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HomeMy WebLinkAbout1987-12-21 City Council Summary MinutesCITY COUNCIL MINUTES PALO ALTO CITY COUNCIL MEETINGS ARE BROAfX,AST LIVE VIA3;ZSU-FREWENCY9L.1 ON FM DIAL. Regular Meeting December 21, 1987 ITEM PAGE Oral Communications 59-46 Approval of Minutes of November 16 and 23, 59-46 1987 1. Resolution Expressing Appreciation to the Members of the Palo Altars for Civic Excellence for their Outstanding Public Srvice 2. Construction Contract with AMPECO for Hydraulic Hoist Replacement and Repair 3. Agreement with Robert Engiekirk, Inc., for Structural Renovation of the Ruth Stern Wing of the Community Center and Seismic Evaluation of the Senior Center 4. Cc nzultant Contract with California Micro Utility, Inc., for Thermal Energy Storage Monitoring Project 5. Contract with Adapts & Smith, Inc., for Installation of Transformer Tie -Downs at Alma, Hansen Way, and Hanover Substations 6. Financial Data Base Project - Agreement by and between the City of Palo Alto and Bi- Tech Software, Inc. 7. Rejection of Bids: Load Research System 8. Rejection of Bids: Floor Coverings for the Fifth Floor, Civic Center 59-47 59-48 59-48 59-48 59-48 59-48 59-48 59-48 59-44 -12/21/87 ITEM 10." Report from Council Legislative Committee re Fire -Safe Cigarette Legislation Agenda Changes, Additions, and Deletions P A G E 59-48 59-48 11. PUBLIC HEARING: Planning Commission 59-48 Recommendation re the appeal of Harold and Joan Schneider from the Decision of the Zoning Administrator for a Use Permit for Con- struction of a Second Dwelling Unit (Cottage) for Property Located at 855 Clara Drive (Continued from 11/16.87) 12. PUBLIC HEARING: Planning Commission 59-49 Recommendation re the Appeal of Lidia Reguerin from the Decision of the Zoning. Administrator to Revoke the Use Permit for a Day Care Center for Property Located at 450 W. Charleston Road (Continued from 11/16/87) 12A. (Old 9), Resolution Adopting a Compensa- 59-56 tion Plan for Hourly Personnel and Rescinding Resolution No. 6552 13. Analysis of Alternative Procedures for Housing Electronic ' Components of the Underground. Cable System Recess for Closed Session from 9:20 p.m. to 9:45 p.m. 59-57 59-6u 14. Request by the Palo Alto Housing Corpora- Lion for $100,000 in Housing Reserve Funds for Purchase of 3039-3049 Emerson Street 15. Lease and Covenant Not to Develop with the Palo Altai Unified School District Ordinance Ascending the Budget for the Fiscal Year 1987-88 to Provide an Addi- tional Appropriation for Utility Users Tax Revenue and Lease Payments to the Palo Alto Unified School District 16. Mayor Gail Woolley re Cancellation of December 28, 1987, City Council Meeting. Adjournment at 11:20 p.m. 59-81 59-45 12/21/87 Regular Meeting Monday, December 21, 1987 The City Council of the City of Palo Al trs met en this date in the Council Chambers, 250 Hamilton Avenue, at 7:34 p.m. PRESENT: Bechtel, Cobb, Fletcher, t.lein, Levy, Patitucci, Renzelfi Sutorius, Woolley Mayor Woolley announced that a Special Meeting Lto interview Human Relations Commission candidates was held in the Council Conference Room at 6:15 p.m. Appointments would be made at the first City Council meeting in January 1988. At some point during the meeting there would be a Closed Session regarding pending litigation pursuant to Government Cede Section 54956.9(a): 1) City of Palo Alto vs. Philadelphia Gear et al., 2) City of Palo Alto vs.\Vertical Management Systems, Inc., et al-. ORAL COMMUNICATIONS 1. Ed Powe, 2254 Dartmouth Street, asked Connell Member Cobb what was meant by "greater public access to the San Francisco Bay" and what his reasons were for destroying the Palo Alto Yaeht Harbor and denying public access to the water by way of the Sea Scouts' facility. The rea- soning presented by the City Attorney was logically indefensible. There was enough need for diking material and fill to use the dredging spoils -from Palo Alto Harbor as fill for the next 100 years. Part of the Countywide planning could be to offer the cheap fill material for the Alviso area. He submitted an article from the San Francisco Chronicle on the Subject and noted the Palo Alto Weekly was a good ferum for pub- lishing Council Members answers. 2. Alison Lee, 1241 Harker Avenue, Chairman of the Standing Committee on the Arts and Sciences, said they in the arts were concerned about the .Cost Recovery Study and considered it a loaded shotgun at the head of. their three major art groups situated at the Community Theater. They were .upset that the report took no account of voluntarism and requested a public hearing to discuss the justification for a study of that sort. APPROVAL OF' THE: MINUTES OF NOVEMBER 16 AND 23 1987 MOTIOt4: approval of the Minutes of November 16, 1987,. as submitted. Vice Mayor . Sutorius moved, seconded by Klein, 59-46 12/21/87 MOTION PASSED unanimously. MOTION: Vice Mayor Sutorius moved, seconded by Klein, approval of Minutes of November 23, 1987, as submitted. MOTION PASSED a., - vote of 8-0-1, Woolley `abstaining." . RESOLUTION EXPRESSING APPRECIATION TO THE MEMBERS OF PALO ALTANS FOR CIVIC EXCELLENCE FOR THEIR OUTSTANDING PUBLIC SERVICE (701-04) Mayor Woolley said she would not participate due to a con- flict of interests. Vice Mayor Sutorius said the purpose of Palo Altans for Civic Excellence was to ensure the passage of a Utility Users Tax and an Increase in the City's Appropriations Limit on the November ballot. Through its concerted efforts, additional ,revenues would be available to provide for identified needs. The Council of the City of Palo Alto expressed its appreciation and gratitude to Ellen Christensen, Gary Fazzino, Judy. Higgerson, Sandy Hopkins, John Joynt, Julia Keady, Larry Klein, Susan Levenberg, Trina Lovercheck, Betty McCroskey, George Richardson, Sally Siegel, and John Tuomy, and commended Palo -Altans for Civic Excellence for its outstanding public service. MOTION: Vice Mayor Sutorius moved, seconded by Cobb, approval of the Resolution. RESOLUTION 6657 entitled 'RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING ITS APPRECIA- TION TO THE MEMBERS OF PALO ALTANS FOR CIVIC EXCEL- LENCE FOR THEIR OUTS rANDING PUBLIC SERVICE" MOTION PASSED unanimously, Klein, Woolley not partici- pating." Vice Mayor Sutorius also praised Diane- Caton and Papa Marsh and presented copies of the Resolution to members of Palo Altans for Civic Excellence. Council Member Klein recognized Diane Caton's remarkable contribution to their successful effort. CONSENT CALENDAR Council Member Levy removed Item 9, Resolution Adopting a Compensation Plan for Hourly Personnel and Rescinding Resolution No. 6552. MOTION: Council Member Cobb moved, seconded by Fletcher, approval or the Consent Calendar. 2. CONSTRUCTION CONTRACT IN THE AMOUNT OF $96,318.06 WITH AMPECO FOR HYDRAULIC HOIST REPLACEMENT ANI) REPAIR (CMR:561:7) (603-01) 3. AGREEMENT WITH ROBERT ENGLEKIRK, INC., CONSULTING STRUCTURAL ENGINEERS,, FOR STRUCTURAL RENOVATION OF THE RUTH STERN WING OF THE COMMUNITY CENTER AND SEISMIC EVALUATION OF THE SENIOR CENTER IN THE AMOUNT OF $7,0,045 (CMR: '-50:7) (1312-02) 4. CONSULTANT CONTRACT WITH CALIFORNIA MICRO UTILITY/ INC., FOR THERMAL ENERGY STORAGE MONITORING PROJECT IN THE AMOUNT OF $24,260 (CMR:564:7) (1410-01) 5. CONTRACT WITH ADAMS & SMITH, INC., FOR INSTALLATION OF TRANSFORMER TIE -DOWNS AT ALMA 1 HANSEN WAY AND HANOVER SUBSTATIONS IN THE AMOUNT OF 54,649 (CMR:562:7) 1101) 6. FINANCIAL DATA BASE PROJECT - AGREEMENT -BY AND BETWEEN THE CITY OF PALO ALTO AND BI -TECH SOFT WARE, INC., IN THE AMOUNT OF 121(702 (CMR:556:7) (270-01) 7. REJECTION OF BIDS: LOAD RESEARCH SYSTEM (CMR:565:7) (1410-01) �. 8. REJECTION OF BIDS: FLOOR COVERINGS FOR THE FIFTH FLOOR, CIVIC CENTER (CMR:566:7) (810) 10. REPC.RT FROM COUNCIL LEGISLATIVE COMMITTEE RE FIRE -SAFE CIGARETTE LEGISLATION (CMR:567 : 7) (702-06) MOTION PASSED unanimously. AGENDA CHANGES, ADDITIONS, AND DELETIONS City Manager Bill Zaner said Item 9, Resolution Adopting a Compensation Plan for Hourly Personnel and Rescinding Resolution No. 6552 would become Item 12A. 11. PUBLIC HEARING: PLANNING COMMISSION RECOMMENDATION RE APPEAL OF HAROLD AND JOAN SCHNEIDER FROM THE DECISION OF THE ZONING ADMINISTRATOR TO DENY A USE PERMIT FOR CONSTRUCTION OF A SECOND DWELLING UNIT (COTTAGE) FOR PROPERTY LOCATED AT.. 855 CLARA DRIVE (Continued from 11/16/87) CMR:570:7) (300) MOTION: Mayor Woolley moved, seconded by Fletcher, continue the item per the applicant's request. 59-48 12/21/87 MOTION PASSED unanimously, 124 PUBLIC HEARING: PLANNING COMMISSION RECOMMENDATION RE THE APPEAL OF LIDIA REGUERIN FROM THE DECISION OF THE ZONING ADMINISTRATOR TO REVOKE THE USE PERMIT FOR A DAY CARE CENTER FOR PROPERTY LOCATED AT 450 W. CHARLESTON ROAD (Continued from -11/16787) (CMR:523:7) (300) Mayor Woolley reopened the Public Hearing. Planning. Commission Chairperson Ellen Christensen ermphasized the Planning Commission felt the major issue was meeting the State licensing requirements.-- Its concern was to give the applicant sufficient time to qualify for that license by meeting any deficient educational requirements necessary. to qualify her as a director. The Commission did not feel committed to the six-month period beyond that time, and she believed the six -months was from the time of the Planning Commission meeting and not from the present time. The Planning Commission believed the existing driveway was. functional and. _there. was no evidence that it was particu- larly hazardous; therefore, the Commission did not believe it was necessary to compel the applicant to install the circular driveway. Chief Planning Official Carol. Jansen spoke 'regarding the status of Ms. Reguerin's licensing and said the Council received a December 7, 1987, licensing report that noted problems of inadequate staffing on site, the qualification requiring a .director on site, and lack of supervision; however, Ms. Reguerin had Applied for an exemption to the requirements for qualification as director and had enrolled. in a De Anza College course to complete the educational requirernents. Council Member Cobb asked if granting a Use Permit in the subject case would expose the City to any liability. City Attorney Diane Northway did not believe the City would ultimately incur liability for damages but would not get the attorneys' fees back. The decision to grant a conditional use permit involved immunityfor a discretionary act on the part of the Council, but that would not necessarily get them out of a lawsuit, and the City could incur some costs. Council Member Cobb asked if the legal staff would be com- fortable with staff's alternate suggestion of a three-month temporary permit. 