HomeMy WebLinkAbout1984-12-03 City Council Summary MinutesCITY
COUFICIL
MINUTEs
ITEM
Regular Meeting
December 3, 1984
CITY
OF
PALO
ALTO
PAGE
Workshop re City Auditor's Work Program 5 2 6 8
Oral Communications 5 2 6 8
Minutes of September 18, 1984, Adjourned Meeting of 5 2 6 8
September 11, 1984
Consent Calendar 5 2 6 8
Referral 5 2 6 8
Item #1, Functional Classification System, Urban 5 2 6 8
Limit, and Federal Aid Urban System - Referral to
Poi icy anti Procedures Committee
Action
Item #2, Substance Abuse Prevention and Suppression 5.2 6 8
Grant
Item #3, Ordinance Extending Moratorium on Office , 6. 2 6 9
Development in GM Zone (2nd Reading)
Item f4, Ordinance re Properties Located at 418-420 5 2 6 9
Everett and 332 Ki pl-ing- (2nd .Read{ng)
Agenda Changes, Additions and Deletions 5 2 6 9
Item #5, PUBLIC HEARING: Di sestabl i shmen t of 5 2 . 6 9
Downtown Business Improvement Area
Item f6, Finance and Public Works Committee 5 2 8 2
Recommendation re Electric Rate Increase
Item f7, Finance • and Publ is Works Committee 5 2 8 3
Recommendation . re rol icy Gu1 del Ines for 1985-56
Annue1 Budget
Item f8` Amendment to the Downtown Moratorium to
Prevent Subdivisions and Mergers of Land
Item #9, Ordinance re Het Tub, Sauna, and Massage
Parlor Establ.1 sbients
Item #10, Request :of Mayor Klein :Me Resolutions for:
Downtown Charette Participants
Item f11, Request of Coancilmem ber Retue
Support for Golden Gate Council of American _ Yowth;
Hostels' Proposal for a Icon -profit Organization
Grant under the California Park and Recreation
Facilities Bond Act or 196e
5 2 8 6
5 2 8 8
5: 2 9 0
6 2 9 1
Adjournment: 10.45 p.m. 5 .2 9 1
a 2 6 7.
12`3/84
Reg ul ar Meeting
Monday, December 3, 1984
The City Council of the City of Palo Alto met on this date in the
Council Chambers, 250 Hamilton Avenue , Palo Al to, at 7:45 p .m.
PRESENT: Bechtel , Cobb, Fl etcher , Klein Levy, Renzel
Sutorius, Witherspoon, Woolley
WORKSHOP RE CITY AUDITOR'S WORE( PROGRAM
Mayor Klein announced that a special meeting was held at 6:30 p.m.
re City Auditor's Work Program in the Council Conference Room.
ORAL COMMUNICATIONS
None
MINUTES OF SEPTEMBER 18, 1984, ADJOURNED MEETING OF SEPTEMBER 11,
1984
Councilme!aber Renzel submitted the following correction:
Pale 5085, last paragraph, first line, change "lands" to "lanes,"
Councilmember Sutorius submitted the following correction:
Pale 5093 second to last paragraph, line 7, insert "is" between
-wmtamaTTy" and "consistent."
MOTION: Ceuuc i 1 seember i'eaze1 moved. seconded by Levy, approval
of the minutes of September ill ; 1984. as corrected.
$CTIQM MASSED aaaalmemsly.
CONSENT CALENDAR
POTION: Coenti'lme.Mer Bechtel moved. seconded by Levy. approval
•f the Consent CW ender.
Councilmeebers Witherspoon and Woolley asked to be reco:•ded as
voting "no" on Item 4, Ordinance re Properties located at 418420'
Everett and 332 Ki pl ing.
Councilmereber Sutorius referred to the amendment to Item 2 re
Substance Abuse Prevention and Suppression Grant reflecting the
"soft" satchin9 commitment from the City of 20 percent, or
$30,461, instead of 25 percent.
Referral
ITEM #1 FUNCTIONAL CLASSIFICATION SYSTEM URBAN LIMIT, AND
PEDEdAL AID URBAN S' S.
