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HomeMy WebLinkAbout2008-07-07 City Council Agenda Packet 1 07/07/08 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS 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 July 07, 2008 6:00 PM ROLL CALL 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. 1. Public Employment Title: City Auditor Authority: Government Code section 54957(b) 1A. Public Employment Title: City Manager Authority: Government Code section 54957(b) 7:00 or as soon as possible thereafter STUDY SESSION 2. Mayor’s Advisory Group Presentation on Citywide Broadband Project 8:00 or as soon as possible thereafter SPECIAL ORDERS OF THE DAY 3. Adoption of a Resolution Expressing Appreciation to Richard James Upon His Retirement Attachment 07/07/08 2 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS 4. Selection of Candidates to be Interviewed for the Utilities Advisory Commission Attachment 5. Selection of Candidates to be Interviewed for the Planning & Transportation Commission 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 or Oral Communications. APPROVAL OF MINUTES May 19, 2008 June 02, 2008 CONSENT CALENDAR Items will be voted on in one motion unless removed from the calendar by two Council Members. 6. Adoption of Two Resolutions: (1) Adopting a Compensation Plan for Management and Professional Personnel and Council Appointees and Rescinding Resolution Nos. 8748, 8799, 8821, 8832, and (2) Amending Section 1701 of the Merit System Rules and Regulations to Incorporate the 2008-2009 Compensation Plan for Management and Professional Personnel ad Council Appointees CMR Attachment 7. Approval of Master Agreement for Installation of Underground Facilities with Pacific Bell Telephone Company dba AT&T of California and Comcast of California IX, Inc. CMR Attachment 8. Annual Public Review and Approval of Compliance of Development Agreement with Stanford University for the Sand Hill Corridor Projects CMR Attachment 9. Approval of an Area Median Income-Based Resale Price Formula for the Below Market Rate Ownership Program 07/07/08 3 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS CMR Attachment 10. Adoption of an Ordinance Amending Chapter 9.79 (Newsracks) of Title 9 (Public Peace, Morals and Safety) of the Palo Alto Municipal Code to Create a Special Newsrack Area in the California Avenue Commercial Area and Approval of Newsrack Regulations for California Avenue Special Newsrack Area CMR Attachment 11. 2nd Reading Adoption of an Ordinance Amending the Zoning Map of the City of Palo Alto to Change the Zone Designation for Approximately 0.45 Acres, Located at 2995 Middlefield Road, from Planned Community (PC 3779) to Neighborhood Commercial (CN) Zone District with a Retail Shopping (R) Combining District (First reading June 16, 2008 – Passed 8-0 Morton not participating) 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. REPORTS OF OFFICIALS 12. Review of Polling Results for Library/Community Center Bond Measure and Direction to Staff on a November 2008 Bond Measure CMR Attachment COUNCIL MATTERS 13. Acceptance of Transmittal of Police Auditor Semi-Annual Report CMR Attachment 14. Approval of Scope of Services and Agreement for Not to Exceed $50,000 for a One Year Term with Police Auditor (OIR Group) to Investigate Children’s Theatre Police Investigation 07/07/08 4 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS Attachment 15. Review and Direction on Proposed Scope of Services for Citywide Cash Handling and Travel Reimbursement Audit and Discuss Possible Referral of the Audit to the City Auditor’s Office or to a Qualified Outside Accounting or Audit Consultant Attachment COUNCIL COMMENTS, ANNOUNCEMENTS, AND REPORTS FROM CONFERENCES Members of the public may not speak to the item(s). 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: 300:08 Page 1of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: HUMAN RESOURCES DATE: JULY 7, 2008 CMR: 300:08 SUBJECT: ADOPTION OF TWO RESOLUTIONS: (1) ADOPTING A COMPENSATION PLAN FOR MANAGEMENT AND PROFESSIONAL PERSONNEL AND COUNCIL APPOINTEES AND RESCINDING RESOLUTION NOS. 8748, 8799, 8821, 8832 AND (2) AMENDING SECTION 1701 OF THE MERIT SYSTEM RULES AND REGULATIONS TO INCORPORATE THE 2008-2009 COMPENSATION PLAN FOR MANAGEMENT AND PROFESSIONAL PERSONNEL AND COUNCIL APPOINTEES RECOMMENDATION Staff recommends Council adoption of the attached resolutions adopting a compensation plan for Management and Professional personnel and Council Appointees effective for the pay periods beginning July 1, 2008 and continuing through June 30, 2009; and amending the Merit System Rules and Regulations to incorporate the 2008-2009 compensation plan for Management and Professional personnel. BACKGROUND The Management and Professional group includes 236 active employees. Over the last five years, the City has strived to contain increases in personnel-related costs in the Management and Professional group. In 2003, these employees took the lead in addressing the City’s financial challenges by receiving no salary increase and a 1% salary decrease implemented through a mandatory furlough. The City implemented additional cost-saving measures for management and professional employees before other employee groups, including a cap for health insurance at the PERS Choice rate instead of the PERS Care rate; prorated benefits for new part time management and professional employees; and a two-tier retiree health program, raising the vesting requirement for eligibility for retiree medical benefits from 5 years to 20 years for new hires. By implementing a cap on medical benefits for Management and Professional employees, the City has avoided an estimated $3.5 million in costs since 2003. In 2004, Council approved a 3% salary increase for the Management and Professional employees, offset by a mandated furlough equivalent to a 1% salary reduction. The Management and Professional group was the only unit that fully participated in this significant cost saving measure that year. In 2005, this group received a 3% control point increase effective July 1, 2005, followed by a 1% control point increase effective January 1, 2006. In 2006, the group received no salary 6 CMR: 300:08 Page 2of 3 increase between July 1, 2006 and January 5, 2007. The Management and Professional employees received a 3% control point increase between January 6, 2007 and June 30, 2007, of which one percent was awarded at the discretion of the department heads based on merit. At the same time, management employees began contributing, for the first time, two percent of their salaries to the PERS employee share for the 2.7 percent @ 55 retirement benefit, effectively