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HomeMy WebLinkAbout2011-06-20 City Council Summary Minutes 1 6/20/2011 Special Meeting June 20, 2011 The City Council of the City of Palo Alto met on this date in Council Chambers at 6:04 P.M. Present: Burt, Espinosa, Holman, Klein arrived @ 7:26 P.M., Price, Scharff, Schmid, Yeh Absent: Shepherd STUDY SESSION 1. Study Session Regarding the Valley Transportation Authority's El Camino Real Bus Rapid Transit (BRT) Project. Staff from Valley Transportation Authority presented the El Camino - Bus Rapid Transit (BRT) project. The proposed El Camino Real BRT Corridor extends from Downtown San Jose (Arena Station) to Downtown Palo Alto (Palo Alto Transit Center) passing through the cities of Santa Clara, Sunnyvale, Los Altos, and Mountain View. The goal of the project is to improve transit access along the El Camino Real corridor by providing faster and more reliable bus transit service with target stops using specialized transit vehicles and enhanced station facilities. VTA Staff is recommending that the project include a combination of BRT operations in either a “Mixed Flow Lane” or “Dedicated Center Median Lanes” through the corridor. Mixed Flow Lane operations preserve existing lane configurations along El Camino Real while Dedicated Center Median operations require a reduction in lanes along El Camino Real to provide the dedicated roadway right-of-way to sustain BRT operations. In Palo Alto, the VTA is proposing BRT to operate within a Mixed Flow Lane operation with stations at California Avenue and near Charleston Road-Arastradero Road (Maybell Avenue). The City Council indicated a preference for the VTA to analyze both BRT operation models in Palo Alto and to return to both the Planning & Transportation Commission and Council in Fall 2011 so that a better informed decision regarding design preference for BRT operations in Palo Alto can be made. 2 06/20/2011 SPECIAL ORDERS OF THE DAY 2. Proclamation Recognizing the 80th Anniversary of Gleim the Jeweler. Vice Mayor Yeh read the Proclamation recognizing the 80th anniversary of Gleim the Jeweler into the record. Georgie Gleim thanked Council and stated that she was extremely honored to receive the Proclamation. She specifically thanked Vice Mayor Yeh and Paula Sandas, President and CEO of the Palo Alto Chamber of Commerce, for their participation. She stated that it was an honor to have been afforded the opportunity to play a role in the lives of so many Peninsula residents over the years, and that she greatly appreciated receiving such recognition. Council Member Holman stated that one of her favorite things about Palo Alto is the abundance of local independent businesses and their positive contribution to the community. She stated that Gleim the Jeweler is an excellent example of a local business actively engaging in the community. She thanked Ms. Gleim for her ongoing community support and her presence as a long-standing, stable local business. Council Member Schmid stated that he had three sons whose sports teams were sponsored by Gleim the Jeweler, and suggested that the support of youth sports through local business sponsorship was the best and longest lasting form of advertisement within a community. He thanked Georgie Gleim for her sponsorship of youth sports teams and urged other small businesses to participate. Ms. Sandas congratulated Gleim the Jeweler for their position as both a community and industry leader. She stated that such industry leadership was emblematic of Palo Alto small businesses, and thanked the City Council for making the Proclamation possible. Mayor Espinosa stated that due to the extent of her participation in numerous community organizations, Ms. Gleim had been one of the first people that he met upon arriving in Palo Alto. He expressed gratitude for the level of support that Gleim the Jeweler has provided to the community and explained that this type of leadership and involvement deserves to be recognized. 3. Selection of Candidates to be Interviewed for the Planning and Transportation Commission for One Term Ending on July 31, 2015. 3 06/20/2011 MOTION: Council Member Klein moved, seconded by Council Member Holman to interview all candidates for the Planning and Transportation Commission. MOTION PASSED: 8-0 Shepherd absent CITY MANAGER COMMENTS James Keene, City Manager, announced that on July 1, 2011 the Department of Public Works and the Community Services Open Space Division will open a 36 acre section of the landfill at Byxbee Park to the public. On December 1, 2011 the City will also open an additional 10 acre section for use. He cautioned that although the two areas will be opened to the public, final trail construction will not begin until late 2011 or early 2012. The areas are scheduled to be seeded with native grasses in the fall of 2011. Mr. Keene also announced that the Palo Alto Arts Center Groundbreaking Family Day would take place Saturday, July 16th from 1 p.m.-3 p.m. at the Palo Alto Arts Center to celebrate the Center’s major transformation. He added that the Downtown Library’s Grand Opening would take place at the same time, and encouraged local families to attend both events. Mayor Espinosa announced that Agenda Item Numbers 9 and 14 would be pulled from the Agenda. He assured members of the public that although no action would be taken on the items at the meeting, members of the public would still have an opportunity to comment. ORAL COMMUNICATIONS Jack Van Etten addressed Council, introducing himself as a past President and 15 year member of the Burlingame Lions Club. He informed Council that several of the local Lions Club leaders were in attendance, and that they would like to announce that they are searching for new members in order to charter a second Lions Club within Palo Alto. He assured Council that the new Club would compliment the existing Club, founded in 1927, and asserted that the population base of Palo Alto is sufficient to support a second Club. He announced that an informational meeting would be held June 30, 2011 at 6:30 p.m. at the State Farm Insurance Conference Center at 4546 El Camino Real. CONSENT CALENDAR Staff and Stanford University representatives requested that Agenda Item Number 9 be pulled and rescheduled for Council consideration at the July 11, 2011 meeting. 4 06/20/2011 Mark Tortorich, Stanford Medical Center Vice President of Design and Construction, addressed Council regarding the rationale behind the removal of Item Number Nine from the Agenda. He explained that members of the Stanford Project Management Team had held a series of meetings with the Arboretum Day Care Center parents, in which they discovered that the parents had not been properly informed of the project. He stated that his team had made a commitment to work with the parents to resolve their concerns regarding the project, and would like to postpone Council consideration of the Item to allow time for both the parents and Stanford Staff to reach a successful compromise. Council Member Klein recused himself from Agenda Item Number 9, due to the fact that his wife was currently employed by Stanford University. He left the meeting at 7:33 P.M. Melissa Michelson addressed Council regarding Agenda Item Number 9. Ms. Michelson stated that the Arboretum Day Care Parents had significant concerns regarding the comprehensiveness of the Environmental Impact Report for the project, and asked that Council take these concerns into consideration when the Item returns to Council in July. She added that many of the parents have a great deal of scientific expertise and were extremely dedicated to ensuring that Stanford would not move forward with this project without making the necessary revisions. Daniella Perlroth addressed Council regarding Agenda Item Number 9. She explained that she was an Infectious Disease Physician for Stanford University and a mother of three children, two of which currently attend the Stanford Arboretum Child Care Center. She stated that although the parents were fully supportive of Stanford’s efforts to rebuild the Hospital and provide the community with improved medical access, it was unacceptable that 140 children located 20 feet from a construction site had been overlooked. She assured Council that if the parents had been informed of the site’s location, and the project’s possible impact on the Day Care, the parents would have been involved with this project much sooner. She stated that any compromise would need to include relocation of the children for the duration of the construction, and asked that, if no compromise was reached with Stanford Staff, Council amend the Developer Agreement to require parental participation going forward. Victor Perlroth addressed Council regarding Agenda Item Number 9, stating that as a former graduate of both Stanford University’s Medical and Business Schools