Staff recommends the item be referred to the Policy & Procedures
Coaim 1 ttee .
Action
ITEM #2, SUBSTANCE ABUSE PREVENTION AND SUPPRESSION GRANT
(SOLIT-771*—T0411TSTIFEIT - - - Staff recommends that Council indicate support of the program by
adopting the resolution and authorizing the City : I4ansger to enter
into an inter -agency agreement with the School District as out-
lined in the grant application.
5 2 N A
12/3/84
MOWN GUN1INUtU
RESOLUTION 6331 entitled "RESOLUTION OF THE COUNCIL OF
THE CITY OF PALO ALTO TO SUPPORT THE 'SUBSTANCE PREVEN-
TION AND SUPPRESSION PROGRAM' AS A JOINT VENTURE WITH,
AND TO BE ADMINISTERED BY, THE PALO ALTO UNIFIED SCHOOL
DISTRICT"
GRANT AWARD SUBSTANCE ABUSE PREVENTION AND SUPPRESSION:
A MOD!; L PROGRAM
TEM. 03, ORDINANCE EXTENDING MORATORIUM ON OFFICE DEVELOPMENT IN
TAE CM UN E 12nd to a d g
ORDINANCE 3587 entitled "ORDNANCE OF THE COUNCIL OF
T O ALTO EXTENDING THE EXISTING MORATORIUM
ON THE P:JCESSING OF APPLICATIONS FOR NEW OFFICE USES OF
5.000 SQUARE FEET OR MORE IN TOE GM ZONE (1st Reading
11/19/84, PASSED 8-0, Cobb absent)
ITEM #4, ORDINANCE RE PROPERTIES LOCATED AT 418-420 EVERETT
n ead ing) (PLA 3.6)
ORDINANCE 3588 entitled "ORDINANCE OF THE COUNCIL OF
TOE CITY OF PALO ALTO AMENDING SECTION 18.04.040 OF THE
PALO ALTO MUNICIPAL CODE (THE ZONING MAP) TO CHANGE THE
ZONE CLASSIFICATION OF CERTAIN PROPERTIES BETWEEN
HAWTHORNE AVENUE AND LYTTON AVENUE FROM R -4 TO
RM-D(SIP)" (1st Read1ng • 11/19/84, PASSED i-2, Woolley,
Witherspoon "no," Cobb absent)
MOTION PASSED unanimously, Witherspoon and Woolley voting "no"
on Item 4 re Ordinance re properties located at 418-420 Everett
and 332 Ki pl ing.
AGENDA CHANGES, AUDITIONS AND DELETIONS
None
AND
ITEM #5, PUBLIC HEARING: DISESTABLISHMENT OF DOWNTOWN BUSINESS
IMPUVtFEEI(T A i {pCA 4-6-2) [tMR 593:4)
Councilmewber Renzel said the report indicated rather conclusively
that it was not reasonable to attempt to collect those assessments
that were not paid. At the some time, members of. the downtown
group asked the City to pay some costs that were not covered by
the previous assessments. She asked if staff believed it would
cost too much to collect the funds, or was the problem prorating
reimburseeents should excess funds be left over. She asked why it
could not be dealt with on a straightforward basis, as the City
was assured at the outset that no general funds' would be involved
in the proposal
Executive: Assistant to the City Manager Yicci Rudin said . the staff
report 1ndicr+ted the City originally intended to rebill those who
had not paid the first Or second billings whin the 1984 charges
were assessed against the businesses in the district. However,
from the Task Force study and the adv i sorb ballot sent to all the
businesses, it was clear that the Business District would ` not go
forward. Since there would be neither a 1984 budget nor
assessments, people who were ' unwilling to respond to the first or
second bil l inga, when the Business District was in place and had a
list Of activities, were unlikely to respond to a third billing.
Staff did not recommend that Moneys be paid gut of the General
Fund to cover additional expenses incurred_ by the contractor, who
was well ,.aware that no additional moneys other than those
spec ificai ly budgeted end collected would be forthcoming.
