 2008, would provide additional revenues of $3.6 million for FY 2007-08. This rate increase, along with the approved-in-concept 10 percent electric retail rate increase for FY 2008-09, effective July 1, 2008, would put the E-SRSR above the minimum guidelines level by the end of FY 2008-09. 2. Drawdown of the E-SRSR and higher future rate increases The expected supply cost increases would increase the E-SRSR drawdown necessary to cover operating expenses to $19 million and $16.6 million in FY 2007-08 and FY 2008-09, respectively. Given both the City’s policy to set rates to recover costs and the reserve guidelines, staff would need to consider a rate increase greater than the 10 percent approved- in-concept rate increase for FY 2008-09. 3. Drawdown of Calaveras Reserve The Calaveras Reserve was established in 1996 as part of the City’s effort to prepare for deregulation of the electric industry and the possibility of losing customers to retail competition. The Calaveras Reserve was set to cover the difference between the cost of City- owned assets and long-term contracts, and the market value of those assets, otherwise known as stranded cost. In 1999, the Calaveras Reserve was fully funded at $71 million and Council approved a schedule of Calaveras Reserve drawdowns to be used to offset power costs for future ratepayers through FY 2031-32 [CMR: 222:99]. Staff’s preliminary assessment shows that approximately $10 to $20 million could be drawn from the Calaveras Reserve without adversely impacting the competitiveness of the electric utility. Such a drawdown could be a single transfer to the E-SRSR or could be a transfer over multiple years. Staff is not recommending drawing down the Calaveras Reserve for FY 2007-08. However, this alternative may be considered in the future, if the E-SRSR is insufficient to cover costs. Any change to the drawdown schedule will need Council approval. CMR: 122:08 Page 3 of 4 To address the increased supply costs, staff considered implementing a 10 percent mid-year rate increase effective February 1, 2008. However, with the concurrence of the UAC, staff recommends foregoing a mid-year rate increase and instead utilizing the E-SRSR based on the following: 1. The ending E-SRSR for FY 2007-08 with the increased supply cost is estimated at approximately $42 million, sufficiently above the minimum reserve guideline level of $29.3 million. 2. Hydrologic uncertainty for FY 2007-08 is reduced as a dry hydro scenario is included in the expected cost and the E-SRSR is sufficient to cover the remaining cost uncertainties in FY 2007-08. 3. Use of the E-SRSR to fund the increased cost associated with reduced hydroelectric generation is consistent with the purpose for which the reserve is intended. COMMITTEE REVIEW AND RECOMMENDATIONS At its December 5, 2007 meeting, the UAC voted 4-1 to “recommend to Council to utilize funds from the Electric Supply Rate Stabilization Reserve, instead of a mid-year rate increase, to offset electric supply cost increases in FY 2007-08.” Commissioner Melton voted against the motion arguing that a mid-year rate increase would send the proper signal to ratepayers that there are costs associated with dry hydrologic conditions and that a delay will result in a larger rate increase in July 2008. Commissioner Dawes countered that a mid-year increase is not warranted given the reserve level forecasts for June 2008. Further, the UAC advised staff that in addition to considering the use of the Calaveras Reserve to offset future rate increases, staff should evaluate use of the Calaveras Reserve to 1) invest in other capital projects; and 2) pay off some of the Calaveras and/or California Oregon Transmission Project debt. RESOURCE IMPACT Utilization of the E-SRSR to fund the increased cost in FY 2007-08 will require approval from Council in the form of a budget amendment ordinance. The exact amount to be drawn from reserves will be determined through the mid-year budget process in March 2008. POLICY IMPLICATIONS Use of the E-SRSR to fund changes in cost associated with hydroelectric generation supply is consistent with the E-SRSR guidelines (CMR:467:03) and supports the Utilities Strategic Plan objective of providing competitive rates to customers. This recommendation does not represent a change in current City policies. ENVIRONMENTAL REVIEW The utilization of the E-SRSR to fund charges in cost associated with hydroelectric generation supply does not meet the definition of a project pursuant to Section 21065 of the California Environmental Quality Act (CEQA), thus, environmental review is not required. CMR: 122:08 Page 4 of 4 ATTACHMENTS A. UAC Minutes from November 7, 2007 meeting B. UAC Minutes from December 5, 2007 meeting PREPARED BY: MONICA PADILLA Resource Planner DEPARTMENT APPROVAL: ________________________________ VALERIE O. FONG Director of Utilities CITY MANAGER APPROVAL: ________________________________ EMILY HARRISON Assistant City Manager CMR: 124:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: JANUARY 22, 2008 CMR: 124:08 SUBJECT: ADOPTION OF A RESOLUTION SUMMARILY VACATING A