HomeMy WebLinkAbout2005-07-25 City Council Summary Minutes
Regular Meeting
July 25, 2005
1. Vote and Appointment of Candidates to the Human Relations
Commission .............................................................................. 257
2. Vote and Appointment of Candidates to the Planning and Transportation
Commission .............................................................................. 258
ORAL COMMUNICATIONS ................................................................... 258
4. Resolution 8548 entitled “Resolution of the Council of the City of Palo Alto
Approving the Execution of Supplement No. 4 to the Northern California
Power Agency Joint Powers Agreement Wherein Such Supplement No. 4
Provides for the San Francisco Bay Area Rapid Transit District to Become
a Signatory Party to the Northern California Joint Powers Agency Joint
Powers Agreement and Authorizing the City Manager to Execute
Supplement No. 4 to the Northern California Power Agency Joint Powers
Agreement” .............................................................................. 259
6. Agreement for Base Map Cooperative Use Between the County of Santa
Clara and the City of Palo Alto .................................................... 259
6A. (Item No. 3) Ordinance Amending Section 12.16.020 of Chapter 12.16
of Title 12 of the Palo Alto Municipal Code by Establishing Underground
Utility District No. 41 ................................................................. 259
7. Public Hearing: Notice of Intent to Award License to Place
Telecommunications Equipment on Property Located on the South Side
of Colorado Avenue Near the Intersection of Colorado Avenue and
Simkins Court; Update on ZOU re Telecommunications .................. 268
8. Public Hearing: Consideration of a Request for Site and Design Review
of a New 77,956 Square Foot Office Building, Including 4,023 Square
Feet of Exempt Floor Area, with at Grade Parking and Related Site
Improvements Located on a 5.66-acre Site Located at 2300 East
Bayshore Road and 2450 Watson Court. Applicant: Hoover Associates Along with Jim Baer of Premier Properties on Behalf of Richard Peery.
Zone District: LM(D)(3). Environmental Assessment: An Initial Study
07/25/05 99-255
Has Been Completed and a Mitigated Negative Declaration is Proposed
............................................................................................... 268
9. Public Hearing: License Agreement Between the City of Palo Alto and
Acterra for Operation of a Native Plant Nursery and Restoration of a
0.53 Acre Portion of a City-Owned 7.7-Acre Parcel Adjacent to Foothills
Park ........................................................................................ 277
10. Recommendation to Terminate Fiber to the Home Trial and to
Discontinue Monitoring of Financing Methods in Other California
Jurisdictions ............................................................................. 277
11. Colleagues Memo from Council Members Beecham and Kishimoto
Regarding Revised Approach for Fiber to the Home ....................... 277
COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS ................... 284
ADJOURNMENT: The meeting adjourned at 11:10 p.m. .......................... 285
07/25/05 99-256
The City Council of the City of Palo Alto met on this date in the Council
Chambers at 7:05 p.m.
PRESENT: Beecham, Burch, Cordell, Freeman, Kishimoto, Kleinberg, Morton,
Mossar, Ojakian
City Attorney Gary Baum indicated Oral Communications was inadvertently
left off the agenda under Government Code section 54954.3, which was a
required portion of the meeting. He recommended the Council pass a motion
to add Oral Communications to the agenda.
MOTION: Council Member Beecham moved, seconded by Kleinberg, to add
Oral Communications to the agenda as an emergency item, since it was
inadvertently omitted from the agenda.
MOTION PASSED 9-0.
SPECIAL ORDERS OF THE DAY
1. Vote and Appointment of Candidates to the Human Relations
Commission
FIRST ROUND OF VOTING FOR THE HUMAN RELATIONS COMMISSION
VOTING FOR ANDREW FREEDMAN:
VOTING FOR THEODORE GLASSER: Morton
VOTING FOR MARK HEYER: Burch, Morton, Ojakian
VOTING FOR JOHN KLINESTIVER: Beecham, Kishimoto, Mossar
VOTING FOR COREY LEVENS:
VOTING FOR WINIFRED LEW: Cordell, Freeman, Kishimoto,
Kleinberg, Ojakian
VOTING FOR ANN OZER:
VOTING FOR DARYL SAVAGE: Beecham, Burch, Cordell, Freeman,
Kleinberg, Mossar
VOTING FOR BRIAN WAX:
City Clerk Donna Rogers announced that Daryl Savage was appointed to the
term ending March 31, 2008, with six votes on the first ballot and Winifred Lew
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was appointed to the term ending March 31, 2007, with five votes on the first
ballot.
2. Vote and Appointment of Candidates to the Planning and Transportation
Commission
FIRST ROUND OF VOTING FOR THE PLANNING AND TRANSPORTATION
COMMISSION
VOTING FOR DANNY DYKWEL:
VOTING FOR DANIEL GARBER: Beecham, Burch, Cordell, Freeman
Kishimoto, Kleinberg, Morton,
Mossar, Ojakian
VOTING FOR COREY LEVENS:
VOTING FOR BONNIE PACKER: Burch, Morton, Ojakian,
VOTING FOR PAULA SANDAS: Beecham, Cordell, Freeman,
Kishimoto, Kleinberg, Mossar
City Clerk Donna Rogers announced that Daniel Garber was appointed with nine
votes and Paula Sandas was appointed with six votes to the term ending July 31,
2009.
Vice Mayor Kleinberg expressed appreciation to Bonnie Packer for her
contributions, thoughtfulness, and time in serving on the Planning and
Transportation Commission.
ORAL COMMUNICATIONS
Eve Agiewich, 3427 Janice Way, spoke regarding homelessness.
Bob Gaebler, 1525 Montalto Drive, Mountain View, spoke regarding Notice of
Fraud and conflict – Brown Unruh Act violation BP Code violation 17200 –
17208.
Roger Smith, 270 Tennyson Avenue, spoke regarding parks in Palo Alto.
Faith Bell, Bell’s Book Store, spoke regarding the store’s 70th Anniversary.
Norman Carroll, 425 High Street, #120, spoke regarding the need for blood
donations.
Herb Borock, P.O. Box 632, spoke regarding the Brown Act.
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Trina Lovercheck, 1070 McGregor Way, spoke regarding an irresponsible Daily
News article blaming the homeless for affecting local businesses.
CONSENT CALENDAR
Council Member Morton moved, seconded by Cordell, to remove Item No. 3
from the Consent Calendar to become Item No. 6A.
Council Member Kishimoto stated she would not be able to participate in Item
No. 5 due to a potential conflict of interest because she lived on Embarcadero
Road.
MOTION: Council Member Mossar moved, seconded by Kleinberg, to approve
Item Nos. 4-6 on the Consent Calendar.
LEGISLATIVE
4. Resolution 8548 entitled “Resolution of the Council of the City of Palo Alto
Approving the Execution of Supplement No. 4 to the Northern California
Power Agency Joint Powers Agreement Wherein Such Supplement No. 4
Provides for the San Francisco Bay Area Rapid Transit District to Become
a Signatory Party to the Northern California Joint Powers Agency Joint
Powers Agreement and Authorizing the City Manager to Execute
Supplement No. 4 to the Northern California Power Agency Joint Powers
Agreement”
5. Resolution 8549 entitled “Resolution of the Council of the City of Palo
Alto Authorizing the Filing of an Application for Federal Surface
Transportation Program Funding for Street Rehabilitation Project for
Embarcadero Road”
ADMINISTRATIVE
6. Agreement for Base Map Cooperative Use Between the County of Santa
Clara and the City of Palo Alto
MOTION PASSED 9-0 for Item Nos. 4 and 6.