Co„ncilrnembar Renzel said she strangled with the staff recnnenenee-
ti on to offer reimbursement for the approximately $30,000 already
collected. She asked 1f the City could legally pursue those who
were billed but had not paid to cover the costs incurred on their
benai f. Had they paid in a timely fashion, there would now be a
rest dual as the money was not spent.
City Attorney Diane Lee said the City could go through the Small
Claims Court to legally collect from those persons in the District
who had not_ paid the charges levied. However, the practicality of
the procees, given the amounts involved and the aao tnt of staff
time required, was one reason it was not suggested.
Councilrember Re.nzel asked if the City had a legal obl igation when
there was any kind of assessment mechanism, to pay back those who
had paid if any person refused.
Ms. Lee did not believe the City was legally obligated to reim-
burse those who paid.
Councilmember Renzel asked it there was any legal "fairness"
issue.
Ms. Lee said fairness was a more equitable consideara.tion, of which
the Council was the best judge.
Counci_lmember Renzel said that value was received, both by those
who paid and those who had not, for the moneys expended
City Manager Bill loner agreed. Services were provided and val ues
received. It was the other side of that argument staff used to
recommend that moneys be refunded from the General Fund. There
was no question that from a fairness point of view, all should
have paid their assessments, which would have covered the cost.
However, that did not happen, and it was not believed those funds
could be collected without great expenditure of time, energy, and
;coney.
Councilmember^ Renzel said she had trouble understanding why staff
bel ieved the money should be refunded since services were rendered
and value received.
Mr. Zaner said only some people paid for those services. A por-
tion of the people in the downtown area paid them assessments,
which were used to provide services for the downtown. Those
people now alleged that they paid for services that others
received who had not paid for them. They had some argument on
their side.
Councilmember Renzel asked if those persons who paid would then
take the Ci ty to Small Cl aims Court if the matter were 1 eft as- is
and the District dissolved.
Mr. Zaner . said if things were left as they stood, it peant some
paid for services to the entire District for which others had not
paid. lie asked the City Attorney to address the legal issue
Ms. Lee assumed that given the small allount of money involved, the
Small Claims Court would be the appropriate jurisdiction.
Coyne ilmember Cobb referred to the request made by the contractor
for compensation for services beyond a certain point which at that
time were not compensated. He .asked at what point the contractor.
clearly understood there would be no further compensation paid.
He hoped the contractor would respond later. The contractor was
asked to; do things beyond the point for which compensation was
received, and he was troubled about the fairness . issue
i
Ms. Rudin said. she hoped the City would be consistent although
there were numerous points of view. The tenuous nature of the
District was first discussed in April 1983 when the lawsuit was
filed challenging the District. The contractor was then advised
by the City and had acknowledged the possibility that no funds
beyond the $22,000 already advanced to the District might be
forthcoming and the level of activity should be curtailed. That
was the understanding until August when the Superior Court ruled
in favor of, the District. In late August/early September the City
invoiced all the businesses, which were mailed by the contractor.
If necessary, a follow-up billing was planned. The contractor was
constantly apprised of the revenues received, and he proposed a
1984 budget in November 198;, which was brought to the Finance and
Public Works (F&PW) Committee in December. At that time it was
decided the budget needed to be scrutinized more closely before
submission to the Council. An alternative method of assessing and
charging the businesses was suggested. The contractor was
informed that following the start of the New Year, as no budget
existed, he would be in limbo. In January, 1984 the staff re-
turned to the F&PW Committee with a proposal, and it was decided
that members of the community wanted to review it further. The
contractor suggested delaying returning to F&PW Committee from
February to March as he believed additional support and participa-
tion could be generated within the District. At that point it was
clear to staff the contractor was operating without an adopted
budget, although requesting the City slow down the process to
obtain more participation. At the March F&PN Committee meeting
the direction was to hold a meeting which representatives of all
the downtown businesses could attend to discuss the issue. The
moneys collected from the invoicing and follow-up billing in
February brought additional moneys into the District above the
$22,000 which it was originally advanced, so there was approxi-
mately $10,000 available for the District to use for its ex-
penses.
Counc.i lmember Cobb clarified the City worked with the contractor
into December, 1983. Not until August 1984 was there a formal
communication from the City to the contractor telling him to stop
work. However, there was an implicit stop in about January/March
when the F&PW Committee acted to vies the public involved.
Ms. Rudin said although she knew the executive director of the
District worked with the president of the District to provide
information to the task force, she believed the president of
Downtown Palo, Alto Inc. (DPAI) suggested the executive director
play a rather low-key position during the time the task force was
in operation.
Councilmember Cobb wanted to hear from the contractor on his
understanding of the position.
Mayor Klein declared the public hearing open.
Chuck Kinney, President, DPAI, said he was the contractor for the
District. The District did . not have the support to continue as an
entity ,and should be disestablished. Many people believed some-
thing ldke the District was needed, but the many discordant view-
points could not always agree, and the District might be ahead of
its time. It was the germination of an idea by lied and Tay
Gallagher, the co -directors of DPAI, to provide a mechanism to
work with the City to !sake the downtown function and become
viable. Four years earlier they petitioned the Council to make
something happen, and , he commended their efforts, which largely
went unrecognized. In all contracts, unforeseen situations arose.
In its deliberations, he asked the Council to act in a spirit of
fairness. In a spirit of goodwi l l , the contractor worked to make
the downtown a better -place.
5 2 7 1
12/3/84
As Corrected
1/28/85
Tay Gallagher, Co -director, DPAI, said Mayor Bechtel in December,
1983, asked her to attend an Olympic Committee meeting to promote,
with other .ignitarttes -i+- area, the Olympic events to be held
at Stanford. In January, `1`984 a full six months of planning for
the promotion of the .downtown was undertaken with an average of
three to five meetings per week. She contacted many merchants and
her office was used as a centrex to feed names of people to the
main Olympic Committee. The,. moneys collected were spent on the
District. She received money for the flags, but used her contacts
to have them put up. From January until the closing of the
Olympics in August she worked primarily for the promotion of the
downtown. She also participated in .the fair given in March inhere
she represented DPA1 . She and her husband's time, from January
until August, ;was" committed without salary to the promotion of
downtown Palo Alto working with Stanford and the other Palo. Alto
areas.
Steve Singer, 552 Waverley Street, was a downtown merchant and
represented others who felt disenfranchised from decision making
processes downtown. Many favored the Assessment District, and
were sorry to see it go. In principle, he believed in a District,
and hoped it would be recreated to �-evitaiize the promotional
activities that no longer took place in the downtown.
John Wallace, 261 Hamilton Avenue, #2O spoke for the Committee
for Fair Assessments which supported the staff recommendation to
disestablish the District and refund the moneys collected; al-
though he did not necessarily agree with the facts or logic used
to arrive at the recommendations. The committee did not; and
would not, oppose any fairly structured and legally implemented
District.
David Florian, 530 Emerson, a downtown merchant, asked if it was
possible to table the Downtown Assessment District, rather than
completely doing away with it. A tremendous amount of time and
effort went into putting it in place, and many regretted the way
it turned out and that it was unacceptable to so many. He hoped
it could be tabled legally without too many problems.
Ms. Lee said the possibility wad raised at a. F&PW Committee meet-
ing. She did not believe the Council had to disestablish the
District or take any action. Staff expressed strong feelings on
the matter at the F&PW Committee.
Mr. Zaner said at that time staff strongly recommended the Dis-
trict be disestablished. If at some future time the Council
wanted it reestablished, it would not be a difficult process. The
Citizens Committee and the staff concluded that only a minority of
the downtown merchants supported the District. His recommendation
was that it be disestablished so staff did not have to deal with
it. If at somme- future time someone garnered sufficient support to
convince the Council it should be reestablished, a new District
could be formed.
Mayor Klein declared the public hearing closed. He asked what
would happen to the cash on hand .of $1,689 .if Council decided to
disestablish the District and return, from the General Fund,
moneys to those who paid their~ assessment.
Mr. Zeiler said there was a balance of approximately $1,700. Staff
held';kpproximately $975, and the District held the balance. Those
funds were legally usable by the District to apply against their
expenses, which were controlled by the ,City through the budget
process. The Council, as the District, could determine an eli-
gible expenditure and on what it wanted the moneys to be spent.
Mayor Klein was unclear what staff recommended the .moneys be used
for. He asked if the outstanding expenses staff said the cow -
tractor -could use then for included amounts owed to the Gal1aghers
for salaries and legal' -fees to, their attorney.
5 2 7 2
12/3/84
its Corrected
1/28/85
Mr. toner pointed to, other expense .:.such at., accounting expenses.
Ms. Rudin said DPAI provided the City with_ a statement of Revenues
and Expenses as of June 30, 1984 indicating that it expended
$7,121 between January 1 and June 30, and received assessments and
interest in the amount of $6,304, with a net loss of $816. They
also had a cash bal once on hand of. $714. In a letter in the
October 10, 1984 Council packet, DPAI noted the salaries of the
executive' directors, an accountant's bill and legal fees, were
outstanding.
Mayor Klein said it was unclear from the staff report what should
happen to the $1,700.
Ms. Rudin said the staff report suggested the remaining $1,689
be applied to outstanding expenses. It could not include the
attorney' s fees, but could be arpl led against- the accountant' s
fees and to some of the contractor' s sal aries.
Mayor Klein failed to see the logic of not recommending payment of
those items while allowing the balance to be used for those .pur-
poses.
Ms. Rudin clarified that the $1,689, pl us the value of the, equip-
ment held by the contractor, would be available to him to pay hi s
outstanding expenses. The Council could give direction about how
the money could be allocated by the contractor.
Mr. Zaner explained the logic was that no additional funds should
be paid out to the District. They performed services and had a
small sum of money left over, which should not flow into the
General Fund but could be used by the Council to offset some of
the General Fund refund expenditure or used to pay back some of
the outstanding debts by the contractor.
Councilmember Witherspoon said the contract was valid until it
expired in December, 1983. It was brought up to the F&PW Com-
mittee for renewal, bvt was put off. She asked why the salaries
and accountant's bill were not paid through December.
Ms. Rudin said a good share of the revenues came in December,
January, and February. The understanding was the revenue could be
applied to the expenses that occurred but there was insufficient
cash flow to pay them at the time.
Councilmember Withers -goon asked why they were ;not paid as the cash
was received. '
Pis. Rudin said the contractor was instructed to pay them.
Councilmesaber Witherspoon, asked if it was an oversight that they
were not- paid at least through December.
14s. Rudin said one of the outstanding .bill -s was for accounting
services to provide an end of the year str,tement, which was not
done until January and February, 1984. It was -in the budget but
came in after the close of the fiscal year.
Councilmeratser Witherspoon said she could..not speak to where the
Council stood after the approved budget expired. She felt obi l -
'gated to pay those items incurred under the budget in effect until
December 31, 1983, excluding the:.: attorney's fees. The total_ of
the accounting fees and the , salaries was approximately $4,400,
offset by the $1,700 on hand and should be paid from the General
Fund to close the books of the Downtown Business Improvement Di s-
‘trict through December 31, 1983.
Councilmember Cobb asked if the proposed motion wool -d be specific
to -the budget the District operated ruder, or specific to the num-
bers in the staff report in terms of expenses incurred' for sal-
aries and accounting.
5 2 7 3'
1213/84
As Corrected
1/28/85
Councilmnmher Withers,nnn said she as .i'rn d there was no dis-
crepancy. She tried to pin the expenditure down to only those
items in the budget the City agreed to with the District, which
probably excl uded the attorney's fees. Since some of the expenses
coming in under the budget were billed against the 01 strict after
December 31, 1983, she asked whether the accountant's bill was in
the budget. If it was, and was for work performed as part of the
close of the fi scat year, she considered it a valid expense.
Ms. Rudin sald it was a valid expense, but not in so large an
amount. The professional fees specified in the budget were less
than the amountthe accountant actually billed the Di strict.
NOTION: Coauc i i Member Witherspoon moved, seconded by Cobb, to
honor the expenses budgeted through December 31, 1983, as agreed
between the City of Palo Alto aid the Downtown Business Improve-
ment District, even though some of those expenses were billed
after the close of the calendar year on ; December 31, 1983,
Mayor Klein said it was necessary to give more guidance on the
dollar amount.
Councilnernber Witherspoon said there seemed to be a discrepancy
between , what the budget all owed and what was incurred. She
assumed staff would solve that problem as she did not have the
budget before her and the staff report did not give a cut off
point on December 31, 1983. The number was approximately $4,400,
as stated in the staff report, which was not an unreasonable
amount.
Ms. Rudin ci arified the budget incl uded $1,140 for accounting
services for the calendar year 1983. It might be better if the
contractor indicated whether that amount was exceeded. She under-
stood $570 was paid it fall 1983 for the first six- month state-
ment of accounts, with a further $1,679 being requested, which
appeared to exceed the amount in the budget.
Mayor Klein asked if the motion should include the staff recom-
mendations.
Counc ilmeinber Witherspoon restated her motion.
NOTION RESTATED: Adapt the staff recommendations to:
1. Approve the ordinance to disestablish the Downtown Business
Improvement Area; .
2. Authorize, upon application, refunds to those businesses which
paid . their 1983 business charges to the Iswstown Business
Improvement Ares;
3. Honor the expenses budgeted through December 31, 1983, as
agreed betimes the City of Palo Alt, and the Downtown Business
Improvement District, even though some of those expense: were
billed after the close of the cal esdar year om December 31,
1983.
SECOND TO MOTION WITHDRAWN
MOTION FAILED FOR LACK OF SECOND.
Councilmember Fletcher referred to page .3 of the staff report:
regarding equipment valued at $1,300 purchased with District funds
that was legally the property of the City. Staff recommended the
value be applied against the outstanding debts of the District.
Sne tossed that amount into the discussion about refunding costs
beyond the calendar year 1983.
Councllmember
Cobb, suggested dealing with the i tern s p1 ec ewi se
5 2 7 4
12/3/C4
As Corrected
1 /28/85
Councilniember Cobb sueuested the contractor he compensated for the
specific amounts 1 fisted for cal cries of $2,915 and accountancy
services of $1,540, as specified on page 2 of the staff report,
but excl uding litigation costs.
Mayor Klein asked what the source of payment would be for the ex-
penditure of $4,455.
CounIc ilmernber Cobb cl ari fled that the cash on hand and the total
value would be applied to the compensation.
MOTION: Conncilmember Cobb moved, seconded by Sutorius, to com-
pensate the contractor for the .specific amounts listed for sal-
aries of $2,515 and account services of $1,540 as specified on
page 2 of the staff report (CMR:SSS:4), and that the available
funds on hand be used to pay these two categories of expenses and
the remainder of those expenses be wet by a distribution from the
General Fund to the extent necessary to make those two payments.
Counciloernber Renzel asked if a budget amendment would be required
in order to pay anything in excess of the moneys collected and
avail able to the ui strict.
Mr. Zaner said it would require an expenditure from the General
Fund, but not necessarily a budget amendment, as the amount was
far below the sum he was authorized to expend.
Councilmember Renzel obtained confirmation from Mr. Zaner the
$30,000 anticipated refund would require a budget amendment. She
referred back to the basic law under which the District was estab-
lished and the information the Council was given at that time, and
asked about the responsibilities of the Council as the governing
body. When it was formed, the Council was told no, General Fund
moneys could be liable for the District and that none would be
expended. She asked if that was the legal format under which such
di str is is were formed .
Ms. Lee said it had nothing to do with the organic law under the
Streets and Highways, Code nor with the City's Municipal .Law. It
was determined when establ i shi ng the Di strict by contractual
agreement with the administrator that only funds collected .would
be expended for the Di strict. It was always possible_ to use the
General Funds for such purposes if desired.
Councilmember Renzel pointed out the Council was under no. obliga-
tion to nee General Funds for any expenditures incurred by the
Di strict .
Ms. Lee said it had to do with the pul icy set by the Council
when it formed the District, the reports received, the Council's
discussions, the context in which the District was established and
the resolution setting up the budget. The Streets and Highways
Code said nothing about whether the Council could choose to aug-
ment District revenues from the General Funds.
Councilmeenner Renzel did not question the Council's ability to do
so, but the Council entered into an agreement to act as a coor-
dinator for the District on the understanding that no Generel
Funds would be spent. Now the City contemplated ated spending some
$35,000 on the District for services rendered which people paying
into the District received, albeit they might have paid more than
their fair share or nothing. If Proposition 36 had passed, the
Council would not consider the question as there would be no
money, and if larger sums were involved, the Council might not
look on it so casually. The City Council was led into the Dis-
trict with the full understanding it would not incur any expendi-
tures of , General Funds. There were any citizen demands on the
General Funds, and even though the numbers appeared small: every-
one went into it with their eyes open except perhaps the Council.
She did not believe moneys should be paid for services after it
5 2 7 5
12/3/84
As Corrected
1;8/85
was clear the District would not continue and there was a question
o whether finds would be available. As that was the basis on
which the City entered into the formation of the District, she
opposed the moti on and the refund .
Councilmember wool ley bel ieved the crucial word was "curtail .°" It
fi rst appeared in April, 1983 when the 1 awsui t surfaced. It was
misl ending as "curtail" meant "cut back" , not "cease" or "suspend
activities." During the last quarter of 1983 the City still
bel ieveci the 01strict would be successful. In November, the F&PW
Committee directed staff to find a different_ formula, but dissolu
tion of the Di strict was not discussed until 1984. It was reason-
able to pay the contractor for his expenses during the 1 ast quar-
ter of 1983. It was a different matter for 1984, when there was
no budget. During the 1 ast quarter of 1983, the contractors orch-
estrated the Christmas decorations, in stark contrast to what was
happening in the current year. It was a valid service the Dis-
trict performed . She asked the maker of the motion if he would
consider including the recovered value of the equipment assets
purchased with District funds into "the available funds on hand."
Councilmember Cobb said al though he did not know how much could be
recovered nor how easy it would be to do, he considered it reason-
able.
Councilmember Sutorius did ,not believe it should be spelled out
specifically, but left to the discretion of the City Manger
whether the equipment be recovered and put to City use or con-
verted to whatever cash it could supply.. He understood the equip-
ment was a typewriter, a calculator with tape, and meeting record-
ing equipment. He did not know what the cash value of that would
be 15 months later.
Mayor Klein agreed. He assumed if the City took the assets over,
it would credit an equal amount. If the motion passed, the debts
would come from the General Funds so it would not make any differ-
ence in the end .
Councilmember sutorius believed "curtail" was analogous to, but
not synonymous with, "decrease." Curtail had a much stronger
meaning than "cutting back." The word was used at a later point
than the Council might have understood-- in June, 1983 in a letter
from the Di strict to the City. He asked staff to confirm that
some $10,000 was received after the November and February bill-
ings.
Ms. Rudin said the total amount collected was over $32,000. The.
$10,000 was above the amount initially advanced by the City. As
moneys were received, the District credited them against the first
$22,000 plus interest. Above that, they knew they had to use a
further $10,000.
Councilmember Sutorius asked if the money came in during the time
frame from November to April
Ms. Rudin said the City conveyed two separate payments to the
District of approximately $3,000 in February and in March or
April . The bunk of the money was received prior to March.
Councilmember Sutorius said those figures coincided with his
earlier recollections that $3,000 came in mid -February and $3,100
came in mid -Apr it . Page 3 _ of the staff report (CMR: 485 : 4) sug-
gested the moneys .received at that juncture be used in the Task
Force process. Me asked for approximate charges associated with
the Task Force process.
Ms. Rudin said DPAI paid $3,438 for Task Force expenses E with the
City picking up some additional expenses.
5 2 7 6
1213/84
Counciln.ember Sutorius wanted it on record because staff and the
contractor were dealing with Council and committee peocesses
through the winter period. In November, 1983, there was a Commit-
tee initiated deferral to further consideration, even though the
proposal before the F&PW Committee in November or December, 1983
was to review a budget for the upcoming year. The City was,
therefore, party to an opinion being formed that the District
would continue, and there were other things that had to be inves-
tigated. In February, 1984, things looked dimmer, but there was
still encouragement to make a broader outreach into the community
which was capably made. The conclusions from it led to the ,pro-
posal that the District be disestablished. The point was that
moneys were on hand from the billings to cover the 1983 expenses.