PORTION OF THE ABANDONED EMBARCADERO ROAD RIGHT-OF- WAY AND RESERVING A PUBLIC UTILITIES EASEMENT ADJACENT TO THE TOWN & COUNTRY VILLAGE SHOPPING CENTER, 855 EL CAMINO REAL RECOMMENDATION Staff recommends that Council adopt the attached resolution summarily vacating a portion of the abandoned Embarcadero Road right-of-way and reserving a public utilities easement along Embarcadero Road adjacent to the Town & Country Village Shopping Center, 855 El Camino Real. DISCUSSION In conjunction with a redevelopment project for the Town and Country Village shopping center, the owner/developer has requested that the City vacate a segment of the abandoned 37-foot right- of-way for the former Embarcadero road (see plat map attached to Resolution). This right-of-way is no longer used or needed for street purposes. The vacated right-of-way will be used to provide additional parking and vehicular circulation for new development on the site, including a new grocery store. The City will retain a portion of the right-of-way for pedestrian and bicycle use and will retain a utility easement over the entire right-of-way. In exchange for the use of the vacated right-of-way, totaling about 9,000 square feet, the owner/developer will: 1) construct a bike/pedestrian path on the remaining segment of the abandoned right-of-way; and 2) install a new traffic signal at the intersection of the shopping center main driveway and Embarcadero Road. In addition, the developer has included a number of bicycle and pedestrian improvements into the project: new railing along both sidewalks on Embarcadero in the vicinity of the signalized pedestrian crossing; re-landscaping of the planted area behind the sidewalk along Embarcadero Road to provide a wider flat walking surface for pedestrians; and enlargement of the island for pedestrian storage area on the shopping center side of the signalized pedestrian crosswalk on Embarcadero Road. The bike/pedestrian path will provide a connection to the bike path extending along the west side of the Caltrain right of way, which is adjacent to the easterly boundary of the shopping center. The traffic signal will mitigate traffic impacts of the new development on the site and improve traffic flow at the intersection. The redevelopment project for the shopping center was recommended for approval by the Architectural Review Board on December 20, 2007. CMR: 124:08 Page 2 of 3 The attached Resolution will vacate a portion of the City’s abandoned right-of-way (see plat map attached to Resolution). This right-of-way is no longer needed for street purposes; however, it does contain utility facilities. Therefore, the Resolution also reserves an easement for utilities. Staff has notified the City Utilities, Public Works and Planning departments of the proposal to vacate the right-of-way, and all concur with the vacation subject to the reservation of a utility easement. The portion of the right-of-way to be vacated is not necessary for any present or future use, except for utilities facilities, and therefore it may be summarily vacated, subject to the reservation of a PUE in accordance with Section 8334 of the California Streets and Highways Code. RESOURCE IMPACT The owner/developer’s cost to install the bike/pedestrian path and the traffic signal is estimated at a minimum of $366,000. In exchange for the 9,000 square feet of right-of-way to be vacated, the $366,000 cost amounts to $40.00 per square foot. This is a fair value for use of the vacated right-of-way, especially considering the City will reserve an easement for utilities beneath the entire right of way to be vacated. POLICY IMPLICATIONS The recommendation does not represent any change to City policies. The Planning Department has determined that the vacation of a portion of the public right-of-way and the reservation of a public utility easement is in conformity with the Palo Alto Comprehensive Plan. ENVIRONMENTAL REVIEW The proposed summary vacation of the portion of the street right-of-way is categorically exempt from the review under the California Environmental Quality Act (CEQA) pursuant to Title 14 California Code of Regulations Section 15305 as a minor alteration in land use limitations. PREPARED BY: WILLIAM FELLMAN Manager, Real Property DEPARTMENT HEAD APPROVAL: LALO PEREZ Director, Administrative Services CITY MANAGER APPROVAL: EMILY HARRISON Assistant City Manager ATTACHMENTS Attachment A: Summary Vacation Resolution CMR: 124:08 Page 3 of 3 cc: Ellis Partners, LLC CMR: 119:08 Page 1 of 4 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: JANUARY 22, 2008 CMR:119:08 SUBJECT: ADOPTION OF AN ORDINANCE AMENDING CHAPTER 2.11 OF TITLE 2 OF THE PALO ALTO MUNICIPAL CODE TO ESTABLISH A FEE TO SUPPORT PUBLIC, EDUCATION, AND GOVERNMENT ACCESS THAT WILL APPLY TO COMCAST AS IT PROVIDES SERVICE UNDER ITS STATE VIDEO FRANCHISE RECOMMENDATION Staff recommends that the Council adopt an ordinance amending Chapter 2.11 of Title 2 of the Palo Alto Municipal Code to establish a fee to support Public, Education and Government (PEG) access that will apply to Comcast as it provides service under its