offsetting the 3% salary increase. Recently, the City addressed a longstanding grievance from SEIU regarding a request from SEIU to move certain management group classifications into the SEIU Unit by participating in a Mediation/Arbitration with SEIU. That mediation resulted in a stipulated order and agreement to modify the Service Employee International Union (SEIU) unit by transferring 14 classifications involving 26 Management, Professional, & Confidential employees effective June 21, 2008. This Stipulated Order and Award leaves the Management and Professional group with 236 employees and 171 classifications to which the 2008-2009 Management Compensation Plan will apply. Staff has been working with SEIU to help ease the concerns of transitioning employees and will present Council with a change to the SEIU Memorandum of Agreement reflecting the stipulated order in the near future. DISCUSSION Each year, a committee comprised of one employee from each department provides the City Manager with feedback and concerns on behalf of the Management and Professional employees. This year, after considering this input, the City Manager recommends: • A 3.5% salary control point increase. • The Police Lieutenants will also receive an additional 14% salary increase. This will bring the Lieutenant’s pay above the Sergeants they supervise who earn overtime pay and other premium pay (Palo Alto Lieutenants are not eligible to receive overtime or premium pay) in addition to bringing the Lieutenant’s salaries closer to the salaries being paid in the market. • An additional half percent to be allocated toward equity adjustments to address compaction problems, as determined by the City Manager. • Allow Management, Professional and Confidential employees the ability to voluntarily purchase additional life insurance (paid by the employee at no cost to the City) Other minor changes in the compensation plan have been made in order to clarify existing benefits, policies or processes. RESOURCE IMPACT The annual cost for the proposed Management and Professional Compensation Plan control point increase (beginning July 1, 2008) is $1,317,340 including salary and benefits, representing $689,600 in General Fund cost and $627,740 in enterprise and other fund costs. The total increase for the compensation plan is 2.9 percent based on total compensation, on an annual basis in fiscal year 2008-09. The 2008-09 Adopted Budget includes funding for this expense in the General Fund salary contingency. Staff traditionally transfers the enterprise and other funds’ portion of the salary contingency funding to those funds as part of the midyear report and budget amendment ordinance (BAO). Accordingly, staff will propose this transfer as part of the 2008-09 midyear report and BAO CMR: 300:08 Page 3of 3 in winter 2009. POLICY IMPLICATIONS The action recommended by this report is consistent with City Council direction. ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment A: Resolution Adopting a Compensation Plan for Management and Professional Personnel Plan and Rescinding Resolution Nos. 8748, 8799, 8821 and 8832 Attachment B: Resolution Amending Section 1701 of the Merit System Rules and Regulations to Incorporate to 2008-2009 Compensation Plan Attachment C: Redline Version of Management and Professional Compensation Plan PREPARED BY: Sandra T.R. Blanch, Assistant Director, Human Resources DEPARTMENT HEAD: RUSS CARLSEN Director of Human Resources CITY MANAGER APPROVAL: KELLY MORARIU/STEVE EMSLIE Interim Deputy City Managers CMR: 272:08 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: JULY 7, 2008 CMR: 272:08 SUBJECT: APPROVAL OF MASTER AGREEMENT FOR INSTALLATION OF UNDERGROUND FACILITIES WITH PACIFIC BELL TELEPHONE COMPANY dba AT&T CALIFORNIA AND COMCAST OF CALIFORNIA IX, INC. RECOMMENDATION Staff recommends that Council approve the attached master agreement for installation of underground facilities in the City of Palo Alto by and among the City of Palo Alto, Pacific Bell Telephone Company dba AT&T of California and Comcast of California IX, Inc. BACKGROUND On September 24, 1990, the City of Palo Alto, Pacific Bell and Cable Coop entered into an agreement for joint installation of underground facilities used to supply services to new prospective customers. The purpose of the agreement was to lower the cost for trenching and to minimize the inconvenience caused by multiple contractors trenching to a single customer. The agreement was based on work to be done by either the City or the telephone company’s own forces, and that each party would supply the material necessary to install its own system. When any one party retained a contractor to install a system, it was necessary to execute a separate agreement. This agreement also limited the cost of installing any single system to $25,000 for labor, whether the system was installed by the City or the telephone company. Staff has been in negotiation with AT&T and Comcast to update the master agreement. Comcast during the cable TV transfer in 2000 acquired the rights from AT&T Broadband dba Pacific Bell Telephone Company, which received the rights of Cable Coop by assignment. The new master agreement is now between the City, AT&T and Comcast. It also increases the threshold limit for any single system from $25,000 to $85,000. With the adoption of Ordinance No. 4827 (June 7, 2004), Chapter 2.30 of the Palo Alto Municipal Code has been amended to increase the original $25,000 threshold for contract construction limit to $85,000. Also attached to the master agreement is an addendum template that would be applicable to future Underground Utility Districts (UUDs). This addendum will be executed between the City, AT&T and Comcast and approved by City Council prior to beginning any construction work in future UUDs. 7 CMR: 272:08 Page 2 of 2 POLICY IMPLICATIONS This recommendation is consistent with the Council-approved Utilities Strategic Plan to invest in utility infrastructure to deliver reliable service. The project furthers Program L-80 (the continuation of Citywide undergrounding of utility wires) of the Comprehensive Plan. ENVIRONMENTAL REVIEW This project is categorically exempt from the California Environmental Quality Act under California Public Resources Code Section 15302(d) (conversion of overhead electric utility distribution system facilities to underground). ATTACHMENT A: Master Agreement PREPARED BY: ______________________________ PATRICK VALATH Sr. Electric Project Engineer REVIEWED BY: ______________________________ TOMM MARSHALL Assistant Director of Utilities Engineering DEPARTMENT HEAD: ______________________________ VALERIE FONG Director of Utilities CITY MANAGER APPROVAL: ______________________________ STEVE EMSLIE/KELLY MORARIU Deputy City Managers CMR:295:08 Page 3 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: July 7, 2008 CMR: 295:08 SUBJECT: ANNUAL PUBLIC REVIEW AND APPROVAL OF COMPLIANCE OF DEVELOPMENT AGREEMENT WITH STANFORD UNIVERSITY FOR THE SAND HILL CORRIDOR PROJECTS RECOMMENDATION Staff recommends that the City Council: 1. Find that Stanford University has complied in good faith with the terms and conditions of the development agreement for the 2006-2007 reporting period. 