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HomeMy WebLinkAbout1986-07-07 City Council Summary MinutesCITY COUNCIL Minutes Regular Meeting July 7, 1986 CITY Or - ALTO IT M PAGE Oral Communications Minutes of May 27, 1986 Minutes of June 2, 1986 Consent Calendar Referral 1. Proposed Wholesale Water Rate Decrease 7 4 0 5 7 4 0 7 7 4 0 7 7 4 0 7 7 4 0 8 7 4 0 8 2. Utilities Plant Asset and .Infrastructure 7 4 0 8 Records Project 3. Selection .of Fiscal Year 1986-87 Consultant 7 4 0 8 Projects :for Review Procedures Action 7 4 ° 0 8 4. Agreement with Richard Whitmore for Legal Services 5„ Contract with Community Association for the Retarded for Fiscal Year 1986-87 6. Award of Construction Contract to Valley Slurry Saa1, Inc. for 1986. Slurry . Sea l 7. Agreement with Torratech, Inc. for Construction Testing Technical Services 7 4 0 8 7 4 0 8 7 4 0 8 7 4 0 8 7 4 0 3 7/07/06 ITEM PAGE 8. Approval of Increase in Authorization for 7 4 0 9 Custodial Services 9. Downtown II Underground Conversion Project #29 - Award of Contract for Utility Trench and Substructure 7 4 u 11. Resolution of Appreciation to Ann Milstein 7 4 0 Guite 12. Ordinance re 772 Talisman Court and 774 Talisman Drive (2nd Reading) 14A. Resolution of Intent to Establish Underground Utilities District Ho. 30 Crescent Park 13. Issues Appraisal re Bingo (Continued from 6/9/86) 14. Public Hearing re 4293 Wilkie Way Recess W 1P d� from 10:00 p.m. to 10:20 p.m. 7 4 0 9 7 4 1 0 7 4 1 1 7 4 3 0 15. Acquisition of Bell Savings and Loan Parcel 7 4 4 1 16. Request of Councilmember Fletcher re Palo Alto 7 4 4 5 Airport Adjours.merat at 12:34 a.m. Regular Meeting Monday, July 7, 1986 The City Council of the City of Palo Alto met on this date in the Council Chambers, 250 Hamilton Avenue, at 7:35 p.m. PRESENT: Bechtel, Cobb, Fletcher, Klein, Levy, Patitucci (arrived at 7:50 p.m.), Renzel, Sutorius, Woolley Mayor Cobb announced a Closed Session would be held at some point during .or after the meeting to consider not only the case of Cit of Palo Alto v. International Neutronics, but also the Counci would discuss the initiation of Litigation pursuant to Government Code Section 54956.9(c) concerning possession of the Palo Alto Yacht Harbor and Personnel Matters. ORAL COMMUNICATIONS Brian Boortz, 3565 El Camino Real, said the intention of the task force in initiating the Palo Alto Sanctuary Resolution was in part a call to the Palo Alto community :to fulfill its historical responsibility of providing a place where the politically and religiously oppressed might find refuge. In part, the intention was an attempt to resist theevil of law- less and brutal killings compounded by an illegal refusal by the Immigration and Naturalization Service (INS) to accept or process -applications for political asylum and the.. deportation of Central American refugees. Their attempt to influence government policy through the local City Council was in response to the stories of refugees which led to lobbying for their rights to asylum. The problem remained of •what the citizens of Palo Alto could do for the .many exiles who lived in and around them and were part of the 1,000,400 refugees from El Salvador in the U.S. Clearly a double standard existed when the U.S. granted political asylum to three per- cent of Salvadorans and thirty percent to refugees from other countries. A major effort to educate citizens of U.S. on international law should continue in order to inform people of refugee rights. Recent polls showed 62 percent of the nation opposed military aid to the Contras . in Nicaragua, yet the House of Representatives voted 221-209 to ignore the people. The vote illu:,trated the House of Representatives was not rep- resentative of the wilt of the people. The ..task force would continue to work on the . sanctuary issue, : exploring every pos- sible means to protect exiles. At the close of the Liberty weekend, it was appropriate to remember the immigrants and refugees who presently lived under the fear of deportation and political pers ect!tioray The issue did not involve politics but asked only what they would do to help people in need. e Jim Wake, 244 Robin Way, Menlo Park, said in March nearly 300 people asked the City _Council to join in a humanitarian ges- ture of support for those who fled violence in Central America that claimed the lives of 100,000 Central Americans. They asked for a simple statement that the City believed human beings had a right to protection against violence and was willing to make a stand to ensure the safety of those whose lives were threatened. The response of the City Council was bitterly disappointing. Before going to Council, the sanctu- ary movement gathered nearly 2,000 signatures of concerned citizens so did not address the Council as a small, special - interest group but as a sizable segment of the City's residents. The movement stated from the outset they were willing to discuss the proposals, to compromise, to try to find some statement or action acceptable to Council and to the backers of sanctuary for Central American refugees. Despite their efforts, it was clear the majority of Councilmembers maintained only the most parochial definition of the word "community_*` Lack of response from the Council had not deterred the movement which attempted to educate not just the Councilmerbers but also the people of Palo Alto to the issues which originally provoked the actions. The Peninsula Times Tribune accused the movement of filibustering when they went before Council utilizing the only mechanism available, the Oral Communications' process. Since members of Council indi- cated only the most local concerns would merit consideration and that they were uncomfortable with the concept of sanctuary when its legality was being challenged in other parts of the country, the movement carefully revised its oronne. l elimi- nating all references to the word "sanctuary." They asked for only the simplest of statements proposing a resolution so sanctuary activists in the community and Central American refugees living in the City knew exactly what their status would be. Surely, such a request did not endanger City offi- cials since the resolutions were carefully worded to eliminate any possibility of law breaking on the part of anymember of the City government. The compromise resolution eliminated all references to the place of origin of, any person fleeing . from conflict, so the resolution applied just as much to people fleeing from violence in Afghanistan as those fleeing from viol► nce in El Salvador, and still the City refused to act. He asked the people of Palo Alto to hold members of the Council accountable, and to ask what future candidates for City office believed in. Harrison Otis, 2721 Midtown Court, was a 58 -year resident of Palo Alto, and sold his house several months ago because he was concerned about high density ,developments, especially the Jordan Middle School development. He urged a moratorium on building. 7 4 0 6 7/07/86 e Mike Moyer, 2267 Taaso Street, said four years ago, Vincent Lavery, a Fresno school teacher, started a program entitled "The Children's Committee Ten." The concept was for a Catholic and Protestant teenager from Northern Ireland to live with a host family in the United States for six weeks. By the end of the 1986 summer, over 1,200 children from Northern Ireland will have done so. On July 14, 1986, two members of Northern Ireland would be in Menlo Park to make a presentation of the problems in Northern Ireland and the Children's Committee Ten project. The meeting would be held at the Menlo Presbyterian Church, 950 Santa Cruz Avenue, Menlo Park, at 7:30 p.m. He thanked the Palo Alto community for its support in the fund raising efforts to help Children's Committee Ten pay for transportation costs and Councilmember Levy for serving on the committee. He introduced Jim Clark and Morrison. two lads from Northern Ireland. Joe Mayor Cobb presented flags to Jim Clark and Joe Morrison as a formal welcome to Palo Alto. MINUTES OF MAY 27, 1986 MOTION a Corms i lmenber Su toci ss moved, seconded by Woolley, approval of tit: Xlaiites of Ray 27, 19$ti, #s submitted. NOTION PASS= by a vote of 7.-5-2, Klein, Rented °abstaining. * MINUTES OF JUNE 2j 1986 Councilmember Fletcher had the following corrections 212e 7298, third from last paragraph, third line, should read: "...space. Los Altos was an excellent e::ample of how the provi- sion could work under a strict code. During the Downtown Study process, a compromise..." MOTION: Coblcilnember Sutorius moved, seconded by Woolley, approval of the Minutes of June 2, 19$6, as corrected. KOTIOI PASS= by s vote of 8-4'1, Klein "abstaining*. CONSENT CALENDAR Councilmember Klein removed Item #10, Resolution of Intent to Establish Underground Utility District No. 30 - Crescent Park. Councilmember Sutorius asked the record to reflect he _ abstained from voting on Item #12, Ordinance re 772 Talisman Court and 774 Talisman Drive. 'ION a Counoiluember : SeOktel moved, seconded by MoolleIN appcoVs1 of the Consent Cation r 7 4 0 7 7/07/86 Referral to Finance and Public Works Committee 1. PROPOSED WHOLESALE WATER RATE DECREASE (UTI 1-3) 2. UTILITIES PLANT ASSET AND INFRASTRUCTURE RECORDS PROJECT (UTI 1=1.7) (CMR : 8 3 : 3. SELECTION OF FISCAL YEAR 1986-87 CONSULTANT PROJECTS FOR REVIEW PROCEDURES (FIN 3-1) (CMR:379 :6 ) Action 4. AGREEMENT WITH RICHARD WHITMORE FOR LEGAL SERVICES (LEG 11) Staff recommends the City Council approve and authorize the Mayor to execute the agreement with Richard Whitmore, Whitmore, Kay & Stevens. AC IZERSIT Whf for+s' Kay or Stevens 5. CONTRACT_ WITH COMMUNITY ASSOCIATION FOR THE RETARDED FOR FISCAL YEAR 1986--87 (SOS 9) ( MR 380:6) Staff recommends the City Council authorize the Mayor to execute the contract between Community Association for the Retarded, Inc. and the City of Palo Alto for fiscal year 1986-87. AGREEMENT Conn 1 ty Association for the Retarded, Inc. 6. AWARD OF CONTRUCTION CONTRACT TO VALLEY SLURRY SEAL. J NC FOR 1986 SLURRY SEAL (PWK 2-5) (CMR:375:6) Staff .recommends Council: Authorize the Mayor_ to execute the contract with ; Valley Slurry Seal, Inc. in the amount of $152,231.83; and • Authorize staff to execute change orders to the construction contract of up to $22,000. AWARD Of COMACT Valley SI*rry Sealv 7. AGREEMENT WITH TE.RRATECH, INC. FOR CONSTRUCTION TESTING TE } N1CA SERVICES FIN 3) (CMR:38 2:6 ) Staff recommends, Council authorize the Mayor to execute the agree- ment with Ter!atechs Inc. for on -call construction testing services for an amount not to exceed $20,000. ASISSUST To a. lis 101* 7 4 0 8 7/07/86 8. APPROVAL OF INCREASE IN AUTHORIZATION FOR CUSTODIAL SERVICES FIN 9-1) (CMR:38136 ) Staff recommends Council authorize the Mayor to execute the chang': order to provide custodial services at the Main Library and the new Water Quality Control facility in the amount of $36,800 with Hassan Janitorial Services ($27,600 from the FY 1986-87 budget, and the remaining $9,200 depending upon approval of the FY 1987-88 budget) . Change Order to Contract No. 4552 Hassan Janitorial Services 9. DOWNTOWN =I UNDERGROUND CONVERSION PROJECT 129 - AWARD OF CONTRACT POR UTILITY TRENCH AND SUBSTRUCTURE (UTI 8-11) (CMR:385:6) - - - - - - Staff recommends Council: Accept the low bid from. Pacific Construction, Inc.. _in the amount of $1,187,870 including tax, and the Mayor be authorized to execute a contract for the work; O Authorize execution of change orders to the construction contract up to 15 percent of the contract amount, or $178,180; and o Approve the Downtown Palo Alto II. Joint Construction Agreement with Pacific Bell Company, and authorize the Mayor to execute the document on behalf of the City. AWARD OF CONTRACT Pacific Construction Company JOINT PARTICIPATION AGREEMENT Pacific Sell Company 11. RESOLUTION OF APPRECIATION TO ANN MILSTEIN GUITE (COU 5-7) RESOLUTION i; 31 entitled 'RESOLUTION OF THE COUNCIL OF TAE CI TX OF PALO ALTO EXPRESSING ITS APPRECIATION TO AMA MILSTEIN GUITE FOR OUTSTANDING PUBLIC SERVICE LAS A NNRBER OF THE VISUAL ARTS JURY 12. ORDINANCE RE 772 TALISMAN COURT AND. 774 TALISMAN. DRIVE (2nd Reading) (PLA 3-1) ORDINANCE . 3693 •altit1ed "ORDINANCE OF THE COUNCIL OF TOE CITT_ OF PALO ALTO 1ZDING - LION 18.88.041 OF THE PALO ALTO NUNICIPIL CAE ITNE ZONING NAP) TO CUM= TEE CLASSIFICATION or TEE PROPERTY ESIONN AS 772 TAL/SNAN WORT AND 774 TALISUAM DRIVE FROM R-3 TO PC' itlst f 6/16/114 I- $D Rea, Setof14i absent) 7 4 0 9 7/07/86 MOTION PASSED unanimously, Sutorius •abstaining," on Item #12, Ordinance r• 772 Talisman Court and 774 Talisman Drive. AGENDA CHANGES, ADDITIONS AND DELETIONS City Manager Bill Zaner advised Item 110, re Crescent Park Underground Utility District No. 30 would become Item #14-A. MOTION: Councilmember Klein moved, seconded by Sutorius, to bring forward Item 114-A, Crescent Perk Underground Utility District Ne. 30. MOTION PASSED unanimously. 14-A.. RESOLUTION Of INTENT TO ESTABLISH UNDERGROUND UTILITY DIr RICT NO. 30 - CRESCENT PARK (UTI 8-12) (CMR:384:6) Councilmember Klein was surprised staff received completed ques- tionnaires from 110 property owner., of which 91 supported the project. The response was a `marked contrast to the previous Crescent Park undergr.ounding where the skate was close. He asked what information was given to the property owners and comments from staff in tents of the significant swing fror one part of Crescent Park to another. Assistant Director of Utilities, Engineering, Ed Mrizek, did not know why there was such a high percentage of support. Staff held a meeting with the property owners and had on excellent turnout. Staff provided the property owners with estimated costs from pre- vious underground projects of anywhere from $2,000 to $3,000. Staff also advised they would return to the property owners with the exact estimated costs prior to the public hearing. Councilmember Klein understood new technology in the electric trap;,Mission business allowed existing poles to be saved by put- ting` -some type of sleeve around them without going through a lot of th.e maintenance costs. He asked whether the new procedure would work .in Crescent Park III. Mr. Mrizek said the procedure. would not work in Crescent -Park III due 'to the deterioration above 'the ground line because of pole climbers' spikes, etc. In Crescent Park. III many poles required replacement ihich was why the bot..tndary was changed. MOTION* Comacilmember plain moved, seconded by Sutorius, approval of the resolution„ &ESOLUT 8S3® entitled _! SOLUTION OP TOR COUNCIL of +r�.�r.