State Video Franchise issued by the California Public Utilities Commission (Commission). BACKGROUND On September 29, 2006, Governor Schwarzenegger signed into law Assembly Bill 2987, the Digital Infrastructure and Video Competition Act of 2006 (DIVCA). The purpose of DIVCA is to create a streamlined process for the granting of video service franchises in an effort to foster the rollout of technology, encourage competition and expand customer choice. This new law permanently changes the franchising and regulatory structure for the provision of cable television and other video services in the State of California. Under DIVCA, video service franchises are now granted exclusively by the Commission rather than by local franchising entities. DIVCA gives the City certain rights and responsibilities with respect to any holder of a state franchise (Holder). These rights and responsibilities must be established by local ordinance before they become effective and enforceable. On April 9, 2007 Council approved an ordinance amending and adding to several chapters of Title 2 (Administrative Code) and Title 12 (Public CMR: 119:08 Page 2 of 4 Works and Utilities Code) to implement the provisions of DIVCA (CMR:171:07). On June 18, 2007, Council approved amendments to Title 19 to conform the City’s architectural review process to the requirements of DIVCA (CMR:273:07). The Commission commenced accepting applications for state franchises in March 2007. The Commission has 30 days to determine whether a franchise application is complete, and is required to issue a state franchise within 14 days of determining an application is complete. Prior to offering video service, the state franchise holder is required to notify the local entity. The notice shall be given at least 10 days, but no more than 60 days, before the video service provider begins to offer service. DISCUSSION Under DIVCA, Comcast may seek and obtain a state franchise from the Commission after January 1, 2008, whenever another Holder (such as a competitor like AT&T) enters the Palo Alto market. AT&T filed for a state franchise to serve an area that includes Palo Alto; the Commission granted AT&T its state franchise on March 30, 2007. Comcast filed for a state franchise to serve an area that includes Palo Alto; on January 2, 2008, the Commission granted Comcast that state franchise. The City anticipates receiving notice from Comcast that it will begin service in Palo Alto under its State Video Franchise in the near future. DIVCA allows the City to continue to collect its current PEG support fee of $0.88 per residential subscriber per month from any Holder. Comcast has been providing PEG support funding of approximately $300,000 annually. Palo Alto has designated the Media Center, as its community access organization, to operate and manage its PEG channels and to promote PEG access. The Media Center relies on the PEG support fee to bring local community media services to Palo Alto. Upon the termination of Comcast’s local franchise, the City can by ordinance collect from Holders either its current PEG support fee ($0.88 per subscriber per month) or a PEG support fee of 1 percent of the Holder’s gross video-service revenues in the City. At the present time, a PEG fee of $0.88 per subscriber exceeds what a 1 percent PEG fee would yield by about 30 percent or $75,000. As a result, staff is proposing that Council adopt an ordinance, amending Chapter 2.11 of the Palo Alto Municipal Code, to establish a PEG fee of $0.88 per subscriber for Holders. Selecting the $0.88 option has some potential downsides. First, this option has no built in mechanism for growth and over time inflation could erode its purchasing power. In addition, if Comcast revenues continue to grow at their current rate, the 1 percent option could yield greater PEG fees than the $0.88 option in the next 4 to 5 years. However, with anticipated competition driving down prices and the expected bundling of video with non-video service revenues, it is risky to assume revenues will grow at the same rate in the future. These potential downsides notwithstanding, staff and the Media Center recommend the $0.88 option because it provides more revenue in the short-term and a stable funding amount in the long-term. DIVCA requires the City to re-authorize by ordinance its PEG fee at the expiration and renewal of each Holder’s state franchise. Under DIVCA, the term of a state franchise will be 10 years. CMR: 119:08 Page 3 of 4 It is important to note that, under DIVCA, certain obligations contained in the City’s just expired franchise with Comcast (e.g., its I-Net obligations and its obligation to provide free cable service to schools and other public and governmental buildings, etc.) will continue to apply to Comcast until the franchise would have expired by its terms, or until July 25, 2010. Holders are not obligated to provide I-Net facilities and free cable service, and Comcast will no longer be required to do so after July 25, 2010. Staff hopes to negotiate a continuation of these facilities and services with Comcast after 2010. NEXT STEPS In 1983, the