MOTION PASSED 8-0 for Item No. 5, Kishimoto not participating.
6A. (Item No. 3) Ordinance Amending Section 12.16.020 of Chapter 12.16
of Title 12 of the Palo Alto Municipal Code by Establishing Underground
Utility District No. 41 (1st Reading 7/11/05, Passed 8-0, Freeman absent)
Jack Barrie, 657 Bryson Avenue, said approximately 65.5 percent of the land
owners on Bryson Avenue were against the underground electrical project.
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Christopher Glazek, 656 Bryson Avenue, said the underground utility project
would hurt him financially because he had been unemployed due to a
permanent disability.
Richard Chou, 578 Bryson Avenue, said the out-of-pocket cost estimates
made by the City for each homeowner of District 41 ranged from $4,000 to
more than $10,000, which would incur a fiscal burden for the individual
homeowner and was excessive the for project.
Mary Howland, 547 Bryson Avenue, urged the Council to postpone or vote
against the formation of District 41. She also suggested having the lines come
in from the back.
Michael Arne, 538 Bryson Avenue, said the process taken for putting out the
questionnaires was inadequate, especially when compared to what other cities
with utilities in the State of California had as their criteria. Pacific Gas and
Electric (PG&E) and the City of Manhattan Beach both required 60 percent
positive signing on a petition before they would form such a district.
Sung Sook Lee, wife of Chul Choo Lee, 567 Bryson Avenue, concurred with
the comments of the previous speakers.
Troy G. Parker, 600 Bryson Avenue, said he felt the City of Palo Alto Utilities
(PAU) had misrepresented the dollar amount compared to the estimate
indicated in the survey.
Jay Jeffries, 2569 Webster Street, said he could not make an informed
decision based on what little information he had received.
Cindy Hsiang Hsu, 557 Bryson Avenue, said the underground utility project
would pose an undue financial hardship.
William Birdsey, 2563 Webster Street, said he did not have an idea what was
going to happen from a technical or supply issue, and wondered whether the
project required reworking the rest of the electricity in his home to bring it up
to code.
Mary Emard, 548 Bryson Avenue, concurred with the comments of her
neighbors. As a single parent, she too found it financially difficult to finance
the bill.
Herb Borock, P.O. Box 632, said in past years most of the undergrounding
was paid by the general utility customer because of other undergrounding
associated with the district and the streets, with a small proportion paid by
the individual customers. One way to mitigate the project was to charge the
customers the amount indicated in the first Capital Improvement Project
(CIP).
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Robert Stock, 521 Colorado Avenue, expressed support for the underground
utility project.
Robert Smith, 2291 Greer Road, reminded everyone the Underground Utility
District (UUD) was a longstanding effort of the City. Whatever the Council did
that evening would be precedent setting. If reasonable changes were needed
they should be responded to.
Council Member Morton said he understood the residents received notice and
what appeared to be a ballot, which informed the neighbors of
undergrounding in their district. He asked if the residents could vote to opt
out of being a member of that district.
Electrical Engineering Manager Tomm Marshall said the vote was an advisory
to Council, and it was up to them whether or not to proceed with the
underground district. Staff’s role was to propose a district, hold a public
meeting, send out a mailer that explained what was going on in the district,
and present an advisory vote to the Council.
Council Member Morton asked whether the Council had ever voted not to
proceed with a UUD.
Mr. Marshall said no.
Council Member Morton asked how the costs were established.
Mr. Marshall said staff went to each home and prepared an estimate based on
what they found.
Council Member Morton clarified it was an onsite estimate with staff’s best
guess as to what a contractor would bid for the jobs.
Mr. Marshall said that was correct.
Council Member Morton said the City made available a ten-year loan to
homeowners who chose to take advantage of it, which was then added to the
property tax bill. He believed Santa Clara County allowed seniors to defer
their property taxes until their house was sold. He asked whether a similar
sort of thing took place in cases of hardship.
Mr. Marshall said yes. There was a State program in place whereby
homeowners could defer their property taxes.
Council Member Morton asked whether the UUD would qualify for a deferral.
Mr. Marshall said the deferral was based on income and any senior could
apply for a property tax deferment based on income.
07/25/05 99-261
Council Member Morton said as he listened to the speakers there was some
question as to the use of the easement and how and where the connections
were made. He asked staff for further explanation about that.
Mr. Marshall said staff determined the issue of a rear easement was not
something they would suggest because of safety issues, especially with the
use of a conduit and not being able to encase it. It would also pose difficulty
in gaining access to the transformers and other equipment if put in the rear of
the house.
Council Member Morton asked what the expected reconnection costs would be
after the new undergrounding was completed.
Mr. Marshall said the estimates given included reconnection costs.
Council Member Morton clarified some of the estimates were higher because
staff had already built in what the homeowner would have to pay in addition
to the trenching.
Mr. Marshall said that was correct.
Council Member Morton asked how large the turnout was for the public
meeting.
Mr. Marshall said approximately 12 people attended.
Council Member Morton asked whether many of the neighbors’ issues were
addressed.
Mr. Marshall said staff conducted a presentation and answered a number of
questions at the public meeting.
Vice Mayor Kleinberg said when the Council took up the issue previously, she
asked whether it was within the Council’s authority to decide not to do an
underground district. She asked for further clarification on the issue.
City Attorney Gary Baum said the Council could vote to reject staff’s
recommendation to impose the UUD or vote to change the boundaries of the
district. Neither would be consistent with past policy, but the Council had the
authority to make policy and direct staff how to proceed.
Vice Mayor Kleinberg said she had previously understood the Council was
bound to vote for the district and did not have the authority to override a
UUD. Hypothetically, if the City had undergrounded 99 out of 100 districts,
would the Council have the authority not to underground the last district.
07/25/05 99-262
City Manager Frank Benest said the Council had the authority to change City
policy, although it was against the existing policy.
Vice Mayor Kleinberg said Council’s authority that evening was to change the
policy in order to postpone or reject staff’s recommendation to underground in
the proposed district. She asked whether the Council had to have an
affirmative vote about a policy change or could they just defer the
undergrounding.
Mr. Baum said the Council could direct staff not to underground, defer
underground, look at other financing mechanisms, or return the next year. It
did not require a policy decision.
Vice Mayor Kleinberg asked would that work for the agenda if the Council
voted to defer the UUD until the policy could be reviewed again.
Assistant City Manager Emily Harrison reminded the Council that if they chose
to defer the proposed UUD they should do so for all upcoming UUDs.
MOTION: Vice Mayor Kleinberg moved, seconded by Cordell, to defer all new
proposed Underground Utility Districts (UUD), including this district, until the
policy matter is taken to the Policy and Services (P&S) Committee for review
of the undergrounding policy and finance methods and brought back to the
Council.
Council Member Cordell said her understanding about the process was
approximately 40 years prior when the Council voted to underground, and
each time a district was considered, the Council would decide whether to go
forward. A survey was conducted to get an advisory opinion from the
residents in the district. Unless the advisory opinion process was simply pro
forma it was significant, influential, and could be determinative of what the
Council did district by district. The exorbitant expenses today were not in
existence 20, 30 or 40 years prior.
