HomeMy WebLinkAbout2002-06-17 City Council Summary Minutes
Special Meeting June 17, 2002
1. Study Session on Council Appointed Officers Compensation....213
ADJOURNMENT: The meeting adjourned at 6:58 p.m...................213
1. Conference with Labor Negotiator............................214
ADJOURNMENT: The meeting adjourned at 7:03 p.m...................214
ORAL COMMUNICATIONS..............................................215
1. Friends of the Children’s Theater...........................215
2. Options for City Council consideration in Response to Result of Second Community Survey on Library and Other Community Facilities Bond Measure...........................216
3. PUBLIC HEARING: Adoption of the 2002-03 Budget and Approval of a Budget Adoption Ordinance of the Council of the City
of Palo Alto, including 1) Exhibit A -- The City Manager’s Proposed 2002-03 Budget; 2) Exhibit B – All changes
detailed in the Amendments to the City Manager’s Proposed 2002-03 Budget; 3) Exhibit C – Proposed 2002-03 Municipal Fee Schedule; 4) Exhibit D – Revised pages to the Table of
Organization; and 5) Exhibit E – Amendments to the Proposed 2002-03 Municipal Fee Schedule..............................221
APPROVAL OF MINUTES..............................................233
4. Adoption of Final Appropriation Limit Calculation Resolution for Fiscal Year 2002-03..........................234
5. Annual Adoption of the City of Palo Alto Statement of Investment Policy and Proposed Changes to the City’s
Investment Policy as described in CMR:275:02................234
6. Rejection of Bids Received on May 21, 2002 for the Water-Gas Wastewater Service Installation Project.................234
7. Contract Between the City of Palo Alto and Leo Tidwell Excavating Corporation in the Amount of $89,000 for
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Construction of Underground Electric Duct Systems at the Green Acres Subdivision (IFB#142906)........................234
8. One Year Review of City Sustainability Program Accomplishments and Recommendation to Revise Citywide Sustainability Policy.......................................234
9. Agreement Between the City of Palo Alto and the Palo Alto Housing Corporation in the Amount of $75,000 for
Administration of the Below-Market-Rate Housing Program for Fiscal Year 2002-2003.......................................234
10. Contract Between the City of Palo Alto and Geoline
Positioning Systems, Inc. in the Amount of $72,847 for Prototype Global Positioning Satellite System (GPS) to
locate Utility Infrastructure, for Use with the City of Palo Alto Geographic Information System.....................234
11. Agreement Between the City of Palo Alto and the Los Altos Hills County Fire District for Inter-Jurisdictional Fire Protection and Emergency Medical Response Service from City
of Palo Alto Fire Station Number 8..........................235
12. Contract Between the City of Palo Alto and David Powers and Associates in the Amount of $92,300 for Services and Completion of the Environmental Impact Report for the Edgewood Redevelopment Project Area.........................235
13. Approval of Software Support Services Renewals with Oracle Corporation in the Amount of $342,285 (three years at
$114,095 per year)..........................................235
14. Amendment in the Amount Of $15,714 to Existing Contract for Employee Training with Foothill DeAnza Business and
Industry Institute, Changing Contract Amount from $119,286 to $135,000 for the Second Contract Year....................235
15. Request for Authorization to Contract with the Law Firms of Liebert, Cassidy & Whitmore; Neufeld & Jaffe; Richards, Watson & Gershon; McDonough Holland & Allen; Ruby &
Schofield; Miller & Canfield; Thelen, Reid; Richard Maul, Esq.; Roger Beers, Esq.; Severson & Werson; and McCarthy &
Berlin, LLP.................................................235
COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS...................235
16. (Old Item No. 1) Conference with Labor Negotiator...........236
FINAL ADJOURNMENT: The meeting adjourned at 11:25 p.m...........236
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The City Council of the City of Palo Alto met on this date in the Council Conference Room at 6:00 p.m.
PRESENT: Beecham, Burch, Freeman, Kishimoto, Kleinberg, Lytle, Morton, Mossar, Ojakian SPECIAL MEETING:
1. Study Session on Council Appointed Officers Compensation No action required.
ADJOURNMENT: The meeting adjourned at 6:58 p.m.
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Special Meeting
June 17, 2002 The City Council of the City of Palo Alto met on this date in the Council Chambers at 7:00 p.m. to discuss matters involving labor negotiations as described in Agenda Item No. 1.
PRESENT: Beecham, Burch, Freeman, Kishimoto, Kleinberg, Lytle, Morton, Mossar, Ojakian
1. Conference with Labor Negotiator
Agency Negotiator: City Manager and Human Resources Director pursuant to the Merit System Rules and Regulations Employee Organization: Unrepresented Management and
Confidential Employees Authority: Government Code Section 54957.6
Council Member Lytle asked that the Council delay the Closed
Session until after conducting the public hearing so as to not keep the public waiting.
Mayor Ojakian said since the matter was heard at the end of the prior meeting, it should be discussed prior to the regular meeting.
Council Member Freeman understood why the Council wanted to discuss the Closed Session early, but due to the amount of people in the audience, holding the Closed Session later in the
meeting was more fair to the public. MOTION: Mayor Ojakian moved, seconded by Vice Mayor Mossar, to hear the Closed Session as scheduled.
MOTION FAILED: 4-5, Burch, Morton, Mossar, Ojakian “yes.”
BY CONSENSUS of the City Council, the Closed Session would be heard at the end of the regular meeting. ADJOURNMENT: The meeting adjourned at 7:03 p.m.