cities of Palo Alto, Menlo Park, East Palo Alto, the Town of Atherton and portions of San Mateo and Santa Clara Counties entered into a Joint Exercise of Powers Agreement (JPA) for purposes of obtaining cable television service for residents, businesses and institutions within these jurisdictions. The JPA gives the City of Palo Alto the sole authority to grant and administer the cable franchise process on behalf of its members. Under DIVCA, Palo Alto no longer has the authority to grant franchises to providers of cable or video services in the JPA’s service area. DIVCA does, however, allow the JPA to continue to serve as the “local entity” for DIVCA purposes, thereby permitting the JPA members to continue to rely on Palo Alto for such activities as franchise fee and PEG fee collection, PEG oversight, customer service and the like with respect to all Holders in the JPA’s service area. In early 2008, the JPA plans to amend its Agreement to reflect changes in the law due to DIVCA. RESOURCE IMPACT The proposed ordinance provides for the continued payment of a PEG support fee by Comcast as it provides service under its State Franchise.. In 2006, the JPA received PEG fees from Comcast in the amount of $316,113. In 2007, PEG fees are expected to reach about $327,000. In addition to PEG fees, Holders will continue to pay franchise fees to compensate the City for the use of its public streets and rights-of-way. In 2006, the City received franchise fees in the amount of $581,000. Staff does not currently anticipate any material impacts to these revenues as a result of DIVCA. Although the City will continue to collect PEG and franchise fees under DIVCA, support for in- kind PEG services (e.g., free cable service to schools and other public and governmental buildings and free inclusion of PEG program information on a “TV Guide” channel, etc.) and for Institutional Network services will be discontinued at the expiration of Comcast’s current franchise. The potential loss of these services after July 25, 2010, could have a significant, but undetermined, adverse fiscal impact on government facilities and schools in the JPA’s service area. POLICY IMPLICATIONS This proposed ordinance is consistent with the current State law for video service franchises. CMR: 119:08 Page 4 of 4 ENVIRONMENTAL REVIEW This is not a project under the CEQA. PREPARED BY: MELISSA CAVALLO Cable Coordinator DEPARTMENT HEAD APPROVAL: LALO PEREZ Administrative Services Director CITY MANAGER APPROVAL: EMILY HARRISON Assistant City Manager ATTACHMENTS: Attachment A: Ordinance ______________________________________________________________________________ CMR: 100:08 Page 1 of 4 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: JANUARY 22, 2008 CMR: 100:08 SUBJECT: APPROVAL OF A TENTATIVE MAP AND A RECORD OF LAND USE ACTION TO SUBDIVIDE THE ELKS LODGE SITE INTO TWO LOTS, FOR A NEW LODGE AND A MULTI-FAMILY RESIDENTIAL PROJECT LOCATED AT 4249 AND 4251 EL CAMINO REAL. RECOMMENDATION Staff and the Planning and Transportation Commission (Commission) recommend that the City Council approve the proposed Tentative Map which proposes to subdivide the Elks Lodge site into two lots, based upon findings and conditions contained within the draft Record of Land Use Action (Attachment A). DISCUSSION The Tentative Map proposed by SummerHill Homes on behalf of the property owner, Benevolent and Protective Order of Elks (BPOE), involves a two-lot subdivision of the approximately 7-acre Elks Lodge site to enable the construction of a new Elks Lodge on Lot 1 and the development of a 45 unit, multi-family residential community by SummerHill Homes on Lot 2. Although the applicant’s request is for only a two-lot subdivision, PAMC 21.04.030 requires a Tentative Map for certain minor subdivisions involving less than five lots or units where the total acreage involved exceeds five acres or for any subdivision where an individual lot created exceeds two acres. The proposed two lot subdivision would create one 2.82 acre parcel to be retained by BPOE for the future Elks Lodge and a second 3.97 acre parcel to be purchased by SummerHill Homes for its proposed multi-family development. Approximately .34 acres of the Elks Lodge site, which is currently a public access easement for a portion of Deodar Street, would be permanently dedicted. A preliminary architectural review application for the new Elks Lodge was reviewed by the Architectural Review Board on August 2, 2007. A formal application for architectural review of the new Elks Lodge has not yet been submitted. The proposed 45 unit, multi-family SummerHill Homes development on Lot 2 was granted architectural review approval on October 30, 2007. A Tentative Map for the separate SummerHill Homes development on Lot 2 will be presented for Commission recommendation and City Council approval after the approval of this subject two-lot subdivision. ______________________________________________________________________________ CMR: 100:08 Page 2 of 4 Because of the terms of the purchase agreement between BPOE and SummerHill Homes, the existing Elks Lodge will not