Council Member Kishimoto expressed support for the motion and would like to
see the process fine-tuned in terms of communicating the potential costs to
residents.
Council Member Freeman asked how the cost per household could change so
drastically over time if the UUD was a citywide project that went from district
to district.
Mr. Marshall said the costs were particularly high in District 38 because of a
lack of competition between contractors to provide services. There were only
two contractors willing to do it in that District, which drove up the costs.
07/25/05 99-263
Council Member Freeman said the UUD was a utility function and believed the
reserves were designed to even out the costs of utilities. She asked whether
there was any way the City could even out the costs to homeowners.
Ms. Harrison said staff anticipated looking at a number of financing issues.
The City Attorney indicated in other jurisdictions where Pacific Gas and
Electric (PG&E) did undergrounding, they added it to the rate base so the
customers paid it over time.
Council Member Freeman suggested a varying rate scale for retired persons,
and those on fixed or low incomes. Her concern was the UUD projects had
been going on for the past 40 years, there were a number of streets that were
not undergrounded; although other streets were being re-undergrounded. She
would like to see a time certain in approximately three months when staff
would come back to Council with additional information.
Ms. Harrison said staff would move with all rapidity on the issue. She
reminded Council the Electric Engineering and Operations Division of Utilities
was presently in challenge mode.
Council Member Mossar said at a prior hearing on the issue, she understood
the City’s present infrastructure was in need of repair, maintenance, and
upgrade, and staff was reluctant to spend money to do the upgrading then
turn around and spend additional monies undergrounding utilities. She asked
whether her assessment was correct.
Mr. Marshall said that was correct. Staff had deferred maintenance in the
proposed district.
Council Member Mossar asked whether the area could potentially experience
power outages if the undergrounding was deferred or not done at all.
Mr. Marshall said that was possible.
Council Member Mossar asked whether the decision to defer the UUD for the
proposed district would create a problem for staff in terms of maintenance.
Mr. Marshall said it would depend upon the delay. Staff planned to begin
construction in the next fiscal year, which would allow time to bring additional
information to the Council and still keep that schedule.
Council Member Mossar expressed support for the motion. She reminded her
colleagues of the responsibility to maintain the system, which was not simply
a beautification issue.
Council Member Ojakian asked for further clarification of the City’s
infrastructure problems.
07/25/05 99-264
Mr. Marshall said the utility poles were deteriorating due to age and rot.
Council Member Ojakian asked what the difference was to the average
homeowner between replacing the poles and doing the undergrounding of the
wires.
Mr. Marshall said there was no charge to the homeowner to replace the utility
poles.
Council Member Ojakian asked what the difference in cost was to the City
between replacing the poles and doing the undergrounding of the wires.
Mr. Marshall said it was less expensive to replace the poles. It would cost the
City approximately $10,000 to $15,000 for the work the Utility Department
did in the street for each home. A pole serving four or five homes costs
approximately $5,000 per pole.
Council Member Ojakian asked what year undergrounding began.
Mr. Marshall said it began in 1965.
Council Member Ojakian asked what the timeframe was to underground the
entire City.
Mr. Marshall said there were various timeframes. There was a movement in the early 80’s to accelerate to undergrounding, which went through a series of
Council meetings before going back to the original schedule of 60 to 70 years
for completion.
Council Member Ojakian said the original intent was to have a program that
would take a period of time because of the varying aspects.
Mr. Marshall said the City had to cooperate with SBC Communications who
had a limit on how much they could spend on undergrounding as set by the
California Public Utilities Commission (CPUC).
Council Member Ojakian said PG&E had a similar program, which was
discontinued.
Mr. Marshall said he believed the program was still in effect.
Council Member Ojakian said he did not believe PG&E was doing the program
at the same speed with which they had done so in the past.
Mr. Marshall said he could not really speak to the issue, but believed they
were still moving forward.
07/25/05 99-265
Council Member Ojakian expressed opposition to the motion. He believed City
policy was the way to go and wanted to see the UUD program continue. He
preferred a motion to defer undergrounding in the proposed district to give
the P&S and/or Finance Committees an opportunity to look at an array of
financing mechanisms.
Council Member Beecham said one key problem with the UUD was the failure
to communicate. He would support deferring the matter and sending it to the
P&S Committee to look at all financing mechanisms.
Mayor Burch said the City decided a number of years prior the desirability of
undergrounding the entire City for aesthetic as well as safety reasons, and for
better control by the Utilities Department and the CPUC. The question that
came up most was the cost to connect. He had asked the City Attorney about
the possibility of offering a variety of financing measures, and expressed
support for a motion to that affect.
Council Member Morton said he would prefer his colleagues forego the process
of sending the item to the P&S Committee, but instead decide whether or not
to change policy. He asked whether the City would honor the request of
everyone on Bryson Avenue to take out a loan.
Mr. Marshall said the City would honor such a request.
Council Member Morton said since the district had already been set up, staff would need to reopen a portion of the hearing to allow those who previously
did not opt to take out a loan the ability to do so.
Mr. Marshall said that was correct.
Council Member Morton expressed support for the motion.
Vice Mayor Kleinberg said the original motion was not to recommend the P&S
Committee consider a revocation of City policy. Rather, it was a motion to ask
the P&S Committee to defer the proposed district until they could look at the
policy with respect to financing mechanisms. Council Member Cordell had
pointed out some issues of equitability, while others mentioned it was a
matter of communication.
SUBSTITUTE MOTION: Mayor Burch moved, seconded by Morton, to have
this issue return to the Council in late September, early October, with
suggestions on financing mechanisms.
Council Member Freeman clarified the original motion included all UUD’s going
forward, while the substitute motion deferred just the proposed district. She
asked Mayor Burch which one he meant.
07/25/05 99-266
Vice Mayor Kleinberg said there was another district in the pipeline and staff
had asked the Council to include all others as well.
Council Member Freeman asked for clarification of the substitute motion.
Mayor Burch said the substitute motion was to have the matter return to the
Council in late September, early October with financing options.
Council Member Freeman asked how many districts were in the pipeline
between now and the end of September.
Ms. Harrison said there was one district already approved and set to be
awarded a contract.
Council Member Freeman expressed support for the substitute motion. She
said the reason some items went to committees was to vet ideas and allow
people to speak about them.
Council Member Kishimoto expressed opposition to the substitute motion.
SUBSTITUTE MOTION PASSED: 5-4, Cordell, Kishimoto, Kleinberg, Mossar
no.
AGENDA CHANGES, ADDITIONS, AND DELETIONS
MOTION: Vice Mayor Kleinberg moved, seconded by Ojakian, to continue
Item No. 7 to September 19, 2005 and Item No. 9 to August 1, 2005.
MOTION PASSED: 8-0, Morton absent.
Council Member Freeman asked why Item No. 7 was not being heard that
evening and whether there was a time restriction.
MOTION: Vice Mayor Kleinberg moved, seconded by Burch, to hear Item No.
11 concurrently with Item No. 10.
Council Member Morton stated he would not participate in Item Nos. 10 and
11 due to ownership of SBC and Comcast stock.
Council Member Mossar stated she would not participate in the Item Nos. 10
and 11 due to ownership of telecommunications stock in her mother-in-law’s
Trust Fund.
Council Member Ojakian stated he would not participate in Item Nos. 10 and
11 because of his wife’s ownership in Comcast, SBC, Verizon and AT&T stock,
as well as other ancillary telecommunications operations.
07/25/05 99-267
Ms. Harrison said Council’s direction to staff was to return within a year with a
report. She also noted the equipment for the trial was not intended to last into
perpetuity. A decision was needed but it did not have to be that evening.
MOTION PASSED 6-0, Morton, Mossar, Ojakian not participating.
UNFINISHED BUSINESS
7. Public Hearing: Notice of Intent to Award License to Place
Telecommunications Equipment on Property Located on the South Side
of Colorado Avenue Near the Intersection of Colorado Avenue and
Simkins Court; Update on ZOU re Telecommunications (Staff requests item to
be continued to 09/19/05)
Item continued to September 19, 2005.
PUBLIC HEARINGS
8. Public Hearing: Consideration of a Request for Site and Design Review
of a New 77,956 Square Foot Office Building, Including 4,023 Square
Feet of Exempt Floor Area, with at Grade Parking and Related Site
Improvements Located on a 5.66-acre Site Located at 2300 East
Bayshore Road and 2450 Watson Court. Applicant: Hoover Associates
Along with Jim Baer of Premier Properties on Behalf of Richard Peery.
Zone District: LM(D)(3). Environmental Assessment: An Initial Study
Has Been Completed and a Mitigated Negative Declaration is Proposed
City Attorney Gary Baum said he had been working on the litigation against
the City concerning a prior application for 2300 East Bayshore Road, and
would turn the matter over to Senior Deputy City Attorney Donald Larkin.
Director of Planning and Community Environment Steve Emslie said the
project before the Council had two antecedent projects. The first being the
zone change that was accomplished several years prior and approved by the
Council to change the Planned Community (PC) zone for the former Scott’s Restaurant site to Light Manufacturing (LM)(D)(3) with a D-Overlay, and the
vacant industrial buildings adjacent to the Scott’s Restaurant that were owned
by the Peery-Arrillaga Group. The applicants had subsequently submitted a
site and design application for an office project in compliance with the zoning,
which was reviewed and approved with conditions by the Planning and
Transportation Commission (P&TC), reviewed and denied by the Architectural
Review Board (ARB), and ultimately denied by the Council. He clarified the
reference “to deny without prejudice” as indicated in the staff report
(CMR:337:05) should be stricken. The revised project was in compliance with
the existing zoning. The LM(D)(3) was the least intense zone, required the
least amount of site coverage and was in compliance with the Baylands Master
Plan (BMP), which recognized the existing developed area might continue to
07/25/05 99-268
remain commercial and job producing.
Senior Deputy City Attorney Donald Larkin said questions came up with
regard to the denial with prejudice on the submittal of a substantially similar
application. Section 18.77.020 (d) of the zoning ordinance stated, “If an
application is denied, the director or city council may specify that a
substantially similar application may not be accepted within twelve months
prior to the date of such denial”. The ordinance applied to certain applications
but not to site and design review. The denial with prejudice in regard to site
and design review was made to provide additional guidance to the applicant
but was not binding on the City.
City Planner Chris Riordan said the project involved a new two-story office
building with at-grade parking located on a 5.6-acre site at 2300 East
Bayshore Road and 2450 Watson Court. The approximately 42,000 square
feet of existing office buildings would be removed. The allowable .3 Floor Area
Ratio (FAR) would allow for the construction of a 73,932 square foot building
and would equal 77,956 square feet, with the additional 4,023 square feet of
exempt FAR set aside for onsite employee amenities that would facilitate the
reduction of employee vehicle use. The applicant also proposed to incorporate
a cafeteria and recreation areas into the building; however, the details were
not included on the plans since the building was being constructed as a shell
building. Any future tenant improvements would be the responsibility of the
occupants. Staff added a Condition of Approval (COA) that the exempt floor
area be clearly shown on any plans submitted for a building permit. As stated in the staff report (CMR:337:05), the Architectural Review Board (ARB)
conducted two preliminary reviews of both the building and landscape design
of the project. The ARB was generally supportive of the proposed design and
commented on the projects improved effort to achieve the goal of serving as
the gateway to the Baylands and meeting the objectives of the BMP. The
P&TC also reviewed the project, was supportive of it, and recommended
Council approve the application and Mitigated Negative Declaration (MND).
The P&TC was also supportive of the proposed Transportation Demand
Management (TDM) Plan and commented favorably on the Baylands
Interpretive Garden (BIG); making the statement that the design of the
landscape would further the objectives of the BMP. The P&TC did express;
however, some concern about the height and extent of the proposed
mechanical screening and requested the ARB, during their review of the
project attempt to minimize the extent and height of the screening. The P&TC
also added a COA that the driveway on East Bayshore Road be limited to
vehicular ingress to avoid potential traffic impacts. Staff recommended the
Council approve the MND on the findings that the project would not result in
significant environmental impacts, and approve the site and design review
application based on the findings of the draft Record of Land Use Action
(ROLUA).
Associate Planning Engineer Heba El-Guendy said the Traffic Impact Analysis
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(TIA) evaluated four scenarios: the existing, background, background plus
project, and accumulative analysis. The four scenarios as well as the
significant impact criteria were consistent with the Congestion Management
(CM) program as developed by the County of Santa Clara. Staff evaluated the
existing conditions analysis using the highest volume year of 2001, and
conservatively used those same volumes to come up with the 2008 volumes
by applying a compounded growth rate that was consistent with the
Comprehensive Plan (Comp Plan). The background plus project considered the
net new trips by the proposed project giving credit for existing uses. The
accumulative analysis for 2015 was from staff’s model forecast, which took
into consideration the growth, and traffic on the local and regional level, as
well as all pending and approved projects within the City limits. Despite the
fact the project had no significant impacts, it was conditioned to contribute
towards improvements recently implemented or would be needed in the future
under the accumulative analysis scenario.
Planning and Transportation Commissioner Karen Holman said the project was
an important one as it was at the entrance to the Baylands. The P&TC, on a 5-
1 vote, found the project to be consistent with zoning, the BMP, and the Comp
Plan. The applicant furthered those goals by adding the following COA: 1) the
4,023 square feet of exempt space be maintained as ancillary space; 2) the
TDM program be made a commitment; 3) more indigenous plantings be added
to the landscaping; 4) story poles be erected on site for the ARB review; and
5) to include the dedication of the pedestrian/bicycle path as shown on the
plan. Additionally, the P&TC included a recommendation that the ARB look at minimizing the roof screen height and the extent of lateral screening, which
was then 70 percent of the building primer. As a separate motion that passed
on a 4-3 vote, the P&TC moved to allow ingress only on the East Bayshore
driveway.
Architectural Review Board Chairperson Judith Wasserman said the ARB
denied the project at one time because as a gateway location, the building did
not meet the criteria, was contrary to the Baylands in terms of materials,
colors and massing, and did not offer much in the way of green practices. The
project before the Council that evening met all of the criteria and had a 12.5-
kilowatt photovoltaic project on top of it. The dedicated bike lane was a major
factor in the ARB’s considerations, and the architecture of the building had
come to be quite compatible. The ARB did address the two requests from the
P&TC; one on the height of the screening which included screening of the
photovoltaics as well as the mechanical equipment, and the other addressed
the planting material and its compatibility with the Baylands, which extended
further into the project than simply the Interpretive Gardens.
Mr. Emslie said the one area where the P&TC and staff disagreed was
regarding the restriction of the right in, right out driveway to ingress only.
Staff’s recommendation included retaining an ingress/egress driveway as it
did not justify a gap in the congestion, and studies showed it was not
07/25/05 99-270
warranted. Secondly, staff felt the project was superior with at least two
points of access for both ingress and egress.
Mayor Burch declared the Public Hearing open at 8:52 p.m.
Jim Baer, 172 University Avenue, spoke on behalf of the applicant who was
unable to attend. He said the proposed project had created a required TDM
program, dedicated a significant portion of its land to connect the overpass
bicycle/pedestrian bridge from Embarcadero Road through to Watson Court
without a nexus, embraced sustainability features like no other private office
in Palo Alto, took on the notion of gateway and Baylands compatibility and
took what was approved as a complementary site plan and transformed it into
an entire vision of the gateway. The challenges of being progressive about
transportation, sustainability, and being a uniquely attractive contemporary
design with materials found by the ARB unanimously to be compatible with
the Baylands captured the language to which the Council had directed.
Council Member Cordell said the Council denied the project in November
2004. The developer sued the City and was presently in litigation. The same
developer had come back with a revised project for Council’s approval, but
was still in litigation for the earlier denial. She asked whether Council’s
approval of the project before them had any impact on the litigation.
Mr. Larkin said the new application was unrelated to the litigation.
Council Member Cordell said it defied logic since the litigation was the direct
result of Council’s denial of the applicant’s first project.
Mr. Larkin said he could not speak as to why the applicant would continue
with the litigation.
Sheri Furman, 3094 Greer Road, said because the project was being
developed as a shell building, the Council should consider the type of
permitted use that should go in as a business and the projected accuracy of
traffic impacts since the buildings had been vacant for a period of time.
James Hager, 3160 Maddux Drive, suggested the Council delay the project
until more information could be obtained.
Robert Moss, 4010 Orme Street, said he was opposed to the project. He
believed traffic impacts would be significant and severe.
Diane Sekimura, 2082 Sandalwood Court, said there were a number of errors
in the MND. The TIA used improper trip generation data in its analyses,
thereby reporting incorrect statistics and conclusions. The TIA also failed to
analyze the reasonable expected worst-case traffic scenario if other permitted
uses occurred at the site.
07/25/05 99-271
Angelica Volterra, P.O. Box 1724, said approval of the MND should be denied
as it did not comply with the California Environmental Quality Act (CEQA) and
did not ensure that all significant/potentially significant project impacts were
mitigated.
Toni Stein, 800 Magnolia, Menlo Park, urged the Council not to approve the
project until proper mitigations were included. The magnitude of the project
would cause issues with the need for a signal light at Watson Court.
Georganna Hynes, 140 Azalia Drive, East Palo Alto, suggested using the site
to build a car dealership. She urged the Council to study the project further
before voting on it.
Jim Baer addressed the issue of traffic impacts. He said if trip generation was
based on an average as opposed to the curve, the difference was 110 PM
peak hour trips versus 162, which equaled less than two trips per minute and
three trips per minute respectively. In relationship to the gap analysis, there
were 221 left turn gaps, which was 2-1/2 times the number of gaps necessary
for 110 cars to exit and make the left turn, and 2 times the number for 162
cars to do the same. There were 254 right turn opportunity gaps, which was
14.9 times the number of gaps necessary to make a right turn out of Watson
Court. He believed the project had done more on a voluntary basis in meeting
the needs checklist.
Mayor Burch declared the Public Hearing closed at 9:25 p.m.
Council Member Kishimoto asked whether the flow of traffic on East Bayshore
Road was based on 2005 data or extrapolated data from 2001.
Ms. El-Guendy said the volumes on Watson Court were based on the 2005
survey. On East Bayshore Road, they were done under four analysis
scenarios: 2001 volumes; background for 2008; background plus project
including the project trips with no credit; and 2015 cumulative volumes.
Council Member Kishimoto clarified 2008 volumes were calculated on the
extrapolated 2001 data and not the actual 2005 data.
Ms. El-Guendy said that was correct. Despite that volumes had decreased
from 2001 to the present, a 1.2 compounded yearly growth rate was applied
to come up with the 2008 volumes.
Council Member Kishimoto asked for clarification of the recommendation for
ingress only on East Bayshore Road.
Mr. Emslie said staff suggested modifying the recommendation to retain East
Bayshore driveway as ingress and egress.
07/25/05 99-272
Council Member Kishimoto believed it was customary in a site and design
review for there to be a fixed number of parking spaces. She asked for
clarification on the issue.
Mr. Emslie said the project far exceeded the impervious coverage limitation on
the site, and the flexibility for future parking was important in that location
due to limited offsite parking opportunities.
MOTION: Council Member Kishimoto moved, seconded by Cordell to accept
the staff, Architectural Review Board, and Planning and Transportation
Commission recommendation to: 1) approve the Mitigated Negative
Declaration (Attachment Q of CMR:337:05) for the project at 2300 East
Bayshore Road, with a finding that the project would not result in significant
environmental impacts; and 2) approve the Site and Design Review
application to allow the construction of a new office building in the LM(D)(3)
Limited Industrial Combining District, based on the findings in the draft
Record of Land Use Action (Attachment A). Further, to direct staff to return in
September with an analysis to designate medical/dental, private school and
other high-traffic uses, as a conditional use permit (CUP) as part of the LM
Zoning Ordinance Update (ZOU).
Council Member Kishimoto said members of the public raised a number of
valid issues regarding traffic impacts. She believed there was a significant
difference between 110 PM peak hour trips versus 241. The way the zoning
was currently written the City could have 241 PM peak hour trips even though the TIA indicated there would not be that much additional traffic.
Mr. Emslie said the motion coincided with staff’s anticipated timeframe to
bring to Council the LM zones as well as the other industrial zones. There were
recommendations for changes of certain permitted uses to conditionally
permitted uses, which would give the City the discretion to impose additional
conditions.
Council Member Morton said he heard from a number of speakers that people
would like to see an auto dealership at East Bayshore Road and Watson Court.
He asked what effect would there be if the City changed the zoning
possibilities of the LM(D)(3) in the application.
Mr. Larkin said even if the Council made changes to the pending application,
the zoning would not be subject to those changes.
Council Member Morton asked if the Council approved the motion on the table
would the pending project be exempt from those changes.
Mr. Larkin said no. There was no use proposed as part of the application. If
Council proposed to make medical uses subject to a CUP, it would apply to the
project.
07/25/05 99-273
Council Member Morton said he was bothered by the project’s first denial
because the City did not have a standard for gateway projects. He asked
whether the requirement of plantings compatible with the Baylands and a
dedicated bike path were legal requirements or simply requests consented to
by the applicant.
Mr. Larkin said as part of the site and design review the P&TC, the ARB, and
the Council looked at the environmental design and ecological balance that
went along with development in an environmentally sensitive area. In doing
so, conditions would be put on the developer that met certain standards.
Mr. Emslie said staff did not feel there was a nexus to require dedication for
the bike path; however, the applicant agreed to it. The condition could be
imposed subject to the applicant’s concurrence.
Council Member Morton clarified there was a fair amount of consensus from
the applicant’s second application to meet the City’s gateway project.
Mr. Emslie said that was correct.
Council Member Morton asked if the Council decided the contributions agreed
to by the applicant were not enough and required further decisions about the
City’s use permits and modifications of the LM(D)(3) zone, would that defer
the applicant even longer.
Mr. Emslie said he did not believe so. The application could be approved on its
own merits. If the Council decided to change use rules it would apply district
wide, including the proposed building or any other building that changed use
from an office to one more intense. Uses were only grandfathered in when
they were established, and the proposed building was months away from
being occupied.
Council Member Kishimoto clarified the motion was to adopt staff’s
recommendation with additional language to direct staff to return in
September with an analysis to designate medical/dental, private school and
other high-traffic uses, as a conditional use permit (CUP) as part of the LM
ZOU.
Council Member Morton asked if the Council directed staff to come back in
September with proposed changes to the LM ZOU, could that be done in a
separate motion.
Council Member Kishimoto said the motion was a direction to staff to conduct
the analysis and return in September. If her colleagues did not agree with
that happening on a timely basis, she would vote against the project.
Council Member Morton asked if staff had any hope or expectation that the
07/25/05 99-274
pending litigation would end if the project was approved.
Mr. Larkin said he was not involved in the litigation. It was a question for the
applicant to answer.
Council Member Cordell urged her colleagues to support the motion. It was
not a delay in the project, but something staff said they could comply with in
terms of the September time period and would not disrupt the developer’s
timeline. She also advocated for other possible uses for the building,
specifically the medical/dental uses. She said one of the speakers spoke about
the fitted curve equation and asked whether there was merit to the argument
presented.
Ms. El-Guendy said in addition to the information presented by Mr. Baer, it
was well known practice for general office use to draw on the average trip
generation rates. In review of the Institute of Traffic Engineers (ITE) graphs
the difference between the survey points and the fitted curve for general
office use was very small. For other uses such as retail, the difference was
quite significant and more appropriate for the fitted curve.
Council Member Freeman said when looking at traffic impacts, staff should
take into account the worst-case scenario. She was reminded of severe traffic
impacts from the International School and how the City had built a new
entrance to the school that cut through the Baylands. In the previous case, it
appeared staff chose the lightest trip generation rate scenario.
Ms. El-Guendy said it was common practice to utilize the average trip
generation rate rather than the fitted curve for certain uses. If the City chose
to make a change, it would need to be consistent for all projects.
Council Member Freeman clarified the only way to use the fitted curve was if
the project was retail oriented.
Ms. El-Guendy said it was one of the uses.
Council Member Freeman asked would the same apply if the project was a
medical/dental office or school.
Ms. El-Guendy said the fitted curve would apply for a school use, but would
not apply for a medical/dental use.
Council Member Freeman said there was the possibility the project could
become a school; however, staff chose to utilize the average trip generation
rate.
Ms. El-Guendy said if the project were to become a school the applicant would
have applied for a permit.
07/25/05 99-275
Mr. Emslie said it had been the City’s practice to use the general office use as
the trip generation rate. The analysis before the Council complied with that
practice.
Council Member Freeman recommended when staff returned in September
with the LM ZOU, the City’s practice of using the average trip generation rate
should be evaluated. The traffic congestion and the mitigations made after the
fact had been proven time and again.
Mr. Emslie said staff agreed with Council Member Freeman’s comment and
expected it would be part of the analysis that was ongoing with the ZOU.
Council Member Freeman asked whether the MND was in violation of CEQA.
Mr. Larkin said no.
Mr. Emslie concurred.
Council Member Freeman expressed concern about the ingress/egress at
Embarcadero and East Bayshore Roads. She asked if the Watson Court entry
was 900 feet from the traffic light, how many feet was the new ingress from
the traffic light.
Ms. El-Guendy said it was approximately 450 feet.
Council Member Freeman asked approximately how many cars fit into 450
feet.
Ms. El-Guendy said each car took approximately 25 feet. In distributing the
project trip generation, staff assigned a very small number of trips off the
access driveway. Most of the right turn movements were from Watson Court.
Council Member Freeman asked how the assignment of right turn only would
be determined.
Ms. El-Guendy said it was determined by the site plan layout and the number
of parking spaces closest to the access relative to Watson Court.
Council Member Freeman asked whether the ingress or egress had any fire
safety issues associated with it.
Ms. El-Guendy said it was preferable to have two access locations for a site
plan because of emergency services.
Council Member Freeman asked whether it was possible to designate a right
turn only from the driveway.
07/25/05 99-276
Ms. El-Guendy said presently it was designated as a right turn in, right turn
out. There was a condition on the project that provided a channeled island
that prevented motorists from making a left turn.
Council Member Freeman asked whether the motion would require a CUP if a
tenant other than general office use was retained.
Council Member Kishimoto said the motion would not require a CUP, but it did
direct staff to come back with an analysis and set of recommendations about
doing so.
MOTION PASSED 9-0.
Mayor Burch asked Mr. Baer whether he had authority to speak on behalf of
the applicant as to what affect the approved motion had on the pending
litigation.
Jim Baer said he was not involved in the litigation and could not speak on
behalf of the applicant.
9. Public Hearing: License Agreement Between the City of Palo Alto and
Acterra for Operation of a Native Plant Nursery and Restoration of a
0.53 Acre Portion of a City-Owned 7.7-Acre Parcel Adjacent to Foothills
Park (Staff requests item to be continued to 08/01/05)
Item continued to August 1, 2005.
REPORTS OF OFFICIALS
ITEM NOS. 10 AND 11 WILL BE HEARD CONCURRENTLY.
10. Recommendation to Terminate Fiber to the Home Trial and to
Discontinue Monitoring of Financing Methods in Other California
Jurisdictions
11. Colleagues Memo from Council Members Beecham and Kishimoto
Regarding Revised Approach for Fiber to the Home
Council Member Morton stated he would not participate in Item Nos. 10 and
11 due to ownership of SBC and Comcast stock.
Council Member Mossar stated she would not participate in the Item Nos. 10
and 11 due to ownership of telecommunications stock in her mother-in-law’s
Trust Fund.
Council Member Ojakian stated he would not participate in Item Nos. 10 and
11 because of his wife’s ownership in Comcast, SBC, Verizon and AT&T stock,
as well as other ancillary telecommunications operations.
07/25/05 99-277
MOTION: Council Member Beecham moved, seconded by Kishimoto, to
terminate the Fiber to the Home Trial (FTTH) Trial.
Manager of Telecommunications Blake Heitzman said the first portion of
Council’s direction to staff was to continue the Fiber to the Home (FTTH) trial
for one year with an evaluation on whether to continue it further. Staff
recommended termination of the FTTH trial beginning the early part of
December 2005 or when the equipment delivering current services failed.
Reasons for closing the FTTH trial included: 1) the trial had served its purpose
as a pilot project that demonstrated its functionality; and 2) the trial was
never meant to be a commercial operation. It had no dedicated support staff,
no service contract with the equipment supplier, and no equipment
replacement fund. Staff anticipated working with the trial participants to help
them find other sources before the period ended.
Deputy Director Administrative Services Joe Saccio said the second portion of
Council’s direction was to continue the monitoring of financing methods used
in other California jurisdictions. While there had not been significant progress
on financing methods, the experience in other localities was informative. The
City of Lompoc had a two-phase program. The first was to build a wireless
system, and the second was to build an FTTH system. Completion was
expected in four months. A local write-in campaign against the wireless and
FTTH enterprises had been initiated. Letters were written to Lompoc’s Council
opposing the use of City resources for telecommunications and opposed City
competition with the private sector. Although there was strong opposition from incumbent providers and taxpayer associations, Lompoc’s Council and a
large number of residents were in favor of building the FTTH system. The
Local Agency Formation Commission (LAFCO) because of a technicality
temporarily stopped Truckee-Donner Public Utility District. Based on their
charter, Truckee-Donner was not allowed to use electric funds to fund non-
electric projects. It did appear the District would proceed with its financing
plan that first used bridge financing and eventually issued Revenue
Certificates of Participation. Alameda Power and Telecom had gone through
three different financings with a fourth planned in 2009 to construct a
fiber/coaxial system. These financings included a $10 million loan from the
Electric Utility and a $2.2 million loan from the City’s Redevelopment Agency.
Staff found the FTTH projects in California costly in terms of private financing,
high interest rates, and favored discontinuing looking at other cities in
California.
Council Member Beecham said the Colleagues Memo authored by Council
Member Kishimoto and himself recommended action that was consistent with
the bulk of staff’s recommendation to terminate the FTTH trial. In addition,
the memo recommended the City begin the process to issue a Request for
Proposal (RFP) that would solicit ideas from the private sector on a build out
of a 100 Megabit per second system within Palo Alto. In consultation with
staff, the first step would be for staff to return to Council with legal and
07/25/05 99-278
financial issues regarding the issuance of the RFP. He believed there were still
substantial benefits to the community of an alternative, ultra high bandwidth
competitive and open system. The United States continued to lag other
nations in residential access to ultra high bandwidth and there was little
comprehensive competition at the local level.
Council Member Kishimoto acknowledged there was little choice but to shut down the FTTH trial. The trial was successful. It produced satisfied customers,
rock solid service, and City staff proved it could install and service the
equipment. She believed the RFP was critical to Palo Alto’s future. Palo Alto
was a community of innovators and people who valued their neighborhood.
She hoped her colleagues would support the motion.
City Manager Frank Benest said staff recognized the potential upside for Palo
Alto if they were to find a way to achieve a successful FTTH project. There
continued to be sufficient legal, financial and other concerns that militated
against proceeding with FTTH efforts at the present time. The first concern
involved financial exposure. In most cases a private operator would require
the City to back any debt to build out the system. Because staff could not use
the Electric Fund, the General Fund (GF) would be put at risk for up to $40
million. In addition, any costs related to preparing and issuing the RFP,
evaluating proposals, and negotiating franchise agreements would be GF costs
and could not be borne by the Electric Fund. Staff believed the administrative,
legal, and outside expertise costs would be significant. Because the private
operator would take over dark fiber operations, the City would lose any
opportunity to recoup the initial $3 million investment. The City’s GF would be
exposed if the private operator went out of business leaving the City obligated
for running the ongoing operations. The second concern involved legal issues.
Any private operator would have to function under the same rules as Comcast
and be required to pay for a franchise. The franchise required a payment of
five percent of gross revenues on any cable and video services, plus Utility
Users Tax (UUT) on any telephone service. From a legal perspective, the City
could be inviting Federal Communications Commission (FCC), and California
Public Utilities Commission (CPUC) regulations of the Electric Utility as well as
dark fiber and other telecom operations. Accordingly, the City might need a
vote of the people to amend the City Charter in order to address issues
related to the venture. The final issue involved administrative hurdles that
would require the City to layoff employees or have those employees hired by
the private operator. The bigger issue; however, concerned the workload. The
RFP would significantly impact Electrical Engineering and Operations, the
Administrative Services Department and the City Attorney’s Office. Staff
acknowledged the upside opportunity and the enthusiasm for the proposed
venture, and the City Manager generally supported strategic investments in
Palo Alto’s future; however, given the financial, legal and administrative
barriers, staff did not believe proceeding with the proposed RFP was worthy of
the required City resources and risks involved to the GF.
07/25/05 99-279
Jeff Hoel, 731 Colorado Avenue, expressed support for the FTTH trial. He
believed the staff report (CMR:319:05) was incomplete as it did not take into
account what the cities of Fontana, Loma Linda, and Ontario had done about
FTTH.
Mark Heyer, 726 Marion Avenue, said the FTTH trial had achieved its purpose
and believed it was time to shut it down. In the first round of business
planning for the project staff focused unduly on a frontal attack on the
incumbent providers. If instead, they had focused on a scaled down more
sophisticated approach to the business plan, Palo Alto would have the benefit
of economic development, educational opportunities, energy management,
security, and traffic reduction. He encouraged Council to support the
Colleagues Memo.
Bob Smith, 2291 Greer Road, said the problem involved difficulty in mounting
a project that would assemble together services that were effectively
competitive against the incumbent providers.
Arthur Keller, 3881 Orina Way, said he did not believe there was any reason
to shut down the current FTTH trial. Doing so would send the message that
Palo Alto was not interested in FTTH.
Andy Paggio, 2708 Gasper Court, said he favored discontinuing the FTTH trial,
but not the service. He supported moving forward with the RFP.
Peter M. Allen, 1127 Hopkins Avenue, said he took part in the FTTH trial and
found the service and reliability invaluable to him and his family.
Sanford Forte, 280 College Avenue, said the original impetus behind FTTH was
visionary. He favored the continuance of the trial because there was much
merit in a well ran broadband service. Canceling the project would risk losing
institutional memory. If the City chose to move forward it must consider the
following: 1) the business model should not be a plain service at risk from
incumbent pricing attacks; 2) the business plan must take into consideration
disruptive and convergent technologies such as distributed content models
and wireless technologies; 3) must gauge real risks without selling blue sky;
4) must pursue a public/private partnership; and 5) must keep the process
inclusive.
Michael Eager, 1960 Park Boulevard, urged the Council to move forward with
the RFP, show some vision, and keep the FTTH trial because it was symbolic
and made a statement that Palo Alto had a hand in the game.
David Harris, 455 Margarita Avenue, recommended cutting the universality
requirement as the demand for FTTH varied from place to place. He preferred
to see proposals made from small groups founded by their members or
residents themselves, and allow the use of dark fiber as an available resource.
07/25/05 99-280
Robert Moss, 4010 Orme Street, said there was no reason to stop the existing
FTTH trial. It costs the City nothing and would actually make a profit. More
importantly, as long as the trial continued both SBC and Comcast were
motivated to provide some minimum level of service.
Derwin Cox, 2600 E. Bayshore Road, recommended the City not sell the
system to a single provider but keep the model they already had, manage
dark fiber services, and lease it to small companies like his.
Council Member Beecham said the anticipation was the open system would be
available to services similar, which Mr. Cox and other firms like his spoke
about. The City Manager mentioned the financial exposure of up to $40 million
to build out the entire system. He believed it could be done for less in the
private industry, and any proposal the City received should consider a
modular approach and/or with minimal upfront capital costs to reduce their
risks as well as the City’s. The City Manager mentioned the inability to use
Electric Funds, which he supported. If the City moved forward, any fiber
system must have a fire/brick wall between it and any other operating utility.
He believed the City had not made sufficient benefit out of the dark fiber
opportunity either through marketing or in the flexibility in how the rates were
established. He did expect there to be franchise fees and welcomed them;
however, he did not believe those fees in a UUT would prevent services. He
did agree there were regulatory issues the City must pay attention to. He was
aware of the workload costs, and would need to know what they were and
how to fit them into the workload.
MOTION: Council Member Beecham moved, seconded by Kishimoto, to
terminate the Fiber to the Home Trial (FTTH) Trial.
MOTION PASSED 6-0, Morton, Mossar, Ojakian not participating.
MOTION: Council Member Beecham moved, seconded by Kishimoto, to direct
staff to return to the Council to discuss legal and financial issues regarding the
issuance of the Request For Proposal (RFP) for the construction and operation
of a minimum 100 Megabit per second Citywide infrastructure providing
access to service to all residential and commercial residents and open to all
providers.
Council Member Freeman said she did not recall limiting the review of
different financing methods to those used just by California jurisdictions. She
asked whether that was part of the previous motion or did it include other
states.
Mr. Saccio said he recalled the motion was restricted to California
jurisdictions. In the staff report dated July 19, 2004 (CMR:360:04), staff
looked at and reported on the two experiments in Utah. The discussion
07/25/05 99-281
focused around California because of Proposition 218 and the unique law
relative to other jurisdictions and places in the country.
Council Member Freeman expressed support for the Colleagues Memo. She
said Palo Alto individually spent money for synchronizing traffic lights, and
state-of-the-art police and fire telecommunications when it already had the
dark fiber and the infrastructure for a data utility system.
Vice Mayor Kleinberg confirmed the proposal to staff for the RFP would require
the system to be a publicly owned infrastructure.
Council Member Beecham said the motion directed staff to return to Council
with a discussion of the legal and financial issues and an insight toward
issuing a RFP for the system as described in the Colleagues Memo.
Vice Mayor Kleinberg confirmed the RFP would be a publicly-owned fiber.
Council Member Kishimoto said that was the intent.
Council Member Beecham said what was proposed in the Colleagues Memo
was to have a City-owned system.
INCORPORATED INTO MOTION WITH THE CONSENT OF THE MAKER
AND SECONDER to add the words “to become a public-owned fiber” to the
motion.
Vice Mayor Kleinberg asked why the RFP was not limited to fiber technology.
Council Member Beecham said one option discussed was an operation called
Current Connections, which was a technology for putting out data over AC
power lines.
Vice Mayor Kleinberg asked whether Council Member Beecham was referring
to the possibility of Google responding to the RFP.
Assistant City Manager Emily Harrison said staff did not know whether Google
might be interested in responding to a RFP.
City Attorney Gary Baum said staff had made the assumption collectively it
was telecom/cable like companies that would be responding.
Vice Mayor Kleinberg asked whether the ultimate plan was that the entire
community would bear the cost of the venture, or was that just one financing
option.
Director of Administrative Services Carl Yeats said certainly there could be the
option of a public/private venture that was structured so the utility would be
07/25/05 99-282
returned to the City after a period of time to make back the initial investment.
Another format could be the issuance of debt to build out the utility.
Vice Mayor Kleinberg said one possibility could include the entire community
paying for the infrastructure through a public/private venture.
Mr. Yeats said when the matter was previously before Council, staff suggested
doing the build-out in an area-by-area network based on small assessment
districts. The current path was to go with a RFP.
Vice Mayor Kleinberg asked if the staff were to work on the RFP, what would
have to be deferred, for what period of time, and which departments would be
involved.
Ms. Harrison said the departments included Electrical Engineering and
Operations (EEO) in the Utilities Department, the City Attorney’s Office, the
Administrative Services Department, as well as the participation of the City
Auditor and City Manager’s offices. The bulk of the time estimated in the EEO
by the telecom group was approximately 500 to 600 hours. The other
departments were looking at between 40 to 100 hours depending on how the
RFP was structured.
Vice Mayor Kleinberg asked what matters would need to be deferred in order
to do the work.
Ms. Harrison said staff had not discussed what would be deferred, other than
the telecom group.
Vice Mayor Kleinberg said a major concern of the City Manager was the
burden on City staff.
Mr. Benest said there was no doubt other priorities would be affected if the
Council wanted to come back within a certain time.
Vice Mayor Kleinberg asked whether additional legal staffing would be
required to deal with the regulatory issues.
Mr. Baum said he did not anticipate adding staff, but did anticipate
approximately $35,000 to $50,000 in outside counsel.
Vice Mayor Kleinberg asked if staff had estimated or evaluated the possibility
of a legal fight.
Mr. Baum said assuming Comcast/SBC did not come out a winner, a lawsuit
was a near certainty based upon other communities’ experiences. The cost
would be difficult to estimate and could not be handled in-house.
07/25/05 99-283
Council Member Cordell confirmed if the Council followed the recommendation
to issue a RFP it was likely the City would be subject to some legal challenges.
Senior Assistant City Attorney Grant Kolling said yes it was highly probable.
Council Member Cordell asked what the likelihood was the City would prevail.
Mr. Kolling said the risk of losing could be minimized if the City required the
successor to compete on the same terms that Comcast and SBC were
required to do. If a RFP could be tailored in such a way as to allow the
successor to comply with federal law constraints, it would level the playing
field.
Mr. Baum said in order to have a level playing field the entire community
would have to be covered. The modularity concept probably would not work.
In addition, Palo Alto had an I-Net that would require the successor company
to build one or provide an equal financial contribution, plus the Public,
Educational, and Governmental Access (PEG) Channel and all the other
components the cable company was required to provide. Although it would
constrain what was being asked for in the RFP, it was needed in order to make
the venture as legally defensible as possible.
Council Member Cordell said the visionary concept of FTTH was good;
however, the reality of it was better. She believed there was a certainty of
litigation, of expending substantial sums of money, and a huge amount of time consumed by staff. Now was probably not the time given the times,
which were riffed with litigation regarding the issue. She stated an opposition
to the motion.
Council Member Beecham said the issues raised by the City Attorney were
real. A part of the potential success of the venture was how well the City
found a route to take that respected the rights and limitations others
expected, yet still uncovered a way to provide the services for the community.
He expressed optimism that staff could find something that would satisfy the
needs of the community.
Council Member Kishimoto said the legal challenges were a very serious
threat; however, there were potential ways to share some of the risks. Even if
the incumbent providers threatened litigation, she did not believe the City’s
only choice was to roll over and allow them to take over.
MOTION PASSED 5-1, Cordell no, Morton, Mossar, Ojakian not participating.
COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS
07/25/05 99-284
Council Member Freeman noted her concerns regarding the Downtown North
area where the roundabouts would have crushed granite and the signage for
“no parking” on sweep day.
ADJOURNMENT: The meeting adjourned at 11:10 p.m.
ATTEST: APPROVED:
City Clerk Mayor
NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto
Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing
Committee meeting tapes are made solely for the purpose of facilitating the
preparation of the minutes of the meetings. City Council and Standing
Committee meeting tapes are recycled 90 days from the date of the meeting.
The tapes are available for members of the public to listen to during regular
office hours.
07/25/05 99-285