and a supporter of prior Stanford development projects, he viewed Stanford as an extremely important institution in the community. He expressed disappointment with the way that the current Project had been handled and concern regarding the close proximity of the construction site to the Day Care facility. He stated that it was unsafe for young children and 5 06/20/2011 infants to be exposed to deconstruction and reconstruction of this magnitude. He stated that the Day Care Center must be relocated, and urged the City Council to use their position to encourage Stanford to do so. Sofie Kleppner addressed Council regarding Agenda Item Number 9. She stated that she was the mother of a four year old child who attended the Arboretum Day Care Center five days a week, but that she was only informed of the construction’s impact on the Center one week ago. She explained that she had no intention of sending her child to day care in a construction zone every day for a year and a half, but faced nine to twelve- month waitlists for other day care centers in the area. She stated that although she was a full-time employee of Stanford Medical Center, she may have to consider a leave of absence if she was not able to obtain safe child care. She stated that she looked forward to the opportunity to reach a compromise with Stanford that would consider the children’s health, while also allowing the Hospital Project to move forward with as little delay as possible. Rania Sanford addressed Council regarding Agenda Item Number 9. She explained that she had been a Stanford University employee for 15 years and had a four-year-old attending the Arboretum Day Care Center. She commented that the Lucille Packard Children’s Hospital had taken precautions to ensure that all patients remained indoors for the duration of the construction and that the Hospital’s air quality would be professionally monitored. She urged Council to question why extraordinary precautions had been taken to ensure the safety of the patients, but not that of the children in the Day Care Center next door. Simon Klemperer addressed Council regarding Agenda Item Number 9, introducing himself as a Professor of Geophysics and Geological and Environmental Sciences at Stanford University. He stated that although he supported the Stanford Renewal Project, he could not do so at the expense of his child’s health. He asserted that Stanford consultants had made an error by omitting mention of the construction’s impact to the Child Care Center from the Environmental Impact Report, and asked that Council request a supplemental Report specifically referencing the Arboretum Child Care Center. Ofer Shackam addressed Council regarding Agenda Item Number 9. He introduced himself as both a Post Doctoral student in Electrical Engineering at Stanford University and the father of two children who attended the Arboretum Day Care Center. He expressed gratitude to Council for the time spent reviewing the Environmental Impact Report and concern for the fact that it did not include any mention of the impacts to the Day Care Center. 6 06/20/2011 Kenneth Ligda addressed Council regarding Agenda Item Number 9. He introduced himself as a PhD student in the English Department at Stanford University and requested that Council halt all construction at the site until the Child Care Center could be relocated. Matt Richter addressed Council regarding Agenda Item Number 9. He introduced himself as a life-long Palo Alto resident and a local small business owner. He urged Council Members to look very carefully at this project to ensure that all interests were protected. Steven Lieske addressed Council regarding Agenda Item Number 9. He spoke to the omission of the Child Care Center in the Environmental Impact Report and asked that the construction be delayed until the impacts to the children could be carefully and thoroughly investigated. Laura Pisceno addressed Council regarding Agenda Item Number 9. She introduced herself as a Stanford University Physicist and identified four instances in which the Arboretum Child Care Center was mentioned during the course of the project’s preparation. She asked that Council adopt amendments to the project, requiring relocation of the Child Care Center and ensuring both the continued existence of the Center and future parental participation with regards to this project. Carly Heidenger addressed Council regarding Agenda Item Number 9. She introduced herself a Pediatrician and the mother of two children currently attending the Arboretum Child Care Center. She expressed concern over the proximity of the construction to the Child Care Center, which she cautioned could result in the children’s exposure to noise, diesel fumes, vibrations, lead, asbestos, dust, and other infectious spores. She discussed the potential ramifications of the exposure and asked that Council condition approval of the project upon permanent relocation of the Center. James Keene, City Manager, emphasized that July 11, 2011 was chosen due to the fact that it is the first Council Meeting in July and would provide the most immediate opportunity to begin a dialogue regarding the public’s concerns. Council Member Holman inquired as to how the City planned to address the concerns of the parents as the project moved forward. Mr. Keene stated that the issues regarding the construction project must be resolved between Stanford Hospital representatives and the Arboretum Child Care Center, and that the City would like to see the two groups return after having reached a compromise. He stated that the second reading of the Ordinance has been postponed, and that construction cannot begin until the second reading has been completed. 7 06/20/2011 Council Member Holman asked whether the City had an obligation to ensure that Stanford University representatives properly address all environmental concerns with regards to the Child Care Center. Molly Stump, City Attorney, informed Council that Staff anticipates a resolution to be included in the document that comes before Council, thereby creating an enforcement mechanism. Mr. Keene stated that it would be premature for Staff to speculate on what the outcome of the dialogue between the Hospital and the community would be, and that once a compromise was reached, the City Attorney would advise Council as to how to proceed. Council Member Holman inquired whether it would be appropriate for the City to undergo an environmental analysis of its own or whether the City’s role with regards to this matter would simply be to implement the enforcement mechanism. Mr. Keene stated that he believed that it would be premature to comment on that issue, and that Council would be better served to wait for an independent resolution to the matter. He remarked that the only action required by Council at this time was to accept the deferral of the Item. Vice Mayor Yeh thanked the parents and family members in attendance for sharing their concerns, and stated that deferral of the Item was the most logical step for Council to take to support resolution to their concerns. Council Member Burt expressed confidence in the fact that Stanford University would rectify the problem and acknowledged that all parties were anxious for resolution. Ms. Stump explained that the City Council had already approved the Environmental Impact Report, and that the items still before Council were the Development Agreement and the Entitlements. Mr. Keene explained that Council had significant discretion under the purpose of the Development Agreement. MOTION: Vice Mayor Yeh moved, seconded by Council Member Scharff to approve Agenda Item Numbers 4-8, 10. 4. Resolution 9175 entitled “Resolution of the Council of the City of Palo Alto Determining the Proposed Calculation of the Appropriations Limit for Fiscal Year 2012.” 8 06/20/2011 5. Resolution 9176 entitled “Resolution of the Council of the City of Palo Alto Approving a Professional Services Agreement between the Northern California Power Agency and the Cities of Alameda, Palo Alto and Santa Clara for Electric Transmission, Generation and Regulatory Consulting Services.” 6. Approval and Authorization of the City Manager to Execute a Contract with Pacheco Utility Line Builders in the Amount of $371,412 for the Electric Pole Replacement and Overhead Wire Install Project on City’s Electric Distribution System. 7. Approval of a Utilities Enterprise Fund Contract with Dresser, Inc. in an Amount of $935,700 for Supplying Regulating Equipment for Rebuilding of Gas Receiving Stations 1, 2, 3, and 4 Capital Improvement Program Projects GS-09000, GS-08000, GS-10000, and GS-11001. 8. Approval Of Software Consulting Service Contract Amendment with Sierra Infosys, Inc. in the amount of $84,000 for the SAP Basis Support of SAP Industry-Specific Solution for Utilities, SAP Financials, Customer Relationship Management System, Business Intelligence System and Utilities Customer Electronic Services. 9. 2nd Reading- Adoption of a Resolution Approving the Reorganization of an Approximately .65 Acre Territory Designated “Major Institution/University Lands” Located in the County of Santa Clara and Second Reading for the Adoption of Two Ordinances: (1) Amendment of Title 18 of the PAMC to add a new Chapter 18.36 (Hospital District), adding Section 8.10.95 (Tree Removal in HD Zone) to Chapter 8.10 (Tree Preservation and Management Regulations) of Title 8 (Trees and Vegetation) and amending Section 16.20.160(a)(1) (Special Purpose Signs) of Chapter 16.20 (Signs) of Title 16 (Building Regulations) and amending Section 18.08.010 (Designation of General Districts) and Section 18.08.040 to Chapter 18.08 (Designation and Establishment of Districts) and (2) Approval of a Development Agreement Between the City of Palo Alto and Stanford Hospital and Clinics; Lucile Salter Packard Children’s Hospital at Stanford; and the Board of Trustees of the Leland Stanford Junior University. (Continued from June 13, 2011) 10. Annual Adoption of the City’s Investment Policy. MOTION PASSED for Agenda Item Numbers 4-8, 10: 7-0 Klein, Shepherd absent Council Member Klein returned to the meeting at 8:19 P.M. 9 06/20/2011 ACTION ITEMS 11. PUBLIC HEARING: Approval of an Ordinance 5121 Adopting the Fiscal Year 2012 Budget, including the Fiscal Year 2012 Capital Improvement Program, and Changes to the Municipal Fee Schedule; Adoption of Five Resolutions: (1) Resolution 9177 Amending Utility Rate Schedules for a Storm Drain Rate Increase; (2) Resolution 9178 Amending Utility Rate Schedules for Fiber Optic Rate Increases; (3) Resolution 9179 Amending Utility Rate Schedules for Wastewater Rate Increases pursuant to Proposition 218; (4) Amending Utility Rate Schedules for Water Rate Increases; (5) Amending the 2010-2011 Compensation Plan for the Management and Professional Personnel and Council Appointees; and Adoption of an Ordinance Amending Chapter 2.08 to Create a New Department of Information Technology (Continued from June 13, 2011). Lalo Perez, Director of Administrative Services, introduced the Item as the second part of the City’s budget approval process. He stated that Staff would not be making a formal presentation of the Item, but did acknowledge Council Member Holman’s request that Staff provide additional information regarding a resolution to change management and professional compensation by providing a table of all eleven proposed salary changes. Mr. Bobel, Acting Assistant Director of Public Works, stated that Staff intended to bring a Budget Amendment Ordinance for the Arts Center Project before Council in July. He explained that the Budget Amendment Ordinance would include approximately $600,000 worth of additions to the Arts Center Project. He stated that although the project is currently out to bid, Staff was considering a Budget Amendment Ordinance in order to take advantage of the current economic climate in which bid prices have been significantly lowered and to minimize disruptions to the Arts Center Staff and Patrons as much as possible. He noted that there would not be a need for a Budget Amendment Ordinance if the returning bids were low enough, but wanted Council to be aware of the possibility. James Keene, City Manager, assured Council that if the need arose for a Budget Amendment Ordinance, the Item would be returned at a later date for consideration. He stated that this was being discussed now only for the purpose of advising Council that the Item may appear at a future meeting. Mr. Perez asked that, if they were amenable to the proposed changes to the Municipal Fee Schedule, Council vote to approve an amended version of Ordinance 5121. Council Member Holman asked for an explanation of proposed increases to several positions in the Municipal Fee Schedule. 10 06/20/2011 Mr. Perez stated that Staff was changing the structure of the Office of Management and Budget Division within Administrative Services and moving towards a more analytical program. He explained that these changes were needed, and that the Finance Committee had communicated a desire to see Staff reorganize operations and capital budgeting and provide a more in- depth analysis of services and programs. He anticipated that the next few years would be financially challenging and that, in response to growing budget difficulties, both the State of California and Council were requiring more detailed information than Staff had historically provided. He informed Council that Administrative Services’ restructuring efforts were an attempt to meet the growing demand for information. Council Member Holman asked what factors were considered in determining pay increases. Mr. Keene explained that the increases were motivated in part because of the City’s inability to attract the candidates needed to fill the positions in question. He added that the Director of Information Technology/Chief Information Officer position was created to oversee the Information Technology Department, a newly independent Department, no longer a division of Administrative Services. He noted that the salary for this position reflected Staff’s intention that the position serve as an autonomous member of the Executive Leadership Team, and stated that Staff had conducted research to determine the salaries paid by other agencies for similar positions. Public Hearing opened and closed without public comment at 8:35 P.M. Mayor Espinosa stated that there were 20,126 property owners and water customers subject to the proposed water rate increase, and that 10, 064 protests were needed to create a majority. He asked the City Clerk to provide the number of written protests received against the proposed water rate increase. Donna Grider, City Clerk, reported that there were 128 protests received for the water rate increase. Mayor Espinosa stated that 128 protests did not constitute a majority protest, and that the water rate changes would be made as part of the Ordinance adopting the budget for Fiscal Year 2012. He stated that there were 22,232 property owners and wastewater customers subject to the proposed wastewater rate increase, and that 11,117 protests were needed to create a majority. He asked the City Clerk to provide the number of written protests received against the proposed wastewater rate increase. 11 06/20/2011 Ms. Grider reported that there were 94 protests received for the wastewater rate increase. Mayor Espinosa stated that 94 protests did not constitute a majority protest, and that the wastewater rate changes would be made as part of the Ordinance adopting the budget for Fiscal Year 2012. Molly Stump, City Attorney, reported that Council Member Klein would recuse himself for Item Number One, which comprised those portions of the budget relating to Stanford University. Council Member Klein advised that he would not be participating in deliberations for this Item, as the Item pertained to Stanford University, where his wife was currently employed. He left the meeting at 8:38 P.M. MOTION: Council Member Scharff moved, seconded by Vice Mayor Yeh to approve the Staff and Finance Committee recommendation that the City Council adopt the portions of the Police and Fire Department Budgets and Capital Improvement Projects relating to Stanford University for the Fiscal Year 2012 and the Ordinance portions related thereto. MOTION PASSED: 7-0 Klein abstaining, Shepherd absent Council Member Klein returned at 8:40 P.M. Council Member Scharff stated that in his opinion the water rates as currently proposed, with a tier 3 for residential and a tier 2 for commercial, violated Proposition 218. He stated that Council should not approve the rates, and observed that Staff had not completed a Cost-of-Services Study to demonstrate that the amounts charged to parcels would not exceed the Proposition 218 limitations. MOTION: Council Member Scharff moved, seconded by Council Member Klein to: 1) not approve water rate increases and Staff is to return to Council on June 27, 2011 with new rates that do not include Tier 3 rates for residential usage or Tier 2 rates for commercial usage; 2) and revised water rates do not need to be reviewed by Utilities Advisory Commission or the Finance Committee; 3) a transfer of $2.8m from the Water Rate Stabilization Reserve Fund would continue as currently proposed; and 4) no further updates to the financial forecast. Council Member Scharff stated that some of the rates proposed by the Utilities Advisory Commission did not comply with Proposition 218, and emphasized that it was very important for Council to proceed in the right direction with regards to this matter. 