�r�rrri ���� lr�.r w TON CITY OF MO ALTO OSCLARING ITS INTONT TO AMEND SOCTION 11.1f►.OZ$ Or COURTIER 12:1 ► OP TITLi 12 or TNS PALO ALA ONNICIPAL COWS U NSTA'ALI$NIMii ONDIERGROOND UTILITY DISTRICT WO. 3D" 1 Councilmember Levy received calls from people who lived on the even side of Dana regarding the propooed undergrounding project. He asked whether those homeowners could be kept advised of the progress because he believed some wanted to be included in the undergrounding. Mr. Mrizek.said yes. All of the substructures and circuits on Dana would be undergrounded. The distribution system would be available for all of the property owners on the even side of Dana even though it was out of the .district; however, the poles in their backyards would have to remain. MOTION PASSED unanimously. 13. ISSUES APPRAISAL RE BINGO (Continued from 6/9/86 LEG 5-4-1) (CMR:389:6) City Manager Bill Lefler said because the item was of considerable importance and the last submission received from the proponents left only two working days in which to respond, he wished to add the following statement: First, he acknowledged the cooperation the City had from the proponents of the proposal. The proponents met with City staff the previous Thursday .to help clarify some of the issues in their June 26 proposal. After reviewing the mate- rial they presented and listening to .the -comments, he came to the conclusion that the proposal was not in the best interest of the City and urged the Council not to approve it. He reviewed very quickly what the proposal was and precisely what Council was requested to do. The last request appeared to come from five non- profit organizations. One, the Hebrew Day School, was a Sunnyvale organization while the rest maintained offices in Pa1c Alto. In addition, another organization, the Community Services Agency, which appeared on the.. first application received the previous month, no longer appeared on the application and might or might not be interested in the proposal. Staff was unable . to determine that at the present time. The applicants requested Council amend its existing ordinance in two ways: First, to allow any non- profit organization to sponsor a bingo game more than once in seven days. The present ordinance limited such games to once in seven days per organization. Second, the applicants requested an amendment that they be permitted to lease the bingo equipment rather than to purchase it. The present ordinance required the equipment to be owned by the organization. -The organizations did not seek a use permit --no use permit .was required a t the Fiesta Lanes location they had i n mind ---nor did .they seek any rezoninge or variances since no changes were needed at that .location. Under the existing ordinance, the organizations could join together in a private agreement, lease the Fiesta Lanes on their own, aid con- duct bingo that day as long as no single L' r .* .zation played more than once per week and conformed to all other state laws and local regulations, Mr. Zeiler said the proposed amendments to.. the ordinance had far-reaching imp l ications. Four major jor areas of concern were: 7 4 1 1 7/07/86 First,. under state law, the game of bingo must be operated solely by volunteers; no paid employees were permitted. In the meeting the proponents indicated they would need a. minimum of 12 volun- teers for each bingo session and anticipated 10 sessions per week or 120 volunteers. In order to obtain approximately 120 volun- teers a week, the pool of available volunteers had to be much larger. Each person had to be treined and supervised since he/she would be directly responsible for Andling close to $6 million in cash every year. The City had see Aux questions about a financial operation of that. size relyieg or volunteers. One concern voiced during the research was that sr a third parties. might • offer to provide so-called "volunteers" Fen.. the initial enthusiasm died down and sponsoring organizaties,s found. it difficult to provide their own volunteers. Staff's research indicated closer to 20 volunteers, not 12, were required to operate a game. The second concern was the size of the bingo game proposed. Not only would the game. require 120 volunteers per week to operate, but the _income statements .depended upon an average of 325 players per day, 365 days a year. The figure came from the proponents' proposal of June 26. In order to generate the $6 million income estimated in the report, the . proponents must gross more than $.13,000 a night. Each player who attended must spend an average of $42 per attendance in order to get to the $6 million. Clearly, that kind of volume in both dollars and population could come only. from an area far beyond Palo Alto's boundaries. The facility would become a regional one and would have to draw people from long distances in artier to meet its financial projections. The size issue was further complicated by the child care proposal whose operation would overlap the bingo sessions during afternoon playa A third concern was the administrative costs associated with oper- ating any kind of program of that magnitude. It was difficult for staff to estimate costs in the absence of actual experience; however; research indicated the pure administrative costs would exceed the ° percent fee which the state permitted the City to collect to offset expenses. (The City was limited to collecting a 1 percent fee to corer costs, set in the state statute.) Some of the pure administrative costs for the City were the present ordi- nance required the City to license each volunteer in order to ensure the person was a bona fide volunteer and not in the employ of some third party. As noted, that amounted to hundreds of vol- unteers every year. If some kind of meaningful audit was to be performed, additional time and expense would be involved. Spot checks of the premises to see the ordinance., was being followed would .be costly and time consuming. :New ;non-profit organizations might apply to sponsoror co --sponsor a _gamme which would be further administrative work since not only individuals but organizations Were requir.'1 to be licensed. The items mentioned did not inc1udo zany enforceent efforts undertaken by law enforcement agencies or the Attorney's office should the ordinance be violated. To pro- vide some idea of the size of the administrative chore, the City obtained a copy of the administrative regulations and guidelines from the County of Sacramento which ran 50 pages just for admini- strative regulations from a County with wide experience in the field. \ The fourth concern was the opportunity for proliferation of bingo parlors in Pa]n Alto. The City Attorney could address the issue in more detail, but it was important to cite a few salient facts. There were several potential sites for additional bingo parlors. Almost . any supermarket could be converted; some movie theaters might be suitable, especially in the Downtown area where the parking district was in effect; a vacant school gymnasium or cafe- torium might be used. A suggestion was made that the City adopt an ordinance that was site specific, thereby restricting use to the subject location alone. It was also suggested the ordinance restrict licensees to Palo Alto -based organizations with a finan- cial history of work in Palo Alto. As stated in the previous staff report (CMR:331:6) (on file in the City Clerk's office), staff did not .believe such an ordinance would be enforceable. While the City migilL be able to draw a "tighter" ordinance, it would not be possible to totally eliminate other similar estab- lishments. Some reference was made to the existing card rooms which operated for a number of years without unusual problems. There were sev- eral differences between card rooms and the proposed bingo parlor. The card clubs were restricted as to location by a very restric- tive ordinance. In fact, the Fiesta Lanes would not be usable for a card club under the ordinance. Second, the card clubs were limited in size. No card club could have more than 13 tables, and each table could consist of no more than 8 players, so the card clubs were substantially smaller in scale than the proposal in question. Finally, card rooms did not rely upon volunteers to operate. Mr. Zaner spoke to a number of miscellaneous items. A part of the proposal was for .a child care facility. Staff was unable to advise Council as to any details on that aspect: of the . program. The proponents indicated as much a3 10,000 square feet finished and furnished for child care facilities would be available. Staff was unable to confirm that fact but had no reason to doubt it. A second item related to the existing bar on the premises. Staffrs research left them unclear as to whether or not the bar would remain in operation if the bingo parlor;.'_ was approved. State law prohibited alcohol in the bingo game parlor, but it might be pos- sible for the bar to continue as a separate use without physical connection to the parlor. In summary, Mr. Zaner believed there were four reasons why the proposal should not be approved. First, the proposal depended entirely on volunteer efforts to collect, disburse, and account for $6 million a year. Second, the size of the operation involved hundreds of volunteers and several thousand players each week and 7 4 1 3 7/07/86 was too large. Third, the administrative responsibilities for the City were very substantial, and costs were .likely to be high. Fourth, the City was unable to draw an ordinance to prevent pro- liferation of the activity. Mr. Zaner again pointed to the excellent work done by the City staff in so short a period of time. In that regard, he called Council's attention to a letter from the Attorney General's office (on file in the City Clerk's office) delivered to staff last Thursday and distributed to Councilmembers that evening. The letter complimented the staff for complete analysis and noted the continuing concern by the Attorney General in what he termed, "big business bingo.° 'Vice Mayor Woolley asked about site -specific waivers which were mentioned by the Barron Park Association (BPA) in their letter. to Council (on file in the City Clerk's office). City Attorney Diane Northway said the City was accustomed to dealing with site -specific waivers in the land use regulation area. Palo Alto to did not have exceptions but did have variances. Under state law, she did nOt believe the City could grant site - specific waivers and did not know how staff would distinguish one type of gambling operation from another. General standards would be required which related to the purposes of the legislation, and the purpose of the .legislation was to regulate gamblingi, activities such as bingo. She was not sure what a site -specific waiver would do except grant a special favor to one particular group of people, which she believed was unconstitutional.. Vice Mayor. Woolley referred to the possibility of a bar on_ the site, and said she would appreciate any information from members of the public on whether alcohol would be on the premises or not. Mr. Zaner said the response staff received from one of the gentle- men who intended to lease the building was different from the response from the non-profit groups who clearly understood that alcohol could not be permitted on the parlor site itself. Vice Mayor Woolley said the model of the organization in Sezcrasento spoke to the fact the amount_ of money from revenue to the actual charitable organizations ranged from 27 percent to 17 percent, and then dropped to 8 percent in the third year. She asked if any reason was given by the Sacramento officials for the drop. Lieutenant Tom Maroon, Coordinator, Personnel and Training, Police Department, said no reason was given, and the period audited was a random, three-month one. Vice Mayor Woolley imagined staff based the amount of the 1 per- cent tax on gross revenue on the same model. In relation to that aspect of the revenue, staff indicated the administrative cost:) 7 4 1 4. 7/01/86 would exceed the 1 percent tax received by the City, and yet in the original staff report (CMR:331:6) from the number of hours necessary for the spot checks and also for surveillance, the administrative costs would amount to less than the revenue from the model in Sacramento which ran around $50,000. Mr. Zaner said staff did not have good, solid figures. The $50,000 figure was 1 percent of Toughly $5 million, and the mate- rial from Sacramento indicated the gross in Sacramento was about $58 million. The difficulty was in determining the expense side of the ledger. When staff looked at the figures, they came out to just over $50,000 in expenses, but he was reluctant to tell Council the figure was legitimate, Vice Mayor Woolley understood from the staff report the auditing could be done by an outside firm paid for by the charitable orga- nizations rather than the City. Mr. Zaner said it was possible. Vice Mayor Woolley equated the situation to the state lottery for education in California and asked if there was any way Council could specify a certain percentage of the bingo revenue had to be for charitable purposes, Ms. Northway replied under the state law presumably the money received by the charitable organizations after expenses must be used for charitable purposes Nobody denied that was the intent but could not guarantee that would happen because of difficulty with auditing a totally cash operation. Lieutenant Merson said one of the things the people in Sacramento were currently researching was to mandate thata certain amount of the moneysthatpreviously went to administrative costs in running the facility, might be guaranteed to the charitable organizations. The issue was controversial and had not been decided. Vice Mayor Woolley asked if there was a way to go ahead with the issue for a trial or finite period. Ms. Northway said yes, Council could provide the ordinance would sunset in one year, and applications would only be granted for that period of time. Council*ember Fletcher asked whether Sacramento licensed every volunteer and wondered if a member of the public could speak to that. Councilmember Klein asked i f staff knew precisely what the finan- cial arrangements would be between the charitable organizations and their landlord. Mr. Zaner said the charitable organizations provided staff with data as a typical model, but it was not known whether the data 7 4 1 5 7/07/86 would appear in their private agreement with the landlord. The information indicated 10 percent of the gross would be for rent, advertising, and supplies. Councilmember Klein asked if there was a floor or ceiling on the rent. Mr. Zaner replied staff was unware. Councilmember Klein said the staff report of June 5, 1986, pages 1 and 2, quoted extensively from Penal Code Section 326.5 which implemented the constitutional provision which allowed bingo games under certain limited circumstances. Subparagraph 3, page 2, said. that no individual should hold a financial interest in the conduct of such a bingo game. His reaction was that 10 percent interest or a dollar bet was a financial interest. Ms. Northway agreed. If the rent was tied into the frequency, the gross receipts, or anything of that nature, it would violate Penal Code Section 326.5 subsection 1. She was not clear on how the rental arrangement comported with the section. Councilmember Klein asked if it was not Council's obligation see the Penal Code Section was complied with. Ms. Northway said yes. Councilmember Klein asked how the City Attorney's office would find out whether the charitable organizations were in compliance. Ms. Northway said there would have to be a complaint that the sec- tion was being violated, and the City Attorney's office would request a copy -of the lease arrangement and would prosecute if they believed a violation of the section had occurred. Councilmember Klein said assuming the 10 percent was accurate and produced a return to the landlord of $5-600,000 a year, ho' did that compare to what each of the charities could expect to receive after expenses. Mr. Zaner replied the percentage breakdown staff received indi- cated the charities anticipated receiving a total of close to 22 or 23 percent of the gross, or approximately $1.2 million. Councilmember Klein clarified the $1.2 million would be divided among the five or six charities in equal shares. Mr. Zaner did no.t know whether or not the shares would be equal as that could depend upon the :frequency with which each of the orga- nizations sponsored a bingo session. Councilmember Klein said staff report (CMR:331:6) quoted Penal Code Section 326.5 and said that bingo games were only authorized i 4 1 6 7/07/86 if the game was conducted on "property owned or leased" by the charitable organization and such "property must be used by the organization for offices or for the performance of the purposes for which the organization is organized." He asked how charitable organizations would cosr:.ly with the provision given the fact no significant offices were planned for the present Fiesta Lane site. Ms. Northway stated the Penal Code Section was .326.5 subsection F, and the City's Municipal Code contained an even more restrictive provision. The Penal Code Section said the organizations ceeld use the property for an office. Palo Alto's Municipal Code Section 4.51.060 said that a non-profit charitable organization should conduct a bingo game only on property owned or leased by it and which property was used by the organization for its principal office, or for the perforr.,ance of the purpose, for which the orga- nization was organized. She did not consider bingo the purpose for which the organizations were organized, and, if they were not conducting some of their other business on the property, and were not using it as their principal office as designated in their articles or bylaws, she believed the organizations would be in violation of Palo Alto's provision, while they might not be in violation of the Penal Code Section- Councilmember Klein returned to the State law and asked what a charity would have to do to establish they had legitimate offices on the property. Hs. Northway gaid the remainder of the Penal Code Section said nothing in the subdivision section should be construed to require the property owned or leased by or whose use was donated to the organization to be used or leased exclusively by or donated exclu- sively to such organization. She believed the State provision envisioned some sharing of office space, and the organization would have to conduct ~r+'_ome of its usual business in the office other than things related to the bingo game. That was the reason staff was not supportive of the issue. There would be other such questions requiring staff to spend time determining hours of operations, etc. Councilmember Levy asked regarding the card parlors presently in Palo Alto, how many there were and what kinds of problems the City had experienced. Lieutenant Pierson said the City's only current card club was the Cameo Club on El Camino Real, and there were only two crime preb- lems during the past year: an assault and a petty theft .at the preeiees. CounciImember Levy understood the organizations would simply lease the premises and pay a certain lease fee per session which would amount to approximately 10 percent but would not be a direct per- cent. He asked if the number of sessions per week could be limited. Ms. Northway said yes. In regard to Councilmember Klein's earlier comment, she believed if rent was tied into the frequency of bingo sessions that would violate Section 326.5, Subsection I of the Penal Code. Councilmember Sutorius wondered hnw a regional type of operation would 't d proliferation .,..��....3ffect concerns. He asked whether Staff anti- cipated the market would allow for multiple, regional bingos parlors in Palo Alto. Mr. Zaner was not sure, but based on Sacramento County's experi- ence the market appeared large enough for that kind of operation. Councilmember Sutorius referred to the site -specific question, and asked if a Planned Community (PC) might be considered vis a vis a site -specific application. Ms. Northway said Palo Alto had site -specific waivers which applied in the land use field. The regulations related to what Council was trying to do. In the case of a PC, Council allowed people certain incentives in exchange for their property being developed creatively, and to get projects with certain amenities. In the subject case, if Council favored one particular bingo parlor, what was the purpose. CouncilmemberSutorius wanted to understand how the PC did or did not have eligibility for consideration in such a situation. Ms. Northway was not sure land use regulation() .were analogous to regulation of gambling and believed the courts would analyze them as two, totally different fields of the law. There were regul- ations for when Council allowed PCs. which they did not apply post hoc. Those regulations related to the purpose of regulating .the land, and Council would have to have regulations in the context in question which related to regulating gambling. Councilmember Sutorius clarified Council was not regulating land if they utilized a PC as a method of playing limitations on the use of the land with respect to it being a parlor operable under existing ordinances. Ms. Northway said the City could have a bingo parlor zone in the Zoning Code in terms of where the parlors were located, but a study would be needed to determine the appropriate locations. Council had done a study already with respect to card rooms. Card rooms could not be within a certain distance of schools or resi- dential because card rooms were inherently problems, nor within a certaindistance of other types of uses such as massage parlors. Councilmember Sutorius said the illustration of : the card room ordinance suggested there were ways and means of providing 74 1 8 7/07/86 limitations that de facto would proscribe portions of the zoned land in Palo Alto where one could not have a card. room. Ms. Northway said the regulations were found in the set dealing with card rooms, Chapter 4.52, were not part of the Zoning Code, and not treated as land use regulations"in that context. Councilmember Sutorius said the present bingo games!,` ordinance already provided for audits at such reasonable times and places as might be requested, and any expenses for such audits should be the responsibility of the licensee. He asked how frequently the City conducted such audits and what the costs were. Ordinance Compliance Inspector Pete Hazarian did not believe the City ever audited a bingo establishment, and the reason could be the infrequency of the use. Elks Club operated once a month and their gross receipts were approximately $1,000 every month. Councilmember Sutorius asked how the provision of alcohol was managed at the Elks Club site. Ms. Northway believed there was a provision in the bingo ordinance with respect to clubs licensed under the Business and Professions Code allowing an exception for alcoholic uses, and all other types of establishments were not allowed alcoholic uses on the prem- ises. Councilmember Patitucci said staff asked to look at the issue pre- liminarily to come up with questions that might be of concern to Council. He was .concerned that the resistance, amount of inform-- ation,, and negative point of view increased as staff progressed. Council was in an awkward situation. The City Manager said the two proposed revisions to the ordinance would allow for twice -a -- week operation of a bingo game by charitable organizations, and to allow them notto own their equipment. If the organizations owned the equipment and held a game just once a week, if there were seven organizations, they could operate in exactly the manner described. The City Attorney said the organizations might be vio- lating the law in their existing proposal in two instancesx The proceeds of the game were shared by the owner of the building, and the charitable organizations did not have a primary purpose of their business conducted at that facility. Those levels were very different, and it was very confusing when a concern was expressed and then said to be illegal. He asked if the organizations' pro- posal was illegal on those two grounds, and if so did Council have e legal problem. Mr. Zaner said the proposal from the group west in effect, a draft ordinance and would need additional changes to clean up just the kinds of issues raised by Councilmember Patitucci. Ns. Northway said staff needed to clarify with the proponents the exact rental arrangement. The question about rent and how. it 7 4 l 9 7/07/86 would be charged was hypothetical. She had not seen a lease and did not know if there was a firm rental arrangement at that point. There was a problem if the lease was for the property owners to receive a certain amount of money per game. Councilmember Patitucci if staff requested a Z e ft.. G4{li^. Ms. Northway could not recall asking that question personally. Councilmember Patitucci asked if proponents were requested to describe the ,type of business that would be carried out to deter- mine if it met the criteria to conduct their primary purpose at that facility. Mr. Zaner said no, staff had not asked that question. Councilmember Patitucci referred to the amount of activity to be. carried out, the number of people, the amount of money spent, and where the people would come from, and asked what nature of oper- ation a successful bowling alley would have if Fiesta Lane was as successful as in the 1950s and early 1960s when bowling was more popular. Director of Planning and Community Environment Ken Schre ieer_• pre- sumed Planning 11{lit{1., .iY biiYtY l3 vl • -{{Y�4w as LEV V�r l{{. !/liMb�. �./ V sumed the bowling alley did not serve only Palo Alto residents but, had a sub -regional function at least, although there were bowling alleys in adjacent communities. The number of people _ associated with a bowling alley could vary substantially based on hours of operation, number of leagues, etc. A bowling alley could be a major traffic generator and major source of activity for a . commer- cial establishment. Councilmember Patitucci clarified the amount of activity was defined more by the facility and number of parking spaces than . the type of activity and was probably similar to a successful bowling alley. Mr. Schreiber said size was certainly important. Inherently the bowling alley had a large portion of the facility not occupied by people but devoted to the lanes. In that sense, a bowling alley might have an 'occupancy load less than the same --sized facility used for an intensive bingo operation. Councilmember Patitucci asked why the twice -a --week operation and the `fact that the proponents did not own the equipment were criti- cal factors. Could the proponents continue owning or sharing the equipment and operate . once a week. Mr. Zaner undersfsod . from the proponents that unless they could Operate at least two sessions per non-profit corporation and not put up the up -front money for equipment, the venture was not eco- nomic. i Mayor Cobb said a number of problems had been raised and sometimes there was a temptation for Council to direct the legal staff to find a clever way to write legal language to solve problems. He asked if in the particular instance that would be wise to do. Ms. Northwav said no. Mayor Cobb asked if the Sacramento ordinance as it existed was flawed and would the ordinance require considerable work to make it applicable to Palo Alto. Ms. Northway said absolutely. Mayor Cobb presumed the questions of hours of operation, what applicable conditions, and making the existing ordinance stiffer than the state ordinance with respect to offices, would all have to be built into the ordinance. Ms. Northway said those questions would have to be built into the ordinance for aayother bingo parlor that Council approved. Mayor Cobb asked i f i t was correct staff had to find general lan- guage which applied to the specific case. Ms. Northway said general language that applied generally would also apply to the specific case. Mayor Cobb said if Council found the bingo operation less desir- able after the trial period or sinset clause, Council's only action would be to repeal the ordinance. Ms. Northway said yes. Councilmenber. Levy said his impression was that one of the signi- ficant City administrative costs would be the licensing of volunteers. He asked if all current volunteers at bingo games in Palo` X11. to were licensed. Mr. Zaner said yes. Courcilmeber Levy was not clear what the City accomplished by the licensing procedure, as he assumed a licensee could still be paid. Ms. Northway replied the licensing procedure was a way of tracking for administrative purposes who was involved in the operations. To the extent the City could determine at some point that someone was being paid, then the City would have a proceeding, give notice, and go through the process to revoke the license. They would not for a certain period of time be able to be involved in a bingo operation,. Pat Marin, 156 Los Altos Avenue, President of the Hoard of the Community Association for Retarded, Inc. (C. A. R..) , said C.A.R. 7/07/86 1 was a public human service organization headquartered in Palo Alto for 35 years. They currently served 1,600 individuals and affected many more. Although they served San Mateo and Santa Clara Counties, 580 of their clients were Palo Alto residents. She was distressed that the discussion centered on why should Palo Alto have bingo and nowhere was the central theme mentioned that bingo was a legitimate fund-raising activity so recognized by the State of California for nonprofit organizations. As much as C.A.R. would like to conduct bingo on their own premises, they were not a rich agency. Every penny brought in went to provide services, and every square