be demolished until after the final map for the two-lot subdivision is recorded. In effect, the proposed lot line subdividing the Elks Lodge site into two lots would slice through the existing Elks Lodge structure. City staff has discussed the logistics of the demolition with the applicant and an agreement was reached that a bond or letter of credit would be provided by the applicant to the City to guarantee the demolition of the Elks Lodge upon final map recordation. The actual demolition of the Elks Lodge and accessory structures would occur immediately after final map recordation. Conditions pertaining to the demolition of the Elks Lodge are included in the attached draft Record of Land Use action. With the incorporation of conditions relating to the demolition of the Elks Lodge, staff has determined that the two-lot Tentative Map request is in general conformance with the requirements set forth in Chapter 18 (Zoning) and Chapter 21 (Subdivisions) of the Palo Alto Municipal Code (PAMC). Background information related to the project’s details and history has been included in the attached draft Record of Land Use Action. BOARD/COMMISSION REVIEW AND RECOMMENDATIONS On November 28, 2007, the Commission conducted a public hearing and recommended (6-0-0- 1) that the City Council approve the Tentative Map to subdivide the Elks Lodge site into two lots, as submitted, based upon the findings and conditions contained within the draft Record of Land Use Action. At the hearing, the Commission had questions regarding drainage impacts of the proposed development which were addressed by the applicant’s civil engineer. Three members of the public spoke regarding access to Wilkie Way from the proposed development at the Elks Lodge site, and traffic concerns on Deodar Street and El Camino Real. The Commission also posed questions regarding pedestrian and bicycle connectivity to Wilkie Way, and street design and circulation within the proposed development by SummerHill Homes. Staff explained to the Commission that these issues will be considered with the Tentative Map for the 45-unit SummerHill Homes condominium development (the site planning for which was granted architectural review approval on October 30, 2007) to be presented to the Commission for review and recommendation to the City Council within the next three months. Draft minutes from the Commission hearing are included in Attachment C. RESOURCE IMPACTS The proposed map, a lot split, will not result in any cost or revenue impacts to the City. After acting on the final map for the lot split, Council will review the tentative map allowing for the 45-home condominium project. The CMR for the second tentative map will contain information about resource impacts of the condominium development, with its associated development impact fees and provision of public parkland. The Elks Lodge site plans are not yet developed, but in general the new lodge will replace the old with little change in size and use. The Elks Lodge project will be reviewed by the Architectural Review Board for recommendation to the Planning Director. All development review costs for both projects will be recovered through permit fees. POLICY IMPLICATIONS The proposed map is consistent with the Comprehensive Plan in that the site is zoned for multi- family residential use and the continued use and renovation of the Lodge was expressly permitted by prior action of the Council. Design and compatibility policies are addressed by the Architectural Review Board during design review of each project. ______________________________________________________________________________ CMR: 100:08 Page 3 of 4 ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) lists a land division of property in an urbanized area into four or fewer parcels as exempt from CEQA if the subdivision is in conformance with all zoning regulations. As such, the proposed two lot subdivision would generally be exempt from the requirements of CEQA. However, CEQA requires that a Lead Agency examine the potential environmental impacts of the ‘whole of an action’ which has the potential to physically change the environment, directly or ultimately, and not just the act of merely subdividing a parcel into two lots. In this case, the two lot subdivision would ultimately facilitate the construction of two developments – a new fraternal lodge and a 45 unit multi- family development – which are not exempt from CEQA requirements. Prior to Architectural Review approval of the proposed SummerHill Homes multi-family development, Staff prepared an Initial Study and Draft Mitigated Negative Declaration which discussed the potential impacts of the two lot subdivision, the SummerHill Homes development and the new Elks Lodge development. The documents were made available for a 20 day public review period between August 31, 2007 and September 19, 2007. No public comments were received during this review period. The Environmental Assessment found that the impacts produced by the project, including the development of the multi-family homes and the new Elks Lodge, would have less than