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Regular Meeting
June 17, 2002 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, Freeman, Kishimoto, Kleinberg, Lytle, Morton, Mossar, Ojakian
ORAL COMMUNICATIONS
Kevin Murray, 2091 Harvard Street, spoke regarding the Sea Scouts building. Maarten Lightenberg, 27791 Edgerton Road, Los Altos Hills, spoke regarding Sea Scouts.
Will Keller, 3233 Bryant Street, spoke regarding Sea Scouts. Jim Dinkey, 3380 Cork Oak Way, spoke regarding ramp metering.
Gwen Weisner, 722 San Jude Avenue, spoke regarding cultural kaleidoscope.
Mary Jean Place, 809 Northampton Drive, spoke regarding the Friends of the Palo Alto Public Library and the Library
Foundation.
David Coale, 766 Josina Avenue, spoke regarding sustainability. Gary Fazzino, 126 Kellogg, spoke regarding the Library Bond
Committee and the measure for libraries this November.
Shelby Valentine, 3116 Stelling Drive, President of the Friends of Palo Alto Public Library, spoke regarding “library thank you.” Herb Borock, P.O. Box 632, spoke regarding Stanford University
open space/field research zone district. SPECIAL ORDERS OF THE DAY
1. Friends of the Children’s Theater
Beth Broderson, President of the Friends of Palo Alto Children’s Theatre, 455 Hale Street, thanked the Council for its extraordinary support during the prior 71 years.
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Kent Vickery said his son, Charles, was involved with the Palo Alto Children’s Theatre for five years and 27 plays. Other
parents described their children’s experiences with words such as confidence, accountability, responsibility, and empathy. The Palo Alto Children’s Theatre was the paragon of children’s theatre in the United States. Cameron MacIntosh chose the Palo Alto Children’s Theatre to do the first adaptation in the
history of Les Miserables. Lucie Stern Community Center gave the City a building in 1937 where residents could continue to support children to become better citizens.
Mayor Ojakian thanked Mr. Vickery for the video presentation.
No action required. UNFINISHED BUSINESS
2. Options for City Council consideration in Response to Result of Second Community Survey on Library and Other Community Facilities Bond Measure (continued from 6/10/02 –
public testimony closed) Assistant City Manager Emily Harrison said the Council asked staff to follow up on some variations of the options, beginning with a base package of the Children’s Library, the Mitchell Park
Community Center, and financing costs for a package as a whole. Staff asked the Council to look at the option of a reduced
Children’s Library package. Material was provided to the Council that explained why staff felt it was difficult to reduce the program at the Children’s Library. The program was already
significantly reduced due to the site constraints of the Children’s Library. Council was to receive the full, conceptual
design presentation the following week. Staff believed the design problems on the Children’s Library expansion project were solved. Concerns had to do with the way the design dwarfed the
original Children’s Library. Staff was confident the Council would agree with the Historic Resources Board (HRB) that the
problems were solved without damaging the integrity of the Children’s Library. Another option was to consider pledging a portion of the Infrastructure Reserve that represented the
facilities improvements no longer needed if the Mitchell Park facilities and Children’s Library were placed on the bond. The
Art Foundation would then have time to raise funds to identify matching funds up to a total of $5 million from the General Fund to come up with a $10 million project. Council Member Beecham read a Colleagues Memo to the Council,
dated June 17, 2002, from Council Members Kleinberg, Mossar, and Beecham, and from community members Lanie Wheeler, Julie Jerome,
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Lynn Torin, Karen White, Gary Fazzino, Tina Kass, Carolyn Tucher, Beth Bunnenberg, Mark Sabin and Shelby Valentine. The
subject of the memo was “Libraries Plus Bond Measure.” MOTION: Council Member Beecham moved, seconded by Kleinberg, that staff be directed to prepare a bond measure for the November 2002 ballot to finance the following:
1. Mitchell Park Library and Community Center $40.5 M 2. Children’s Library $ 6.5 M
3. Bond Financing $ 0.8 M Total $47.8 M
(Cost per $100,000 assessed property value $27.00 Further, the Children’s Library construction must meet the Secretary of Interior’s Standards for Rehabilitation.)
Council Member Kleinberg thanked the people who signed the memo and who were in support of the measure. Resources were focused on the facilities and needs that most resonated with the public. The proposal met the needs and objectives that she was most interested in pursuing. The proposal allowed the City to enhance
and build facilities that served families and children in both north and south Palo Alto and allowed the City to move forward
with its plans for improved library services, a homework center, and meeting rooms. The measure was a conservative proposal, tremendously trimmed back from the first proposals that were
considered. The proposal contained attractive features in a conservative format that would answer most of the concerns about
the original proposals and allowed the City to incrementally, in a phased fashion, move forward in a concerted, community- spirited way to improve facilities.
Council Member Lytle thanked Council Members and community
members who worked on the proposal. Council Member Morton was excited about the Mitchell Park Community Center. The Council made a major mistake at the beginning of the process by not understanding it was the job of
the Library Advisory Commission (LAC) and the Friends of the Library to dream and the job of the Council to be realistic. The Council needed to demonstrate to the community that it
understood the times were economically challenged and prove that the needs had to be met. The size of the Children’s Library was
a concern. Ms. Harrison said the motion gave staff the parameters under which a package would be brought back to the Council on July 8, 2002.
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Council Member Burch supported the motion but expressed disappointment that more of the library buildings and art center
were not included. Council Member Freeman supported the motion, noting that the recommendation represented the will of the people. The Council looked at the results of the survey and accepted letters and
phone calls. The signers of the Colleagues memo, dated June 17, 2002, put together something that was palatable and achievable.
Council Member Kishimoto supported the motion and felt the process worked.
Mayor Ojakian supported the motion and appreciated his colleague’s work on the Colleagues memo, dated June 17, 2002. MOTION PASSED: 9-0.
MOTION: Council Member Kleinberg moved, seconded by Mossar,
that it is this Council’s intent to support art in Palo Alto in the following manner:
Following and contingent upon the success of the Libraries Plus Bond Measure in November, the City of Palo Alto will
use Infrastructure Reserve funds unencumbered by the bond measure, supplemented as necessary by other funds, to match over the next four years on a one to one basis up to $5
million raised by the private community to enhance and upgrade the capital facilities at the Palo Alto Art Center.
Council Member Kleinberg said those who appreciated art knew that art was one of the major assets of a civilization. Palo
Alto had a long tradition of being a magnet for those who wanted to enjoy the type of privileges and experiences that residents
enjoyed at the Art Center. Vice Mayor Mossar said art made a great community. The arts community was thanked for its role in the effort.
Council Member Morton proposed that the City match in $200,000 increments to make funds available as the Art Center raised funds.
Council Member Kleinberg agreed with Council Member Morton’s
intent but did not want to encumber the final way of funding at the present time. Staff needed to look at other funding schemes that supported the Art Foundation’s private fund raising.
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Council Member Burch understood the air conditioning was a $2 million installation. Staff needed to explore ways to expedite
the air conditioning. Council Member Kleinberg said the motion indicated the City matched funds during the following four years.
Vice Mayor Mossar said the final action on the bond was scheduled to go to the Council on July 8, 2002, and asked whether staff could return at that time with a suggestion as to
how to address those concerns.
Council Member Morton clarified the motion did not preclude incremental matching. Council Member Kleinberg said the motion did not include any type of matching strategy.
Council Member Lytle said the proposal guaranteed and demonstrated the Council’s strong support for the Art Center and the ability to match its commitment in making improvements to the community.
Council Member Freeman said she was a supporter of the arts as
well as a supporter of the public/private partnerships. Her understanding was that approximately $2.2 million was available if the bond passed to match what the Art Center Foundation
received, which left a deficit of $2.8 million. Staff was asked to return on July 8, 2002, with ideas on where the City would
find the $2.8 million to support the effort. Ms. Harrison said the issue could be discussed on July 8, 2002.
Council Member Freeman clarified that even though the City was
in budget reductions, the money would be found somewhere. City Manager Frank Benest said staff would continue to commit $2 million per year for the Infrastructure Reserve.
Council Member Freeman said there would be money earmarked for the projects. The City talked about a campus for some time, which would hold the Main Library and Art Center. Her concern
was the Council had not come up with a final design for the campus, and there were no plans to talk about the Main Library
in the near future. Ms. Harrison said the Council would discuss both the Environmental Impact Report (EIR) and conceptual designs on June 24, 2002. The Art Center would occur in three phases, which
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provided flexibility to the Art Foundation in terms of how they chose to proceed in a way that would minimize any impact it
might have on the campus. Council Member Freeman said Phase 3 of the Art Center was the classrooms for children, which did not change the footprint of the current Art Center.
Council Member Beecham said the art community would work for a period of up to four years to raise funds and would not know how
much it raised until the four-year period was over. The plan that was proposed by the Art Center and City was greater than
$10 million. A decision would not be made until 2006. Council Member Freeman understood the Art Center would not start building or changing the site until 2006.
Council Member Beecham said some immediate improvements such as air conditioning would be done. Designing a project was difficult without knowing the amount of money that would be available to spend.
Council Member Freeman suggested adding wording to the motion to ensure that whatever happened on the campus, included plans for
the Main Library prior to building commencement. Council Member Beecham said the Council was not approving plans,
but only committing funds.
City Attorney Ariel Calonne said the project was a Public Works project, and the Council would control any contracts or construction that occurred on the site.
Council Member Freeman supported the motion.
Council Member Kleinberg said her motion did not intend that the money for the Art Center was contingent upon master planning for the entire site.
Council Member Kishimoto asked what the timing was for the master planning of the whole area if the Art Center proceeded ahead of the Main Library.
Mr. Benest said the Council would look at certifying the EIR and
look at conceptual plans at its meeting the following week. The Council was not taking action on the Main Library in the near future. The Council was in complete control of the City land and City facility. Staff would ensure that the project worked.
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Council Member Lytle said she had confidence about what the City Manager said about the master planning.
Council Member Morton clarified that the motion was to match funds and staff was asked to return with comments on funding. The comments on funding should be deferred until the reality of the matching funding.
Mayor Ojakian did not want to minimize the effort of a private group who tried to raise private funds to fix a public building.
MOTION PASSED: 9-0.
RECESS: 8:42 p.m. to 8:52 p.m.