inch of their building space was used to provide those services. In effect, C.A.R. had no choice but to band together to lease an outside facility with other like organi- zations who also used every squaie inch of their space to provide services. The Fiesta Lanes building provided an added advantage in that C.A.R. was wait listed for all their programs at the moment. The decision was not taken lightly. C.A.R. had a board of community -minded citizens which had lengthy and thoughtful dis- cuseions on the issue, and they did a lot of homework. Bingo counters such as proposed operated trouble free for four years in Sacramento, and the organizations benefited. Some of the City's figures sounded better than she hoped. C.A.R. hoped to raise $100,000 to benefit its clients which meant over 18,000 hours of client services. The lessor would not benefit from the success but would simply be a landlord providing space and equipment with which to conduct the games., Vice Mayor Woolley said in regard too. the volunteers needed to staff the bingo games, could Ms. Marin give any- comparison in terms of the number of volunteers at C.A.R. working on fund- raising projects. Ms. Marin said C.A.R. asked similar agencies in Sacramento who dealt with developmental disabilities hoe they dealt with volun- teer burn out and, with the exception of one much smaller agency,. the agencies had not had the problem. The volunteers .who worked at C.A.R. for the past 35 years dealt with developmentally - disabled people which was much tougher than working on a bingo game. When C.A.R. ini ti;lly thought of proposing the idea, they asked through the newsletter if people who knew about the organi- zation would be interested in helping out. They had. over 50 responses immediately. They estimated they only needed 48 people and believed . they could have a body of 100 volunteers. Based on other fund-raising activities, bingo was an economical way to use volunteers. Bingo generated a lot more income per volunteer hour than anything else. C.A.R. was confident it would not have a problem .with volunteers. Councils ember Sutorius said ls. Marin commented that C.A.R. would get some spacerelief by the proposal and asked if C.A.R. would be performing direct services out of Fiesta Lanes or administrative services that would release space at the existing C.A.R. 7 4 2 2 7/07/86 1 Ms. Marin said the Board had discussion about having some of C.A.R.'s direct services off site. In C.A.R.'s "Home Companion" program, people went into homes of families with retarded indi- viduals and cared for them in their homes. In some cases the people were medically fragile and could not travel to C.A.R. to provide respite to the families. That direct program was pri- marily administratively staffed because the people worked in the homes. If the program was moved to Fiesta Lanes, it would be dif- ficult to say whether the program was direct or administrative. Councilmember Klein asked if Ms. Marin had an estimate of how much time per week would be required of each volunteer. Ms. Marin said the sessions were three or four hours. Councilmember Klein asked if that was for each of the 120 volun- teers. Ms. Marin said 12 volunteers per night were required, and each volunteer would spend 3 or 4 hours per night. To hold bingo games twice a week was wise because time went into training volunteers. If the volunteers were used infrequently, the training time was not well spent. C.A.R. estimated each volunteer would go about twice a month. Councilmember Klein asked if C.A.R. had figures as to how much money a volunteer could produce in other fund-raising activities as compared to bingo. Ms. Marin; said no. The potential revenue from bingo far exceeded any other kind of fund-raising activity on a per hour basis. The revenue was of such greater magnitude that an analysis was not necessary. Councilmember Klein asked if C.A.R. had numbers along those lines. Ms. Marin deferred a response until she had a chance to work out some numbers. Councilmember pa ti tucci asked if the City Council did not approve the change . of the City ordinance and bingo was that lucrative, would C.A.R. still go ahead with a proposal. If note, could Ms. Marin explain why the twice -a -week and equipment -leasing provi- sions were the key variables. Ms. Marin was somewhat surprised the two provisions were made the key variables. She believed one of the variables was having to be in their primary sits.: C.A.R. had been in its primary site for 35 yea's and did not have the space and, , therefore, was asking to go off site and lease. With regard to . twice a week, bingo was an effective fund-raising technique, and the organizations wanted to 7 4 2 3 7/07/86 hold games as often as feasible. Holding games more than twice a week was not feasible. Councilmember Patitucci asked if holding games once a week was feasible. Ms. Marin said sure. Councilmember Patitucci said if it was feasible once a week, was it feasible for C.A.R. to own its own equipment and hold bingo once a week. Ms. Marin said for C.A.-R. to own their own equipment was probably not feasible because they were very tightly budgeted and did not have that kind of capital investment up front. Councilmember Patitucci asked how much the equipment cost. Ms. Marin deferred to their staff. Mayor Cobb suggested Ms. Marin return after the last speakerto answer any questions remaining. Councilmember Fletcher wondered if C.A.R. did an analysis of how much each player would be spending a night to make the kinds of revenues projected. Ms. Marin said the amount was considerably less than staff esti- mated. Mr. 7,aner emphasized the figures he quoted were not staff esti- mates but given to staff by th. nonprofit groups based on the experience derived from Sacramento. When he met with the non- profit groups, he understood the gross receipts were exactly half the number reported to Council that evening. He was corrected and handed a sheet doubling the gross to $5.8 million, which amounted to $ 4l per player. Richard C. Placone, 601 Chimalua Drive, was a representative mem- ber of the Board of Directors of the C.A.R. delegated toanswer questions Council raised during earlier discussion. He asked Council to make every attempt to give C.A.R. a fair hearing. He believed more negativism had been raised. If C.A.R. was to sur- vive at its present base of operations, it was essential they broaden their base of funding.. The federal government long since bowed out of helping community organizations such as C.A.R. The state government was also declining in its support id terms of real dollars achieved. C.A.R. was presently supported by about 45 percent in private gifts and had one of the most sophisticated fund -rising programs :of any organization in Palo Alto, other than Stanford University. C.►=R_- wee approaching the point, of maxi- mizing what they were able to get from the community: by way of private gifts. The state provided ways to do that through _ its bingo legislation. He wanted to dispel two issues he kept hearing amongst various staff members. In the issue of Mr. Ross, the gentleman proposing to remodel the facility and lease it, they were not denying he expected to make a profit. Mr. Ross' expected rate of return on the investment would be approximately 14 percent and, considering the risk involved, 14 percent was not unfair. He kept hearing bingo referred to by staff as gambling. Considering the restrictions on the size of the gifts, no one became rich on bingo. It was considered a recreational program. It was stated there were insufficient City resources to monitor the program, and he pointed out the operation would be. self -regulated which was not clearly stated in staff reports. C.A.R. self -regulated itself for 35 years. C.A.R. had only their own auditors and was capable. of monitoring the program from a legal aspect. C.A.R. spent over a year studying not only the operation in Sacramento but also the applicable state and City regulations and would be in full con- formance. The facility would be improved. At present Fiesta Lanes had access to a bar, but C.A.R. repeatedly stated the bar would be sealed off by a wall, and the organizations would be totally unrelated. The other improvements were defined, and the '0,000 square feet of space had been offered as a community resource. If a •community resource was not found, he had no doubt the five agencies would take advantage of Mr. Ross' offer and use the space, fe e..ee "-zee raised Cobb asked Mr. Placone to briefly answer the questions earlier by Council. Mr. Placone said C.A.R. leaned heavily on the Sacramento experi- ence for its proposal. Presently 250 volunteers a month worked in C.A.R. programs, demonstrating they`,could manage the large number of volunteers needed for the program. The 8 percent reduction experienced in Sacramento was County -wide. Sacramento had many operations, and the average individual yield per facility went down as new operations began. That experience was not true at the facility C.A.R. examined where the return to the organizations remained fairly constant in three years of operation. C.A.R. was prepared to do whatever was necessary in regard to licensing vol- unteers. He understood volunteers had to be members of the organization, and C.A.R. was required by state regulations to have a stringent policing mechanism for its volunteers. The charitable organizations would pay a fixed monthly rent for the facility, utilities, and all other services, and the rent had nothing to do with ,whether the organizations made a dime or a million dollars a month. The rent. was fixed on an annual lease, and the organiz- ations and Mr. Ross were prepared to submit not only copies of the lease but all books and any papers or accounting mechanisms to staff or the Clay Council. The books would be totally open if that was required to demonstrate the charitable organizations would abide by the law. He send of course the facility' was regional, as was Stanford Shopping Center and every industrial business in Palo Alto. 7 4 2 5 7/07/86 Vice Mayor Woolley noticed Mr. Placone was present at,the meeting of the Barron Park Association (BPA) where the term "site -specific waiver" was introduced and asked if he had any further explanation of how the waiver would work. Mr. Placone said EPA was concerned about proliferation and asked if it would be acceptable to the organizations and the developer if tte City granted approval for the proposal but limited the approval to the specific site only. C.A.R. agreed from theit per- spective. There was no further legal background. Barbara Holstein, Director of Development at C.A.R., was the staff person who investigated the project originally and was responsible for bringing the other organizations together for mutual benefit. She showed a drawing of what was proposed at Fiesta Lanes and said Fiesta Lanes was not very .beautiful at present and would be com- pletely remodeled into a real asset to El Camino Real and the City. The cost of the equipment was approximately $60,000 including tables and chairs, sound system, score boards, consoles, television, and was far beyond what the charitable organizations could afford together. In regard to holding bingo games twice a week, she said once a week was theoretically possible but twice a week was more economically viable. The basic coat of the facility and the cost of remodeling remained the same, but the organiza- tions would have to pay the amount divided by five out of smaller proceeds if each organization held a game once a week. It was not economically viable or practical to bring in more than five organizations. Coordinating the efforts of more than five organi- zations to ensure consistency became unwieldy. Joan Weaver, 299 California Avenue, Director of Fund Development, United Cerebral Palsy (U.C.P.), believed volunteer hours were gold. U.C.P. recently cotipleted a fund raiser which took approxi- mately 500 volunteer hours to net only $4,500. Ten percent of fund-raising overhead was extremely lows Many fund raisers spent 90 cents to make a dollar. U.C.P. considered its administrative fee of '15 percent extremely low.. T.he cost of owning equipment was prohibitive and the charitable organizations had no place to store it. U.C.P. rented space in Palo Alto for 15 years aid 'someone benefited as the space was not rent free. Five organizations shared the $6 million figure, with five separate boards monitoring the dispersion of the funds and auditing as a checks and balance system. There was a vault and the money would be transferred to the bank the following day. Prize money came out of the figure. With regard to the amdit, even the paper cups and napkins repre- sented a dollar amount, and each organization would perform an audit. As charitable organizations, they had a fiduciary respon- sibility to treat their hard-earned dollars wisely and , to the best interests of those they served. The $42 per person was not out of line considering dinner and a show could cost $100 for two people. She read a letter from one of the business people in the commtriity who said as proprietor of two Round Table pizza parlors in Palo Alto, he had occasion to work U.C.P. Association in some of their. 1 1 1 fund-raising activities. He supported the efforts because of the invaluable services they provided to the community. Obviously businesses such as his could only assist in a limited way. There-- foreF he encouraged support for U.C.P.'s efforts to join with similar agencies to provide bingo which would generate much needed revenue to support services to the citizens of Palo Alto. Councilmember Fletcher asked if Ms. Weaver said there would be cross -auditing between the organizations. Ms. Weaver was notclear on that point but was sure there would be cross -discussion. Thorn Johnson, 299 California Avenue, President of the Board of Directors of U.C.P., said U.C.P. originally approached the estab- lishment of a bingo center as a business decision. The primary concern was in finding a fund-raising activity which produced con- siderable income from a reasonable input of energies and which had the additional virtue of not jeopardizing the positive public image. U.C.P. also had been in Palo Alto for 35 years. U.C.P. pursued the matter for approximately five years, and the subject operation was the first they encountered which was worthwhile. The Executive Director and the immediate Past President of U.C.P. visited the organization located in Sacramento and found it to be first class. In terms of volunteer usage they could generate about $9 for every dollar expended. U.C.P. tried for ten years to accumulate the funds necessary to build a special residential facility for severely disabled people. During the ten-year period, they raised .less than $20,000 for that purpose, therefore, the possibility of generating funds from $50,000-$100,000 per annum for such a special purpose made the proposal particularly attractive. The acquisition of equip en: by U.C.P. might be pos- sible, but renting the space was utterly impossible. George Wilson, 340 Lowell Avenue, a volunteer for. C.A.R., was pleased that City staff reported favorably on the Sacramento bingo center to be used as a model but was sorry C.A.R. had not yet been able to satisfy staff's concerns, principally over proliferation. C.A.R. proposed strengthening the present ordinance and, if Council agreed with staff that such modifications were either undesirable or infeasible, then C.A.R. respectfully urged the site -specific waiver or anexemption be granted so that, C.A.R. could proceed. C.A.R. found the issue not without precedent as the Elks Club was granted an exemption to pursue their private gates at the time the present ordinance was enacted. Sally Ellenberger, 1240 Dana Avenue, came as an interested citizen and friend of C.A.R. She said anyone who worked in the volunteer area or fund raising knew there was a limit to the types of fund raisers that consistently raised money for nonprofit organiza- tions. There cold only be .so many used clothing stores, benefits, etc. She had memories of bingo going back to the 1940s when Sunday night bingo was enjoyable, with none of the adjectives attached to it that were offered that evening and in recent news- paper articles. As a fund raiser, bingo was an ideal situation where money could be raised for good causes. She asked why non- profit organizations should not be allowed to operate a bingo cen- ter in a business -like manner. She understood some of the concerns raised by staff and respected their microscopic review of Codes, but found it curious that the emphasis was more on nega- tives than positives. Staff gave only one paragraph to the positive aspects of the bingo center in Sacramento. If Sacramento could run a bingo center that well, she believed Palo Alto could run one better. She urged the City Council to approve the pro- posal for the bingo center. Eliot Klugman, 1326 Forest Avenue, said the report of the City Manager noted that the South Peninsula Hebrew Day School (SPHDS) was located in Sunnyvale. The statement was correct but .two thirds of SPfiOS's constituent students came from the City. of Palo Alto. In a framework of quality of education, the more money the school could raise through whatever manner of means, directly affected the quality of education the school delivered to its students. He believed the editorial that appeared in the Times Tribune the previous day stated the case quite well,. The edito rial acknowledged the downsides and possible risks, but also acknowledged the upsides that five extreordini ily-worthy organi- zations could benefit, the players could benefit; and the City could maintain its image of being progressive and innovative. Basically the Councilmembers tried to protect people in the area from potentially bad influences. Their effort was commendable. However, if the proposal could not function, human nature dictated that people would continue to put tremendous amounts of recre- ational funds into the California State Lottery, football pools, etc. If Council allowed the proposal, it would be diverting a large amount of funds spent for those purposes into some -worthy community causes. Sarita Ledet, 460. California Avenue, Child Advocacy Council (C.A.C.), said the agehcy had been in existence since - 1.979 -arid was the child abuse prevention council for San Mateo and Santa , Clara Counties. C.A.C. served over 20,000 clients each year either directly or indirectly, and there were about 10,000 reports of child abuse and neglect in Santa Clara each year and about 5,000 in San Mateo County. Currently in Palo Alto C.A.C. offered fami- lies involved with the system alternative ways to have their needs met. The Board of Directors asked the C.A.C. staff to study the possibility of a stable fund-raising source. To support the agency, C.A.C. had to raise about $100,000 each _. year over .and above the money generated from goverment grants.. In the study, bingo was found to be a viable and cost-effective way for the agency to raise the $100,0000 The agency dealt on a regular basis with the entire criminal justice system and would not want ,to do anything to put the agency in a position that appeared in ; vio- lation of any law of the City of Palo Alto or the State of California. C.A.C. decided bingo was viable and realized they could not raise the money to hold a bingo game alone, and could not raise the money to buy the equipment, and it was best to join with other reputable organizations to attempt the raise the funds. C.A.C. also believed it needed between 75 and 100 volunteers to staff the games, and bingo was a more cost-effective way for the agency to raise the $100,000. She requested the issue be moved away from whether or not it was bad to have bingo in the City and focus on what the proposal meant. Councilmember Bechtel asked how many current volunteers were .nvolved in C.A.C. Ms. Ledet said C.A.C. had up to a 21 -member Board of, Directors, a fund-raising auxiliary of 13 active members, a speakers bureau had 3 active members, and about 10 clerical volunteers within the agency. C.I.C. would use some of the current volunteers and would recruit others. Councilmember Bechtel asked if it was realistic that C.A.C. could recruit the required number of volunteers. Ms. Ledet said yes. Harrison Otis, 2721 Midtown Court, said he had 35,000 hours of voluntary service to the Spinal Cord Unit and Retarded Children. If the City was going to approve bingo, there should be stringent controls to not allow proliferation so the City did not have to bring in the IRS as happened with massage parlors. He had a place in Palm: Springs and spoke to the Indians on the east end of the reservation about the low percentage they took in bingo opera- tions. Sucn issues should be considered in every way. Council should listen to their City Manager. Bob Moss, 4010 Orme Street, said the BPA. discussed the issue at length and tried to address the issue on the narrow grounds of land use and traffic, setting aside rora.' ity. Many people `Kon the board: were sympathetic to the worthy causes represented by the interested agencies. He was confused in -the letter written by C.A.R. by the three different hours of operation listed. The first page entitled "Strengthening the ordinance," under a) said, "Bingo . games shall be conducted only ' during the hours of noon to eleven p.m." Under "Summary," (3) said, "Hours of •operation - bingo games will be conducted only in "off" hours between noon and four -thirty in the afternoon and seven and ten -thirty p.m." and the attached specific ordinance spoke about hours of operation not being between. 2:00 a.m. and 10:00 a.m. BPA discussed hours of operation extensively and had a specific position that the games should not operate during peak traffic hours.. Peak traffic hours were carefully defined as including the hours from 3:30 p.m. to 6:30 p.m. None of the hours in the C.A.R. letter encompassed those particular traffic hours. He clarified BPA wanted bingo prohibited on the site during those traffic hours because.. there 7 4 2 9 7/07/86 were two extremely congested intersections, one just north and one just south of Fiesta Lanes, and: any operation which dumped traffic onto El Camino Real between the hours of '`3:30 p.m. and 6:30 p.m. would be objectionable to BPA. BPA did not address any of the regulation or policing issues because they believed such issues were outside the scope and expertise of a neighborhood associa- tion. 14. PUBLIC HEARING RE 4293 WILKIE WAY Mayor Cobb suggested Council move forward the decision as to whether or not to act upon 14, Public Hearing re 4293 Wilkie Way that evening. There were ten members of the public who wished to speak on the item, and a continuation was possible. He asked staff- when the item would be continued to and what impact that had. Assistant City Manager June Fleming said the item would be con- tinued to July 14, 1986. MOTIONS Councilaember Klein moved, seconded by Woolley to continue 14, Public Hearing; Planning Commission recommendation re variance for property located at 4293 Wilkie Way, for one week to July 14, 1986. MOTION PASSED unanimously. COUNCIL RECESSED FROM 10:00 .m. TO 10:20 .m. 13. ISSUES -APPRAISAL RE BINGO (Continued from 6/9/86) Ms. Marin said the cost of the equipment was $60,000. How much each player would spend was a debatable issue, but C.A.R. esti- mated $30 or $35. Bingo was a recreational activity. No one became rich or lost a lot of money on bingo, and there was a state limit to the prizes awarded. In terms of the effectiveness of the use of volunteers, C.A.R. was supported by the Retarded Childrens Guild which ran the Market of the Flea in Palo Alto. Based on the number of volunteer hours needed and the amount of money raised each year, the Market of the Flea operation generated about $8 per volunteer hour expended. C.A.R. ran phone appeals, gathering volunteers together in a brokerage house or real,`: estate office to phone people who supported C.A.R.. in the past, and that activity generated about $11 per volunteer hour. Based upon staff figures, C.A.R. estimated bingo would generate about $50 per volunteer hour and, therefore, was very cost effective in terms of the use of volunteers. With regard to use of the space, C.A.R. had two pro- grams, one for retarded infants and one for severely retarded adults, both looking for space "off campus.'" C.A.R. proposed games in the evenings only starting at 6:3© p.m. to 7:a0 p.m., after the rush hour, and on weekend afternoons. When there was a downturn in the economy, as in Silicon Valley that year, there was a downturn in support to United Way. United Way encouraged the organizations to pursue the specific venture whichhad to be cleared with them. Councilmember Fletcher believed Council should assist nonprofit agencies to raise their own funds, and bingo was one method. Public funding was being reduced all the time, and the City would probably reduce its contributions in future if its budget became tighter as predicted. A lot of volunteerism was involved and a partnership with other nonprofit organizations. She saw a lot of good coming from the issue. MOTION: Councilmember Fletcher moved, seconded by Sutorius, to direct the City Attorney to return to th• City Council with a modification to the Palo Alto Bingo Ordinance to permit the opera- tion of a bingo center as proposed. Councilmember Sutorius seconded the ;motion for purposes of dis- cussion and potential amendment. Ms. Northway assumed Councilmember Fletcher was not suggesting that Council adopt the ordinance that was part of the package. She hoped that was not what was meant by "as proposed." Councilmember Fletcher was not referring to any. specific ordi- nance, wording, changes, etc. She hoped the end result would be that the group of organizations led primarily by the C.A.R. could. have the joint operation, lease the facility with the equipment provided to make possible.twice-a-week bingo per organization. She believed staff ` was carried away in the one-sided, strong oppo- sition. Bingo could not be ell bad when. it worked well in Sacramento. She asked the Chair of the Board of Supervisors why Sacramento was "forced" to implement an ordinance and was told it was really a modification of the current ordinance suggested by the task force, and no-. crisis precipitated the ordinance as sug- gested by the language in the staff repoe.t. A. lot of worthwhile causes were funded` and many good services were provided in Sacramento, and .the least Palo Alfo could do was to try. If . bingo did not work out, the Council could rescind the ordinance in the future as suggested. Councilmember Sutorius said the concept was worth favorable con- sideration and a constructive effort to arrive at proper ordinance 1anguage that addressed the kinds of concerns staff identified. Applicants registered an awareness and understanding of how the concerns could be generated. If the motion endorsing bingo as a concept passed, he was confident Council could offer areas of con- cern to be studied for incorporation in the ordinance. Council might speak to hours of operation, numbers = of sessions per ; day, intev'a a inbetween sessions, so that concerns regarding traffic were addressed. Similarly, concerns could be addressed to ame- liorate reservations: because of the specter of proliferation. A we1letonatructed ordinance would act as a brake because the poten- tial of the fly°-byd-night type of operation was minimized if not 7 4 3 1 7/O?/86 eliminated. There might be concepts expressed by Council that staff could work on to cut down on physical proximity between cen- 'ters as another way to assure proliferation was not encouraged. Distance was used between drive-in services, etc., as a control. He encouraged Council to endorse the concept with recognition the Council would not be approving establishment of a bingo center but approving the concept in order to work out the details of how a center could be implemented in a proper fashion for the commu- nity. Councilmember Bechtel believed Council should separate the worthy nonprofit organizations from the actual bingo center in evaluating the proposals. The causes were good and needed to . raise money, but bingo was not the way, and it was inappropriate for Council to get involved and try to bend rules for the worthy nonprofits. Staff was emphatic in their concern about too many problems. There was too much dependence on too many volunteers. In her experience with nonprofit organizations, she had to cajole and persuade volunteers. It was easy for ah occasion, but twice a week, week after week to need so many volunteers for three to four hours was quite a commitment. She believed the costs to the City for staffingand administration were too high and she waa con- cerned about proliferation.. She did not support the motion. Councilmember Levy supported the motion. He was concerned about the report because he shared Councilmember Bechtel's high regard for staff. However, the concerns were overstated and the self - policing of the nonprofit organizations was understated. It was in the organizations' best interests to run the games so as much profit a.s possible flowed to them. Every nonprofit was a public agency with a public board of directors. He believed, the self - policing would help assure bingo was run to benefit the entire community. He did see bingo as a predaceous gambling effort, but more as a benefit and social activity which appealed largely to the older population. He wanted to ensure bingo did not proli- ferate the community or get bad. He wanted the ordinance to reflect bingo games were conducted only during the hours of 12:00 noon to 11:00 p.m., and no games were conducted during peak com- mute hours, approximately 3:30 p.m. to 6:30 p.m. Nonprofits could conduct games twice a week. He referred to the letter from the C.A.R. dated June. 26, 1986, page 8, "b)," which said, "a nonprofit organzation wishing a license to conduct bingo more than one time a week must have been incorporated as an organization meeting the definition of Section 4.51.030 for at least two continuous years immediately preceding filing of the application for a bingo permit" His intent that the City secure the objective that the. entity be a legitimate nonprofit organization, not a nonprofit specifically set up to take advantage. On the same page, he also endorsed some fund raising levees.. Item °c),'" read, "bass during said immediately preceding two (2) year .period, raised at least one hundred thousand dollars ($100,000) through public and private solicitations (including publicly funded grants, ilecreationa1 and other fund raising activities) but exclusive of any revenues that have resulted through the sponsorship of bingo games, and spent that amount in the pursuit of the activities for which the organization is chartered." He assumed California law considered the lessor of the building did not benefit directly in the conduct of the bingo games, but if it did not, it should be specified in the ordinance. There should be review to assure the facility and its operation were not detrimental to public health, safety and welfare and would not result in significant increases in traffic or parking problems. There should also be a high visual stan- dard. Councilmember Klein believed it was wrong society did not support worthy organizations such as the ones before the Council, but it was also wrong to encourage bingo on such a large scale. There was no question if one person requested a bingo permit, the appli- cation would have been denied in record time... The fact worthy organizations applied for a permit should not change the analysis. The worthy -organizations would use the money for worthwhile pur- poses, but he did not believe it would change the negative effect on the community. He did not ►)elieve bingo should be encouraged in Palo Alto. Staff did an excellent job pointing out the risks, and the social costs to the community far outweighed the short- term financial benefits to the organizations. The state legisla- tion was an effort to legalize a small scale, typical church bingo operation, and the proposals went far beyond the intent of the legislation. If Council approved the requests, it encouraged and fostered a loophole in the law. Bingo and slot machines were not recreation, they were gambling. Unless people lost money, there were no profits for the charitable organizations. As a steward of Palo Alto, he could vote that his community not encourage gambling. Neighboring communities denied the requests, and he was intrigued there was not a bingo facility in San Francisco. Council was kidding itself if it believed bingo would not prolif- erate. The City Attorney pointed out Council could not discrimi- nate between one group of charities and another without some good reasons. While the sunset provisions worked in many other areas, it would be extremely difficult to administer because the non- profits would make a substantial investment, and it was .unrealistic to think the City might yank it out from tinder them in one year. He regretted he could not support an effort by the worthwhile organizations to raise money, and opposed the motion. Councilmember Patitucci supported the motion. 1 AMINDI t$T: Councilmember Pati t*cci moved, seconded by Woolley, as toilOrb1 1) establish hours of operation that de not compete with peak hours. Bingo hours to end at 10034 p.m. on weekdays, and operations Saturdays and Sways be from 13 300 noon to 1100 p.n. allowing , two sessions; 7 4 3 3 7/07/86 MOTION CONTINUED 2) nonprofits share equipment through the lease process; 3) the City Attorney look for some way to discourage prolifera- tion of the centers; 4) organisations be permitted to operate no more than two sessions per week; 5) there be s sunset provision of three years; and, 6) the City Attorney develop mechanisms to ensure only qualified organisations participated. Couricilmember Patitucci said bingo was a difficult issue on which to take a strong stand. The involved organizations were respon- sible, capable, and proven, nonprofit, charitable organizations which should be given the opportunity to tap some dollars. He wanted the bingo operations to be a credit to the community. To him, bingo was in the same category as a card parlor or a bowling alley. On balance, Council should support the request and convert the staff work into an ordinance which would not overwhelm the City with bingo centers. He specified hours of operation at 6:30 p.m. to 10:30 p.m. Monday through Friday, and two sessions per day on Saturdays and Sundays, from 12:00 noon to 11:00 p.m. Mayor Cobb encouraged Councilmembers to speak to the general issue of bingo before the specifics of the amendment. Vice Mayor Woolley supported the concept of bingo as a fund raiser for nonprofit organizations. She put in a lot of volunteer time and appreciated the need to use volunteers effectively. Funds raised per volunteer hour were much greater through a bingo center than through many other projects. Regardless of whether bingo was recreational or gambling, the applicants had excellent track records and were fine organizations. Palo Alto had the advantage of being a smaller area than Sacramento, and its surveillance operations could be closer. Her concern was proliferation and as long as the City could maintain the quality operation being dis- cussed, the whole fund raising process could be a credit to Palo Alto and a boon to the organizations. She supported the amend- ments. She suggested a use permit be required. If the 10,000 square feet of space was not useful as a child care facility, . ehe suggested it beopened as a center for other nonprofit organiza- tions, all .of whom always looked for low cost office space. Not only could the five nonprofit organizations use the space, but others in . the community might be involved. 7 4 3 4 7/07/86 Councilmember Renzel associated herself with the comments of Councilmembers Bechtel and Klein. She was concerned about the proliferation of bingo uses, and believed it was clear Council would have denied such a request by an individual. While Council was attempting to aid worthwhile organizations, it might be making inclined gamblers to spend the children's milk money or their social security checks. Many people in Palo Alto could not afford such a "recreation," and by permitting a large scale operation as opposed to an occasional in-house, church -type operation or other nonprofit operation, Council encouraged the activity in the commuity and she was uneasy. She opposed the motion. Mayor Cobb associated with Councilmembers Bechtel, Renzel, and Klein, He spent most of his adult life in some type of volunteer activity, including six years as chaitman of one. of the two major political parties in the county where volunteers were depended on for everything. Volunteer burnout was real, and it was hard to keep a volunteer base big enough to- do the job needed. He con- curred with the comments made on proliferation. If Council said "yes" to worthwhile groups, how would they say "no" to the next group which might be less worthwhile. Council would have to establish what was worthwhile and what was not. He did not believe the suggestion that the demand for bingo was not big enough to encourage proliferation. He saw a publication adver- tising an enormous number of games going on between San Mateo and San Jose, which suggested a huge demand. Some of Councilmember Patitucci's amendments suggested ways to achieve controls. To build in all the controls Council wanted could cost more than the one percent return, and the City Attorney advised it might ne;. be possible to establish such controls. If Council could not closely control bingo, it could live with the cost within City staff. If bingo were closely controlled, a large organization would be needed to enforce the complicated law. The matter could easily become quicksand for Council. One of the reports before Council said, "Bingo was one of the most regressive forms of gambling." Bingo took: money from people who could least afford to put money into charities, and he had a hard time endoring it in Palo Alto. Councilmember Patitucci suggested specifying hours of operation; frequency of operation; and language to control, etc., but eco- nomics would make the issue work. Council might end up with constraints that turned out not to be economic, and people who must make bingo work because of leases and .co mitrnents to certain dollar--. flows, would return to Council to expand the hours of operation to assure they did not lose money. The City Council was charged with a stewardship and needed to consider worst -case conditions. There could be some serious problems. He would vote against the sense -of -the -Council motion, , but might vote differently for some of the controls which should be asstrict as possible. 7 4 3 5 7/07/86 MAYOR COBB RE COMPLETION OF AGENDA Mayor Cobb suggested Council complete the agenda. 13. ISSUES ISSUES APPRAISAL RF BINGO (CONTINUED) Councilmember Fletcher asked if the amendment would be divided. She would vote "nog' on the first segment of the hours of operation. If the organizations could hold bingo sessions twice per week, they needed more than just Sunday afternoons in addition to the evenings. She preferred the hours suggested by the Barron Park Association with the agreement of the operators that no games be held during commute peak hours such as 7:00 a.m. to 9:30 a.m. and 3:30 p.m. to 6:30 p.m. Counciimember Patitucci said it was not his intent for Council to set the hours of operation, but to have hours of operation not conflict with peak traffic hours. MAKER AND SECOND AGREED ITEM (1) OF THE ANEND=EN7 SuOULD READ: "TO ESTABLISH HOURS OF OPERATION THAT DO NOT CONFLICT WITH PEAK TRAFFIC HOURS" Ms. Northway said specific hours, lease of equipment, and sessions per -week were no problem. She believed ways "to discourage pro- liferation" were in the staff report and had to do with distances from other types of uses, from other types of gambling and similar uses, and distances from residential, schools, etc. Those were the recognized, legal ways to deal with proliferation. If Council had other desires, she did not believe she could return with an ordinance as quickly as she assumed Council wanted. Developing criteria to determine which organizations had track records was a significant problem under the state law. State law did not allow Council to pick and choose among organizations and further research onthe matter would take two to three weeks. To rezone the property was a lengthy undertaking. Mayor Cobb noted Council did not have an amendment with respect to a use permit before it. Mr. Zaner said if Council wanted something in the ordinance with regard to audit they should so instruct staff. The ordinance presented to staff by the organizations included a complete section on bingo suppliers. If Council wanted that included, or some reference to controlling bingo suppliers, staff needed those instructions. Councilmeaber Renzei asked h work. w the three-year sunset clause would 7 4 3 6 7/07/86 1 Councilmember Patitucci said the categories listed were those he wanted covered in an ordinance, but other items were not excluded. If an item was unworkable, he expected staff to say so, or suggest how it would work. There would be a point when Council would review and determine whether to continue bingo. If there were serious problems, and Council did not want bingo to continue in the community, Council had an automatic cut off and would not need to undo something. Councilmember Renzel clarified the bingo would automatically end unless Council took action otherwise. Councilmember Patitucci said that was correct. He did not know how that worked legally. Ms. Northway said she would look at the issue of whether the City had to provide amortization for the businesses once they were in existence. She presumed Council required some kind of report six months before the sunset date in order to direct staff with respect to amending the ordinance. Councilmember Fletcher asked about the amortization period based on the amount of investment necessary in both the remodeling of the structure and the purchasing of the equipment. Richard Gherman, 320 West Santa Inez, Hillsborough, believed the.. Sacramento Community Service Center could live within the confines of the three-year program proposed by Councilmember Patitucci. The program was basically designed to work better on a longer -term basis, but he was confident bingo would be an asset to the community. He pledged his assistance to the community.. ITEM 16 OF AMENDMENT SEPARATED FOR PURPOSES OF VOTING Councilmember Levy believed all six elements of the amendment were important, especially- the discouragement of proliferation. He was glad the developer accepter a three-year sunset clause. In terms of allowing bingo to proceed in a manner which guarded the City from proliferation, the six elements were positive goals. It was important to ensure that qualified organizations were the only ores involved, and he defined "qualified" as being organizations which reached a threshold of community acceptance. The letter from the applicants indicated some levels of threshold which were worth considering. Council could fine tune the elements when the City Attorney returned with the draft document. M. Northway said if Council wanted an ordinance which had it all, the soonest she could return would be one months 7 4 3 7 7/07/86 Councilmember Klein was troubled by Item #6, to develop mechanisms toensure only qualified organizations participated. The criteria for qualified organizations was set forth in state law, i.e., organizations which were tax exempt. For a newly -created organization to fight,a new disease or to serve a social cause not yet recognized to not be on the same footage as the subject organizations, had no justification in the law or the United States Constitution. The City had no business distinguishing among tax exempt, charitable organizations. He would not support Item #6. Councilmember Sutorius would not support Item #6 for the same reasons identified by Councilmember Klein. He hoped staff per- ceived the context of the discussion and direction positively. If there were items of omission or commission which needed to be acted upon, he hoped staff would include them in the document which returned to Council. He was not concerned the document might take a month. He urged Councilmembers who did not intend to support the general concept to contribute to the list of conditions. If the motion passed, staff would be living with the direction provided. Staff report (CMR:331:6), referred to the local control issue and changes in legislation to be addressed by District Attorneys and other government officials in late ,Junes He was interested in the outcome, and hoped the sense of what evolved from the motion allowed staff the 14titude to use all of the input including what evolved from the District Attorneys and other governmental officials. Mayor Cobb would support Items 1 through 5 because they estab- lished controls the City needed if it intended to embark on the bingo operation, which he believed mas a mistake. He would not support Item #6 for the reasons stated by Councilmember Klein. Just as a worthy organization could be omitted by the criteria set forth in Item *6, it was the kind of loophole where a not so worthy organization could get in. Council ember Levy . asked those Councilmembers opposed to Item #6 to carefully consider their vote. He was concerned about the organization primarily set up to get into the bingo business rather .than to do good works in the community. It was not hard to become a nonprofit organization although it was ' difficult to be a nonprofit organization with broad community support. Council should do its best to limit bingo to those organizations with broad community support. He could not speak to enforcement, and hoped the City Attorney could incorporate the objectives of Item #6. i • Councilmember Renzel concurred with Mayor Cobb and Councilmember Klein. She did not believe Council would be in a position to sit in judgment either in the abstract or specific on whether it was more important to do the work of C.A.R or the Winter Lodge, for example, in regard to bingo. Both were nonprofit organizations and had popular services or activities within the community. To the extent there was a masquerade of a real for-profit business as a bonafide nonprofit organization, it was seen in the use of nonprofits as a means of establishing a. bingo center. It would be a long term concern if all the nonprofits who found bingo to be an attractive fund raising mechanism began to lobby Sacramento to further loosen State law leaving local governments with a difficult situation. Councilmember Klein believed the comments of Councilmember Levy and Mayor Cobb pointed out the problem when one tried to judge a tax exempt organization. It was not automatic that a corporation received tax exempt status under . Ca1ifGhia law. There was a bureau in Sacramento which reviewed the long applications, but people did not necessarily tell the truth in the applications. The law was broad and what one Councilmember might think was a worthwhile organization and charity, another Councilmember might not. If. Item *6 passed, it would be close to an impossible assignment for the City Attorney, and it- was not an area Council could handle. Councilmember Patitucci sympathized with Councilmember Klein's comments. He suggested the City Attorney not spend too much time on Item *6 if it passed. FIRST PART OF AMENDMENT NT COVERING ITEMS *1 THROUGH *5 -PASSED unani- mously. SECOND PANT OF AMENDMENT REGARDING ITEM *6, FAILED by: a vote of 3-6, Patitucci, Woolley, L vy vo ing "aye. AMENDMENT; Mayor Cobb moved, seconded by Klein: as follows: 1. Staff be directed to develop audit procedure; and 2. Develop controls with respect to bingo suppliers. Councilmember Sutorius said Council was dealing with potential modifications to an existing ordinance which covered the audit subject. He imagined .any other appropriate provisions of the existing ordinance would be retained. Ms. Northway understood and appreciated Councilmember Sutorius' domments, but the ordinance was controversial. She was more comfortable with some sense of Councilts direction on some of the items. 7 4 3 7/07/86 As corrected 8/11/86 Councilmember Levy asked if the current ordinance stated the City would assess a one percent fee against bingo. Ms. Northway said no. Councilmember Levy said based on the current ordinance, there was no income to the City, and he asked what was to be audited. Mayor Cobb wanted staff to return with whatever they believed was necessary for the City to provide the kind of controls discussed. There might be at extensive audit, and there mighi: be no audit. Mr. Zaner wanted to provide the City Attorney with information to draft an ordinance which was admin.isterable and workable for the organizations in the community, and he wanted to ensure everyone left the Chambers with the same sense as staff. The proposed ordinance contained three pages related to audits, and if Council did not want audits, staff needed to know. Councilmember Levy did not believe there was anything to audit at that point. If Council later decided to assess bingo operations a one percent fee, he,, assumed the Audi tor" would pick i. t up in his normal audits. The nonprofits had their own auditors, and it was in their self -interests to audit themselves to ensure a fair share. He did not believe the City needed to step in and protect them. The City needed to protect its own interests. NMEIDJ T DIVIDED FOR PURPOSES OF VOTING FIRST PART OF AMENDMENT RE AUDIT PROCEDURE PASSED by a vote of 8-1, lopvy .stile9 *no-. SECOND PART OP AMENDMEUT RE CONTROLS ?OR BINGO snPPLIU5 PASSED unanimously. AMENDMENT: Mayor Cobb moved, seconded by ` Patitvcci, to . lmpoRe a one percent administrative fee. Councilmember Renzel believed. the City's main costs were . in pro- cessing the volunteer licenses, and if the cost exceeded one per- cent, she wanted the City to charge one percent. If the costs ,were less than one percent, she 'wanted to see the fee be cost. Mayor Cobb set the amendment at one percent because it was what the law allowed, but he guessed it would cost the City more. &MEMOREX? PEED unanimously. MOTION AS AMENDED PASSED by • vote of 5-4, Renzel, Klein, Cobb, Bechtel voting "fro,." 7 4 4 0 7/07/86 15. AC UISITION OF BELL SA S AND LOAN PARCEL (PWK x:37'b:6j Councilmember Renzel asked about the procedure. 2-10/ City Manager Bill Zaner said staff notified Council several weeks ago they were taking advantage of a provision in the Palo Alto Municipal Code which allowed the City Manager to lease property in order to "tie up" the property. It was a one -of -a -kind situation where if the City moved quickly, the property was made available at a good .price compared to market. The City obtained an option through the lease. No commitments were made with regard to expenditure of funds without going to Council. If Council desired, it could stop the process. Councilmember Renzel asked whether the previous approvals on the site still stood. Director of Planning and Community Environment Ken Schreiber said it was a valid approval for 32 units and slightly less than 19,000 square feet of commercial. Councilmember Renzel asked if a combination with the current Peninsula Conservation Center (PCC) site could be done without a revised approval. Mr. Schreiber said yes. Councilmember Renzel asked whether one building covering two parcels would require a merger or zoning approval. Mr. Schreiber said it would require a subdivision, new project approval and processing of the project either under existing zoning or a planned community (PC) zone. Councilmember Renzel assumed the price being paid was based on the 32 units and 19,000 square feet of commercial. Real Property Administrator Bill Fellman said yes. Councilmember Sutorius said Councilmembers had less freedom than citizens because there were many things Council had to consider in the Brown Act which did not permit some types of discussions. If he erred in being overly conservative in that regard, he apolo- gized, but the most sensitive types of issues .involved real estate or legal matters. If the potential availability of the property became generally known, other private parties would present offers to B411 Savings, and there was another offer behind the City's* Presently, the City had the option to proceed if it elected to do so. He believed it was important to preserve the option. 4.4 1 7/07/86 Jonathan King, 1570 Walnut Drive, supported the acquisition. He agreed with the editorial in the Palo Alto Weekly, dated June 25{ 1986, which said it was a rare opportunity to develop an affordable housing project on a near perfect site and provided a feasible way to preserve the PCC. Carole Robin, 1544 Walnut Drive, represented Palo_ Alto 2000, who was dedicated to preserving open space and enhancing cultural and recreational facilities in the urban area of Palo Alto. It was concerned about the dwindling amount of open space in Palo Alto and the changes in the quality of life the City continued to experience as a result of "overbuilding." Of the five sites the Council originally asked staff to review for the purposes of affordable housing, the Bell Savings site was the most attractive; however, it was also an excellent site for the PCC. The acquisi- tion of the property offered an excellent opportunity to accom- anodate the PCC as well as expand the scope of the housing project which would have been possible. Palo Alto 2000 was concerned about preserving neighborhood quality, and its endorsement assumed the City would build something compatible with the surrounding neighborhood. She applauded Council's continuing efforts to go forward with sensible solutions to the community's needs. Palo Alto 2000 supported the budget amendment and acquisition of the Bell Savings property for a mixed use, affordable housing proj- ect. Ann Briggs, 480 Hale Street, PCC Board member, said the PCC was interested in the site's development. The Bell Savings site was adjacent to the City -owned land currently rented by the PCC, which the City determined should be used either for subsidized family housing or housing for the elderly. The City was currently studying a mixed use development for the property, and the acqui- sition presented a good opportunity to consider a comprehensive plan for the parcels. The PCC wanted to see an innovative com- bined plan for both parcels to incorporate the PCC with housing. David Schrom, 302 College Avenue, urged the City to consider past mistakes in land use. The Palo Alto Housing Corporation (PAHC), City staff, advocates of different uses stated many reasons to build on the Bell Savings Lot, but he believed it would be a mistake. If the housing money was already committed, there would be pressure for as much housing as possible to make it as afford- able as possible. Despite many studies, the City was still short on answers to fundamental questions about what the community should be, and without a coherent policy, the City would sacrifice the future of the community to the individual citizens and groups whose particular interests were not necessarily consistent with the community's interests 7 4 4 2 7/07/86 Herb Borock, 2731 Byron Street, said if another buyer could pur- chase and develop the Bell Savings site under the existing City development plan, it was fine. If the City got the property, it should be developed for housing rather than mixed use. The Bell Savings site was zoned RM-4 and the PCC site was zoned RM-3. Both permitted a community center as a conditional use, and the PCC could stay where -it was. Based upon the support in the corninunity for both housing. and the PCC, he imagined the only way to get housing on the PCC site ways with a mixed use; otherwise, it would be one or the other and would probably be the PCC. The Council had an opportunity to zone the L.nd residential on two occasions. The first time was when Mr. Schrom said leave it as vacant land, but Council said neighbors were complaining about the choice to have it residential, ao it was left community commercial. He believed Council's subsequent action in March, 1984 to change the land use to multi -family residential was correct. At that time, Council amended the Comprehensive Plan to say existing legal uses and approved building could remain, but the change would assure any future redevelopment of the properties would be tor housing. It was wrong if Council accepted the property for the City to leave in the option for a mixed use as one of the objectives of the ordinance. He requested it be stricken as one of the objec- tives from the last "whereas" clause, If it was supposed to be affordable housing, he believed the "whereas" clause should say it was for affordable housing and what kind. If the intent was for low- and moderate -income housing, the ordinance should so reflect. In terms of the ordinance, the parcel could be mixed -use housing with 19,000 square, feet of commercial space, which he believed was wrong. Program 13of the Housing Element of the Comprehensive Plan provided for the use of limited -equity cooperative housing; and, if Council bought the land and had available cheap money to loan to construction from the Varian mitigation, Council should pursue limited -equity cooperative housing. He was not sure the price was bargain based on the RM-4 zoning of 36 units, as the price was about 82.5 percent of the price per unit compared to the ,Hoover School development, but they should look at how many units were empty when trying to cover the inflated cost. He was not aware of Palo Alto 2000. The Palo Alto Weekly said it was a great opportunity for advocates of -housing. He believed Council should look at the people who needed the housing. In ' that sense, an a11--re,sideotia1 development of a kind that limited ;,costs and providedhome ownership would be best. Councilmember Renzel asked if it was correct now the Comprehensive Plan .was amended to call the site residential, if there was any change from the approved development plan on that site, only pure residential could be built. 7 4 4 3 7/07/86 Mr. Schreiber said that was essentially correct. There could be minor architectural changes in the project without losing the ability to get the previous approval, but there could be no substantive change. Councilmember Renzel clarified under the RM-3 zoning existing on the PCC site, the PCC use was a grandfathered use which could continue as long as it did not expand. Mr. Schreiber said that was correct. Councilmember Renzel asked if the two sites merged, could the PCC use be located anywhere on the combined site or must it be used on the site on which it existed. Mr. Schreiber said under typical circumstances the commercial had to occur on its present site. Staff had not confronted a situa- tion where the parcel was enlarged through a subdivision process. Councilmember Renzel would like to see the City purchase the site and join it with the other site because it offered the advantage of a more creative design, but it the two sites were not merged, it left the City in the position of having commercial use and also of not necessarily being able to make use of the combined property,, Mr. Schreiber saidcurrently the proposal was notto use the site as either a mixed use or straight housing but to keep the options open. In preliminary discussions with the PAHC, staff identified a variety of alternatives including the existing appreeal. The PAHC and other nonprofits were also looking at their longer --term needs. There was no final decision before Council that evening, and staff recommended keeping the options open for a mixed -use development or a 100 percent housing development on the site. MOTIQHa Councilmember Klein moved, seconded by Fletcher, to adopt the staff recommendation as follows: 1. Adopt Budget Amendment Ordinance; 2. Authorize the Mayor to execute the . Avosmont of Sale; and 3. Authorise the Mayor to execute .:whatever additional document may be required to implement Use Agreement of Sale. ORDINAHCB ° ,t entitled *ORDINANCE OF T$1 COUNCIL OF THE CITY OF P , ALTO AMENDING TEE &UD ET FOR THA PTSCAL TEAR 19$6-4T TO ESTABLISH AND PROVIDE mink FOR CAPITAL IMPROVEMENT PROGRAM NO. . Si -20 • BELL SAVINGS AND LOAN SITE ACQUISITION" MOTION CONTINUED SUMMARY OF PURCHASE AGREEMENT PURCHASE OPTION AGREEMENT AGREEMENT OF SALE Councilmember: Sutorius was pleased with the comments made by several speakers and endorsed Mr. Schreiber's statement regarding the importance of keeping options open. Councilmember Bechtel concurred. Councilmember Renzel supported acquisition of the site which pro- vided a good opportunity to make optimal use of a site already owned by the City and to have better control over a poorly --planned site under the previous approval. She hoped in the course of negotiations and planning, Council could combine the sites, accommodate the uses spoken to including the PCC and_perhaps the PAHC . office but reduce the bulk and mass of the overall project to be more compatible than Phase I of California Park had been. She was willing to go with the "whereas" that included the mixed use, but with the idea that the project would be more compatible overall thanif each site was developed separately. Councilmember Patitucci commended staff, and urged his colleagues to approve the project. 1 Councilmember Fletcher said Councilmember Sutorius deserved a word of thanks for setting in motion the process. He worked on the issue for many months. Mayor Cobb concurred with the last remark. Councilmember Levy also concurred. MOTION PASSED ananisousiy. 16. RE UEST OFCOUNCILMEMBERFLETCHER RE PALO ALTO AIRPORT Councilaember Fletcher said the item was brought to Council by members of the Palo ,Alto Good Neighbor Committee. Council previ- ously requested that the County conduct a feasibility study to determine the safety and feasibility of landingfrom the Bay side only ,and not over residential areas. She was embarrassed because, in looking overmaterial, she realized there had been a policy for many years and was never questioned. The 'policy was not 100 per- cent observed and was currently observed less. The pilots con- sidered flying in from the Bay side more dangerous than from the residential side. 7 4 4 5 7/07/86 MOTION: Co*ncilmeMber Fletcher moved, seconded by Stenzel, Council confirm its support for the Bay side approach landing pattern and the 1,500 feet mllimum altitude over residential areas, and ask the County to work with the FAA to enforce these policies. Robert Lenox, 3261 Ramona Street, said the pilots did not believe approaching from the Bay side was unsafe; however, making exclu- sive use of the Bay side presented operational difficulties and potential problems. Palo Alto could not extend patterns too far to the southeast because of Moffett's air space. County staff instituted a study of the issues requested by Council, and he sug- gested Council await the results before taking any action. The pilots were not ignoring or challenging the altitude restrictions over the City. The Good Neighbor Committee was designed to promulgate the information that pilots should be noise -sensitive and maintain a high altitude over the City. Dr. Michele Fisher, 410 Sheridan Avenue, Apt. 335, said in a recent series of articles about midair collisions, the navy was quoted as saying many inexperienced or rusty pilots flew in the area which helped make Moffett Field the third most dangerous naval airfield in the country. If those rusty, inexperienced pilots flew around Moffett Field, they probably flew close to Palo Alto. She asked. County to consider the public safety issue after the recent crashes in the area. Bea Peterson, 939 Moreno Avenue, was concerned with the low -flying private airplanes over her neighborhood. Two weeks ago, she attended the first twilight concert in the park, and it was lovely except for several low -flying airplanes. She hoped they would not have to wait until a plane crashed before such flights were banned over the City. The alternate flight over the Bay did not severely restrict the pilots and should be used. Louie Marincovich, 943 Moreno Avenue, urged Council to eliminate the left approach or community -side landing pattern at the Palo Alto Airport. Facts provided by the airplane regulators refuted any arguments for retaining the noisy, unsafe flight pattern. The left approach was usually characterized as a safety valve: a , handy area to funnel traffic when flight conditions became saturated over the Bay. Two faits refuted that:. Many of the complaints about low flying took place during low traffic periods of the day, and the FAA air control tower chief at the. Palo Alto Airport, Henry Barbachano, clearly stated that since he became chief the previous August there was no instance of saturation in local ' air patterns. At a recent Pilots Meeting, : Mr. Barbachano stated the left approach was a convenience for pilots to save a few minutes and a few gallons of fuel •The San Carlos Airport was similar in location and size to P.o Alto and had no left approach. San 7 4 4 6 7/07/86 Carlos had an equal safety record and no midair crashes. There were no concrete reasons for keeping the left approach. County Aviation Director Jay Jaso stated, in a May letter, he had no spe- cific objections to removing the left approach, and to do so was feasible. On the busy three-day Memorial Day, only 8 percent cf the flights used the community -side air pattern, which produced most complaints from residents; therefore, 92 percent of the air traffic was already over the Bay and there were no accidents. Claims that removing the left approach would result in planes get- ting in each other's way were refuted by the figures. Patterns e, that would be used if the left approach was eliminated were already being used. Councilmember Fletcher's agenda item sug- gesting that all low planes should not be over the Bay was a good one. Planes over houses reflected slipshod flying and air con- trol. Slipshod air control could be documented. Of the latest 33 complaints from residents about low planes, the tower claimed to be unaware of the existence of 13 of the planes, or 39 percent, even with radar. The tower knew another three planes were low, but believed they were all right. The tower did not sanctione low flying airplanes. Given the record, a community -side landing pattern was bound to be abused and was not regulated. Erik Reimritz, 914 Van Auken Circle, was one of the many citizens annoyed by aircraft noise over residential. areas. There were other equally noisy activities, but .there was nothing more devastating to a Sunday -morning breakfast in one's garden than a low -flying aircraft. Flying in Palo Alto was mainly for recreation. He urged Council to support elimination of the resi- dential loop of the flight pattern. Ann Rlsbac_h., 164 Middlefield Road, lived . in Palo Alto for 14 years and was an accident prevention counselor. She taught flying for 5,000 hours and was concerned about safety. She believed it would be unsafe to close down completely the west, southwest side of the runway. Mr. Marincovich quoted out of context in several cases the letter from Hank Barbachano to Jay Jaso Ninety percent of the complaints in the last year were made by two individuals, Mr. Marincovich and Ray Chamberlain, who lived in the .same area. She wads aware of the noise in that area as she lived on Ross Road for five years; however, closing down that side would mean planes would be in a holding pattern, and there would be more noise and a safety problems Regarding saturation, Mr. Barbachano said in his letter, °The landing and take -off phase of flight is crucial. The limited air space that Palo Alto .shares with Moffett and San Carlos Airport requires an even greater . amount of . attention, by pilots and controllers. Realizing these complexities, con=- straints, and restrictions, it is imperative that the egress and ingress routes at Palo Alto. Airport remain safe with as much flexibility as possible that allows for an orderly flow of traffic," Air traffic had already been restricted a great deal. 7 4 4 7 7/07/86 Mr. Barbachano also went into what was done since 1976 in terms of changing departure and arrivals so the airport could be good neighbors. Mr. Barbachano said, "To restrict air traffic further by eliminating the west traffic pattern would not be in the inter- ests of flying safety or the wellbeing of tie surrounding com- munity." _There would be a lot of noise wit#•h aircraft piled up over Stanford, over SLAC and over the Palo Alto Veterans Hospital. Those were the reporting . points. She was also a member of the Good Neighbor Committee. She asked Council to carefully consider any major changes, and suggested it might support what the County was doing step by step to take care of the issue. Councilmember Patitucci said a pilot friend provided him with a paper that came out April 20, 1986, from ,the FAA which did not show an entry into. the landing pattern fro -the land side of the airport. 11 showed the only legal entry was from the Bay side and said the departure and arrival . traffic patterns were established to provide a safe flow of traffic and support a good neighbor policy. The question seemed to be one of enforcement of the rules. Ms. Elsbach said the information was not accurate. There were two ways the pattern was used: One, to enter the pattern from come place else, the other to practice landings to remain in the pat- tern. Pilots used the Bay side for any practice, for take -offs and landings, and closed traffic. Both sides were used for entry at the present time. Mayor Cobb asked if staff could clarify the point. Mr. Zaner did not believe so. Larry Templeton, 496 Cuesta Drive, Los Altos, was a member of the board of the Palo Alto Airport Association, an association of 80 pilots who dealt airport safety and noise issues. The association's policy was to work with all governments and citizens in Palo Alto to be as good a neighbor as possible. Most pilots supported minimizing noise and any potential safety hazard, but issues were being taken out of context. Regarding Mr. Jaso's study, the association was participating in the study, and he recommended founcil not reach a conclusion until the facts were available. Dealing with pilots lives was complex, and it was worth• getting get all the facts before acting The Aircraft Owners and Pilots Association, 1964-79, did a study and found the average number of deaths on the ground due to airplanes coming out of the sky for the entire United States was 1.3 deaths per year. The statistic that only eight percent of the airplanes came in on the City side really disguised the whole issue. He was at the meeting when Mr. Barbachano conceded occasionally the pattern was a convenience. 7 -4 4 8 7/07/86 Councilmember Bechtel agreed with the thrust of Councilmember Fletcher's motion. She also, however, agreed with the comments of the last speaker who said the issue had been with the City for quite sometime. A study was underway, and a letter from Jay Jaso, dated July 3, 1986, said four of the ten steps had been com- pleted. SUBSTITUTE MOTION: Councilmember Bechtel moved, seconded by Woolley, to defer the issue for two months to allow the ,study of the feasibility of changing aircraft landing patterns at the Palo Alto Airport to be transmitted to the City from the County of Santa Clam. Transportation Agency. Vice Mayor Woolley was confused. Councilmember Fletcher's memo (on file in the City Clerk's office) referred to the "master plan." if the "master plan" said airplanes were to go in from the Bay side, she asked whether the "master plan" was advisory, some- thing to be followed, or whether there was a law on the books which stated the flight pattern and all Council had to do was enforce the law. If the substitute .motion passed, the information should return to Council for consideration. Councilmember Fletcher said the issue that the left side approach had to be there as a safety valve was not previously raised. The fact the airplanes had to land from the residential area was never once suggested. If the number of flights increased to the point -where planes needed to land from the residential side, it might be time to limit the number of f1ights, The issue ;:as not primarily one of safety, but one of peace and quiet over the City, Supervisor McKenna's assistant, who dealt with the issue and represented the City at the County level, stated she did not know the Palo Alto City Council's position. Council did not want flights over the residential areas, `;and the rule always was flights went in over the Bay. It was important Council's position be stated at that time. Councilmember Levy concurred with Councilmember Fletcher. Council's responsibility was to look out for the health, welfare, peace, comfort, and safety of the residents of the community. Air safety was not Council's responsibility, and he deferred to the FAA and other authorities. Those authorities had to balance their desire for proper safety with other factors, but one of those factors was the welfare of the residents of Palo Alto. By endorsing the motion, Council was communicating to proper authori- ties the desire of the residents of Palo Alto. 7 4 4 9 7/07/86 Councilmember Bechtel said Jay Ja.so had been a County employee for over a year, and the Good- Neighbor policy of costly Bay flights had been a policy for a long time. The policy needed to be upgraded. A `message was; conveyed earlier in a May letter, but it did not hurt to defer to get additional information because pilots' safety should also be of concern to Council. SUBSTITUTE BOTIO$ PASSED by a veto of S-4, kennel, Patitaact, Fletcher, Levy, voting "aa. ° ADJOURNMENT Council adjourned at 12:34 a.m. ATTEST: erk APPROVED: