HomeMy WebLinkAbout1999-08-02 City Council Summary Minutes Regular Meeting August 2, 1999
1. Resolution 7880 entitled ΑResolution of the Council of the City of Palo Alto Recognizing the Presence of and Welcoming to the City of Palo Alto Exchange Students from Oaxaca, Oaxaca,
Mexico≅ ...............................................88-439 2. Proclamation Honoring Pat Briggs as a Recipient of the Campton Bell Lifetime Achievement Award.......................88-439 ORAL COMMUNICATIONS........................................88-440 APPROVAL OF MINUTES........................................88-441 3. Amendment to Sublease with Foothill/DeAnza College District to Provide for Painting of Facility at Cubberley Community Center, 4000 Middlefield Road.........................88-441 4. Contract Between the City of Palo Alto and West Valley Construction Project 9 in the Amount of $1,618,276 for Gas Main Replacement Project..............................88-441 5. Contract Between the City of Palo Alto and Lewis and Tibbitts, Inc. in the Amount of $3,383,974.55 for the Installation of the Utility Trench and Substructure System in Underground Utility District No. 37 - Embarcadero/Middlefield Roads88-441 6. Contract Between the City of Palo Alto and to All City Management Services, Incorporated in the Amount of $133,000 for Adult Crossing Guard Services.....................88-441 7. Contract Between the City of Palo Alto and General Lighting Services in the Amount of $109,800 for the Replacement/ Addition of Street Light Poles and Fixtures in the Downtown Parking Lots..........................................88-441 8. Contract Between the City of Palo Alto and Golden Bay Construction, Inc. in the Amount of $679,132 for Fiscal Year 1999-2000 Phase I Sidewalk Replacement Project........88-441
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9. Contract Between the City of Palo Alto and Hastings Landscape Conservation Services in the Amount of $102,000 for Byxbee Park Vegetation Management............................88-442 10. Rejection of Bids - Construction Contract for Lucie Stern Courtyard and Walkways Project........................88-442
11. Resolution 7886 entitled ΑResolution of the Council of the City of Palo Alto Amending the Citywide Stop Intersection
System Map≅ ...........................................88-442 12. Request for Authority to Participate in Amicus Curiae in the Court of Appeal on Griffith v. Santa Cruz, et al. Relating to Proposition 62........................................88-442 13. Conference with City Attorney--Potential Initiation of Litigation............................................88-442 14. Planning Commission Recommendations Regarding Local Shuttle Study - Recommended Shuttle Pilot Project.............88-442 15. Utilities Advisory Commission Recommendations Regarding Universal Telecommunications Service Request for Proposal88-456 16. Ordinance of the Council of the City of Palo Alto Amending the Budget for the Fiscal Year 1999-00 to Provide an Additional Appropriation of $120,349 for Downtown Urban Design Improvements Capital Improvements Capital Improvement Project Number 19608..........................................88-458 17. Request for Council Direction Regarding Community Center
Neighborhood ΑFiber to the Home≅ Trial ...............88-459 18. Council Comments, Questions, and Announcements........88-465
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The City Council of the City of Palo Alto met on this date in the Council Chambers at 7 p.m. PRESENT: Eakins, Fazzino, Huber, Mossar, Ojakian, Rosenbaum, Wheeler ABSENT: Kniss, Schneider SPECIAL ORDERS OF THE DAY MOTION: Vice Mayor Wheeler moved, seconded by Huber, to adopt the resolutions.
1. Resolution 7880 entitled ΑResolution of the Council of the City of Palo Alto Recognizing the Presence of and Welcoming to the City of Palo Alto Exchange Students from Oaxaca, Oaxaca,
Mexico≅
Resolution 7881 entitled ΑResolution of the Council of the City of Palo Alto Recognizing the Presence of and Welcoming Palo Alto Exchange Students Who Visited Oaxaca, Oaxaca,
Mexico≅
Resolution 7882 entitled ΑResolution of the Council of the City of Palo Alto Recognizing the Presence of and Welcoming to
the City of Palo Alto Exchange Students from Albi, France≅
Resolution 7883 entitled ΑResolution of the Council of the City of Palo Alto Recognizing the Presence of and Welcoming
Palo Alto Exchange Students Who Visited Albi, France≅
Resolution 7884 entitled ΑResolution of the Council of the City of Palo Alto Recognizing the Presence of and Welcoming to the City of Palo Alto Exchange Students from Enschede, The
Netherlands≅
Resolution 7885 entitled ΑResolution of the Council of the City of Palo Alto Recognizing the Presence of and Welcoming Palo Alto Exchange Students Who Visited Enschede, The
Netherlands≅ MOTION PASSED 7-0, Kniss, Schneider absent. 2. Proclamation Honoring Pat Briggs as a Recipient of the Campton Bell Lifetime Achievement Award MOTION: Council Member Mossar moved, seconded by Huber, to approve the proclamation.
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City Manager June Fleming congratulated Pat Briggs on her award and said Ms. Briggs was a constant source of admiration as she
exercised her own brand of magic in the Children=s Theatre. She was a giant among her peers, an angel to the youth of the community, and a source of inspiration for those who knew and
worked with her. The common denominator was ΑPat=s kids≅ and making sure they received the respect and support needed for the theatre passion she shared and instilled in them. The honor bestowed upon her was earned, not sought, which she accepted with great humility. Each life she touched was changed through her love, caring, respect, patience, and professional skill. Director of Arts and Culture Leon Kaplan said Ms. Briggs was a valued colleague and trusted friend, and he respected her as a skilled administrator. One quality which stood out was that she was a brilliant and inspiring teacher, and it was fitting that her professional colleagues realized on a national level what a treasure she was. Palo Alto was fortunate to have her in the community. Council Member Ojakian congratulated Ms. Briggs on her award, and also thanked her as a parent of a child who had experienced the
Children=s Theatre, an invaluable appreciation of plays.
Council Member Eakins had a friend who moved beyond Children=s Theatre and would be receiving his PhD from Harvard in the next few years. Ms. Briggs deserved credit for his success. Council Member Huber had two sons who participated in the
Children=s Theatre programs and were all the better for it. He thanked Ms. Briggs for all she had done and all she would do in the future.
Mayor Fazzino was involved with the Children=s Theatre as a youth
and said Ms. Briggs had touched many people=s lives in unique, special ways and was a hero in the community. She encouraged, inspired, pushed, and taught many generations to be creative co their own special way. He thanked her for her contributions to the
community. She and the Children=s Theatre defined much of what
made Palo Alto special. He introduced a group from the Children=s
Theatre who sang a song in Ms. Brigg=s honor.
Director of the Children=s Theatre Pat Briggs thanked everyone. MOTION PASSED 7-0, Kniss, Schneider absent. ORAL COMMUNICATIONS Ed Power, 2254 Dartmouth Street, spoke regarding politics.
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Herb Borock, P.O. Box 632, spoke regarding the City Manager recruitment. Bob Moss, 4010 Orme Street, spoke regarding the attack on the bike path. Stephanie Munoz, 101 Alma Street, #707, spoke regarding Cable Co-op. APPROVAL OF MINUTES MOTION: Council Member Eakins moved, seconded by Mossar, to approve the Minutes of June 7, 1999, as submitted. MOTION PASSED 6-0-1, Huber Αabstaining,≅ Kniss, Schneider absent. MOTION: Council Member Eakins moved, seconded by Mossar, to approve the Minutes of June 8, 1999, as submitted. MOTION PASSED 6-0-1, Huber Αabstaining,≅ Kniss, Schneider absent. CONSENT CALENDAR MOTION: Vice Mayor Wheeler moved, seconded by Ojakian, to approve Consent Calendar Item Nos. 3-12. Council Member Rosenbaum said he would not partcipate because his sidewalk was included in the proposed Phase I Sidewalk Replacement Project. 3. Amendment to Sublease with Foothill/DeAnza College District to Provide for Painting of Facility at Cubberley Community Center, 4000 Middlefield Road 4. Contract Between the City of Palo Alto and West Valley Construction Project 9 in the Amount of $1,618,276 for Gas Main Replacement Project 5. Contract Between the City of Palo Alto and Lewis and Tibbitts, Inc. in the Amount of $3,383,974.55 for the Installation of the Utility Trench and Substructure System in Underground Utility District No. 37 - Embarcadero/Middlefield Roads 6. Contract Between the City of Palo Alto and to All City Management Services, Incorporated in the Amount of $133,000 for Adult Crossing Guard Services 7. Contract Between the City of Palo Alto and General Lighting Services in the Amount of $109,800 for the Replacement/ Addition of Street Light Poles and Fixtures in the Downtown Parking Lots
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8. Contract Between the City of Palo Alto and Golden Bay Construction, Inc. in the Amount of $679,132 for Fiscal Year 1999-2000 Phase I Sidewalk Replacement Project 9. Contract Between the City of Palo Alto and Hastings Landscape Conservation Services in the Amount of $102,000 for Byxbee Park Vegetation Management 10. Rejection of Bids - Construction Contract for Lucie Stern Courtyard and Walkways Project
11. Resolution 7886 entitled ΑResolution of the Council of the City of Palo Alto Amending the Citywide Stop Intersection
System Map≅ 12. Request for Authority to Participate in Amicus Curiae in the Court of Appeal on Griffith v. Santa Cruz, et al. Relating to Proposition 62 MOTION PASSED 7-0, for Items Nos. 3-7 and 9-12, Kniss, Schneider absent. MOTION PASSED 6-0, for Item No. 8, Rosenbaum Αnot participating,≅ Kniss, Schneider absent. CLOSED SESSION
This item may occur during the recess or after the Regular Meeting. 13. Conference with City Attorney--Potential Initiation of Litigation Subject: Potential Initiation of Litigation on Two Matters Authority: Government Code section 54956.9(c) REPORTS OF COMMITTEES AND COMMISSIONS 14. Planning Commission Recommendations Regarding Local Shuttle Study - Recommended Shuttle Pilot Project City Manager June Fleming said as staff worked on the item with the community and a plan was put together which responded to the
Council=s direction, it became apparent there was a sincere need on the part of the community to have more attention paid to alternative transportation systems, not just a shuttle system, if Palo Alto was ever going to reduce the number of cars and the resulting negative impacts on the community. It became evident to staff that the need was greater than could be accomplished using the Council directions given. Staff used all the imagination and
ingenuity available to stay within the Council=s constraints and still recommend a system. The system met the guidelines
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established by the Council. It was evident that staff had much work to do in conjunction with Santa Clara Valley Transportation Authority (VTA) in terms of improving the service VTA gave to Palo
Alto and being more visible and vocal about Palo Alto=s needs, to be responsive to VTA, and to work together. It was an issue that could not be solved alone. Staff was working on a problem that had escalated and changed dramatically because of the way in which Palo Alto interacted with its neighbors. It was not only interaction with agencies such as VTA but also with neighboring communities in order to have a negligible impact. The shuttle pilot was a trial and not the ultimate design. Staff did not have the expertise nor the time to put together a thorough system that would work as a bus system. Resources had to be augmented. Staff saw the item as a
high priority and went as far as was possible with the Council= directions. It was not a bus system nor a thorough transportation alternative, but the beginning of an experiment with a shuttle system from which staff could learn and move forward. Director of Planning & Community Environment Ed Gawf said the Local Shuttle Study was part of a larger program that was given to the Council in May showing what staff was doing in the short term and what was proposed for the long term. He was excited to bring to
the Council a creative way to take the Council=s direction, given
the budget constraints, and put together a program. Staff=s recommendation included various routes: Embarcadero/Bayshore, Citywide Circulator during midday weekdays and Saturdays, and extension of the Marguerite Shuttle through the Downtown. Staff would work on expanding the budget by looking at all the resources available for a shuttle system in the region. Staff included a
proposal on alternatives based on the Council=s direction, and the cost of alternatives. Finally, staff identified future goals. Staff recommendations were both aggressive in scope and in timing. The shuttle system was an ongoing effort with many different aspects to it over the years. Chief Transportation Official Joe Kott visited The Netherlands the prior year and was inspired to find in places similar to Palo Alto in size and characteristics, that half the local trips made were by alternative modes. The Netherlands was a first world nation and those kinds of examples were inspiring and could be accomplished in the United States, particularly Palo Alto was a good candidate.
Staff=s recommendations were based on an involved process of planning an analysis which included public input on a study of the feasibility of shuttle bus service in Palo Alto and a request for Council action on the recommended service plan. Staff was directed by the Council to return with a shuttle plan that worked within certain budget limits to provide a service that was fair and, if possible, to use 300 fueled vehicles with specific reference to electric or hybrid vehicles. The first year of funding would involve the use of T-20 federal transportation funds for the purpose of shuttle start-up operations costs. The following 2
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through 5 years would use $100,000 in General Fund revenues and, for the longer term, staff would seek out new resources and partnerships. He emphasized, using overview projection, that staff felt the shuttle program was a promising first step, had tremendous potential for augmentation, and was feasible, prudent, and manageable. Staff wanted to combine a primary commuter service on the Embarcadero/Bayshore route during peak hours Monday through Friday with two vehicles on 15-minute frequency, and redeploy those vehicles off-peak on the Citywide Commuter route. It was not a school commute service due to its off-peak nature. Staff was in discussions with Stanford regarding expansion of the Marguerite which was essentially a lunch hour shuttle, Monday through Friday on a 15-minute frequency basis. Staff was interested in extending that service out from Ramona Street to Webster Street by deploying an alternative vehicle. For the long term, staff was exploring possibilities with VTA for additional transit services within Palo Alto. The Citywide Circulator would not traverse El Camino Real; therefore, it would not service Barron Park. Staff was hoping when discussions with VTA were concluded, that VTA would agree to reroute Route 88 down Arastradero Road through Barron Park which included two trips during the school commute period in order to help students cross El Camino Real and Alma Street. Staff recommended partnerships be developed for the long term, a five- to ten-year horizon, and a Transit Master Plan for Palo Alto based on community needs. Potential partners were Stanford University, VTA,
Caltrain, and SamTrans. Staff kept within the Council=s budget limits and service frequency structure of 10- to 15-minutes. Commute service along the Embarcadero met that, but the Citywide Circulator did not, being a 30-minute service including Saturday. Staff was convinced that the combination of services would allow important markets to be assessed which could yield a transformation of motor use in Palo Alto: commuters, seniors, shoppers, and visitors to community facilities, Palo Altans and non-Palo Altans. He explained how the revenues and general budget would be
accomplished within the Council=s restrictions. Private sector funds needed to be determined, as the Council did not give staff direction to aggressively look for private sector funds which were more difficult to acquire than public sector funds. Staff proposed that resources be augmented with monies from other sources including additional monies from the Caltrain grant and VTA reallocation. The first two years would be a fully funded shuttle bus program which in the third year would turn into a sustainable program, assuming there were no additional resources, at least on the Embarcadero corridor. The program was sustainable the last three fiscal years at $169,000 per year, including $100,000 General Fund monies along with the Caltrain grant. There were price upgrades included for Council consideration, including Saturday service at 15-minute intervals rather than 30 minutes. Staff felt the program used resources cost effectively and gave enough time for staff to augment resources. The 15-minute headway throughout
was not met. The Planning Commission, in considering the staff=s proposal, suggested the Council consider seeking funds for a more
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expanded Citywide Circulator service, and that the staff recommendation be approved. Additionally, staff requested the Council pursue and implement the recommended program and develop partnerships and a Master Plan for a more elaborate transit service in Palo Alto. Planning Commissioner Phyllis Cassel said the Planning Commission encouraged the implementation of a variety of alternative transportation modes at every opportunity and was excited about the shuttle bus proposal. After discussions, the Planning Commission took two votes, the first was unanimous to encourage the Council to think about how the options could be expanded. The Planning Commission supported Option No. 4, the Citywide Circulator route, a north/south route which would serve more people at less cost per unit, but did not want options closed if they came about at a later time. The hope was that the City would be able to do more than what could be done currently. The second vote was for the staff recommendation. Two commissioners did not support the staff recommendation because it would not give enough test to see whether the system would work. Four commissioners supported the recommendation because it was important to move forward but hoped the Council would consider the shuttle as a start with the need for expansion in the future in order to solve any problems. Walt Hays, member of the Project Advisory Committee, 355 Parkside Drive, spoke in favor of the staff report (CMR:333:99). The committee learned that public transportation was a chicken and egg situation. In order to get people to ride, there needed to be frequency and headway, but that had a high cost to it, and there was a natural reluctance to spend money until it was known whether people would use the system. The staff and consultant did an outstanding creative job of balancing the two factors in the recommendation. He felt the shuttle would be an excellent start. It made sense to start small because the City needed to learn how to operate a transit system. There were two different systems to be tried out. One, the commuter Embarcadero/Bayshore route which took advantage of the Caltrain subsidy and had the potential of bringing in private contributions from companies served by the shuttle. The second, the Citywide Circulator, offered service which was proven successful in Menlo Park with only a 35-minute headway. In the years 3 to 5, if the money dried up would probably only support the Embarcadero route. Since that alone would not be enough to excite Palo Altans, and there would not be enough money to do more, he did not feel the shuttle was worth continuing. At the end of the trial period if the shuttle appeared to be successful and the money could not be found, he felt the Council should approve City funding. He supported the staff recommendation and believed it provided a reasonable demonstration and gave enough time to resolve the financial issues. Elaine Gradman, 1885 Mark Twain Street, supported the shuttle program. The traffic congestion in Palo Alto had become dangerous
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in her neighborhood, the area of Newell and Embarcadero Roads, for children riding bicycles which left parents with no options but to get into that same traffic and take their children to Palo Alto High School (Paly). Neighbors with children going to Paly discussed creating a car pool, and the shuttle would be a wonderful opportunity for everyone due to the different activities and timing issues related to a successful carpool effort. Also, for people such as herself and her husband who worked in the area, the shuttle could be used to get to/from work. The shuttle would also give children who were not comfortable riding bicycles or driving, the independence of not relying on their parents to drive them. Carol Tracy, 751 Laurel, #802, San Carlos, supported the shuttle program in order that congestion be reduced and the environment be preserved, which was necessary for the health of the community. Palo Alto needed public transit because pollution aggravated asthma and bronchitis, and customers should be shopping rather than sitting in traffic looking for a place to park. She did not know if the City was aware that the Environmental Protection Agency (EPA) had Better America bonds as part of its Fiscal 2000 budget, and might want to avail itself of those funds. Also, pollution from cars knew no boundaries, and it was necessary that children be taught to think about their environment and how people could get places quicker and more economically, while saving the environment. Rick Ferguson, representing the Community Center Neighbors Association and member of the Project Advisory Committee, 1037 Harker Avenue, supported the shuttle proposal and appreciated the high level of quality and creativity on the part of the consultant and staff. He felt staff was working on difficult funding constraints imposed by the Council, and the proposal was at bare minimum. He wanted the Council to consider adding financing because there was no room for error in the current financing plan. It was foreseeable that any number of things that might add additional cost could happen in six months. He thought the Council could ask staff to provide a reserve so if something happened in a two-month period while waiting for a grant program to come through, there would not be a difficult interim period where one of the buses had to be shut down. It would be terrible to launch a bare minimum program worth doing and run out of money. He asked that language be crafted to provide a cushion for that eventuality. Kathy Durham, 2039 Dartmouth Street, member of the Project Advisory Committee and Chair of the PTA Council Traffic Safety Committee, complimented the consultant who dealt with complex issues in order that lay people could understand and helped everyone visualize a local bus system that would be a comprehensive, forward-looking solution for Palo Alto. Staff was commended for creating a shuttle system that fit within the guidelines of the Council which was truly a minimum project to get started toward that solution. She urged the Council to adopt the staff recommendation, Option 1 of Attachment A of the staff report (CMR:333:99) which would give some
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hope of service being inaugurated by the start of the rainy season. Part of her wanted the Council to support Alternative 4, the only option that would serve the community of both middle schools but accepted that the $666,000 for Alternative 4 was not likely to be approved. She was concerned about the increasing risks to the children who biked or walked to school and was grateful for the initiative to work with the VTA regarding Route 88 to be in place by September. Parents of school-age children wanted alternatives to driving their children to school. The start-up and the trial of the shuttle were important to prove that Palo Altans would voluntarily use public transit. The off-peak service on the Citywide Circulator would be successful and was hoping by July 2001, the shuttle would be successful enough in both ridership and outside funding. It would be politically unwise for the Council to cut back and only operate the Embarcadero route. There was a need to get the energy going and get a long-term plan in place. Edward R. Holland, 1111 Parkinson Avenue, felt generally when the City did something, it was done right, but questioned putting $100,000 into public transportation to test whether people would use it. It should be done right or not at all. He suggested the Downtown parking garage be moved to the Embarcadero Road area and run a shuttle on 15-minute headways all day so people could park there and not bring their cars into the Downtown. The City could save $500,000 which would fund a decent test of the shuttle system. Irvin Dawid, 753 Alma Street, #126, supported the collaborative
effort with Stanford=s Marguerite bus system which made sense and could be done right away. He saw the other two routes as long term with the key obstacle being funding. He was impressed with a
document entitled ΑPublic Transportation and Mobility Management; A Collaborative Proposal for East Palo Alto, Menlo Park, and Palo
Alto≅ was obtained from a person who attended the quarterly Tri Transit meeting. He read from the document and said it made him realize that Palo Alto was lacking a comparable Transportation Management Association. The residents of Palo Alto wanted a shuttle. As co-chair of the Sierra Club Transportation Committee, a document was submitted opposing the parking structures. There was a nexus between the parking structures and the shuttle system. The business community was loud and clear in support of the parking structures with necessary help from the City. The business community asked for an assessment district, the City was fronting the money for half the design, and the business community would pay the construction costs. The business community was not involved in the shuttle effort, and with regard to the Citywide Circulator, the employers, land developers, and retail firms should be involved. The business community got its forces out for parking structures which was a point that needed to be made. The business community was willing to pay for parking which showed that money was necessary, so residents should think about doing an assessment district, a car tax, or a SUV tax. With regard to the relationship between congestion and alternative transportation, public
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transportation did not solve congestion; it was the inverse relationship. Because of congestion, alternative transportation was created. People needed choices, but the congestion was going to stay. Bob Moss, 4010 Orme Street, said the staff proposal was good but insufficient. Having a citywide shuttle that ignored Barron Park was insulting. He drove along Meadow Drive everyday which took 5 minutes normally, but during a school event or bad weather, it could take as long as 30 minutes. If the City was going to have a transit system, it needed to be done right. The Council was talking about spending $20 million for a parking garage so more people could drive Downtown, create more congestion, and take up valuable real estate to park cars. One quarter of that money should be used to build parking lots on the fringes of town and put the money into shuttle buses to take people to and from those remote areas to Downtown and using the valuable Downtown parking space for retail which would revitalize and enhance the Downtown and bring in revenue in the form of sales tax. Everybody would win if there were no Downtown parking garages. Parking garages were the wrong way to solve the problem. An example of a good transit system was in downtown London. He was not suggesting a transit system at that level, but what staff was proposing was almost guaranteed to fail if the resource and choices were not adequate. He urged the Council to spend the money on getting the people Downtown rather than driving to parking garages. Stephanie Munoz, 101 Alma Street, #701, agreed that congestion and people living close together created the need for public transportation and the ability to pay for that transportation such as was done in London. It was a different situation in Palo Alto. She believed two distinct needs were desirable. One, was a
shoppers= shuttle which could start out with one small bus and make a few trips up and back during the day. A person could choose his/her time to coincide with the bus trip which could not be done by people going to school or work. With regard to funding, the State of California took over the school funding to equalize and
thus cut off Palo Alto=s funding. Since middle and high schools were currently consolidated, she suggested the State be called upon through Senator Byron Sher to provide school buses which would not be the same as a shuttle. She was previously involved in looking at shuttle possibilities for Little House, and the big problem was insurance. She had proposed a medical shuttle, looked at the insurance, and wrote to Senator Sher that the shuttle could succeed if the state would assume the liability insurance. Occupational Safety and Health Agency (OSHA) and the Department of Motor Vehicles (DMV) should work together in order that the buses and drivers were safe, which did not happen in all public transportation systems. If school buses were used, data needed be gathered from all children in public, private, and parochial school systems as to what the bus needs were and who would use them. With
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regard to buses serving private companies, she believed companies would be willing to pay. David Harris, 455 Margarita Avenue, said the proposal as he understood it was somewhat imaginative, but could have been done years earlier. At the same time, the economy was transformed by the effect of the Internet and telecommunications. He asked the Council to visualize vehicles having global positioning systems that cost less than $200, a lap top computer under $1,000, a ricochet modem under $200, plus monthly charges so people could see where the vehicle was and when it would arrive at a specific location. The vehicle could communicate using the same ricochet modem from people who needed to move a package or drop off a library book. The intercommunication capacity would interconnect with the moving atoms and be thought of in terms of transporting different things to different destinations at different times. The
City would use today=s and the foreseeable future=s technology to get more value out of the vehicle. He did not know whether that could be interjected into the present shuttle trial, but the Council might want to think about using the same theme of how the atoms could be moved such as people, packages, etc. The project could be coordinated using communication capacity technology. He understood the City had strict regulations on taxis, and there might be a role for the vehicle to do the fill-in trips that would move people, packages, etc. He urged the Council to consider how to use those new opportunities and get better value and return for the investment of the vehicle that would not currently be using communication. Mayor Fazzino said several weeks prior, the City Manager held one of a regular series of subregional Mayor meetings in Palo Alto which included himself, Mayors from Menlo Park and East Palo Alto, and President Casper from Stanford University. At that meeting, President Casper and the Mayors indicated their enthusiasm for the concept of a collaborative shuttle system. Four different shuttle systems were discussed using connected routes. He was glad to hear
Mr. Gawf=s report regarding the Marguerite and believed the issue would be resolved fairly quickly given the enthusiasm from Stanford. The reality was that Stanford had done a better job than any other jurisdiction in the area to create a locally serving shuttle system which had a lot to do with parking disincentives, but Stanford had a shuttle system that worked. He believed as the City moved forward with its own shuttle system alternative, the
Council should look closely at Stanford=s reasons for success in
addition to taking all steps possible to link Palo Alto=s system to
Stanford=s. He was not talking about only the Marguerite Downtown route, but also with other parts of the Marguerite system. At the meeting he was encouraged that the Mayors, City managers, and Stanford President agreed to ask their respective transportation managers to begin meeting on a regular basis to address the shuttle
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and other transportation issues which affected the peninsula communities. Council Member Mossar referred to Table 2 on page 7 of the staff report (CMR:333:99) regarding funding and asked whether there were City monies already committed and not reflected in the table. The Embarcadero route was a reconfigured version of an existing shuttle route because the City began that shuttle route for its own employees. She clarified there was already budgeted money in the General Fund and believed there was more money than shown in Table 2. She opined that as the City moved forward, a portion of the money in the budget for the Special Event Shuttle was available given the overlap with the proposed Saturday Citywide Circulator. If an event occurred on Saturday, the Special Event Shuttle was similar to the Citywide Circulator route which special event monies were budgeted for. Mr. Kott said staff assumed that use of the Embarcadero shuttle was currently a 25 percent City match for the Caltrain 1 shuttle. Vice Mayor Wheeler referred to the Embarcadero shuttle and clarified that money allocated to the shuttle system, particularly the Caltrain grant, must be used to fund a shuttle which went to a Caltrain station and also serve a business component of the community. Mr. Kott replied that Caltrain shuttles must synchronize with Caltrain. Vice Mayor Wheeler added that the shuttle needed to serve the business community. Mr. Kott replied yes, particularly the peak market of employees of businesses. Caltrain grants were awarded competitively based on their quality benefits which were highest during peak periods in diversion of auto trips to transit trips creating the most amount of pollution reduction benefit.
Vice Mayor Wheeler said people had reservations about the shuttle=s potential for success, particularly the modified Circulator route. She asked whether thought was given to the timing and types of evaluations the City would engage in during the interim period between the beginning of the service later in the fall and prior to the expiration of the trial period to determine how the shuttle might be working and how it might be amended for success if it appeared to be struggling. Mr. Kott said there were three things staff would be tracking: 1) ridership, performance of the service against the projections in ridership; 2) on time performance, general service quality and trips made and kept; and 3) customer surveys, customer opinion on service and suggestions on enhancements.
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Vice Mayor Wheeler clarified that would be done as the project proceeded and would not wait until the one and one-half years ran out. Mr. Kott said staff would have an evaluation scheme ready before start-up of the service, including customer surveys initially and tracking ridership over weekly and monthly periods as any conventional transit service would do. There would be a sampling of trips to make sure there was good service and quality including on-time performance. Vice Mayor Wheeler knew staff would aggressively look for additional funding sources which would hopefully materialize within the first phases of the program. She asked whether there was a planned expansion scheme that could be implemented during the initial period should funding sources materialize. Mr. Kott said the expansion efforts would likely concentrate on enhancing the Citywide Circulator route. With regard to Vice Mayor Wheeler question on service frequency, it was conventionally correct that the more service, the more successful for transit compared to the automobile. There were many outstanding examples of success in small- and medium-sized cities in the United States and Europe with 30-minute headways. One critical point must be that the services were timed such that they were extremely predictable, any inter-modal connections were made on time with limited wait, were adequately promoted, and in general customers were welcome.
Council Member Ojakian said a frequent comment heard was, ΑIt will
take a while for Palo Alto to learn how to run a shuttle service.≅ Since Menlo Park already started a successful shuttle service, he asked how long it took for Menlo Park to get its program going, for instance, what was the learning curve. Mr. Kott said with shuttle services there were issues about adequacy: 1)the right vehicle, staff, drivers, and servicing which did not all show up at the beginning; and 2) building awareness that the service was available. Offering the quality and getting that right as well as promoting that quality were two critical
pieces that needed to be brought together. With Menlo Park=s shuttle service, there were obstacles to overcome as staff was sure
there would be with Stanford, but Stanford=s service had attained a considerably high degree of quality.
Council Member Ojakian recollected that Menlo Park=s shuttle service had not been in operation for long, and the general comments made were that the service was successful.
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Mr. Kott said staff was inspired by the success of Menlo Park=s shuttle service, but the program was not a success right at the beginning. Every problem that might occur with providing a transportation service could not be anticipated. Council Member Ojakian asked what the anticipated ridership for the Embarcadero route was. Mr. Kott replied the projection was 53,000 passenger trips a year. Council Member Ojakian clarified that was the number of cars coming and going, but what the Council was looking at was somewhat of a captive audience which was the audience in the commercial section down Embarcadero Road and across the freeway. Also, there were comments from the public about getting their high school age children to and from Palo Alto High School. Mr. Kott said it was conventional that transit projections, particularly done by consultants, were done conservatively. Staff expected riders other than Bayshore commuters which the public had spoken to that evening.
Council Member Ojakian asked what the ridership was on VTA=s Route 88 and how that route was working. Mr. Kott said staff had documentation which was prepared by the consultant on the project but did not have it there that evening. He did know the route was a quarterly performing route when measured against the standard of Route 22, a line haul service, high frequency route along El Camino Real. Council Member Ojakian asked what the potential ridership was between the Veterans Administration (VA) Hospital to East Meadow Circle which was the area Mr. Moss was concerned about. Senior Planner Gayle Likens said staff did not have the exact ridership numbers but knew there was a fair concentration of ridership at Gunn High School, close to El Camino Real where the stop was on Arastradero and Charleston Roads and transfer ridership from Route 22. The consultant had that information by stop. Planning Commissioner Phyllis Cassel said with respect to Route 88, the afternoon bus from the VA Hospital around through Stanford Industrial Park to the Caltrain station was usually full. It was a relatively small bus, and in the fall and winter, people would be standing. Route 88 was important to the VA Hospital because disabled people were dropped off where the Route 22 bus stopped. Mayor Fazzino asked about Stanford Research Park commuters. He understood there was a Route 88 bus and a number of large company shuttles in operation and asked what kind of work staff did to communicate with employers in the Research Park in order to tie
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them into the program. It appeared there were more commuters in the Research Park area than east of Embarcadero Road, yet the focus of the plan was on commuters east of Embarcadero Road. Mr. Kott said staff met with Employee Transportation Coordinators at the Research Park which was lightly attended. In terms of working with the coordinators as part of the Transportation Demand
Management (TDM) program, the consultant=s report was discussed and it was a high priority that the Transportation Management
Association (TMA) be a part of the City=s commute coordinator. Prior to when that person came on board, pending Council action that evening, staff would be returning to private employers to begin raising funds. Mayor Fazzino asked whether what was currently being done by private employers could be incorporated into the Citywide shuttle system between Caltrain and the Research Park. Mr. Kott said one proposal offered among the initial five, the enhanced Deer Creek shuttle, did just that. Staff would seek to do that in a master plan with an expanded enhanced version of transit services in Palo Alto, particularly the Embarcadero Road corridor. There was no transit service there currently, the Bayshore area was unserved transit-wise. The Embarcadero was far more appealing than spending money or resources on the enhanced Deer Creek shuttle. MOTION: Council Member Mossar moved, seconded by Eakins, to approve the staff recommendation as follows: 1. Approve the Negative Declaration (included at Attachment to the Planning Commission staff report) finding that the proposed project will not result in any significant environment impact. 2. Direct staff to proceed to implement a start-up shuttle project as described in the Planning Commission staff report as Alternative 1. 3. Direct staff to develop partnerships and apply for grant funding to augment City resources during and after the initial period. Particular attention will be given to relationships with SCVTA, Stanford University, Bay Area Air Quality Management District, the private sector, the Cities of Menlo Park and East Palo Alto, and the Palo Alto Unified School District. In addition staff will: a) Develop, in collaboration with the above organizations and others, a Transit Master Plan for Palo Alto to improve and augment transit services
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in the community over a five to ten year period, and an associated funding plan. b) Work with SCVTA to modify Line 88 prior to the start of school in September to serve Barron Park on selected morning and afternoon trips to serve the east/west trips from the neighborhood to JLS Middle School and Hoover School. c) Continue to work with Stanford to extend the Marguerite Express further into the Downtown. Council Member Mossar said the proposal before the Council was a beginning. Once the Transit Master Plan was complete, the Council would have a better idea of where the funding sources would come from, how the City might raise money to enhance the transit plan, and have time to build critical partnerships in generating funding and support. Staff was actively recruiting for a Commute Coordinator who would be responsible for working on the shuttle program and with the business community to generate interest in the shuttle. She emphasized the importance of starting the shuttle in a prudent manner. She thanked staff, the consultants, and the Shuttle Advisory Committee of their creative work. Council Member Eakins believed that a first step in a pilot project was an appropriate way to proceed. She was optimistic that the shuttle program would attract riders instead of discouraging them because it was incomplete. Creative financing would be found. She suggested that financing be made a major part of the Commute
Coordinator=s program. The shuttle program was implemented to reduce congestion, provide transportation for children to school, reduce parking demands, and provide convenience. A pilot project would give the City a chance to assess what worked. She hoped that
Vice Mayor Wheeler=s suggestion regarding a survey would be implemented in the first month of the shuttle program so the benchmarks and the month-by-month changes would be recorded. In addition to the survey, she hoped there would be phone surveys to test the awareness of the shuttle program. She was interested in regular updates on funding sources and reports on progress with VTA, Stanford, PAUSD, Palo Alto Chamber of Commerce, and other businesses. AMENDMENT: Council Member Ojakian moved, seconded by Fazzino to condense funding proposed over four years to three years. Council Member Ojakian said according to Attachment A of the staff report (CMR:333:99), the budget for the first three years of the shuttle program was approximately $629,000. Condensing the funds would show the community that the Council supported the shuttle program, that the shuttle program was a viable service, and would show the funding sources that the City made a legitimate commitment. He agreed with the routes that were proposed at that
evening=s meeting as part of the three-year proposal. There was a
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route that partially served Route 88. He hoped that the City could create a partnership with the VTA to create a similar route in years 4 and 5 on the other side of the City. Council Member Mossar did not support the amendment. She agreed with Council Member Ojakian; however, she believed that a three-year program was too short. Mayor Fazzino asked Mr. Kott to clarify what the amendment would mean in terms of service. Chief Transportation Official Joe Kott believed the amendment could potentially provide additional service on Saturdays for the City-wide Circulator and extra money to promote the service. Twenty-two thousand dollars was budgeted to promote the service which would include bus-stop signs. City Manager Fleming said it was difficult to imagine what the City would do with additional money without planning. She was concerned about what staff would do and what the Council had in mind as an objective to be achieved with the additional funding. She did not want to delay the start of the shuttle program. Council Member Ojakian was not talking about City staff or monies going into the project. He wanted to be sure that after three years the project was going to work. Council Member Eakins was concerned about losing the capacity in later years to have seed money available. She believed that the City would be expanding the shuttle program in the future; therefore, she wanted to retain the schedule as it was to ensure that the money would be there for matching funds due to long-range planning. AMENDMENT TO MOTION FAILED: 2-5, Fazzino, Ojakian Αyes,≅ Eakins,
Huber, Wheeler, Mossar, Rosenbaum Αno,≅ Kniss, Schneider absent. Council Member Rosenbaum supported the motion. He did not believe
that the City=s existing revenue funds could afford to take on transportation. In the long run, transportation could only be funded by a new revenue source which was going to require
everyone=s support. Vice Mayor Wheeler did not believe that the scaled down Circulator was doomed to failure. If the City set its sights correctly, the shuttle would be of value to the community. Council Member Huber appreciated the work staff and consultants did
in returning a Αlean≅ test project to the Council. He observed that if staff had good reason and could demonstrate that the
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project was underfunded it would return to the Council with a request for additional funds. Mayor Fazzino thanked the Advisory Committee, Planning Commission, staff, and members of the public for their input. The shuttle
program was an important part of the City=s plan for an integrated public transportation system in the community. The challenge over the next 10 years would be to build small-scale transit systems within cities. He was comfortable with the approach that staff took. He believed the shuttle program would be a success and that the City should seek out every opportunity to integrate the shuttle program with other existing transportation shuttles. Every step possible should be taken to work closely with Stanford and the cities of Menlo Park and East Palo Alto to build a sub-regional transportation system. MOTION PASSED 7-0, Kniss, Schneider absent. RECESS: 10:00 p.m. - 10:30 p.m. The City Council met in Closed Session to discuss matters involving Potential Initiation of Litigation as described in Agenda Item No. 13. Mayor Fazzino announced that no reportable action was taken on Agenda Item No. 13. 15. Utilities Advisory Commission Recommendations Regarding Universal Telecommunications Service Request for Proposal Utilities Director John Ulrich said there was public comment on the staff report (CMR:331:99) particularly in regard to the Broadband Access Advisory Group (BAAG). Rick Ferguson, 1037 Harker Avenue, said the Request for Proposal (RFP) was running in parallel to the Fiber to the Home (FTTH) project. The FTTH trial cost more money than other high-speed connections and was one of several options before the homeowner. One value in the trial was that members would participate in
learning about fiber=s performance and could use the information when the City sought RFPs. The RFP should state clearly that it
was the City=s preference to accept bids that produced FTTH for equivalent bandwidths. The coordination between the two projects did a disservice to the selling and performance of the FTTH project. If the City proceeded on the time schedule, it was difficult for the community that wanted FTTH to succeed.
Herb Borock, P.O. Box 632, spoke regarding the City=s fiber optic backbone on Middlefield Road. The staff report (CMR:242:97) indicated there would be a final phase of the construction of the backbone which would be the Middlefield Road segment between the
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substation at Newell Road and Embarcadero Road and the substation at East Meadow Drive and Middlefield Road. He spoke with staff in terms of project cost and completion. There appeared to be some ambiguity in putting out a proposal without the respondents being clear about whether it was something the City would or would not be doing. It was important that the City complete the segment of the backbone system that was included in the original map of the system when the contract was awarded by the City. He agreed with a 1982 staff report in which staff recommended municipally owned cable systems. Bob Moss, 4010 Orme Street, spoke regarding omissions he noticed in the draft Universal Telecommunications Service Request for Proposal (UTS-RFP) (CMR:331:99). On page 5 of the staff report (CMR:331:99) there was a list of approximately 24 companies in the City. He was surprised to see that Space Systems Loral, which was larger than at least 20 of the 24 companies listed with over 3,000 employees, was omitted from the list. The table on page 6 of the staff report (CMR:331:99) showing revenues for cable television for 1995 were in excess of $9 million, and projected $8.2 million for the year 2002. He believed the figures were in error since cable television had approximately $11 million dollars in 1998. MOTION: Council Member Mossar moved, seconded by Ojakian, to approve the draft Universal Telecommunications Service (UTS) Request for Proposal (RFP) and authorize the City Manager or her designee to proceed with implementation of the UTS-RFP process. Council Member Rosenbaum said the telecommunications industry was moving quickly. AT&T and RCN were likely to offer a hybrid system. He assumed the reason the RFP did not specify FTTH as the only solution was because the City did not think anyone would bid on the RFP. He asked what the City expected to receive as a result of the RFP. Telecommunications Manager Mohammad Fattah said staff tried to assure that some proposals or bids would be received. Staff did not specifically mention that FTTH was the only option that was looked at. Several options were given that staff would look at such as FTTH or hybrid fiber coax. Staff would closely review the higher performance. There were technologies that used a combination of fiber and other types of media that provided performances close to what the City would offer. If staff looked for a FTTH partner, the City might not get any proposals or would receive services similar to other cities around the nation that contracted with providers who did not provide services that the cities wanted. Assistant City Manager Emily Harrison said the City brought an enormous value to its partner through its right-of-way ownership. Staff hoped to have a negotiating position. She agreed with Council Member Rosenbaum that the two companies he mentioned could
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overbuild or take advantage of assets already owned; however, the City became a negotiating partner through the assets it brought through the UTS-RFP. Council Member Rosenbaum asked whether AT&T would use the same right-of-way as the City. Ms. Harrison thought more in terms of RCN Communications. RCN would have to over build its current cable system. There might be advantages that RCN could enjoy with the City as a partner that RCN might not have on its own, which was the kind of response the City hoped to obtain with the RFP. She did not know whether there was anything of value a partnership with AT&T would bring; however, RCN was interested in responding to the RFP. MOTION PASSED 7-0, Kniss, Schneider absent. ORDINANCES 16. Ordinance of the Council of the City of Palo Alto Amending the Budget for the Fiscal Year 1999-00 to Provide an Additional Appropriation of $120,349 for Downtown Urban Design Improvements Capital Improvements Capital Improvement Project Number 19608 Contract Between the City of Palo Alto and Anderson Pacific Engineering Construction Inc. in the Amount of $546,808 for Downtown Urban Design Improvements CIP No. 19608 Approval of Change Order Authority for Contract C8104362 Between the City of Palo Alto and Wallace Roberts & Todd for Downtown Urban Design Improvements CIP No. 19608 MOTION: Council Member Ojakian moved, seconded by Mossar, to approve the staff recommendation as follows: 1. Approve a Budget Amendment Ordinance in the amount of $120,349 for : 1) installation of additional newsracks in the downtown; 2) additional consulting services for new newsrack locations, with the firm of Wallace Roberts and Todd; 3) additional expenses required to produce the public art elements of the project; and 4) provisions of a contingency for miscellaneous project expenses.
Ordinance 4579 entitled ΑOrdinance of the Council of the City of Palo Alto Amending the Budget for the Fiscal Year 1999-00 to Provide an Additional Appropriation of $120,349 for Urban Design Improvements Capital Improvement Project Number 19608" 2. Approve and authorize the Mayor to execute the contract with Anderson Pacific Engineering Construction Incorporated in the amount of $546,808 for construction
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of the Downtown Urban Design Implementation CIP #19608 including the signage add-alternative #1. 3. Authorize the City Manager or her designee to negotiate and execute one or more change orders to the contract with Anderson Pacific Engineering Construction Incorporated for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $54,000.
4. Increase the City Manager=s or her designee=s authority to negotiate and execute one or more change orders to contract C8104362 with Wallace Roberts and Todd to perform the design and construction administration for the Downtown Urban Improvements Project from $4,000 to $10,000 for related, additional but unforeseen work which may develop during the project. MOTION PASSED 7-0, Kniss, Schneider absent. REPORTS OF OFFICIALS 17. Request for Council Direction Regarding Community Center
Neighborhood ΑFiber to the Home≅ Trial Utilities Director John Ulrich said staff worked with the Community Center Neighborhood Association (CCNA) and people in the area to extend the Fiber to the Home (FTTH) trial. Staff recommended
Alternative 3: ΑRisk Sharing≅ Proposal, page 7 of the staff report (CMR:332:99). Placing all cost on the people who would receive FTTH would be a burden; therefore, staff proposed an alternative that would put a portion of the cost at a risk. Staff believed that the proposal would be economically pliable. A number of alternatives were offered that staff believed would fit the financial interest of the people in the community. Individuals could pay for FTTH up-front or opt for a long-term plan that would cost approximately $34 per month for four years. The risk would be spread out; however, it allowed residents to make a decision in their best interest. An advantage was that residents would receive high-speed bandwidth and staff would see how viable the trial was in other areas of the City. While staff reviewed the UTS-RFP, the City might receive proposals that would not give the same kind of speed that the FTTH trial would. Staff believed that proceeding with the recommended proposal would provide the trial and be an economic advantage to the community, but at the same time minimize the risk to the City. Staff was prepared to mitigate the risk by additional marketing of the system. Council Member Rosenbaum asked whether the long-term plan was the financing of the initial $1,200.
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Mr. Ulrich said no. The $34 would be a monthly fee for service which did not include the Internet Service Provider (ISP) service. The initial $1,200 would occur in two stages: $500 would be requested at the time people indicated an interest, and the remaining $700 would be due prior to service connection. However, as part of the proposal, staff was willing to offer extended financing of the actual installation over a period of time. Council Member Rosenbaum said on page 10 of the staff report
(CMR:332:99), Alternative 3: ≅Risk Sharing≅ Proposal, the monthly service fee was $45. He asked where the $34 amount was listed in the staff report. Mr. Ulrich said the $34 was shown on page 7 of the staff report
(CMR:332:99), Alternative 3: ΑRisk Sharing≅ Proposal. Vice Mayor Wheeler asked whether customers WHO chose the long-term plan would pay $34 per month in addition to the $45 monthly fee. Mr. Ulrich said yes. Customers would pay $45 for monthly service
paid over a contract of 22 years. In addition, if the customer chose not to pay $700 at the time of installation, the City would finance the amount over a period of time, allowing the customer to pay both fees in a monthly fee. In addition, staff estimated the ISP would cost approximately $25 per month. Council Member Rosenbaum questioned financing the $1,200 service connection fee. Mr. Ulrich said the reference to financing $1,200 over four years at $34 per month was an attempt to provide an alternative to paying a monthly fee of $45 with a two-year commitment. Customers were concerned that the $45, when added to the ISP charge and installation cost, was financially prohibitive. Staff provided an
alternative in which the $45 for monthly service with a 22 years contract could be reduced to $34 with the contract extended to 4 years. The customer had the choice of a one year contract; however, the service cost would be $118 per month. Council Member Rosenbaum ask how the City would recover its investment if the City did not collect $45 per month for a six year period which was the basis for cost recovery. Mr. Ulrich said the rest of the money was at risk. The risk was the 1/3 total cost. Customers were paying a share and the City was paying a 1/3 risk. Council Member Rosenbaum asked why customers would sign up for $45 per month if there were a $34 per month alternative. Mr. Ulrich said the amount of money at $45 when added to ISP charge was more than some customers budget could handle. If the customer
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planned to live in his/her home for a long period of time, signing a four-year contract allowed him/her to have a $34 per month payment rather than $45. Council Member Rosenbaum was prepared to support Alternative 3 if
the customer was paying a $45 per month fee with a 22 year commitment over the next six years. He did not understand the other contract arrangements.
Mr. Ulrich said Alternative 3 was Αrevenue neutral≅. Staff expanded Alternative 3 to include a one-year contract at $118 per
month if the customer did not want to pay $45 per month with a 22 year contract. All of the contracts worked out to be the same for
the City: one year at $118 per month, 22 years at $45 per month, and 4 years at $34 per month. Council Member Rosenbaum asked what the customer who chose a one-year contract was going to do at the end of the contract, assuming he/she wanted service continued. Mr. Ulrich said the service could be continued at a lower rate because the customer met his/her one-year commitment to the City.
Prices would also drop at the end of the 22 year contract and the 4 year contract. Staff was unsure of what additional types of improvements would be made to the system during the trial. Staff did not try to view the trial as a money-maker for the City, nor was staff trying to find a way to place additional burdens on people who were willing to participate in the trial. Council Member Rosenbaum believed the report was misleading. Peter Allen, 1127 Hopkins Avenue, thanked staff for the FTTH trial.
The risk sharing proposal offered the City=s best chance for a successful trial. The trial was flexible and had something for everyone. He believed the risk sharing proposal was fair. Joe A. Villareal, 360 Sheridan Avenue, #101, discussed an overhead document regarding FTTH which he prepared to help him understand the FTTH process. Craig A. Green, 200 Sheridan Avenue, #101, moved his Internet company from Florida to Palo Alto two weeks prior. The competitive advantages in the Silicon Valley were greater than anywhere in the United States. He was fortunate to be living in an apartment on 200 Sheridan Avenue which was part of the FTTH trial. Arthur Keller, 3881 Covina Way, supported the FTTH trial. He hoped the FTTH trial was successful and extended throughout the entire City.
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Margaret Cooley, 830 University Avenue, was on the negotiating committee with the Palo Alto FiberNet (PA FiberNet) and the CCNA worked with staff in early June 1999 when all materials were prepared for review. The committee decided to poll the entire section east of Newell Road to find out what the customers price point was. The resulting numbers were transmitted in a letter dated June 22, 1999, to Assistant City Manager Emily Harrison and was included in the staff report (CMR:332:99). The committee suggested an 8-year payback and a year to year contract. The committee wanted a successful residential trial in the City. She said that if RCN or AT&T were available for residential service, it would not be as good as what the ISP channel offered. The residents wanted the trial and were ready. John Easter, 1175 Stanley Way, collected 28 signatures from neighbors interested in FTTH. The residents were willing to pay the $1,200 and all were interested in 10 Mbps. He was asked by the CCNA to participate as a negotiator to negotiate the terms of the agreement for the trial with the Utilities Department. CCNA was successful in obtaining agreement in five areas. He asked how much residents were willing to pay for FTTH. Fifty percent of the residents would pay up to $35, 71 percent would pay up to $40. Eighty-five percent of the residents would pay up to $30 for an
ISP. Unless the items in CCNA=s report were addressed, the contract would not be good. The CCNA believed it was important that an oversight committee should be formed to work with the staff after the trial commenced. Michael Eager, President, Palo Alto FiberNet, 1960 Park Boulevard, said PA FiberNet had a number of discussions with staff and made a
proposal coordinating PA FiberNet=s view of the larger City trial. PA FiberNet wanted a simple and understandable proposal. PA FiberNet believed a successful trial represented something that was acceptable in the market where prices were comparable to what people expected. The installation cost was high; however, if it could be financed the cost would gain acceptance. PA FiberNet informed staff with such terms that 100 people, based on PA
FiberNet=s survey, would be willing to sign up for FTTH. Staff did not accept the proposal; however, staff did take the target of 100
for more restricted terms. The term Αprofit-loss≅ was a misnomer since the system turned a 100 percent profit the first year of income revenue over expenses. The system retired the installation debt in under eight years. Any growth in the system, such as a ten percent per year growth, the cost recovery time would decrease to approximately five years. PA FiberNet believed that FTTH represented an investment for the City. Residents would be paying one-third of the cost up-front which was a significant investment. Peter Teale, 1174 Stanley Way, spoke with many people regarding a $35 per month maximum estimated charge that was provided to the City to all its utility customers in a mailing. The original
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estimated cost of $35 was based on market realities and a reasonable pay-back period. If FTTH was going to succeed, it had to be within the $35 range. Leith Anderson, 1021 Stanley Way, wanted to see FTTH proceed. The
operative word was that FTTH was a Αtrial≅. He did not understand the business plan that was discussed. The City discussed recovering $1 million worth of cost in six years with a base of 89 people. The vision behind FTTH should be thousands of users that would continue to pay for FTTH indefinitely, making it a successful and profitable program. Mark Heyer, 726 Marion Avenue, encouraged the Council to give the FTTH trial every opportunity to succeed by offering the lowest possible price and that its implementation be accelerated to the greatest possible extent. The risks of the trial were minuscule in comparison to the knowledge that would be gained. With long-term information resource planning and organization, the reward to the community would be the creation of an information resources development process that sustained economic growth and enhanced quality of life. Rick Ferguson, 1037 Harker Avenue, said the CCNA was delighted to
support FTTH. CCNA adopted the FTTH verbiage at staff=s direction in the prior year. On the advice of many, CCNA recognized that it was not a single issue organization and was pleased to form the PA
FiberNet. As a result of the prior year=s activity, PA FiberNet received advice and expertise on all questions on broadband telecommunications. In the prior month, staff requested a check of negotiating terms and conditions for FTTH after realizing that people in the CCNA would be signing the contract. CCNA looked for people involved in the original collection of signatures in the prior year as well as others who were interested but had not participated to give them an opportunity to review the terms and conditions. The only way to make the trial work was to come back from the 100 percent cost recovery mode. The City routinely did cost-sharing with commercial and industrial customers on shared utilities equipment and allowed for a cost recovery period in excess of eight years. It seemed reasonable to treat the residents on the same basis. Eight years was not a tough argument to make. The fiber would continue to be valuable even though the electronics and customers changed. The City had the continued benefit of connecting first to FTTH. The City set up a competition making it more difficult to pitch the trial to the neighbors by having a full-scale invitation for bid for services that did not need to be as good as FTTH throughout the City. The City could help make FTTH a success by vouching for an eight-year period and lower terms. FTTH was a tougher sell than it was in the prior year and, if the City wanted to make a go of FTTH, the risk had to be shared. The CCNA voted that it was time to proceed; the longer the trial was delayed, the more people would choose other options.
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David Harris, 455 Margarita Avenue, urged the Council to lower the price of FTTH and increase the number of people signing up. Council Member Ojakian asked whether the statement that Mr. Ulrich made regarding Alternative 3 that City had money at risk meant that was money the City would not get back. Mr. Ulrich said the money was at risk; however, it was not firm that the City would not see a return. At the end of one year whatever money was not collected back was at risk. A one-year commitment for services did not mean the money was at risk because some customers would not terminate service. The longer the contract, the less that was at risk. Council Member Ojakian asked what the worse case scenario was. Mr. Ulrich said the number was approximately $140,000 if everyone did not continue service after one year, assuming that everyone paid either the $1,200 or the $2,400 as the initial fee. Council Member Rosenbaum said he was willing to support Alternate 3. He understood the assumption of a six-year payback that most of the participants would continue to pay a $45 per month fee for six years. MOTION: Council Member Rosenbaum moved, seconded by Wheeler, to
adopt Alternative 3: ΑRisk Sharing≅ Proposal requiring 22 year contract for payment of $45/month for 10 Mbps or $100/month for 100 Mbps as follows: The customers in this alternative would be required to
contract for 22 years of service and could leave the system after this term. The expected payback for this alternative is 6 years, one more than previously mandated by the Council. This alternative also requires 100 customers (85 @ 10 Mbps, 15 @ 100 Mbps) at this reduced price in order to obtain a 6 year payback, along with needing the signups to be somewhat clustered in order to construct the system for the approved amount of $380,000. In addition, at the time of sign-up, customers will be offered the option to finance installation
cost over 22 years. Council Member Mossar referred to page 10 of the staff report. There was a nine year payback listed under Alternative 2: PA FiberNet Proposal. She asked whether the nine year payback was an error since PA FiberNet computed the payback at eight years. Assistant Director of Engineering and Operations Larry Starr said the nine year payback at the price of $35 and $70 per month was computed by staff. Mr. Eager said PA FiberNet used the same numbers that staff used in its estimates. PA FiberNet stood by its numbers.
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Council Member Eakins believed it was important to proceed with the trial. The trial either needed to be done immediately or not done at all. There were many cost estimates about the price curve, and the only way to learn was to proceed. She assured the public that the City was not interested in getting into the telecommunications business but wanted to enable access for the residents. Mayor Fazzino asked what the impact would be with a seven-year payback. Mr. Starr said the payback period was not important. What was important was that the City collected at least two-thirds of the money. Two and a half years collected two-thirds of the money at $45 per month. INCORPORATED INTO THE MOTION to include the ability by staff to finance the front-end costs of $700 or $1,900. Mayor Fazzino wanted to see the trial succeed. The Council viewed the trial as important to the City in providing the information needed to assure universal access for fiber and high-speed communications to the community. MOTION PASSED 7-0, Kniss, Schneider absent. COUNCIL MATTERS 18. Council Comments, Questions, and Announcements ADJOURNMENT: The meeting adjourned at 11:55 p.m. ATTEST: APPROVED:
City Clerk Mayor NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing Committee meeting tapes are made solely for the purpose of facilitating the preparation of the minutes of the meetings. City Council and Standing Committee meeting tapes are recycled 90 days from the date of the meeting. The tapes are available for members of the public to listen to during regular office hours.
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