PUBLIC HEARING
3. PUBLIC HEARING: Adoption of the 2002-03 Budget and Approval of a Budget Adoption Ordinance of the Council of the City
of Palo Alto, including 1) Exhibit A -- The City Manager’s Proposed 2002-03 Budget; 2) Exhibit B – All changes detailed in the Amendments to the City Manager’s Proposed
2002-03 Budget; 3) Exhibit C – Proposed 2002-03 Municipal Fee Schedule; 4) Exhibit D – Revised pages to the Table of
Organization; and 5) Exhibit E – Amendments to the Proposed 2002-03 Municipal Fee Schedule MOTION: Council Member Burch moved, seconded by Morton, to adopt the 2002-03 Budget and Approve a Budget Adoption Ordinance of
the Council of Palo Alto, including 1) Exhibit A -- The City Manager’s Proposed 2002-03 Budget; 2) Exhibit B – All changes detailed in the Amendments to the City Manager’s Proposed 2002-
03 Budget; 3) Exhibit C – Proposed 2002-03 Municipal Fee Schedule; 4) Exhibit D – Revised pages to the Table of
Organization; and 5) Exhibit E – Amendments to the Proposed 2002-03 Municipal Fee Schedule Ordinance 4756 entitled “Ordinance of the Council of the City of Palo Alto Adopting the Budget for Fiscal Year 2002-
03” Resolution 8174 entitled “Resolution of the Council of the
City of Palo Alto Amending Utility Rate Schedules E-1, E-1-G1, E-1-G2, E-1-G3, E-2, E-2-G1, E-2-G2, E-2-G3, E-4, E-4-
TOU, E-4-G1, E-4-G2, E-4-G3, E-7, E-7-TOU, E-7-G1, E-7-G2, E-7-G3, E-8, E-16, E-17, and E-18 of the City of Palo Alto Utilities Rates and Charges Pertaining to Electric Rates”
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Resolution 8175 entitled “Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedules G-1, G-2,
G-3, G-4, G-6, G-7, G-10, G-11, and G-12 of the City of Palo Alto Utilities Rates and Charges Pertaining to Gas Rates” Resolution 8176 entitled “Resolution of the Council of the
City of Palo Alto Amending Utility Rate Schedules S-1, S-2, S-3, and S-4 of the City of Palo Alto Utilities Rates and Charges Pertaining to Wastewater Collection Rates”
Resolution 8177 entitled “Resolution of the Council of the
City of Palo Alto Amending Utility Rate Schedules W-1, W-1-B, W-1-C, W-4, and W-7 of the City of Palo Alto Utilities Rates and Charges Pertaining to Water Rates and Approving and Adopting Rule and Regulation 13 Governing Shortage of Supply and Interruption of Delivery of Energy, Gas, and
Water”
Resolution 8178 entitled “Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedules W-5, G-5, S-5, E-15, and C-1 of the City of Palo Alto Utilities Rates
and Charges Pertaining to Connection Fees”
Resolution 8179 entitled “Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedules R-1, R-2 and R-3 and Eliminating Schedule R-1-FA of the City of Palo
Alto Utilities Rates and Charges Pertaining to Refuse Collection”
Resolution 8180 entitled “Resolution of the Council of the City of Palo Alto Amending the Compensation Plan For
Classified Personnel (SEIU) Adopted By Resolution No. 8056, and Amended By Resolution Nos. 8059 and 8141, To Include
New Classifications” Resolution 8181 entitled “Resolution of the Council of the City of Palo Alto Amending the Compensation Plan For Management and Confidential Personnel and Council Appointed
Officers Adopted by Resolution No. 8096, and Amended By Resolution No. 8117, To Add New Classification”
The Finance Committee recommends to the City Council approval of one-time funding of $35,000 for the Community
Services Department in support of the 2003 Summer Brown Bag and Twilight Concert Series ($20,000) and department Board and Commission activity ($15,000). The Finance Committee recommendation is to make the Budget whole again in areas the department identified for budget reduction. These
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amounts do not represent additional funding requests, but rather a transfer from the Council Contingency.
The Finance Committee recommends the City Council direct staff to put aside the remaining $73,000 in the Council contingency fund to assist in the implementation of suggestions from the Field Committee for expanding field
usage. The Finance Committee recommends to the City Council
removal of $20,000 in revenues from the Public Works Department Budget related to a proposed contract with VTA
for bus shelter maintenance and advertisement rights. Staff noted that an additional $20,000 in non-salary expenditures would be necessary as a result of this recommendation for bus shelter maintenance activities in 2002-03.
The Finance Committee recommends the City Council direct staff to explore different funding options to augment Transportation Division staffing for projects and other potential alternative transportation programs.
The Finance Committee recommends the City Council direct staff to conduct a study to determine whether it was
possible to include public realm tree planting as a public benefit.
The Finance Committee recommends the City Council refer to the Audit Committee a recommendation to examine the CPA
External Services Fund activities and determine a way to assure the Council that the expanded efforts were not affecting the City’s capacity to deliver quality core
services and to establish a customer service evaluation baseline.
Finance Committee Chair Jim Burch said the Budget represented the second year of a two-year budget plan that was originally approved more than one-year prior. Staff and prior Councils recognized early on that revenues were trending down. In the
fall of 2001, the City looked at an $8-$9 million shortfall, which increased to more than $10.8 million. The Finance Committee began its study of the Budget on May 7, 2002, and
continued for two additional meetings on May 14 and 21, 2002. The Committee made excellent suggestions and voted unanimously
to send the Budget to the Council. Mayor Ojakian requested all speaker cards be turned in no later than 9:15 p.m.
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City Manager Frank Benest said staff undertook the “Strengthen the Bottom Line” process. A session was held with the Council
that focused on how the Budget addressed the Top 5 priorities and eliminated a projected $9 million shortfall. Labor management teams were created in each department and ideas were solicited from all employees. The strategies incorporated in the Budget reflected the employees’ ideas. In the face of a
shortfall, staff was able to preserve services and continued to end the year with $2 million that could be transferred into the Infrastructure Reserve as part of the City’s commitment to
infrastructure. The prior year’s Adopted General Fund Budget was approximately $125 million. The current proposed Budget was $125
million; even in the face of labor and health cost care increases. The Finance Committee was provided with $108,000 as a Council contingency. The Council put back $20,000 in the Community Services budget for certain concerts and reallocated $15,000 in the Budget to support various commissions in the
Community Services Department. The remaining $73,000 was put aside for issues such as usage of play fields. Staff wanted to maintain the Budget Stabilization Reserve of 18.5 percent of expenditures. An operational surplus at the end of the year was approximately $300,000, and the City had to come up with an
additional $1.7 million by the end of the year. During the following year, Council and staff had to be disciplined in order
to save the $1.7 million. The Council was concerned as to how to cut the administrative overhead of the City. The use of procurement cards was expanded, which saved an average of $100
per transaction and staff time. The Council agenda packet was placed on-line. The budget document and review process was
streamlined, and staff was in the midst of streamlining the contract process. The goal was to shave one to two months off the contract process. Staff looked at how the enterprise
resource planning helped to automate payroll, eliminate the processing of in-house permits and fees, outsource paramedic
billing, increase collections for damaged City property, put all Human Resources forms on-line, and develop better Court protocols to reduce Police overtime. The total General Fund revenue was $126 million. The $10.8 million shortfall came from a variety of losses in revenue, particularly sales tax of
approximately $5 million, the Transient Occupancy Tax (TOT) of approximately $3.6 million, and Real Property Transfer Tax of approximately $2 million. Approximately $8.2 million was added
in additional revenue from the original Budget in departmental revenues of approximately $3.2 million and non-departmental
revenues of $5 million. Approximately 17 percent of the total General Fund revenues were derived from Sales Tax, approximately 11 percent from Property Tax, approximately 5.5 percent from TOT, and approximately 5.8 percent from Utility Users Tax (UUT). One strategy was to maintain a hiring freeze. There was an
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increase of approximately $5 million in expenses related to previously negotiated, multi-year contracts with labor groups in
addition to escalating health care costs. Staff removed nine positions from the previously approved Budget, which represented approximately $700,000 in savings and an additional $700,000 in non-staffing costs. Some cost-recovery and entrepreneurial positions were added: one position was paid for in
Administrative Services Department (ASD) out of the Enterprise Fund, one position dealt with additional work in the Development Center and was paid for by permit revenues, one parking
enforcement position was paid for by parking citation revenues, and an engineering technician was offset by permit revenues.
Three positions were added that were necessary with the aggressive Library Plus effort if the bond measure passed. Other proposed positions included a half-time position for Code Enforcement, three and one half positions for Basic Life Ambulance Transport, and three positions in the Enterprise Fund.
The net revenue from cost recovery or entrepreneurial ventures was approximately $600,000. The Council continued to double capital spending even in the face of revenue shortfalls. Administrative Services Director Carl Yeats said Utilities
continued to face significant challenges. During the prior year, the energy markets experienced volatility, uncertainty, and
reliability degradation. Total revenues for the Electric Fund were approximately $94.8 million, net sales were $5.4 million, and expenditures totaled approximately $113 million. Electric
Fund reserves were $101.7 million, and approximately $5.9 million was added to the Distribution Stabilization Reserve. The
Supply Rate Stabilization Reserve was projected to be $23.4 million. The major highlight in the Gas Fund was that total revenues decreased, and there was a proposed rate decrease of
approximately 27.6 percent. Expenditures showed a decrease in part for the gas commodity purchases. Reserves of $15 million
for the Gas Fund were projected for year-end. The Distribution Rate Stabilization reserve was slightly above the maximum guideline, as well as the Supply Rate Stabilization Reserve. Total revenues in the Water Fund were approximately $19.8 million. A 20 percent rate increase was proposed for the current
year. Expenditures totaled approximately $21.9 million. Reserves for the Water Fund totaled $11.4 million. The Rate Stabilization Reserve was approximately $9.6 million. Wastewater Collection
revenues totaled approximately $12.8 million, with a projected 25 percent rate increase. Net sales increased by $1.7 million
due to the rate increase. Total expenditures of $13.9 million represented a $1.5 million increase. The Reserves for the Wastewater Collection Fund was stable.
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Mr. Benest said the Council expressed an interest in decreasing the ongoing operational expenses. Staff discussed with the
Finance Committee a process for the Council to make choices with the community about where it wanted to make the operational cuts and decrease the ongoing operational expense. Staff would present to the Finance Committee a listing of all programs and services in each department. Staff would recommend certain
criteria and a scheme in order to rank and evaluate the importance of each program as to whether the programs related to health and safety, attracted customers, and how the criteria was
weighted. The Finance Committee and Council would evaluate and finalize the criteria. Staff would then conduct an initial
ranking on programs based on the criteria and weights, and solicit input from citizens. The rankings would be posted on the City website for feedback from citizens. The Finance Committee and Council would finalize the rankings and suggest areas for reductions in ongoing operational expenses in the short to mid-
term. Staff, based on Council priorities and the approved list of areas to reduce ongoing expenses, would prepare the proposed two-year budget. The Budget was balanced with focus on Council priorities and basics.
Mayor Ojakian declared the Public Hearing open.
Bob Carlstead, 147 Walter Hays Drive, said approximately 28 percent of Palo Alto residents were over the age of 60, and many were retirees who lived on fixed incomes. All residents were
impacted by fees and taxes imposed by the City. Two items on the Consent Calendar included $72,000 for global positioning for the
Utilities Department and $92,000 for the Redevelopment Agency (RDA) at Edgewood Plaza. One new fee was the reimposition of an access fee to enter Foothills Park, which was an example of an
ill-conceived fee to raise income. There should be no fee to enter Foothills Park, which belonged to the residents of Palo
Alto. The Council was asked to reconsider the fee. Fees should be raised for non-residents to play golf in Palo Alto. Herb Borock, P.O. Box 632, agreed with Mr. Carlstead that the Foothills Park fee should be deleted from the fee schedule
because it would not raise the $30,000 suggested in the Budget since the fee would reduce attendance. A $1 fee was imposed in 1976, which lasted one month when the Council rescinded the fee.
The number of people going to the park during that one month dropped 37 percent. Ten years later, an opinion survey was sent
to the residents asking whether they would pay a $2 park entrance fee to retain Baranda Lake. Once the fee was imposed, park attendance dropped. Mayor Ojakian declared the Public Hearing closed.
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Council Member Lytle said staff mentioned that nine positions were removed from the Budget.
Mr. Benest said staff recommended taking nine positions out of the Budget that were included in the first year of the two-year budget. The General Fund indicated 35 current vacancies. Of the 35 vacancies, staff recommended keeping 14 positions open and
managing the other vacancies in order to achieve a savings at the end of the year of approximately $2 million.
Council Member Lytle asked for the net addition of positions.
Mr. Benest said the net was three positions, and staff suggested that the 12 positions generated approximately $600,000 in net revenue. Council Member Lytle said her theory was that the Council
adopted public policy in the Architectural Review Board (ARB) and Zoning ordinances that deciduous landscaping was an energy conservation program. The same concept of a passive energy program could be applied to the Utility budget as a way of using Utilities to help subsidize tree replacement. The Utility
Department maintained it could not be proven that the program would work in Palo Alto. Literature was available to document
that deciduous trees reduced the ambient temperatures in urban environments. Staff was asked to look at the public benefit use for urban forest replacement.
Mayor Ojakian asked about the restrictions on the public benefit
funds. Assistant Director of Utilities Administration Randy Baldschun
said staff needed Council direction to investigate the application of AB 1890 funds.
Mayor Ojakian said a motion could ask City staff to explore the possibility of using the public benefits funds under Utilities AB 1890 for planting of trees. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER that staff explore use of electric public benefit funds
(AB1890) to be used for street tree plantings.
Council Member Lytle said the Council was asked to make a
referral to the Audit Committee to do a baseline customer service satisfaction study. The purpose of reviewing enterprise positions was to assure the Council that as it enterprise activities that extended services outside City boundaries would not sacrifice core resident services.
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Mr. Benest said the action by the Finance Committee was to refer the matter to the Auditor and Audit Committee. If the Audit
Committee and the City Auditor felt the concern was a priority, staff would return to Council and ask for funding. City Auditor Sharon Erickson said the new Audit Plan would be brought to the Council on August 5, 2002.
Council Member Lytle said a vote at the current meeting took a simple majority but required a super majority in August.
Council Member Morton said the Finance Committee expressed
reservations that the size of the audit pool did not necessarily merit the Auditor’s attention. Council Member Freeman said staff’s ideas on bringing revenue to the City were good and suggested that the audit include
indications of net profit to the City. AMENDMENT TO MOTION: Council Member Freeman, seconded by Lytle, to include in the Budget that the City Auditor would do an independent audit of the City of Palo Alto (CPA) Enterprise
Fund.
City Auditor Sharon Erickson said she needed to return to the Council on August 5, 2002, with a plan that outlined the full year of the Auditor’s work. The Council should not take action
on one specific item without knowing the full scope of different projects that were proposed.
Mr. Benest said he committed to the Finance Committee that staff had no problems being held accountable to its grand plans. When
staff returned to the Finance Committee with the 2003-2005 Budget, staff would report on its start up efforts.
Council Member Freeman said it was important in City government to have checks and balances. The Council had an opportunity to get a report from an independent source.
Council Member Lytle said all the information for making budget adjustments came through the City Manager. The proper place for objective information was an independent office.
Vice Mayor Mossar welcomed a conversation at an appropriate time
about the Auditor’s Plan. Adding money into the Budget without having gone through the correct exercise was not appropriate. The City Auditor’s Office had money to do audits, and the subject of the audits was not defined by the Budget. Council had
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the opportunity at the appropriate time to tell the City Auditor how to spend the money.
Council Member Kishimoto said the City Auditor had an important role in providing a check for the City Manager’s Budget. AMENDMENT FAILED: 2-7, Freeman, Lytle “yes.”
Council Member Beecham said the Water Fund indicated revenues of $19.8 million decreasing by $7.7 million and indicated an
increase in net sales of $2.9 million. The large decrease in revenue and increase in sales was questioned.
Mr. Baldschun said the net sales revenue increased due to a water rate increase, but the slide indicated a reduction in revenue since it included bond proceeds as revenue in the prior year. It was a matter of presentment.
Council Member Beecham clarified there was an unusual amount of bond financing in the Water Fund the prior year. Mr. Baldschun said that was correct.
Council Member Beecham complimented staff on using
entrepreneurial positions to increase revenue. Palo Alto had a good reputation and considerable expertise in many areas. Sharing that ability and skills with other entities was a good
idea. Long-term revenue under increasing pressure was a continuing concern. Top generators of sales tax in Palo Alto
were Stanford Shopping Center and auto dealers. The City was at risk of losing auto dealers because of space availability.
Council Member Kleinberg said Foothills Park fees were an emotional and fiscal subject. The minutes of the Finance
Committee did not include discussion about the underlying policy of reopening or reinstituting the fees in order to reap $30,000. Mr. Benest said there was a fee in place for many years to pay for the upfront cost of the dam. The dam was paid off in full by
the fee. As part of the former City Manager’s Budget, the fee was eliminated because it did not generate the amounts of money to fully pay back the cost of the dam. Operating costs at
Foothills Park were approximately $35,000 per year, and staff felt it was reasonable to reinstate the fee in the Budget.
Council Member Kleinberg said the staff report (CMR:289:02) made reference to the Fields Management Committee and the fact the remaining $73,000 in the Council Contingency Fund would be allocated to expanded field usage.
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Mr. Benest said the Finance Committee felt it was wise to have money available so that when recommendations went back to the
full Council on how to expand field uses, money would be available. Money could be used for lighting of fields and irrigation systems in parks. Council Member Burch suggested using the money for additional
playing fields. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to remove the Foothill Park fees from the municipal fee
schedule under the Community Services Department budget (Page
13) and reduce non-departmental contingency (fields) funds. Council Member Lytle said the field issue was an adopted Council milestone under the five point priorities. It was the only one late adopted that did not receive financing in the budget.
Council Member Kleinberg appreciated and valued seed money for increasing fields, but $43,000 remained in the Contingency Fund. A large percentage of the community valued access to the City’s parks. Keeping faith with the people who felt that Foothills
Park was one of the free assets in Palo Alto was important. The City was heading into two important initiatives: the Library
Plus bond and a Storm Drain vote. There was no reason to alienate voters over a $30,000 line item.
Vice Mayor Mossar said the Council needed to work with the community to help them understand that everyone had a
responsibility to maintain and care for the community assets. Foothills Park was a treasure, and little money was spent taking care of that treasure. Taking the fees out of the Budget was
disappointing.
Council Member Kishimoto proposed amending page 3 of the staff report (CMR:289:02) to add a measure to the Traffic Calming Performance Measures that would address the speeding issue. Assistant Police Chief Lynne Johnson said staff spent
considerable time discussing whether or not objectives dealing with speeding should be recommended. Staff decided not to make that recommendation because during the prior two years, speeding
was the primary collision factor for approximately 27 percent of the accidents. The main goal was to reduce the number of
collisions. Council Member Kishimoto said traffic enforcement was only one part of achieving traffic calming and suggested adding “together
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with transportation” as achieving a long-term goal of reducing speeds.
Ms. Johnson said education, enforcement, and engineering could make a sustaining reduction in speeds. Overall speed reduction throughout the City was difficult. AMENDMENT TO MOTION: Council Member Kishimoto moved, seconded by Lytle, to direct the Police Department and Transportation Division to work together to develop one more performance
measure to the Traffic Calming Performance Measures with a goal of reducing speeding on a long-term sustainable basis.
AMENDMENT FAILED: 3-6, Freeman, Kishimoto, Lytle “yes.”
Council Member Freeman thanked the Finance Committee for its diligence in dealing with the details. The Council needed to
look at each fund with the fund dollar amounts for the prior and the current budgets in order identify changes. Mr. Yeats said the proposed Budget contained a fund summary.
Council Member Freeman was not optimistic about the future of revenues but was excited about the concept of an enterprise
solution. She recalled there was a net of $600,000 and asked if that amount was already included.
Mr. Benest said the $600,000 was yet to be made.
Council Member Freeman asked whether it was possible to look to the $600,000 to get the $30,000 that was needed for Foothills Park.
Council Member Kleinberg understood the $30,000 was to support
staff salaries. Mr. Benest said the $30,000 was for increased costs to operate the park.
Council Member Freeman said if the motion passed, there was a $35,000 deficit. There might be options from that money since the purpose of the enterprise was to make money for the City.
Mr. Yeats said the $600,000 was built into the Budget.
Mayor Ojakian clarified the $600,000 was part of the discretionary funds used for any expenditure. Mr. Yeats said that was correct.
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Council Member Freeman asked where administration fell into the reduction cycle.
Mr. Benest said staff identified services and programs. Some services were external for the public and others were internal programs and services that supported the organization.
Council Member Freeman said she wanted assurance that the administrative functions were included in the process.
Mr. Benest said Purchasing was a good example.
Council Member Freeman said there were juniors who played golf and did not have a differentiated fee because they were not residents. Her understanding was that only 17 percent of the users of the golf facility were Palo Alto residents, and a differentiated fee could be a reasonable increase to the City.
Council Member Burch said the issue was raised over and over during the prior three years. The first time he heard it, he tried to do exactly what Council Member Freeman was trying to do and change the senior rate a little bit. Nobody paid any
attention to it. The complaints went on and it did not make any difference at all.
AMENDMENT TO MOTION: Council Member Freeman moved, seconded by
Lytle, to have staff review the non-residential junior golfers
fees to determine if increasing fees would increase revenues. AMENDMENT FAILED: 4-5, Beecham, Freeman, Kishimoto, Lytle “yes.” Council Member Burch said staff looked at the issue of non-
residential fees in the past.
Council Member Morton said the Budget was put together by hundreds of people. The accomplishment of the City Manager, department heads, and staff in coming up with a Budget that the City and staff enthusiastically supported was a major accomplishment. Palo Alto managed two years in a row to come up
with a balanced budget in spite of significant reduction in income in both years. MOTION PASSED 9-0.
MOTION: Mayor Ojakian moved, seconded by Burch, to reconsider the discussion of Valley Transportation Authority (VTA) bus shelter advertising.
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Mayor Ojakian said when the VTA matter was initially heard, two Council Members were not present to participate in the
deliberations. He was one of the Council Members not present and wanted the item reconsidered because some VTA funds might be used to benefit other projects. Council Member Burch said bus shelters needed to be repaired and
rebuilt within the following two years. Council Member Kleinberg said some of the numbers needed to be carefully examined. Bringing back a matter that did not pass at
a full Council hearing or at a Finance Committee hearing concerned her.
Council Member Freeman suggested all Council Members visit the VTA bus shelter in front of Hewlett Packard on Hanover Street prior to making any decisions. MOTION FAILED: 4-5, Burch, Morton, Mossar, Ojakian “yes.” APPROVAL OF MINUTES MOTION: Council Member Burch moved, seconded by Mossar, to
approve the minutes of May 13, 2002, as submitted. MOTION PASSED: 8-0, Beecham absent.
CONSENT CALENDAR
Council Member Morton stated he could not participate in Item
No. 9 due to a conflict of interest because he had clients with interests in the property.
Council Member Kishimoto referred to Item No. 8 and applauded staff for its accomplishments.
Council Member Burch concurred with Council Member Kishimoto’s comments regarding Item No. 8. Council Member Morton stated he could not participate in Item
No. 12 due to a conflict of interest because he had holdings in Albertson’s.
Council Member Kleinberg applauded staff for its accomplishments with regard to Item No. 8.
Herb Borock, P.O. Box 632, referred to Item No. 12 and noted
that the last day for public comment on the draft Environmental Impact Report (EIR) was eight weeks prior. Recently, public came to the Council because of concerns that the public review period
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for the final EIR was imminent and there was little time available for the public review. He recalled the Council adopted
a motion to have the public review at a later date. The Council did not yet have the final EIR. Clarity as to the new schedule was important. MOTION: Council Member Beecham moved, seconded by Mossar, to
approve Item Nos. 4-15 on the Consent Calendar. LEGISLATIVE
4. Adoption of Final Appropriation Limit Calculation Resolution for Fiscal Year 2002-03 Resolution 8182 entitled “Resolution of the Council of the City of Palo Alto Determining the Calculation of the
Appropriations Limit of the City of Palo Alto for Fiscal Year 2002-03” ADMINISTRATIVE
5. Annual Adoption of the City of Palo Alto Statement of Investment Policy and Proposed Changes to the City’s Investment Policy as described in CMR:275:02 6. Rejection of Bids Received on May 21, 2002 for the Water-Gas
Wastewater Service Installation Project
7. Contract Between the City of Palo Alto and Leo Tidwell Excavating Corporation in the Amount of $89,000 for Construction of Underground Electric Duct Systems at the
Green Acres Subdivision (IFB#142906)
8. One Year Review of City Sustainability Program Accomplishments and Recommendation to Revise Citywide Sustainability Policy
9. Agreement Between the City of Palo Alto and the Palo Alto
Housing Corporation in the Amount of $75,000 for Administration of the Below-Market-Rate Housing Program for Fiscal Year 2002-2003
10. Contract Between the City of Palo Alto and Geoline
Positioning Systems, Inc. in the Amount of $72,847 for Prototype Global Positioning Satellite System (GPS) to locate Utility Infrastructure, for Use with the City of Palo Alto Geographic Information System
11. Agreement Between the City of Palo Alto and the Los Altos Hills County Fire District for Inter-Jurisdictional Fire
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Protection and Emergency Medical Response Service from City of Palo Alto Fire Station Number 8
12. Contract Between the City of Palo Alto and David Powers and Associates in the Amount of $92,300 for Services and Completion of the Environmental Impact Report for the Edgewood Redevelopment Project Area
13. Approval of Software Support Services Renewals with Oracle Corporation in the Amount of $342,285 (three years at
$114,095 per year)
14. Amendment in the Amount Of $15,714 to Existing Contract for Employee Training with Foothill DeAnza Business and Industry Institute, Changing Contract Amount from $119,286 to $135,000 for the Second Contract Year
15. Request for Authorization to Contract with the Law Firms of Liebert, Cassidy & Whitmore; Neufeld & Jaffe; Richards, Watson & Gershon; McDonough Holland & Allen; Ruby & Schofield; Miller & Canfield; Thelen, Reid; Richard Maul, Esq.; Roger Beers, Esq.; Severson & Werson; and McCarthy &
Berlin, LLP MOTION PASSED 9-0 for Item Nos. 4-8, 10, 11, and 13-15. MOTION PASSED 8-0 for Item Nos. 9 and 12, Morton “not
participating” THE CITY COUNCIL ADJOURNED AT 11:07 P.M. TO A SPECIAL MEETING AS THE PALO ALTO REDEVELOPMENT AGENCY AND RECONVENED AS THE CITY COUNCIL AT 11:10 P.M.
COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS
Council Member Morton noted his concern regarding the proposal by Senator Torlakson (SB 1243) to combine Association of Bay Area Governments (ABAG) and Metropolitan Transportation Commission (MTC) and suggested the City send a letter of
opposition. Council Member Beecham encouraged staff and the Mayor to look
into the issue.
Vice Mayor Mossar noted SB 1243 was a proposal that met with strong opposition in the region. Council Member Lytle said the Council heard during Oral Communications that the Santa Clara County Planning Commission
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had continued the Stanford proposal for their hillside zoning, which allowed the City the opportunity to review the Planning
and Transportation Commission recommendation. MOTION: Council Member Lytle moved, seconded by Morton, to consider the Planning and Transportation Commission recommendation on Stanford hillside zoning regulations before
the County took action in August 2002. Council Member Kleinberg stated she would not participate in the item due to a potential conflict of interest because her
husband’s law firm represented Stanford in land use matters. Vice Mayor Mossar stated she would not participate in the item due to a conflict of interest because her husband was employed
by Stanford University. MOTION PASSED 7-0, Kleinberg, Mossar “not participating.” CLOSED SESSION
The meeting adjourned at 11:15 p.m. to a Closed Session.
16. (Old Item No. 1) Conference with Labor Negotiator
Agency Negotiator: City Manager and Human Resources Director pursuant to the Merit System Rules and Regulations
Employee Organization: Unrepresented Management and Confidential Employees Authority: Government Code Section 54957.6.
The City Council met in Closed Session to discuss matters involving labor negotiations as described in Agenda Item No. 16.
Mayor Ojakian announced that no reportable action was taken on Agenda Item No. 16. FINAL ADJOURNMENT: The meeting adjourned at 11:25 p.m.
ATTEST: APPROVED:
City Clerk Mayor
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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.
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