2. Direct staff to issue a Certificate of Compliance to the University, according to the provision of Section 10(a) of the Agreement, stating that: a. The Agreement remains in effect, and b. Stanford University is not in default. CMR:295:08 Page 3 of 3 BACKGROUND In June 1997, the City Council approved Comprehensive Plan amendments, zoning changes and design applications for the Sand Hill Corridor Projects (Projects). The Projects included the Stanford West Apartments (Apartments), Senior Housing, Shopping Center modifications and a set of roadway modifications, including the widening of Sand Hill Road to four lanes from Santa Cruz Avenue to Arboretum Road and a two-lane extension from Arboretum Road to El Camino Real. A development agreement vesting these approvals was entered into between Stanford and the City and was effective on August 14, 1997. The development agreement requires annual City Council review of Stanford’s compliance with the provisions of the agreement. DISCUSSION The attached April 23, 2008 memo from Stanford Management Company describes Stanford’s 2006-07 activities related to implementation of the development agreement. The development agreement calls for Stanford to demonstrate good faith compliance with specific conditions identified in a separate attachment to the agreement. The annual compliance review process provides the City and the public an opportunity to periodically review the project’s implementation and ensure compliance with the project conditions. Construction related to the Sand Hill Road Corridor Project was completed during earlier reporting periods. As a result, most of the implementation measures in the agreement were reported in previous years. Post-construction activities that were completed or were ongoing during the past reporting period include: CMR:295:08 Page 3 of 3 • The on-site retail store at the Stanford West Apartments continues to operate; Stanford is subsidizing the store to offset the on-going loss from operations. • The Senior Housing Care Center is now completely operational with completion of the Skilled Nursing element in October 2006. • The Roads phase of the Sand Hill Road Project is now completed. • The results of the historical archaeological investigations for the Senior Housing project were published by Pacific Legacy Incorporated. The archeological report is entitled The Historic Archaeological Investigations at the Stanford Mansion, Leland Stanford Jr. Mausoleum, and CA-SCl-623/H. • The Stanford West Apartments are now in the seventh year of operation and the number of Below Market Rate (BMR) units remain at 105 units in accordance with the development agreement. • A post-construction acoustical study completed in July 2006, determined that no additional noise-related mitigations are required. CMR:295:08 Page 3 of 3 An application has been submitted to the City of Palo Alto by Simon Property Group, the lessee and operator of the Stanford Shopping Center, proposing to expand the Stanford Shopping Center by approximately 250,000 square feet plus an addition of a 120 plus room hotel. This expansion would require amending the Sand Hill Development Agreement. The terms of the Sand Hill Development Agreement shall continue through August 14, 2012 or until earlier terminated by mutual consent of the parties involved in the Agreement. RESOURCE IMPACT There are no resource impacts from the development agreement compliance program that affect the General Fund. POLICY IMPLICATIONS This report does not represent any changes to existing City policies. ENVIRONMENTAL REVIEW Issuance of the Certificate of Compliance and consent to an Assignment and Assumption Agreement are not projects under the California Environmental Quality Act, and no environmental assessment is required. CMR:295:08 Page 3 of 3 ATTACHMENT April 23, 2008 memo from Jim Inglis, Stanford University PREPARED BY: _______________________________________ ROLAND A. RIVERA Senior Planner DEPARTMENT HEAD REVIEW: ____________________________________ CURTIS WILLIAMS Interim Director of Planning and Community Environment CITY MANAGER APPROVAL: ___________________________________________ KELLY MORARIU/STEVE EMSLIE Interim Deputy City Managers cc: Stanford University (Jim Inglis) Stanford University (Larry Horton) City of Menlo Park (Arlinda Heineck) County of Santa Clara (Val Alexeeff) County of San Mateo (Lisa Grote) Bill Phillips Jean Snider CMR: 298:08 Page 1 of 5 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: JULY 7, 2008 CMR: 298:08 SUBJECT: APPROVAL OF AN AREA MEDIAN INCOME-BASED RESALE PRICE FORMULA FOR THE BELOW MARKET RATE OWNERSHIP PROGRAM RECOMMENDATION Staff recommends that the City Council approve the resale price formula for appreciation of BMR ownership units based on 80 percent of the percentage change of the area median income as recommended by the BMR Study consultants (Attachment A) to be incorporated into revisions to the BMR Ordinance and/or rules and regulations. BACKGROUND At its meeting of March 24, 2008, Council voted (8-0 with Burt absent) to approve recommendations from the Policy and Services Committee, PTC and staff implementing policy changes to the BMR program as described in Attachment E. Council, however, voted to direct staff to return with a resale price formula based on the change in the Santa Clara County Area Median Income (AMI) for the full Consumer Price Index (CPI) resale price formula recommended by the PTC and staff. Council’s specific direction to staff on March 24th was: “to change going forward to an Area Median Income (AMI) appreciation formula which will be brought back to Council by staff with an analysis and specific recommendations on consent agenda at a later date.” Council members stated support for an AMI based formula because it would be more likely to provide greater appreciation for BMR owners and also result in resale prices which would maintain the BMR units within the moderate income affordability price range of 80 to 120 percent of AMI, based on the comparative history of the CPI and AMI indices over the last 30 years. A policy of maintaining the units over the long term within the