Loading...
HomeMy WebLinkAbout2018-11-19 City Council Summary MinutesCITY OF PALO ALTO CITY COUNCIL MINUTES Page 1 of 18 Special Meeting November 19, 2018 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:06 P.M. Present: DuBois, Filseth; Holman arrived at 5:11 P.M., Kniss, Kou, Scharff, Tanaka; Wolbach arrived at 5:09 P.M. Absent: Fine 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, Kiely Nose, Rumi Portillo, Sandra Blanch, Nicholas Raisch, Tori Anthony, Molly Stump, Terence Howzell, and Michelle Flaherty) Employee Organizations: Service Employees International Union, (SEIU), Local 521 Authority: Government Code Section 54957.6(a). 1A. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Government Code Section 54956.9(d)(2) and (e)(1) Four Potential Cases. MOTION: Vice Mayor Filseth moved, seconded by Council Member Scharff to go into Closed Session. MOTION PASSED: 6-0 Fine, Holman, Wolbach absent Council went into Closed Session at 5:07 P.M. Council returned from Closed Session at 8:12 P.M. Mayor Kniss announced no reportable action. Council Member Scharff suggested the Council hear Oral Communications prior to the Study Session because of the number of people present for the meeting. MINUTES Page 2 of 18 City Council Meeting Minutes: 11/19/18 Beth Minor, City Clerk, advised that she had six speaker cards for Oral Communications. MOTION: Council Member Scharff moved, seconded by Vice Mayor Filseth to hear Oral Communications before Agenda Item Number 2 - Study Session Regarding Recycled Water … MOTION PASSED: 8-0 Fine absent Oral Communications David Levinson shared his history with the Rinconada Masters swim team and the health benefits of swimming regularly. The Council would determine the future of Rinconada Masters. He hoped the Council would prevent the destruction of Rinconada Masters. Rita Vrhel announced that the Downtown Streets Team would host its annual Thanksgiving dinner for the community. The Downtown Streets Team needed food items for the meal. She expressed disappointment with the Council's approval of funding the California Avenue garage with a bond because it would increase the cost of each parking space to $110,000 over the period of the bond. Council Member Holman requested details of food donations to the Downtown Streets Team. Ms. Vrhel advised that needed items could be found on the website. Donations should be made on or before Wednesday at 10:00 a.m. at the church located on the corner of Waverley and Hamilton. Linda Fletcher expressed frustration with Team Sheeper's management of Rinconada Pool. Pool closures had increased; lane availability had decreased; and communications were poor. She asked the Council to meet with and listen to Palo Alto swimmers. Wendy Parry related her experiences with the Swim for Fitness program. The Rinconada Masters program was a large part of the community. David Entwistle, Stanford Health Care CEO and President, thanked the Council, residents, and Stanford Health Care employees for opposing Measure F. Without the City's support, the defeat of Measure F would not have been possible. Liz Vilardo, Palo Alto Medical Foundation CEO, appreciated the Council's support in opposing Measure F. MINUTES Page 3 of 18 City Council Meeting Minutes: 11/19/18 Dr. Christopher Joy, Midpeninsula Dental Society President, thanked the Council for unanimously supporting access to healthcare. Bruce Anderson remarked regarding City Staff's comments and rumors about Team Sheeper's Masters program. He wanted to read the proposed contract between the City and Team Sheeper. Alan Lee indicated having a former Olympic swimmer coach a Masters swim team was rare and special. Rinconada Masters provided a service to the community. Rinconada Masters did not receive timely notice of Team Sheeper not renewing the contract. He requested the contract be extended for a year. Carol MacPherson shared her history of building the Rinconada Masters program. Team Sheeper wanted to take her team and her livelihood. She was disappointed with the handling of the matter and the way she was being treated. Chris Kanazawa stated Rinconada Masters had worked hard to comply with its contract with Team Sheeper. Rinconada Masters was not asked to provide feedback regarding its experiences with Team Sheeper. Rinconada Masters made a proposal that addressed lifeguard coverage and lane fees; however, Team Sheeper did not want to consider the proposal. Team Sheeper having its own Masters program rather than renting lanes to Rinconada Masters appeared to be a conflict of interest. Oleg Milman appreciated the training, competition, and sense of community provided by Rinconada Masters. Rinconada Masters welcomed all participants. Edie Gelles reported that Rinconada Masters paid the City $15,000-$20,000 annually for use of Rinconada Pool prior to the contract with Team Sheeper. In 2018, Rinconada Masters would pay Team Sheeper almost $50,000 while the City would apparently receive approximately $500 of the $50,000. Carol MacPherson deserved respect and deference for having created, built, and sustained Rinconada Masters. Ann Protter did not understand why the issues between Rinconada Masters and Team Sheeper were not addressed months ago. Team Sheeper had proposed an annual fee that would have a big impact on a lot of people. Timothy Groves indicated the Request for Proposals was crafted in such a way that only one potential contractor could respond. Not all stakeholders were engaged in the process. Contract negotiations were conducted with little transparency. He recommended the Council not ratify the contract with Team Sheeper but continue the existing contracts for another year. MINUTES Page 4 of 18 City Council Meeting Minutes: 11/19/18 Terri Baxter-Smith remarked that it made no sense to replace an accomplished swim coach and a successful program with a program that did not have the history, accolades, and community roots of Rinconada Masters. Meetings with City Staff left representatives of Rinconada Masters feeling hopeless. Mr. Sheeper did not feel Ms. MacPherson was company material. She requested the Council continue the contract with Rinconada Masters. Council Member Kou requested the City Manager's Office provide the Council with a report regarding the situation with Team Sheeper and Rinconada Masters. Ed Shikada, Assistant City Manager, advised that the proposed contract between the City and Team Sheeper had been agendized for the next Council meeting. Council Member Kou asked if the item was a public hearing. Mr. Shikada reported Staff agendized an action item; therefore, the Council could take testimony regarding the proposed contract. Study Session 2. Study Session Regarding Recycled Water Expansion and Other Water Reuse Opportunities. Brad Eggleston, Public Works Acting Director, reported Staff would discuss next steps for Palo Alto's recycled water program; decisions that could impact recycled water in other areas of the Regional Water Quality Control Plant (RWQCP) service territory; and key concepts and issues relevant to potential actions. Karla Dailey, Senior Resource Planner, advised that Public Works and Utilities Staff had been working collaboratively with the Santa Clara Valley Water District (Water District). The purpose of the Study Session was to provide information and gather feedback regarding local water reuse opportunities and local use of recycled water versus a transfer to the Water District. Palo Alto's potable water supply was obtained from the San Francisco Public Utilities Commission (SFPUC). Recycled water was used at some City facilities. The City had eight emergency water wells. Recycled water activities were consistent with the City's sustainability goals. Water reuse fell into several broad categories with numerous projects in each category. Staff was working with the Water District to develop the Northwest County Recycled Water Strategic Plan, which would determine the best use of water from the RWQCP for the service territory. Non-potable reuse utilized recycled water for landscape irrigation, toilet flushing, and industrial processes. Indirect potable MINUTES Page 5 of 18 City Council Meeting Minutes: 11/19/18 reuse involved purifying RWQCP water to drinking-water quality, introducing it into an environmental buffer, and then distributing it for potable reuse. Direct potable reuse involved purifying recycled water and distributing it for potable reuse. Satellite non-potable reuse involved siting a treatment plant near the water source. Because Staff found satellite non-potable reuse to be economically infeasible, they were no longer considering it. Google and Microsoft were planning facility onsite reuse projects for their campuses. Under regional transfer, the City would transfer water from the RWQCP to the Water District for use in other parts of the county. Council Member Holman did not understand why the City would consider providing recycled water to Stanford Research Park when Stanford Research Park had stated it did not want the water. Ms. Dailey explained that the Council had not made a decision regarding the Phase III pipeline. Providing water to Stanford Research Park was one possible project in the category of non-potable reuse. Staff was evaluating the project against other possible uses of recycled water. It was the best project for non-potable reuse. The Environmental Impact Report (EIR) addressed Stanford Real Estate's concerns. If a pipeline was constructed to Stanford Research Park, it could serve the landscape needs in the area. If the objective was to reduce the City's dependence on imported water, potable reuse options were the best means to achieve the objective. Phil Bobel, Public Works Assistant Director, clarified that Ms. Dailey presented the effects of reuse options on Palo Alto. He would present the effects on the six partners in the RWQCP. A potential agreement with the Water District would address enhanced recycled water and a regional transfer of water. Enhanced recycled water was recycled water with a lower level of salinity than typical recycled water. A small enhanced recycled water facility (ERWF) would be needed to upgrade the quality of the recycled water and could be located at the RWQCP. Enhanced recycled water would be used in Palo Alto and Mountain View initially. Water that was not needed for local use could be transferred to the Water District for use south of Mountain View. Staff had calculated that approximately half of the treated water from the RWQCP could be transferred to the Water District. A regional transfer could require either pipeline infrastructure or construction of a purification facility at the RWQCP or at the terminus of the pipeline. With a regional transfer, less water would be discharged to the Bay. Staff had developed a preliminary design for an ERWF located at the RWQCP. Staff believed a purification facility could be located on the Measure E site and would cover approximately half of the site. In 2021, the Council could dedicate the Measure E site as parkland or seek voter approval of a purification facility on the site. The advantages of a regional transfer included compensation for the City, a reduction in the MINUTES Page 6 of 18 City Council Meeting Minutes: 11/19/18 RWQCP's discharge to the Bay, and assistance with fulfilling countywide water needs. The disadvantages of a regional transfer included the significant amount of water not available for City use over the length of the contract and funding for the ERWF being tied to a regional transfer. Questions for consideration were the term of the contract in light of the uncertainty around the availability of the imported water supply; the amount of the compensation for a water transfer; and the location of the purification plant on the Measure E site. The compensation per acre foot should not be compared to the fees per acre foot charged by SFPUC or the Water District because the water transferred to the Water District would require considerable treatment to reach the quality of water provided by SFPUC and the Water District. If the purification plant was located in Palo Alto and if the City needed additional water in the future, the City could likely reach an agreement with the Water District to use some of the water from the purification plant. The City would not be able to transfer water from a purification plant located in another city to the City. Additional questions for consideration should the City agree to a regional transfer were the pursuit of non-potable or potable projects to meet a potential increase in demand for water; the community's acceptance of purified water as a direct potable reuse project; and the community's acceptance of groundwater as a future potable water supply. Staff would return to the Council in early 2019 with an analysis of the various water reuse categories, the Northwest County Recycled Water Strategic Plan, and an agreement with the Water District. Garth Hall, Santa Clara Valley Water District, stated reducing the salinity of recycled water would benefit the horticultural aspects of recycled water. Making the water palatable to the endpoint consumers was essential. The Water District supported the concept of reducing the salinity level of recycled water. The water supply had to be diversified in the future because imported water alone could not serve the demand for water beyond 2040. Recycled water fulfilled sustainability goals. The Water District had collaborated with the City regarding water conservation, environmental efforts, and flood prevention and would work collaboratively regarding recycled water. The Water District supported the feasibility study of an ERWF and had worked with Staff to update the City's 1992 Recycled Water Master Plan. The Water District supported the ERWF in conjunction with a regional transfer and respected the City's concerns regarding the amount of water that could be transferred to the Water District. The Water District would continue to work with City Staff in negotiating a contract. Mr. Bobel related that the City of Mountain View is the largest partner in the RWQCP and the largest consumer of recycled water. MINUTES Page 7 of 18 City Council Meeting Minutes: 11/19/18 Gregg Hosfeldt, City of Mountain View Assistant Public Works Director, reported that the City of Mountain View operated a recycled water system in the North Bayshore area and utilized approximately 400,000 gallons per day of recycled water. The largest obstacle to expanding the recycled water system and use of recycled water was water quality. Advanced treatment of recycled water was the highest priority. Because progress in reducing salinity had been limited, the City of Mountain View believed advanced treatment was the best option for meeting salinity reduction goals. The City of Mountain View had participated in negotiating an agreement with the Water District and supported the effort. The use of water for indirect potable reuse projects would benefit the region, supported Mountain View's sustainability goals, and was a long-term step in addressing water supply issues in the area. Pat Burt remarked that reducing the City's reliance on distant and vulnerable water supplies made the City more sustainable and self-reliant. An ERWF would be one of the first plants anywhere to use 100-percent carbon-free electricity. The cost of enhanced recycled water would be lower because of the City's lower electricity costs. The capital costs of an agreement with the Water District were dependent on the compensation for water conveyance fees that ratepayers paid each year. Peter Drekmeier emphasized that advanced purified water was the future of water. In most communities, it would be an improvement over existing tap water. The problem with purple pipe water was the need for additional water lines and dual plumbing. The City needed to be prepared for direct potable reuse. Dave Warner suggested addressing the questions raised by Staff would be easier if the City had clearer overall goals regarding the water supply and a strategy to achieve those goals. In his opinion, most Palo Alto residents would drink recycled wastewater, particularly if they knew the environmental benefits of drinking recycled wastewater. Keith Bennett, Save Palo Alto's Groundwater, commented that water would become more important as the population grew and climate change continued. He favored direct potable reuse and a plan that segmented potable and non- potable water uses. He encouraged the Council to consider the use and management of groundwater and the use of the shallow aquifer levels for distribution. Rita Vrhel felt groundwater could be utilized as an emergency water supply for fire suppression. Prohibiting the irrigation of grass strips located between the sidewalk and the street could reduce water consumption by 15 percent, and the City and Mountain View should implement this prohibition. MINUTES Page 8 of 18 City Council Meeting Minutes: 11/19/18 Arthur Keller, speaking as an individual, questioned whether water from a purification facility rather than an ERWF could be used for irrigation; whether the water could be used as an emergency water supply, perhaps through indirect reuse; whether the reduction of effluent from San Francisco Bay would be an appropriate mitigation for tidal flood protection levees; whether the Water District would be willing to pay the full cost of tidal flood protection for Palo Alto to protect the purification plant; and whether the Water District would be willing to act as a backup water supply for Palo Alto. To recharge groundwater, water could not be discharged near the Bay; therefore, a pipeline would be necessary. Council Member DuBois advised that he served as Vice Chair of the Joint Recycled Water Advisory Committee. The Council needed to provide policy direction for contract negotiations. Much of the discussion had focused on the Water District funding the ERWF and purification plant in exchange for a regional transfer. Key issues were differences in long-range forecasts for recycled water use, the value or price of water transferred to the Water District, costs and location of the purification plant, and tax revenues paid to the Water District. Locating the purification plant in Palo Alto would benefit the City in future years. The City should focus on potable recycled water as it would be best for the City in the long term. The Council should analyze ways to locate the purification plant in Palo Alto. He preferred shared ownership of the purification plant and water rights reverting to the RWQCP over time. In 20 or 30 years, wastewater could be quite valuable. Council Member Holman inquired whether Staff would present recycled water to the Utilities Advisory Commission (UAC). Ms. Dailey advised that Staff discussed local water use alternatives with the UAC and mentioned the possibility of a regional transfer. Staff would present the Northwest County Recycled Water Strategic Plan and an analysis of local options versus a regional transfer to the UAC before presenting them to the Council. Council Member Holman requested the rationale for Staff scheduling a Study Session rather than an Action Item. Mr. Bobel explained that the Study Session was agendized prior to the negotiations progressing, and Staff decided to use the Study Session to present information and discuss the details of a potential agreement. Staff preferred allowing the Council to discuss and think about the information before making a recommendation to Council. Water reuse is a new concept for the Council, and it has long-term ramifications. MINUTES Page 9 of 18 City Council Meeting Minutes: 11/19/18 Council Member Holman asked if the 16.57 million gallons per day from SFPUC included the water transfer to East Palo Alto. Ms. Dailey replied yes. Council Member Holman expressed concern that the Staff Report did not mention the use of the Measure E site for a facility. Mr. Bobel believed Staff should have included the possibility in the Staff Report. Council Member Holman concurred with Council Member DuBois' comments. She requested clarification of Options 1 and 4 of the AWPS facility site location. Mr. Bobel clarified that the only sites large enough to accommodate the purification plant or regional transfer facility were Options 4 and 5. Options 1-3 pertained to the ERWF. Ms. Dailey added that the map was prepared for the feasibility study. Staff had identified Option 1 as the best location for the ERWF and Option 4 as the best location for the purification plant. Construction on the Option 5 site was not feasible due to unstable soil on the site. Council Member Holman remarked that the purple pipe project was probably not the best use of funds. Residents would be interested in leveraging tax revenues paid to the Water District. She expressed concern about the City's ten-year forecast in relation to a potential 40-year agreement. The contract should contain an escalating compensation rate for the regional transfer. Mr. Bobel disclosed that Staff would negotiate an escalating rate because virtually all City agreements contained escalators associated with the Consumer Price Index (CPI). Council Member Holman suggested there could be a factor other than the CPI. Staff should engage the community regarding the use of recycled water and the Measure E site. Council Member Wolbach agreed that recycled water was the future. Ensured access to water was a paramount concern. The Council had to guarantee that the local community would have dependable access to safe drinking water into the future. The City should continue to share water with regional partners, but committing to transfer water to all parts of the county for 40 years at low rates was questionable. He favored stronger guarantees and negotiating the price. The City could walk away from the deal and find other ways to fund recycled water projects. Direct potable reuse made more sense than indirect MINUTES Page 10 of 18 City Council Meeting Minutes: 11/19/18 potable reuse because of the potential for water to acquire contaminants from the ground through indirect potable reuse. Recharging the groundwater with non-potable water could provide water storage for irrigation and toilet-flushing uses. Use of recycled water would reduce the City's need for imported water and benefit the environment. Vice Mayor Filseth inquired about the City's annual cost for water from SFPUC. Ms. Dailey responded about $20 million a year based on a cost of $2,000 per acre foot. Vice Mayor Filseth concurred with concerns regarding a 40-year contract term. Council Member Scharff felt the future was direct potable reuse. He inquired whether the City's cost for an ERWF would be $1-$4 million with the Water District's contribution. Mr. Bobel advised that Staff believed the Water District should pay 80 percent of the cost rather than 50 percent. The City's cost would be closer to $1 million. Council Member Scharff asked if the City would utilize more recycled water if the salinity level was lower. Mr. Bobel reported the salinity level had not been an issue for the City, but it would be an issue for an expansion into Stanford Research Park. Council Member Scharff inquired regarding the City's ability to expand into areas other than the Stanford Research Park if the salinity level of recycled water was not an issue. Mr. Bobel explained that Staff explored the number of potential consumers of recycled water and the amounts they would consume and found that Stanford Research Park could provide a substantial number of users who would make an expansion project efficient and viable. Council Member Scharff agreed that direct potable reuse would be better than indirect potable reuse. He questioned whether constructing an ERWF would be a waste of money. Mr. Bobel clarified that funds would not be wasted because a distribution system and demand for enhanced recycled water currently existed. A supply of enhanced recycled water was needed. The Phase III project would require construction of a distribution system. The financial investment to improve the water quality for the current system would be quite small. MINUTES Page 11 of 18 City Council Meeting Minutes: 11/19/18 Vice Mayor Filseth understood the primary application of enhanced recycled water in Mountain View would be corporate landscaping. Mr. Bobel added Mountain View's golf course and the shoreline irrigation system, both of which were large areas and certainly larger than a single corporate landscape. Vice Mayor Filseth commented that the economics seemed tenuous, and the applications would be eliminated under drought restrictions. He asked if non- potable projects would move the City closer to potable solutions. Council Member Scharff questioned whether construction of an ERWF would constrain direct potable reuse projects. Mr. Bobel advised that, if the City eliminated its purple pipe system and constructed an ERWF, the cost of treating water to drinking standards would decrease because the ERWF would have already removed much of the salt. Council Member Scharff clarified that an ERWF could be a first step toward direct potable reuse. Mr. Bobel concurred. Council Member Scharff asked if enhanced recycled water would be split 75 percent to Mountain View and 25 percent to Palo Alto. Mr. Bobel reported that was the current projection of use in five years' time and was greater than the current use of enhanced recycled water. Council Member Scharff inquired whether a long-term contract with the Water District would affect the City's direct potable reuse projects. Staff appeared to be supporting construction of an ERWF. Mr. Bobel recalled the Water District's support for an ERWF. Enhanced recycled water could be used in the existing recycled water system and could supply a potable system. Council Member Scharff supported the City proceeding toward direct potable reuse but did not support a contract with a 40-year term. He was interested in Staff preparing a cost analysis of the RWQCP partners constructing a purification plant without Water District participation. Ms. Dailey disclosed that the Northwest County Recycled Water Strategic Plan was reviewing that as a reuse alternative with the water being supplied to the RWQCP service territory. Regulations for direct potable reuse had not been drafted; therefore, direct potable reuse was a longer-term solution. MINUTES Page 12 of 18 City Council Meeting Minutes: 11/19/18 Council Member Scharff commented that the City could advocate with its representatives. Ms. Dailey indicated direct potable reuse would likely not occur in the next five years. Council Member Scharff believed an ERWF could be constructed in the next five years. Ms. Dailey suggested an ERWF could be completed in one or two years. Mr. Bobel advised that Staff was prepared to begin design of an ERWF. Design could be complete in a year and construction in two years. Council Member Scharff felt the $1 million cost was too low. The Council should carefully consider partnering with the Water District because the value of water would increase. As climate change continued, direct potable reuse would become acceptable. He encouraged Staff to continue negotiations with the Water District and to construct an ERWF as soon as possible. Council Member Kou inquired whether an ERWF would be needed if a purification plant was built. Mr. Bobel explained that the ERWF could be built sooner than the purification plant and would fulfill the existing demand for higher-quality water. An ERWF and a purification plant were not mutually exclusive. Council Member Kou asked if an ERWF could produce sufficient water to supply other cities in the future. Mr. Bobel replied no. An ERWF would be large enough to supply water to the RWQCP partners, who were Palo Alto, Mountain View, Los Altos, Stanford University, East Palo Alto Sanitary District, and Los Altos Hills. Only the Cities of Palo Alto and Mountain View had expressed interest in obtaining recycled water in the near term. Council Member Kou requested clarification of the location of the purification plant on the Measure E site. Mr. Bobel explained that the purification plant would be located on a portion of the Measure E site. The plant would not cover the entire Measure E site. Staff would prepare a better map showing the locations of the RWQCP, the proposed ERWF, and the Measure E site with purification plant. MINUTES Page 13 of 18 City Council Meeting Minutes: 11/19/18 Council Member Kou indicated Staff should investigate the value of water when negotiating the price of water under the contract and the value of water pumped from the ground during construction. Council Member Tanaka inquired whether recycled water could be utilized for the Palo Alto golf course. Mr. Bobel answered yes. Council Member Tanaka liked the idea of recharging Lake Lagunitas, but the practicality of such a project was unknown. Direct potable reuse was more logical than indirect potable reuse. He asked if the $1-$2 million stated in the Staff Report was the City's share of an ERWF under the 50-percent proposal or the 80-90-percent proposal. Mr. Bobel advised that Palo Alto property owners paid $1-$2 million in taxes to the Water District. The amount did not relate to the cost of an ERWF. Ms. Dailey clarified that Palo Alto property owners paid $1-$2 million annually to the Water District under the State Water Project Tax. Council Member Tanaka inquired whether the City of Palo Alto and the City of Mountain View would split the cost of $16 million to build an ERWF. Mr. Bobel responded yes. Palo Alto would pay approximately $1 million of the $16 million cost, assuming the Water District paid 80 percent of the cost. Council Member Tanaka agreed that the Water District should provide 80 percent of the funding. He inquired about the source of $88 million to rehabilitate the 50-year old treatment center over the next 5-10 years. Mr. Bobel explained that the RWQCP would need rebuilding over the next 5- 10 years, and the total cost estimate for four rehabilitation projects was $88 million. The rehabilitation was needed so that the RWQCP could produce water for transfer to the Water District. The cost of refurbishing the RWQCP should be considered in the discussion of recycled water and a regional transfer. Council Member Tanaka recalled Mr. Bobel's statement about the cost of water under the contract not being comparable to the cost of water from SFPUC and the Water District. He requested a current market price for the quality of water that would be transferred to the Water District. Mr. Bobel reported Staff could not find any sales of water of comparable quality. Agencies were not selling water of the same quality. MINUTES Page 14 of 18 City Council Meeting Minutes: 11/19/18 Council Member Tanaka wanted the contract to contain an option to terminate the contract. The proposed price of $100 per acre foot seemed low. Mr. Bobel related that proposed terms of the contract included an option to terminate before the 40-year term began and after the 40-year term expired. Mayor Kniss asked if San Jose was utilizing recycled water and, if so, the applications of recycled water. Mr. Hall indicated the City of San Jose obtained recycled water from the South Bay Water Recycling System. Ms. Dailey added that San Jose's uses were all non-potable reuse. Mayor Kniss asked if San Jose used any potable recycled water. Mr. Hall answered no. The Water District was discussing with the City of San Jose a proposal similar to the proposal made to the City of Palo Alto. Mayor Kniss assumed most drinking water across the world was treated. Mr. Hall concurred. Mayor Kniss inquired about the possibility of the City implementing its own projects to treat water. Mr. Hall clarified that most drinking water was conventionally treated much like the water provided by the RWQCP. Some significant projects in Southern California were recharging groundwater in conjunction with purifying water. Cities in Southern California were interested in direct potable reuse; however, regulations were not in place. Mr. Bobel emphasized that groundwater recharge was indirect potable reuse. Mayor Kniss inquired regarding projects to desalinate water in Southern California. Mr. Hall reported a substantial amount of desalinization was occurring, and the resulting water was utilized for groundwater recharge. Mayor Kniss asked if Staff had considered desalinization. Mr. Bobel replied that Staff had not seriously considered desalinization. Most people understood desalinization as removing salt from seawater. No one was seriously considering desalinization of Bay water because of the amount of contaminants in the water. MINUTES Page 15 of 18 City Council Meeting Minutes: 11/19/18 Mr. Hall offered to discuss the logic of a 40-year contract term if the Council wished. Agenda Changes, Additions and Deletions Mayor Kniss suggested the Council hear public comment regarding Agenda Item Number 4 but continue the item to a subsequent meeting. MOTION: Council Member Scharff moved, seconded by Mayor Kniss to continue Agenda Item Number 4 - PUBLIC HEARING/QUASI-JUDICIAL. 285 Hamilton Avenue [18PLN-00006] … to a date uncertain. Molly Stump, City Attorney, reported Staff would re-notice Agenda Item Number 4, and the Mayor did not need to open the public hearing. Council Member Holman inquired about the possibility of hearing Agenda Item Number 4 given that Staff and a Planning and Transportation Commissioner were waiting for the item. Mayor Kniss advised that they were waiting for Agenda Item Number 5, and the Council would hear that item. Council Member Holman preferred to postpone Agenda Item Number 5 and hear Agenda Item Number 4. James Keene, City Manager, reminded the Council of its procedures, which restricted the Council from taking up new items after 10:30 p.m. MOTION PASSED: 8-0 Fine absent MOTION: Council Member DuBois moved, seconded by Council Member XX to continue Agenda Item Number 5 - Finance Committee Recommends the City Council Accept the Utilities Smart Grid Assessment … to a date uncertain. Mayor Kniss did not believe Agenda Item Number 5 would require a lengthy discussion, and Utilities Staff had been waiting for three hours. Council Member DuBois noted Staff and a Planning and Transportation Commissioner had been waiting for Agenda Item Number 4 as well. Mr. Keene suggested the Council proceed with the remaining agenda items and then decide whether to hear Agenda Item Number 5. MOTION FAILED DUE TO THE LACK OF A SECOND MINUTES Page 16 of 18 City Council Meeting Minutes: 11/19/18 City Manager Comments James Keene, City Manager, postponed his comments to a subsequent meeting due to the late hour. Minutes Approval 3. Approval of Action Minutes for the October 29 and November 5, 2018 Council Meetings. MOTION: Council Member Scharff moved, seconded by Vice Mayor Filseth to approve the Action Minutes for the October 29 and November 5, 2018 Council Meetings. MOTION PASSED: 8-0 Fine absent Action Items 4. PUBLIC HEARING/QUASI-JUDICIAL. 285 Hamilton Avenue [18PLN- 00006]: Recommendation on Applicant's Request for a Text Amendment to Title 18 of the Palo Alto Municipal Code to Allow for Minor Increases in Floor Area to Provide Access to Roof-top Decks on Existing Structures in the Commercial Downtown (Community) CD-C Subdistrict, as Well as a Conditional Use Permit and Architectural Review for a 2,600 Square Foot Roof-top Deck on the Roof of the Existing Commercial Building at 285 Hamilton Avenue. The Planning and Transportation Commission Reviewed and Recommended Approval (4-2) of the Text Amendment and Conditional Use Permit at a Public Hearing on October 10, 2018. Environmental Assessment: Exempt per Sections 15301 and 15305 of the California Environmental Quality Act (CEQA) Guidelines. Zone District: CD-C(GF)(P). 5. Finance Committee Recommends the City Council Accept the Utilities Smart Grid Assessment and Utilities Technology Implementation Plan, Including Advanced Metering Infrastructure-based Smart Grid Systems to Serve Electricity, Water, and Natural Gas Utility Customers. James Keene, City Manager, reported the Utilities Advisory Commission (UAC) and the Finance Committee (Committee) unanimously recommended the Council accept the Utilities Smart Grid Assessment and Utilities Technology Implementation Plan (Plan). If it wished, the Council could view a video of the Committee's detailed discussion of the Plan. Council Member Scharff advised that the Committee recommended an action item because of the cost and policy involved in the Plan. In essence, the MINUTES Page 17 of 18 City Council Meeting Minutes: 11/19/18 Committee recommended the Council proceed with the Plan because of its cost, the possibility of the Plan breaking even, the low likelihood of the Plan increasing rates, and the many qualitative benefits of the Plan. Shiva Swaminathan, Senior Resources Planner, indicated the UAC and the Committee held extensive discussions regarding the Plan. If the Council approved the Plan, Staff would begin work and return with contracts and budgets for Council approval. Implementation of the Plan could require five years. The $19 million investment was expected to break even over 18 years. If costs were higher and the values lower than expected, bills could increase by 1-2 percent. With the use of reserve funds, bills could decrease by 0.5 percent. Fiber to the Node (FTTN) infrastructure could benefit the project, and Staff would explore the possibilities for FTTN use. Jeff Hoel did not believe the Plan would break even in 18 years. Instead, Staff would increase rates to cover costs and direct customers to utilize data to conserve energy and, thus, offset the rate increase. The City had no data regarding consumers' likely actions if time-of-use (TOU) rates were higher during the day and lower during the night. The Council should provide multiple plans for customers to opt out of using smart meters. MOTION: Council Member DuBois moved, seconded by Council Member Scharff to accept the Utilities Smart Grid Assessment and Utilities Technology Implementation Plan (Utilities Technology Plan), including the estimated timeline and resources for the implementation of an Advanced Metering Infrastructure (AMI)-based smart grid system to more effectively serve electricity, natural gas and water utility customers. Council Member DuBois encouraged Staff to investigate use of FTTN. Use of the Enterprise Fund and the Fiber Fund could benefit Palo Alto residents. He requested Staff's intentions with respect to leveraging the dark fiber network. Ed Shikada, Assistant City Manager, related that Staff would need to explore a design that would maximize the benefit for the utility. Hopefully, the design would complement the City-wide deployment. Council Member DuBois felt aligning the dark fiber network and the project would benefit the City. MOTION PASSED: 8-0 Fine absent State/Federal Legislation Update/Action None. MINUTES Page 18 of 18 City Council Meeting Minutes: 11/19/18 Council Member Questions, Comments and Announcements Council Member Holman suggested the Council utilize the Council Contingency Fund for a donation to the Camp Fire relief efforts. Mayor Kniss supported the suggestion and recommended Staff determine an appropriate recipient of the donation. James Keene, City Manager, reported Staff would return to the Council with a proposal. Council Member Wolbach announced the Rail Committee would meet at 1:30 p.m. on November 27 to conclude its most recent meeting, which was disrupted by a fire alarm. Beth Minor, City Clerk, confirmed the meeting time. Council Member Tanaka suggested a more meaningful donation to the Camp Fire relief efforts would be the use of carbon offset funds. Adjournment: The meeting was adjourned at 11:05 P.M.