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HomeMy WebLinkAbout2018-10-29 City Council Summary MinutesCITY OF PALO ALTO CITY COUNCIL MINUTES Page 1 of 22 Special Meeting October 29, 2018 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:05 P.M. Present: DuBois, Filseth, Fine, Holman, Kniss; Kou arrived at 5:06 P.M., Scharff, Tanaka, Wolbach Absent: Closed Session 1. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Government Code Section 54956.9(d)(2) and (e)(1) Five Potential Cases. MOTION: Council Member Scharff moved, seconded by Vice Mayor Filseth to go into Closed Session. MOTION PASSED: 8-0 Kou absent Council went into Closed Session at 5:05 P.M. Council returned from Closed Session at 7:08 P.M. Mayor Kniss announced no reportable action. Mayor Kniss condemned the senseless act of anti-Semitism that claimed 11 lives over the weekend and reaffirmed the City's commitment to being inclusive, supportive and open to diverse views, while remaining vigilant against hateful acts of violence. Agenda Changes, Additions and Deletions None. City Manager Comments Ed Shikada, Assistant City Manager announced that the City had submitted a Freedom of Information Act request to the Federal Aviation Administration (FAA) to obtain documents regarding the PIRAT operational procedure. Legal and technical consultants were drafting comments and should provide MINUTES Page 2 of 22 Sp. City Council Meeting Minutes: 10/29/18 them on or before the November 13, 2018 deadline. The City and the Santa Clara Valley Water District were finalizing a joint use agreement for the Adobe Creek Reach Trail as part of the Highway 101 bike bridge project. The City was close to an agreement with Google for an easement across Google's real property. Public Works had completed the paving of Alma Street and Middlefield Road from Colorado Avenue to the Menlo Park border. The Library and the City Manager's Office sponsored a short story kiosk in the lobby of City Hall. A retirement celebration was planned for November 1, 2018 for Chief Sustainability Officer Gil Friend. The City's event to recognize veterans was scheduled for November 5, 2018. With respect to Agenda Item Number 3, the bid for Transferable Development Rights (TDR) would generate $4 million for the City if approved by the Council. Sale proceeds would fulfill the City's commitments for the Avenidas building and the Junior Museum and Zoo. Mayor Kniss inquired about the source of the drumming sound in the distance. Mr. Shikada explained that Police Staff were utilizing the adjacent workout facility. Council Member Holman requested clarification of the date for the veteran’s event. Mr. Shikada indicated the date was Monday, November 5, 2018. Oral Communications Stephanie Muñoz explained that the eviction of tenants from the Hotel President was different from other evictions because the tenants were paying market rate. Edie Gelles felt swimming regularly with the Rinconada Masters contributed to her good health. Members of Rinconada Masters encouraged each other, and the coaches adapted workouts to each person. Members of Rinconada Masters were bereft if the team could no longer use Rinconada Pool. Paul Cipriano disclosed the vendor's three reasons for not renewing the subcontract with the Rinconada Masters swim team. Rinconada Masters agreed to provide two lifeguards during its swim times and wished to work with the vendor to improve communications. John Beeley did not understand the reasons given for canceling the contract with Rinconada Masters. Rinconada Masters offered workouts for all skill levels and was an important resource for Palo Alto and surrounding MINUTES Page 3 of 22 Sp. City Council Meeting Minutes: 10/29/18 communities. He attributed his good health to workouts with Rinconada Masters. Timothy Groves stated privatization of the Rinconada Pool would result in the ejection of Rinconada Masters from its long-term home. He disagreed with the backroom contract negotiations between the Community Services Department and Team Sheeper and recommended the Council oppose the proposed contract. Joan Chace wanted Rinconada Pool to be used to the fullest and best extent, but Team Sheeper's discontinuation of the Rinconada Masters was unfair. The Rinconada Masters team and its excellent coaches contributed to her radiant energy. John Romfh advised that the Rinconada Masters swim team included people of all ages. The loss of Rinconada Masters was going to be unfortunate. Jim Shaw believed the negotiations of the contract with Team Sheeper lacked transparency. On October 16, 2018 Rinconada Masters learned that Team Sheeper was not going to renew their contract with Rinconada Masters. He requested a renegotiation of the contract with an independent broker. Carol MacPherson, Rinconada Masters coach, related Rinconada Masters' compliance with requirements for lifeguards and certification. Terri Baxter-Smith, Rinconada Masters assistant coach recounted Rinconada Masters efforts to obtain certified lifeguards for its times in the pool. Ann Protter as a lap swimmer preferred to swim with Rinconada Masters rather than Team Sheeper's Masters Team. Ms. MacPherson taught her son to swim when no other organization was able to teach him. Pria Graves, College Terrace Residents' Association advised that Stanford University had purchased many properties in the College Terrace and Evergreen Park neighborhoods. Stanford University's ownership meant a loss of tax revenue, a decrease in the City's housing stock and an erosion of neighborhood character. At a minimum, they thought the Council should insist the University commit to occupying the homes within three months of purchase. Annika McClure, Silicon Valley Leadership Group invited the Council and the public to the Turkey Trot on November 22, 2018. The city with the most Council members and city managers participating would win a trophy. MINUTES Page 4 of 22 Sp. City Council Meeting Minutes: 10/29/18 Susan Rosenberg reported many trees on the Post Office property died, and a heritage dawn redwood tree was in danger of dying due to the lack of water. She requested that the Postmaster to water the trees. Mayor Kniss requested the Assistant City Manager (ACM) follow up with the Postmaster. Council Member Holman understood Public Works was watering the heritage tree. Ed Shikada, Assistant City Manager reported Staff was using a water truck to water the tree, but promised Staff would negotiate a long-term strategy with the Post Office. Council Member Wolbach inquired about Staff following up with the Rinconada Masters issue. Mr. Shikada advised that Staff would follow up before the contract was presented to Council. Mayor Kniss requested Staff investigate the housing issue raised by Ms. Graves. Mr. Shikada agreed to follow up on that issue. Minutes Approval 2. Approval of Action Minutes for the October 1 and 15, 2018 Council Meetings. MOTION: Vice Mayor Filseth moved, seconded by Council Member Scharff to approve the Action Minutes for the October 1 and 15, 2018 Council Meetings. MOTION PASSED: 9-0 Consent Calendar MOTION: Council Member DuBois moved, seconded by Council Member Holman, third by Council Member Wolbach to pull Agenda Item Number 6 - QUASI-JUDICIAL: 3743 Redwood Circle [17PLN-00272]: Consideration of an Appeal of the Director's Individual Review Approval of a new Two-story, Single Family Home to be heard at a date uncertain. Mayor Kniss asked which Council Member notified Staff about the possibility of removing Agenda Item Number 6. MINUTES Page 5 of 22 Sp. City Council Meeting Minutes: 10/29/18 Council Member DuBois replied that he emailed the Assistant City Manager (ACM). Ed Shikada, Assistant City Manager had received emails the morning of the meeting. Mayor Kniss requested Council Members follow Council protocol regarding notifying the City Manager of items they wished to remove from the Consent Calendar. Mr. Shikada indicated Staff would determine a date for Agenda Item Number 6 to be heard in the future. A date in January, 2019 was a possibility. Ming Lei, spoke regarding Agenda Item Number 6 and indicated a neighbor expressed no concerns while Staff was reviewing the project but filed the appeal of the Director's decision. Staff informed the neighbor that the project closely followed guidelines. Her family was living in the home, which badly needed repairs, and additional delay would be detrimental. Ket Le, spoke regarding Agenda Item Number 6 relayed that he as the project architect and City Staff had met with the neighbor many times and attempted to satisfy the neighbor's privacy concerns. The neighbor's demands were unreasonable. Joe Kauegan, spoke regarding Agenda Item Number 6 and felt that he had no privacy concerns about the two-story homes on each side of his home. He did not understand the neighbor's concern about the proposed two-story home. The applicants worked with the neighbors to design a home that alleviated neighbors' concerns. John Hurst, spoke regarding Agenda Item Number 6 and stated the neighbor's privacy concerns were shared by many neighbors. Privacy and sightline concerns in Eichler neighborhoods merited further community discussion. Jasleen Raisinghani, spoke regarding Agenda Item Number 6 and wanted the applicants to move the second story 40 feet from the property line and eliminate windows on the rear of the home so that her family could enjoy the indoor-outdoor living of an Eichler home. Manoj Raisinghani, spoke regarding Agenda Item Number 6 and did not object to the applicants building a second story, but he did not want windows on the second story because they would look into his backyard. Eichler guidelines needed to be updated to focus on privacy. MINUTES Page 6 of 22 Sp. City Council Meeting Minutes: 10/29/18 Stephanie Muñoz, spoke regarding Agenda Item Number 3. She suggested the Council consider why a person needed to purchase Transferable Development Rights (TDR). Council Member DuBois urged Staff to bring Agenda Item Number 6 to the Council as soon as possible. Mr. Shikada replied that a potential Special Meeting in November could include Agenda Item Number 6. MOTION: Vice Mayor Filseth moved, seconded by Council Member Scharff to approve Items 3-5. 3. Approval of the Sale of Transferable Development Rights From City Owned Avenidas and College Terrace Buildings to Selected Qualified Buyers; Disbursement of the Sale Proceeds; and Approval of a Budget Amendment in the Community Center Impact Fund. 4. Approval of the Fiscal Year 2018 Re-appropriation Requests to be Carried Forward Into Fiscal Year 2019 and Approve Budget Amendments in Various Funds. 5. Ordinance 5452 Entitled “Ordinance of the Council of the City of Palo Alto Amending Chapter 4.62 (Citywide Minimum Wage) of the Palo Alto Municipal Code to Correct and Clarify That the First Consumer Price Index (CPI) Adjustment to the Minimum Wage Will Occur in 2020 (FIRST READING: October 15, 2018 PASSED: 8-0 Kniss Absent).” 6. QUASI-JUDICIAL: 3743 Redwood Circle [17PLN-00272]: Consideration of an Appeal of the Director's Individual Review Approval of a new Two-story, Single Family Home. Environmental Assessment: Exempt From the Provisions of the California Environmental Quality Act (CEQA) in Accordance With Guideline Section 15303 (New Construction). Zoning District: R-1 (Single Family Residential). 7. Approval of the Acceptance and Appropriation of State of California Citizens Options for Public Safety (COPS) Funds and Approval of a Budget Amendment in the Supplemental Law Enforcement Services Fund. STAFF REQUESTS THIS ITEM BE PULLED. 8. Approval of the Agreement Between the City of Palo Alto and Racing Hearts, a Nonprofit Corporation, for the Purchase of Automatic External Defibrillators (AEDs) for the Palo Alto Police Department. STAFF REQUESTS THIS ITEM BE PULLED. MINUTES Page 7 of 22 Sp. City Council Meeting Minutes: 10/29/18 MOTION PASSED: 9-0 Action Items 9. TEFRA HEARING: Resolution 9797 Entitled “Resolution of the Council of the City of Palo Alto Regarding Conduit Financing for the Lytton Gardens Apartments Project Located at 656 Lytton Avenue, Palo Alto, and Approving the Issuance of Revenue Bonds by the California Municipal Finance Authority for the Purpose of the Acquisition, Rehabilitation, Improvement, and Equipping of Lytton Gardens Apartments.” Ed Shikada, Assistant City Manager (ACM) reported that the item was a perfunctory duty for the Council. Public Hearing opened and closed without public comment at 8:14 P.M. Council Member DuBois inquired whether the City owned any interest in Lytton Gardens Apartments. Molly Stump, City Attorney advised that the Agenda Item provided an opportunity for public comment regarding the project. Council Member DuBois expressed interest in learning about Council participation on the Board due to an ownership relationship. Ms. Stump indicated Staff would provide information at a later time. Council Member DuBois inquired regarding the use of the funds. Karim Sultan, Covia Affordable Communities on behalf of Lytton Gardens explained that Covia was the current owner of Lytton Gardens. Funding was used to transfer ownership to a tax credit partnership and to improve the property. Council Member DuBois inquired about Council action in the prior few years regarding Lytton Gardens. Mr. Sultan was not aware of any changes to agreements between the City and Lytton Gardens. He did not believe the City had any ownership interest in Lytton Gardens. There were some agreements for easements and affordable housing. Council Member DuBois asked if Lytton Gardens would continue to provide affordable housing. MINUTES Page 8 of 22 Sp. City Council Meeting Minutes: 10/29/18 Mr. Sultan answered yes, absolutely. MOTION: Council Member Fine moved, seconded by Council Member Scharff to adopt a Resolution approving the issuance of the bonds by the California Municipal Finance Authority (CMFA) for the benefit of Lytton Gardens 1 LP (Borrower). Council Member Tanaka requested the rationale for City involvement in the financing of the project. David Ramberg, Administrative Services Department Assistant Director clarified that the City had no responsibility for the debt. The City's involvement was limited to providing a forum for public comment. MOTION PASSED: 9-0 Mayor Kniss asked if Lytton Gardens was comprised of I through IV. Mr. Sultan replied yes. The retirement community and skilled nursing community were transferred to a separate corporation. 10. Direct Staff to Amend Budget Assumptions for Pension Benefit Costs and Complete the Workplans to Address the City Council Fiscal Year (FY) 2019 Adopted Budget Referral to Identify $4 Million in General Fund Savings. Ed Shikada, Assistant City Manager (ACM) recalled the Council direction for Staff to prepare a strategy to reduce City expenditures by $4 million. Kiely Nose, Administrative Services Department Acting Director and Chief Financial Officer reported the Finance Committee (Committee) vote was not unanimous as stated in the Staff Report. The Committee recommended Staff amend its budgeting process and assume a discount rate of 6.2 percent. The difference between the City's discount rate and the California Public Employees' Retirement System (CalPERS) discount rate was that it should be placed in the City's 115 Trust Fund. The Committee also recommended Staff proceed with a Strategic Action Plan to address fiscal year (FY) 2019 normal costs for pensions. The Item was then to return to the Council in November 2018 with suggestions for reducing expenses by $4 million without negatively impacting the organization. Staff had to determine the impacts of utilizing the Budget Stabilization Reserve (BSR) for the remaining funding gap. The Committee's discussion focused on methodically and proactively balancing the budget. Expense reductions were not supposed to negatively impact City resources and services. Revising the discount rate assumption added $4.4 million to General Fund costs in FY MINUTES Page 9 of 22 Sp. City Council Meeting Minutes: 10/29/18 2020 and increased Citywide pension expenses by approximately $7 million. With Council approval, Staff planned on utilizing a 6.2 percent discount rate to develop financial plans starting in FY 2020. An employer pension contribution rate of 6.2 percent for both the Unfunded Accrued Liability (UAL) and the normal costs resulted in total additional costs of $8.2 million. Additional budget considerations were Labor Contracts, the Stanford Fire Services contract, and various other contracts for services. The overall