12 06/20/2011 Council Member Price remarked that she felt as though she did not have enough information to make a clear decision regarding this matter, and requested a legal opinion regarding the proposed rates. Ms. Stump replied that jurisdictions around the State have struggled to address the structure of utility rates with respect to the procedural requirements of Proposition 218 and the policy interests of conservation, both of which were state mandated. She stated that Council had the authority to adopt the rates as proposed. Valerie Fong, Director of Utilities, informed Council that if a decision were made at this meeting, than Staff would be able to return the item by August 1, 2011. However, if the decision were not made until the following meeting, than Staff would likely not be able to return the proposed amendments until Sept 12, 2001, in which case the rates would not take affect until November 2011. Mr. Keene disagreed with the timeline presented by Ms. Fong, and stated that he believed that Staff could begin the work necessary to meet the August 1, 2011 deadline regardless of whether the Item were returned to Council before then. He stated that given that the Motion represents a new direction for Staff, he would feel more comfortable if Staff had some time to review the proposal before a vote of Council. Council Member Scharff responded to Mr. Keene’s concerns, and commented that he believed the matter was legal in nature and not an issue of review. Ms. Stump stated that it may be helpful to take another week to allow Council to obtain Council Member Scharff’s proposal in written form, along with any possible operational, legal, and policy implications, and compare it alongside the current Staff proposal. Council Member Scharff agreed with Ms. Stump’s suggestion, but asked for an assurance from Ms. Fong that Staff would be able to commit to an August 1, 2011 deadline if Council were to agree to postpone a vote on the Motion. Ms. Fong stated that two of the key Staff Members who would normally work on the project would be out of the country during the time in question. Mr. Keene stated that he believed that Staff could meet the August 1, 2011 deadline if given a week to prepare a written report for a vote on the Item. Mayor Espinosa acknowledged the commitment from Mr. Keene. 13 06/20/2011 Council Schmid stated that he understood the confusion caused by introducing fundamental change to a process that had been in place for the previous three months and was aware of the consideration that must be given to a proposal that could potentially postpone a rate increase for up to four months. SUBSTITUTE MOTION: Council Member Schmid moved, seconded by Vice Mayor Yeh to: 1) approve Staff recommendation to increase the water rates for 6 months, 2) direct Staff to complete a Cost-of-Services Study for the basis of new rates for April 2012. Council Member Schmid commented that it was important to comply with Proposition 218 and to ensure that customers were not paying to subsidize other users. He stated that in a non-tiered rate structure, those living in a small rental apartment would pay the same as those with large scale landscaping. As a consequence of this structure, those renters who comprise 55% of the community would be made to subsidize larger users. He acknowledged that Council had already unanimously approved the Water Management Plan, as required by the State, and stated that by doing so Council had agreed to a five-year Water Conservation Program which would include a rate mechanism to encourage conservation. He urged Council to approve the rates proposed by Staff, in order to avoid the need to draw from Budget Stabilization Reserves to augment revenue until which time as a new rate structure could be put into effect. Vice Mayor Yeh stated that he agreed with Council Member Schmid’s approach, and stated that during Finance Committee discussions there was acknowledgement that a Cost-of-Services Study was essential to gain an understanding of the complexity of restructuring the City’s water rates. He maintained that direct intervention with large landscape users did not appear to be the best approach, and that tiered water rates created the best incentive for users to conserve water. He stated that he felt that a delay in approving the new water rates would be risky, but that there was still a need to investigate subsidization across user groups and gather more information. He commented that Council Member Schmid’s proposal would allow the Utilities Department time to prepare the necessary Cost-of-Services Study and would provide the opportunity to revisit the rates in six months. Council Member Burt asked Council Member Schmid why he considered the six month time period necessary. Council Member Schmid responded that from what he understood, a one week delay in consideration would prevent Staff from providing an adjusted rate structure until sometime in early November. He stated that he felt that a six month period would allow Staff the time necessary to prepare the requested information. 14 06/20/2011 Council Member Burt asked Ms. Fong to clarify her timeline. Ms. Fong stated that if Council were vote on this issue at the next scheduled meeting in one week, the Cost-of-Services Requests for Proposals would go out in mid July and would close in mid-August. The Study would likely start in September and be completed and returned to Council in November. She reported that Staff could return with new rates in mid-January, at which time they would begin the Proposition 218 process. The results of that process could be returned to Council in March and could potentially produce rates effective April 1, 2012. Ms. Fong stated that the wording of the original Motion was clear, in that the Residential Tier 3 rate and the Commercial Tier 2 rate would be eliminated. She requested clarification regarding Council Member Scharff’s desire to maintain compliance with Proposition 218 through eliminating the previously mentioned tiers. She stated that she was unclear as to whether the intent was to eliminate all tiers or only those specifically named. Council Member Scharff replied that in his understanding, the City had the burden of proof regarding maintaining compliance with Proposition 218. He stated that, if challenged, the City needed to be able to provide evidence that one rate payer class was not subsidizing another. He remarked that in his opinion, the Residential Tier 3 rate and the Commercial Tier 2 rate constituted a violation of the Proposition 218 prohibition on cross- subsidization and that the proposed rate structure was a liability without a Cost-of-Services Study to support it. Council Member Burt asked for clarification regarding which rates Council Member Scharff was specifically opposed to. Council Member Scharff replied that there was currently no Residential Tier 3 rate or Commercial Tier 2 rate, but that the new rate structure would create them. He was opposed to these additions, stating that they were a violation of Proposition 218. Council Member Burt asked for an explanation of the Utilities Staff’s justification for the tiered rate increases. Ms. Fong explained that Staff provided the Utilities Advisory Commission with the financial forecast and the Cost-of-Services Study, as well as some possible scenarios for review. She stated that the Cost-of-Services Study examined the cost of services between commercial and residential users and between different classes of commercial and residential users, and after review of these materials the Utilities Advisory Commission selected the three tiered system. 15 06/20/2011 Council Member Burt asked Ms. Fong how Staff had established the various rate structure scenarios presented to the Commission, and what consideration was given to Proposition 218 requirements. Ms. Fong explained that Staff had provided possible rate structuring scenarios to the Commission, and that the Commission evaluated those scenarios based on policy considerations provided by Council, such as conservation. Council Member Burt stated that he didn’t understand how Staff could present scenarios to an advisory commission without providing legal considerations. He acknowledged that he was torn on the issue and that he was disappointed to be hearing about the possible negative legal ramifications of the Item at this late date. He stated that Council was now faced with a dilemma; they must attempt to meet the goals of the water management plan while ensuring the City’s compliance with Proposition 218. He noted that although the public had raised many objections to the water rate increases, the issue of whether to undertake a new Cost-of-Services Study would not eliminate that increase. He emphasized the importance of alerting the public to the fact that the Study would not only fail to prevent a rate increase, but that it could potentially result in higher user rates down the road. He asked that, for the benefit of the public, Staff provide a brief review of the motivating factors behind the rate increase. Ms. Fong stated that