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HomeMy WebLinkAbout2001-05-14 City Council Summary Minutes05/14/01 92-104 Special Meeting May 14, 2001 1. Public Employee Performance Evaluation......................106 ADJOURNMENT: The meeting adjourned at 7:00 p.m...................106 Regular Meeting..................................................107 1. Utilities Strategic Implementation Plan and Associated Changes to the 2001-02 Proposed Budget......................107 2. Youth Council Presentation..................................107 ORAL COMMUNICATIONS..............................................108 4. Ordinance 4695 entitled “Ordinance of the Council of the City of Palo Alto Amending the Budget for Fiscal Year 2000- 01 for Legal Services for PG&E Bankruptcy Proceedings”......109 5. Appointment of Candidates to the Historic Resources Board...109 7. Contract Between the City of Palo Alto Monterey Mechanical Co., Inc. in the Amount of $69,000 for the Flowmeter Replacement Project for the Water Quality Control Plan (Wastewater Treatment Capital Improvement Program 8022).....109 8. Contract Between the City of Palo Alto and Royal Roofing Company, Inc. in the Amount of $59,151 for the Avenidas Roof Replacement Project (Capital Improvement Program 10006)......................................................110 10. PUBLIC HEARING: The Palo Alto City Council will consider an appeal from the September 29, 2000, decision of the Director of Planning and Community Environment, whereby the application of William Lee for a Home Improvement Exception [00-HIE-18] was approved. Approval was granted to allow the construction of a detached two-car garage within a rear- yard setback at a distance of 71.5 feet from the front property line and 30.5 feet from the street-side property line where 75 feet is the minimum distance required from any street facing property line. The property involved is an existing single-family residence.........................110 05/14/01 92-105 11. Resolution Authorizing Issuance of Limited Obligation Improvement Bonds...........................................111 12. Consideration of the Long-Term Preservation Strategy Deal for the Buena Vista Mobilehome Park.........................111 12A. (Old Item No. 3) Ordinance Amending Title 9 of the Palo Alto Municipal Code to Add Chapter 9.76 Relating to Mobilehome Park Conversion..................................112 12B. (Old Item No. 6) Contract Between the City of Palo Alto and Energy Masters International, Inc. in the Amount of $710,144 to Reduce Electric Demand in City-Owned Facilities.125 12C. (Old Item No. 9) Arastradero Preserve Trail Master Plan and of the Environmental Impact Assessment Application by the Palo Alto Community Services Department for Implementation of the Trail Plan. A Mitigated Negative Declaration has been prepared for this Project in Accordance with California Environmental Quality Act (CEQA).................129 COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS...................131 ADJOURNMENT: The meeting adjourned to a Closed Session at 10:45 p.m.........................................................131 13. Conference with City Attorney—Existing Litigation...........131 14. Conference with City Attorney-Existing Litigation...........131 15. Conference with City Attorney-Existing Litigation...........132 FINAL ADJOURNMENT: The meeting adjourned at 11:00 p.m............132 05/14/01 92-106 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:00 p.m. PRESENT: Beecham Burch, Eakins, Kleinberg, Lytle (arrived at 6:20 p.m.), Mossar, Ojakian, Wheeler ABSENT: Fazzino CLOSED SESSION 1. Public Employee Performance Evaluation Subject: City Attorney Ariel Calonne Authority: Government Code section 54957 The City Council met in Closed Session to discuss matters involving Public Employee Performance Evaluation as described in Agenda Item No. 1. Mayor Eakins announced that no reportable action was taken on Agenda Item No. 1. ADJOURNMENT: The meeting adjourned at 7:00 p.m. 05/14/01 92-107 Regular Meeting May 14, 2001 The City Council of the City of Palo Alto met on this date in the Council Chambers at 7:08 p.m. PRESENT: Beecham, Burch, Eakins, Fazzino (teleconferencing from Washington, D.C.), Kleinberg, Lytle, Mossar, Ojakian, Wheeler Mayor Eakins read a letter addressed to her from Congresswoman Anna Eshoo thanking Mayor Eakins for her letter requesting support of federal funding for the Children’s Library, the Intermodal Center, the Arastradero Trail Preserve, and the Storm Drain Infrastructure. Congresswoman Eshoo’s letter indicated she formally requested funding from the appropriate members of Congress and their committees, and she would do everything she could to make the projects successful. REPORTS OF OFFICIALS 1. Utilities Strategic Implementation Plan and Associated Changes to the 2001-02 Proposed Budget Staff requested that the item be removed from the agenda and rescheduled to the May 21, 2001, Regular Council meeting. SPECIAL ORDERS OF THE DAY 2. Youth Council Presentation Palo Alto Youth Council Member Marissa Huang said the Youth Council was made up of 15 teen members who represented the diverse teen voices in the City. The main focus was to enhance the community by serving as links between adults and teenagers. The Youth Council addressed the recreational needs of teens in Palo Alto. Surveys were distributed to students at Gunn, Palo Alto, and Castilleja High Schools. In response to the question, “Is there a need for a Teen Center in Palo Alto,” 38 percent said yes, 56 percent said no, and 6 percent did not answer. The question “Do the recreational activities offered in Palo Alto fit your needs” 41 percent said yes, 51 percent said no, and 8 percent did not answer. In response to a question on preference of a Teen Center, 14 percent said yes to a new Teen Center, 77 percent wanted new programs, and 9 percent did not answer. Palo Alto Youth Council President Christopher Tsai said there was a push away from a Teen Center and a push toward more programs. The Youth Council devised a proposal to lease out the 05/14/01 92-108 proposed Teen Center, and that 75 percent of the revenue from the lease went to teen programs. The Youth would determine whether the 75 percent was used for current programs or creation of new programs. A transition Teen Center was requested at the Mitchell Park Community Center. During the needs assessment, popular ideas were brought up which included a Black and White Ball for teens, film festival in Palo Alto, and a ski trip to Bear Valley. Council Member Burch said the Youth Council came up with a creative, wonderful idea. Council Member Kleinberg said the Youth Council’s interest in having more services dated back to the early 1980s when there was a tremendous move on the part of the teens to have a Teen Center. At that time, neighborhoods did not want Teen Centers. The Youth Council was complimented on its proposal. Council Member Lytle expressed appreciation to the Youth Council for the work they did. She asked why the Youth Council considered only 75 percent of the revenue toward its programs. Mr. Tsai said the Youth Council felt the 75 percent was a reasonable amount. Vice Mayor Ojakian asked how the Youth Council’s proposal fit in with the City plans. City Manager Frank Benest said he looked for the Community Services Department to step forward. The remaining 25 percent paid for the City’s portion of the Parking Assessment. Council Member Fazzino asked the Youth Council whether they had any discussion of venues or locations for the type of programs that were needed. Mr. Tsai said the current Teen Center was distant from the centers of teen population such as schools. The Youth Council wanted to begin implementation of the programs close to the schools. No action required. ORAL COMMUNICATIONS Dorothy Bender, 591 Military Way, spoke regarding the ground floor retail ordinance. 