59-49 12/21/87 Ms. Northway asked if that was the staff's recommendation. Ms Jansen said that was one of the options, and pointed out the Planning Commission recommendation was. for six months from the date of the Council action if Council did not revoke the use permit. That would allow the applicant suf- ficient time to complete her course work, less a month or so. Ms. Northway deferred response until the Council had an opportunity to ask the applicant questions about what she was doing and how she was doing it, when they would all have a better understanding of where the matter stood and their respective responsibilities and concerns. Council Member Bechtel clarified staff's reco{,:mendation was rather than the six-month period recommended by the Planning Commission, it would be a three-month delay. She asked if the recommendation was three -months from the present date or from the Planning Commission meeting. Ms. Jansen clarified the staff recommendation was from the date of the Council's determination. She was concerned three months right not allow sufficient time for the appli- cant to complete course work. Mayor Woolley asked what conditions still had not been «et. Ms. Jansen said Conditions l and 2 still had to be met; in - Conditions 3 and 4, the license and use and occupancy permit had not been issued; Condition 5 was directly related to the: licensing; Condition 6, hours o_L operation were standard; Condition 7 stated all references to time for completion of conditions of approval should be from the date of Council action on theUse Permit; in Condition 8, the drop-off area would have to be widened, Condition 9 was standard; and Condition 10 would be required. Portions of many of the conditions, i f not all, needed resolution. Mayor Woolley clarified so far nothing had been done to satisfy Conditions 1, 2, 3, 4, or 8. Ms. Jansen could not r-espond to some of the details of the licensing. Council Member R€enzel asked if staff had information regarding a letter (on file in the City-: Clerk's office) which indicated the property was listed, for sale as a licensed business and was not intended to be operated, by the applicant. 59-50 12/21/87 Associate Planner Joanne Auerbach said staff was aware the property had been offered for sale; however, the use permit went with the land and a new owner could purchase the prop- erty and still operate under any existing valid use permit, or lease the property back to any day care center operator to operate under the conditions of that use permit. Changes in their licensing requirements from the State might be caused. Ms. Jansen said Ms. Reguerin had withdrawn her application for licensing at 527 Arastradero Road which had been one of the problems in complying with the conditions of the subject use permit. Council Member Renzel said the Council also received at places (on file in the City Clerk's office) a copy of a drop -in evaluation on December 7, 1987, which seemed to indicate there was not strict compliance at that time with the licensing requirements as they existed. Ms. Jansen said that was correct; there apparently continued. to be problems with the numbers of supervisors on site and their qualifications as teacher versus aide. Mayor Woolley asked what steps Ms. Reguerin had taken to qualify as a director. Lidia Reguerin, 575.. Arastradero Road, the owner/director of the child care center, said she registered in two courses necessary to be the director of an infant center. She did not understand why she had to fulfill those requirement because she was licensed and was director of an infant center for over three years and was simply moving sites. Mayor Woolley asked when Ms. Reguerin registered for the courses. Ms. Reguerin said she registered by mail at De Anza College on December 15, 1987. The term would start January 5, 1988, and would end March 25, 1988, and she would take both courses during that quarter. Mayor Woolley asked what else Ms. Requerin had specifically done to take care of the various problems since the first hearing in August 1987, with the zoning Administrator. Ms. Reguerin said there was nothing else she could do except wait for approval of the extension. 59-51 12/21/87 Council Member Renzel asked whether Ms. Reguerin had sub- mitted an application to withdraw her application tor the day care license at 575 Arastradero Road. Ms. Reguerin said the withdrawal of the application was given to the licensing office on December 7, 1987. Mayor Woolley asked if the property was for sale, and if Ms. Reguerin intended to sell it, as a business. Ms. Reguerin said no, the property was previously for sale. She had another property at 575 Arastradero Road and was planning to have one day care center for infants and pre- schoolers, but the licensing office said they would not grant her a license for both ages at that site, so she was not going to sell the property. Mayor Woolley asked if the decision was recent, because the Council had correspondence indicating the property was for sale. Mr. Reguerin said it was a recent decision. Council Member Renzel said there was confusion about the age of the children. She asked whether the children were up to and including two years old, or only up to 24 -months. She asked the ages of the children at present, and what ages Ms. Reguerin was applying for. Ms. Reguerin had children ages 8 weeks to 24 months, but the license applked tor read 8 weeks to 30 months. Council Member Renzel asked whether the staffing was One for every four children. Ms. Reguerin said yes, except the day of the drop -in visit, she went to get milk for the children. MOTIONS Council Member Bechtel moved, seconded by Renzel, to continue the Public Hearing to the first meeting in May of 1988 to allow the applicant time to comply with licensing requirements and other conditions of approval. During this period, the Use Permit (86 -UP -7) would continue in effect, the child care center may continue in operation and must comply with conditions 2, 4, 5, 6, and.9, which modify Use Permit 86 -[JP -7. The conditions of Item 4 should be com- plied with by the end of the 60 -'day period. In addition, the .licensing requirement described in Condition 3, would then have to be wet when this Use, Permit returns to Council in May 1988r rather than the six-month period recommended by the Planning Commission. 59-52 12/21/87 Council Member Bechtel did not believe the Planning Commission recommendation for completion of the requirements by March was realistic. The applicant had difficult deci-_ s ions about which center to operate,' -and the City was des- perately in need of day care and, particularly, infant care. Her motion gave the applicant time to work for that licensing and was reasonable. If the applicant did not make the date, the Council should be "hard nosed" and say the applicant must, at the same time, continue with the other conditions and must actively pursue the licensing require- ment because the Council would not be happy with an unlicensed day care center. Council Member Fletcher asked whether the motion included all the conditions. Council Member Bechtel said yes. AMENDMENT: Council Member Fletcher moved, seconded by Cobb, to amend Condition 8 to require a circular driveway. Council Member Fletcher said not only was the circular driveway recommended for safety's sake by the Transportation Division staff, but the particular property was dominated >y the concrete of the driveway which was right in the middle of the property. To widen it further would detract from any semblance of attractiveness. The house looked all right, but the landscaping was terrible. Staff pointed out a circular driveway would give added opportunity for more landscaping at the frontage. Ms. Reguerin said the architect presented a new plan, and a study was made by the City of Palo Alto in regard to the proposed plan by Architect Jenks. She believed the agree- ment was the architect's presentation was accepted by the Planning Commission. Mayor oioolley clarified the architect's plan was accepted by the Planning Commission, but its action was referred to the Council for final action. AMENDMENT FAILED by a . vote of 4-5, Fletcher, Cobb, Sutorius, Renzel, voting "aye." Vice Mayor Sutorius said the license application was for the care of infants up to 30 months of age. There had been much dialogue and correspondence about the terminology used to describe what the limit on the age would be, and he asked where the City stood on the matter. 59-53 12/21/87 Ms. Jansen said the Planning Commission recommendations for Condition 3 said the day care license should be for 16 children, and Condition 5 said limited to a day care center on the first floor with 16 infants, four_ staff and one director. Basically, staff would take the definition of "infants" from the State licensing agency but could make the modify the definition_ if Council wished. Vice Mayor Sutorius asked for clarification of the history of the discussion of the age limitation. Commissioner Christensen believed the discussion at the Planning Commission centered around whether the limitation should be two years or 24 months; and there was a feeling not to include the 24 -month provision because the State licensing requirement basically defined infants as up to 30 months. The Planning Commissioners had no problem with hildren all the way up to 36 months. Vice Mayor Sutorius said the Council was voting on the term "infants," and, therefore, by default the term became whatever the State defined "infants" to be. At the present time, the licensing was up to and including 30 months. Council Member Levy asked what happened next if the motion before the Council passed or if the Planning Commission recommendation was approved. Commissioner Christensen said the Planning Commission recom- mended that the use permit remain in effect and be auto- matically reviewed in six months by the Planning Commission. It would not return to the Council unless the Commission recommended revocation of the use permit. The staff recom- mendation essentially continued Council discussion and the public hearing over the,next five months so the entire issue was open during that pe,iod. Council Member Cobb clarified the motion extended for five months Council's decision about whether to revoke the cur- rent use permit. He°agreed with the need for child care but was concerned about whether Council was being as critical as it normally would because the issue was socially attractive. He saw many problems including the tact that: the applicant demonstrated a marked unwillingness to comply with the City and State requirements.. Mayor Woolley said the use permit was originally granted in May of. 1986. If Council passed the motion, two years would have passed within. which the applicant. should have complied with.the use permits When the use permit was granted, there 59-54 12/2.1/87 were certain conditions to be met and those same conditions were still outstanding. A public hearing was held on August 6, 1987, when the Zoning Administrator wanted to revoke the use permit. 