in considering the Tier 3 Rate, the Utilities Advisory Commission did consider the cost of an alternative water supply. She explained that these alternatives, such as desalination or recycled water, are typically very expensive. She communicated that the main motivations for the rate increases were San Francisco Public Utilities Commission water supply costs, seismic safety improvement costs, Capital Improvement Program costs, and a decrease in water demand. Council Member Burt stated that he understood that there were certain fixed costs associated with the distribution of water and that as fewer units were sold the price per gallon must increase to compensate, but observed that many water customers felt penalized because although they had conserved water, their rates continued to increase. He explained that users must be made to clearly understand that they were not being penalized for conserving and that what they were experiencing was not a net increase in their bill, but an increase in their price per gallon. He urged Staff to engage the community on this issue and to clearly articulate the factors behind the changes that they were seeing in their bill. Mr. Keene stated that this was going to be an ongoing issue and stated that Council Member Klein had asked Staff to agendize a study session with 16 06/20/2011 information on the SFPUC water project, which has been scheduled for the July 25, 2011 meeting. He explained that Staff has arranged for some SFPUC representatives to attend and provide information regarding some of the motivating factors behind water rate increases. Council Member Klein spoke in opposition to Council Member Schmid’s Substitute Motion, and in favor of Council Member Scharff’s Original Motion. He asserted that Council Member Schmid had incorrectly stated that the Original Motion would require the City to draw on the Budget Stabilization Reserve Fund, when in fact the Motion included a provision to pro-rate the rates to compensate for the delay. He agreed with Council Member Burt that the community needed to be aware of the fact that the rates would increase regardless of Council’s decision regarding the Cost-of-Services Study. He commented that the one week delay would provide Council with an opportunity to review the facts and determine how to proceed. Council Member Price stated that she would support the Substitute Motion because of the number of unanswered questions regarding the issue and her objection to making a change in direction at this point in the process, after the item had already been reviewed by several committees. She agreed that there should be a concerted effort on the part of the Utilities Staff to inform the public regarding the reasons behind the rate increases, and suggested a statement be included in the utility bills. Council Member Scharff stated that the real problem was that, to his knowledge, the issue of Proposition 218 compliance had not been vetted by either the Finance Committee or the Utilities Advisory Commission. He explained that his Motion was intended to allow Staff the opportunity to provide Council with the information necessary to remedy that oversight. Council Member Schmid stated that the proposed rates addressed the customer class issue clearly, and that they represented an active attempt from Council to move towards compliance with Proposition 218. He acknowledged that the question of how to differentiate between users in a given class was a more complex question, deserving of another Cost-of- Services Study. He suggested that Council move forward with the preparation of the Study before adjusting the rates. Vice Mayor Yeh stated that while some further analysis appeared to be required on the issue of Proposition 218 compliance, the existing Cost-of- Services Study indicated that the City needed to restructure their water rates. He explained that the Original Motion would delay the implementation of the rates, which had been developed based on information already provided, and allow a further continuation of the cross-subsidization that was already occurring. He noted that Council Member Schmid was correct in 17 06/20/2011 acknowledging that another study was warranted, and stated that he would continue to support the Substitute Motion. Mayor Espinosa stated that he would not support the Substitute Motion because of his concern regarding the fact that a week long continuance of the Item would place it on an agenda that is already anticipated to be extremely long. He explained that the concerns over Proposition 218 compliance compelled him to agree with the original Motion. SUBSTITUTE MOTION FAILED: 3-5 Price, Schmid, Yeh yes, Shepherd absent Vice Mayor Yeh requested that City Attorney explain the legal implications of the vote, which would ensure that the new rates would not be implemented until August 1, 2011 at the earliest. Ms. Stump responded that she would advise Council regarding the relative risk of the options before them during a closed session. MOTION PASSED: 7-1 Price no, Shepherd absent MOTION: Council Member Scharff moved, seconded by Vice Mayor Yeh to: 1) Staff and the Finance Committee recommend that Council approve the following: 1. The Budget Adoption Ordinance, which includes: a. the City Manager’s Fiscal Year 2012 Proposed Budget b. amendments to the City Manager’s Fiscal Year 2012 Proposed Budget c. revised pages to the Table of Organization d. amendments to the Fiscal Year 2012 Proposed Municipal Fee Schedule 2. Resolution amending Utility Rate Schedules for a Storm Drain Rate Increase 3. Resolution amending Utility Rate Schedules for a Fiber Optic Rate Increase 4. Resolution amending Utility Rates Schedule for a Wastewater Rate Increase 5. Resolution of the Council of the City of Palo Alto amending the 2010- 2011 Compensation Plan for Management and Professional Personnel adopted by Resolution No. 9156 to add three new positions, change the titles of six positions and update the compensation for five positions 6. Ordinance of the Council of the City of Palo Alto amending Chapter 2.08 of Title 2 of the Palo Alto Municipal Code to add Section 2.08.240 creating a new Department of Information Technology 18 06/20/2011 Vice Mayor Yeh noted that the now adopted budget highlighted the anticipated movement within the City’s public safety negotiations, the importance of achieving equity across the City’s labor units, and of finding economically sustainable solutions. Council Member Schmid expressed strong support for the budget, and while acknowledging some remaining uncertainties, stated that Staff’s willingness to return in 90 days to check-in with Council had a great deal to do with his acceptance of the document. Mayor Espinosa expressed confidence in Staff’s ability to closely monitor any areas of uncertainty within the budget, and to meet expected targets. He conceded that the next few years would likely produce equally difficult budgeting constraints, but that Staff’s hard work has kept Palo Alto financially sound in comparison to many other cities. MOTION PASSED: 8-0 Shepherd absent 12. Policy & Services Committee Recommends the City Council Increase the Number of Flex Positions in the Table of Organization in the Fiscal Year 2012 Proposed Budget. Sandra Blanch, Interim Human Resources Director, addressed Council to recommend approval of the proposed increase in flex positions from seven positions to twenty positions. She explained that Staff had presented the Item at the May 10, 2011 meeting of the Policy and Services Committee, at which time the Committee had voted to recommend approval of the Item to the full Council. She stated that this proposed increase was a response by Staff to operational impacts experienced over the last two to three years. She informed Council that Staff had experienced an increased need for flexibility when assigning staffing resources to accomplish key projects and objectives. She stated that Staff utilized two methods of addressing their temporary staffing needs; the first included hiring an hourly management specialist under the provisions in the hourly compensation plan, limiting the position to 1,000 hours, and the second method, which was recently approved under the Management and Compensation Plan, involved employing provisional employees. She informed Council that the current proposal would provide the funding necessary for Staff to hire sufficient numbers of provisional employees on an as-needed basis and would also allow Staff to move provisional employees between departments more quickly in response to shifting needs. She noted that if the need arose to convert a provisional position into a permanent position, Staff would return to Council for approval. Herb Borock spoke in opposition to the Item, stating that the proposal violated the City’s Charter. He explained that the current procedures 19 06/20/2011 stemmed from the section of the City’s Charter stating that after the adoption of a budget, transfers from one department to another may be made only by a majority vote of Council. He urged Council to maintain direct authority over the budget. Council Member Price asked the City Attorney to respond to Mr. Borock’s assertion that the proposal would violate language in the City’s Charter. Molly Stump, City Attorney, replied that the proposal did not constitute a change in the appropriation, but instead more closely fit under Article 4, Section 6, which enumerated the duties of the City Manager and allowed the City Manager to organize the work of the departments and assign employees from any office of the City to perform work in connection with any other office or department. She explained that any such temporary movement would return to Council for a shift of appropriation mid-year or during the annual budget period. Council Member Price asked whether one of the motivations behind the proposal was the desire to stream-line and consolidate Council approval of temporary employee movements. James Keene, City Manager, remarked that the oversight role of Council would be exercised in a summary fashion at mid-year and at the end of the year, rather than on an as-needed basis. MOTION: Council Member Price moved, seconded by Council Member Burt, to accept the Staff recommendation that Council increase the number of flex positions (over-strength) in the Table of Organization in the Fiscal Year 2012 Proposed Budget, from seven to twenty positions. Council Member Schmid stated that flexibility in staffing was very important. He asked Mr. Keene to comment on a recent Grand Jury report regarding the City’s use of outside temporary staffing, which indicated that the City of Palo Alto used more of these staffers than other Cities. Mr. Keene stated that he had not yet seen the report, but that he believed that the report related to the temporary re-hiring of retirees, often done in order to fill the vacated position for the duration of the recruitment period. He explained that flex positions are a separate issue, as they are often hires from outside of the organization. He noted that in the case of flex positions, funding for a vacant position in one department was used to fund a position in another department where a staffing need existed. MOTION PASSED: 8-0 Shepherd absent 20 06/20/2011 13. Policy & Services Committee Recommends the City Council Make Policy Decision Regarding Removal or Modification of City Charter Provision on Binding Interest Arbitration. James Keene, City Manager, stated that the Item was recently considered by the Policy and Services Committee, who referred it back to the City Council for consideration. Marcie Scott, Acting Assistant Human Resources Director, explained that the issue before Council was the possible removal of the City Charter provision providing compulsory professional third-party arbitration for sworn police and fire employee disputes not resolved during the course of the meet and confer process. She stated that repeal of the provision, or of any part of the Charter, would require a majority vote of the citizens. She explained that Staff was seeking direction on whether to pursue the repeal or modification of the binding interest arbitration provision. She informed Council of the Policy and Services Committee’s request that if Council determined that substantial modification was the correct approach, they provide broad guidelines for modification and refer the Item back to the Committee for development of ballot language. She also stated that if Council decided to pursue repeal efforts, the Committee had requested direction regarding when the Item should be placed on the ballot. She informed Council of the Committee’s interest in the adoption of a new Charter provision to create timelines for all contract negotiations, in hopes that the new provision would more closely align contract negotiations with the City’s budget process and allow for more accurate planning. She added that the timelines provision could be determined independently of Council’s decision regarding the binding arbitration provision. She explained that the results of Staff’s effort during the Committee review process in May and early June to obtain impasse reports from other California cities and other states, and to conduct meetings with several subject matter experts, were included in the report to Council. She gave a brief history of the binding arbitration issue and reviewed possible election dates. She noted that, were the repeal of the binding arbitration provision to be approved by a majority of voters, the fire and police employees would then be subject to the same impasse resolution process as all other employees. She discussed several amendment options that were considered by the Committee as alternatives and/or modifications to the binding arbitration format: replacement with a format identified as Mediated Arbitration, in which the arbitrator also serves the role of a mediator in an attempt to eliminate issues that would ultimately have to go before the arbitrator for final decision, introduction of a mandatory non- binding mediation provision requiring completion within a specific timeframe prior to arbitration, a reduction in the scope of arbitration by allowing for collective bargaining rather than referring any dispute which reaches impasse to arbitration, amendment of the factors considered by the arbitrator, imposition of timelines to help Staff better coordinate negotiations 21 06/20/2011 with the budget process, an increase in public access during the arbitration process, and the introduction of judicial review. Molly Stump, City Attorney, explained that the introduction of judicial review would ensure that in the event that Council adopted a modified interest arbitration provision, it would receive adequate judicial review by an arbitrator with respect to application and implementation. Ms. Scott noted that the information provided to Council and to the public included comparisons to many local city and county arbitration provisions. Mr. Keene recommended that Council consider the information provided by Staff as a survey of possible scenarios, and stated that the report was indicative of the complexity and volume of the available alternatives. Council Member Price, Chair of the Policy and Services Committee, stated that the Committee held two separate meetings on this Item, and that there was a great deal of information to consider. She reported that the Committee was evenly split on the issue of whether to modify or repeal the binding interest arbitration provision, but reached consensus on the need to introduce timelines corresponding to the City’s budget cycle. She expressed her support for this proposal and stated that timelines would not only add structure to the process, but would allow discussions to take place within the context of budget considerations. Frank Ingle addressed Council, stating that he had attended both meetings of the Policy and Services Committee regarding the issue. He stated that as a voter, he was uncomfortable having nobody to contact regarding his budget concerns. He explained that he supported the removal of the mandatory binding arbitration provision from the City Charter and remarked that it would in no way prohibit the City from using binding arbitration in the future if needed. He stated that his second choice would be a modification to the binding arbitration provision. However, he noted that the public had already waited for a year to see this issue come before them and that agreement to the terms of an amendment could take many more. He urged Council to forego the time consuming task of drafting and approving an amendment and to eliminate the mandatory binding arbitration provision all together. Alan Davis introduced himself to Council as a lifetime resident of Palo Alto and explained that although he was speaking as an individual, he was also a former School Board Member and the current representative of several local labor organizations. He informed Council that he had authored Palo Alto’s binding arbitration provision in 1978, and that it passed with significant support at the time. He explained that the provision was developed by a Blue Ribbon Commission of the State Legislature, and that although the 22 06/20/2011 measure did not pass there, it was adopted by most of the major cities in California. He explained that the driving force behind the provision was the fact that public safety employees cannot strike. He commented that although he would support reasonable amendment to the provision, he was strongly opposed to repeal. Bob Moss stated that while the citizens of Palo Alto expect the City Council to set priorities, pay, benefits, and establish services, they do not expect unknown arbitrators to control the City’s budget. He asserted that public safety comprises almost half of the City’s budget, meaning that decisions made by arbitrators with regards to these services greatly affect all other City services. He stated that to allow arbitrators to determine public safety issues, and in so doing affect the funding available for all other services, was undemocratic and usurped Council’s authority to govern. He urged Council to place repeal of binding arbitration on the November ballot. Herb Borock spoke in opposition to the proposed repeal of the binding arbitration provision. He stated that, since the voters had approved the provision in 1978 via an initiative petition, if the voters wanted to repeal the provision they should take the necessary steps to qualify the measure for the ballot themselves. He noted that the voters had ample time to pursue this course of action since the last time that the Item was before Council in August 2010, and failed to do so. Tony Spitaleri introduced himself as the President of the Palo Alto Firefighters Association. He stated that firefighters now had a system that provided a fair process to settle labor disputes and while the firefighters believed that the Charter may need review and modification, they also felt that all of those affected should be involved in the process. He explained that the Firefighters Association believed that elimination would not create a system of fairness, and would instead create a strenuous atmosphere that would be harmful to employee-employer relations and to the citizens of Palo Alto. On behalf of the Firefighters Association, he requested that the Item be returned to the Policy and Services Committee where all affected labor organizations could participate in deliberations to update the Charter provision and provide recommendations to Council. He stated that denying the labor organizations an opportunity to express their ideas and assist in the formation of an improved policy could damage employee relations moving forward. Amal Hamady explained that the Palo Alto Fire Department had recently come to her house to complete a property inspection. She explained that she had moved to Palo Alto in order to benefit from the superior education and fire and police organizations, and asserted that these factors were part of what makes Palo Alto special and unique. She urged Council to continue to 23 06/20/2011 support public safety services and to consider preserving the binding arbitration provision. Barry Marchisio introduced himself as a member of the Palo Alto Firefighters Association, and stated that binding arbitration was a significant issue to the Public Safety Employees. He urged Council to send the Item back to the Policy and Services Committee where a committee of all stakeholders could be established and where those who were most closely affected by this provision could participate in designing any necessary modifications. Sally Lieber, former Assembly Member, stated that she was surprised to discover how few Palo Alto residents were aware of the issue. She expressed a desire to see the Item returned to the committee level, in hopes that alternatives to complete elimination could be agreed upon. She acknowledged that often times an Item must be bought before Council before the affected parties are compelled to agree to compromise. She observed that there were a number of first responders waiting in the lobby to hear the outcome of the Item, and stated that Council now had the full attention of the affected parties. She respectfully asked Council to allow more time for consideration and provide the voters an opportunity to consider a more comprehensive package. Stacy Ashlund introduced herself as a Palo Alto homeowner, mother of two school age children, and an active advocate for education and special needs. She stated that she would appreciate time to fully understand the issue in its complexity, and asked that Council postpone a vote on the Item in order to allow the public time to educate themselves on the issue and to understand the broader implications of the proposed scenarios. Council Member Klein stated that due to the absence of Council Member Shepherd, and in light of last year’s nearly split vote on the issue, it would be difficult for Council to come to a decision at this meeting. MOTION: Council Member Klein moved, seconded by Vice Mayor Yeh to refer to Policy & Services Committee to: 1) draft a significant modification of the existing Binding Interest Arbitration provision, 2) provide language to repeal the Binding Interest Arbitration provision, 3) return with recommendation when the election should occur, if there is to be one, and 4) return with this information on July 25, 2011 for full Council consideration. Council Member Klein stated that there were two reasons for supporting a substantial modification to the binding arbitration provision: fairness and practicality. He asserted that while it was undemocratic to allow an unelected and unknown arbitrator authority over public labor negotiations, it was equally undemocratic to prohibit public safety employees from striking. 24 06/20/2011 He acknowledged that there were valid reasons that public safety employees were not permitted to strike, and assured Council and the public that he would not suggest otherwise, but maintained that the inherent unfairness of that prohibition must be recognized. He expressed his opinion that the current binding arbitration provision was fundamentally pro-labor and that it would need significant modifications in order to represent a more modern and balanced approach to labor negotiations. He proposed three modifications to the provision: limiting arbitration to financial issues, requiring the arbitrator to consider long term financial impacts, and requiring the arbitrator to consider equity across various employment groups. He stated that labor representatives were requesting that the City hold negotiations to amend the provision. He opposed this request, stating that the City should receive input from the labor groups and the public during the public comment session of each meeting as they do for any other issue. Although he expressed his support for Staff’s proposal to introduce timelines, he indicated that it should be considered separately from the other modifications and that Council should consider introduction by Ordinance rather than by Charter. Vice Mayor Yeh spoke in support of Council Member Klein’s Motion, characterizing it as very thoughtful, and stating that the lack of consensus on the issue supports sending the Item back to the Committee. He added that the inclusion of the July 25, 2011 return date would keep all options on the table during the review process. He stated that he supported modification rather than repeal, and that Council should acknowledge the complexity of the issue. Council Member Burt asked the City Attorney whether Staff’s timeline proposal could be enacted by Ordinance and not by Charter. Ms. Stump replied in the affirmative. Council Member Burt inquired as to whether the Motion would allow ample time for Staff to prepare a Charter amendment and repeal language. Ms. Stump stated that Staff would work to accommodate both Council and the Committee, and that the priority would be placed on scheduling a meeting of the Policy and Services Committee as soon as possible. She stated that she did not anticipate the drafting of language to be an obstacle. Council Member Burt stated that during the course of the Policy and Services Committee debates he had learned that less than 5 percent of all California Cities had a binding arbitration provision. He disagreed with the assumption that the repeal of binding arbitration would inhibit the City’s ability to negotiate fairly or operate efficiently, and noted that the neighboring cities of Mountain View and Sunnyvale had excellent public safety organizations 25 06/20/2011 without the use of binding arbitration. He stated that he did not understand why Palo Alto should be an outlier on this issue, and why it would be so detrimental to do what 95 percent of California cities had already done. He stated that Council had decided one year ago that more time would be needed to study the issue before placing it on the ballot, and maintained that Council must now make a decision. He explained that the decision before Council is not whether to repeal or modify the provision, but whether to place the Item on the ballot and allow the voters to make that decision. Council Member Price spoke in support of modification of the Charter’s binding arbitration language, and in opposition of repeal. She remarked that collective bargaining was a key social institution and that binding arbitration was simply one method of dispute resolution. She stated that binding arbitration had only been employed by the Fire Department three times and by the Police