05/14/01 92-109 Wei Wang, 3054 Price Court, spoke regarding Amendment Nos. 5 and 6 of option to lease with CSI. Stephanie Munoz, 101 Alma Street, spoke regarding housing. Kristina Lindsay, 1591 Dana Avenue, spoke regarding the shuttle. Pat Kinney, 689 Wildwood Lane, spoke regarding the shuttle. Kathy Durham, 2039 Dartmouth Street, spoke regarding school trip reduction. Laura MacDougall, 2875 Ramona Street, spoke regarding the Palo Alto lease ordinance. Council Member Mossar said the Policy and Services Committee would meet on June 7, 2001, to discuss escalating rents. Lynn Chiapella, 631 Colorado Avenue, spoke regarding the conversion of CN retail into office. CONSENT CALENDAR Mayor Eakins announced that Agenda Item No. 3 would be removed from the Consent Calendar and become Agenda Item No. 12 A. MOTION: Council Member Mossar moved, seconded by Beecham, to approve Consent Calendar Item Nos. 4, 5, 7 and 8, with Item Nos. 3, 6 and 9 removed to become Item Nos. 12A, 12B, and 12C. LEGISLATIVE 4. Ordinance 4695 entitled “Ordinance of the Council of the City of Palo Alto Amending the Budget for Fiscal Year 2000- 01 for Legal Services for PG&E Bankruptcy Proceedings” ADMINISTRATIVE 5. Appointment of Candidates to the Historic Resources Board 7. Contract Between the City of Palo Alto Monterey Mechanical Co., Inc. in the Amount of $69,000 for the Flowmeter Replacement Project for the Water Quality Control Plan (Wastewater Treatment Capital Improvement Program 8022) 8. Contract Between the City of Palo Alto and Royal Roofing Company, Inc. in the Amount of $59,151 for the Avenidas 05/14/01 92-110 Roof Replacement Project (Capital Improvement Program 10006) MOTION PASSED 9-0. UNFINISHED BUSINESS 10. PUBLIC HEARING: The Palo Alto City Council will consider an appeal from the September 29, 2000, decision of the Director of Planning and Community Environment, whereby the application of William Lee for a Home Improvement Exception [00-HIE-18] was approved. Approval was granted to allow the construction of a detached two-car garage within a rear- yard setback at a distance of 71.5 feet from the front property line and 30.5 feet from the street-side property line where 75 feet is the minimum distance required from any street facing property line. The property involved is an existing single-family residence (Zone District R-1), located at 404 Lowell Avenue, Palo Alto, California. Environmental Assessment: Exempt from the provisions of the California Environmental Quality Act. Zone District R-1 Single Family Residential. (continued from 2/05/01) Mayor Eakins noted the item was a quasi-judicial matter and any new contact with representatives of the applicant or appellant needed to be reported. Mayor Eakins reported that she received an email from a relative of the applicant. Chief Planning Official Lisa Grote said the item was before the Council on several occasions and continued in order for the applicant and appellant to work out a solution. A compromise solution was proposed and was agreeable to the applicant and appellant. The solution required the garage to be replaced in the same location and be of the same size and height as the original garage that was demolished. Staff recommended the Home Improvement Exception (HIE) be approved with the garage in the same location and of the same size and height as the original garage. Mayor Eakins declared the Public Hearing open. There were no comments from the public and the Public Hearing was declared closed. MOTION: Council Member Fazzino moved, seconded by Beecham, to accept the appellant’s request to rebuild the 404 Lowell Avenue garage on the exact location of the demolished garage, with 05/14/01 92-111 dimensions and features identical to those of the old garage (i.e. same location, height, width and length, and no windows facing the Ben Efraim property). MOTION PASSED 9-0. ORDINANCES AND RESOLUTIONS 11. Resolution Authorizing Issuance of Limited Obligation Improvement Bonds Council Member Beecham would not participate in Agenda Item No. 11 due to a conflict of interest because he lived in close proximity to the facility. MOTION: Vice Mayor Ojakian moved, seconded by Mossar, to approve the staff recommendation as follows: 1. Adopt a Resolution Authorizing Issuance of Limited Obligation Improvement Bonds. 2. Authorize staff to implement the sale of bonds of an amount not to exceed $9,250,000. These bonds will be used to: refinance the District’s 1989 Improvement Bonds; pay remaining debt service on the 1977 Parking Bonds; reimburse the City’s General Fund for study and predesign expenditures; and find final design, acquisition, management and bond issuance expenditures. Resolution 8051 entitled “Resolution of the Council of the City of Palo Alto Authorizing Issuance of Limited Obligation Improvement Bonds” University Avenue Area Off-Street Parking Assessment District MOTION PASSED 8-0, Beecham “not participating.” REPORTS OF OFFICIALS Mayor Eakins recommended that Council combine Item Nos. 12 and 12A to be heard at the same time. 12. Consideration of the Long-Term Preservation Strategy Deal for the Buena Vista Mobilehome Park 05/14/01 92-112 12A. (Old Item No. 3) Ordinance Amending Title 9 of the Palo Alto Municipal Code to Add Chapter 9.76 Relating to Mobilehome Park Conversion City Attorney Ariel Calonne reported that on April 30, 2001, the Council introduced for first reading the Buena Vista MobileHome Park (the Park) Conversion-closure Ordinance and asked that he get together with the residents to give a better explanation of what was going on. He and Human Services Administrator Kathy Espinosa-Howard met with a group of residents from the Park the prior Saturday and were cordially welcomed. The key issue of concern at the April 30, 2001, meeting was the Consumer Price Index (CPI) plus 6 percent threshold in the Park Conversion- closure Ordinance in the economic eviction portion. That threshold was the point in which a rent increase could be petitioned for review by 25 percent or more of the residents in the Park to a private hearing officer who would determine whether or not the proposed rent increase was necessary to provide a fair return on investment for the owners. Public comment was made that the threshold was too high. He pointed out on April 30, 2001, that the intent was not for a rent cap or rent control but rather to stop