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HomeMy WebLinkAbout2001-05-07 City Council Summary Minutes Special Meeting May 7, 2001 1. Conference with City Attorney - Existing Litigation.........94 ADJOURNMENT: The meeting adjourned at 7:00 p.m...................94 1. PUBLIC HEARING: The Finance Committee recommends to the City Council approval of the following: 1) The CDBG funding allocations, as recommended by staff, be included in the final 2001-02 Action Plan update to the Consolidated Plan for the period 2000-05; 2) Staff be authorized to submit to the Department of Urban Development (HUD), by the May 15, 2001 deadline, the Action Plan for the expenditure of 2001-02 CDBG program funds; and 3) The City Manager on behalf of the City, be authorized to execute the 2001-02 application and Action Plan for CDBG funds, and any other necessary documents concerning the application, and to otherwise bind the City with respect to the application. Additionally, information should be included for consideration of types of funding, especially with respect to requirements for other costs such as relocation..............................95 2. Selection of Candidates to be Interviewed for Historic Resources Board.............................................97 ORAL COMMUNICATIONS..............................................97 3. Agreement Between the City of Palo Alto and Corestaff Services, Inc. or Manpower Staffing Services for Temporary Employment Services.........................................98 4. Amendment No. 2 to Contract No. C911163 Between the City of Palo Alto and Utility Constructors in the Amount of $400,000 for Providing Overhead Construction Services and Incidental Underground Electrical Work......................98 5. Finance Committee recommendation re Forgiveness of the Principal Balance of the City of Palo Alto’s Non-Profit Rehabilitation Loan in the Amount of $20,000 to Palo Also Senior Housing Project, Inc. DBA Adlai E. Stevenson House. Further, that the $6,000 in accrued simple interest be paid 05/07/01 92-92 back on a schedule to be worked out between staff and the Stevenson House on a two-to-three-year schedule.............98 AGENDA CHANGES, ADDITIONS, AND DELETIONS.........................100 COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS...................101 ADJOURNMENT: The meeting was adjourned at 7:57 p.m. in memory of Winifred Coyle, former Mayor Joe Huber’s mother-in-law, who moved to Palo Alto in 1976 to be near her grandchildren and loved various activities such as the May Fete Parade in Palo Alto...................................................101 05/07/01 92-93 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:00 p.m. PRESENT: Beecham (arrived at 6:15 p.m.), Burch, Eakins, Fazzino (arrived at 6:05 p.m.), Kleinberg (arrived at 6:05 p.m.), Lytle (arrived at 6:05 p.m.), Mossar, Ojakian, Wheeler CLOSED SESSION 1. Conference with City Attorney - Existing Litigation Subject: In re Pacific Gas and Electric Company, a California Corporation, Debtor, U.S. Bankruptcy Court Case No.:01-30923DM Authority: Government Code Section 54956.9(a) The City Council met in Closed Session to discuss matters involving Existing Litigation as described in Agenda Item No. 9B. Mayor Eakins announced that no reportable action was taken on Agenda Item No. 1. ADJOURNMENT: The meeting adjourned at 7:00 p.m. 05/07/01 92-94 Regular Meeting May 7, 2001 The City Council of the City of Palo Alto met on this date in the Council Chambers at 7:00 p.m. PRESENT: Beecham, Burch, Eakins, Fazzino, Kleinberg, Lytle, Mossar, Ojakian, Wheeler PUBLIC HEARINGS 1. PUBLIC HEARING: The Finance Committee recommends to the City Council approval of the following: 1) The CDBG funding allocations, as recommended by staff, be included in the final 2001-02 Action Plan update to the Consolidated Plan for the period 2000-05; 2) Staff be authorized to submit to the Department of Urban Development (HUD), by the May 15, 2001 deadline, the Action Plan for the expenditure of 2001-02 CDBG program funds; and 3) The City Manager on behalf of the City, be authorized to execute the 2001-02 application and Action Plan for CDBG funds, and any other necessary documents concerning the application, and to otherwise bind the City with respect to the application. Additionally, information should be included for consideration of types of funding, especially with respect to requirements for other costs such as relocation. Council Member Wheeler said she did not participate in the discussion of the item at the Finance Committee meeting because she was a Board Member of the Palo Alto Housing Corporation (PAHC). She had since resigned from that position and was advised by the City Attorney that she could participate on the item. Vice Mayor Ojakian said the item was the adoption of an annual Action Plan update to the Consolidated Plan that included the 2001-02 allocation of the Community Development Block Grant (CDBG) funds. CDBG funding was money received from the federal government through the Department of Housing and Urban Development (HUD) and was for local housing. There was over $1 million to allocate; however, the City received 15 applications for funding totaling approximately $2.25 million. The City selected a Citizens Advisory Committee (CAC), which held a meeting to determine how the funds should be divided. Council received a staff report (CMR:181:01), which included not only the CAC’s information but also staff’s recommendations. The CDBG funds were divided into three categories: 1) public service, 2) administrative cost, and 05/07/01 92-95 3) capital projects. Each category had a limit. The Finance Committee met on April 3, 2001, and voted on staff’s recommendation, which differed from the CAC’s recommendation of putting less money into the administrative category and more into the capital projects. Subsequent to the Finance Committee meeting, news came that the Opportunity Center was receiving federal funds, but monies would have to be provided for relocation costs. The $350,000 that the Finance Committee approved would have to be raised to $480,000. The CAC met on April 12, 2001, and made a recommendation to allocate the additional amount of money to the Opportunity Center. Mayor Eakins declared the public hearing open. Brian Baggaley, Ombudsman Program & Catholic Charities, thanked the City’s ongoing support on behalf of the elderly and dependent adults who lived in long-term care facilities in Palo Alto. Philip S. Carter, Jr., 221 Iris Way, represented the Santa Clara County affiliate chapter of the National Alliance for the Mentally Ill (NAMI) and expressed thanks for the support of the residential rehabilitation facility on Waverley Street. He understood that there was an additional allocation of funds that would be made to the project, which was under the direction of the Alliance for Community Care. The facility would satisfy some of the area’s needs for low-cost rehabilitation for the mentally ill. He urged Council to make the maximum allocation possible. He distributed copies of an editorial in the San Jose Mercury News regarding state legislation and activity in the mental health area. MOTION: Vice Mayor Ojakian moved, seconded by Mossar, to approve the staff recommendation as follows: 1) Adopt the Resolution and the Annual Action Plan establishing funding allocations for the 2001/2002 Community Development Block Grant Program Resolution 8050 entitled “Resolution of the Council of the City of Palo Alto Approving the Use of Community Development Block Grant Funds for Fiscal Year 2001-2002” 2) Authorize and direct the City Manager, or his designee, to execute and submit to the U.S. Department of Housing and Urban Development (HUD} the application and other documentation necessary to file the application with HUD, and to otherwise bind the City 05/07/01 92-96 with respect to the application, before the May 15, 2001 deadline; and 3) Authorize and direct staff to carry out any further required environmental assessments and certifications for each project under the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) prior to the commitment of funds. MOTION PASSED 9-0. Council Member Fazzino thanked the Finance Committee and the CAC for their excellent work. He also thanked and congratulated Don Barr, Larry Brown, and Litsie Indergand on their phenomenal work with respect to the Opportunity Center. SPECIAL ORDERS OF THE DAY 2. Selection of Candidates to be Interviewed for Historic Resources Board MOTION: Council Member Burch moved, seconded by Fazzino, not to interview any of the applicants and to agendize the appointments for the next Council meeting on May 14, 2001. MOTION PASSED 9-0. ORAL COMMUNICATIONS Sophia Dhrymes, 483 Hawthorne Avenue, spoke regarding her letter addressed to Attorney General Bill Lockyear about the legal assault by his office and the U.S. Department of Justice against Microsoft. Wei Wang, 3054 Price Court, spoke regarding the Winter Lodge sound wall. Herb Borock, P.O. Box 632, spoke regarding retail strategy for the City of Palo Alto and Carnegie Foundation project. City Manager Frank Benest stated the retail strategy was distributed to the Council, and any member of the public could contact his office for a copy of the report. Stephanie Muñoz, 101 Alma Street, spoke regarding redevelopment. APPROVAL OF MINUTES MOTION: Council Member Mossar moved, seconded by Beecham, to approve the Minutes of April 2, 2001, as submitted. 05/07/01 92-97 MOTION PASSED 9-0. CONSENT CALENDAR MOTION: Council Member Mossar moved, seconded by Wheeler, to approve Consent Calendar Item Nos. 3 and 4, with Item No. 5 removed by Mayor Eakins. ADMINISTRATIVE 3. Agreement Between the City of Palo Alto and Corestaff Services, Inc. or Manpower Staffing Services for Temporary Employment Services 4. Amendment No. 2 to Contract No. C911163 Between the City of Palo Alto and Utility Constructors in the Amount of $400,000 for Providing Overhead Construction Services and Incidental Underground Electrical Work MOTION PASSED 9-0. COUNCIL COMMITTEE RECOMMENDATION 5. Finance Committee recommendation re Forgiveness of the Principal Balance of the City of Palo Alto’s Non-Profit Rehabilitation Loan in the Amount of $20,000 to Palo Also Senior Housing Project, Inc. DBA Adlai E. Stevenson House. Further, that the $6,000 in accrued simple interest be paid back on a schedule to be worked out between staff and the Stevenson House on a two-to-three-year schedule. JoAnn Revis, 4015 Scripps Avenue, President of the Board of Directors of Stevenson House, thanked the staff, the Citizens Advisory Committee (CAC), and the Finance Committee for recommending that the loan be forgiven, which would be very helpful. Stevenson House was legally obligated to pay both the loan and the interest, unless the Council agreed to forgive the loan. In support of staff’s request to forgive the $6,000 interest, she presented information that she did not have when she spoke at the Finance Committee meeting. There was a $26,000 projected increase in utility costs for the upcoming year. A capital improvement loan request to the Department of Housing and Urban Development (HUD) had been in process since July 2000, but the program ran out of funds. The application would not be moved forward until at least the start of a new federal fiscal year in October. There was the need to replace components in both elevators at a cost of approximately $110,000. There would be depletion of the Stevenson House’s reserves, which were currently at $153,000. The minimum recommended reserve of three 05/07/01 92-98 months’ expenses was $222,000. She believed the $6,000 was a modest amount. However, to the residents $6,000 was the equivalent of a 1 percent rent increase. Stevenson House already had to request an increase of 7 percent, one of the highest increases ever, for the current year due to the utility costs increase, the Bay Area inflation rate of 5.5 percent, and numerous continuing physical needs for the facility. For example, over $12,000 had been spent for plumbing repairs since June 2000. The residents received only a 3 percent increase in social security, and Stevenson House tried to keep the rent increases as close to the social security increase as possible. Vice Mayor Ojakian said the Finance Committee supported the recommendation from the CAC because the $6,000 would have come from the Community Development Block Grant (CDBG) funds, and there was not much interest in that. Also, the Finance Committee did not want to set a precedent on forgiving interest on loans. CDBG Coordinator Suzanne Bayley said it was originally CDBG money that was put into a program called the “Nonprofit Rehabilitation Loan” many years before. The loan would be paid back in 10 years with 3 percent simple interest. Funds available under the CDBG program were done as grants. The loan was an exception and was combined with a CDBG grant at the time to do improvements to the dining facility at Stevenson House. Last November staff received a letter from Stevenson House, which asked the City to forgive the loan. Staff reviewed Stevenson House’s expenses and the HUD approved pro forma and felt that forgiving the loan made sense to keep the rents as low as possible and prevent more rent increases. Rehabilitation needs at facilities such as the Stevenson House were great, and forgiving the loan was appropriate. The $6,000 had not been programmed to anything. It would come back as income to be reallocated to another program. If the City gave $26,000 to do the Stevenson House do a project, it would cost Stevenson House another 30 percent of the $26,000 to follow all the HUD regulations. Mayor Eakins asked what it would cost to collect the $6,000 interest costs. Ms. Bayley said there was an administrative expense to amend the promissory note and deed of trust and to follow up in three years to make sure the loan had been paid. Council Member Mossar asked whether there were any other CDBG loans outstanding. 05/07/01 92-99 Ms. Bayley said no. She believed there were five in total, but the Stevenson House loan was the last one. Council Member Lytle asked whether there was a precedence issue. Ms. Bayley said there were no other outstanding loans. The other loans were repaid. Because they were CDBG funds, they were put into a loan program, but they could have just as easily been grants. It was not a federal regulation that the City had to get the money back. Council Member Kleinberg said the item was discussed thoroughly at the Finance Committee meeting. Basically, it was turning a loan into a grant, and the Finance Committee supported that. The Finance Committee also supported the CAC’s recommendation that it was important to bring the interest back into the CDBG funds. There were many worthwhile organizations that competed for the funds, and the $6,000 would be an important addition to the City’s ability to fund other programs. It was a question of policy. The other loans were repaid with interest. Council Member Fazzino said Stevenson House was a very valuable community asset that served an important population, which was increasingly difficult to support given the rising housing costs. Also, Stevenson House had some unexpected cost increases over the last few years. He supported forgiving the loan and interest. MOTION DIVIDED FOR PURPOSES OF VOTING MOTION: Mayor Eakins moved, seconded by Burch, that the City Council authorize and direct the City Manager, or his designee, to execute the necessary documentation to amend the December 22, 1989 promissory note between the City of Palo alto and Palo Alto Senior Housing Project, Inc. to forgive the entire $20,000 principal balance due. MOTION PASSED 9-0. MOTION: Mayor Eakins moved, seconded by Burch, that the City Council forgive the accrued interest in the amount of $6,000 on the non-profit facility rehabilitation loan that was made on December 22, 1989, with City funds without negatively affecting the Community Development Block Grant funds. MOTION PASSED 8-1, Kleinberg “no.” AGENDA CHANGES, ADDITIONS, AND DELETIONS 05/07/01 92-100 Mayor Eakins announced the Closed Session Item No. 6 would be removed from the agenda. COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS Council Member Fazzino expressed concern with the Rearden Steel building, which was located in the middle of ground floor retail district. He wanted to ensure that the ground floor retail regulations would include the Rearden Steel building. City Manager Frank Benest stated that staff was dealing with the issue. Vice Mayor Ojakian requested that the meeting be adjourned in memory of Winifred Coyle, former Mayor Joe Huber’s mother-in-law. CLOSED SESSION 6. Conference with Labor Negotiator Agency Negotiator: City Manager and his designees pursuant to the Merit Rules and Regulations (Jay Rounds, Charles Perl and Scott Bradshaw) Represented Employee Organization: Services Employees International Union (SEIU), Local 715 Authority: Government Code Section 54957.6 ADJOURNMENT: The meeting was adjourned at 7:57 p.m. in memory of Winifred Coyle, former Mayor Joe Huber’s mother-in-law, who moved to Palo Alto in 1976 to be near her grandchildren and loved various activities such as the May Fete Parade in Palo Alto. ATTEST: APPROVED: City Clerk Mayor 05/07/01 92-101 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. 05/07/01 92-102