'If the applicant was serious about complying with the terms of the use permit, the applicant would have registered for courses at college during the fall quarter. She saw no evidence that the operator was making a concerted effort to comply. She believed Council would be in the same position in May --two years after the process started. It was time to follow the City processes and revoke the use permit. She would not support the motion. Council ,ember Bechtel supported giving the applicant one last chance on the basis that decisions were being made as to which property would be the one where the activity would be conducted. The motion provided better control, because the matter returned to the Council. Council was only con- tinuing the public hearing at that point. Council Member Levy supported the Planning Commission recom- mendation which laid out many criteria, which if met, the use permit would not be revoked. If the criteria were not met, the Commission would consider recommending that Council revoke the use permit. There did not seem to be a need for Council to consider the item in a few months if, in fact, all of ..the recommendations Of the Planning Commission were met at that time. He concurred with Council Member Bechtel that in any case, child care was important and he was willing to give the applicant another six months. Council Member Mein concurred with the remarks of Council Members Bechtel and Levy.. There were technical rules which the applicant needed to meet, State and City, and given the applicant's background and the various things she tried, while not to be commended, it should not be sufficient to throw out the whole program. Council Member Fletcher was committed to child care but had real problems with the application. Among the conditions not complied with was the use and occupancy permit. She queried what other use the City would have permitted to occur for two years without the proper permit. She did not have much faith in the applicant's commitment to adhering to the regulations once the permit was issued. She would not support the motion. Council Member Renzel supported the motion because she believed the applicant attempted to run the center and com- ply with the conditions. While the record was not out- standing in terms of compliance with the conditions, it took 59-55 12/21/87 time and someone involved in infant care probably had a greater time involvement than with any other type of child care. She concurred with the concerns expressed and would seriously consider whether all of the conditions. were met when the matter returned. Vice Mayor Sutorius believed the record reflected many con- cerns. He would support the motion and was somewhat relieved because one of the conditions was that "a use and occupancy -permit shall be applied for and any deficiencies noted as part of the use and occupancy inspection shall be corrected within 60 days." Many conditions were enumerated and specific time elements were associated with them. Mayor Woolley asked what happened. if the conditions were not met in 60 days, Ms. Northway said if the conditions were not met, staff was obligated to return to Council so it could finalize its action. Otherwise, Council would continue on until May if the motion passed. The 60 --day time period would start on December 22, 1987. She clarified that the motion continued the public hearing until the first meeting in May unless the use and occupancy permit was obtained within 60 days in which case the matter would return to the Council. Council Member Renzel clarified the application must be made for a use and occupancy permit and any deficiencies must be corrected before 60 days so one could not wait for 59 days to apply for the permit. Ms. Nortnway said that was correct. NOTION PASSED by a vote of 5-4, Cobb, Fletcher, Levy, Woolley voting "no, 12A. (OLD 9) , RESOLUTION ADOPTING COMPENSATION PLAN FOR HOURLY PERSONNEL AND RESCINDING RESOLUTION . 6552 (CMR:563:7) (701-04/501) Council Member Levy understood the compensation plan should have taken effect on or about July 1, 1987. He queried the delay and whether anything could be done to be fair to City employees who went without a pay raise _ for a substantial length of time whet: other City employees received a raise. City Manager Bill Zaner said the compensation plan was late due to problems regarding part-time and temporary employees, not all of which were resolved. Staff would return in a few weeks with issues related to -retirement. Rather than hold 59-56 12/21/87 the compensation plan, staff chose to bring it forward. The ideal way to handle the issue would have been to try and make the part-time salaries retroactive. In consultation with the City Attorney, the salary plan was presently drafted so that could not be done. As a result, he instructed the Director of Personnel and the Director o.f Social and Community Services to try and find some ways to make the specific employees whole over the next few months so that as they approached the new salary date, which was July 1988, the employees would be back where theybelonged and would be recompensed for the wages lost due to the City's delays. Council Member Levy asked whether the City could assure that such increases would take place in a more timely manner. Mr. Zaner said yes. He did not believe there would be the same problems with the retirement system. City Attorney Diane Northway said the resolution was worded the same as past resolutions and did not address the issue of retroactivity. Section 3 of the resolution provided the resolution was effective until amended or revoked Iby the Council. It did not have a definite term upon which to conclude as other City compensation plans did. If Council wanted to address the problem, it would need to be done by changing Section 3. Staff would be returning in a few weeks with some charges in the plan and the problem could be addressed at that time if Council desired. MOTION: Council Member Levy moved, seconded by Fletcher, to approve the resolution and direct the City Attorney to draft language with respect to future contracts being retroactive. RESOLUTION 6658 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING A COMPENSATION PLAN FOR HOURLY PERSONNEL MID RESCINDING RESOLUTION NO. 6552" MOTION PASSED unanimously. 13. ANALYSIS OF ALTERNATIVE PROCEDURES FOR HOUSING ELEC- TRONIC COMPONENTS OF THE UNDERGROUND CABLE SYSTEM (CMR:559 :7 ) -- Council Member Klein said net incremental difference per mile was. approximately $34,064/ arid there were approximately 12 miles of undergrounding which equaled about $408,000 gross, discounted at present value equaled $276,000. He 59-57 12/21/87 asked tor clarification. He asked where the $436,000 to maintain technical service came from. Cable Coordinator Jeanne Moulton said the costs from the Cable Co-op were primarily the service calls it would have to make when a maintenance problem arose. The _Cable Co-op would ,have to fix the problem when it was_ on the house side of the tap. The marketing cost would be for increased mar- keting necessary to get customers on the institutional net. Council Member Klein was concerned that Council had no back- up -data for the $436,000 figure. It seemed to overlap with what -Pacific Bell would be doing. He, referred to the cash payments of $62,000 to cover the cost -- of retrofitting the Leland Manor Neighborhood and believed it was inconsistent with what the Pacific Bell report showed, which was $19,000. The $62,000 figure referred also to line extenders or ampli- fiers. Staff _justified $62,000 in cash payments as being the cost of retrofitting the Leland Manor neighborhood but the Pacific Bell referred to the $62,000 as being for taps, line extenders and arnplifi.ers. Staff recommended that Council not do the :line extenders and amplifiers but only the taps, which should equal $19,000. Council Member Bechtel asked about the extension of the amortization period for the property of Cable Co-op and askew whether it referred to the amortization of the entire parcel (the former "Maximart" site), or whether it was for one corner and exactly what it involved. Mr. Zaner said it referred to the entire "Maximart9 site, There was an arrangement as a part of the lease between the owners of the property and the Co-op such that if an extension of the amortization period was granted, then the lease payments for the Co-op dropped. It also meant the Co-op would not have to face a relocation. He deferred to the Cable Co-op for details of the lease. Council --Member Bechtel asked what percentage of the "Maximart" site was occupied by the Co-op. Director of Planning and Community Environment Ken Schreiber deferred to the Cable Co-op representatives for the exact figures. Council Member Patitucci said the basic recommendation was to underground the taps in the City of Palo Alto for neigh- borhoods which currently had undergrounding. He asked about those neighborhoods which would be undergrounded in future years and queried whether. the City. would pick up all the 59-58 12/21/87 costs which would occur at that point when underground vaults were used. Mr. Zaner said the franchise agreement required cable to be undergrounded as the City went underground. If Council decided in ten years to declare an underground district somewhere, cable would be required to be underground. Future costs were not addressed because as he saw it, those costs would be covered as an undergrounding occurred, and would be an ongoing expense for the franchise. The fran- chise was required to pay the difference between going underground as it. now believed it could and going under- ground with vaults. He assumed that over the years the franchise would build the costs into its maintenance and operating costs, and ultimately spread it across to everyone because it would be built into the rates. Council Member Patitucci said the Co-op could basically charge whatever the market would bear based on its need to get revenue to cover costs and do whatever a Co-op did with the increment. If the Co-op's costs went up and they could not be passed along, the -Co-op would lose money. If the costs went down and the revenue was higher in proportion, then they would make more money. He queried whether a profit criteria could hive been established at the beginning and included in the rate structure. Mr. Zaner believed the criteria could have been included in the original Request for Proposal ( RFP) . Ther.'a was a time when cities had a right of rate review for cable television companies, but the right was withdrawn at the federal.. level. Council Member Patitucci said his problem was taking the discounted .present value of future maintenance costs and incorporating it into something that would be paid now. What if the Cable Co-op became profitable, like the City's utility, and could charge a competitive charge to cover the costs. He queried whether an ongoing mechanism was explored where the City would be willing to pay something when the costs occurred as long as they were documented and the Co-op did not have the revenue to cover them, but not on a present value basis before they occurred. He did not trust many of the estimates. He wanted to see some experience with the undergrounding. Mr. Zaner said the costs listed in the report (CMR:559i7) were for areas already undergrounded. Staff did not attempt to go forward except in the ►pia intenance areas. -It seemed the greater danger was not with the Co-op's ability to lose 59-59 12/21/87 money but rather that it might work out to be reasonably profitable, and the City would end up overpaying. He did not know how to account for it except for a complicated system of monitoring the Co-op all the time. Council Member Patitucci could see that the Co-op had the opportunity through managing the rate structure to allocate the costs over the entire rate base and the City had an obligation to step up and pay for something it did not require in the first; place. He did not understand the justification for charging Pacific Bell $100,000. Mr. Zaner could not provide a. rationale for why the division was as it was. The operation was entered into in good faith with the understanding that they would build a system that was "underground." No one realized that the word "under- ground" meant different -things to different people. He did not hold the responsibility for the difficulty solely with the Cable Co-op, the City or Pacific Bell. Pacific Bell was asked to participate financially, but declined to do so. Vice Mayor Sutorius asked if and when the Cable Sounding Board was sent copies of the December staff report (CMR:559:7). Ms. Moulton said copies of the report were not sent but letters were sent to the same people in November and December telling their► of the meeting and that copies of the report were :available. .The letters were sent out on December 16, 1987. Vice Mayor Sutorius asked about the justification for pro- posing that costs sae absorbed in significant amounts by all of the taxpayers. It appeared that the General Fund would be affected although the source rfor the $62,000 in cash payments was not identified and that the other dollars were taking the assets of the City in one way or another and applying them to an undergrnunding situation. Mr. Zaner said the rationale was found in the motion Council adopted at its last session wherein staff was to undertake a study to determine who should bear the costs...taking into consideration (a) the use -Of users fee; (b) the absorption of additional costs by either Co-op, Pacific Bell, or a combination thereof; and (c) determine the City of Palo Alto contribution by either reducing some of the requirements of the contract or some reductions of the franchise fee. Staff took the instruction seriously and tried to find a way to Structure an arrangement whereby either the Co-op, Pacific Bell or both would contribute and the City's contribution 59-60 12/21/87 would not be cash but would be some way of "reducing some of the requirements of the contract." Staff included a cash fee which Council Member Klein revised down to $19,000. Vice Mayor Sutorius said the report indicated staff was unable to devise an equitable means for spreading some or. all of the costs to homeowners in the affected area. He queried whether a surcharge applied to cable service subscribers on a monthly basis was considered for the underground areas. Mr. Zaner said yes. Staff looked at many ways to levy the costs directly back on the affected areas including a one- time connection fee or a monthly surcharge which might spread the cost over a period of time. The difficulty _was the nature of cable television itself because it was some- what inequitable to levy either of those kinds of fees or some other variation on homeowners who determined not to take cable television but who happened to live in an under- grcuud district. In the case of a one-time connection charge to cover the undergrounding costs,- it would ue diffi- cult to figure out what the charge Would be because there was no way to know-how many people in the underground area would sign up for cable television, how many would dis- connect, or decide later to sign up, which would all.change the mathematics. Staff could not find a fair and equitable way to distribute the costs just to the undergrounding area. It was much different in electrical undergrounding where every homeowner would receive service without question and no one would ever disconnect. There was a concern on the part of the Co-op representatives that a surcharge or additional monthly charge to cover the costs would have a deleterious effect on their marketirg in the area. Vice Mayor Sutorius believed staff was attempting to spread $800,000. It seemed there would be the opportunity for other scenarios, one of which could be to have a surcharge related to thenumber of taps to be affected. The questio., of whether to pay maintenance on a forward basis could be a formula process which compared actual trouble experience in Menlo Park, Atherton, East Palo Alto, and the unincorporated areas where there was underground service to establish the trouble rate and find a way to offset the' actuals on an ongoing basis rather than just using an estimate one-time at the very beginning to build into a charge_, Council Member Renzel clarified there was about 13. years left on the amortization period for the "Maximart" site which meant there would not be housing on the entire site for 24 years. 59-61 12/21/87 Mr. Schreiber said that was correct. While he had not seen the written information, he assumed they were speaking of the entire 12.4 acres and not the area occupied by the Co-op facilities. Council Member Renzel confirmed that WSJ Properties basically told the Co-op that if it_ could leverage the City's interest into changing the amortization period, it would discount its rent. Mr. Zaner understood that was the arrangement when they sinned the lease. it did not arise as a consequence of the discussions. Council Member Renzel under stood the $250,000 value was -not related to cost savings of the Co-op not having to move but rather to a rent savings the Co-op realized by being the vehicle by which the amortization was extended, Mr. Zaner acknowledged representatives of the Co --op shaking their heads in the negative and he deferred to them for responses Council Member Renzel asked whether the location of the Co-op facilities was such that the small portion of the site could be provided for in some sort of a zoning provision like a conditional use permit or something else which specifically related to the particular type of facility that would not require an amortization of the entire "Maximart site" in order to continue the use of the antenna and broad- casting facilities, etc. Mr. Schreiber had not been through the facilities but under- stood they fronted on Park Boulevard. In that sense, they fronted on a public street and if part of the site was sep- arated off, that would be the logical place. The problems of trying to separate off part of an existing building and the code related issues, etc., were substantial. Council Member Renzel asked if there was a means by which a' conditional use permit could oecome a part of the RM-3 zone which was so specifically designed that .it only accommodated something like a cable headquarters. Ms': Northway said that would require a zoning ordinance change which would have to apply across--the-board to any RM-3e use. Staff would need to investigate whether they could draft it so particularly as to impact just one use. 59-62 12/21/87 Council Member Renzel assumed it took a change of zoning in order to extend the amortization period. Ms. Northway said the particular property, because it was not part of the 1978 rezoning and had a separate ordinance on it, would not be eligible for the so-called "exception extension procedure" .currently in the Code. It would require that a different process be developed, but that could be done in the context of a zoning amendment for the particular property. Council Member Renzel asked if it essentially became con- tract zoning in view of the fact a value had been attached to the action proposed by the staff report (CMR:559:7) in order to compensate costs Co-op would incur. M s. Northway did not construe it that way. She believed the recommendation was to consider doing something, and she assumed that once the City did that, the remainder of the proposal would be forthcoming. If the City entered into a so-called "contract" which said the City had to rezone the property in order tor certain other things to happen, then they would be into contract zoning. Council Member Renzel wondered if saying the City would con- sider it, and then it corning to the Council in the context of being valued at $250,000 to the City, put the City in a biased position with respect to the public hearings required for a rezoning. Ms. Northway said any kind of hearings required would be up to the Council. The action the Council would initially take would be some sort of rezoning or changing of the zoning ordinance that affected the particular property. That was a legislative act so, unless they were speaking to a personal financial conflict of interest, the terms "bias" and "prejudice" were not appropriate to use in the cotext of'a legislative;proceeding as opposed to a quasi-judicial pro- ceeding, which would not be the ease. Council Member Fletcher wondered where the extra $100,000 might come from, since PacBell had not offered the • $100,000 requested. She did not see possible use of the franchise fee in the list of sources of funding, which was one of the alternatives mentioned in the last meeting. Mr. Zaner confirmed that one of the items in the motion made by Council Member Klein- was consideration of the franchise fee. At best, the franchise fee was going to be relatively small -phis estimate was - somewhere in the $120,000 to $125,000 range for. the City --and they had already placed 59-63 12/21/87 enormous demands on it for many years to cover litigation costs; therefore, he tried not to include_ the franchise fee. In addition, although he did not believe it would happen immediately, there was some question as to whether or not the City would have'a franchise fee. In regard to the $100,000, if PacBell did not participate only two parties were left to the agreement, and one or both of them had to cover all or some of the costs. Council Member Fletcher said the key point brought out at the last meeting was when the consultant, Mr. Page, stated there would be no added maintenance problems with the pedes- tals being undergrounded. Subsequently, the last report and the new information by PacBell stated that was not accurate, and she had not been able to find experts to support that point of view. She_ wondered whether there had been any follow-up contact with fir. Page to clarify the point he made. Ms. Moulton said yes. She clarified Mr. Page said that technically it was possible to put the equipment in under- ground vaults, but the maintenance was more difficult, and the risk of improper maintenance made the damage that might happen to the system more likely. Mr. Page did -not say the maintenance would not increase but that technically it was possible and it became a question of how well the vaults c_ed maintained. be v .