HomeMy WebLinkAbout1985-10-07 City Council Summary MinutesQTY
COUIICIL
MINUTEs
ITEM
Regular Meeting
October 7, 1985
LIEN
OF
Pal °
AIT0
P A G.E
Selection of a Cable Communications Franchisee 6 4 1 4
Recess to Closed Session Re Personnel 6 4 2 6
Oral Communications 6 4 2 6
Minutes of August 5, 1985 6 4 2 6
Consent Calendar 6 4 2 6
Referral 6 4 2 7
Item 01, Consultant Selection - Financial Data Base 6 4 2 7
and Reporting S stem upgrade
Action 6 4 2 7
item 02, Tennis Court Resurfacing 6__ 4 2 7
Item 03, Arastradero, Preserve Parking Lot 6 4 2 7
Item 04, Annual Charges for Use of Refuse Area by 6 4 2 7
Stanford University
Item 05, Fire Department Laundry Services 6 4 2 /
Item 07, Final Subdivision Map - 3120 Stockton 6 4 2 7
Item 08, Final Subdivision Map - 744 Ramona/225 6 4 2 /
Homer
Item 09, Rescind Resolution 6421 and Adopt Updated 6 4 2 7
1985 Land Use Policy Agreement
Item 010, Noise Ordinance 6 4 2 8
Item 011, Ordinance Re Transmission Agency of 6 4 2 8
Northern California
Agenda Changes, Additions and Deletions
Item 013, PUBLIC HEARING: Planning Commission
Recommendation Re Approval of the . Application of
Robert Lerch et al. for a zone change.. from R-1
(929) to R-1 (743) for property located at 170,
174, and 180 Monroe Drive
Item 015, Finance and Public Works'Public .Works .jPommittee Re
Consultant Selection for, City-wide nd Use and
Transportation Study
item 16, Finance and Public Works Committee Recom-
mendation Re Regional Water Quality Control Plant
Capacity Expansion and Wastewater Collection System
Rehabilitation
6 4 2 8
6 4 2 9
6 4 3 0
6 4 3 0
6 4 1 2
10/7/85
ITEM
it A17, Finance and Public Works Committee Recom-
mendation Re Wholesale Electric Rate Increase
item #18, Finance and Public Works Committee Recom-
mendation Re Gas Rate Decrease and Gas Refund
Adoption of the Gas Rate P1 do as Presented
ADJOURNMENT: 10:30 p.m.
P AGE
6 4 3 1
6 4 3 1
6 4 3 1
6 4 1 3
10/7/85
Regular Meeting
October 7, 1985
The City Council of the City of Palo Alto met on this date in the
Cuurcit Chamber=s, 250 Hamilton Avenue, at 7:30 p.m.
PRESENT: Bechtel, Cobh, Fletcher, Klein,
Levy, Renzel , Sutorius, Woolley
ABSENT: Witherspoon
Mayor Levy announced the need for a Closed Session re Personnel to
be held at some point during the meeting.
Mayor Levy said the City Council held a Closed Session on October
4, 1985 re Personnel, and as a result, he read the following Press
Release: "On Friday, October 4, 1985, the Palo Alto City Council
unanimously appointed Gloria Young as Palo Alto's City Clerk,
effective with the retirement of City Clerk Ann J. Tanner on
November 15, 1985. Ms. Young has been a City,employee since 1973
and has served as Assistant City Clerk for the past four years.
Prior to that she served as Executive Secretary to Planning
Director Kenneth Schreiber. She is a member of the City Clerks
Association of California and the International Institute of
Municipal Clerks. She has completed the International Institute
of Municipal Clerks' certification program. In addition to her
City position, Ms. Young is President of the Santa Clara Board of
Education where she has served since 1979." He sai-d the Santa
Clara County Board of Education was are elective position which
placed Ms. Young in the unique position of being not only an
employee of a public body, but an elected member of another public
body simultaneously. It gave her a unique insight into the work-
ings of the City Council and the City. Ms. Young did an outstand-
ing job as Assistant City Clerk and was the unanimous choice of
the Council after reviewing a number of applications from outside
candidates. Palo Alto was fortunate to secure a person of Ms,
Young's abilities from among its own employees. Since Ms. Young
was present that evening, filling the position of Acting City
Clerk, he believed a round of applause was in order.
SELECTION OF A CABLE COMMUNICATIONS FRANCHISEE (Continued from
geptember 30, 198511-5TIFT-7)
Mayor Levy said Council had many discussions and reports from
staff and the consultants regarding the cable television franchise
in Palo Alto. The two applicants, Palo Alto Cable Cooperative and
tho City Cable Partners, who survived the rigorous selection pro-
cess, that dated back several years, were questioned at length.
Council had concluded public hearings, questions of staff and the
applicants, and it was time to return the matter to Council for
further discussion. He hoped for a vote that evening. The item
was a difficult one for the Council because there were many ele-
ments to making the decision, and the ground rules changed sig-
nificantly during the award process, Early on, Council had con-
trol over the service provided to the community by a private cable
operator, and would have control over the rates charged. Those
two elements were taken from the ontrol of local governments by
action at the Congressional level ilast fall, which rude the Fran-
chi si ny .process more difficult. Council worked at length and in
such detail because once the cable award was made, while Council,
could provide input on some elements of the operation, the sig-
nificant elements which affected residents in the Joint Powers
area were no longer within the direct Control of: the . citizens of
the area.. The City Council of Palo Alto acted 'on behalf of the
residents and cities of Atherton, East Palo Alto, Menlo Park, and
the Stanford community. Although the Palo Alto City Council made.
the decision, the affected area was about twice as large as the
City of Palo Alto itself.
6 4 .1 4
10/07/85
Counc i lmember Klein said cable television had been at the tnp of
the aeenaa for. the City Coun:i l for almost the entire time he had
been on it, since February 1981. Knowing it was a major decision
he attended, as had virtually all members of the Council, a
variety of courses and did a lot of reading with regard to cable
television over those years. He also had various conferences ►:ith
cities, the National League of Cities, and the California League
of Cities and made a point to tack to City councilmembers from
other cammunities am ed the country which had cable, to find out
their concerns, and problems, as well as. their good experiences,
and there were many. Therefore, ite was not just what Council
heard from the applicants and the citizens. There was talk in the
press about how long the Council sat theme and deliberated. He
believed it was a plus, and an extraordinary demonstration of what
he loved about the City --the great interest citizens had in issues
that faced the City and the extraordinary participatio)itwith which
Palo Alto was favored in its City government. Garrison Keillor
said with regard to the public participation, "In Lake Wobegon,
al' men were good looking, all the women strong, and all the
children above average." In Palo Alto during the past week, they
saw, with regard to cable television, all the men were eloquent,
all the women excee inyly well spoken, and --if and when the City
got cable television --all the children would be well educated&
Changes occurred at a rapid rate in cable television over the past
four -and -a -half years. There were changes in the competitive
nature of the business, the explosion of VCR units made a signifi-
cant change as had the advent of rooftop satellite dishes.
Congress made a significant change in the passing of the Cable Act
of 1984. All of those produced extraordinary swings in the way
the financial community looked at cable. Four years ago, the
financial community believed cable was great and prices of cable
company stocks were bid up. Along came VCRs and satellites, etc.,
and the prices plummeted. With the quasi -deregulation, or almost
deregulation of the cable industry, prices rose again. It made'_.it
difficult for him, at least, to determine whether cable was a good
or bads business. He concluded it was a risky business, which was
why he was opposed to a municipally -owned system. He was per-
suaded it was a difficult business and the successful applicant
had a difficult row to hoe. It was not just laying cable, turning
on the switches, and collecting money. At the various conferences
he attended, he asked so-called experts what they saw as the
future of the cable industry, and never received a satisfactory
answer. He believed the answer was nobody that knew. The only
thing for sure was it was fast moving, and required nimble manage-
ment to make the system go. He had friends on both sides of the
issue that evening as did others on the Council. He was sure
those people each believed he would do them a favor if he voted
for their company or the applicant they supported. He concluded
that was not true, and believed he might do a favor to those who
lost for two reasons: 1) As he already mentioned, it was a tough,
competitive environment; and 2) The City . had a history of a com-
pany suing with regard to cable television, which might well con-
tinue. If that was the case, the successful applicant would get
to participate in all of those lawsuits at a cost that could be
significant. Therefore, trying to decide what was best for the
community was no easy task. His conceens were several. The lead-
ine one and the major factor in his decision, was financial.
Before discussi.ng the financial issue, another factor which car-
ried a lot of weight was public responsiveness, meaning which
applicant would better respond to the public's concerns, whether
the concern was, "My set -isn't working properly," or "You
should'nt show this on television," or "You should show something
else," `or a variety of other things. That was .a significant
factor, and he believed the Co-op, -throughout that process, hid an
edge in that regard. At that point, he eompl imented John Kelley
and Lisa Van Dusen for what seemed to him to have been an extra-
ordinarily effective campaign. If they managed a cable franchise
as _ well as they u aneged that effort over the last several months,
they would have a successful operation. As indicated, cable tele-
vision moved fast and an applicant's ability to innovate was still
important.
6 .4 1 5
]4/07/85
1
It was important two or "your years ago when cable had more money
available, and it has stiL important. The Co-op apnea red to be
more interested, aware, and receptive to changes in the system and
in cable TV, than City Cable. Governance was discussed at length,
and at that point he departed from the Co-op's pasitlon. He was
not persuaded by the staff report nor by Co-op's arguments that a
corperative provided more public input into the system. He was
concerned that elections of a cable co-op organs ?at ion wool d not
be much of an election and the public really would not partici-
pate. The evidence was clear from a variety of other organi-
zations of that type, that it was difficult to get public partici-
pation beyond those who were really concerned. It almost always
ended up with the core group being the ones who ran the show. To
him, the governance of Palo Alto's cable TV franchise would'be,
regardless of which applicant succeeded, by the customer voting,
with his or her dollars as to what they wanted on the cable
system. In that regard, the gave a slight edge to City Cable for
talking more about being responsive to the needs of the subscriber
as evidenced by what the subscriber was willing to pay for.
Management was another significant factor•, and related to govern-
ance and how organizations would continue. Regarding management,
it was unknown who would be managing two, four, or ,:five years from
then. As indicated, John Kelley and Lisa Van Dusen, did an extra-
ordinary job, but, if they were not there, he worried as to how
the Co-op would select its successors. It was not clear the
system was in place to assure continued excellent management in
the Co-op, whereas he believed Palo Alto would have a greater
degree of confidence in the more traditional arrangement of City
Cable. The Community Access Organization (CAO) should not he a
factor. He was concerned about the CAO and believed Council
shculd talk about it more at some later date, but not as part of
the franchise consideration that evening. It involved a contract
between the successful franchisee and the CAO and did not directly
involve the City, although the City had a concern since t, in a
way, acted for the subscribers who would pay for the CAO, and they
needed to focus more on that later. Regarding financial matters,
if he was persuaded the future of . cable was`- rosy, he would be
inclined to vote for the Co-op because they showed a more creative
approach to the use of the cable television systems. However, he
was going to vote for rlty Cable because they demonstrated what he
believed was a better ability to withstand the difficult, competi-
tive environment he saw cable television entering during that era.
It was his overwhelming concern, and once the system was in Palo
Alto and neighboring cities, he warted to ensure it stayed there
and operated. City Cable showed a greater ability to withstand
the difficult times, Their approach had equity capital not sub-
ject to being called by any financial institution. He also liked
the idea that people tended to manage things better when they had
their own money at risk," The report from Price Waterhouse also
showed that, on a revenue basis, City Cable's pro forma financials
could better withstand a downturn in projected revenuee than could
the Co-op's by a margin of roughly 2 to 1. Lastly, City Cable
seemed, throughout their presentation, to be more driven by the
desire to please the consumer, the subscriber, which was important
when looking at an industry economically marginal. For his over-
whelming concern that the system bo financially secure; that the
City never be faced with the situation of the franchisee returning
to the City Counci i saying, "We just can't make it. We're -going
to have to do something radically different from what we talked
about in September and October of 1985." To avoid that risk and
the incrediblemess that would occur if the franchisee could not
make it financially, he would cast his vote for City Cable.
However, the vote was not an overwheliing one. If there were 100
points on the scoreboard, it was in no way a 99-1 decision. It
was more of a 51-49, 52-48 decision in his mind --it was close. If
thar'`vote went in favor of Co-op, that would be okay, too. Co-op
demonstrated it was a fine organization, and he hoped and expected
they would do well by their communities.
6 4 1 6
,10/07/85
Mayor Levy said a - letter was received from Oeloitte Haskins &
Sells (which is op file in the City Clerk's office) the previous
week, and although it was not mentioned in the letter, the record
shouli reflect that the firm performed accounting services for
Cable Co-op.
Couec i i meiiibe:i_- Woo11 ey ea i d it was a tough decision, and it was
comforting to know that both companies were comprised of capable
and dedicated people. She knew many of the people in both com-
panies for over four years, and it was a pleasure to work with
both groups. She was sorry there could not be two winners, but
agreed with Count i 1 member Klein that, regardless of which way the
voting went, the City would be in good hands. In order to go
through the morass of material, she went back to the RFP and the
basic 11 objectives. She believed the 11th nbjective, which the
public added later, was -a good summary of the other 10, and her
comments were based on it, It said "An ownership structure that
enhances community participation and maximizes the service and
economic benefits of cable television to the residents of the ser-
vice area without unacceptable risks to the City." As she saw it,
there were four parts to that objective : Community participation,
service, economic benefits, and risk.
In terms of community participation, the Co-op would provide a
broad support. In the long run, the one vote/one subscriber
should offer the possibility of an even broader support. She
believed City Cable had an unusually highly qualified group of
people, and strong and outstanding support, but probably not as
broad as the Co-op's. She felt strongly about the Council's con-
cern that the matter could return to them. If the City had the
most democratic organization possible, the Council could reason-
ably say to anyone who complained about the cable system that an
organization was set up for that purpose, and the citizen could be
referred to the group. If they did not like the members of the
board then, just as with the Council, you either campaigned your-
self, or found your own candidate, supported that person, and saw
the Board changed. In the long run that would provide the best
forum and not cause the subject to return to Council.
Service was hard to define, but objectives two and four primarily
dealt wit!, service. One talked about a broad diversity of ser-
vices available uniformly, and the other talked about creative
uses of cable techno? ogy. Council probably agreed that the readi-
ness to utilize and commitment to develop the interactive and
advanced services seemed to lie with the Coeop. She believed if
an entrepreneur wanted to try out some service, it would be easier
with the system in place for the parson to proceed and more likely
that services would develop with the Co-op system than with City
Cable.
Economic benefits depended on whether one considered the short run
or the long run. In the short run, it `seemed City Cable's finan-
cials made it possible for them to offer a lower rate In the
long run, after year 12 or so when the Co-op became more profit-
able, it would be possible for the Co-op to offer a lower rate.
She believed that was a tie.
She was most concerned about the category of risk, and all the way
along, she carefully watched and analyzed it. The first kind of
risk was placing the financing. for City Cable. .. The Council heard
a lot about t.e difficulty of marketing limited partnerships.
While there might be a difficulty in marketing, if there was a
difficulty and it was necessary for City Cable :to accommodate a
decrease in the tax advantages, she believed it could be done --
that they had enough margin in their plans so it was not a prob-
lem. They estimated their construction costs on the high side, so
there were savings in that category. They also had a two .percent
management fee to the general partners, which probably could be.
handled in a .different way. Therefore, she was not concerned
about it. The Co-op had a highly -leveraged financial plan. In
6 4 1 7
10/07/85
other words, a high level of fixed costs, which she believed was a
serious peobl em. Because she was concerned, during the hei rings
she kept: a tally of those categories where she believed the Co --op
estimated their expenses too low. One category was the drop, and
the difference between the two was as much as $1.8 million. She -
was not as concerned about the two-way services because much of it
was incivaea in the J'ac-tae! I contract, which was a fixed contract
as was the rest of the plant. From the operating standpoint, she
believed Co-op's staffing was low, and for her own purposes, she
estimated $500,000 being too low. She included the energy costs
for using the two-way system from the beginning instead of putting
it in later because it might not actually be used that much in the
beginning. All of that totaled a little over $700,000. She did
not include the capital costs in total, but merely the .debt
service on the capital costs. Therefore, the debt service on the
capital costs, plus the operating expenses totaled around $766,000
a year. With the help of the consultant, she tried to figure -out
how much that would eat into they. margin. In other words, the
consultant gave Council the order of magnitude of operating
expense increase at which the debt service could not be paid,
and could also be considered a cushion. That ate into the margin
about 3 percent out of the 18 percent. She satisfied herself that
although the Co-op might have made some optimistic projections in .
some categories, they could easily be covered by the margin of
risk allowed. The third area she considered having to do with
risk was the role of the system manager. She believed both Viacom
and Heritage were fine companies. The advantage in that category.
might fall to the Co-op slightly because of the built-in incen-
tives put into the contract with Heritage, which should make them
want to keep the system on track even more.. She believed the risk
with the Co-op was greater because the cushion, as Couricilmember
Klein said, was less. The objective seated, "without an unaccept-
able risk." She believed the risk level was acceptable with the
Co-op.
She sumtiiarized the four parts of the ilth objective by, saying that
in terms of community participation and service, the Co-op offered
the community more. In terms of economic benefits, it was a tie
because whether, talking about the long or short term, the Co-op
was more risky, but not unacceptable; therefore, she leaned toward
voting for the Co-op. Jim Culpepper pointed out in a letter
(which is on file in tae City Clerk's office), "we can do it;
therefore, we should do it."
Councilmember Fletcher was an active member of the National League
of Transportation and Communications Committee, and sat through
many meetings where mayors and Councilmembers from all over the
United States related their woes and frustrations over their
investor -owned cable systems. Few, if any, kept their commit-
ments, including Viacom.ln Mountain Viet,, and cities were helpless
once the franchise was given. Palo Alto could make a fresh start
by contracting with an outstanding cooperative company. She was
convinced it could be successful. People in the area were more
highly ,educated, more politically .involved, more involved in the
arts -probably than in any other community in the United States.
The Co-op: system could generate an enthusiastic involvement on the
part_ of subscribers more than could an investor -owned company.
There was talk that experience_ showed people in cooperatives did
not become involved, but ` she believed if it was compared to an
ureanization like a.food -cooperative, there was no comparison
because if people were unhappy with what they --received at the food
cooperative, they would go .to another stogy e. In terms of commun-
i_cations, there _ needed to be one system because there was nowhere
else to go. She doubted the enthusi asap already generated would
fade, but would rather -grow over time. , Palo Alto saw ongoing
volunteer organizations have phenominal `- successful L,. 4.e.,. the
Com*unity- Theatre, Childrens' Theatre, Council for the Arts,
Cultural Center, and the City's .government itself; had 900 ongoing,
active and enthusiastic volunteers. If there -was a - financial
crunch, -she was convinced.. the sr'btcribers would rally to the cause
-6 4 1 8
10/07/85
and bail out the Co =op. With the other applicant, Palo Alto was
not sure what the construction costs or financing costs would be.
The costs to the CAQ were unknown as were the costs to .the edu-
cators because they were not bound in a contract. In contrast,
all the costs of those items were known in the Co-op agreement
beea11!e they ,.� were -- all wrapped .� -
nr ut+acu up iii legally binding form. They
would not be saddled with construction cost overruns because they
had a binding agreement with Pacific Bell, which was where the
overruns were in the City of Davis. The Co-op was committed to
community programming because they demonstrated it in their
legally binding agreement with Em-pac. The Co-op was committed to
reinvest their revenue into the system because it was spelled out
in the freznchi se ayreement. The Co-op would be - responsive to
subscribers because of the nature of their corporate structure.
They demonstrated them commitment, expertise and businesslike
manner of conducting themselves during the franchising process.
In contrast, she had doubts about the commitment or' the priority
that would be given to community access, which was high in her
mind with the Viacom system because in Mountain View, the commun-
ity access organization, which was under Viacom, voted unanimously
to ask their City Council to be independent because they did not
believe they were getting cooperation from Viacom. They did not
yet the promised staffing and they had minimal prime tine air
time. , The Co-op subscriber mothers would keep the Co-op on their
toes. As mentioned by Councilmember Woolley, subscribers would go
directly to the Co-op with problems, not the City Council. Palo
Alto could have an or.!i nary system like Mountain View .and all the
other cities around the country, or it could be better. Council
heard from the consultants and representatives from Heritage that
the level of citizen participation and involvement they witnessed
in the Palo Alto City Council Chambers was unparalleled in any of
the cities they went to in their vast experience. Palo Alto could
do better, but it needed to give it a chance by going with the
Cable Communications Cooperative of Palo Alto.
MOTION: Cour,cilmember Fletcher moved, seconded by Renzet, that
the City Attorney be directed to prepare an ordinance awarding a
non-exclusive franchise for the provision of cable television
services pursuant to the Joint Exercise, of Powers Agreement to
Cable Communications Cooperative.
Vice Mayor Cobb saw the Council as being in the happy position of
being able to choose from two good applicants for the cable tele-
vision franchise. Whichever side prevailed in the vote, he would
not be disappointed and was convinced Palo Alto would have a good
cable operator. He would cast his vote to the City Cable Partners
for the following reasons: Regarding -wnership, without question
the community involvement aspects of the Co-op proposal gave them
the edge; however, he opined it was a qualified edge. He was con-
cerned that down the road, the body could potentially get politi-
cized in the intereet of making decisions that might not be market
based and could cause financial difficulties for the systems, In
his own surveys of people not in the Council Chambers, without
exception, no one cared which operator Council chose. The people
in the Chambers obviously cared by their attendance, but there
were many people in Palo Alto who did not care as much. They just
wanted Council to make a decision and get on with it which tended
to reinforce his concern that a relatively small group of people
would be the ones who focused on the Board of Directors of the
Co-op, which was not likely to: be a problem, but was potentially a
problem, and he was concerned about thedownside risk.
Regarding financials, he gave the edge to City Cable Partners, and
had no doubts on their ability to raise, the additional funds they
needed for the venture capital market, believed it would be
simple for there to do, and it would give them a system financed
frontloaded with relatively 1 ss leverage as against a completely
Dackloaded system that was 1U0 percent leveraged. That bothered
him, and he was concerned about the backloading. of the Co-cp's
b 4 1 9
10/01/85
Z:inarrc:ing, and that concern was reinforced by the Price._ Waterhouse
analysis tnat clearly showed lower risk associated with , the
Partners' proposition. Headded that the risk got lower if the
Partners succeeded in striking a deal with Pac-Be11, as he sus-
pected they would be, which would wring construction costs down
from their � t . _ tes bas-
�+.v►�ti their estimates upon which their reserve was based. H. gdV(3
a slight risk to Partners in that regard because it was a less
risky proposition.
Regarding technical construction, there again, the Co-op provided
the most intriguing proposal by far. He likel their proposal and
it was the kind of thing he wanted to see happen. He was more
interested in two-way communication than in normal programming on
cable, but he did not hear any market for that type of thing. He
was concerned the real meat and potatoes market for cable tele-
vision were movies and sports, which war what would pay for it in
the near. term. Two-way would eventually arrive, but he believed
it was further downstream. If he was right and too much emphasis
was put on it, he was afraid of cost problems that would return to
the Council eventually. With respect to the cost figures, the
fixed price agreement Council heard so much about did not cover
all the construction costs. There were other aspects on the list
of the Price Waterhouse summary which were not covered by the
fixed price agreement with Pac-Bell, and the Co-op consistently
estimated their costs on the low end. It was supposedly within
the reasonable range, but still at the low end. He was again
concerned about riak.
In terms of local commitment, he concurred with Councilmember
Klein's comments that it was not the basis upon which Council
should make the decision because much of it was out of their
hands. He noted that once the franchise was awarded, much was out
of Council's hands because of the federal legislation referred to.
Council needed to pick an operator that would be around for a
while, that would do what they had to do inea way that would not
return .o haunt the Council.
Services and rates was another thing out of Council's hands once
the decision was made. All the two applicants could be measured
by was their philosophies. The low penetration with higher over-
all rates suggested by the Co-op as a philosophical point clearly
suggested the type of sophistocated and upmarket system they would
like to see succeed. He hoped they were right, but looking beyond
Palo Alto and into other communities, he believed the Partners'
approach of lower rates with higher penetration was probably more
likely to measure the real world as it was then as opposed to in
ten years.
He conclu'led he did not want the issue back in Council Chambers in
two, three or four years. He did not believe the City should be
involved in any ownership way whatsoever. It was too risky and
the first amendment question was such that he believed it needed
tu be .a purely private sector actjvity whether it be Co-op or
Partners. He was concerned that Palo Alto have the most finan-
cially secure __,ystem because one of his bottom lines was he did
not want it back in the Chambers with someone requesting the City
bail them out, which was why he was somewhat biased toward staying
within a totally funded operation where large amounts of peoples'
■oneye were invested and where they were forced to make it a suc-
cess. He agreed with most of what Councilmember Klein said. He
believed Mr. Kelley and Ms. Van Dusen did a brilliant job in
presenting their case. Several years ago, he never would have
expected the Co-op to be in their strong position where in his
mind they could do essentially the same ` job the other side could
do, but with a little more risk. Despite his vote, his reserva-
tion about the Partners' organization was their incredible reluc-
tance to pet to the agreements easily and without pressure from
the Council. He was concerned and it made him somewhat uneasy.
His choice was close --perhaps closer than 51-49. The question of
financial risk and his concern that it wind up back in the Council
Chambers with the Council as the court of last financial resort
s 4 2 0
10/07/85
which was what tipped the balance ever so slightly in favor of
Partners. If Co-op was successful, he had every reason to believe
they would do a brilliant job because both applicants were excel-
lent. In terms of Palo Alto, he did not believe there would b+
any loser.
Councilmember Renzel favored the Cable Communications Cooperative,
and Councilmember Woolley expressed many of the reasons for her
support. At the beginnin9 of the process, Council re::ognized it
was entering the era of deregulation in the cable industry which
left the City in a position, subsequent to issuing a franchise, of
not having a lot of influence over how the company was run, what
rates they charged, or what services they offered. Council was
limited in.what it could do once the franchise was issued, and it
embarked upon the elaborate process because of the concerns about
how companies might respond efter deregulation. As many of her
colleagues had said, Palo Alto was fortunate to have two high
quality applicants. She personally believed Council should look
at the approach the companies took to the franchise process
because it was a telling factor in what to expect after the fran-
chise was issued. In that regard, she believed the Cable Communi-
cations Cooperative clearly showed its responsiveness to the com-
munity in a much more clear cut way. They followed the RFP and
did everything requested. They obtained firm 'agreements with the
telephone company to build, with Heritage to run, with the CAO
with respect to the services available to the public and with the
educational community. They did it all without any ,rind of gun to
their head type mentality. On the other hand, the City Cable
Partners showed a profound 'iisregrd for the process. She opined
that City Cable Partners only went in with their proposed
agreement as a result of the staff recommendations for Co-op
probably because the Co-op was responsive. She found it appalling
at that late date the `City had so many\'addenda to the agreements
which had been hammered out over many months. It suggested to
her, if Palo Alto faced the situation going into the franchise, it
could not expect anything better after the franchise. In response
to suggestions of a possible takeover of management of the Co-op
or something like it, she believed there were small managements
with both applicants. The real question was how responsive they
would be to the citizens of Palo Alto, Athe ton, East Palo Alto,
and the members of the Joint Powers Agreement once they had the
franchise. The mechanisms of the Co-op proposal were stacked in
terms of them being responsive to their subscribers. The
management of City Cable Partnere would be first responsible to
the Partners and to the bottom line to the exclusion perhaps of
some of the important services Palo Alto hoped cable would provide
to the community. She was not suggesting any company should
ignore the bottom line, but it was clear in the Co-op proposal,
the bottom line returned to the consumer who was the ultimate
decider of what they got and how much they wanted to pay for it.
It we's a process -that -would be interactivebetween management and
the subscribers because a balance needed to be struck, but the
process would be one in which the consumer had a say. While
Council should not consider what was negotiated with the CAO or
the educational community, she .believed it was proper for Council
to note the willingness and responsiveness with which companies
dealt with those organizations. That also said something about
how Council might expect those companies to deal with subscribers.
once the:franchise was issued.
Regarding r±s!, she concurred with_ Councilmember Woolley's
remarks. The level of risk was lot leas with firm agreements than
when looking out into the future to virtually ererything having to
be negotiated after the franchise was lets She believed- it made a
big difference in the amount of .'risk faced, and she was satisfied
the Co-op anticipated many of those risks and built into their
financial structure and proposal ways to deal with changes' in the
'risk. level. She believed there was: adequate -margin, and Price
Waterhouse said their -margins were adequate. City staff analyzed
both proposals and were satisfied that both provided the adequate
1
1
As
call
<.a x 4 - �'► ',�}�T.. mss..- ....- �.
margins and safety. In sum, Council knew it would not have
another shot at getting responsiveness after the franchise was
let, and from her point of view, she wanted to ensure the system
established would be self-governing in terms of responsiveness.
She strongly urged her ,colleagues to support the Cable Communica-
tions Cooperative.
Councilmember Sutorius agreed it was a long and arguous process.
He concurred with Councilmember Klein's preamble contents and
found htrnself in considerable agreement with him on most of his
points. Finances boiled down to different points of vulnerability
and risk to each of the applicants. The consultants concluded,
and Council could reasonably conclude whichever applicant were
selected, a prudent, competent follow through by the seccessfu 1
applicant in the administration of their respective business plans
presented a reasonable assurance either
that
MV �� �.�:Cr c:uula survive the
vulnerabilities aid risk. The chief difference in the risk
factors was the highly leveraged financing in place for the Cable
Cooperative and the higher debt servicing predicament that might
be faced downstream, while Partners' financing was less costly and
its operating expense ratio provided more cushion in future years.
The adjusted figures provided by the City's consultant were 25
percent to 15 percent. In one sense, Partners took its vulner-
abilities and risks at the start, whereas it was evident the Co-op
faced its vulnerabilities and risks further downstream. Council
needed to ensure that any significant financial calamity would not
rebound financially upon the Palo Alto City Council or its JPA
affiliates. He opined the differences in the financing plans
would not show up so much in the financials, but in another arena.
In terms of ownership and management, he believed there was local
ownership and direction present in both applic?tions. The dif-
ferences were not in locality, but in form. In his mind, the
exploration and rationale behind an investment was an individual
choice, and it was better `e-ade when not linked to either a philo-
sophical stimulus oe an investment plan which appeared at all to
be City or JPA sponsored. It was in that regard he was concerned
about the Co-op membership plan because he believed there was that
risk of stimulus of investment that might IN, misunderstood.
Iteyardiny management, both Heritage and Viacom were experienced
and successful cable television system operators. The Partners'
arrangement with Viacom offered some savings and head -end expenses
which were catalogued. When Council went into the JPA arrange-
ment, once thing he was proud of was the link with other cities.
He was pleased Palo Alto was not using the geographical fact of
San Francisquito Creek to continue to have a pnysical border that
too often was more than physical in how problems of c; mmunication
and workinu together were approached. He believed that function-
ing the JPA area via a cable service could improve on the communi-
cations between communities which would be beneficial. It was the
link up Partners had with Viacom which offered :the same opportun-
ity into the Mountain View area Anything which brought the com-
munities that bordered on each other and interrelated in so many
other contacts was valuable in his opinion. He would not spend
time on the CAO for the same reasons as expressed by Councilmember
Klein and Vice Mayor Cobb. The subject needed to be ; addressed
promptly, but at another time.
In technology and advanced services, both applicants had indi-
viduals and resources that in many cases were properly labeled as
"genius type." He had no doubt, about the capabilities of either
firm with respect to advanced services. He had some cautions and
reservations in his own mind regarding when, how much, and how
fast, but he tel ieved the business Odds of both would permit a
balanced approach. When decisions needed to be made for the bread
and butter operationsy experimentation and piloting could be con-
trolled appropriately. On the other hand, the emphasis each gave
was exceedingly important, and he perceived 1 cable television
system to be a communications system and not exclusively an
entertainment system, but it would initially' get its money from
6 d 2 2
10/07/85
entertainment, For him, it boiled down to an el emeht of irony,
for whatever set of reasons through the participation process, two
stereueypes emerged. One was the stereotype of the three-piece
suited, typical corporate, financially -oriented bottom line per-
son, narrowly focused who put an emphasis on a businesslike
annenaeh ee thin t- •_ L to...the yAM.r 1�RnAT n -- a the cuib-
ion i_ �ulti ll IlH
scribers, the public, and to participation concepts, etc. The
other stereotype was an organization that philosophically many
might not have experienced. The closest he came to experience
with cooperative processes was that he did not shop at the
markets. However, it should not tnvolve hie think-tng in his eval-
uation. He had favorable experience with Northwestern Mutual jeife
Insurance Company and AAA and while they might not be coopera-
tives, the concepts involved were semi 1 art and they were s .CUSS _
were J4lL�rG JJ
tul businesses. The image Council perceived was tiie Co-op group
had a lot of enthusiasm, ideas, and irons in the fire ee televi-
sion, and every other subject in town. He queried how they would
corral themselves and operate effectively in the long run. He
concluded, particularly over the past 30 days, that what emerged
was a situation where an organization conceived an idea five years
age; they decided they meant business, and so they operated in a
businesslike manner. They, along with Partners, survived the
difficult RFP process, and if Council voted in July, 1984, he
would have' voted for Partners. He saw the Co-op organization
could survive time and travail, determine its business plan, and
t{ en go out and work that business plan. They .obtained the seed
:coney to undertake tue project, determined their financing and put
it in place, determined their technical design and designed it,
determined their constructor and secured an able MSO. Through the
process and particularly recently, they were not distracted by
thinee. , They just kept at it. If the Co-op 'was awarded the
franchise they were now in the stage where they would focus or.
implementation. He believed if Partners received the franchise,
they had a double -load responsibility. They had to continue in
preparation as well as get started on implementation which put
ser'‘eral balls in the air simultaneously. It meant focusing on
financing, final design, and a contractor for the construction of
the feeder and the distribution plant, aced meeting many other
requirements of the franchise, process. He believed Partners was
capable of doi ny it, but they would be focusing on both prepara-
tory as well as implementation ementation processes. The fact that the Co-op
could focus on implementation caused him to believe they had an
edge perhaps disregarded in some of the concerns and assessments
about their governance, risk factors involved, and their ability
to work a business plan. It was not an easy decision for him, but
he would vote in favor of the Cable Cooperative.
Councilmember Bechtel read volumes of material and spoke to many
people trying to evaluate the two applicants and the bottom line
was .she was impressed with the effort of the Cable Co-op in being
cooperative with all parties they dealt with. The Co-op was also
very responsive. She was also impressed that their initial
financing was in place, they had a contract with Pac Bell which
lessened the risk of what those costs might potentially be unlike
City Cable where it was not clear if there was a lease or an
eventual lease purchase with Pac Bell. In addition, the Cable
Co-op would be able to start construction sooner since their
financing was already in place. They had built in support and
generated incredible numbers of people who supported them, akd she
hoped they would all be subscribers. She shared the concerns
about the fait that the applicant selected might ultimately be the
loser becauee It was a difficult tow to hoe and one which involved
many financial risks, but she believed those risks could be
lessened with the commitment she saw on the part of those people
who pushed so strongly for the Cable Co-op. She c• st. her support
for the Cable Coop,
6 4 2 3
10/07/85
Mayor bevy said he ran the risk that evnei ny of making the Mayor's
;position a diffic+ ?t one, but five of his ;olleeguc made.up their
minds in one direction so he could speak without having to worry
about the outcome. Sometimes the Council forgot who it repre-
sented, and in that case, the decision was unique. ,.Council did
not really represent all of its constituents, but rather those who
::owl subsc ;be to a cable television system, which.. might be
between- a\ third and two-thirds of the constituency. If a consti-
tuent wanted to subscribe, they must subscribe to whomever Council
granted the franchise. Unfortunately, cable television was known
as a natural monopoly, and he knew of no city where there were two
-cable systems competing for --each i, dividual homes' business. It
he were a `cable subscriber, he would want low rates, reliable
service, educational and community programming,'and timely avail-
ability of new off -rings which included new technological uses of
cable television. As a City Councilmember, he did not want any
risk to the City, but as a subscriber, he did not went personal
risk and hassel which went in along side the element of reliable
service. Regarding low rates, the nature of the economic organi-
zation of each applicant was such that Partners would have costs
each year of approximately $1,000,000,_ less to handle their organi-
zational- and economic system. One million dollars a year was
something like $5') per year for each subscriber. The City could
not ontr 1 r so was conceivable 4 Partners C ',kt£'� .... it ,,v€€�.e+'ra€,le would Say no
matter what the economics were, they would charge .n extremely
high rate, but if Council granted the franchise to the Co--ope then
it granted the franchise to a system that was defined as being
higher cost and, therefore other things being equal, must charge
higher rates to the subscribers, which would be in the range of
$50 a year. The consultant estimated they would be More like $50
to $70 per year, which he believed was significant and high in his
mind as he compared the applicants. With regard to reliable
service, the choice was simple for him. He looked into Heritage
and Viacom, and he was satisfied both would provide reliable
service. He heard some comments that Viacom was subject to criti-
cism because they were seen next dor and were not perfect, which
was true, but he added that Heiitae ; was also not perfect. Every
cable television system was subject to criticism and because they
were monopolies, there were only the choices of criticizing or
dropping the subscription altogether, which choice the economics
of America did not like to see.
-Regarding educational and community programming, he believed both
applicants were similar, but the Co-op ind-icat"ed more of a will-
feyness to provide educational and community programming. He
weighed that as he compared both. In terms of timely availability
�f new offerings, it was important in the sense there would be
rapid change in the business as indicated by Counci ln-ember Klein.
Techno't'oyical change as well as political change, and `it was sig-
nificant to him in making the decision that he 'choose the appli-
cant who would be best able to respond. to change. In many mar-
kets, no one knew; what the next two or three years would be or
what the rules would be, which was the case in the'..market of cable
television. With regard thereto, the consultant analyzed the
downside risk, which .indicated if the Co-op Miscalculated by 15
per cent, they were., i n . a position where they. could not meet their
debt service .and faced the risk ; of .being taken over by -either one
of their creditors. With Partners, the downside risk level Was 25
percent. •' It meant the penetration in one case might be 15 percent
lower and they :were in trouble; In- the othereeeise, it was 25
percent, but those numbers were critical to hi:n. They .said the _
Partners had a lot ,more .flexibility in -deal ir.g with the -unknown
adversity of the future..
Regarding significant elements .to the City, one was the element of
governance, and he respected the co-op having developed a system
of excellent governance. He was not concerned they would be
unresponsive to the community. He believed Partners also did a
good job. It was not; -as perfect as Co-op's in the sense that
everyone was selected from the general subscription membership,
6 4 2 4
10/07/85•
but. of their seven board members they would begin with, six of
them were members of the: cunrnunity, and they developed a system
which in the long run, he believed also satisfactorily guaranteed
the community would be represented _in substance on their board.
If he -selected Co-op, -he selected a system that would be respon-
sive tkthe community, but would ask each subscriber to pay $50 to
$70 more per year. In government, oae hated to make de. l:,ions
based -on costs, but rather on something deeply philosophical or
idealistic. He found it hard to be too philosophic or idealistic
about television because he had a much higher opinion of televi-
sion titan most people he talked t6. He liked the idea or watching
professional sp rts, fine entertainment, and being able to just
relax and +unload with crummy entertainment. However, as a member
of the Council representing many constituents and groups of people
who would have only one cable television system to which to sub-
scribe or not, the question was whether it was right for him to
ask those people to pay $50 to $70 more in order to have what he
believed was marginally better representation and sere ces that
would not be significantly different from, another, appl ;-cant. 0n
that basis, he arrived at Partners. - The worst case, if Council
was wrong, was not that either applicant would go into bankruptcy.
As a matter of fact, if it went to that, it -would be the end
result of a long period of discomfort, and it was the long period
of discomfort which worried him. it was during that time that the
community would be poorly served and that`.the_subscribers and
residents would complain and be frustrated. Because the flexi-
bility of one applicant was considerably greater to respond to the
risks and the unknown of the future, it was important in weighing
his decision, to look at that ability to respond. He believed a
government official looking at the issue of .cable television
should look at the ability of each applicant to serve the sub-
scribers of the system to the best way possible at the most rea-
sone'.,l a cost. ale was satisfied that Cable Co-op would do a satis-
factory job, and that the City Cable Partners could do a somewhat
better job. He expresseJ his personal respect for everyone who
participated in the endeavor. There was `.sti 1 1 a long way to go
and it was important for City staff, particularly to not relax
their vigilance over the process. It was important to ensure the
applicant selected moved ahead with dispatch, met all the dead-
lines and did their job:well.
Councilmember Sutorius said there was a motion before the Council
and procedurally it was appropriate to offer ,two conditions to be
inserted. Staff submitted the wording for the motion, which
Counci lmember Fletcher used. There was the matter of a date
certain for the commencement of construction, and a finalization
as to appropriate documentation.
AMENDMENT: Council■ember Sutorius moved the following condi-
tions:
1. Staff to modify the draft Franchise Agreement and Appendices,
dated August 19, 1985, to accomplish the objective of setting
eight months after Closing as a date certain - eapora which °com-
mencement of construction" will be deemed to have occurred for
purposes of administering the obligations ender the Agreement;
and
2. Finalization .to the satisfaction of the City Manager and City
Attorney of all documentation neces ery for Closing pursuant
to the draft -franchise Agreement, inciudiny but not limited
to, a.satifactory opinion of counsel.
MAKER AND SECOND OF MAIN MOTION INCORPORATED AMENDMENT INTO MAIN
MOTION
Counciimember Sotorius asked the record to reflect there was con-
tact with him on, the subject of commencement date and he found
both applicants to be extremely responsive o n the subject. He was
sure there would be no problem.
6 4 2 5
10/07/85
NOTION RESTATED:
The City Council directs the City Attorney to prepare an ordinance
awarding a n sm-esclusiva franchise for the provision of cable
television services pursuant to the Joint Eztrc'se of Powers
Agreement to cable Connunicetions . Cooperative subject to the
following=
1. Staff wall modify tho draft Franchise Agreement and Appen-
dices, dated August 19, 19E5, to accoaplinh the objective of
setting eight months after Closing as a date certain upon
which "commencement of ' construction" will be deemed to have
occurred for purposes of administering the oblige tioas under
the Agreement; and
2. Finalisation to the :s'tisfact'lon of the City Manager and City
Attorney Of all documentation necessary for Closing pursuant
to the draft Franchise Agreement, including but not United
to, a satisfactory opinion of counsel,
MOTION PASSED by a vote -of 5-3, Levy, Klein, Cobb voting "no,"
Witherspoon absent.
COUNCIL RECESSED TO A CLOSED SESSION RE PERSONNEL FROM 9:15 p.m.
TO 9:40 p.m.
ORAL COMMUNICATIONS
Will Beckett, 4189 Baker Avenue, represented the Barron Park
Association -Board and Barron 'Park Traffic Committee, and said
regarding Barron Park's efforts to defeat Measure D, the Barron
Park Traffic Committee was generally not in favor of barriers, but
did not want the one barrier in its area removed. Therefore, it
could not support the measure. There were some circumstances
which warranted the use of traffic diverters and other traffic
control devices, and the option of those tools could not be
eliminated as a way to improve traffic conditions in the
neighborhoods. In an effort to assure a "no" vote on Measure D,
tt;e Barron Park _Association joined the Citizens for Safe
Neighborhoods, whi-=h group was comprised of many members of City
neighborhood associations with varied opinions about the purpose'
and use of barriers. All agreed the. measure must not pass. They
began to organize and were calling for help and contributions.
The address was 2040 Ash Street. The Barron Park Board and
Traffic Committee loaned that group in urging a "no" vote on
Measure D.
MINUTES OF AUQUST 5.A.985
NOTIONS Co cilmember Fletcher moved, seconded by Kemal;,
approval. of the Minutes of August 5, 19E5 as submitted.
WOTION PASSE unanimously, Comb "abstaining,' . Witherspoon
absent.
CONSENT CALENDAR
MOTION* Co.scilaewber Bechtel moved, seconded by Cobb, approval
of the Consent Calendar.
Mayor • Levy removed Item #6, Regional Water Quality Control Plan
Pre -Environmental Protection Agency Audit, at the request cf staff
to be reagendized.
Counci2aeadber Renzel asked to be: recorded as voting no on Item
#8, Final Subdivision Map, 744 Ramona/225 Homer; and Mayor Levy
asked to be rscorcked as voting no. on Item #10, Noise
Ordinance.
6 4 2.6
10/07/85
As corrected
1/06/86
Referral
ITEM #11 CONSULTANT SELECTION - FINANCIAL DATA BASE AND REPORTING
SYSTEM UPGRADE - REFER TO FINANCE AND :PUBLIC WORKS COMMITTEE
(FIN 3-1) (CMR:551:5)
Action
ITEM #2, TENNIS COURT RESURFACING (PAR 4-3) (CMR:539:5)
Staff recommends that Council?
1. Authorize the Mayor to execute the contrac,with Cal Clay
Corporation in the amount of $54,844; and
2. Authorize staff to execute change orders to the contract of up
to $8,000.
AWARD 0? CONSTRUCTION CONTRACT
Cal Clay Corporation
ITEM #3 ARASTRADERO PRESERVE PARKING LOT (PAR 2-23) (CMR520:5)
Staff recommends that Council:
1. Authorize the Mayor to execute a contract with Caleb Paving,
Incorporated in the amount of $93,782.25; and
2. Authorize staff to execute change orders to the contract of up
to $6,000.
AWARD OF CONSTRUCTION CONTRACT
Caleb Paving, Incorporated
ITEM #4, ANN''.AL CHARGES FOR USE OF REFUSE AREA BY STANFORD
UNIVERSITY (UTI 5) (CMR:536:5)
Staff recommends the Mayor be authorized to sign the amendment
which has been approved by Stanford University.
AMENDMENT NO. 6 TO CONTRACT 4039 -
USE OF PALO ALTO MUNICIPAL REFUSE DISPOSAL AREA
The Board of Trustees of the
Leland Stanford Junior University
ITEM #5, FIRE DEPARTMENT LAUNDRY SERVICES (SAF 4) (CMR:542:5
Staff recommends that Council authorize the hayor to execute a one
year contract with Austen's Fremont Laundry Service in the amount
of $14,565.50.
AWARD OF CONTRACT
Austen's Fremont Laundry
ITEM #7s FINAL SUBDIVISION MAP - 3120 STOCKTON (PLA 3-1)
tCMR:550:S)
Staff recommends that Council approve the final map and the street
rases of Bautista Court and Moraga Court.
ITEM. -fat FINAL; SUBDIVISIOM MAP - 744 RAIIONA/225 HONEZ (PLA 3-1)
CMR:s49:5)
Staff recommends the City Council approve : the final map.
:nt!,,19. RESCIND RESOLUTION 6421 AND ADOPT UPDATED 1985 LAND USE
POLICY AGREEMENT PL 1 10 -*X NRg5 4 5 - -
Staff recommends that Council repeal Resolution 6421 and adopt the
resolution, which has as an exhibit the revised agreement.
6 42 7
10/07/85
MOTION CONTINUO
RESOLUTION 6434 entitled 'RESOLUTION OF THE COUNCIL OF
TOE CITY OF PALO ALTO APPROVING AN AGREEMENT SETTING
FORTH POLICIES OF THE COUNTY OF SANTA CLARA, THE CITY OF
PALO ALTO, AND STANFORD UNIVERSITY REGARDING LAND USE,
ANNEXATION, PLANNING AND DEVELOPMENT OF STANFORD LANDS
IN SANTA CLARA COUNTY"
ITEM 410, NOISE ORDINANCE (2nd Reading) (ENV 5)
ORDINANCE 3640 entitled "ORDINANCE OF THE COUNCIL OF THE
CITY OF PA« ALTO AMENDING SECTION 9.10.060(d) OF THE
PALO ALTO MUNICIPAL CODE TO CHANGE THE NOISE REGULATIONS
TO PROHIBIT CONSTRUCTION BEFORE 9:00 a.m. OM SATURDAYS"
(1st Reading 9/16/85, PASSED 7-1, Levy "no," Witherspoon
absent)
ITEM #11, ORDINANCE RE TRANSMISSION AGENCY OF NORTHERN CALIFORNIA
(2nd Reading) (UTI 3-4)
ORDINANCE 3641 entitled 'ORDINANCE OF THE COUNCIL OF THE
CITY OF PACO ALTO AUTHORIZING THE TRANSMISSION AGENCY OF
NORTHERN CALIFORNIA TO ISSUE REVENUE BONDS, NOTES, AND
OTHER EVIDENCES OF INDEBTEDNESS" (1st Reading 9/16/85,
PASSED 8-0, Witherspoon absent)
MOTION PASSED unani0ously, Renzel voting "no," on Item 08,
F' a1 Subdivision Nap - 744 Rsmona/225 Homer; and Levy voting
"no," on Item 410, Noise Ordinance, Witherspoon absent.
AGENDA CHANGES, ADDITIONS AND DELETIONS
MOTION: Councilmember Woolley moved, seconded by Klein, to con-
tinue Item 414, Public Hearing re Zoning Ordinance amendments in
the R-1 Districts to October 15, 1985.
City Manager Bill Zaner said the Palo Alto Unified School District
(PAUSD) had an interest in the item and might have a timing prob-
lem on October 15, 1985.
Julian Crocker, Superintendent, Palo Alto Unified School District,
said he was going to request action be deferred to November 12,
i 48b .
Councilmember Klein asked why the PAUSD wanted a month's continu-
ance.
Mr. Crocker said the PAUSD waned time to work. with City staff and
the neighbors to present a voluntary solution as it affected the
DeAnza and Ross Road sites. The major problem faced by; the
Uistrict was a spring marketing mode, and with any uncertainty to
that situation, it presented a problem to the PAUSD.
Councilmereber Bechtel asked a continuance to November 12 would
impact the City-wide moratorium which ended in December.
Zoning Administrator Bob Brown said the City-wide moratorium on
the development of substandard lots would expire on Deceeber 31.
,985. If Council deferred action until November 12 and wanted -to
take action which would affect oevelopment regulations on sub-
standard lots at that time, staff would return with a request to
extend the morator i em.
City Attorney Diane Lee said dependent upon Council's action on
October 15, 1985, staff might have time to provide a particular
form of . ordinance, return, and have it ,be .effective before th4
expiration of the moratorium. She did not believe it could be
done with a November 12 date,
6 4 2 8
10/07/85
SUBSTITUTE MOTION: Councilmember Klein moved to continue stem
#14 re zoning ordinance amendments in R-1 Districts to November
12.
SUBSTITUTE MOTION 01ED__FOR LACK OF A SFcmen
SUBSTITUTE NOTION: Councilmember Klein moved, seconded by
Bechtel, to continue Item #14, Public Hearing re Zoning Ordinance
amendments in R-1 Disticts to October 21.
MOTION ,PASSED unanimously, Witherspoon absent.
Vice Mayor Cobb said the staff report offered a circle of alterna-
tives, and he queried whether it might be useful to give the PAUSD
the benefit of Council and the public's'discussion ar early as
\possible to try and find a volLntary solution. He asked if it
could be discussed on October 15 to facilitate a better solution.
Councilmember Renzel was concerned that Council not delay action
too long because problems were beginning to be experienced witl,
the issue. It was important to deal with it expeditiously. She
was willing to continue for a week, but believed any further time
continuance was too far away considering the length of time the
City already waited.
Dr. Crocker said the PAUSD was also concerned about timing, but
the problem they saw as the property owner on the two sides most
in question was if the Council accepted the Planning Commission
recommendation at that point, it would create a lot of uncertainty
for the PAUSD. The PAUSD wanted to propose a solution to the
problem to satisfy the concerns of the City and allow the District
some certainty by spring.
Councilmember Sutorius asked where Item #14 best fit with the
least jeopardy to the balance of the two agendas of October 15 and
October 21.
Mr. Loner said neither was very good. The Policy and Procedures
(P&P) Committee recommendations on animal services was scheduled
for October 21. The Planning Commission's EIR on Varian was
scheduled for October 15.
Councilmember Sutorius had no problem with the substitute motion,
but jt seemed that October 15 was the better time to address it
from the standpoint of the agendas.
Councilmember Klein was concerned about the PAUSD schedule.
Ur. Crocker said the PAUSD's next meeting was October 15, and if
Council deferred the matter to October 21, the PAUSD would try and
do as much as possible. If the matter were deferred to October
15, .a regularly scheduled meeting of the PAUSD would not take
place prior.
Mr. Zaner said staff would reschedule the P&P Committee issue on
animal services.
SUBSTITUTE MOTION PASSED unanimously, Witherspoon absent.
ITEM #13, PUBLIC HEARING: PLANNING COMMISSION RECOMMENDATION RE
At' R0VAL OF THE F ROBERT L RCI et a1. FOR �A-`�E
CHANCE FROM R-1 429) TO R-1 . _ tRop-EiI E 7T ,
174 Aft 180 kONROE akin VE (PLA -1)
Mayor Levy declared the public hearing open.
Robert Lerch, 170 Monroe Drive, -applicant, was available to answer
questions, and said the two objections rased at th2 Planning
Commission meeting concerned traffic and a precedent it might set.
He did not believe the traffic situation was that serious, and he
•;r
5 4 2 9
10/07/85
was aware of the traffic density in the area.- In-.terme of prece-
dent setting, a small minority :sf the potential cottage applicants.
took advarttaye or the ordinance. It did not seem to be a problem
which overran the City. In his situation, he. believed he was the
only possible resident that could proceed with a cottage.
Mayor Levy declared the public hearing closed receiving no further
requests from the public to speak.
MOTION: Councilmember Woolley moved, seconded by Fletcher, to
adopt the Planning Commission recommendation •cIppraving the prc,-
posed rezoning of 170, 174 and 180 Monroe Drive from R-1 (929) to
R-1 (743), finding that the rezoning is compatible with the
Comprehensive Plan and will not have a significant detrimental
impact on the environment.
ORDINANCE FOR FIRST READING entitled "ORDINANCE OF, THE
COUNCIL bF THE CITY OP PALO ALTO AMENDING SECTION
18.08.040 OF THE PALO ALTO MUNICIPAL CODE (THE ZONING
MAP) TO CHANGE THE ZONE CLASSIFICATION OF THE PROPERTY
KNOWN AS 170, 174, AND 1180 MONROE DRIVE FROM R-1 (929)
TO R-1 (743)"
NOTION PASSED unanimously, Witherspoon absent.
ITEM 115, FINANCE AND PUBLIC WORKS (F&PW) COMMITTEE RE CONSULTANT
SELECTION FOR CITY-WIDE LAND USE AND TRANSPORTATION STUDY
(PLA 5-4/5/6) (CMR:547:5)
MOTION: Councilmember Bechtel for the Finance and Public Works
Committee moved re City-wide Land Ute and Transportation Study
that the Mayor be authorized to execute the agreement with Fehr A
Peers Associates in the amount of $159,000; and authorize staff to
execute change orders to the agreement of up to $16,000.
AGREEMENT - PROFESSIONAL CONSULTANT SERVICES
Fehr & Peers Associates
MOTION PASSED unanimously, Witherspoon absent.
ITEM #1&, FINANCE AND PUBLIC WORDS !F&PW COMMITTEE RECOWHDATION
R i; G N L A I; QL U R L P I TY EXPANSION AND
WAS1' WATER COLLECTION SYSTEM REHABILMt1ON (UTI 7-4) (CMR:553:5)
Councilmember Bechtel, Chairperson of the F&PW Committee, said the
item related to hiring a financial consultant to put together a
pack'° ge for sale of bonds for the Regional Water Quality Control
Plant expansion. Advice was needed on how to package the matter
In such a way that the City could do it in the most advantageous
manner. At the time of the F&PW Committee meeting, two members of
the public expressed concern about Security Pacific' and their
association and dealings in South Africa. At that point, the
Council committee only had the information provided by those
members of the public. The Committee shared their concern and
expressed ccncern about involvement in South Africa. It was the
recommendation of the F&PW Committee that because the particular
group was involved in a local effort and because of the recom-
mendation of staff that the Security Pacific capital markets group
was by far the best of the consultants being recommended, it was
the recommendation of the F&PW Committee Committee that the City contract
with Security Pacific Capital Markets Group for financial services
associated with the 19r35 utility bond issue and to recommend exe-
cution of the agreement with Security Pacific Capital Markets
Group.
MOTION: Councilmember Bechtel_ for the Finance and Public Works
Committee moved that Council authorize the Mayor to execute the
agreement with Scurity Pacific Capital Markets Group for
financial services associated with the 1985 Utility load Issue.
AGREEMENT - FINANCIAL CONSULTANT
Security Pacific Capital Markets Group
6 4 3 0
10/07/85
Ted Rowland, 547 Bryson, was impressed that staff researched
Security Pacific, and reported back so quickly. He did not be-
lieve Security Pacific's loan policy was good enough and the City
of Berkeley still refused to deal with them because they still
actively financed trading in South Africa, which other l%anks. like
Weis hargo, would not do. He believed one reason Security
Pacific changed its policy was because they were afraid if they
did not, they would start losing business because city governments
were doing business only with socially responsible companies more
and more.
MOTION PASSED unanimously, Witherspoon absent.
ITEM #171 FINANCE AND PUBLIC WORKS COMMITTEE RECOMMENDATION RE
WHOLESALE ELECTRIC RATETNCREASE (UTI "1 -2) -
MOTION: Councilmember Bechtel for the Finance and Public Works
Committee moved to adopt the resolutions revising electric utility
rate schedules E-1, E-2, E-3, and E-4 effective November 1, 1985.
RESOLUTION 6435 entitled 'RESOLUTION OF THE COUNCIL OF
THE 'MY OF PtO ALTO AMENDING SCHEDULES E-1, E-2, E--3,
AND E-4 OF THE CITY OF PALO ALTO UTILITIES RPTES AND
CHARGES PERTAINING TO OOMESTIC, COMMERCIAL, CUSTOMER -
OWNED GENERATION AND STREET AND HIGHWAY LIGHTING RATES"
Mayor Levy said the fact no one from the public protested what
might seem to be a large increase on the surface, testified to the
excellent preparation and low rates the City continued to charge
for its electric utility. He hoped the City's foresight in plan-
ning would enable Palo Alto to stay ahead of the game.
MOTION PASSED unanimously, Witherspoon absent.
ITEM #18, FINANCE AND PUBLIC WORKS COMMITTEE RECOMMENDATION RE GAS
RATE DICR AS€ AND GA R€ UNo ADOPTION OF —THE GAS RATE PLAN AS
PRI`SENTED (UTI 1-1)
MOTION: Councilmembee Bechtel for the Finance and Public Works
Committee moved to adopt the resolutions confirming the actions
takes by the City Manager to effect a gas rate change on August
12, 1985 resulting in a gas revenue decrease of approximately
$820,000.
RESOLUTION 6436, entitled ,'RESOLUTION OF THE COUNCIL OF
THE CITY OF 'PALO ALTO AMENDING UTILITY RATE SCHEDULES
G•1 AND ' G-50 AS A RESULT OF TRACKING PG,IE GAS RATE
CHANGES"
RESOLUTION 6437 entitled "RESOLUTION OF THE COUNCIL OF
Twirnstrarnro ALTO ADOPTING A GAS RATE REFUND PLAN°
Director of Utilities Richard Young said $384,000 was the amount
of the actual rebate.
MOTION PASSED unanimously, Witherspoon absent.
ADJOURNMENT
MOTION: Cooncilmember Klein moved seconded by Fletcher,
adjournment of the meeting in memory of Jack Witherspoon.
MOTION PASSED unanimously, Witherspoon absent.
Council adjourned at 10:30 p.m., in memory of Jack Witherspoon.
6 4 3 1
10/07/85