Department three times in it’s history. She indicated that she would like to see modifications to the provision similar to those adopted by the City and County of San Francisco and the City of San Jose. She emphasized that the arbitrator used in these situations is agreed upon by all parties at the table and stated that arbitrators provide a fair and balanced view. She remarked that although she approved of the Motion in concept, she had concerns that the time table was too short to have meaningful discussions with all stakeholders. She maintained that although she would not like the review to take longer than two to three months, Council did have a responsibility to be thoughtful and measured in their approach to this issue. She praised Staff for the balanced nature of the material provided, and thanked the members of the public who spoke regarding this Item for their insights. Council Member Holman stated that Council considered this Item for the first time one year ago, the Policy and Services Committee had two passes at the Item, and that Council Members had ample time to consider the issue in the interim. She stated that although she was undecided as to whether the Item should be put on the ballot for this year or next, it was clear that if the Item were to return to the Policy and Services Committee it would not meet the deadline for the November 2011 ballot. She expressed her belief that a debt is owed to the unions and that they had played a significant role in our nation’s history. She stated that union members were valued members of the community and that Council should work with the unions as best it could. She asserted that the current system of negotiation did not allow for optimal cooperation and that it must be changed so that it works better for all parties. She indicated that she would not support the Motion. Council Member Scharff explained that the budget approved by Council included a $4.3 million deficit, and assumed concessions from the public safety units that the unions had not yet been agreed to. He stated that Council faced a $6.7 million deficit for the next fiscal year. He agreed that 26 06/20/2011 unions were an important part of the community, but proposed that public safety unions should be treated the same as other unions. He maintained that this issue was about more than whether the employees have the right to strike. He stated that while the safety employees didn’t have the right to strike, there were employees within the Utilities Department who were also designated as essential personnel, and as such did not have the right to strike either. He emphasized that the unions were not powerless, and observed that on several occasions they had picketed and launched campaigns against Council Members. He stated that if the goal was to solve the budget and to keep the services that the community wanted, the only choice before Council was to repeal binding arbitration. He emphasized that there was a finite amount of money in the General Fund and that if concessions couldn’t be made by the Public Safety Employees, than they must be made by reducing services or by receiving concessions from other employees. He asserted that the public should be given the choice regarding this issue, and that if they choose not to repeal binding arbitration than they would have to live with the financial consequences of that decision. SUBSTITUTE MOTION: Council Member Scharff moved, seconded by Council Member Holman, to place before the voters, in November 2011, a ballot Initiative to repeal Binding Interest Arbitration. Council Member Holman indicated her support for the Substitute Motion. Council Member Burt stated that if he were to make a decision at this point in time, he would support the Substitute Motion. He remarked that if Council comments were to be any indication, a vote of Council on the issue would likely be split. He commented that Council would be better advised to withdraw the Substitute Motion and approve the original Motion, in hopes of reaching a majority decision to place the Item on the ballot at the July 25, 2011 Council Meeting. Council Member Holman stated that she would not rescind her second to the Substitute Motion, as not all Council Members had spoken and she believed it impossible to know what Council would approve. Council Member Schmid stated that he would not be present at the July 25, 2011 Council meeting. Council Member Klein inquired as to whether Council Member Schmid would be available to participate by phone. Council Member Schmid replied that he would not be. Council Member Klein inquired as to whether Council Member Schmid would be available any other day that week. 27 06/20/2011 Council Member Schmid stated that he would be out of town, but could participate by phone on the morning of Thursday, July 28, 2011. Council Member Klein stated that Council Member calendars would need to be consulted. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER: to bring this back to Council when all nine Council members are present in July 2011. Mayor Espinosa stated that it was unfortunate that not all Council Members were present to discuss this Item, and thanked Council Member Klein for making an effort to achieve full Council participation. He stated that binding arbitration was an important issue and that everyone should be involved. He asserted that binding arbitration was not working for Palo Alto, and that the City had deep structural financial issues that could not be addressed with the current binding arbitration provision. He stated that there was no question that binding arbitration must be reformed or repealed; the question was whether reform could adequately address Council concerns. He commented that after reviewing the information provided by Staff, he believed that reform was a viable solution. He explained that asking the Policy and Services Committee to draft language providing specificity within a relatively short timeline and continuing the Item until which time as all Council Members can be present is a good compromise. For these reasons, he stated that he would support the Motion. SUBSTITUTE MOTION WITHDRAWN BY THE MAKER Donna Grider, City Clerk, asked the City Attorney to offer an opinion regarding the applicability of the legal statute requiring a 10 day waiting period between Ordinance readings. Ms. Stump stated that she did not believe that the statute applied to placing an item on the ballot, but that she would conduct further research on the issue to confirm. She suggested that the maker of the Motion include a provision stating that after a review of legal considerations Staff would schedule an appropriate date of return to Council to ensure the possibility of placement on the November 2011 ballot. Council Member Holman asked Council Member Klein whether the intention of the Motion was to omit any direction as to what the modifications should be, allowing the Committee to make that determination. 28 06/20/2011 Council Member Klein replied that he had deliberately not provided any guidance to the Committee, and noted that Council had the right to modify the Committee’s recommendations. Mr. Keene stated that Staff would be happy to work with the Policy and Services Committee to formulate ideas to focus the discussion as quickly as possible. Council Member Price stated that the Policy and Services Committee would likely need to meet more than once in July. MOTION PASSED: 8-0 Shepherd absent 14. Adoption of Two Resolutions: (1) Adopting Utility Rate Schedule E-16, as amended; and (2) Approving the Master License Agreement and Exhibits For Use of City-controlled Space on Utility Poles and Streetlight Poles and in Conduits. Staff requests Agenda Item Number 14 be pulled to be heard on July 25, 2011. COUNCIL MEMBER QUESTIONS, COMMENTS, AND ANNOUNCEMENTS Council Member Burt informed the public that he had recently discovered that the City is approving backyard wells for irrigation purposes. He stated that the City has a very shallow aquifer and that although the water is not potable, it is acceptable for irrigation. He suggested that there may be a sizeable population that is also unaware of this opportunity; given the rising price of water, many people may be willing to undertake this project. He asked Staff to investigate whether there would be any drawbacks to publicizing this permitting process as an attempt to increase City revenue. Council Member Klein reported on his attendance at the most recent meeting of the Board of Directors of the Santa Clara County Cities Association where they had 3 presentations including: 1) census taking of homeless persons in Santa Clara County, 2) recycling of products by businesses, and 3) Bay Plan Update focusing on sea level rise. Mayor Espinosa acknowledged Claude Ezran and his work on World Music Day festivities. ADJOURNMENT: The meeting was adjourned at 11:27 P.M.