�t l. G[t [lid. Council Member Fletcher believed the information from PacBell was the nature of the materials used were corroded by the acid in the soil, the condensation moisture produced, etc., which was unrelated to good or bad maintenance. She asked if Mr. Page had clarified that point. Ms. Moulton believed there was a difference of opinion. Mr. Page opined that the materials should work, and the mainte- nance of the equipment caused the risk. Council Member Levy asked whether the total $832,000 assumed undergrounding of taps, line extenders, and amplifiers alto- gether. Ms. Moulton said the estimate was based only on taps because a system could not be found that undergrounded more than taps. Council Member Levy asked if "Cable Co-op maintain, techni- cal service," assumed only the undergrounding of the taps. Ms. Moulton believed so. 59-64 12/21/87 Mayor Woolley was aware that delaying was a problem for PacBell resulting in a cost of $35,000 a week, and she asked the impact of an indefinite delay of the underground areas in Palo Alto in order to go over the project with a fine- tooth comb. The figure for undergrounding the 617 taps seemed high based on Council Member Klein's point that it would be about $19,000 to underground the 77 taps in Leland Manor. There should be some savings trom not installing the pedestals first, and the figure should not be the same as for retrofitting. Pacific Bell Project Manager Chris Salkeld replied an indefinite delay would certainly mean PacBell would have to release their current subcontractor, to hire a new sub- contractor at the -time resolution was made, and would increase the costs associated with the project. The current contractor had contracted to complete approximately 120 miles of underground constrs tion, which allowed a low cost per unit. If PacBell were to sublet another construction company for a bid that woul. approximate possibly 15 miles, the. per unit would be gre t'ot r and the inflation factor also had to be taken into consideration. The costs associated with undergrounding the new areas was $188 per tap site, and the cost for a replacement such as in the Leland Manor area would be $248 per site. The costs were incremental costs above what it cost PacBeii to do the work at present in the pedestal environment. Council Member Levy said it was a savings not to replace pedestals, and he was not sure he saw that savings. Mr. Salkeld believed the actual cost per pedestal was $18, and PacBell had not shown a potential savings in the event they were able to dispose of the pedestals in some manner and receive payment for them. PacBell made a lump --sure pur- chase of all pedestals for the system, and they were cur- rently stored in their yards. Council .Member Levy clarified the $188 cost of a new tap underground was over and above the cost of putting a pedes- tal in that location, i.e., the total cost of installing a tap underground was more than the $188. Mr. Salkeld said that was correct. Council Member Cobb understood two construction crews were involved: one for the overhead installations and one for the underground. He asked if it was the underground -crew that would-be released in the event of _an indefinite delay in the underground areas. 59-65 12/21187 Mr. Salkeld said yes. Council Member Cobb asked what the impact of a delay of a few weeks would be in the decision with respect to the same crew. Mr. Salkeld said PacBell currently had work scheduled through January 15, 1988, and believed they could continue. through that time without a delay. Council Member Klein asked if it was a possibility for PacBell to continue the underground work while a solution was worked out with regard to who paid.what. Mr. Salkeld believed it was certainly a possibility. They wanted to do whatever they could to put the issue to rest and complete the system. They would certainly like to take any suggestions back to the table within Pacbell for resolu- tion. COUNCIL ADJOURNED TO A CLOSED SESSION ON LITIGATION FROM 9:20 P.M. to 9:45 P.M. Al Kartchner, 577 Patricia Lane, lived in the middle of the area in question and served on the ad hoc committee that had one meeting when there were a number of highly -trained elec- trical engineers as well as representatives of PacBell and Cable Co-op. From the report, he found no evidence of staff's taking advantage of the professional help volun- teered, and he believed they might have come up with some alternatives to the problem. He suggested taking advantage of some of the expertise before final .conclusions were made. Cable Co-op Representative John Kelley, 1868 Mark Twain, noted they had a lease agreement with WSJ Properties for the site where the head end, studio facilities and their offices were located. Part of the term of the lease, which he believed was negotiated in September 1985, provided if there were a change in the amortization period that there would be a• reduction in the lease payments to WSJ for the property of $75,000. He hoped it did not appear to the Council that Cable Co-op was doing WSJ's "dirty work," as that was not their intention. In _trying to come up with a means of paying for the changes the Council asked for in the system, Cable Co-op tried to respond to staff's request for changes that were basically non -cash items, and it seemed to be one that was of relatively large magnitude and . something that should be considered.. Frankly, he preferred to have cash to pay .for it. It might be that housing on the site was more important than anything else, and Cable Co-op did not take 59-66 12/21/87 a position on whether that was an advisable thing to do. With all due respect to the Council and to their respect to the community and their judgment, he ,believed the Council made a bad decision on November 23, 1987. The decision to require the Cable Co-op underground the pedestals was a short-term solution to an acute and pressing problem, i.e., considerable discontent with the appearance of the pedes- tals. The pedestals were unsightly to some degree; unfor- tunately, he did not believe placing them underground would lead to any less discontent in the future. Based upon the analysis PacBell provided, PacBell would be replacing the taps regularly, approximately every three years where each pedestal was at present. As a result, not only would there be aesthetic and other forms of inconvenience for the home owner, but there would also be severe interruptions of ser- vice. There would be a total outage for everyone affected by a particular pedestal, and some people would have regular outages every 30 to 90 days as long as they had a coaxial system. He believed in the future they would have a system without pedestals if and when they were able .to install a fiber-optic system. He offered the alternative that the Council allow the Cable Co-op to install the pedestals now in the smaller pedestal housings already considered by staff, place vegetation around them, and try that for a period of two years. If the aesthetics continued to be a problem, the Council at that time could choose to require the Cable Co-op to pay tor the undergrounding of the pedes- tals. Based upon his rough calculations! he believed the savings obtained by not having to do the additional mainte- nance over the two-year periou would roughly equal the cost of,the vegetation and the purchase of the smaller pedestal covers. The proposal would give everyone an opportunity to see effect the pedestals had on the community. The experi- ence of many other communities was the people adapted to them. They.were fact of life, much like a television antenna. They served a community purpose, and he believed cable would be good for the community. Council ,Member Patitucci said one possibility was a sur- charge applied to those users in the areas directly affected. In other words, each tap served four houses, and the penetration rate was about 33 percent. Mr. Kelley said the rate varied from day to day, but 33 per- cent was probably a good figure. Council Member Patitucci said if $250,000 was amortized over a period of time for one tap over the 1.6 people around that tap who would use it, with reasonable financing, it ended up about $1.25 to $1.50 for those people over that period, of time. The surcharge would apply .to the- new areas 5967 12/21/87 undergrounded in the future where people did not want the pedestals. The people who chose to use the system would pay the basic fee plus a surcharge. He asked if it was feasible within the billing system to bill that way. Mr. Kelley said they had the technical capability; however, he was uncertain whether they had the legal authority because of the way they were organized as a cooperative. Council Member Klein asked for clarification of Mr. Kelley's offer. In particular, he ciid not undersea„d who would pay for the cost of undergrounding two years hence if that proved desirable. Mr. Kelley opined that the•question of who should pay was debatable at the present point. One school of opinion held that the City should pay for the entire amount of money, but that was not what was discussed with staff. Council Member Klein asked tor Mr. Kelley's proposal as to who would pay two years hence if the Council adopted his suggestion. Mr. Kelley replied that would probably depend on who was going to pay for the work now. He believed the allocation of costs discussed with staff thus far was something he could convince their subscribers and board of directors to go along with. As he saw it, the City would make a contri- bution on the order of $600,000 and it would remain for Cable Co -'op and Pacific Hell to figure out who would pay for the rest. Council Member Klein said those,figures were certainly in the memorandum (CMR: 559 t7) , but from the questions was not the sense of the Council. He clarified Mr. Kelley was not willing to commit as to who would pay what if his suggestion was adopted. Mr. Kelley said they would be happy to discuss the matter. He thought about the proposal listening to the comments that evening, and it seemed the question of having experience with the maintenance also raised the question of having experience with the aesthetic values and whether the prob- lems could be corrected with the vegetation. He offered the suggestion on the spur of the moment and had not had a chance to discuss it with staff. Council Member Klein said one item that seemed clearly the Cable Co-op's cost would be the difference between installing the items now and installing them :~ two years later. From PacBell' a figures, there was a $60 difference 53.68 l?