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HomeMy WebLinkAbout1988-07-11 City Council Summary MinutesCITY i COUNCIL MINUTES PALO ALTO CITY COUNCIL MEETINGSARE BROADCAST LIVE VIA KZS11- FREQUENCY 90.1 ON FM DIAL Regular Meeting July 11, 1988 ITEM Oral Communications Approval of Minutes Consent Calendar 1. Contract rith Whitmore, Kay & Stevens for Labor Relations Services 2. Contract with Safety Specialists, Inc. for 1988-89 Household Hazardous Waste Disposal Program 3. Amendment No. 1 to Agreement No. C03944 with EMCON Associates for Palo Alto Landfill Operations 4. Contract with SEPCO, Inc. for Removal of Tanks of City Property 5. Amendment to Agreement No. C4504 with EMCON Associates for Subsoil Investigation 6. Public Hearing: Finance and Public Works Committee Recommendation re Utility Rates 7. Public Hearing: Finance and Public Works Committee Recommendation re Refuse Rates 8. Finance and Public Works Committee Recom- mendation re Utilities Rules and Regula- tions and Connection tees 9. Finance and Public Works Committee Recom- mendation re Gas Utility Rebate PAGE 60-146 60-147 60-147 60-147 60.147 60-147 60-147 60-148 60-148 60-152 60-152 60-153 60-144 7/11/88 ITEM 10. Finance and Public Works Committee Recom- mendation re Utility Retained Earnings 11. Finance and Public Works Committee Recom- mendation re Reserve Policy for Refuse Fund Adjournment to Study Session re Hazardous Waste Plan at 9:15 p.m. Final Adjournment at 10:15 p.m. PAGE 60-155. 60-155 60-156 60-158 60-145 7/11/88 Regular Meeting Monday, July 11, 1988 The City Council of the City of Palo Alto met on this date in the Council Chambers, 250 Hamilton Avenue, at 7:30 p.m. PRESENT: Bechtel, Cobb, Fletcher, Klein, Levy, Patitucci, Renzel, Sutorius, Woolley ORAL COMMUNICATIONS 1. Ben Bailey, 171 Everett, spoke regarding his right to know how many complaints received by the Police Department resulted in disciplinary actions. 2. Anita Engle, 2316 Santa Catalina, spoke regarding problims with on --street parking. 3. Edmund Power, 2254 Dartmouth Street, spoke regarding the destruction of the Yacht Harbor, Palo Alto City Council accountability, and the Police Department complaint processes. 4. Dr. Joseph LaDou, 3364 Woodside Roads, Woodside, spoke regarding support for totally banning smoking in all restaurants. 5. Dr. Neal Benowitz, 1001 Potrero Avenue, San Francisco, spoke regarding support for totally banning smoking in all restaurants. 6. Sumner Kalman, 2299 Tasso Street, spoke regarding support for totally banning smoking in 411 restaurants. 7. Dr. Joe Prendergast, 560 Chaucer Street, spoke regarding the visiting German soccer players from Paloma. Mayor Sutorius presented proclamations and received gifts from Harry Krepler, team captain, German soccer team. Council member Patitucci welcomed the delegation from Hamburg and indicated it was an exciting experience to host the youths and team managers. He noted his family was a host three years ago and enjoyed it immensely. Harry Krepler, team captain, thanked the City of Palo Alto for welcoming the German soccer team and for dis- playing the German banner, 60-146 7/11/88 8. John Berwald, for Senior Coordinating Council, 261 Creekside Drive, spoke regarding the tenth anniversary of the Senior Center, and presented awards to the City Council Members.. Vice Mayor Klein attended the tenth anniversary celebra- tion of the Senior Center, and said the event was very meaningful to him because one measure of any society was how well it took care of its older people. The com- munity should be proud of the fact the Senior Coordinating Council took care of the senior citizens in are excellent manner. APPROVAL OF MINUTES MOTION: Council Member Cobb moved, seconded by Fletcher, approval of the Minutes of June 6, 1988, as submitted. NOTION PASSED by a vote of 8-0-1, Patitucci abstaining. MOTION; Council Member Cobb moved, seconded by Fletcher, approval of the Minute3 of June 13, 1988, as submitted. MOTION PASSED by a vote of 8-0-1, Levy abstaining. CONSENT CALENDAR MOTION: Council Member Menzel moved, seconded by Klein, approval of the Consent Calendar. 1. Contract With Whitmore, Kay & Stevens for Labor Relation Services (720-06/516) 2. Contract With Safety Specialists, Inc. for 1988-89 Household Hazardous Waste Disposal Program (CMR:356r8) (720-06/1440-01) 3. Amendment No. 1 to Agreement No. C03944 with Eb1CON Associates for Palo Alto Landfill Operations (CMR:350:8) (720-06/1072-01) Staff is further _ uthorized to execute change orders to the agreement up to $25,000. 4. Contract with SEMCO, Inc. for removal of Tanks on City Property (CMR:324 s8) (720-06/1.440-01) Staff is further authorized to execute change orders to the tank removal project up to $6,000. 60147 7/1 1/88 5. Amendment to Agreement No. C4504 with EMCON. Associates for Subsoil Investigation (CMR:324:8) (720-06/1440.01) Staff is further authorized to execute amendments to Agreement No. C4504 of up to $33,000. 6. Public Hearing: Finance and Public Works Committee Recommendation re Utility Rates (CMR:196:8) (CHR:197:8 ) (CMR:198:8) (701-04/1121) (701-04/1102) (701-04/1111) Council Member Patitucci pointed cut the interrelationship between the recommendations and the subsequent agenda items with respect to reserves. He noted after establishing certain reserve goals, it was necessary to make sure the revenues were sufficient enough to maintain those reserves. The City Manager prepared two charts, one illustrated the effect of the combined changes in rates for the various utilities for a residential customer; the second chart summarized current projected and targeted levels of the various reserves for each of the separate utilities. The Finance and Public Works (F&PW) Committee recommended approval of water utility rate which amounted to an increase of 56 percent, the electric utility rate whict amounted to a decrease of 4.5 percent, and the gas utility rate which amounted to a 15 percent decrease. With respect to the residential customer, the net utility bill did not change because of the decreases in gas and electric utilities as opposed to the increase in the City water utilities. MOTION: Council Member Patitucci for the Finance and Public Works Committee moved that the City Ccuncil approve the rats schedules as follows: RESOLUTION 6706 entitled 'RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SCHEDULE W-1, W -1-C, AND W-2 OF THE CITY OF PALO ALTO nTILITIES RATES AND CHARGES PERTAINING TO GENERAL MATER SERVICE" RESOLUTION 6707 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDIICNG SCHEDULES E-1, E-2, E-3 AND E-4 OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGE) PERTAINING TO DOMESTIC, COMMERCIAL, CUSTObER- imp GENERATION AND STREET AND HIGHWAY LIGHTING RATES' RESOLUTION 6708 entitled 'RESOLUTION OF THE COUNCIL OF TEE CITY OF PALO ALTO REPEALING RESOLUTION NO. 6568 MW RESOLUTION NO. 6453 MW AMENDIG SCHEDULES G-1 AND G-50 OF THE CITY O _ PALO ALTO UTILITIES RATES AND CHARGES PERT INIRG TO GENERAL NATURAL GAS SERVICE' 60-148 7/11/88 Council Member Levy referenced the three different reserves for the water utility in the chart, and noted the total targeted amount for 1988-89 was $3.640 million. He asked if the total targeted amount of reserves would reach the pro- posed 56 percent incLeaae. Director of Utilities Richard Young said the total: amount of reserves as presented was where staff wished to have the rates, but the 1988-89 budget column represented what was expected. The reserves were not being built to the extent that would be represented by the targets. Council Member Levy said the City Manager had separated out the amount that would be added to the reserves for 1988-89, which WAS $534,000. Mr. Young said the $534,000 figure represented an accounting shift from expending reserves to nonexpending reserve funds. The amount of money had to he placed into the revenues in order for the funds not to be expended from the reserves. Consequently, there was not $534,000 that would remain in the reserves. Council Member Levy asked whether the increase in contribu- tions to the reset ves prevented the City from using up the reserves, or whether the water utility would break even. Mr. Young said yes; there would be nearly $14,000 net increase by the close of the following year. Council Member Levvasked if the 56 percent increase in the water utility rates included an increased transfer to the General Fund so the water utility would transfer the maximum allowed. Mr. Young said that was correct based on the new assets evaluation and the maximum transfer level based on the Public Utilities Commission (PUC) percentage. Council Member Levy was concerned the 56 percent increase in the water rate was a very large increase to pay in a one- year period. He suggested the rate increase be spread over a two-year period. Council Member Patitucci clarified if the revenue adjustment was wade to the water utility to replenish the funds that were being expended, in subsequent years the revenue source would catch up with the expenditures and it would not be necessary to expect another .significant increase in water rates. 60-149 7/11/88 Mr. Young said staff would have a better handle on the situation when the end results were known with respect to the water conservation effort_, and the normal plan for building raserve3 took effect. Council Member Patitucci said the F&PW Committee understood the electric and gas rates wire structured to appll for a two-year period. The reduction in the cost of electricity to the City was greater than 4.5 percent, but it did allow the two-year perAnd for normal growth in rates. The other point alcng with the gas rate action was to repeal the past policy of holding the line directly with Pacific Gas and Electric rates. Mayor Sutr)rius declared the Public Hearing open. Receiving no requests from the public to speak, he declared the Public Hearing closed. LMEWDMENT: Council Member Levy moved, seconded by Patitucci, that the Councils 1. Increase the water rate by 38 percent for fiscal Year (FY) 1988-89, and an additional increase of 18 percent for FY 1989-90; 2. Direct staff to return to the City Council with a revised rate schedule which reflects the increases; and 3. The increases to become effective retroactively as of July 11, 1988. Further, the increase to the General Fund from the water rate to occur in FY 1989-90, and be in the amount of $540,000, and the contribution to the reserves to occur in F° 1989-90 be in the amount of $540,000 to allow for the two step increase in the water rate. Council Member Patitucci felt reducing the amount of the rate by the amount of the increase and the amount. payable to the General fund could be postponed for a yeac given the impact on the public. However, he was not convinced given the recent discussions about the reserves to accept post- ponedlent of the $540,000 in contributions to the reserves. Mr. Zaner urged the Council not to approve the amendment. The water fund was in jeopardy because of that very action cKcurring previously. Three years ago, staff recommended a water rate to the Council; the full water rate was not adopted and the sane was true for the t:to subsequent years. The water rates fell further behind. The water fund neez1ed to be self-sufficient and provides the appropriate 6a-150 7/11/88 contributions to the General Fund as well as have adequate reserves. To accomplish that, the City had to charge an appropriate rate for the water utility. If the F&PW Committee's recommendation was adopted, the bill to the customer would still be 6 percent lower than Menlo Park, 6 percent lower than Los Altos, approximately 15 percent lower than Redwood City, but the City of Palo Alto's rate would be somewhat higher than Mountain View by 15 or 16 percent. Council Member Fletcher opposed the amendment on two counts. First, there would not be substantial rate shock overall. Second, there was a water crisis situation and the City needed to make it clear what the cost of the water actually was rather than having it artificially low. The effect could be more contributions to the conservation efforts. Vice Mayor Klein opposed the amendment and agreed with the Council Member Fletcher's comments. The argument that the water rates would.. have a remarkable ,impact on the public was disingenuous at best. He was concerned how the amendment solved anything by increasing the rate by 38 percent this year and 18 percent next year; it simply confused the public. It was time for the City to be up front with the public and to be fiscally responsible. The staff had adequately demonstrated the increases were appropriate, Council Member Woolley concurred wholeheartedly with Vice Mayor Klein and Council Member Fletcher. She reminded the Council of the water utility's obligation to the Genv.ral Fund of $1.2 million for rent charges and noted the charges were not included in the water fund. To make any further determents in farms of payments the water fund owed the General Fund would not be prudent. Council Member Cobb agreed with Vice Mayor Klein and Council Members Fletcher and Woolley. During the budget reduction process, the F&PW Committee tried very hard to save programs, jobs and services to the public. The proposed increase in the second year of 18 percent, which included the transfer to the General Fund was important now, and if postponed, would result in more decreases in City services and reductions in �&itions. Council Member Renzel concurred wth Council Member Levy regarding the rats shock, but also felt the City had defe;r‘d too long balancing the water utility fund. Council should not be too sanguine about hearing from the public once the next utility bill was sent out. Given the current relationship with the water supplier and the drought period, as well as for the fiscal reasons noted, it was prudent to raise the rates as proposed. 60-151 7/11/88 Mayor Sutorius received telephone calls and some letters on the subject; however, when he had the opportunity to speak directly to the persons, he found they understood the reasoning, and were mollified by the reduction in the gas and electric rate. He also noted San Francisco PUC reserved the =ri :tht to rescind any emergency increase end substitute a regular increase which would probabiy be at a higher increase. AMENCMENT FAILED by a vote of 2-7, Levy, Patituccci. sayer. MOTION PASSED ;unanimously. 7. Public Hearing: Finance and Public Works Committee Recommendation re Refuse Rates (CMR:288:8) (701--04/1105) MOTION: Council Member Patitucci for the Finance and Public Works Committee moved that the City Council: 1) Approve the resolution amending the Refuse Rate Fund schedules for the City of Palo Alto utilities rates and charges for collection and disposal to become effective the first billing cycle in August 1988; and 2) Approve the amendment to contract 4688 to provide additional compensation to Pale= •'_1io Sanitation Company (PASCO) effective with the first pilling cycle of July 1988. PASCO to be paid as if new rates had been in effect for the entire fiscal year 1988-89. RESOLUTION 6789 entitled rRSOOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING UTILITY RATES SCHEDULES R-1, bt--1--FA, R-2, R-3 AND R --4r Amendment No. 1 for Contract 4688 for Collection and Transportation of Refuse Produced, Kept, and/or Accumulated in the City of Palo Alto Mayor Sutorius declared the Public Hearing open. Receiving no requests from the public to speak. he declared the Public Hearing closed. MOTION PASSED unanimously. 8. Finance and.. Public Works Committee Recommendation re Utilities Rules and Regulations and Connection Fees (CMR 282:8) (701-04/1105) 60-152 7/11/88 MOTION: Council Member Patitucci for the Finance and Public Works Committee moved that the City Council adopt the resolution to place into effect revisions to the Utilities Department Rules and Regulations and Connection Fee Rate Schedules W-5* G-5, E-5 and E-5. RESOLUTION 6710 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING AND ADOPTING RULES MW REGULATIONS GOVERNING UTILITY SERVICES AND FEES AND AMENDING SCHEDULES W-5, G -S, E-5, AND S-5 OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES PERTAINING TO WATER? GAS, ELECTRIC, AND WASTEWATER UTILITY CONNECTION CHARGES' MOTION PASSED unanimously. 9. Finance and Public Works Committee Recommendation re Gas Utility Rebate (CMR:198:8) (701-04/1111) Chairman Patitucci was pleased that the reserves which had accumulated in the gas public utility for the purpose of securing sources of gas for present and future customers were no longer needed bised on a number of rules and regulations changes by the California Public Utilities Commission (CPUC) as well as the City's participation in the natural gas market. Therefore, $8.5 million would be returned to the customers in the form of some sort of rate adjustment. The method approved by the F&PW Committee and recommended to the Council was that beginning October 1, 1988, the b411s s would be reduced to zero until the individual customer's proportion was depleted. The F&PW Committee discussed alternative waye of achieving that which was why there was a three -to -one vote. The process for rebating the reserve also involved a necessity to notify customers who might not be customers during the rebate period in October of their rights. NOTION: Council Member Patitucci for the Finance and Public Works Committee moved to that the Council approve the staff's proposed approaisately $8.5 million Gas Customer Rebate Plan, to be inaugurated on or about October 1, 1988, and distributed in the manner described in the staff report ( CIla:198:8) . llddi tiobaily, beginning with the July, 1988, billing cycle, closing bills receive a notification of pending rebate and provide a confirmation of a future address. RESCLUTICO 6711 entitled 'RESOLUTION or THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING GAS RATE REFUND PLAN' 60-153 7/11/88 Vice Mayor Klein understood Council Member Patitucci's primarily reason for dissenting was because of the procedure that would be followed. Council Member Patitucci opposed the method because there was an underlining assumption that the reserve needed to be returned as much as possible to the people who paid into the reserves. He did not agree with that approach and felt customers were always paying into reserves in order to achieve certain future contingencies. The process should not be an attempt to go back in history and re-create who the customers were. The customers who paid into the reserves took a gamble. The rebate funds should be e;)read over a much larger period of time, and if possible, to a much larger gr7up of consumers. Vice ,15ayor Klein asked how Council Member Patitucci would distribute the $8.5 million. Council Member Patitucci proposed the $8.5 million be shown as a rebate against the utility bill over a period of two or three years. Otherwise, the entire gas rebate would be consumed in the six-month period and after that, the billing would resume to normal. The customers would not remember the benefit. He felt the customers would be better served if the rebate was spread out over a couple of years. Vice Mayor Klein referred to the customer who sold his home in September and applied for the gas rebate, and asked what would happen to the people who purchased the home. Manager, Rates and Regulations Randy Baldschun said the credit was based on historical usage from July 1, 1987, through Juno, 1988. Vice Mayor Klein asked about the process if a customer sold his home in August and did not apply for the rebate. Mr. Baldschun said the moneys would be transferred into a gas reserve. Vice Mayor Klein asked about the percentage of the total available rebate that did not get claimed. Mr. Baldshun said mainly the industrial and commercial customers did not claim rebates which amounted to $200,000 to $300,000. NOTION PISSED by a vote of 8-1, Patitucci °no°. 60-154 7/11/88 10. Finance and Public Works Committee Recommendations re Utility Retained Earnings (CMR:293:8) (701-03/1105) Council Member Patitucci said the reserve policies as identified in the staff report (CMR:293:8) were consistent from fund to fund in terms of setting up the System Improve- ment keservee (SIR), Transfer Stabilization Reserves, and .he other identified reserves. He clarified $2,000,000 was no longer needed in one of the reserves and would be trans- ferred to another. Director of Utilities Richard Young said the $2,000,000 in the Conservation Loan Project would be reverted back during the budget process. MOTION: Council Member Patitucci for the Finance and Public Works Committee moved that the Council approve the followings 1. Establishment of a Gas Supplemental Supply Reserve to provide for limited gas supplemental supply acquisition projects; 2. Adoption of reserve poi a dies for the electric,, gas, water and wastewater Emergency Plant Replacement Reserves, Systems Improvement Reserves, electric, gas and water Transfer Stabilization Reserves, and Gas Supple- mental Supply Reserve as contained in the staff report (CMR:29 3:8) ; and 3. Appropriation of X3.0 million from the Gas System Improvement Reserve to the Gas Supplemental Supply Reserve ORDINANCE 3820 entitled 'ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 198889 TO ESTABLISH A RESERVE FOR GAS SUPPLY IN THE GAS UTILITY FUND AND TO MAKE A TRANSFER TO SUCH FUND FROM THE GAS SYSTEM IMPROVEMENT RESERVE' MOTION PASSED unanimously, 11. Finance and Public Works Committee Recommendation re Reserve Policy for Refuse Fund (NPG) Council Meat r Patitucci said this action was the culmina- tion of six committee meetings. The reserves at the current level were adequate based on the best estimates of future costs for of creating the -park and closing the landfill, and present value of the costs. 60-155 7/11/88 MOTION: Council Member Patitucci for the Finance and Public Works Committee moved that the City Council adopt the following System Improvement Reserve Policy for the Refuse Fund: Rates should beset for the Refuse Fund to target the Refuse System Improvement Reserve at $7.5 million (in 1988 dollars) by the time of a landfill closure date of 1999. That amount will fund: Landfill Closure Costs Future Park Development* Post -Closure Environmen gal Care Target SIR as of 1999 $2,846,000 2,683,000 2,000.000 *Mote: Future Park Development costs are estimated as fol- lows: 1985 estimate of $3.7 million increased by 5 percent per year, less amount already appropriated for Phase I ($1,6 million) As of June 30, 1988, the 1987-88 balances in the SIR will total approximately $7.6 to $7.9 million and are, therefore, currently on target. At the time that any significantvari- ables change (landfill closure date, environmental care estimate), staff will present Council 4Sth a revised SIR "target." MOTION PASSED unanimously. ADJOU RNMENT Council adjourned to a Study Session re Hazardous Waste Plan (Tanner) in the Council Chambers. RECESS FROM 9:15 p.m. to 9:25 p.m. STUDY SESSION RE HAZARDOUS WASTE PLAN TANNER! Hazardous Materials Program Coordinator Elizabeth Stowe introduced Is&o Kobashi, staff manager of the Santa Clara County's Hazardous Waste Advisory Committee. Mrs. Stolle indicated the Draft Hazardous Waste Management Plan was written to comply with AB 2948 (Tanner). The Plan was often referred to as 'The Tanner Plan." As mandated under AB 2948, Palo Alto would be required to adopt its own Hazardous Waste Management Plan which mutt be ccnsistent with the final County Plan. Also, the Comprehensive Plan would need to be changed. The State uepartsent of Health 60-156 7/11/88 'ervices iDHS) needed to approve the Plan and send the County its initial comments by the end of July. Four major requirements were necessary to receive DHS approval: 1) The Plan muse substantially comply with DHS guidelines; 2) The Plan must appropriately analyze the waste streams and deter- mine whether there was a need for additional facilities within the County; 3) if the County entered into a formal agreement to manage hazardous waste with another county, then the agreement must be documented; and 4) If there was a determination that additional sites were necessary, the Plan must contain siting criteria and proposed general areas where the criteria might be applicable. If DHS did not approve the Plan's contents, it would be sent back for revi- sion. The County and cities were required to approve the final Plan. The Tanner Plan could be considered in five divisions: goals and peolicie_; assessment of hazardous waste; waste minimalization; types of facilities; and siting criteria. The primary goal was establishing a system for managing hazardous wastes, protecting public health, safety and wel- fare and maintaining the economic viability of the local. community. Several, basic assumptions had been made at the state and local levels, e3g., that local governments were responsible for managing the waste generated within their jurisdiction; regional cooperation was strongly encouraged; waste reduction was the preferred hazardous waste management strategy; and hazardous waste management facilities were needed and siting of the facilities was specifically intended to be expedited. There was a substantial need for increased treatment capacity for most of the hazardous waste produced in the County. Projections for the year 20Vu were that total tons generated would increase substantially, thus exacerbating the insufficiencies of treatment and disposal facilities within Santa Clara County. Discussions were underway concerning the coordination of the "fair share' siting of regional facilities. The Draft Plan placed great emphasiq on' waste minimization as a policy. Achievement of significant movement along the hierarchy,. for many hazardous waste generators meant a substantial reduction in the amount of waste required to be shipped off -site for treatment, storage, and disposal. There were four basic types of facilities for treatment and disposal which rar:ged from transfer and temporary storage facilities, through treatment and recycling facilities, to the final option of permanent repositories. The five major types of treatment processes being used were: physical treatment, chemical treatment, biological treatment, stabilization and solidification, and thermal treatment. 60-157 7/11/88 There were facilities specifically designed for resource recovery and recycling. Materials with useful chemical or physical properties could often be recovered from a waste stream. A successf'!l recycling operation required a steady flow of appropriate wastes and a dependable base of custo- mers to market the recovered materials. Each proposal for the siting of a facility would have to be evaluated on ;.the specifio elements and nature of the proposed installation. City Council Members expressed several concerns about the issued- of minimum setback distances, public input into the process, and the protection of public safety. Concerns were also expressed about the Various types of facilities that might be considered, and the range of scphistication and size that were possible. After discussion by Council Members and staff, comments were received from the public. FINAL ADJOURNMENT Final Adjournment at 10:15 p.m. ATTEST: APPROVED: 60-158 7/11/88