concern was not $4 million in FY 2019, but $16 million over a few years. Staff wanted to save for the future, fulfill City commitments to employee benefits, provide quality services to the community, attract and retain a skilled workforce, and handle rising costs for services. Immediate action items to achieve a $4-million savings in FY 2019 included a one-time savings from vacant positions, deferral of Capital Improvement Program (CIP) projects, and excess revenues. A potential timeline for immediate action items was Staff returning to the Committee in November or December 2018 with recommendations for $4 million in budget adjustments and Council action in January or February 2019. A Strategic Action Plan addressed competing priorities and would result in a review of all funds. A Strategic Action Plan, as a long-term, iterative tool for decision-making, established a common framework and vocabulary Citywide, providing a platform for engaging the community, the Council, and the City employees. Stakeholder engagement was projected to begin in early 2019, with Staff presenting a portfolio of services to the Committee in February or March, 2019. Council Member Scharff remarked that Staff presented the Committee with a short-term and a long-term approach to reducing expenses and requested six months to develop a plan for long-term, sustainable reductions. He expected Staff to present a one-time savings to the Committee in November or December, 2018 and assumed Staff would implement a 2 percent reduction across all departments if they did not present one-time savings. Ms. Nose clarified that Staff would return to the Committee with recommendations for a one-time savings in November or December, 2018. Bob Moss suggested the Council carefully consider the services that would be affected by potential personnel reductions. He questioned whether deferral of maintenance projects would cost more than continuing with maintenance projects. While a 2 percent reduction sounded insignificant, it was anticipated to have significant impacts. Council Member Fine requested the rationale for the $4 million amount. Ms. Nose explained that $4 million was half of the $8.2 million amount for pension contributions. MINUTES Page 10 of 22 Sp. City Council Meeting Minutes: 10/29/18 Council Member Fine asked if the remaining $4 million would be resolved in the following year. Council Member Scharff advised that it would depend on revenues. Council Member Fine inquired about the amount of the annual contribution to the 115 Trust Fund under the 6.2 percent rate. Ms. Nose indicated the Council had not approved an ongoing contribution to the 115 Trust Fund but approved annual contributions since FY 2017. With Council approval of the 6.2 percent rate, the annual contribution increased by $7 million for all funds. Council Member Fine asked if Staff could verify CalPERS' sensitivity analysis figures. Ms. Nose responded yes. Council Member Fine understood the basis for developing a long-term plan was to prevent a dependency on reserve funds for a balanced budget. If Staff was not able to identify $4 million in savings, then the Council would discuss options such as a 2 percent reduction across the organization. Council Member Tanaka noted labor negotiations, the Stanford University Fire contract and Service contracts increased structural costs. He asked if these costs had increased the approved budget by $4.7 million dollars. Ms. Nose explained that the costs were estimations rather than expenditures. Structurally, the cost estimations were included in the budget for FY 2020. Council Member Tanaka asked if the Council needed to find $4 million in FY 2019 and $4.7 million in FY 2020. The Committee was not aware of the costs for Labor Contracts, the Stanford University Fire Contract and various Service Contracts when they discussed reducing expenditures by $4 million. He wanted to understand whether the $4 million reduction returned the City to the approved budget or if it reduced the $8.7 million total cost. Ms. Nose articulated that Staff was attempting to do both. The purpose of the immediate action plan was to find savings so that they could be contributed to the 115 Trust Fund in FY 2019. The purpose of the Strategic Action Plan was to deal with the $4 million and to establish a work plan for the cumulative $16.4 million. Council Member Tanaka thought the Council should direct Staff to reduce expenses to the approved budget amounts overall. The Council needed to MINUTES Page 11 of 22 Sp. City Council Meeting Minutes: 10/29/18 stick to the approved budget. Staff had to present cost reductions whenever they presented the Council with new or additional expenditures. He encouraged his Colleagues to direct Staff to reduce the budget by the full $8.7 million amount rather than $4 million. With the economy signaling and the potential for a recession, the City had to increase Reserve Funds. Council Member Holman agreed that the Council should be allocating more money to Reserve Funds. The City ought not begin infrastructure projects at a more expensive time than the current one. She did not favor the use of Budget Amendment Ordinances (BAO) and felt Staff should utilize better estimates of costs. She suggested funding for environmental issues and the Human Services Resource Allocation Process (HSRAP) program not be reduced. Council Member DuBois requested clarification of Part B of the proposed Motion. Ms. Nose explained that the Council would direct Staff to embark on the Strategic Action Plan. Council Member DuBois asked if Part B could be rephrased as “direct Staff to return with strategic budget reductions according to the Action Plan.” Ms. Nose answered yes. Council Member DuBois inquired regarding the determination of 6.2 percent for the discount rate and the length of its use. Ms. Nose reported 6.2 percent was supplied by CalPERS' actuarial consultant. The 6.2 percent assumption remained in effect until the Council changed it. Council Member DuBois asked if the Committee discussed tying the discount rate assumption to another factor that changed over time. Ms. Nose clarified that Staff, at the Committee's direction, was developing a policy that could change with pension plan information. Council Member DuBois commented that a flexible policy based on the market would be logical. He asked if immediate actions would be solely a “one-time savings.” Ms. Nose indicated the Committee's recommendation was either a “one- time” or structural savings, but a mixture of “one-time” and structural savings was preferred. MINUTES Page 12 of 22 Sp. City Council Meeting Minutes: 10/29/18 Council Member DuBois asked if the timeframe for determining budget reductions would affect the amount of savings in the current Fiscal Year. Ms. Nose replied no. It was possible that there could be options available at the current time that were not available six months ago. Business decisions occurred weekly and monthly and had the potential of being adjusted weekly or monthly. Council Member DuBois suggested a Motion to direct Staff to return to the Council rather than the Committee for approval of budget changes. Council Member Holman asked if the proposed Motion directed Staff to return to the Council or the Committee. Ms. Nose responded the Committee. Mayor Kniss understood the urgency for implementing budget changes and said the recommendations were good. MOTION: Council Member Scharff moved, seconded by Vice Mayor Filseth to: A. Direct Staff, when they develop the next budget, to include the full normal cost for pension benefits in the budget assuming an equivalent of 6.2 percent discount rate, and transfer additional funding beyond CalPERS actuarial determined contribution levels to the 115 Trust Fund; B. Direct Staff to begin work and return with a strategic action plan according to Staff’s recommended Strategic Action workplan; and C. Direct Staff to return to the Finance Committee in November or December 2018 with short-term suggestions on reductions in the amount of $4 million that are not detrimental to the organization, CIP, or Infrastructure Plan and including what it would look like if the remaining gap was funded by the Budget Stabilization Reserve rather than an across-the-board cut to close the gap. Council Member Scharff believed the City needed to make short-term reductions without eliminating CIP projects or reducing funding for the Infrastructure Plan. The Committee had to vet Staff's proposals before presenting them to the Council. He interpreted the ACM’s comments as a promise that Staff would return to the Committee in November or December, 2018 and did not include an across-the-board reduction in the Motion. MINUTES Page 13 of 22 Sp. City Council Meeting Minutes: 10/29/18 Vice Mayor Filseth clarified that Staff would be increasing savings to fund the City's commitments. Not funding the normal costs of pensions was the same as borrowing funds at a 7 percent interest rate. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDED to add to the Motion Part C, “… from the 2019 Fiscal Year Budget in the amount of …” AMENDMENT: Council Member Tanaka moved, seconded by Council Member Holman to remove from the Motion, Part 3, “and including what it would look like if the remaining gap was funded by the Budget Stabilization Reserve rather than an across the board cut to close the gap.” Council Member Scharff supported the proposed Amendment in concept but wanted the Committee to vet Staff's proposals. He did not support funding the full $4 million with funds from the BSR. Council Member Tanaka stated the Council should direct Staff to find $4 million in savings without a possibility of using some funds from the BSR. Council Member Holman concurred with Council Member Tanaka's comments. Using BSR funds was not a responsible action. Council Member Fine asked if the Motion was intended to direct Staff to return with $4 million in savings or to have the Council institute an across- the-board reduction of 2 percent. Council Member Scharff clarified that Staff was to present the Committee with proposals to save $4 million or save close to $4 million with the impacts of filling the gap with funds from the BSR. The Committee was going to review the impacts of using funds from the BSR and determine whether to use BSR Funds, institute an across-the-board reduction or carry the gap forward. Council Member Fine noted some flexibility in that the Council could modify the percentage of reduction, apply a reduction to all or parts of the organization, or transfer funds from the BSR. Council consideration of all options was prudent. Mayor Kniss agreed with the Committee reviewing all options. Council Member DuBois inquired about the possibility of using BSR Funds if the amount of BSR Funds was above the maximum limit, within the range of limits or below the minimum limit. MINUTES Page 14 of 22 Sp. City Council Meeting Minutes: 10/29/18 Council Member Scharff did not support using BSR Funds if the amount of the Fund was within the range or below the minimum limit. There were reasons for not using BSR Funds if the amount was above the maximum limit. Council Member DuBois remarked that the Council typically reduced reserve funds when they exceeded their maximum limits. Mr. Shikada advised that the BSR was an important budget tool. The Council needed to provide Staff with as much flexibility as possible because they did not want to drain the BSR. Vice Mayor Filseth believed the Motion called for ongoing structural changes to the budget. Use of BSR Funds was not a structural change. He prioritized structural changes as being first, use of BSR funds as being second and carrying a funding gap as third. Council Member Tanaka remarked that the point of the item was to plan sustainable structural changes. Savings of $4 million needed to be found. If the Council wanted a better interest rate, they needed to allocate BSR funding to the Unfunded Pension Liability. AMENDMENT FAILED: 4-5 DuBois, Holman, Kou, Tanaka yes AMENDMENT: Council Member Tanaka moved, seconded by Council Member XX to produce a net reduction of $4 million, which would include approved increases. Council Member Tanaka wanted to find savings that were equal to the original $4 million amount, not forgetting any unbudgeted amounts for the Labor, Stanford University Fire and Service contracts. AMENDMENT FAILED DUE TO THE LACK OF A SECOND Council Member Tanaka reiterated his desire for Staff to present funding offsets at the time Staff recommended budget increases. Mayor Kniss asked if Council Member Tanaka intended to have Staff recommend savings for payment of the unexpected budget increases. Council Member Tanaka explained that Staff would present budget increases to the Council, including recommendations that offset increases. Council Member Scharff asked if Staff could realistically present budget increases and offsets. MINUTES Page 15 of 22 Sp. City Council Meeting Minutes: 10/29/18 Mr. Shikada advised that such a proposal dramatically changed the way Council conducted business. He suggested the proposal be part of Staff's strategic actions. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion a new Part D, “Direct Staff to send to the Finance Committee the exploration of the concept of when Staff proposes something above the budget plan, offsets would also be suggested.” Council Member Holman suggested Staff also include budget impacts and funding sources of the budget increases. Ms. Nose explained that any budget increase had to be balanced with an offset, which was according to City policy. Sometimes the offset utilized Reserve Funds. Council Member Holman noted the Staff Report for budget increases did not indicate: the use of Reserve Funds, the remaining Reserve Fund balance or the new target level of the Reserve Fund. Ms. Nose reported those pieces of information were a regular part of the Staff Report. Council Member Holman suggested a ranking of infrastructure projects so that Council was able to better consider options. Council Member Scharff remarked that the CIP was a priority. Council Member Holman explained that a prioritization allowed Council to determine which projects could be deferred. Vice Mayor Filseth remarked that the Agenda Item pertained to operating expenses, not capital expenses. Ms. Stump cautioned Council Members to limit their comments to the Agenda Item, which was $4 million in savings. Council Member Holman related that Part C of the Motion referred to the CIP and Infrastructure Plan. Mr. Shikada interpreted Part C as directing Staff to hold the CIP and Infrastructure Plan constant, while Council Member Holman was proposing a change to the CIP. MINUTES Page 16 of 22 Sp. City Council Meeting Minutes: 10/29/18 Ms. Stump added that Part C referred to the CIP and Infrastructure Plan as being excluded from consideration. Council Member Holman reiterated prioritizing projects as a way to find cost savings. AMENDMENT: Council Member Holman moved, seconded by Council Member Tanaka to direct Staff to return to the Finance Committee with options for prioritization of infrastructure projects related to the budget savings. Council Member Tanaka wanted to determine which infrastructure projects were important because of the limited funding. Mayor Kniss understood the Committee prioritized infrastructure projects. Council Member Tanaka remarked that, as a member of the Committee, he had not seen a prioritization of projects. Council Member Scharff stated the Finance Committee and Council prioritized infrastructure projects; Council approved them and was proceeding with the Infrastructure Plan. Council Member Tanaka remarked that the list of infrastructure projects continued to grow but the list would never include all infrastructure projects. Council Member Scharff believed Council Member Tanaka was confusing CIP with the Infrastructure Plan. Council Member Fine emphasized the need for a long-term effort to address pension obligations. The Amendment did not pertain to the Agenda Item. Council Member Kou supported the Amendment because the Council did not review funding as part of approving Infrastructure Plan projects. AMENDMENT FAILED: 3-6 Holman, Kou, Tanaka yes MOTION AS AMENDED RESTATED: Council Member Scharff moved, seconded by Vice Mayor Filseth to: A. Direct Staff, when they develop the next budget, to include the full normal cost for pension benefits in the budget assuming an equivalent of 6.2 percent discount rate and transfer additional funding beyond CalPERS actuarial determined contribution levels to the 115 Trust Fund; MINUTES Page 17 of 22 Sp. City Council Meeting Minutes: 10/29/18 B. Direct Staff to begin work and return with a strategic action plan according to staff’s recommended Strategic Action workplan; C. Direct Staff to return to Finance Committee in November or December 2018 with short term suggestions on reductions from the 2019 Fiscal Year Budget in the amount of $4 million that are not detrimental to the organization, or our CIP or infrastructure plan, and including what it would look like if the remaining gap was funded by the Budget Stabilization Reserve rather than an across the board cut to close the gap; and D. Direct Staff to send to the Finance Committee the exploration of the concept of when Staff proposes something above the budget plan, offsets would also be suggested. MOTION AS AMENDED PASSED: 8-1 Tanaka no Mayor Kniss inquired about the date Staff would present recommendations to the Committee. Mr. Shikada answered November 28, 2018. 11. Adoption of an Ordinance Amending the Municipal Code and Adoption of Amendments to Council Procedures and Protocols to Conform to a Seven-Member Council; Discussion and Direction to Staff or Referral to the Policy and Services Committee of Additional Discretionary Changes to the Code and/or Council Procedures and Protocols. Molly Stump, City Attorney reported that the effective date for the proposed Ordinance and for proposed changes to the Council Procedures and Protocols should be January 1, 2019. The attachment to the At-Places Memo focused on proposed changes to Council Procedures and Protocols, but the full document was available on the City Clerk's webpage. The recommendation was to have the Council take action regarding changes to the structure of Council Committees for seven Council Members. The Council was able to discuss and refer, or to not discuss topics such as thresholds for removing items from the Consent Calendar. The Policy and Services Committee (Committee) drafted a series of changes to the Council Procedures and Protocols, which could be reviewed in conjunction with other changes referred by the Council. Ed Shikada, Assistant City Manager (ACM) remarked that Council Procedures and Protocols provided the public with ways to engage with the Council. Staff wanted the opportunity to review the organization of the document. MINUTES Page 18 of 22 Sp. City Council Meeting Minutes: 10/29/18 Winter Dellenbach suggested the Council allow members of the public to speak for three minutes routinely, two minutes occasionally, and one minute never. In addition, every member of the public needed to be allowed to address the Council. MOTION: Council Member Scharff moved, seconded by Mayor Kniss to: A. Amend the Municipal Code and Council Procedures and Protocols to conform to a seven-member Council: i. Adopt on first reading an Ordinance amending Municipal Code section 2.04.190 to reduce number of Council Members on Finance and Policy and Services from four to three and Section 12.10.060 to change the votes required to resolve a certain type of appeal from five to a majority; ii. Amend the Council Procedures and Protocols to reduce four to three the number of Council Members who may sign a Colleagues’ Memo and who may serve on an Ad Hoc Committee; and B. Refer to Policy and Services additional discretionary changes to the Municipal Code and/or Procedures and Protocols. Council Member Scharff believed the Committee should review Council Procedures and Protocols in-depth in 2019 with the new Council Members. The Council needed allow the Committee to perform the review, and not rehash all the provisions when the Committee had already made recommendations to the full Council. With a smaller Council, referrals from Council Committees had the potential of not being efficient and not being as numerous in the future. The Committee needed to review the Council Procedures and Protocols without specific direction from the Council. Council Member Holman referred to her numerous requests for the Committee to review the Council Procedures and Protocols as stated in the Council Procedures and Protocols. AMENDMENT: Council Member Holman moved, seconded by Council Member Kou to require two City Council members to remove an item from the Consent Calendar. Council Member Holman felt a threshold of three Council Members would be remarkably high for a Council composed of seven Council Members. Council Member Kou concurred. MINUTES Page 19 of 22 Sp. City Council Meeting Minutes: 10/29/18 Mayor Kniss noted the threshold could be changed easily. Council Member DuBois explained that the Committee's review of the Council Procedures and Protocols could require some time; therefore, the new Council could be seated for quite some time before the Committee's recommendations were presented to it for action. The Amendment maintained the percentage of Council Members required to remove an item from the Consent Calendar. Council Member Wolbach suggested Council Members email a list of their proposed revisions to Staff instead of amending the Motion. Staff was able provide the lists, along with the Staff Report to the Committee. The Committee then reviewed the Council Procedures and Protocols prior to the end of the year. Council Member DuBois understood the Committee would not review the document in 2018. Mr. Shikada advised that the Item was scheduled to go to Committee in November, 2018. However, the length of the Committee review was unknown. Council Member Wolbach thought Council Member Holman should withdraw her Amendment. Council Member Holman explained her Amendment affected the function and threshold of the Council and said Committee recommendation dates were unknown. Council Member Wolbach was concerned about being efficient when sharing Council comments with the Committee. Council Member Fine opposed the Amendment. Council Member Scharff felt the Committee should review the procedures utilized by other cities with seven Council members. He asked if the Amendment would change the proposed Ordinance or the Council Procedures and Protocols. Ms. Stump said Amendments could change the Ordinance or the Council Procedures and Protocols. Council Member Scharff did not support the Amendment. Council Member Kou suggested the threshold should be changed at the current time, having the Committee review it in the future. MINUTES Page 20 of 22 Sp. City Council Meeting Minutes: 10/29/18 Mayor Kniss recommended the Motion be approved as the Committee recommendations could be presented to the Council in December, 2018. AMENDMENT FAILED: 4-4-1 DuBois, Holman, Kou, Tanaka yes, Wolbach abstain Council Member Holman preferred members of the public be allowed to speak for more than a minute. It was not good for the Council to consider proposals that were submitted at the last minute. The Committee needed to consider: 1) applying the Council Procedures and Protocols to Boards and Commissions; 2) allowing Council Members to address their no votes on the Consent Calendar prior to the vote; 3) clarifying the purpose and process for Study Sessions; and 4) clarifying the roles of the Mayor and Vice Mayor. The Council Procedures and Protocols were intended to enhance public participation and to improve the Council's performance. Council Member DuBois inquired whether Section 12.10.060 or Section 2.10.060 was correct. Ms. Stump replied Section 2.10.060. Council Member DuBois asked if a majority vote meant the majority of Council Members present or a majority of the full Council. Ms. Stump interpreted a majority vote as a majority of Council seats. Under provisions of the City Charter, adopting an Ordinance or Resolution, approving a contract, and hiring or firing a Council-Appointed Officer (CAO) with the exception of the City Manager required a majority vote of the Council. Other actions were taken by a majority of the number of Council Members present. Council Member DuBois noted the Council reviewed their Procedures and Protocols in 2015 and 2016 but perhaps the Council was able to return to an annual review at the beginning of each year. Ms. Stump clarified that the correct section was Section 12.10.060. Council Member Fine suggested the Committee consider changing the process for dialing into meetings and voting, folding the Rail Committee into the Council, and instituting time limits for the public and Council Members. He inquired about the process for selecting local and regional bodies on which Council Members serve. Mr. Shikada did not believe a process existed, but suggested the Committee discuss such a process. MINUTES Page 21 of 22 Sp. City Council Meeting Minutes: 10/29/18 Council Member Scharff recalled that the Mayor usually selected the local and regional bodies. Mayor Kniss asked if the Council could create an Ad Hoc Committee composed of four Council Members. Ms. Stump replied no. For the Rail Committee, the Mayor should select Council Members who did not have substantial conflicts of interest. An exception existed for situations where the Council could not act because of the number of Council Members with conflicts of interest. Mayor Kniss recalled only one instance in 2018 of granting one minute for members of the public to address the Council. The responsibility of the Mayor and Vice Mayor was to manage the length of Council meetings. MOTION PASSED: 9-0 State/Federal Legislation Update/Action Mayor Kniss noted State Legislators Marc Berman, Jerry Hill and Supervisor Joe Simitian would be present for Study Sessions in the next few weeks. She inquired whether the City's federal lobbyist would be present for a Council meeting in the next two months. Ed Shikada, Assistant City Manager promised to provide information at a later time. Council Member Questions, Comments and Announcements Council Member Kou reported the Teen Advisory Board was holding a fall carnival on November 2, 2018. The 24th annual California Avenue Halloween event was held on Sunday. Council Member Fine advised that the Santa Clara Valley Water Commission received a presentation regarding steelhead trout and requested the Santa Clara Valley Water District explore policies and investments to support steelhead trout populations in the future. Council Member Wolbach indicated Council Member Fine and he attended a service for the shooting in Pittsburgh the prior evening. Council Member Holman related her attendance at a talk regarding redwood forest management in Santa Cruz County. MINUTES Page 22 of 22 Sp. City Council Meeting Minutes: 10/29/18 Council Member Scharff had attended a meeting of the San Francisquito Creek Joint Powers Authority (JPA). The Friendship Bridge was scheduled to open in December, 2018. Mayor Kniss shared highlights of her trip to Sister City Oaxaca. Additionally, Albi, France expressed interest in dissolving their Sister City relationship with Palo Alto. Adjournment: The meeting was adjourned at 10:54 P.M. in remembrance of those who lost their lives and the families left behind in the senseless shooting in Pittsburgh.