moderate income price range was supported by Council as being more consistent with the original goals of the program than the one-third or the full CPI methods, which have resulted in the units becoming relatively more affordable over time. CMR: 298:08 Page 2 of 5 DISCUSSION A modified AMI based resale price formula was recommended by Keyser Marston Associates (KMA) in the BMR Study report (see Attachments A and B). Staff had asked KMA to develop a resale formula that would work well in varying economic cycles and would meet the following criteria, to the extent possible: • Resale prices should not exceed prices for new BMR units; • Keep resale prices sufficiently below market prices of similar units; • Resales price will not be less than the seller’s original purchase price; • Keep resale prices from dropping far below the moderate income level; • Provide higher appreciation than the one-third CPI method; • Encourage better maintenance and capital improvements; and • Be easy to explain, calculate and administer. Based on Council’s March 24th direction, staff is recommending that the KMA formula be approved rather than using an unmodified percentage change of the AMI. The KMA proposal is based on 80 percent (or four-fifths) of the percentage increase in the County AMI as published annually by State Housing and Community Development (State HCD). The KMA proposal caps and minimum pricing will help maintain resale prices generally within the moderate income range and provide some cushion for the addition of special assessments and capital improvements onto resale prices without pushing the prices higher than the moderate income level. Staff believes that caps on BMR resale prices are especially important with an AMI based method given the past history of rapid AMI growth during local economic boom periods. Growth in the median County income does not necessarily equate to a similar growth rate in the household incomes of our waiting list families. Most households interested in Palo Alto BMR ownership, and now on the waiting list, work in occupations where income growth is modest – this is a key reason why they have given up on market rate ownership. Attachment C illustrates how the AMI has fluctuated as much as ten percent from year to year compared to the lower volatility of the CPI. In the ten years from 1994 – 2003, the AMI increased by 68 percent, but in the last five years, due to changes in HUD’s methodology followed by declining economic factors, the AMI has not increased at all but remained at $105,500. Attachment D provides a detailed retroactive 20-year comparison of the full CPI, the full AMI and the 80 percent of AMI with an example of these formulas applied to a typical three bedroom BMR unit first sold in 1987 and then resold in 2007. The data from Attachment D is used in the table below to compare resale prices produced by each formula for a sample 20-year old BMR unit being sold in 2008 together with the current pricing for a three bedroom newly constructed BMR unit and the range of affordable prices at today’s interest rates for the typical family sizes that would purchase a three-bedroom BMR unit. Typical 1987 New Original Price Resale Prices for 20-Year Old BMR Unit CMR: 298:08 Page 3 of 5 (Based on 1987 – 2008 CPI & AMI History) 1987 Full CPI KMA: 80% of AMI Full AMI (Unmodified) Three Bedroom Townhouse BMR $115,000 $215,300 $248,200 $281,500 2008 - Affordable Price Guidelines for Lower Moderate Households (80 to 100% of AMI) with Five Percent Down Payment & Current Interest Rates for a 3-Bedroom BMR 3 Person Households: $206,000 to $273,000 4 Person Households: $236,000 to $310,000 5 Person Households: $259,000 to $339,000 Current (2008) Pricing for a newly built 3–bedroom BMR = $272,700 The three formulas produce resale prices that generally fall within the affordability range of 80 to 100 percent of AMI. With the full AMI formula, however, the resale price exceeds the current price for a comparable newly built BMR unit. Most BMR buyers can only manage a five to ten percent downpayment, although there are a few buyers able to make twenty percent or more. The full AMI resale prices would be harder for households at the lower end of the moderate income spectrum to afford without a substantial downpayment. Attachment B illustrates the recommended 80 percent of AMI formula resale price calculation using this same sample unit with the addition of fairly typical adjustments for capital improvements, an assessment and a deduction for some deferred maintenance. Full CPI Formula Comparison: Based on past history, compared to the two AMI-based formulas, the full CPI formula is likely to result in units becoming more affordable than newly built units over the long term. Lower resale prices provide more cushion to help absorb the addition of special assessments, renovation costs and legal costs to preserve units faced with foreclosure and still result in a final resale price that’s within the lower end of the moderate income affordability level. The addition of large special assessments (such as those that occurred at the Redwoods and Abitare) and / or credits for capital improvements to higher AMI based resale prices may result in resale prices that exceed what buyers on the waiting list are willing, or able, to pay, especially as resale units age. The combination of this concern, together with the AMI’s unpredictability and Palo Alto Housing Corporation’s concerns about the complexity of the formula and higher resale prices was what led staff to recommend to Council that the resale formula simply be increased to the full CPI. In addition, at the present time, the full CPI provides current owners under the one-third CPI a financial reward for signing the new, improved deed restrictions, while few owners may want to switch to an AMI formula until regular annual increases in the AMI resume. Transition from Current One-Third CPI Formula: After approval by Council, proposed changes will be incorporated into the ordinance adopting the recommended BMR program changes. As detailed in previous staff reports, these changes will require an overhaul of the City’s deed restrictions, together with the addition of supporting legal documents to assist in both enforcement and clear disclosure of the program’s rules to prospective buyers and owners. RESOURCE IMPACT CMR: 298:08 Page 4 of 5 Funds are budgeted in the recently adopted FY 2008-09 budget in the Residential Housing Fund for the cost of contract legal services to prepare new BMR ownership deed restrictions and related enforcement and disclosure documents and to conduct the in-lieu fee study. POLICY IMPLICATIONS Council approval of an AMI