arbitrary financial abuse by the owners that would drive people out of the Park so that the owners might evade paying relocation assistance if they desired to close the Park. At the Saturday, May 12, 2001, meeting with the residents, he explained that the CPI plus 6 percent threshold went into effect 31 days after the Council gave second reading to the ordinance. That was important because from that date forward, rent increases would be reviewed under the CPI plus 6 percent threshold. The second part of the discussion with the residents had to do with the Deal Points. He explained to the residents that the City Council had not had an opportunity for involvement in the negotiation of the deal. Since December, he went as far as practical or possible given what State law required for environmental review or zoning changes. Looking at changing the zoning to the Park in that timeframe was not feasible. The ten-year timeframe of the deal points also got attention. With the State law, there was nothing to stop the Park owners from converting the Park to its current zoning which was a 15-unit to the acre apartment zoning. The meeting with the residents was positive, and the residents understood what was being proposed. Pam Davis, 3980 El Camino Real, Space 88, objected to the long- term preservation strategy. Concessions of the Park owners included keeping all increases at CPI plus 6 percent unless there was an expense that drove it above that. The cap should be 75 percent of CPI which would be the same restriction on the 05/14/01 92-113 Park as another park in San Jose owned by Mr. Jisser. Eighty percent of the Park fell within low-income brackets. Forty percent rather than 15 units should be allowed. If the Park were redeveloped at 104 units, 21 more units would be built than what was originally scheduled to be built. Ellen Gold, Buena Vista Mobilehome Park, heard but did not know whether Council Member Beecham’s business involved coordinating construction on redevelopment projects. If that were correct, Council Member Beecham should have recused himself from voting at the time of the first reading and for the second reading. A fair return on the Jisser’s investment could be realized with a rent cap at 75 percent of CPI. That was the amount set to protect apartment renters under the Condominium Conversion Ordinance. The Park homeowners needed the same protection. If the Council felt that 75 percent of CPI was unfair to the Jissers, a variance to construct rental housing above the Block Buster and 3 adjacent stores fronting on El Camino Real could be offered. The homeowners of the Park did not believe it was inevitable that the Park be redeveloped but wanted to preserve the Park as a mobile home park in the long-term. The zoning needed to be changed from the existing zoning that allowed for 15 apartments per acre to the appropriate zoning to preserve the Park. Ann Greaves, 3980 El Camino Real, #112, wanted the Park to remain a mobile home park or considered an alternative mobile home park in Palo Alto. The Buena Vista MobileHome Park suited the needs of people who were old or ill. The CPI plus 6 percent was too high. Bruce Stanton, 1530 The Alameda #115, San Jose, attorney representing the residents of Buena Vista, said he reviewed 107 mobile home rent ordinances in effect and over 40 conversion ordinances in effect in cities and counties, and he found Mr. Calonne’s work to be excellent. The proposed ordinance did a good job with a couple exceptions. One exception was the CPI plus 6 percent. The economic eviction potential was of concern. The CPI plus 6 percent meant 8 to 9½ percent increases, which was close to 30 percent after 3 years and up to the 80 to 100 percent range after the ten years contemplated by the ordinance. Comparing the CPI plus 6 percent with usual rent stabilization, the CPI was larger. A rent increase was given with 60 days notice followed by a second notice extending the notice 30 days. Those were not legal notices. A legal ninety-day rent increase notice was needed. The clarity of the last resort benefit under the conversion notice was questioned. The residents should be bought out if every conceivable relocation option was exhausted. 05/14/01 92-114 Jim Forthoffer, Buena Vista, said the CPI plus 6 percent was proposed prior to the City doing a survey of the income levels of the residents in the Park. The survey showed there were a large number of low-income people. The proposed rent increases increased at a fast rate and out distanced the ability for many of the low-income people to pay. The concern was that the landowners received a fair return without forcing economic eviction upon the homeowners in the Park. That did not happen with CPI plus 6 percent. A lower CPI would give the people an opportunity to stay where they were. If the residents were forced out early, they lost value in their homes and relinquished any relocation benefits from the state. Julie Cockroft, 930 Colorado Avenue, said the CPI plus 6 percent would be a tremendous impact on the residents. She asked the Council to reconsider the figures to make something more possible for the residents. Edie Keating, 3511 Waverly Street, said the City Council spent many hours looking for ways to add affordable housing to the community. If the Council went forward without some amendments to the ordinance, affordable housing would be lost. The Council was encouraged to reduce the CPI. The Jissers owned other properties in the City and must have benefited from Palo Alto’s real estate boom. Asking the Jissers, in exchange for benefits, to have less real estate gain on one property seemed appropriate. Andrew Pierce, 363 Ely Place, said the Human Relation Commission (HRC) met and discussed the issue. The HRC voted unanimously the prior week on 3 points. The HRC believed, based on Ms. Espinosa- Howard’s data, there was a significant chance of economic eviction with rent increases in the range of CPI plus 6 percent or CPI plus 5 percent. The HRC urged the Council to consider a lower rate of allowable increase under both the Park Conversion- closure Ordinance and under the development agreement if there were to be a development agreement. The HRC did not specify a specific number. The HRC asked that the Council take into account averaging the CPI over a few year period or have a moving average rather than a number set for a particular year. The Park resident’s income did not go up faster than CPI. The mobile Park owner’s expenses did not go up with the CPI because the property was a capital investment and not a high service property with many amenities or labor expended. The units were repaired by the residents rather than the owners of the Park. Council Member Kleinberg said she only heard two points mentioned by Mr. Pierce. 05/14/01 92-115 Mr. Pierce said the first point was a finding that based on Ms. Espinosa-Howard’s, the CPI posed a threat of economic eviction in the near future. The second point was that the number in the development agreement and Park Conversion-closure Ordinance should be lower than CPI plus 6 percent. The third point was a recommendation to average the CPI over a period of years. Vice Mayor Ojakian said the HRC looked at other tenant issues and asked whether anything was considered for Council action that would supersede what was proposed. Mr. Pierce said the HRC would ask the City to adopt a mandatory mediation ordinance in the City of Palo Alto. Joe Jisser, 3980 El Camino Real, said for the past several years he fought to keep the Park open. The proposed agreement was more than fair. As a landowner, much was sacrificed. Herb Borock, P.O. Box 632, said the correct thing to do was to look at what would withstand a court challenge. The increase should give the owner a fair rate of return. Courts had upheld a fraction of the CPI as a fair rate of return, and 75 percent of the CPI was a typical increase in ordinances throughout the state, including Palo Alto on the Condominium Conversion Ordinance. In terms of the likelihood that the owner might want to redevelop the property, there was a requirement in the Housing Element of the Comprehensive Plan (Comp Plan) that on redevelopment of rental property with a subdivision map, two out of 3 criteria needed to be met. The Deal Points mentioned 104 dwelling units with 20 percent developed as below market rate (BMR). Under the Comp Plan, 117 rental units would be required. State and municipal legislation treated mobilehome Parks as rental property. The only alternative the owner had to get out of the Comp Plan program was to develop the property as rental housing without an underlying subdivision map. The question was whether that would be a feasible project. Once that was done, the only way to get a subdivision was to go through a Condominium Conversion Ordinance. Melodie Cheney, 3980 El Camino Real, #102, moved to the Park in January 2001 with a base rent of $675 per month. Her mobilehome was 500 square feet and cost her $30,000. When she moved in, she was unaware of what was going on with the Park. Bob Moss, 4010 Orme Street, said page 5 of the ordinance, Section (f), related to how the property owner got property evaluated, “… an appraisal of the Park site if used for the highest and best use permitted by the zoning for the site or any 05/14/01 92-116 new zoning being requested by the Park Owner.” The owner could say he wanted “CC” on the site and the property appraised as though it was “CC”. That was an incentive to remove the homes. The sentence should be removed. In the long-term strategy Deal Points, the last item said the “City will maintain the current Comprehensive Plan land use zoning for a period of ten years.” That was the wrong approach. As the City Attorney pointed out, the zoning could not be changed for 4 months. The Council would discuss the land use map in the Zoning Ordinance as part of the ordinary Comp Plan update. At that time, the Council should change the zoning back to what it was in 1978, which was RM-10 or R-2. Council Member Beecham asked whether the property owner, under the development agreement, needed to comply with the Park Conversion-closure Ordinance requirements at the end of ten years. Mr. Calonne said yes. The Deal Points said, for the purpose of State law, the Park owners proposed a changed in use. That was where the relocation assistance came from. Council Member Beecham clarified the Park Conversion-closure Ordinance would apply regardless of the development agreement. Mr. Calonne said that was correct. Council Member Beecham asked whether the Condominium Conversion Ordinance applied to the land. Mr. Calonne said the argument made was that no one would develop an apartment project at the current time without also processing a condominium subdivision. The reason for that was converting already-built apartments was subject to the condominium conversion ordinance. The new apartments came through as condominiums. Council Member Beecham said if the owners converted the trailer Park, they had to comply with the proposed Park Conversion- closure Ordinance. If the owners converted the trailer Park to owned housing, would they need to comply with the condominium conversion. Mr. Calonne said no. The argument was to get to whether 20 percent was the right number. Council Member Beecham asked whether there was an estimate of what the closure costs might be per unit. 05/14/01 92-117 Mr. Calonne said no. He only had the description in the ordinance about how the units were computed. Page 7 of the ordinance said for homes that could not be relocated to a comparable Park, the payment was a lump sum based on the cost of moving to and purchasing or renting comparable housing. The language was intended by the State to discourage conversion. Council Member Wheeler said she heard speakers who referred to the Condominium Conversion Ordinance say there was a provision that limited rent increases to 75 percent of the CPI. Mr. Calonne said that was one aspect. The other argument was that the 20 percent BMR was no more than what was already required. The most important information on the cap was the Council’s objective. If the Council’s objective was to preserve indefinitely affordable housing at the location, an approach different from a cooperative arrangement where the owner would be induced to maintain the property for a fixed period of time in exchange for something would be used. In December 2000, the Council was not ready to pursue what was characterized as a regulatory approach. The Council directed staff to look at the issue from a cooperative standpoint. The CPI plus 6 percent did that and had the owners’ agreement. The real answer was that the Council had not established policy, and the residents, owners, and staff did the best they could to take a step in the right direction. Council Member Lytle asked whether the Council could zone for mobilehome Park preservation. Mr. Calonne discouraged the Council from attempting to zone mobilehome Park only. The Council needed a property rights protection escape clause that would allow other uses with the discretionary permit. A permitting process to allow other uses when and if mobilehome Parks became economically infeasible would be needed. Council Member Lytle clarified the proposed agreement essentially fixed a minimum density zoning. Mr. Calonne said he and the owners were operating with a limited amount of information. The preservation strategy was a starting point. The most significant part was that it was cooperative and another arrangement could be made at a later time. Council Member Lytle asked about the size of the units at the minimum density. Taking the unit count, the .5 Floor Area Ratio (FAR), the 35-foot height, the daylight planes, Parking 05/14/01 92-118 requirement, access and circulation, and required open space, she asked whether staff had a sense of the approximate unit size would be for the minimum density required on the property. Mr. Calonne did not have an answer in a quantitative way. The language in the Deal Point mentioned 104 units consistent to the maximum extent possible with the .5 FAR and other development standards. The Deal Points were anticipating another round of negotiation that resulted in a development agreement. His advise to the owners was to get planning assistance to get a better idea of the product type to be built. Council Member Lytle said her analysis showed studio size to one-bedroom maximum units which would rely on underground Parking. She asked whether the owner of the property had any architectural assistance in his negotiations. Mr. Jisser said the timeframe did not allow him to get engineers or architects involved to see what kind of buildings could be built. His plan was not to close down the Park. Council Member Mossar said the letter from Mr. Stanton mentioned setting the 25 percent petition threshold to a number that reflected the affected residents rather than all residents. Mr. Calonne said he viewed it as a political call and was not at liberty to help the residents with organization. The 25 percent was a low number. The intent was not to create a more difficult barrier to rent review but to present an easier access to rent review. Council Member Mossar asked whether it would be difficult to determine who the appropriate affected subgroup of tenants were. Mr. Calonne said from the policy viewpoint that he explained to the residents at the prior May 12, 2001, meeting, the City would be content if the owners chose not to raise rents. Council Member Mossar asked for clarification on Mr. Calonne’s comments about appraisals. Mr. Calonne said the courts looked at whether the law deprived the owner of all economically viable use, which was similar to a condemnation or inverse condemnation analysis. Asking for the highest number from an appraiser was intended to establish a maximum on the record so that when and if the matter went to court, people would know what they were dealing with. There was no bearing on what the tenants got nor on the owners rights but was intended to anticipate the arguments that might come. 05/14/01 92-119 Council Member Mossar asked for advice on a strategy for looking at the question of whether the Park could be preserved or whether the piece of land could be preserved for future very low to low income housing. Mr. Calonne said the Council’s desire in December 2000 was to provide some protection against economic eviction. That was in the ordinance. Whether the CPI plus 6 percent threshold was sufficient was a policy call for the Council. Mr. Stanton’s information was that the net effect of the pair of rent increase notices was to not have any information at all. If that were the case, the Council had time to get the ordinance in place. If that were not the case, the Council needed to have second reading completed prior to the end of the month in order to have the ordinance on the books by the end of June. The comments about affordable housing preservation strategy were well taken. The Council was correct in trying to go down the cooperative path in December. He suggested the Council keep the dialogue going. He was explicit in his staff report of April 2001 that the effect of the 104-unit number was to produce smaller, more affordable units. Council Member Mossar clarified Mr. Calonne’s advice was to treat the matter as a first step in a long process. There was nothing the Council would do by proceeding with the staff recommendation that precluded the Council from taking other actions in the future. Mr. Calonne said that was correct. Council Member Beecham asked about the language that required a minimum density of 104 units. Mr. Calonne said the intention was to require 104 units although that was not expressed as a minimum. The ordinance said the City’s action was to permit 104 units. Council Member Beecham asked what would happen if the owner did not sign the development agreement. Mr. Calonne said the Park Conversion-closure Ordinance would be in place and the owners would have the rights associated with the ordinance and the RM-15 zoning. Council Member Beecham clarified the ordinance was in effect regardless of whether or not there was a development agreement. Mr. Calonne said that was correct. 05/14/01 92-120 Council Member Beecham said he did not see an incentive for the owner to do a development agreement. Mr. Calonne said he had not heard the owners disclaim interest in the Deal Points. He heard the owners acknowledge it was done on a constrained schedule. Council Member Burch clarified there was nothing in place at the present time that kept the current residents from getting a rate increase in their rent. Mr. Calonne said that was correct. There was nothing in the proposed ordinance that would stop a rate increase. The ordinance did not propose to put a maximum on the rent increases but proposed to say if the increase exceeded CPI plus 6 percent, a neutral third party would review it. Vice Mayor Ojakian clarified the action was rent mediation with a threshold rather than rent control. Mr. Calonne said that was correct. Vice Mayor Ojakian said if the number was set too low, there would be quite a few hearing processes or a Park owner who would be incentized to do something else with his property. Mr. Calonne said that was correct. The area he was least comfortable with was exactly how City regulation combined with the economic reality would affect the owner’s behavior. Vice Mayor Ojakian said regardless of where the threshold was set, market forces were in play that determined what the actual rent would be charged for a particular lot. Mr. Calonne said yes. Vice Mayor Ojakian asked if the current property owner chose to build on the site at the current time, would he be able to do that. Mr. Calonne said once the ordinance was in force, the owner needed a permit from the City, and the permit had to be conditioned upon payment of relocation expenses as defined in the ordinance. State law called for preparation of a report that would be submitted to the City and empowered the City to impose relocation costs as mitigation. Council Member Lytle clarified if the Council were to adopt a certain mediation threshold with the ordinance, that did not 05/14/01 92-121 preclude the Council from adopting a mediation threshold that came forward from the HRC at a later date that would apply to the current situation as well. Mr. Calonne said that was correct. Mr. Pierce said the HRC’s proposal, which would be sent to the Policy and Services Committee, was to have mediation of all landlord/tenant disputes. There was no threshold set and it was not limited to rent increases. The HRC talked about expanding mediation generally. Mr. Calonne said if the Council adopted the CPI plus 6 percent at the current meeting, the Council would not be stopped from adopting 75 percent of CPI the following week. The development agreement would presumably constrain the Council, but the ordinance would not. Council Member Mossar asked how the Council would get from approval of CPI plus 6 percent to another number at another time. Mr. Calonne said there was no special notice requirement. Standard Council colleagues memo or staff initiation was sufficient. The Council essentially created the framework for watching what happened. Council Member Mossar asked whether the Council could say they wanted the subject of the CPI plus 6 percent to be agendized at a future meeting, no later than a certain date. Mr. Calonne said that could be done. Council Member Kleinberg said there was no time like the present for the Council to sink its teeth into something and do it right. The Council and residents had an opportunity to review the ordinance and consult with the attorney. There were problems with the ordinance as passed and amendments should be considered. MOTION: Council Member Kleinberg moved, seconded by Burch, to propose an amendment to the Ordinance as follows: the name, address, and phone number of one or more housing experts to assist all eligible homeowners in relocating to available and adequate alternative housing as provided herein, provided that any such persons or firms designated must be approved by the City. 05/14/01 92-122 Council Member Kleinberg said there was a need for relocation expertise, and the Council would be assured that the residents had the opportunity to speak to people who knew about the situation. Mr. Calonne said he would review the language proposed by Mr. Stanton. Council Member Kleinberg said she meant “sample language.” She said the Council had more than 31 days to come in prior to the end of June to bring any rent increases in under the ordinance. If the notice was a failed notice under the law, there was no problem. The action taken was a new first reading. Mr. Calonne said a second reading would be held at the end of May 2001. Council Member Kleinberg said the Council would hold a special meeting on May 29, 2001, and could have a second reading at that time. Council Member Lytle was uncomfortable at making amendments at the current meeting as it affected a single property owner in terms of his responsibilities for relocation and cost. She understood the proposed ordinance could be adopted and staff could be directed to make modifications. Council Member Mossar said if there were amendments that the Council favored and others that the Council could not agree on, a situation would exist where the Council never knew when the ordinance would be in place. The Council was better off passing the ordinance at the current meeting, putting it on the books, and agreeing on the mechanism for bringing back the issues. Choosing an alternative to CPI plus 6 percent was complicated, and the Council did not have enough information. Council Member Beecham said the easy way to get an ordinance in place was to approve the existing ordinance in the second reading, have it in place, and adjust it as necessary. SUBSTITUTE MOTION: Council Member Beecham, seconded by Ojakian, to approve the 2nd reading entitled “Ordinance of the Council of the City of Palo Alto Amending Title 9 of the Palo Alto Municipal Code to add Chapter 9.76 relating to mobile home Park conversion (1st reading 4/30/01 Passed 6-2, Wheeler absent) Ordinance 4696 entitled "Ordinance of the Council of the City of Palo Alto Amending Title 9 of the Palo Alto 05/14/01 92-123 Municipal Code to Add Chapter 9.76 Relating to Mobilehome Park Conversion" (1st Reading 4/30/01, Passed 6-2, Burch, Mossar “no,” Wheeler absent) Council Member Ojakian said creating a Park Conversion-closure Ordinance that allowed for relocation needed to be in place. The Council set a rental threshold that was reasonable to everyone and minimized the amount of mediation. Council Member Kleinberg respected the Council Members’ feelings about wanting to get something on the books that could be adjusted later. The vote to put the item on the book at the current meeting somewhat skirted the opportunity to acknowledge that the ordinance needed to be adjusted. Council Member Beecham said that was not the point. Council Member Kleinberg said the Council had an opportunity to do something that was more in tune to what was affordable rather than what was reasonable. The minutes from the ad hoc committee indicated, “The Council Members present identify some suggested guidelines for policy development and next steps including that solutions must provide near term rent stability for homeowners and tenants and assure no net loss of affordable housing.” The ordinance did not do that. Considering amendments at the current meeting might seem precipitous, but the Council voted two weeks prior without much debate over the fine points. The Council had a responsibility to do something at the current meeting rather than go on record with something which some Council Members felt was not good enough. The Council needed to arrange for some affordability at the mobilehome Park. Council Member Burch said everyone agreed with the desirability of maintaining the diversity that the Park represented. The Council needed to make sure that residents were not left destitute. The idea of staying with the CPI plus 6 percent made him uncomfortable. The idea of putting that amount in place at the current time and changing it later was not favorable. He preferred CPI or 6 percent, whichever was less. Council Member Lytle appreciated the intent of Council Member Kleinberg’s discussion but was not comfortable that the property owner had adequate notice of the proposed changes. The lack of balance shown in the crafting of the regulation that affected one single property concerned her. The property owner needed the opportunity to consult with his counsel and sources of advice prior to the Council making amendments based on information received at the current meeting. 05/14/01 92-124 Council Member Wheeler appreciated the work done by members of staff, the community, and property owners in trying to reach an agreement. She did not support the ordinance in its present form. The Council needed to set a date that would be appropriate to bring forth amendments to the ordinance. Many people were uncomfortable with the provisions voted on by the Council two weeks prior. Council Member Fazzino said he would vote against the motion although it was a good faith effort on the part of all parties. He agreed it was not rent control but represented a trigger mechanism to seek mediation. The question was whether the Council wanted to seek mediation at CPI plus 6 percent or CPI plus 3 or 4 percent. Given the challenging affordability issue, he would rather trigger mediation at 3 or 4 percent than 6 percent. By supporting a lower number, the Council made a more compelling case for moving forward with alternative ways of preserving the housing. A different strategy needed to be adopted in order to preserve the housing. Council Member Kleinberg said there were no real Council policies on appropriate rent increases or how to maintain affordability. Everyone agreed that the Council was not trying to initiate a rent control ordinance but to deal with property owner rights. Council Member Mossar said the issues of affordability and CPI plus 6 percent were not new issues, having been discussed two weeks prior. She voted against the motion to call attention to what she considered a serious flaw with the ordinance before the Council at that time. Two weeks prior, the Council felt it was better to have the ordinance in place and work out the issues over time. Mayor Eakins wanted to get protection for the tenants on the books. SUBSTITUTE MOTION PASSED: 5-4, Burch, Fazzino, Kleinberg, Wheeler “no.” MOTION: Council Member Mossar moved, seconded by Kleinberg, that staff agendize the discussion for appropriate amendments to the mobilehome Park Conversion-closure Ordinance and alternatives relating to the rent review threshold of CPI plus 6 percent. Further, that the items in Attorney Bruce Stanton’s memo dated May 9, 2001, be agendized no later than July 16, 2001, and the issues submitted by the City Council to the City Manager for discussion. 05/14/01 92-125 Council Member Beecham wanted to move forward with action on the item. MOTION PASSED 9-0. Council Member Fazzino left the meeting at 9:30 p.m. Mr. Calonne encouraged the Council to send the message they wanted staff to continue working with the property owners. He asked for specific direction to work with the property owners from the current time through mid-July. Mayor Eakins asked whether the Council wanted her to continue or appoint replacements to the ADHOC committee. The consensus of the Council was to direct the Mayor to continue the Committee. She agreed with the City Attorney that the Council expressed strong interest in continuing to work with the owners as well as the residents. Council Member Lytle said the Council needed to work strongly with the property owner in a cooperative way. Council Member Kleinberg said consultation with the Planning Department about zoning and other issues would be helpful as the pros and cons of the agreement were examined. Mr. Benest suggested involving the Community Services Department as well as the Planning Department. MOTION: Council Member Mossar moved, seconded by Kleinberg, to continue Item No. 12 to July 16, 2001. MOTION PASSED 9-0. RECESS: 9:58 p.m. to 10:03 p.m. 12B. (Old Item No. 6) Contract Between the City of Palo Alto and Energy Masters International, Inc. in the Amount of $710,144 to Reduce Electric Demand in City-Owned Facilities Council Member Mossar asked whether the item went to the Finance Committee. Assistant City Manager Emily Harrison said the item did not go to the Finance Committee. 05/14/01 92-126 Council Member Mossar said the staff report (CMR:235:01) addressed where the money came from in the proposed project. She asked where the Contingency Fund of $71,020 came from. Assistant Director of Utilities Administration Randy Baldschun said the City would be responsible for any of the cost borne above the rebate levels, including the contingency. The rebate amount was estimated at approximately $200,000. Council Member Mossar clarified the Contingency Fund was from City monies and not from the Accelerated Energy Efficiency Program (AEEP). Ms. Harrison said that was correct. Any amount above what was available from the AEEP program was the responsibility of the General Fund. Council Member Mossar clarified the General Fund was responsible for $461,111 plus $71,020. Ms. Harrison said that was correct. Council Member Mossar said the staff report (CMR:235:01) indicated that no competitive bidding process was entered into on the project. Ms. Harrison said that was correct. The timing to award the contract to meet the energy demand reductions did not allow for competitive bidding. Staff did informal checking on both the labor and materials parts of the contract and was confident the City had a good contract. Council Member Mossar understood from the staff report (CMR:235:01) that the AEEP, which the Council passed on April 17, 2001, specified that projects should be completed by June 30, 2001, in order to beat the high-energy peak season. Ms. Harrison said the staff report (CMR:235:01) recognized it might not be possible for all the projects funded by AEEP to be completed by June 30, 2001, for instance, materials might not be available or contractors might be tied up. Council Member Mossar said the staff report (CMR:235:01) was explicit that the project might not be completed prior to August 15, 2001. Saying there was not an emergency might have been more straightforward and honest. Ms. Harrison said staff was not requesting the City Manager’s Emergency Authority. The City was not entering into competitive 05/14/01 92-127 bidding under the Palo Alto Municipal Code (PAMF) authority that said there was no reasonable expectation that bidding led the City to a better result. Council Member Mossar said the project was clearly a Public Works project, and the City Charter required that the City accept the lowest responsible bidder on Public Works projects. Council Member Beecham said Section 2.30.030 of the PAMC discussed several exceptions to competitive bidding. One exception was when calling for bids was impractical, unavailing, or impossible. His understanding was the situation was unavailing. Giving the City Manager authority to go ahead was appropriate. City Manager Frank Benest said staff tried to do the best thing to reduce load as soon as possible and be part of the solution within the confines of existing law. Council Member Mossar asked why the contract did not include incentives or penalties to ensure the contractor would perform in a timely manner. Mr. Baldschun said the contractor had to complete the project in order to get paid. Council Member Mossar said one of her colleagues passed her a note which indicated to be accurate she should have said the staff report (CMR:235:01) could have been more accurate in its presentation of the situation and choices that staff made. That would have served the Council better. She was pleased that the City moved in the direction of taking responsibility for its own energy efficiencies. Having an expenditure of a high amount which went to the Council with no warning and not having gone to the Finance Committee was highly extraordinary. Questions would have been answered at the Finance Committee, and there would not have been an issue. The Council had a responsibility to the public to make sure the Council proceeded in a way that was in accordance with the City Charter and that the public understood the Council spent money wisely and carefully. Manager Utility Marketing Services Tom Auzenne agreed with Council Member Mossar. The issue of timing was critical because the City looked at losing $35,000 for each month that was delayed. Council Member Lytle said becoming a model to others was important. 05/14/01 92-128 Council Member Beecham said page 3 of the staff report (CMR:235:01) indicated that Energy Masters (EMI) would bid on all construction services to be performed. He clarified EMI’s cost of the $700,000 included the estimated cost they bid out. Mr. Baldschun said that was correct. Council Member Beecham said the City would pay whatever costs were incurred and certain performance standards limited how much could be charged. Mr. Baldschun said that was correct. Council Member Beecham asked whether there was a chance that the costs would go over the estimated cost plus contingency. Mr. Baldschun said no. The risk was on EMI. MOTION: Council Member Beecham, seconded by Lytle, to approve the staff recommendations to: 1. approve and authorize the Mayor to execute the attached contract with Energy Masters International, Inc. in the amount of $710,144 to expedite retrofits of electrical lighting systems to achieve demand reductions in 60 municipal facilities. 2. authorize the City Manager or his designee to negotiate and execute one or more change orders with Energy Masters International, Inc. for related, additional but unforeseen work, which may develop during the project, the total value of which shall not exceed $71,020. Vice Mayor Ojakian asked about the cost savings from doing the project per month. Mr. Baldschun said the cost savings to the City was approximately $10,000 in the summer month and to the Utility approximately $35,000 per month in the summer. That was the critical point of the project. If the City waited 90 days, much money would have been lost. Vice Mayor Ojakian clarified the payback on the project was less than two years. 05/14/01 92-129 Mr. Baldschun said the City was responsible for approximately $400,000, which would be 3 to 4 years, assuming there were no rate increases. Council Member Mossar said the staff report (CMR:235:01) mentioned annual electric bill savings of $109,625 per year plus $8,000 in lower maintenance costs. Mr. Baldschun said more electricity was saved during the summer months. Vice Mayor Ojakian said payback would be within a few years, which was good. Mr. Baldschun said that was excellent. Vice Mayor Ojakian asked what the load reduction was. Mr. Auzenne said the load reduction was 390 kWh. Mr. Baldschun said the goal for the summer was to reduce 5 megawatts by June 30, 2001. Council Member Burch understood Council Member Mossar’s concerns about going through the regular process, but the City needed to move fast on the subject item. MOTION PASSED 8-0, Fazzino absent. 12C. (Old Item No. 9) Arastradero Preserve Trail Master Plan and of the Environmental Impact Assessment Application by the Palo Alto Community Services Department for Implementation of the Trail Plan. A Mitigated Negative Declaration has been prepared for this Project in Accordance with California Environmental Quality Act (CEQA) Lynn Chiapella, 637 Colorado Avenue, said if Portola Valley Pastures had a special gate to enter the Preserve, they should pay for the gate and help maintain it. There was no benefit to the public because there were no reciprocal rights to Portola Valley. Herb Borock, P.O. Box 632, said there was no public copy of the Trails Plan. More public notice of the item should have been provided. Money was spent to restore the habitat and on at least one trail invasive species would be brought in. The mitigation he suggested was that the City require zoning to open space and require the applicant to file for a use permit. 05/14/01 92-130 Vice Mayor Ojakian clarified Mr. Borock knew what the new trail system would be because he was at the Park and Recreation Commission (PARC) meeting when the trail system was discussed. Mr. Borock said no. He had not had the opportunity to read the Trail Plan. He was at the PARC meeting but had not seen the trail plan. Council Member Mossar asked whether anything different from the CEQA process was done. City Attorney Ariel Calonne said the notice satisfied State law but was unsure whether the notice met the City’s old guidelines. Mr. Borock might have been correct, but there was no significant violation of City or State law. Council Member Mossar asked about Mr. Borock’s allegation that the public did not see the Trail Plan. She asked the City Clerk whether copies of the Trail Plan were placed in the back of the Council Chambers. City Clerk Donna Rogers said she received one in her packet. Mr. Benest said a copy was in everyone’s packet. Council Member Mossar said one copy did not give the public access to a planning document. Open Space and Sciences Superintendent Greg Betts said he delivered a copy of each updated Trail Plan to the Main Library, the Palo Alto Junior Museum, and the Lucie Stern Center. MOTION: Council Member Wheeler moved, seconded by Burch, to approve the staff and Parks and Recreation Commission recommendations approving the Arastradero Preserve Trail Master Plan and Environmental Impact Assessment applications for a mitigated negative declaration based upon the findings provided in Attachment C of CMR:231:01. Council Member Lytle said she heard testimony that the Trail Plan was available at the Main Library and was comfortable voting on the issue. Council Member Mossar said staff did everything possible to manage many demands on the open space areas, but she had more alliance with the feelings of Park and Recreation Commissioner Ellie Gioumousis than with managed trail systems. Over time, the Council might find it did more than necessary to preserve and protect areas as open space rather than urban Park land. 05/14/01 92-131 MOTION PASSED 8-0, Fazzino absent. COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS Council Member Mossar stated the executive director of the San Francisquito Creek Joint Powers Authority had initiated contacts with neighborhood associations in all of the communities that reside in the San Francisquito Creek watershed. There will be informal conversations held in Palo Alto as well as other communities. Mayor Eakins added that the Valley Transportation Authority’s (VTA) new Light Rail System, “Tasman East,” began functioning on Thursday, May 17, 2001. ADJOURNMENT: The meeting adjourned to a Closed Session at 10:45 p.m. CLOSED SESSION 13. Conference with City Attorney—Existing Litigation Subject: Juana Briones House: Jaim Nulman and Avelyn Welczer v. City of Palo Alto, SCC #CV779831 Authority: Government Code Section 54956.9(a) Herb Borock, P.O. Box 632, had read in the newspaper about a hypothetical situation of the idea of allowing the property owner to keep one acre in the RE zoning. Another half acre could be a planned community zone because the public benefit would be the historic property. The question was what should be allowed to be developed on the one acre that was kept by the private owner. No special extra benefit should be allowed because one half acre went for the historic house. The City Council met in Closed Session to discuss matters involving Existing Litigation as described in Agenda Item No. 13. Mayor Eakins announced that no reportable action was taken on Agenda Item No. 13. 14. Conference with City Attorney-Existing Litigation Subject: Roble Vista Associates v. John Bacon, et al., Santa Clara Co. #ACV1596 Authority: Government Code Section 54956.9(a) 05/14/01 92-132 The City Council met in Closed Session to discuss matters involving Existing Litigation as described in Agenda Item No. 14. Mayor Eakins announced that reportable action was taken on Agenda Item No. 14 as follows: by unanimous vote, the City Attorney should proceed with the appeal. 15. Conference with City Attorney-Existing Litigation Subject: John Duggan v. City of Palo Alto, SCC#776988 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. 15 Mayor Eakins announced that no reportable action was taken on Agenda Item No. 15. FINAL ADJOURNMENT: The meeting adjourned at 11:00 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.