significant impacts on the environment with the incorporation of mitigation measures, and less than significant impact on public services. These impacts are described in the assessment contained in Attachment D. Since State law requires the adoption of an Initial Study and Mitigated Negative Declaration prior to taking action on a discretionary project, these environmental documents were adopted on October 25, 2007 by the Director of Planning and Community Environment, prior to Architectural Review of the proposed SummerHill Homes project. PREPARED BY: __________________________________ ELENA LEE Senior Planner DEPARTMENT HEAD: __________________________________ STEVE EMSLIE Director of Planning and Community Environment CITY MANAGER APPROVAL: __________________________________ EMILY HARRISON Assistant City Manager ______________________________________________________________________________ CMR: 100:08 Page 4 of 4 ATTACHMENTS A. Draft Record of Land Use Action B. Planning & Transportation Commission Staff Report, November 28, 2007 C. Excerpt of the Draft Planning & Transportation Commission Minutes, November 28, 2007 D. Initial Study and Mitigated Negative Declaration, adopted October 25, 2007 E. Tentative Map (Councilmembers only) COURTESY COPIES James E. Baer, Premier Properties Elaine Breeze, SummerHill Homes Carlin Otto Penny Ellson Jean Olmsted Denis Lose CMR: 121:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: JANUARY 22, 2008 CMR: 121:08 SUBJECT: ADOPTION OF AN ORDINANCE AMENDING SECTION 9.04.010 (“STREETS, SIDEWALKS, HIGHWAYS, ALLEYS – CONSUMPTION OF ALCOHOLIC BEVERAGES PROHIBITED”) OF CHAPTER 9.04 (“ALCHOLIC BEVERAGES”) OF TITLE 9 (“PUBLIC PEACE, MORALS, AND SAFETY”) OF THE PALO ALTO MUNICIPAL CODE TO ALLOW, IN ALL COMMERCIAL DISTRICTS WHERE OTHERWISE PERMITTED BY ZONING REGULATIONS, ALCOHOLIC BEVERAGE SERVICE BY COMMERCIAL ESTABLISHMENTS TO PATRONS SEATED AT PERMITTED EATING AND DRINKING AREAS ON PUBLIC SIDEWALKS, SUBJECT TO A CONDITIONAL USE PERMIT RECOMMENDATION Staff recommends that the City Council adopt the attached ordinance amending Section 9.04.010 of the Palo Alto Municipal Code (PAMC) to allow alcoholic beverage service by commercial establishments at permitted eating and drinking areas on public sidewalks subject to a conditional use permit. BACKGROUND The City of Palo Alto allows restaurants in all commercial areas in the City to put tables and chairs on the sidewalk, subject to architectural review and an encroachment permit. Many of these restaurants and cafés also serve alcohol, which requires a license from the State Department of Alcoholic Beverage Control (ABC). Staff has recently become aware of a conflict between the encroachment permits the City issues and other City code provisions. At issue is a regulation originally intended to enable police to prevent people from drinking on sidewalks, in parking lots, or other public areas, but which technically prohibits restaurants from serving alcohol at sidewalk seating. Restaurants, therefore, must decide between refusing alcoholic beverages to patrons sitting in permitted sidewalk seating or risking enforcement by the City or ABC. CMR: 121:08 Page 2 of 3 DISCUSSION The City regulation in question is in Chapter 9.04 of the PAMC. Section 9.04.010 states, “It shall be unlawful for any person to consume any alcoholic beverage upon any street, sidewalk, highway or alley.” Exceptions follow for specific locations and special events, with a permit. There is no exception, however, for eating and drinking establishments. Section 9.04.010 was established in 1982 in response to “an increasing problem related to the consumption of alcoholic beverages on public sidewalks, streets, parking lots, alleys, Lytton Plaza, and other shopping areas.” (CMR 292:82). Laws against being drunk in public were ineffective in stopping the problem, so the City Council enacted this ordinance, on the recommendation of the City Manager and Police Chief. The staff report accompanying the ordinance did not discuss alcoholic beverage service to patrons at permitted sidewalk restaurant seating, most likely because such seating was not permitted until 1986. However, the staff report accompanying the 1986 ordinance that allowed sidewalk seating (CMR 528:86) did not discuss alcoholic beverage service either. Adopting this ordinance will enable the City to issue permits to serve alcohol at outdoor seating areas, which will in turn enable restaurant owners to obtain a license from ABC for alcohol sales and service in those areas. The ordinance is narrowly defined, and only permits alcohol consumption on sidewalks by patrons seated in legally permitted sidewalk seating. POLICY IMPLICATIONS In the 1986 ordinance permitting commercial sidewalk encroachments, the City Council made a finding that doing so would “enhance pedestrian atmosphere and services”. By adopting this ordinance, the City Council would continue to fulfill this objective by resolving an inconsistency that exposes eating and drinking services to enforcement by ABC when restaurants serve patrons at permitted outdoor seating areas. RESOURCE IMPACT Adopting this ordinance will not require the expenditure of additional City resources. ENVIRONMENTAL REVIEW Adoption of this ordinance is not a project under the California Environmental Quality Act (CEQA). ATTACHMENTS A. Ordinance amending Section 9.04.010 of the PAMC PREPARED BY: __________________________________________ JON ABENDSCHEIN Administrator CMR: 121:08 Page 3 of 3 DEPARTMENT HEAD REVIEW: __________________________________________ STEVE EMSLIE Director of Planning and Community Environment CITY MANAGER APPROVAL: __________________________________________ EMILY HARRISON Assistant City Manager COURTESY COPIES Sandra Lonquist, Palo Alto Chamber of Commerce Sherry Bijan, Palo Alto Downtown Business and Professional Association John Benvenuto, Stanford Shopping Center Ronna DeVincenzi, California Avenue Area Development Association Marta Reines James Ellis CMR:116:08 Page 1 of 4 FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: JANUARY 22, 2008 CMR:116:08 SUBJECT: APPROVAL OF MUNICIPAL COMPOST FACILITY STUDY WORK PLAN RECOMMENDATION Staff recommends that Council approve the Municipal Compost Facility Study Work Plan. BACKGROUND The City currently maintains a 7.5 acre compositing facility at the Byxbee Park landfill which is scheduled to close in 2011. Green material managed at the facility includes source separated yard waste such as lawn clippings, leaves, tree and shrub clippings, brush, and other vegetative materials generated through landscape maintenance activities. In addition leaves accumulated through the City’s street sweeping operations “selected screened loads” and clean tree trunk/limb wood grindings (1 to 2 inch chips) are also deposited at the facility. Based on data generated from the 2004 transaction records for weighing and fee collection conducted at the tollbooth, approximately 50 vehicles per day (150 maximum) enter the compost facility to deliver green material. Of those vehicles, 10 are contract collection vehicles delivering green material from the curbside collection program, and 16 are government vehicles (2 leaf truck loads from City sweeping operations and the remaining from the Palo Alto School District, County of Santa Clara, State of California, and Federal Government vehicles). In addition, approximately 23 private vehicles deliver green material to the facility. These private vehicles are predominately self-haul, landscape maintenance companies and contractors. On August 6, 2007 Council directed staff to: 1) Quantify the reduction in greenhouse gas emissions that would result from maintaining a compositing facility in Palo Alto. 2) Compare the financial costs of composting in Palo Alto vs. transporting green waste off site. 3) Compare the pros and cons of in-vessel composting with windrow compositing, with particular attention paid to land acreage needed and overall cost. 4) Explore potential location for a composting facility, including the current recycling center, other land in the vicinity of the Regional Water Quality Control Plant (RWQCP), the unused portion of the Palo Alto airport bordering Embarcadero Road, and the Los Altos Water Treatment Plant. 5) Analyze the impact on Byxbee Park of maintaining a composting facility near the RWQCP. CMR:116:08 Page 2 of 4 To address these issues staff was directed to provide a work plan to Council. DISCUSSION In response to Council’s direction, a study team was formed consisting of staff members from a number of departments and groups including Environmental Compliance, Resource Management, Public Works Refuse and Engineering, Planning, and the recently formed Sustainability Team. This team will study and report on the environmental and financial implications of two different compositing operational scenarios (per attachment A): (1) a new City-owned and operated municipal compost facility and (2) utilization of one or more compost facilities outside the City of Palo Alto. Staff has established a work plan that focuses on the identification and evaluation of several parameters: input material types and volumes; final product volumes and demand; mileage estimates (for transport of feedstock material from source to facility and compost product shipping); and facility types, locations, and operational costs. Staff plans to begin the study by summarizing current operations, which will include an assessment of currently generated compostable input material (feedstock) types and volumes (see Task 1, below). Next, staff will focus on researching potential feedstock materials and issues, local and regional compost product markets, and compost facility technologies (Tasks 2-3). Following that, the study team will evaluate potential facility locations (Task 4). To complete the investigation, staff will conduct environmental and economic feasibility analyses (Task 5). Finally, staff will prepare a comprehensive report that will summarize the results of Tasks 1-5 of this work plan (Task 6). Below is a detailed description of the work plan with Council’s August 6, 2007 direction listed in italics. Task 1: Describe Current Operations Staff will evaluate the current composting operation including the size of the facility, the type of processing that occurs, the types of green waste producers that deliver green waste to the facility and the average tonnage of green waste accepted. Staff will research the annual revenue that the City receives for the green waste as well as revenues received from the sale of finished compost product. Task 2: Evaluate Potential Feedstock Materials and Final Product Markets The study team will evaluate possible organic composting feedstock wastes and discuss the issues associated with composting the wastes. Organic wastes to be considered for composting include food scraps, compostable paper, untreated wood wastes, raw sewage sludge and treated biosolids. Staff will evaluate the pros and cons of the City accepting these wastes at a municipal composting facility. As part of this task staff will research local and regional markets for selling the final compost product. Included here will be a discussion regarding the volatility of these markets. At a minimum, answers to the following questions will be sought: • To whom and where can the City expect to sell the product? • What is the value per ton? • What feedstock material and other restrictions would buyers place on the product? CMR:116:08 Page 3 of 4 Task 3: Evaluate Potential Municipal Composting Technologies This research will provide information on available composting technologies and evaluate them with respect to a municipal operation in Palo Alto. Included here will be a study of the pros and cons of in-vessel composting with open windrow. In reviewing each of the available technologies staff will report on sizing requirements (acreage, labor, and buffer area), projected equipment costs, and additional requirements unique to each technology. This task also entails researching and describing a few selected municipal compost facilities that are currently in operation and of relevance to this study. Task 4: Explore Potential Facility Locations Staff will explore potential locations for a composting facility, including locations on the current landfill site, other land in the vicinity of the RWQCP, the unused portion of the Palo Alto airport, and the Los Altos Treatment Plant (LATP) site, as requested in the August 6, 2007 Colleagues Memo. Information gathered on feedstock materials, technologies, and markets will be applied, as well as site specific context, land use, zoning designations, compatibility with dedicated park use, and other planning concerns. While assessing impacts on adjacent land uses for each of the sites, the team will specifically analyze the impact on Byxbee Park of maintaining a composting facility near the RWQCP. Also, as part of the location analysis, the study team will look into City, County, and State land use permitting and CEQA requirements. While investigating permitting and CEQA, individual site characteristics and potential facility types will be taken into consideration. Task 5: Analyze Environmental and Economic Impacts Staff will compare the costs and benefits of composting in Palo Alto versus transporting green waste off-site. The team will include alternative feedstock materials in this analysis as well. Parameters such as product volumes and estimated value, facility construction and operational costs, and transport mileages will contribute to determining greenhouse gas impacts and the financial implications for each of the two operational scenarios. Task 6: Compile Results and Prepare Final Report The final report will be a compilation of the results of Tasks 1-5. Maps, tables, and charts will be included to graphically support analyses and results as appropriate. Target Dates February 1 – February 29, 2008 Task 1: Evaluate existing operation. February 1 – February 29, 2008 Tasks 2 & 3: Conduct feedstock, market, and technology research. March 1 – March 31, 2008 Task 4: Conduct location analysis. April 1 – April 30, 2008 Task 5: Conduct environmental and economic feasibility analyses. April 1 – May 30, 2008 Task 6: Compile all results and prepare the final report. June 2008 Prepare documents for City of Palo Alto Council Meeting. July 2008 Present findings to Council. CMR:116:08 Page 4 of 4 RESOURCE IMPACT This Council assignment will require over 200 hours of staff time. Staff believes this effort can be integrated into existing workloads as long as City Council accepts the proposed timeline for completion. ENVIRONMENTAL REVIEW The Municipal Compost Facility Study Work Plan does not constitute a “project” as defined by the California Environmental Quality Act (CEQA). All required environmental review will be done accordingly when the project is defined. POLICY IMPLICATIONS The recommendation does not represent changes to existing City policies. ATTACHMENTS Attachment A: Colleagues Memorandum dated August 6, 2007 PREPARED BY: _______________________________ BRIDGET RYAN Engineering Technician III APPROVED BY: _______________________________ GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: _______________________________ EMILY HARRISON Assistant City Manager