based resale price formula establishes the policy that the resale pricing method should maintain resale units within the moderate income affordability level over the long term. This policy action, in combination with the approval of the $2,000 annual Maintenance and Replacements Credit for existing BMR units under the one-third of CPI formula on March 24th, clarifies that the City’s goal is that the BMR ownership program is intended to primarily serve moderate income households. ENVIRONMENTAL REVIEW The administration of the BMR housing program is categorically exempt under Section 15326 of the California Environmental Quality Act (CEQA). PREPARED BY: ___________________________________ CATHERINE SIEGEL Advance Planning Manager DEPARTMENT HEAD REVIEW: ________________________________________ CURTIS WILLIAMS, Interim Director Planning and Community Environment CITY MANAGER APPROVAL: ________________________________________ KELLY MORARIU / STEVE EMSLIE Deputy City Managers ATTACHMENTS A. Resale Price Formula for BMR Unit Based Upon 80 Percent of the Change in the Area Median Income (AMI) B. BMR Resale Price Calculation With 80% of AMI Formula (Sample Calculation) C. BMR Study: Comparison of CPI & AMI Chart D. BMR Study: Appreciation Indexes: 20 year Comparison of Full CPI, Full AMI & 80 % of AMI E. BMR Program Update: Policy Changes Approved by the City Council on March 24, 2008 F. City Council Special Meeting of March 24, 2008: Excerpt from approved minutes for Item #6 Policy and Services Committee recommendations for approval of updated Below Market Rate (BMR) Program (continued from March 17, 2008) CMR: 298:08 Page 5 of 5 CC: Palo Alto Housing Corporation, Candice Gonzalez, Executive Director Bonnie Packer, Palo Alto Housing Corporation Board of Directors Lani Wheeler, Palo Alto Housing Corporation Board of Directors Silicon Valley Association of Realtors 19400 Stevens Creek Blvd. #100, Cupertino, CA 95014 Home Builders Association of Northern California, Southern Division Attn: Beverly Bryant 675 North First Street, Suite 620, San Jose, CA 95112-5118 CMR:275:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: JULY 7, 2008 CMR:275:08 SUBJECT: ADOPTION OF AN ORDINANCE AMENDING CHAPTER 9.79 (NEWSRACKS) OF TITLE 9 (PUBLIC PEACE, MORALS AND SAFETY) OF THE PALO ALTO MUNICIPAL CODE TO CREATE A SPECIAL NEWSRACK AREA IN THE CALIFORNIA AVENUE COMMERCIAL AREA AND APPROVAL OF NEWSRACK REGULATIONS FOR CALIFORNIA AVENUE SPECIAL NEWSRACK AREA RECOMMENDATION Staff recommends that Council adopt an ordinance to amend the Newsracks Chapter (9.79) of Title 9 of the Palo Alto Municipal Code (PAMC) to create the California Avenue Special Newsrack Area to limit the number, location and type of newsracks in a designated area of the California Avenue commercial district to help free up space on congested sidewalks, and approve related regulations for permitting newsracks in that area. BACKGROUND In late 2007, the California Avenue Area Development Association (CAADA) asked Council to consider the creation of a Special Newsrack Area on and around the commercial section of California Avenue in order to free up sidewalk space and improve the aesthetics. Accordingly, Council asked staff to research this request. Staff has evaluated the sidewalk conditions in the commercial area and determined that sidewalk conditions and pedestrian traffic support the creation of a special newsrack area on California Avenue from Park Boulevard to El Camino Real. DISCUSSION The City’s Newsracks Ordinance (Chapter 9.79 of Title 9 of PAMC) was passed in 1999 to establishes regulations that balance the right of publishers and distributors to distribute information through newsracks with the right of citizens to reasonably access and use the public right-of-way. The existing ordinance requires that newsracks on public sidewalks must be placed so as not to interfere with pedestrian, wheelchair and bicycle traffic, and must maintain certain clearances from infrastructure such as wheelchair ramps, crosswalks, utility poles and vaults, regulatory signage, and street trees. The distributors who place newsracks on the sidewalk must obtain a no-fee encroachment permit from Public Works in order for staff to ensure that these regulations are met. CMR:275:08 Page 2 of 3 Newsracks placed on the public sidewalk typically consist of two types: freestanding individual newsracks and modular newsracks, which are multiple newsracks mounted onto pedestals in a top and bottom row. Pedestal-mounted newsracks generally take up less space on the sidewalk than freestanding boxes. A photograph of typical free-standing and pedestal-mounted modular newsracks is included as Attachment C. The existing Newsracks Ordinance created a special newsrack area in the Downtown Commercial Area (Middlefield Road to Alma Street, Hamilton Avenue to Lytton Avenue) as the City Council determined sidewalks were particularly congested with street furniture and other sidewalk encroachments, like restaurant tables and chairs, making it more difficult for pedestrians to negotiate the sidewalks. In enacting the ordinance, the Council determined that limiting the number, location and type of newsracks within that designated downtown area was justified to enable better pedestrian travel and enhance public safety on the crowded sidewalks. The purpose of a special newsrack area is to regulate the number, type, and location of newsracks in designated areas to promote public safety in particularly congested sidewalk areas. Staff visited the California Avenue commercial area and surveyed the sidewalk and newsrack conditions from Page Mill Road to Cambridge Avenue, and Park Boulevard and El Camino Real, and concluded that the sidewalks along California Avenue from El Camino Real to Park Boulevard are heavily traveled pedestrian areas congested similarly to the downtown area with tables, chairs and other encroachments. Consequently, staff recommends designating California Avenue, from Park Boulevard to El Camino Real, as the California Avenue Special Newsrack Area (see Attachment D – Map of area). That map also designates where within the area modular newsracks will be allowed, accommodating a total of 154 individual newsracks. CAADA had originally suggested that the Special Newsrack Area proposed by Staff be expanded to include El Camino Real from Page Mill Road to Stanford Avenue and Cambridge Avenue from El Camino Real to Park Boulevard. However, staff has surveyed sidewalks along these additional streets and determined that the conditions outside the main California Avenue thoroughfare do not rise to the level supporting expanding the California Avenue Special Newsrack Area beyond