/21 87 between retrofitting and installing the vaults at the start, multiplied by 617 taps, was $37,000. Mr. Kelley believed the Cable Co-op could handle $37,000. Council Member. Levy clarified the proposal was that Cable Co-op would install on the current basis and, in addition, work with the home owner to install landscaping. Mr. Kelley said that was correct. He had to check with PacBell, but he knew they could get the other pedestal closures which were somewhat lower and less obtrusive. Some people liked one kind better than the other. The housings were the bullet -shaped channel housings. Council Member Levy clarified the landscaping would be handled by Cable Co-op and PacBell. Mr. Kelley believed that had to be discussed with the staff, In his mind, it was open to debate whether the Council could require that the Cable Co-op do the undergrounding. If the_ Council could require they do it, because 'of the correspon- dence exchanged between PacBell and the City about the use of pedestals, there was certainly a strong case that could be made that the City had given permission to PacBell to use the pedestals throughout the service area, including Palo Alto. According to that school of thought, the Council was now actually asking them to change -what the Council had already granted. If that school of thought held, he opined it became essentially something the Council was asking the Cable Co-op to do and that the City should pay for. Council Member Levy oelieved the argument could also be made that the design of the underground portion was not made with particular sensitivity to the neighborhood. It apparently was designed without walking the neighborhoods, and, in particular, unsightly line extenders were in the middle of open lawns, etc. Mr. Kelley said a :getter job certainly could have. been done. Council Member Cobb gathered from a c'. ,versation with Mr. Riddle earlier that day -that no effort was made at the time the various items were installed to get any kind of home- owner suggestion as to where they could be installed with the least impact on them. Mr. Kelley said in order to minimize the number of pedestals throughout the service area, i.e., to minimize the overall visual impact, it was necessary to install the pedestals 59-69 12/21/87 close to the property line. The easement available was a, certain distance from the street, about three to five feet. There was not much room to play with in the location of the pedestal. In his experience, where there was an opportunity to place the pedestal, the crews had done a reasonably good job of locating it in an unobtrusive spot. A number of homes had no landscaping at all at the intersection of the property line and the easement. Council Member Cobb said the impression he had from his dis- cussion with Mr. Riddle was that the landscaping was not considered seriously until now in terms of doing something with landscaping that would make the installations less obtrusive. Mr. Kelley believed that solution was discussed with staff prior to the preparation of the report discussed on November 23, 1986, and that it was considered as an alter- native with cost estimates. Council Member Cobb was referring to when the installations were made, not the more recent discussions. Mr. Kelley said no. Council Member Cobb asked for clarification that servicing one tap could disconnect up to 40 homes. Mr. Kelley explained that a tap became corroded and needed to be taken out physically and a new one put in. When that happened, the teeder cable providing service to several blocks was temporarily cut. The taps were installed in series. Council Member Cobb said the tap pedestals shown in the drawing (on file in the City Clerk's office) seemed much less .obnoxious in appearance than .the ones presently installed. le asked if the City could move to it at the present time. Mr. Kelley said yes. The tap pedestals came out of the ground. The placement called for a height of. approximately 15 inches. Vice Mayor Sutorius referred to the November staff report (Ck1R:528:7) and d Alternative 2, which spoke to a lower pro- file pedestal aid vegetation. The cost of replacing the tap pedestals with a lower profile would be $25 And raised the question of discarding the already -purchased pedestals. The staff commentary indicated vegetation for each pedestal would -cost approximately $150. They' were approaching $175 59--70 12/21/87 to $180 and he asked Mr. 'Kelley to restate how he saw the alternative being implemented under the two-year plan. Mr, Kelley proposed to install the less intrusive tap ped- estals and camouflage them with vegetation as well as possible. In two years, ;,the situation could be evaluated to determine whether it was\still necessary to. underground the pedestals. Except for the $37,000, he had not committed either the Cable Co-op or Pacific Bell to bear the costs. The alternative was economically sound since rough calcula- tions showed maintenance costs in excess of $200,000 over the next two years, which was about what it would cost to install the vegetation and alternative tap pedestals. It seemed to be a situation where all the parties benefited and the costs of installing the vegetation could be recovered. There was still the cost of installing' the vaults which remained to be dealt with and more estimates from Pacific Bell were needed. He believed the City should consider the alternative when weighing the casts and benefits of vari- ous suggestions. Vice Mayor Sutorius referred to the "downstream" impacts in case of a problem and the 60 to 80 subscribers that might be affected, and asked about the reference to 40 subscribers. Mr. Kelley believed between 15 and 40 taps would affected, but the exact number of horses was unknown. Vice Mayor Sutorius said it would be interesting to know Mountain View's trouble rate and be able to compare per 100 with the trouble rates in other entities where information was collected. Mr. Kelley spoke with Tom Elliott, Mountain View's Chief Engineer, that evening but he was unable to provide a pre- cise figure. He believed it could be compiled. If his sug- gestion was adopted, it would provide more time to study all the factors. Vice Mayor Sutorius hypothesized a process which involved a surcharge and asked if a maintenance factor had to be accounted for, whether Mr. Kelley's recordkeeping systems, as planned, would be able to identify a trouble rate for underground service in just the Palo Alto portion of the service area. Mr. Kelley believed it could be done from Cable Co-op's per- spective -but did not know the costs involved. It was not presently tieing done. When a maintenance call was received, the Co-op's customer service representative tried to diag- nose the problem, and if the problem could not be corrected 59-71 12/21/87 over the telephone, someone was sent out. If the Co-op could not find the problem or it appeared to be a problem with either the tap itself or with the signal coming into the tap, Pacific Bell was called. He was not privy te;N Pacific Bell's record keeping or the structure of its organization and he could not speak on its behalf. Vice Mayor Sutorius referred to the concerns with respect to the type, rate of trouble, and the associated costs in taking care ot the concerns through a vaulting method, and queried whether Palo Alto's system was "state-of-the-art." Mr. Kelley said fiber -optics was not yet economically feasi- ble out he hoped it would be within the life of the fran- chise as Palo Alto was well -positioned to take advantage of it. He was not an engineer and his knowledge was based upon information he -received from sources he considered to know more than he. Ho spoke with the Vice President ot Engineering of Heritage whose experience with vaults was minimal. However, they were completely againat vaults and believed they led to serious operational and sales problems and could cripple a system in some instances. In terms of a trouble rate, he was advised two and one-half times might be a realistic figure. Pacific Bell did a good job investi- gating the matter and he relied on its numbers. If the incremental trouble rate was lower than two and one-half times that of pedestals, the cost would be less. An agree- ment could be structured to track the actual costs but there would be associated costs and he had not attempted to make an estimation. The Co-op provided the City with a reason- ably detailed statement and he requested that staff not include it in the Council packet because the Co-op could find itself in a competitive situation and he was not inclined to reveal salary figures, etc. to potential com- petitors. He would review the calculations and if there was -some way to disclose the information to the Council and maintain confidentiality, he would do so. The softest number in the Co-op's calculation was the number for the increased marketing costs for the advanced services. He tried to come up with something reasonable and only let it run for a period of five years which represented about $61,000 out ot the $436,000. It they went that way, they would not have a "state-of-the-art" system. If they tried to market data services to people, it would cost more money. It would be very difficult to tell the homeowner: their com- puter connection to Stanford would go down routinely and it might be 30, 60, or 90 -days. That being the case, he believed it would be eliminated. Council Member Fletcher_ asked whether the two --year offer would include replacing the presently installed pedestals. 59-72 12/21/87. with the new ones or only the new installations, and whether there was a choice of color. Mr. Kelley said they would all be replaced. Ms. Moulton said the colors included'dark green, light green and cream color. Council Member Fletcher asked how the additional costs would be offset by the Cable Co-op. Mr. Kelley said the Co-op's capital structure had a fixed line of credit and income was generated from subscribers and the Co-op tried to sell equity. It .woulld be difficult to apportion the costs and the bulk would be paid for by sub- scribers. The subscribers were the shareholders and ulti- mately they would pay. , Council Member Fletcher asked if the offer included that the pedestals might be moved a few feet one way or the other if more acceptable to the homeowner. Mr. Kelley said that needed to be discussed with Pacific Bell. The staff report (CMR:559.7) reflected that Pacific Bell indicated some of the pedestals and line extenders could be moved about ten feet in either direction without redesigning the system. They needed to stay within the easements in order to avoid the costs of changing an ease- ment. Pacific Bell noted a limited number of ten -foot placement could be made. One person could not ask to go ten feet in one direction and the next person asking to go ten feet in the other direction. There was some room. The vegetation would do more to disguise the pedestals than moving them ten feet one way or the other. Sid Owen, 246 Walter Hayes Drive, referred to `° the letter which was mailed on Wednesday, December 16, 1987, and advised it was delivered on Saturday, December 19, 1987. He was disturbed when knowledgeable engineers tried to convince the Council that systems which stayed dry inside could not be built. Having done it many times, he knew better. UCLA installed a fiber-optic system a year ago and it was much better. He was bothered about there being a price to dis- card the other pedestal foxes. They were brand new and he queried why the City had to pay someone to take them away. Alison Lee, 1241 Harker Avenue, urged that Couiecil carefully consider Mr. Kelley's comments. She believed the land- scaping idea was a good one. She asked that Council bite the bullet and take on the larger .public interest. 59-73 12/21/87 MOTION: Council Member Klein moved, seconded by Cobb, that the City Councils l) Accept the decision that the line extenders and ampli- fiers will be installed above ground; 2) That the item be continued to 1/11/88 with staff to report on the following: a) clarify the proposal made by John Kelley, Cable. Co-op; b) analyze the $436,000 in staff report (CMRs559s7) to ascertain whether it is realistic and whether there is an overlap between those figures and PacBell's estimate; c) e) analysis of Council Member Patitucci's proposal that the cost -sharing arrangement be based on the actual experience in maintenance costs and only the present capital costs of a change in the system be paid for at this'time; that staff conduct a survey of the Leland Manor neighborhood for a precise quantified opinion as to their views on the taps,:. line extenders, and ampli- firrs; and explore the possibility with PacBell of continuing construction in those portions of the community that have underground utilities while financing arrange- ments are being worked out. Council Member Klein clarified the last point was a public opinion survey to hear what the Leland Manor neighborhood really had to say about the cable system, with staff to pro- vide the specific questions. Council Member Cobb believed the motion covered a lot of ground that needed to be covered before the Council made a final decision. It was clear not much effort was made to do the necessary "public relations" work before the pedestals were installed. Some of that ground could be recovered if, as a part of the survey, people were asked what they felt about the landscaping solution, particularly in the context of the less• -obtrusive pedestal. He asked if that question could be incorporated as part of survey. Council Member Klein said yes, but he preferred not to spell things out and, similarly, was concerned the Council not get. into a lengthy discussion with Mr. Kelley as to his 59-74. 12/21/87 proposal. The proposal should be worked out in more detail, presented to staff, evaluated, and returned to the Council for a decision. Council Member Fletcher asked the maker of the motion what the purposes were of surveying the neighborhood about the line extenders and amplifier boxes, when she believed the Council had decided not to place them underground. She was concerned the survey question would raise false hopes. Council Member Klein believed the comment was fair, and he suggested the survey had to be explicit about that. The line extenders and amplifiers could not be ignored because people would not be able to distinguish, but suggestions had been made that there were ways to mitigate the effect of the line extenders and amplifiers. Mayor Woolley clarified the questionnaire construction was to be left up to staff. Council Member Patitucci believed the motion was consistent with the Council's past action on November 23, 1987, to unanimously make the statement to direct the staff, Cable Co-op, and PacBell to place all tap pedestals underground in R-1 areas. He did not believe the motion was a retreat but a refinement of deciding the methodology to pay for the undergrounding. To the extent they looked at another alter- native andsurveyed the neighbors, there was the opportunity to slip back to another solution. .That was the strategy of those who believed religiously that tap pedestals had to be above ground. He hoped those in the survey area would give the Council as strong a message as those who had the energy to come out had given, that they wanted the tap pedestals underground. He .supported the motion because he believed the information would reinforce the position. It bothered him that all the implementors of the policy had their feet dug in and, if they continued to maintain that position, would prove to the Council that they were wrong. At some point, he would like to see some energy turned in the direc- tion of trying to make the policy work for the community. The community went out on a limb in accepting a fairly dif- ferent proposal from what Cable Co-op was going to provide. Sacrificing state-of-the-art aesthetics for state-of-the-art technology would be a step backward for the community. If the energy that went into the proposal and technology went into solving .the problem, they would not have a serious problem on January 11, 1988. He believed they would reach the same conclusion. He did not like the tension of a policy body unanimously wanting the system underground, and every technician and staff member saying . they could not do it. He hoped for some cooperation in. solving the problem. He would continue to vote in favor of undergrounding the pedestals because they were a mistake. Council Member Levy intended to support the motion. In reference to Council Member Patitucci's views, no one had said the problem was not solvable and $800,000 would solve it. Like so many government problems, it was a question of cost and who would pay the cost. He was not as clear on his final decision as Council Member Patitucci. He did. not want to charge only the home owners of the, undergrounded area, nor only the users, nor everybody in Palo Alto. He did not want to get into a trade-off with zoning amortization periods which had nothing to do. with the basic issue. The whole area of concern was the unwillingness to spend large amounts of money. The motion spoke to getting a tight handle on the money questions and also reviewed Mr. Kelley's proposal, and that proposal clearly should be reviewed. The survey of opinion was a trap, and they should only do it if it was done right. They in politics knew one could ask questions and get any answer one wanted, and if they went into Leland Manor and did not ask the questions correctly, obviously they would not know the real validity of the answers obtained. The residents of a neighborhood would not know what amplifiers and line extenders were and had to be told what they were carefully in the context of an inter- view. As indicated by Council Member Cobb, he just got a better feeling for what the new smaller pedestal looked like on seeing it for the first time. The opinion survey had to be asked in a professional way, and he urged staff to go to a professional survey taker and ensure the questions were asked in the right way. The Council wanted answers to how severe the problem was, how agitated people were about the problem, and whether they were willing to tolerate less than a total undergrounding. Council Member Renzel supported the motion because she believed the Council could use the additional - information produced. She also had concerns about the survey. Obvi- ously, the people in whose yards there were no pedestals and who might have to share the cost of the pedestals in someone else's yard would have a different opinion from those with pedestals. The survey should identify the nature of the respondents in terms of those characteristics. There were many relationships that would influence the answers. In regard to the staff report (CMR:559:7) , she was t e.La1ly opposed to extending the amortization period of. the "Maximart" site --a major 12.3 acre, residentially -zone] site --at a time when they were participating in the Golden Triangle Task Force that might put some heavy housing com- mitment on Palo. Alto in the future. She could see no way 59-76 12/21/87 that the Council should be looking at postponing any further the conversion of the land to residential within the currently -proposed time frame, and was disappointed to see the matter even show up in the staff report. Council Member Bechtel asked for the motion to be divided so that 2d) be voted upon separately. She agreed with Council Member Levy that doing a survey was a trap. In the time given staff, it would be difficult to do a. fair survey. The Council had heard from 150 plus residents of Palo Alto con- cerning the pedestals, and it would be difficult to devise a survey that would not have the biases described by Council Member Levy. Council Member Cobb agreed with some of Council Member Patitucci°s comments, particularly those related to aesthe- tics and why he felt as he did about undergrounding the system. He wanted a good system, but the important dif- ference between the subject item in a utility easement and the other utilities was that two-thirds of the people were, so far, not subscribing to the system. It was a selective utility, not like a telephone pole that served everyone. They should keep in mind that people were putting up with an aesthetic change in their utility easement and in their property when they might have no interest or use for the system, and that. would bear upon how they viewed it. Vice Mayor Sutorius agreed with Council Member Levy there were undoubtedly problems with the survey being made as complete and free from potential bias in such a short time frame. However, in a process that caused affected people or potentially affected people, it became important to ensure that the Council could say an opportunity to express oneself had been offered. They were speaking to surveying Leland Manor, and he believed it was important to find a way to promote awareness of the pending meeting of January 11, 1988, and of the nature of the discussion well in advance so that people in other underground areas were alerted and had the opportunity to express themselves in writing or to attend the meeting. AMENDMENT: Vice Mayor Sutorius moved, seconded by Patitucci, to add 2f) to add input from other underground residents and publicize in advance t f normal processes the subject matter for the January 11, 1988, meeting. Vice Mayor Sutorius suggested input be invited by putting an advertisement in the Palo Alto Weekly. Newspaper coverage was not good enough, because one of the problems in the com- munication process was that people read the newspaper and believed the problem had been taken care of. 59-77 12/21/87 Mr.. Zaner was concerned that the Council might feel the staff was not embracing the Council's policy. Staff's recommendation of a number of weeks ago was made in good faith, and they still believed the recommendation was a good one. The Council, however, rejected that recommendation and adopted another policy, and staff fully embraced that policy. They had attempted to come up with imaginative solutions to a set of problems that were extremely dif- ficult, evidenced by the, fact that the Council was spending a great deal of time dealing with the problem itself. He assured the Council that;, no one on the City staff was attempting to dig in theiL heels or subvert the Council's policy. The Council indicated it wanted the vaults under -- grounded, and that was exactly what staff was trying to do. He was concerned there were only nine working days between now and January llth. He shared the distress some people felt about not seeing the most recent report sooner. Staff had not had the time to do a proper job. He asked the Council to consider a telephone survey and a sample, because he did not believe they could go to 300 homes and return with the kind of data the Council was looking for in the time frame. Mayor Woolley asked if Mr. Zaner would accept the date of January 11, 1988, for the staff report. Mr. Zaner replied he would like to see the date moved for- ward substantially, but in order not to delay the project and incur additional costs, he believed a decision should be made by January 11, 1988. His only concern was with regard to the survey. Council Member Patitucci felt the immediate City staff had been fairly responsive since the Council made their deci- sion. His general feeling was that Cable Co-op and PacBel1 had not been as creative as he would like. Council Member Bechtel asked staff what was expected to be on the agenda for the meeting of January 11, 1988. Mr. Zaner said the only major item shown was the. Yacht Harbor Study recommendations. Council Member Bechtel said Vice Mayor Sutorius had pointed out his amendment could be in lieu of a survey. Sheurged her colleagues to vote for the amendment and delete the por- tion concerning the survey considering the short time frame. Mayor Woolley asked for clarification of the amendment, 59-78 12/21/87 Vice Mayor Sutorius offered the amendmentas point 2f). In the event the amendment passed, and the survey, 2d), failed; 2f) could be amended to ensure the input included Leland Manor. Council Member Fletcher was concerned about the amendment because it would be difficult to make plain the latest pro- posal to the people alerted to the January 11, ' 1988, meeting. While she was for public input, she did not see how to avoid a negative approach because of the experience of Leland Manor. Council Member Klein took into account Mr. Zaner's comments and said his colleague's remarks had made him change his mind. Council Member Klein said, taking into account his col- league's remarks and Mr. Zaner's comments, he believed the January 11, 1988, date was important because of the con- struction program. However, he did not believe they could conduct the type of survey they wanted within the time frame and he would vote against that portion of the motion and also the amendment. He did not see the amendment as a sub- stitute for a survey, nor why the item was being singled out for special attention. He welcomed public participation, but by making an extraordinary special effort they were promising something he did not understand and sending a mes- sage he did not want delivered. Council Member Renze.1 said her concerns with regard to an advertisement and a survey were similar, i.e., however the advertisement was worded, it would draw a particular constituency out without getting a sampling of all the constituencies. The people destined to receive boxes or who might have to pay were more apt to respond to an advertisement because it was germane to them. She did not see how to get a balanced view and would probably vote. against the amendment and the survey, especially given the short time frame. AMENDMENT FAILED by a vote of 2-7, Sutorius, Patitucci voting 'aye A ° MOTION DIVIDED FOR PURPOSES OF VOTING Mayor Woolley noted the vote on November 23, 1987, was not unanimous because she was not present. It was easy to say one wanted something as long as one did not have. to figure out how to pay for it. She did not know how she would have voted but had been bothered all the way along about how the project would be paid for. Seeing the dollar figures, it 59-79 12/21/87 made sense to go back and reexamine the proposal made by Mr. Kelley. She was concerned that they might be exchanging one discontent for another. ITEMS 1, 2a, 2b, 2c, and 2e OF MOTION PASSED unani- mously. ITEM 2d OF MOTION FAILED unanimously. 14. REQUEST BY THE PALO ALTO HOUSING CORPORATION FOR $100 000 IN HOUSING RESERVE FUNDS FOR PURCHASE OF 3039-3049 EMERSON STREET (CMR :568 :7) (300/701-03) Mr. Zaner said Housing and Urban Development (HUD) would not permit the City to use Community Development Block Grant (CDBG) funds as anticipated for the project. Staff's recom- mendation, therefore, included in the material distributed that evening (on file in the City Clerk's office) was to take the funds not from CDBG but from the Housing In -Lieu Fund which had more adequate money. Later on, staff would return to the Council and reuse the CDBG money in another way to reimburse for a project for which the In -Lieu Fund was paying. MOTION: Council Member Fletcher moved, seconded by Patitucci, to adopt the Budget Ordinance Amendment allo- cating $268,222 to the Housing Corporation for the acquisi- tion of the property located at 3039-3049 Emerson Street under the terms of the Rental Housing Acquisition Program and authorize the City Manager to execute whatever documents are necessary for the closing of escrow. ORDINANCE 3784 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1987.88 TO PROVIDE AN ADDITIONAL APPRO- PRIATION FOR CAPITAL IMPROVEMENT PROJECT 87-61 'RENTAL HOUSING ACQUISITION PROGRAM' PROMISSORY NOTE Council Member Fletcher said the motion included the change made by Mr. Zaner. Council Member Patitucci believed the program was probably. the most cost-effective one run by the Palo Alto Housing Corporation (PAHC), and he fully endorsed the proposal with the modification, even if the City did not use CDBG dollars. The City had ` matte some investments in the PAHC in some duplexes on school sites, and he understood the individual duplexes were about to be sold to the occupants. He asked what they would be sold for and if it was a cost -recovery approach. 5980 12/21/87 Planning Administrator Toby Kramer said yes, the duplexes were sold for the construction cost and varied from between $95,000 to about $115,000 for each of the units. Given the areas} a rough estimate of the current prices would be at least $250,000 to $275,000. Council Member Patitucci said, in effect, they had $150,000 or more tied up in capital for each one of the duplex units and the motion was to approve a development in which they would have about $50,000 of capital tied up per unit. Every duplex unit the City continued to operate under the current program meant two other people not being housed, which was an , ineffective use of the capital. In the long run, the Council should take a hard look at the case. They had in - lieu funds the City would be using up, and selling the duplexes might create a fund of $500,000 to $750,000 that could be reinvested in three times the number of units. Council Member Renzel commented the underpinnings of requiring the below -market -rate (BMR) units probably related a lot to what the Council could do with them legally. She would be concerned the Council not jeopardize the underpin- nings of getting those housing units, even though she con- curred with the general thrust of Council Member Patitucci's remarks. Vice Mayor Sutorius said one person on the Planning Commission and ultimately on the City Council voted against the duplex concept for the school sites because of the leverage point just made by Council Member Patitucci. MOTION PASSED unanimously. 15. LEASE AND COVENANT NOT TO DEVELOP WITH THE PALO ALTO UNIFIED SCHOOL DISTRICT (CMR:559:7) (1341-01/902/701- 03) Mayor Woolley was unable to participate in the item :due to a conflict of interest. - Council Member Renzel said, while .the item was just the lease and covenant not to develop, their overall program anticipated leasing at least one of the two junior high schools. The time frame was not clear, but if the Palo Alto Unified School District (PAUSD) decided not to make either of the schools available, what did that` do to the basic. agreement if anything. The basic agreement said the PAUSD could keep one but not both of the junior high schools, and they made a .decision already to postpone their closure of Jane Lathrop Stanford (ILS) and were. holding in abeyance the Jordan site. 59-81 12/21/87 Mr. Zaner said the agreement remained unchanged. The agree- ment provided that the City would not take over JLS until a later date and also allowed the PAUSD to postpone the City's taking over of; Jordan until as late as August. The PAUSD had now exercised that "option," and it was contemplated within the body of the lease and was nothing that would cause the lease to be interpreted in any other way. Council Member Renzel asked the effect if in August the PAUSD decided not to lease Jordan either. Mr. Zaner said the PAUSD could not do that under the present conditions of the lease. In order for that to occur, they would have to renegotiate the terms of the lease into some mutually -agreeable set of new conditions. Vice Mayor Sutorius confirmed that the action of the PAUSD, communicated in the Superintendent's letter to the City Manager of December 4, 1987, was that extension at present was only to March. In other words, the PAUSD had not extended out to the August date, and he anticipated that the City/School Liaison Committee and their respective staffs would consider promptly any other dates, alterna- tives, or aspects necessary with respect to further action on the lease. Mr. Zaner said a meeting of the City/School Liaison Committee was set up for the beginning of January. MOTION: Council Member Levy moved, seconded by Cobb, to adopt the Budget Amendment Ordinance and authorize the Mayor to sign the Lease and the Lease and Covenant Not To Develop. ORDINANCE 3785 entitled "OKDINAtiCi OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1987-88 TO PROVIDE AN ADDITIONAL APPROPRIATION FOR UTILITY USER TAX REVENUE AND LEASE PAYMENTS TO THE PALO ALTO UNIFIED SCHOOL DISTRICT= Council Member Levy said it was clear the PAUSD was taking action to postpone their final school configuration on which the lease was based, and obviously the lease would have to be modified in one way or another, at least temporarily. He indicated his personal willingness to modify the agreement so the Citywould convey annualized payments to the PAUSD in the same magnitude as originally contemplated, i.e., to figure out a way to convey to the PAUSD an additional $650,000 if they would offer Jordan to community groups on 59-82 12/21/87 some kind et break-even basis as the City would have done had they taken over possession of Jordan. He did not want to see the PAUSD be penalized because they were taking more time to make their decisions, or because they decided to keep one set of schools open or another. Council Member Fletcher asked if the renovation costs for. Jordanwere totally borne by the City, assuming it would be leased. Ms. Northway said it was contemplated as part of the proce- dure that every improvement made by the City that cost more than $20,000 would have to be approved by the PAUSD and the State. As part of the process, the parties could agree as to how those costs would be either borne or recouped. Initially, theCity would pay for them and the only question that might be negotiated at the time was what would happen if the City made those improvements and, after a short time, the property went back to the PAUSD. MOTION PASSED unanimously, Woolley "not participating.'° 16. MAYOR GAIL WOOLLEY RE CANCELLATION OF DECEMBER 28, 1987,, CITY COUNCIL MEETING (NPG) Vice Mayor Sutorius asked if a meeting on December 28, 1987, would facilitate any commitments or requirements of staff. Mr. Zaner said no. MOTION: Council Member Cobb moved, seconded by Klein, cancel the City Council Meeting of December 28, 1987. MOTION PASSED unanimously, Woolley ascent. ADJOURNMENT Council adjourned at 11:20 p.m. ATTEST: APPROVED: