Loading...
HomeMy WebLinkAbout2018-06-11 City Council Summary MinutesCITY OF PALO ALTO CITY COUNCIL FINAL SENSE MINUTES Page 1 of 37 Special Meeting June 11, 2018 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:02 P.M. Present: DuBois, Filseth, Fine, Holman, Kniss, Kou, Scharff, Tanaka, Wolbach Absent: Closed Session 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Ed Shikada, Michelle Flaherty, Rumi Portillo, Sandra Blanch, Nicholas Raisch, Molly Stump, Terence Howzell, Charles Sakai, Lalo Perez, and Kiely Nose) Employee Organizations: 1) Utilities Management and Professional Association of Palo Alto (UMPAPA); 2) Service Employees International Union, (SEIU) Local 521; 3) Service Employees International Union, (SEIU) Local 521, Hourly Unit; 4) Palo Alto Police Officers’ Association (PAPOA); 5) Palo Alto Fire Chiefs’ Association (FCA) and Employee Organization; 6) International Association of Fire Fighters (IAFF), Local 1319; and 7) Palo Alto Police Managers’ Association (PAPMA) Authority: Government Code Section 54957.6(a). 2. CONFERENCE WITH CITY ATTORNEY- POTENTIAL LITIGATION Significant Exposure to Litigation (One Potential Case, as Petitioner) – Initiative Measure Palo Alto Accountable and Affordable Health Care Initiative Authority: Government Code Section 54956.9(d)(2). 2A. PUBLIC EMPLOYMENT Title: City Manager Authority: Government Code Section 54957(b). MOTION: Vice Mayor Filseth moved, seconded by Council Member Scharff to go into Closed Session. FINAL SENSE MINUTES Page 2 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 MOTION PASSED: 8-0 Tanaka not participating Council went into Closed Session at 5:03 P.M. Council returned from Closed Session at 7:25 P.M. Mayor Kniss announced no reportable action from the Closed Session. Agenda Changes, Additions and Deletions James Keene, City Manager reported Staff's request to continue Agenda Item Number 7. MOTION: Council Member Scharff moved, seconded by Vice Mayor Filseth to continue Agenda Item Number 7 - Approval of a 1.5 Year Contract With the Empowerment Institute … to August 13, 2018. Mr. Keene proposed the order of Agenda Item Numbers 12 and 13 be reversed. MOTION PASSED: 9-0 Council Member Holman requested the reason Staff proposed changing the order of Item Numbers 12 and 13. Mr. Keene advised that representatives of Stanford University requested the change. Council Members Wolbach and Holman expected a large number of the community to attend the meeting for both items. MOTION: Council Member Scharff moved, seconded by Council Member Fine to hear Agenda Item Number 13 - Accept the City Clerk’s Report Certifying the Sufficiency of an Initiative Petition to Limit Health Care Costs … before Agenda Item Number 12 - Accept the City Clerk’s Report Certifying the Sufficiency of the Initiative Petition to Amend the Comprehensive Plan and Zoning Code … . Council Member DuBois questioned the change in order because he expected more people to be present for Agenda Item Number 12. Council Member Scharff assumed Item Number 13 could be heard in a short amount of time. Council Member Kou objected to changing the order because notice had been provided to the public. FINAL SENSE MINUTES Page 3 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 MOTION PASSED: 7-2 Holman, Kou no City Manager Comments James Keene, City Manager noted the vibrancy of the Plaza since seating and Public Art had been added and restaurants had opened around the Plaza. The Holman Automotive Group had submitted an application to build a new Mercedes Benz dealership and service center on the former Ming's Restaurant property. On June 28, 2018 the Planning Department planned on hosting an open house on the topic of housing at the Downtown Library. The County of Santa Clara (County) was expected to circulate the alternatives chapter of the Stanford University General Use Permit (GUP) Draft Environmental Impact Report (DEIR) and to release proposed updates to the Stanford University Community Plan on June 12, 2018. The public comment period ended on July 27, 2018; therefore, Staff proposed a Council discussion on June 25, 2018. The DEIR for the Downtown garage was released on May 18, 2018; the public comment period would end July 2, 2018. The Architectural Review Board would review the project on June 21, 2018. Staff learned of plans to convert the Hotel President to a 100-key hotel with ground-floor retail. The grand opening of the Peers Park dog park was scheduled for June 14, 2018. The community was invited to meet Peter Wegner, the artist chosen to design artwork for the Public Safety Building, and to offer ideas for art on June 18, 2018. The 10th Annual World Music Day was planned for June 17, 2018 on University Avenue. Oral Communications Ken Horowitz thanked Council Members for supporting a Sugar-Sweetened Beverage Tax and requested the Policy and Services Committee (P&S) make a recommendation to the Council prior to the expiration of Council Members Holman and Scharff's terms. He had submitted documents that could serve as a model for the tax. The Bloomberg Foundation may be able to provide financial assistance for a campaign. Shani Kleinhaus, Santa Clara Valley Audubon Society advised that neither the Animal Shelter nor Pets In Need participated in programs that released feral cats into sensitive environments. Any partnership agreement needed to continue that policy and practice. Annette Ross remarked on the short time provided to public speakers on such things as controversial issues, Staff's workload and City expenditures for redundant and unnecessary things. FINAL SENSE MINUTES Page 4 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Neva Yarkin did not support the City funding the Cool Block program with money or Staff time because of the loss of City employees and because other issues increased community-building. Roger Smith suggested the Council utilize community talent to assist with large infrastructure projects. Sea Reddy commented regarding consumption of alcohol. Stephanie Muñoz requested the Council consider demanding large employers build housing for their employees. Floor area ratio limits and rent control but not density limits should be applied to residential hotels. Rita Vrhel did not understand the Cool Blocks program. The anti-idling Ordinance would reduce CO2 emissions more than the Cool Blocks program for a lower cost. Perhaps the Council needed to consider a Carbon Tax. Increasing the Transient Occupancy Tax (TOT) reduced the occupancy rates for Palo Alto hotels. She thought a Restaurant Tax could be used to pay for pension costs. Minutes Approval 3. Approval of Action Minutes for the May 29, 2018 Council Meeting. Council Member DuBois requested the Minutes be amended to show that he recused himself because he was awaiting a response from the Fair Political Practices Commission. MOTION: Council Member Scharff moved, seconded by Vice Mayor Filseth to approve the Action Minutes for the May 29, 2018 Council Meeting with the addition of, “pending receipt of an opinion from the Fair Political Practices Commission” to Page 5 after “Council Member DuBois advised he will not participate in this Agenda Item.” MOTION PASSED: 9-0 Consent Calendar Council Member Tanaka registered a no vote on Agenda Item Number 8 - PUBLIC HEARING: Approval of a Finding That the California Avenue Parking Garage Project (CIP PE-18000) …. MOTION: Council Member DuBois moved, seconded by Council Member Wolbach to approve Agenda Item Numbers 4-6, 8. FINAL SENSE MINUTES Page 5 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 4. Accept the Stanford University Medical Center (SUMC) Annual Report for Fiscal Year 2016-2017 and Find the SUMC Parties in Compliance With the Development Agreement. 5. Approval of Amendment Number One to Contract Number S16163447 With Brad Horak Consulting to Provide Public Safety Communications Services, Extending the Period of Performance by Two-years, and Increasing the Total Contract Amount by $40,000 to a Not-to-Exceed Amount of $100,000. 6. Approval of Contract Number C18171028A With SCS Field Services for a Not-to-Exceed Amount of $373,362 for Landfill Gas and Leachate Control Systems Monitoring and Reporting Services at the Palo Alto Landfill for a Term of Three Years. 7. Approval of a 1.5 Year Contract With the Empowerment Institute for $25,000 for Community Engagement Block Program (Continued From April 2, 2018). 8. PUBLIC HEARING: Approval of a Finding That the California Avenue Parking Garage Project (CIP PE-18000) is "Substantially Complex" Under Public Contract Code Section 7201 and Direction to Increase the Contractor Retention Amount From Five Percent to Ten Percent. MOTION FOR AGENDA ITEM NUMBERS 4-6 PASSED: 9-0 MOTION FOR AGENDA ITEM NUMBER 8 PASSED: 8-1 Tanaka no Council Member Tanaka believed an increase in the retention amount made no sense. The Council should try to stay within the budget for the project. Action Items 9. PUBLIC HEARING: to Hear Objections to the Levy of Proposed Assessments on the Palo Alto Downtown Business Improvement District; and Resolution 9761 Entitled, “Resolution of the Council of the City of Palo Alto Confirming the Report of the Advisory Board and Levying Assessments for Fiscal Year 2019 on the Downtown Palo Alto Business Improvement District.” Michelle Flaherty, Deputy City Manager reported the City established the Downtown Palo Alto Business Improvement District (BID) in February 2004. The City Council must hold a public hearing annually to authorize the levy of an assessment for the next fiscal year. The Council appointed the Board of Directors of the Palo Alto Downtown Business and Professional Association FINAL SENSE MINUTES Page 6 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 (PADBPA) as the advisory board for the BID. The advisory board had prepared its annual report for Fiscal Year (FY) 2019 and submitted it to the Council. She explained that a majority protest would exist if the owners of businesses that paid 50 percent or more of the proposed assessment had filed and not withdrawn a written protest. Public Hearing opened at 8:05 P.M. Katie Seedman, Downtown Business and Professional Association Board Member, remarked that PADBPA cared deeply about the Downtown community, the City, and surrounding areas. Georgie Gleim commented that PADBPA's accomplishments helped create a cohesive, cleaner, safer, and more appealing Downtown community. City Staff relied on PADBPA for information, feedback, and dissemination of City information. Public Hearing closed at 8:10 P.M. Council Member Holman opposed levying an assessment because of her ongoing dissatisfaction with the services provided by PADBPA. Several retailers had expressed their concerns about the lack of communications from PADBPA. She had observed and been contacted about litter, trash, and debris in alleys when cleanliness in Downtown was imperative. PADBPA needed to work with the Public Works Department to better utilize green machines. At least three retailers along Emerson complained to her about relocation of the Summer Concert Series in Lytton Plaza. She inquired about reasons for businesses not paying their assessments. The City Council was able to direct Staff to provide a termination notice to PADBPA and search for other entities that provided services. Molly Stump, City Attorney advised that the initial action could be Council direction to change the annual report. The contract provided a period of 30 days for PADBPA staff to respond to Council concerns. The contract also provided for 90 days' notice of termination with or without cause. If the Council chose to terminate the contract, some entity that provided services needed to be found. Council Member DuBois inquired whether the Council continued to appoint the advisory board for the BID. He did not recall the Council appointing anyone since 2004. Ms. Flaherty explained that the first agreement extended from 2004 to 2014. After 2014, the agreement was renewed annually. FINAL SENSE MINUTES Page 7 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Ms. Stump was not familiar with the history of the BID organization. The advisory board operated semi-autonomously and held public meetings. She needed to research the current administrative practices. Council Member DuBois inquired whether the Council had ever requested a database of businesses and whether comparing the database to the Business Registry would be helpful. Ms. Flaherty did not believe a comparison would be helpful as MuniServices had access to both. Council Member DuBois suggested the Council or the advisory board poll businesses to determine interest in continuing or re-energizing the BID. He inquired whether PADBPA was interested in a poll. Russ Cohen, Palo Alto Downtown Business and Professional Association Executive Director was able to include a survey of dues-paying members in the e-newsletter. He received minor complaints about issues in Downtown, and PADBPA addressed those as quickly as possible. MOTION: Council Member DuBois moved, seconded by Council Member Holman to adopt a Resolution confirming the report of the Advisory Board and levying an assessment for Fiscal Year 2019 on the Downtown Palo Alto Business Improvement District (BID) and request the Advisory Board conduct a survey of BID membership regarding their satisfaction with the BID. Council Member Holman recommended the poll include businesses that did not pay dues to PADBPA and inquired about reasons for not participating in the BID. Mr. Cohen advised that PADBPA did not have contact information for non- dues-paying businesses. PADBPA dealt with businesses located within the boundaries of the BID. Council Member Holman intimated that the database could be larger than only dues-paying members, based on the Staff Report. Mr. Cohen offered to access Business Registry data to send a poll to non- dues-paying businesses. Council Member Fine felt PADBPA could do more in terms of branding, services, cleaning and greening. The BID assessment was a Business Tax. He was surprised that assessments were levied against business owners FINAL SENSE MINUTES Page 8 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 rather than property owners. He was interested in reinvigorating the BID, which the Council should discuss as a policy direction. Council Member Kou requested the rationale for exempting new businesses, nonprofits, and newspapers. Mr. Cohen understood the purpose was to relieve nonprofits and businesses with less than one full-time employee from paying an assessment. Council Member Kou did not believe fees were too high for new businesses and nonprofits. Mr. Cohen indicated new businesses were not exempt. The fee was based on the number of employees and location within the district. Businesses reported the number of their employees. Often PADBPA was not aware of a new business opening in Downtown. Council Member Kou asked if new businesses had to apply for a use and occupancy permit. Ms. Flaherty clarified that Staff learned of new businesses when they registered with the Business Registry. Registering with the Business Registry was voluntary. Council Member Kou inquired whether the definition of a business included technology companies and startups. Mr. Cohen replied yes. Membership was fairly equally divided among retail, restaurant, and professional businesses. SECOND REMOVED BY THE SECONDER MOTION: Council Member DuBois moved, seconded by Council Member Scharff to adopt a Resolution confirming the report of the Advisory Board and levying an assessment for Fiscal Year 2019 on the Downtown Palo Alto Business Improvement District (BID) and request the Advisory Board conduct a survey of BID membership regarding their satisfaction with the BID. MOTION PASSED: 8-1 Holman no 10. PUBLIC HEARING and PROPOSITION 218 HEARING: Ten Resolutions: Resolution 9762 Entitled, “Resolution of the Council of the City of Palo Alto Approving the Fiscal Year (FY) 2019 Electric Financial Plan;” Resolution 9763 Entitled, “Resolution of the Council of the City of Palo Alto Adopting an Electric Rate Increase of 6 Percent and Amending FINAL SENSE MINUTES Page 9 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Utility Rate Schedules E-1, E-2, E-2-G, E-4, E-4-G, E-4 TOU, E-7, E-7- G, E-7 TOU, and E-14;” Resolution 9764 Entitled, “Resolution of the Council of the City of Palo Alto Approving the FY 2019 Gas Utility Financial Plan;” Resolution 9765 Entitled, “Resolution of the Council of the City of Palo Alto Adopting a Gas Rate Increase of 4 Percent and Amending Utility Rate Schedules G-1, G-2, G-3, and G10;” Resolution 9766 Entitled, “Resolution of the Council of the City of Palo Alto Approving the FY 2019 Wastewater Collection Utility Financial Plan;” Resolution 9767 Entitled, “Resolution of the Council of the City of Palo Alto Adopting a Wastewater Collection Rate Increase of 11 Percent and Amending Utility Rate Schedules S-1, S-2, S-6, and S-7;” Resolution 9768 Entitled, “Resolution of the Council of the City of Palo Alto Approving the FY 2019 Water Utility Financial Plan;” Resolution 9769 Entitled, “Resolution of the Council of the City of Palo Alto Adopting a Water Rate Increase of 3 Percent and Amending Utility Rate Schedules W-1, W-2, W-3, W-4, and W-7;” Resolution 9770 Entitled, “Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 to Increase Storm Drain Rates 2.9 Percent per Month per Equivalent Residential Unit for FY 2019;” and Resolution 9771 Entitled, “Resolution of the Council of the City of Palo Alto Adopting a Dark Fiber Rate Increase of 2.9 Percent and Amending Utility Rate Schedules EDF-1 and EDF-2.” Mayor Kniss inquired about the possibility of continuing Agenda Item Number 10. James Keene, City Manager suggested the Council hear public comments and continue the item to June 12, 2018 with the stipulation that public speakers could not speak to the item again on June 12, 2018. Utilities General Manager Ed Shikada did not plan on being present for the Council meeting scheduled on June 18. Mayor Kniss advised that the Council would take up the item for ten minutes. Council Member Scharff reported the Finance Committee held three hearings on rates and directed Staff to reduce some rate increases. The Finance Committee felt the proposed rate increases were the lowest possible given cost increases. Public Hearing opened at 8:33 P.M. Mayor Kniss indicated proposed changes to the City's Water and Wastewater Collection Rates required a public hearing under Proposition 218. As required by the California Constitution, the Council would conduct majority FINAL SENSE MINUTES Page 10 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 protest proceedings for both Water and Wastewater Collection Rate increases. Molly Stump, City Attorney stated the required protest proceeding began on April 27, 2018, when notice was mailed to affected water and wastewater collection customers. The City Clerk had been accepting written protests and would continue to do so until the Mayor closed the public hearing. If a majority of affected customers had signed written protests against either or both rate increases, the Council was not able to adopt them in the current meeting. Stephanie Muñoz suggested the Council implement a courtesy adjustment for water leaks and require storage of gray water in new construction. Public Hearing closed at 8:39 P.M. Mayor Kniss stated 17,853 water customers were subject to water rate changes, so that 8,927 protests were needed to create a majority. Beth Minor, City Clerk reported she had received 20 protests. Mayor Kniss remarked that the number of protests did not create a majority protest, and the Council could consider adopting the water rate increase. Wastewater collection customers totaled 21,209, so that 10,604 protests were needed to create a majority. Ms. Minor reported she had received 20 protests. Mayor Kniss indicated the number of protests did not create a majority, and the Council could consider adopting the Wastewater Collection Rate increase. MOTION: Council Member Scharff moved, seconded by Vice Mayor Filseth to adopt Resolutions: A. Approving the FY 2019 Electric Financial Plan; B. Adopting an Electric Rate Increase of 6 Percent and Amending Utility Rate Schedules E-1, E-2, E-2-G, E-4, E-4-G, E-4 TOU, E-7, E-7-G, E-7 TOU, and E-14; C. Approving the FY 2019 Gas Utility Financial Plan; D. Adopting a Gas Rate Increase of 4 Percent and Amending Utility Rate Schedules G-1, G-2, G-3, and G10; E. Approving the FY 2019 Wastewater Collection Utility Financial Plan; FINAL SENSE MINUTES Page 11 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 F. Adopting a Wastewater Collection Rate Increase of 11 percent and Amending Utility Rate Schedules S-1, S-2, S-6, and S-7; G. Approving the FY 2019 Water Utility Financial Plan; H. Adopting a Water Rate Increase of 3 Percent and Amending Utility Rate Schedules W-1, W-2, W-3, W-4, and W-7; I. Amending Utility Rate Schedule D-1 to Increase Storm Drain Rates 2.9 Percent per Month per Equivalent Residential Unit for FY 2019; and J. Adopting a Dark Fiber Rate Increase of 2.9 Percent and Amending Utility Rate Schedules EDF-1 and EDF-2. Council Member DuBois expressed concern regarding water rate increases over the next few years and encouraged Staff and the Utilities Advisory Commission (UAC) to consider budget-based pricing for water, such as that utilized by the Water District serving Laguna Nigel and Mission Viejo. That type of pricing could incentivize customers to conserve water. Mayor Kniss noted the quality of Palo Alto water. Council Member Holman concurred with Council Member DuBois' comments. Council Member Tanaka remarked that the proposed water service charge increase was 11.6 percent and the proposed Water Rate increase was 3 percent. He inquired whether the proposed service charge increases were noticed to the public. Eric Keniston, Senior Resource Planner advised that the Proposition 218 notice included individual changes to monthly service charges. Mr. Keene clarified that the service charge and rate increases were noticed. Council Member Tanaka indicated the brochure on the website did not mention service charge increases. At the Finance Committee hearings, he opposed rate increases because operating costs were not kept in line and not all customers could afford rate increases. For those reasons, he did not support the proposed rate increases. Vice Mayor Filseth supported the Motion because rate increases were needed to fund investments in the utilities. MOTION PASSED: 8-1 Tanaka no FINAL SENSE MINUTES Page 12 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 11. PUBLIC HEARING LEGISLATIVE AND QUASI-JUDICIAL 250 and 350 Sherman Avenue, Public Safety Building Project: Adoption of: 1) Resolution 9772 Entitled, “Resolution of the Council of the City of Palo Alto Certifying the Final Environmental Impact Report and Adopting Findings and a Mitigation Monitoring and Reporting Program Pursuant to the California Environmental Quality Act for the Project Comprised of a new Public Safety Building at 250 Sherman Avenue and a new Four-story Parking Structure at 350 Sherman Avenue;” 2) an Ordinance Amending the Public Facilities (PF) Zone Development Standards in Chapter 18.28 of Title 18 of the Palo Alto Municipal Code; and 3) a Record of Land Use Action Approving Architectural Review Application [File 17PLN-00257] for a new Four-story Parking Structure at 350 Sherman Avenue to Provide 636 Public Parking Spaces Above and Below Grade. Planning and Transportation Commission Review Recommended Modification to PF Zoning Development Standards on January 31, 2018 (Continued From June 4, 2018). James Keene, City Manager commented that the Council was dealing with the Environmental Impact Report (EIR) for the California Avenue garage and the adjacent Public Safety Building (PSB). Approvals of the project were limited to the garage portion of the project so that Staff could pursue a contract to begin construction. Staff planned on returning to the Council in late August or September, 2018 with the PSB project. Jonathan Lait, Acting Director Planning and Community Environment Department noted the Planning and Transportation Commission's (PTC) review of the project was limited to review of the text amendments. Brad Eggleston, Acting Director of Public Works Assistant reported with Council approval of the project, construction of the public parking garage could begin in October, 2018 with completion expected in February 2020. Construction of the PSB immediately followed construction of the parking garage with an expected completion date of fall 2021. In April 2017, the Council increased the scope of the garage project to two basement levels and four above-ground levels. Amy French, Planning and Community Environment Chief Planning Official advised that the EIR addressed both the garage and PSB. Project implementation involved measures to ensure potential impacts were mitigated in several topic areas as noted in Attachment F to the Staff Report. A Statement of Overriding Impacts was not required because mitigations were proposed for all potential impacts. Constructing the parking garage first minimized disruption in the area. The new garage replaced parking spaces lost in the development and created 326 new parking spaces. The FINAL SENSE MINUTES Page 13 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 uses were allowable in the Comprehensive Plan-designated parcels. The review considered context for the development as well as the exceptions to the current Public Facility (PF) zone standards. Development of a PSB was intended to meet the program needs for the Police Department, the Office of Emergency Services, the Emergency Operations Center (EOC), emergency communications and Fire Department administration. The PSB design was undergoing changes in response to comments from the Architectural Review Board (ARB). The ARB held three public hearings and recommended Council approval. The PTC recommended text amendments that specifically targeted City Essential Services Buildings and public parking facilities in the Downtown and California Avenue district. The amendments did not apply to private development projects. The Council had case-by-case decision- making on each of the projects. Exceptions for the garage were setbacks, lot or site coverage, floor area, and height. Mallory Cusenbery, Ross Drulis Cusenbery Architecture noted the parking garage would embrace the diversity and qualities of the neighborhood by creating a building that worked on multiple scales and focused specifically on the experience of individual users. The garage resonated with larger buildings to the south and included details that developed a dialog with the traditional fabric of the area. The building design aspect focused on light, movement, and landscaping in an effort to downplay the building as a garage. The large, cascading, single-run staircase directed users from the parking structure towards California Avenue. The primary exterior material was a scrim of terra cotta fins of varying orientations and depths. The recessed corner of the building would lower the scale of the building. The proposed rain gardens were biofiltration planters located along the base of the building. Translucent panels located above the staircase would provide a glow of light to the public area. Grazing lighting along the terra cotta scrim and up-lighting of the canopy at night drew attention to the exterior perimeter of the building and downplayed light from the interior of the garage. Landscaping included a diversity of drought-tolerant and local plantings and street furniture. Public Hearing opened at 9:08 P.M. Rita Vrhel wanted to know the source of funding for the project. She questioned whether an elevator would be less expensive than the staircase. Yvette Yamagata, representative for the owners of 2443 Ash remarked that trash dumpsters were lined up next to the building. The Council needed to consider incorporating trash enclosures into the design of the garage. FINAL SENSE MINUTES Page 14 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Jessica Roth was excited by the creation of parking spaces with the garage. Construction impacts needed to be minimized as much as possible in the business district. Bret Andersen urged the Council to delay or reconsider the parking garage. The EIR and planning documents were deficient in that they assumed new parking was needed. More effective alternatives were available at one-tenth the cost of the parking garage. David Coale, Carbon Free Palo Alto concurred with Mr. Andersen's comments. The City was not able to attain their 80/30 goal if it continued to build infrastructure that supported the car. The EIR did not address greenhouse gases and the need for parking. Stephanie Muñoz believed the garage should be rented at night to people living in their cars. Public Hearing closed at 9:20 P.M. Council Member Scharff was happy to see the PSB and garage becoming a reality. The garage provided parking relief for California Avenue and the Evergreen neighborhood. MOTION: Council Member Scharff moved, seconded by Council Member DuBois to: A. Adopt a Resolution certifying the Public Safety Building Project Final Environmental Impact Report (FEIR) and making required findings under the California Environmental Quality Act (CEQA), including findings related to environmental impacts, mitigation measures and alternatives, and adopting a Mitigation Monitoring and Reporting Program (MMRP); B. Adopt an Ordinance modifying the Public Facilities (PF) Zone Development Standards in Chapter 18.28 of Title 18 of the Palo Alto Municipal Code, as recommended by the Planning and Transportation Commission (PTC); and C. Approve a Record of Land Use Action approving Architectural Review Application [File 17PLN-00257] for a new four-story parking structure at 350 Sherman Avenue to provide 636 public parking spaces above and below grade, as recommended by the Architectural Review Board (ARB). FINAL SENSE MINUTES Page 15 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Council Member Scharff believed there was a strong need for the garage. Electric vehicles (EV) reduced greenhouse gas emissions more than other transportation strategies. Driving around in search of a parking space and moving vehicles every two hours created more greenhouse gas emissions than having a parking garage. Council Member DuBois did not find a discussion of contaminated soil in the EIR. Matt Raschke, Senior Engineer reported extensive soil testing on both parcels determined there was no soil contamination. The contamination plume was located well below the anticipated excavation area. Council Member DuBois inquired whether groundwater pumped from the site would be tested for contaminants. Mr. Raschke replied yes. Construction utilized a cutoff wall to minimize groundwater pumping. Council Member DuBois expressed concern regarding the 135-foot antenna and requested Staff comment on the possibility of locating the antenna elsewhere. Mr. Eggleston explained that the City needed the antenna to participate in the ECOMM communication network. The antenna needed a direct line of sight to the tower with which it communicated. The antenna did not need to be placed on a non-Essential Services Building if at all possible. Both City Hall and the County Courthouse were non-Essential Services Buildings. Alternative locations were prohibitively expensive or would result in a vulnerable single point of connection. He had to check with the experts regarding locating the antenna on existing utility towers. Council Member DuBois asked if the bulk of the antenna could be reduced. Mr. Eggleston did not believe the bulk could be reduced because a number of critical attachments would be placed on the antenna. Mr. Keene reiterated that the PSB would be presented to the Council at a future meeting. Council Member DuBois recalled the Council's discussion of April 2017 regarding the parking garage. With removal of the surface parking lot and removal of parking spaces from the Residential Preferential Parking Permit (RPP) district, the net number of parking spaces provided by the garage was FINAL SENSE MINUTES Page 16 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 approximately 82. The parking garage was one of very few projects both businesses and residents supported. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “direct Staff to have a goal of minimizing zoning exceptions for future projects.” (New Part D) Mr. Keene noted language provided exceptions in the PF zone related to Essential Services Buildings. Council Member DuBois' language seemed to direct Staff to make best efforts not to utilize the exceptions. Staff was able to explain the tradeoffs of not using the exceptions in future projects. Council Member Scharff expressed concerns about applying the language when the PSB was scheduled for a hearing before the ARB. AMENDMENT: Council Member DuBois moved, seconded by Council Member XX to add to the Motion Part D, “excluding the Public Safety Building.” Mr. Keene advised that Staff would report to the Council regarding the tradeoffs considered, reductions made, and the use of exceptions when making a recommendation. AMENDMENT WITHDRAWN BY THE MAKER Vice Mayor Filseth recalled the Council's covenant with neighborhoods to reduce the number of cars parked on neighborhood streets. Council Member Wolbach inquired regarding the number of parking spaces reserved for EVs in the garage. Mr. Eggleston responded 34 EV charging spaces. The Green Building Code required Staff to size all onsite electrical equipment to support 25 percent of the total number of parking spaces for EV charging. Council Member Wolbach requested the expected lifespan of the garage. Mr. Eggleston answered more than 50 years. Council Member Wolbach asked if Staff anticipated only 25 percent of residents to utilize EVs in 50 years. Mr. Eggleston replied no. The question was where residents would charge their EVs. FINAL SENSE MINUTES Page 17 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Council Member Wolbach suggested residential development in the area could utilize the parking garage for residential parking. He inquired about the capacity to convert the garage to non-parking uses. Mr. Eggleston advised that the design of the garage made it infeasible for other uses. Council Member Wolbach requested the number of parking spaces that were appropriate for motorcycle and motor-scooter parking. Mr. Eggleston said he was able to provide that information in a moment. Council Member Wolbach noted community complaints regarding the size of parking spaces in the California Avenue area. Mr. Eggleston stated the garage parking spaces would be larger than many spaces in the California Avenue area. Council Member Wolbach requested the cost difference between a garage with two subsurface levels and four surface levels and a garage with one subsurface level and five surface levels. Mr. Keene indicated the cost savings for eliminating one subsurface level was approximately $6.5 million. He did not have the cost for adding one surface level. Council Member Wolbach noted the current item included an amendment to PF zoning. AMENDMENT: Council Member Wolbach moved, seconded by Council Member XX to add to the Motion, “direct Staff to return with an additional exemption to Municipal Code Section 18.28.060(e) for Below Market Rate housing.” Mr. Keene voiced concern regarding Staff's ability to do that because of the structure of the analysis and impacts. AMENDMENT RESTATED: Council Member Wolbach moved, seconded by Council Member XX to add to the Motion, “direct Staff to work with the PTC to study an additional exemption to Municipal Code Section 18.28.060(e) for Below Market Rate housing.” Council Member Scharff asked if Council Member Wolbach intended to allow Below Market Rate (BMR) housing on all parcels zoned PF. Council Member Wolbach answered no. FINAL SENSE MINUTES Page 18 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Council Member Scharff asked if the Colleagues' Memo for the Housing Work Plan included such an exemption. This was not the appropriate time to put forth the Amendment. Council Member Wolbach explained that the Council was considering amendments to the PF zone. The exemptions in Table 2 applied to parking garages and Essential Services Buildings. He was suggesting affordable housing be eligible for the exemptions. Molly Stump, City Attorney reported the Amendment language should be revised to direct Staff to work with the PTC. Mr. Keene stated the direction could deflect Staff's focus on a range of options when working on the Housing Work Plan. When presenting affordable housing as part of the Housing Work Plan, Staff may present the stated option along with others. AMENDMENT RESTATED: Council Member Wolbach moved, seconded by Mayor Kniss to add to the Motion, “direct Staff to work with the PTC to study an additional exemption to Municipal Code Section 18.28.060(e) for Below Market Rate housing, in conjunction with other Zoning amendments.” (New Part E) Council Member Wolbach believed amendments to the PF zone should allow housing for people as well as housing for cars. The Council should at least discuss the concept. Mr. Eggleston returned to the question regarding motorcycle parking. No spaces were allocated solely for motorcycle parking. Mayor Kniss supported the Amendment because the Council did not always return to issues raised in Council meetings. Council Member Holman did not believe the current item was appropriate for discussion of the Amendment. It required a fair amount of discussion. The Council had loaded Staff with many directives lately. A separate discussion was worthwhile. Council Member DuBois noted the time and the number of people waiting for the next Agenda Item. AMENDMENT AS AMENDED PASSED: 5-4 Filseth, Holman, Scharff, Tanaka no Council Member Wolbach did not believe an Amendment was necessary for Staff to include parking spaces for two-wheeled vehicles. FINAL SENSE MINUTES Page 19 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Mr. Eggleston advised that the design presented for approval did not delineate the layout of parking spaces. Staff was able to incorporate parking for two-wheeled vehicles. Council Member Holman requested the rationale for developing a Parking Mitigation Plan now rather than in the EIR. Mr. Eggleston did not believe parking impacts from construction were considered an environmental impact under the California Environmental Quality Act (CEQA). Ms. French clarified that parking was not an impact. Council Member Holman did not understand why the Parking Mitigation Plan was not part of the EIR as trip generation would increase due to drivers searching for alternative parking during construction. Ms. French explained that parking was part of the logistics plan which occurred prior to construction. Council Member Holman inquired about the possibility of having more trees rather than a canopy. Mr. Eggleston indicated the photovoltaic canopy was located atop the garage. Council Member Holman inquired whether the number of trees on the site could be increased since the project would eliminate trees. Mr. Cusenbery explained that the 3D renderings did not show all the trees proposed for the project. The Landscape Plan provided the number of trees that would be planted. Council Member Holman inquired whether the design could incorporate space or an enclosure for the commercial trash dumpsters. Mr. Eggleston advised that Staff had spoken with the business association group about setting aside space inside the garage for a trash enclosure. In addition, Staff was working with GreenWaste to modify frequency of pickup and sizes of containers so that containers could be located within a business' space. Council Member Holman remarked that many businesses did not have space for a trash container. FINAL SENSE MINUTES Page 20 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Mr. Eggleston noted City standards required redevelopment of parcels to include trash enclosures within the space. Council Member Holman believed newer buildings had a less pedestrian feel. The regular features and details contributed to the massive feel of the structure. Council Member Tanaka understood parking lifts could not be added to the garage design. He asked if parking lifts could be added to the PSB design so that it could be reused in the future. Mr. Eggleston was not able to imagine circumstances in which the PSB's underground garage could be reused during its 50-75-year lifespan. Mr. Keene added that Staff continued to explore options and changes for the PSB design. Council Member Tanaka remarked that the use of stackers would allow better utilization of the PSB garage. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part D, “and consider car lifts and parking that can be repurposed.” Council Member Kou wished to relocate the PSB to the previously proposed Bayshore site so that the current site could be used for BMR housing and retail. She requested the number of parking spaces on each subsurface level of the parking garage. Mr. Eggleston responded an average of 100 spaces per level. Council Member Kou wanted to minimize the number of subsurface levels so that dewatering would not occur. Mr. Keene recounted Council direction for Staff to investigate cost savings or value engineering, which Staff was doing with the PSB design. Council Member Kou felt the PSB site was not being planned to its best and highest use. Council Member Fine commented that the parking garage was not the best deal because more parking was needed for only two hours per day. Outside the lunch hours, parking spaces were available. The City was planning to spend $50 million for a parking garage but not to charge the public to park in it. He inquired whether Council approval of the parking garage and failure FINAL SENSE MINUTES Page 21 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 of the Transient Occupancy Tax (TOT) increase eliminated other projects from the Infrastructure Plan. Mr. Keene remarked that failure of the TOT increase impacted projects within the Infrastructure Plan. He assumed the Council would reduce or defer projects other than the PSB. Council Member Fine requested an explanation of how the parking garage and the PSB were linked. Mr. Eggleston explained that the Council selected Lot C-6 for the PSB. The Feasibility Study found that Lots C-6 and C-7 could be utilized for the PSB and the proposed California Avenue parking garage. Staff presented the two projects together because the impacts of the two projects influenced each other. Council Member Fine concurred with Council Member Holman's comments regarding the pedestrian feel; however, a parking garage was inherently anti-pedestrian. AMENDMENT: Council Member Fine moved, seconded by Council Member XX to add to the Motion, “direct Staff to implement dynamic pricing for the parking garage.” Council Member Scharff inquired about Staff conducting a study of pricing for parking. Mr. Keene was not aware of the scope of the study. He did not believe the notice to the public allowed Council to consider pricing. The Council was able to direct Staff to explore dynamic pricing. Council Member Fine believed the Council did not have a full understanding of parking supply, demand and pricing. It was more helpful to focus dynamic pricing on the parking garage project. The project included parking spaces for permitholders, but the majority of spaces were meant to accommodate parking demand during the lunch hour. Some of the $50 million cost needed to be recovered through parking fees. AMENDMENT RESTATED: Council Member Fine moved, seconded by Council Member Wolbach to add to the Motion, “direct Staff to consider pricing for the parking garage.” (New Part F) Council Member Wolbach reiterated the value of parking and community concerns about the parking garage. The majority of garage spaces needed FINAL SENSE MINUTES Page 22 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 to be allocated to permitholders in an effort to recoup some of the project cost. AMENDMENT PASSED: 5-4 DuBois, Filseth, Kou, Scharff no Council Member Fine commented that the parking garage did not comply with the Comprehensive Plan or the Sustainability and Climate Action Plan (S/CAP). Mayor Kniss concurred with Council Member Fine's comments. She did not believe mechanical lifts could not be utilized in the parking garage. She wanted the project to have indicators for the number of spaces available. MOTION AS AMENDED RESTATED: Council Member Scharff moved, seconded by Council Member DuBois to: A. Adopt a Resolution certifying the Public Safety Building Project Final Environmental Impact Report (FEIR) and making required findings under the California Environmental Quality Act (CEQA), including findings related to environmental impacts, mitigation measures and alternatives, and adopting a Mitigation Monitoring and Reporting Program (MMRP); B. Adopt an Ordinance modifying the Public Facilities (PF) Zone Development Standards in Chapter 18.28 of Title 18 of the Palo Alto Municipal Code, as recommended by the Planning and Transportation Commission (PTC); C. Approve a Record of Land Use Action approving Architectural Review Application [File 17PLN-00257] for a new four-story parking structure at 350 Sherman Avenue to provide 636 public parking spaces above and below grade, as recommended by the Architectural Review Board (ARB); D. Direct Staff to have a goal of minimizing zoning exceptions for future projects and consider car lifts and parking that can be repurposed; E. Direct Staff to work with the PTC to study an additional exemption to Municipal Code Section 18.28.060(e) for Below Market Rate housing, in conjunction with other Zoning amendments; and F. Direct Staff to consider pricing for the parking garage MOTION AS AMENDED PASSED: 8-0 Tanaka not participating Council took a break from 10:26 P.M. to 10:36 P.M. FINAL SENSE MINUTES Page 23 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 13. Accept the City Clerk’s Report Certifying the Sufficiency of an Initiative Petition to Limit Health Care Costs that Hospitals and Medical Clinics May Charge; and Adopt a Resolution Placing the Initiative Petition on the November 2018 Ballot, or Adopt the Petition as an Ordinance Without Alteration, or Provide Other Direction to Staff. Molly Stump, City Attorney, reported a similar initiative in Livermore had qualified for the ballot. Staff did not prepare materials for the Council to adopt the petition as an Ordinance. The Council was able to direct Staff to present a Resolution at a future meeting. David Entwistle, President and CEO of Stanford Health Care (SHC) spoke on behalf of Mary Stutts, Andy Coe, Jon Cowan, Patrick Bartosch, Stanford Health Care, Palo Alto Medical Foundation (PAMF), Kaiser Permanente and others. The measure was inherently against the best interests of Palo Alto and its residents with far-reaching negative consequences. The initiative did not address healthcare costs or limit prices charged to patients with insurance coverage. It prescribed the payment of rebates by local physicians and medical clinics to insurance companies without requiring the rebates be applied to lowering the cost of individuals' premiums. The measure applied to physicians, dentists, optometrists and other small specialty practices. The potential impacts included healthcare providers reducing, closing or relocating their practices. The measure possibly affected the City's ability to provide public services. The initiative was not going to reduce the cost of healthcare but reduced the availability of healthcare programs and services. Dr. Harry Dennis, speaking for Elizabeth Villando, Andrew Epstein, James Mackwood and Christine Thorhbaun remarked that the measure did not help him serve children or help his colleagues treat their patients, did not make healthcare more accessible, and did not improve the quality or safety of healthcare. The measure made attracting and retaining healthcare providers more difficult. Declan Walsh, Service Employees International Union (SEIU)-United Healthcare Workers (UHW) Policy Analyst spoke for Angela Tamayo, Sonia Garcia, Adan Cabral and Ryn Schneider. SEIU-UHW's attorneys were confident in the constitutionality of the initiative. The length and breadth of SHC's legal arguments were baseless. SHC's argument that healthcare providers may relocate was an unlikely outcome. The initiative expressly encouraged healthcare providers to invest in quality improvements. The aim of the initiative was to reign in healthcare costs and improve quality. He was currently unable to substantiate the estimate of reduced revenues provided by SHC. The impact on revenue was dependent on how much SHC FINAL SENSE MINUTES Page 24 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 chose to prioritize and invest in allowable expenditures. He assumed an increase in the City's administrative burden was generic to any proposed initiative or Ordinance. Any enforcement costs were offset by fines proposed in the initiative. The Council needed to let the people decide whether they wanted to lead on affordable quality healthcare. Dr. Dennis Lund strongly opposed the initiative. Lucile Packard Children's Hospital shared services with SHC to increase efficiency and to lower costs. The initiative had an adverse effect on SHC and Lucile Packard Children's Hospital because of the shared services. Jo Coffaro, Hospital Council Regional Vice President advised that all hospitals in the South Bay Area opposed the initiative. The Hospital Council urged the Council to obtain a Fiscal Impact Report so that Council Members, Staff and the public understood the initiative. Curt Kirschner, attorney for SHC and PAMF remarked that SHC and PAMF would take all appropriate steps, including legal action, to prevent the unconstitutional measure from proceeding. It was appropriate for the City of Palo Alto to join SHC and PAMF in seeking to invalidate the measure. Margaret Raffin, SHC Board Member opposed the initiative because of its impact on the community. It imposed an unnecessarily burdensome bureaucracy on the City of Palo Alto, would cost taxpayers money, and would divert critical resources from public services. Peggy Burke opposed the initiative because it did not improve the affordability of healthcare. Olga Hurtado supported the initiative and related cleaning practices at SHC. Stephanie Muñoz supported single-payer healthcare. Chuck Fonseca commented that the most expensive healthcare did not equate to the lowest rate of hospital-acquired infections. Dan Walls related interactions between the Stanford University Student Government Association and SHC regarding the measure. Juan Lamata shared Stanford University graduate students' concerns regarding healthcare. Graduate students viewed the initiative as the best way to make healthcare more affordable and safer for graduate students at Stanford University. FINAL SENSE MINUTES Page 25 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Anna Toledano supported the ballot measure. The measure did not harm SHC's ability to provide care to Stanford University students but alleviated exorbitant patient costs. Johannes Muenzel believed healthcare was a human right. If SHC wanted to reduce costs, it could explore reducing its CEO's compensation. Justine Modica advised that healthcare costs were rising because SHC's prices for standard procedures were exorbitant. She supported the measure. MOTION: Mayor Kniss moved, seconded by Council Member Fine to: A. Accept the City Clerk’s Certificate of Sufficiency of the Initiative Petition to Impose Limits on Costs that Hospitals and Clinics May Charge in Palo Alto (“Initiative Measure”); B. Direct Staff to return at a later meeting in June with a Resolution calling for an election to submit the Initiative Measure to the voters at the next General Municipal Election to be held on November 6, 2018; and C. Direct Staff to prepare an objective and fact-based analysis of the effects of the Initiative Measure on Palo Alto residents after the City Council Summer Recess. Ms. Stump reported Part A of the Motion was not controversial for the Council. It was a ministerial requirement for the Council to accept the Clerk's certification that a sufficient number of signatures were collected. Parts B and C were policy questions for the Council. She felt there could be some discussion about them and the appropriate timing. Mayor Kniss stated the Council's acceptance of the Certificate of Sufficiency was a necessity and commented that the Council had more work to do before placing the measure on the ballot. Obtaining a report with a fact- based analysis of the consequences of such a measure was a common practice. Council Member Fine was interested in hearing Colleagues' opinions regarding Part C of the Motion. Mayor Kniss clarified that Staff should return with the Report in late August or early September, 2018. James Keene, City Manager requested the Council clarify the sequence of events in the Motion. FINAL SENSE MINUTES Page 26 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Mayor Kniss noted the Council would finalize Part A during the current meeting and discuss Part B in one of the two remaining Council meetings in June, 2018. Staff was able to present Part C of the Report, after something had been placed on the ballot. Ms. Stump suggested the measure was far-reaching, and its application created many questions for the City and the community. Once the Council placed an item on the ballot, the City had a responsibility to utilize public resources in an objective and fact-based manner. Any analysis and additional information was going to be balanced and fact-based. Vice Mayor Filseth felt the measure should be placed on the ballot. The measure appeared to constitute a very large, unfunded mandate for the City to regulate healthcare in Palo Alto, a task for which the City had neither expertise nor capacity. Council Member Kou asked if the analysis would include the cost of the City's compliance with the measure. Ms. Stump advised that the report would address the cost to the City because the level of information for such a novel program could be limited. Mr. Keene cautioned the Council that the analysis would not discover or discuss every aspect of the initiative's implications. Council Member Kou wished to be fiscally responsible and mindful of community interests. Council Member DuBois inquired about the logic of conducting the analysis and preparing a report only if the initiative was approved. Ms. Stump remarked that interest had been voiced for having the analysis as an aid to the community's decision-making process prior to the election. Council Member DuBois was unsure whether the City was equipped to respond to the initiative. Mr. Keene stated the City was not equipped to handle the initiative. City Staff had not received prior notice about the petition. Council Member Holman inquired about Staff's ability to collect all the information necessary to prepare an impartial analysis. Ms. Stump did not mean to suggest that the report would be comprehensive; it would not be comprehensive. The City Attorney's Office was going to prepare the ballot statement separate from the analysis. Staff FINAL SENSE MINUTES Page 27 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 was able to prepare and present the analysis prior to the Council deciding to call the election. Staff had received formal correspondence from healthcare providers advising of their concerns about the legality of the measure and their wish to pursue that through the court system. Council Member Holman voiced concerns about Staff's ability to analyze the impacts of the measure given their limited expertise in healthcare and about accusations of the City being partial based on aspects presented or not presented in the Report. Ms. Stump reported that the Council was not obligated to pursue the analysis. AMENDMENT: Council Member Holman moved, seconded by Council Member XX to remove Part C from the Motion. Mayor Kniss offered to separate Part C for voting purposes. Council Member Holman requested Part C be separated if the maker and seconder would not accept deletion of Part C. Mayor Kniss did not accept deletion of Part C. AMENDMENT FAILED DUE TO THE LACK OF A SECOND MOTION PART C SEPARATED FOR THE PURPOSE OF VOTING MOTION: Mayor Kniss moved, seconded by Council Member Fine to: A. Accept the City Clerk’s Certificate of Sufficiency of the Initiative Petition to Impose Limits on Costs that Hospitals and Clinics May Charge in Palo Alto (“Initiative Measure”); and B. Direct Staff to return at a later meeting in June with a Resolution calling for an election to submit the Initiative Measure to the voters at the next General Municipal Election to be held on November 6, 2018. MOTION: Mayor Kniss moved, seconded by Council Member Fine to: C. Direct Staff to prepare an objective and fact based analysis of the effects of the Initiative Measure on Palo Alto residents after the City Council Summer Recess. Council Member Wolbach inquired whether the measure would apply to only SHC and PAMF or to all healthcare providers, including psychologists, psychiatrists, dentists and small clinics within Palo Alto. FINAL SENSE MINUTES Page 28 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Ms. Stump noted the definition of other providers contained in the measure referred to a set of regulations that defined healthcare providers. Practically, she could not provide a full explanation except to say small practitioners or sole practitioners who had organized their businesses in a particular way would appear to be subject to the measure. Council Member Wolbach agreed that the Council needed more information, especially given Staff's concerns around the administrative burden. The County of Santa Clara (County) had more capacity and expertise to act as the administrative body. He inquired about the City's ability to contract with the County to act as the administrative body. Ms. Stump was not in a position to comment on the issue. Council Member Wolbach requested Colleagues speak out regarding reversing the timeline for Parts B and C and holding a special meeting in late July, 2018 so that Council Members could review the analysis before deciding to place the measure on the ballot. Ms. Stump advised that the Council could accept the Clerk's certification and continue the item to the following week's meeting. That gave Staff an opportunity to work on timing issues and the Council an opportunity to consider the actions and the order of actions. Mr. Keene concurred. The action items for the June 18, 2018 meeting were the Transient Occupancy Tax (TOT) increase and adoption of the Budget. SUBSTITUTE MOTION: Council Member Wolbach moved, seconded by Council Member XX to continue this Agenda Item to June 18, 2018. Ms. Stump indicated the Council could continue the entire Agenda item or Parts B and C of the Motion to June 18, 2018. Council Member Scharff did not see an advantage to either suggestion. Ms. Stump indicated Staff would not have more information to share with the Council on June 18, 2018. SUBSTITUTE MOTION WITHDRAWN BY THE MAKER AMENDMENT: Council Member Wolbach moved, seconded by Council Member XX to replace in the Motion Part B, “direct Staff to return at a later meeting in June” with “direct Staff to poll for a Special Council meeting in July.” FINAL SENSE MINUTES Page 29 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Ms. Stump suggested a sooner date would be more logical. The Council did not have to take action at the current time but could postpone action to late July, 2018. AMENDMENT WITHDRAWN BY THE MAKER INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER add to the Motion Part C, “businesses, and City Staff” after “Palo Alto residents.” Council Member Scharff recommended the Council direct Staff to hire a consultant to perform the analysis. Ms. Stump remarked that Staff would utilize consulting resources. Council Member Scharff inquired about a funding mechanism, perhaps the Council Contingency Fund. Mr. Keene had not determined a funding mechanism and said Staff would need to determine a scope of services. MOTION AS AMENDED RESTATED: Mayor Kniss moved, seconded by Council Member Fine to: A. Accept the City Clerk’s Certificate of Sufficiency of the Initiative Petition to Impose Limits on Costs that Hospitals and Clinics May Charge in Palo Alto (“Initiative Measure”); and B. Direct Staff to return on June 18, 2018 with a Resolution calling for an election to submit the Initiative Measure to the voters at the next General Municipal Election to be held on November 6, 2018. MOTION: Mayor Kniss moved, seconded by Council Member Fine to: C. Direct Staff to prepare an objective and fact based analysis of the effects of the Initiative Measure on Palo Alto residents, businesses, and City Staff after the City Council Summer Recess. MOTION PARTS A AND B PASSED: 9-0 MOTION PART C PASSED: 6-3 DuBois, Holman, Kou no 12. Accept the City Clerk’s Report Certifying the Sufficiency of the Initiative Petition to Amend the Comprehensive Plan and Zoning Code to Reduce the Maximum Allowable New Office and R&D Development from 1.7 Million Square Feet to 850,000 Square Feet, Subject to FINAL SENSE MINUTES Page 30 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Specified Exemptions; and Adopt a Resolution Placing the Initiative Petition on the November 2018 Ballot, or Adopt the Petition as an Ordinance Without Alteration, or Provide Other Direction to Staff. Molly Stump, City Attorney reported Staff had not prepared a Draft Resolution for the Council. The Council was able to direct Staff to prepare and present a Draft Resolution at a future date. Mayor Kniss inquired whether the Council could adopt the measure as written and then incorporate it into the Comprehensive Plan. Ms. Stump responded yes. Adoption of the measure amended the Comprehensive Plan and the Zoning Code. Alternatively, the Council was able to place the measure on the ballot for consideration by the voters. James Keene, City Manager advised that Option 2 was permissible; however, that appeared to be counter to the ten years spent considering the Comprehensive Plan. Greg Schmid, speaking for Fred Balin, Annette Ross, Ceci Kettendorff and Mary Sylvester remarked that the Comprehensive Plan continued to allow increases in the number of jobs at two to three times the rate of new resident workers. The goals of a maximum cap and regular monitoring were to set appropriate limits on future commercial development and to minimize deteriorating traffic conditions within the City. The relationship of a strict cap on excessive job growth was a critical component of the community's future. Joe Hirsch, speaking for Lieve Moorteat, Nelson Ng, Kimberley Wong and Zita Zukowsky noted significant community concern regarding rapid office and Research and Development (R&D) growth. The initiative did not establish a moratorium on growth. The initiative would maintain office and R&D growth through 2030 at a level comparable to the historical annual average over the past 29 years. The Stanford Research Park letter indicated growth in Stanford Research Park was well below the amount provided by the initiative. The initiative addressed community concerns around traffic congestion and under-parked developments. Rita Vrhel, speaking for Bill Ross, Elaine Meyer, Eugene Zukowsky and Margaret Heath commented that the initiative was not anti-business. Businesses were not able to hire workers because of the high cost of housing. Stephanie Muñoz felt the Council could determine the best way for residents to live, but the best way was not with rogue capitalistic growth. FINAL SENSE MINUTES Page 31 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Bob Moss advised that community members were eager to sign the petition. Placing the initiative on the ballot was going to cost the City hundreds of thousands of dollars. He urged the Council to approve the measure as an Ordinance. Not building more office space was not going to eliminate office growth. The number of workers per 1,000 square feet was increasing and would continue to increase. Hamilton Hitchings believed adding residents rather than workers was better fiscally for the City. Terry Holzemer indicated the initiative was led by citizen volunteers. Citizens wanted the proposed cap. Paul Machado urged the Council to place the measure on the ballot or accept it as presented. Tiffany Griego, Stanford Research Park Managing Director requested the Council conduct a thorough fiscal and economic analysis prior to advancing the initiative to the ballot. Without better study, the initiative was able to undermine the long-term economic stability of Palo Alto and Palo Alto Unified School District (PAUSD). Jean McCown recalled the 1995 initiative and said the 1989 growth limit had never been increased. The consequences and economic impact needed to be understood and presented to the voters. Andrew Boone felt the initiative was appropriate given the jobs/housing balance, which caused high rents and a high cost of living in and around Palo Alto. Council Member Scharff believed the Council should obtain data and perform an economic and fiscal analysis to understand the claims made regarding the initiative. The analysis needed to be performed prior to the Council deciding to place the measure on the ballot. MOTION: Council Member Scharff moved, seconded by Council Member Fine to: A. Accept the City Clerk’s Certificate of Sufficiency of the Initiative Petition to Reduce the Office/R&D Development Cap (“Initiative Measure”); B. Direct Staff to return on July 30, 2018 with a Resolution calling for an election to submit the Initiative Measure to the voters at the next General Municipal Election to be held on November 6, 2018; FINAL SENSE MINUTES Page 32 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 C. Direct the Mayor to create an ad hoc committee of two or three Council Members to develop a possible measure to amend; D. Direct Staff to hire a consultant to conduct an economic and fiscal impact analysis to the City and the Palo Alto Unified School District including: i. Its effect on the internal consistency of the City’s Comprehensive Plan and coordinated area plans, including the Housing Element, the consistency between planning and zoning, and the limitations on City actions under Section 65008 of the Government Code and Chapters 4.2 (commencing with Section 65913) and 4.3 (commencing with Section 65915) of Division of Title 7 of the Government Code; ii. Its impact on funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, and open space. The report may also discuss whether the Initiative Measure would be likely to result in increased infrastructure costs or savings, including costs of infrastructure maintenance, to current residents and businesses; iii. Its impact on the community’s ability to attract and retain business and employment; iv. Its impact on traffic congestion; v. Its impact on Below Market Rate housing; and vi. Its impact on the Stanford Research Park. Council Member Fine concurred with exploring amendments to the measure and the economic and fiscal policy impacts. Council Member Kou felt the Motion expended funds the City did not have. The Residential Preferential Parking Permit (RPP) districts were not a solution to traffic congestion. Stanford Research Park had not proposed a contribution to Caltrain electrification when the largest number of incoming commuters were traveling to Stanford Research Park and Stanford University. Additionally, the Council had not addressed Below Market Rate (BMR) housing. SUBSTITUTE MOTION: Council Member Kou moved, seconded by Council Member DuBois to: FINAL SENSE MINUTES Page 33 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 A. Accept the City Clerk’s Certificate of Sufficiency of the Initiative Petition to Reduce the Office/R&D Development Cap (“Initiative Measure”); and B. Direct Staff to return on June 18, 2018 with a Resolution calling for an election to submit the Initiative Measure to the voters at the next General Municipal Election to be held on November 6, 2018. Council Member DuBois inquired whether Staff preferred a date of June 18 or 25, 2018. Mr. Keene felt the June 18, 2018 meeting would be better. Council Member DuBois noted a discrepancy between the initiative and the City Charter regarding passage of the initiative and an amended initiative. Ms. Stump stated the City Charter's provision was different. Council Member DuBois asked if both an initiative and amended initiative passing had occurred previously. Ms. Stump was not aware of a prior occasion. Council Member DuBois indicated the initiative coupled with the Housing Work Plan would address congestion and impacts to infrastructure. The initiative was a moderate proposal and had the potential to be a cap. Other cities used Employee Head Count Taxes to limit growth. The initiative allowed reasonable growth while attempting to address unfettered growth. The Council needed to respect the will of the voters and place the initiative on the ballot; the initiative balanced land uses. Council Member Holman commented that the initiative would limit office growth to the traditional limit. Growth higher than the typical rate exacerbated the need for workers. All nine Council Members needed to be present to decide whether to place the measure on the ballot. Vice Mayor Filseth stated the measure should be placed on the ballot. Council Member Wolbach wanted to obtain good data about the fiscal and development impacts of the measure. He did not understand the public comment around doubling office growth. He recalled that adoption of the Comprehensive Plan merely extended the unused portion of the previously approved office growth. The annual office cap as currently drafted reduced the rate to 50,000 square feet, which was below the historical rate proposed in the measure. Therefore, he thought the impact of the measure may not FINAL SENSE MINUTES Page 34 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 be significant. Having more information before sending the measure to the ballot was the right thing to do. Council Member Fine remarked that future office growth was future customers for local retailers. The Council needed to understand the consequences of loss of Impact Fees due to loss of development. He requested the number of pending applications for office development. Mr. Keene did not believe the amount of square footage in pending applications would meet the cap of 50,000 square feet. Council Member Fine advised that pending applications proposed approximately 10,000 square feet of office development. He noted the numerous groups, meetings and reviews involved in updating the Comprehensive Plan. The Council needed to make an informed decision. Council Member Scharff did not recall the Council doubling office space. He wanted to understand the impact of the measure. It was not going to affect traffic or traffic congestion. Stanford Research Park provided as much Sales Tax revenue as all of Downtown, and companies in Stanford Research Park wanted to expand. He concurred with obtaining data to inform the Council's and the community's decisions. Mayor Kniss recalled the Council discussion around excluding Stanford Research Park from the office cap. She questioned the Comprehensive Plan Update process such that the measure was brought forward only four months after the Comprehensive Plan was adopted. SUBSTITUTE MOTION FAILED: 4-5 DuBois, Filseth, Holman, Kou yes INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part D, “but not limited to” after “School District including.” Council Member Fine requested the analysis include the risk of legal challenges. He asked if the Council Contingency Fund would be used to fund a consultant. Mr. Keene reported the Council could direct Staff to utilize the Council Contingency Fund. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “direct Staff to consider input from Stanford University, nonprofits, and the business community.” (New Part D.vii.) FINAL SENSE MINUTES Page 35 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 Council Member DuBois related discrepancies in arguments offered in support of the Motion. The comments regarding doubling office growth were the result of the Comprehensive Plan rate being twice the average office growth over the last 15 years. AMENDMENT: Council Member DuBois moved, seconded by Council Member Wolbach to replace Part D of the Motion with, “direct Staff to prepare an objective and fact-based analysis of the effects of the Initiative Measure on Palo Alto residents, businesses, City Staff after the City Council Summer Recess.” Council Member DuBois hoped the proposed subcommittee did not have inherent bias, given the 5-4 split of the Council. INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Amendment, “and the Palo Alto Unified School District” after "City Staff." Council Member Scharff remarked that the Council did not know the right questions to ask with respect to the healthcare measure, but the Council knew the right questions for the office cap measure. Incorporating language from the Motion on the healthcare measure did not allow the Council to obtain the data it needed to make decisions. Council Member Fine believed Part iv of the Motion better instructed Staff or a consultant to answer specific questions. The Amendment was too broad. Council Member Wolbach inquired whether Staff or a consultant could complete Parts i-vii in the short timeframe. Mr. Keene reported Parts ii-vii were standard components of an analysis. The impact on City Staff was not relevant in the same way the healthcare measure was. SECOND TO THE AMENDMENT WITHDRAWN BY THE SECONDER Council Member Holman was confounded by Parts i-vii in the Motion because collecting that kind of information could require a month and some of the information was irrelevant. AMENDMENT AS AMENDED RESTATED: Council Member DuBois moved, seconded by Council Member Holman to replace Part D of the Motion with, “direct Staff to prepare an objective and fact based analysis of the effects of the Initiative Measure on Palo Alto residents, businesses, and City Staff, and the Palo Alto Unified School District after the City Council Summer Recess.” FINAL SENSE MINUTES Page 36 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 AMENDMENT AS AMENDED FAILED: 4-5 DuBois, Filseth, Holman, Kou yes Vice Mayor Filseth advised that the economic analysis conducted during the Comprehensive Plan Update process showed negligible economic differences among the different growth scenarios. Hopefully, the new analysis was going to provide new information. Council Member Holman reiterated that much of the information sought was irrelevant. MOTION AS AMENDED RESTATED: Council Member Scharff moved, seconded by Council Member Fine to: A. Accept the City Clerk’s Certificate of Sufficiency of the Initiative Petition to Reduce the Office/R&D Development Cap (“Initiative Measure”); B. Direct Staff to return on July 30, 2018 with a Resolution calling for an election to submit the Initiative Measure to the voters at the next General Municipal Election to be held on November 6, 2018; C. Direct the Mayor to create an ad hoc committee of two or three Council Members to develop a possible measure to amend; D. Direct Staff to hire a consultant to conduct an economic and fiscal impact analysis to the City and the Palo Alto Unified School District including but not limited to: i. Its effect on the internal consistency of the City’s Comprehensive Plan and coordinated area plans, including the Housing Element, the consistency between planning and zoning, and the limitations on City actions under Section 65008 of the Government Code and Chapters 4.2 (commencing with Section 65913) and 4.3 (commencing with Section 65915) of Division of Title 7 of the Government Code; ii. Its impact on funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, and open space. The report may also discuss whether the Initiative Measure would be likely to result in increased infrastructure costs or savings, including costs of infrastructure maintenance, to current residents and businesses; FINAL SENSE MINUTES Page 37 of 37 Sp. City Council Meeting Final Minutes: 06/11/18 iii. Its impact on the community’s ability to attract and retain business and employment; iv. Its impact on traffic congestion; v. Its impact on Below Market Rate housing; vi. Its impact on the Stanford Research Park; and vii. Direct Staff to consider input from Stanford University, non- profits, and the business community. MOTION AS AMENDED PASSED: 5-4 DuBois, Filseth, Holman, Kou no State/Federal Legislation Update/Action None. Council Member Questions, Comments and Announcements Council Member Kou requested a status update regarding the committee to fundraise for the Roth Building. Mayor Kniss reported she had not called a meeting of the committee. She and City Staff had analyzed the funds raised. Adjournment: The meeting was adjourned at 1:05 A.M.