the area proposed by staff. Public Works Staff has been working with distributors who maintain racks in the greater California Avenue area to promote voluntary clean up, maintenance and transition to ped-mount racks where possible. Provisions of the existing ordinance already address in detail standards for placement and maintenance of newsracks throughout the City and Public Works’ staff has been working for years to clean up “hot spots” of multiple freestanding newsracks throughout the City by asking the distributors to voluntarily swap out freestanding newsracks for modular newsracks. To date, many of the freestanding newsracks on California Avenue and in other areas of the City have already been swapped out for modular newsracks. Accordingly, CAADA has withdrawn their request to expand the Special Newsrack Area. Staff has asked the distributors to continue to voluntarily clean up hot spots on California Avenue and in other areas and most have agreed to do so. Efforts are currently underway to replace free standing newsracks with modular newsracks near the Bank of America and Starbucks on El Camino Real. Also, staff responds to citizen complaints about newsracks that CMR:275:08 Page 3 of 3 are in non-compliance with the regulations and requires the distributors to bring the newsracks into compliance. CAADA and the local distributors have been apprised of the City’s intent to amend the Newsracks Ordinance to create a Special Newsrack Area on California Avenue and both groups have indicated to staff that they support the amendment. RESOUCE IMPACTS Distributors who maintain freestanding newsracks on California Avenue will be required to replace them for modular newsracks on California Avenue if Council approves this amendment to the ordinance. Consequently, there would be no costs to the City. Ongoing enforcement by Public Works staff will continue. ENVIRONMENTAL REVIEW Adoption of an amendment to the Newsracks Ordinance (Chapter 9.79 of Title 9 of PAMC) does not represent a project under the California Environmental Quality Act (CEQA), Guideline 15061. ATTACHMENT Attachment A: Redline Ordinance showing amendments to Chapter 9.79 Attachment B: Ordinance amending Chapter 9.79 of Title 9 of PAMC Attachment C: Photograph of typical freestanding and pedestal-mounted modular newsracks Attachment D: California Avenue Special Newsrack Area map Attachment E: California Avenue Special Newsrack Area Regulations PREPARED BY: ______________________________________ BOB MORRIS Senior Project Manager DEPARTMENT HEAD: ______________________________________ GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: ______________________________________ KELLY MORARIU/STEVE EMSLIE Deputy City Managers cc: Ronna Devincenzi, President of CAADA CAADA CMR:309:08 Page 1 of 6 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: CITY MANAGER’S OFFICE DATE: JULY 7, 2008 CMR:309:08 SUBJECT: REVIEW OF POLLING RESULTS FOR LIBRARY/COMMUNITY CENTER BOND MEASURE AND DIRECTION TO STAFF ON A NOVEMBER 2008 BOND MEASURE RECOMMENDATION Staff recommends that Council review the results of polling conducted in late June 2008 for a library/community center bond measure and provide direction to staff on components for a potential November 2008 bond measure. The three key questions for Council direction are: 1) Should the City proceed with a library/community center bond measure on the November 2008 ballot? If so, should the bond measure include all three elements discussed previously (construction of a new and expanded Mitchell Park library and community center, renovation and expansion of the Main Library, and renovation of the Downtown Library? 2) Should the City pursue LEED Gold building standards for the new Mitchell Park library/community center at an added cost of approximately $1.3 million over the cost of the LEED silver standard incorporated in the current conceptual design of the facility? 3) Should the City include design costs spent to date on the library/community center projects in the bond measure at a cost of approximately $1.5 million? If Council chooses to proceed with a bond measure, staff recommends that the Council direct staff to return in late July with the appropriate authorizing mechanisms (ordinance and resolutions) to place the measure on the November 4, 2008 ballot. BACKGROUND For the past two years, the City Council has placed plans for enhanced library facilities and operations on the top priority lists. There have been substantial work efforts by the City Council, Library Advisory Commission, Recreation Commission and staff developing proposals for enhanced library and community center facilities and operations. These efforts culminated in approval by Council of the Library Service Model Analysis and Recommendations (LSMAR) and Mitchell Park Space Study in December of 2006. CMR:309:08 Page 2 of 6 Following these efforts, the Council authorized staff to proceed with preliminary polling on potential funding options for the needed improvements. On March 5, 2007, the City Council received the preliminary results of a survey conducted by Fairbank, Maslin, Maullin & Associates (FMMA) regarding voter sentiment towards potential funding options for enhanced library facilities and services and a new public safety building. Attachment A to this report provides a copy of that preliminary polling presentation with the key findings from the March 2007 meeting. Following that meeting, the Council has had several discussions regarding the library and public safety building projects. In February 2008, the Council decided to proceed with the issuance of Certificates of Participation (COPs) for the public safety building and to pursue a potential bond measure to fund the libraries/community center projects that would include a new and expanded Mitchell Park library and community center, renovations to and an expansion of Main Library and renovations to the Downtown Library. Since February, the Council, City staff and community members have been working on an outreach effort to inform the community specifically about the library and community center facility needs. This effort has included presentations to neighborhood and community groups, a letter to key stakeholders, and a direct mail piece among other efforts. If the Council places a measure on the November ballot, staff would continue to provide factual information about the measure through the City’s website and other means. On a parallel track and based on Council direction, the Public Works Department convened a group of construction industry specialists to peer review the project cost estimates for both the library/community center projects and the public safety building project. This group has met several times since February and staff presented the results of their analysis at the May 19, 2008 Council meeting. The group confirmed that the cost estimates for the projects were consistent with current industry standards and that the contingency estimates were reasonable. Staff did some additional analysis and refinement of the project costs and developed a revised cost estimate that the Council discussed at the May 19 meeting (Attachment B). In June 2008, FMMA conducted a tracking poll of Palo Alto voters that focused only on a potential library/community center bond measure. Attachment C is the polling questionnaire used for the survey. Staff based the survey project cost estimates in Attachment C on the May 19 data with appropriate bond financing costs included. The total project cost of $75 million identified in the survey questionnaire does not include any of the non-bondable costs, e.g. furniture, fixtures, equipment or temporary facilities. These costs are addressed in the Resource Impact section below. The Council will receive the results of the June 2008 poll during the presentation at the July 7 meeting. DISCUSSION There are several key decision points for the Council at this meeting: 1) Should the City proceed with a library/community center bond measure on the November 2008 ballot? If so, should the bond measure include all three of the elements discussed previously (construction of a new and expanded Mitchell Park library and community CMR:309:08 Page 3 of 6 center, renovation and expansion of the Main Library, and renovation of the Downtown Library)? 2) Should the City pursue LEED Gold building standards for the new Mitchell Park library/community center at an added cost of approximately $1.3 million over the cost of the LEED silver standard incorporated in the current conceptual design of the facility? 3) Should the City include design costs spent to date on the library/community center projects in the bond measure at a cost of approximately $1.5 million? 1) Should the City proceed with a library/community center bond measure on the November 2008 ballot? If so, should the bond measure include all three of the elements discussed previously (construction of a new and expanded Mitchell Park library and community center, renovation and expansion of the Main Library, and renovation of the Downtown Library)? As mentioned previously, the Council provided direction to staff in February 2008 to prepare for a potential November 2008 bond measure that would include construction of a new and expanded Mitchell Park library and community center, renovation and expansion of the Main Library, and renovation of the Downtown Library. Based on the results of the June 2008 poll presented this evening, staff is asking for direction on whether to proceed with the bond measure and with the same previously anticipated scope. 2) Should the City pursue LEED Gold building standards for the new Mitchell Park library/community center at an added cost of approximately $1.3 million over the cost of the LEED silver standard incorporated in the current conceptual design of the facility? During the February 2008 Council review of construction cost estimates for the Mitchell Park Library and Community Center, the Council directed staff to determine the cost to upgrade the building design from the current U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Silver rating to a LEED Gold status. LEED is a system of guiding building designers towards more sustainable projects. A more sustainable project can collect more LEED points and thereby qualify for a higher rating. A report prepared by Guttmann & Blaevoet Mechanical Engineers (G&B) in May 2008, evaluated six different design options including different types of heating and air conditioning systems, water heating systems and other methods that would reduce energy costs. The analysis included construction costs, operating and maintenance costs and considered any rebates offered by the City’s Utility Department. The recommended configuration that would secure the points required to move the Library/Community Center project into a LEED Gold category include: ▪ Installation of a more energy efficient heating and air conditioning system ▪ Rooftop solar hot water system ▪ Night sky radiant cooling. Night-sky radiant cooling systems enable downsizing of conventional cooling equipment and reduces annual energy costs by cooling water in a radiative and evaporative fashion. Water is sprayed over a flat or low-slope roof surface at night, cooled, filtered, stored and delivered the following day for building cooling. The total cost of these systems is $1.3 million which includes design, construction and contingency costs. When the resulting energy savings, incremental construction costs and life CMR:309:08 Page 4 of 6 cycle costs are factored in, it will take 14 years for cost-recovery. This $1.3 million would need to be added to the current bondable project cost of $75 million tested in the poll. 3) Should the City include design costs spent to date on the library/community center projects in the bond measure at a cost of approximately $1.5 million? To adequately prepare the design and cost estimates for a potential bond measure, the City entered into a contract with Group 4 Architecture to prepare 35% design drawings and project cost estimates for the library/community center projects. To date, the City has spent approximately $1.5 million on this effort and these costs were not included in the May 19 cost estimates. The City has used Infrastructure Reserve funding to cover these costs. If the Council includes these costs in the bond measure, the City would be able to reimburse the Infrastructure Reserve, freeing up funds for other critical infrastructure projects. Adding these costs to the bond measure would add an additional $1.5 million in project costs to the $75 million figure tested in the poll. RESOURCE IMPACT There are numerous financial challenges facing the General Fund, including the need for new revenue sources for facility and service enhancements. As stated in prior infrastructure studies and as policy approved by Council, new infrastructure efforts and new service levels require new revenue streams. As the Long Range Financial Forecast has demonstrated, there is very limited capacity to absorb any new expenses. Debt financing the capital costs envisioned by the LSMAR will require a fresh, ongoing revenue stream to finance the debt service. The potential construction of an expanded Mitchell Park library and community center will require an allocation of additional annual operating expenses, both from a facility maintenance and library/community center operations standpoint. Staff has worked to develop an estimated range of these anticipated annual operating costs, based on input from the Library, Community Services, Utilities and Public Works departments as well as the independent library consultant who has been working with Group 4 Architecture on these projects. These costs include the following: additional library and community center staff necessary for larger Mitchell Park facility (up to 4 full time positions as recommended by library consultant); new Public Works Facilities Mechanic position for building systems maintenance; custodial/maintenance costs; utility costs; library collection maintenance; public computer replacement; security system costs; and furniture replacement. The estimated annual cost for these items could range between $750,000 and $1.1 million. It is difficult to produce a definitive estimate because the buildings are still in the preliminary design phase. Additionally, based on the proposed construction schedules for the facilities, the total annual amount would not be required before FY2013/2014, allowing for these costs to be phased in and evaluated over time. The City has not provided the resources needed to maintain its existing infrastructure. Presently, Facilities Maintenance staff maintain a workload that requires that each person handle 3 times as much area per person as compared to industry standards. A recent report completed to quantify the City’s facilities needs recommended adding 4 facilities technicians (one of which has been budgeted for FY2008/09) and 12 temporary full-time equivalents to catch up with the CMR:309:08 Page 5 of 6 maintenance and repair backlog. Since sufficient resources are not currently provided for existing facilities, additional facilities cannot be maintained without a corresponding increase in staff and operating expense. Staff will also be evaluating the required library staffing levels pending the outcomes of the library technology plan. A report analyzing the benefits and costs of utilizing automated materials handling (AMH) systems and RFID technology in the libraries will be finalized within two months. A key recommendation of the draft report is that AMH technology be installed at Main, Children’s, and Mitchell Park libraries if the proposed bond measure passes. This will allow for some staff efficiencies and will support the projected rise in circulation at the improved libraries. While the cost to purchase AMH systems for Main and Mitchell Park is estimated at $700,000, the life span of this equipment is long – approximately 20 years. Consideration should be given to including the funding for this capital expenditure as part of the financing plan for the equipment in the new facilities. Regardless of any potential offsets, there will be some additional level of annual operating and maintenance costs. To address these added costs, staff will need to evaluate potential service reductions in the General Fund or look to future economic development tax revenues. If staff is unable to make service adjustments immediately, there is an option to use one-time money in the first few years of facility operations. Staff will continue to develop and refine a plan for addressing these added costs pending approval of a potential bond measure in November. In addition to the ongoing operating and maintenance costs, there are costs associated with furnishing and equipping these new facilities that cannot be included in a bond measure. These costs include the furnishings, fixtures, and equipment for the facilities. The current estimate for these items is approximately $4.3 million (based on the May 19 presentation). The Palo Alto Library Foundation has discussed spearheading a fundraising campaign with other organizations to cover the costs of these items plus approximately $1 million for additional items for the collection. If this campaign does not raise all of the anticipated funds, the City would have to explore other one-time funding options for these costs. POLICY IMPLICATIONS This report is consistent with existing City policies and with the establishment of the Library Plan/Public Safety Building as a Top 4 priority for 2008. ENVIRONMENTAL REVIEW The direction staff is requesting tonight is not a project subject to environmental review under the California Environmental Quality Act (CEQA). However, the library/community center project itself requires environmental review before being placed on a ballot measure. Staff has completed the appropriate environmental review. If the Council proceeds with the ballot measure, staff will return with the appropriate authorizing mechanisms to place the measure on the ballot, including confirmation of the environmental review approvals. ATTACHMENTS CMR:309:08 Page 6 of 6 Attachment A: Presentation of Preliminary Polling Results on Library/Community Center and Public Safety Building Bond Measures, March 5, 2007 Attachment B: Revised Library/Community Center Project Cost Estimates – May 19, 2008 Attachment C: June 2008 Survey Questionnaire from FMMA PREPARED BY: __________________________________ Kelly Morariu Interim Deputy City Manager DEPARTMENT HEAD: __________________________________ GLENN ROBERTS Public Works Director __________________________________ DIANE JENNINGS Library Director CITY MANAGER APPROVAL: __________________________________ FRANK BENEST City Manager CMR:292:08 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: POLICE DATE: JULY 7, 2008 CMR: 292:08 SUBJECT: ACCEPTANCE OF TRANSMITTAL OF POLICE AUDITOR SEMI- ANNUAL REPORT RECOMMENDATIONS Staff is transmitting the attached the first report for 2007-2008 provided by the Police Auditor for Council acceptance. DISCUSSION On September 10, 2007, the City Council voted to extend the agreement with Michael J. Gennaco and Robert Miller of the OIR Group to serve as the City’s Police Auditor. A requirement of the contract is for the Auditors to provide two reports per year summarizing their findings and reporting on each investigation and disposition. Attached is the first report for 2007-2008 (September 2007-March 2008). RESOURCE IMPACT The agreement with OIR Group is in the amount not to exceed $52,000. Since September 2007, $14,506 has been expended. POLICY IMPLICATIONS This report is consistent with City policies. ATTACHMENTS 2007-2008 Police Auditor First Report CMR:292:08 Page 2 of 2 PREPARED BY: Lynne Johnson, Police Chief DEPARTMENT HEAD: _________________________________________ Lynne Johnson Police Chief CITY MANAGER APPROVAL: _________________________________________ STEVE EMSLIE and KELLY MORARIU Deputy City Managers