Through Council Committee action, the City supported a new ap-
proach and expenditures of at least $3,400 out of the District to
support that exploration in 1984. Had those steps not been taken,
there would have been at least $3,400 to cover District expenses
that were now not covered. He considered the motion reasonable.
Yice Mayor Levy said it was a messy item which could be handled
legalistically in all its aspects, but which he believed would be
a mistake. Looking at what was right and fair for all , the pro-
posal was made by the contractor and strongly advocated and pur-
sued by him. It was the City's intention and action all along to
be only a passive means of facilitating the contractor's plans.
The Council agreed the result would be positive for the community,
but clearly intended that none of the General Funds be used . The
key element was that the Downtown organization was the active ele-
ment , not the City at any time, nor was it an active party to the
decision to try to keep the District alive after October 1983.
The City was passive, and tried to make the best of what had
become a messy si tuation. It was clear at all times the funds
available to the contractor would be limited to those collected.
It was true the contractor did positive work for the community
after those funds ran out, but it was right that the only funds to
go to the contractor should be those available in terms of funds
collected. He would, therefore, vote "no" on the motion. Many
people made their payments into the District under the assumption
they would be treated fairly and that all would make payments
fairly. Since that did not happen, he believed Council had an
oil igation, which it never expected, to return those funds.
Councilmember Fletcher endorsed Vice Mayor Levy's remarks. She
could not support the motion mainly because according to the staff
report, the contract between the City and DPAI stated specifically
that no funds should be paid to the contract in excess of what was
collected from the business charges. Had it been a City -initiated
project, and the Council urged DPAI to form the District and spend
the money, etc., she night feel differently. DPAI initiated the
formation of the Di strict, which regrettably did not work out. It
was their project,_ and the City was asked only to facil state the
process --not take on obligations. The City already gave gener-
ously of its time, and she saw no justification for making money
available from the General Fund to pay off debts for which the
City was not responsibl c.
Councilmember Witherspoon referred to the discussion of the
Oecember 31, 1983 budget and the Task Force. The Task Force
assignments were entered into and paid some time after January
1984, After obtaining confirmation from 'Ms. Rudin that it was at
the direction of. the F&PW Committee that those costs were
incurred, she asked why they were not paid before the bill s in the
budget that were incurred during the fall.
Ms. Rudin said, staff discussed the issue with the contractor. 1 He
was asked how eluth money was available for the Task Force and, as
a result of his figures, staff agreed a certain portion would be
applied to the Task Force ex pe n sa s .
5 2 7 7
12/3/84
raen a W e e• e• L c was
n n
Councilmember �. th�:r�pvon asked if there Mill suffice lent
money in the kitty to pay the expenses incurred up to December 31,
1983 under that year' s budget.
Ms. Rudin said they advised the contractor how much money was
avail abl e, and after asking how much was earmarked for expenses
al ready incurred, the bal ance was appl ied to, the Task Force. The
issue of salaries to be applied against the amount remaining was
not raised by the contractor at that time. The contractor made a
contract with Geoff Sall of the Forum on Community and the Envi-
ronment to lead the public meetings. When his expenses increased
beyond the point DPAI agreed it could pay, the City picked op the
subsequent bill ings so the second publ is meeting could be held.
Councilmember Witherspoon asked if the accounting fell apart
because such 1 ine items as sal aries were not incl uded
Ms. Rudin said that. was her understanding,
Councilmember Witherspoon said she felt an obligation because the
Task Force, which was a useful process, was initiated by the F&PW
Committee and was not a part of the understanding. It was unfor-
tunate that it was not a portion of the budget for 1984.
Ms. Rudin clarified the budget contained a large amount of money
for District member services. Staff believed the •Tack Force
effort fell within that category. The Committee had not directed
something that was not a part of the total budget.
Councilmember Witherspoon said it was not an inappropriate use of
the money, but staff knew there was little money there. Someone
had to decide how the money should be spent, and goofed by not
real izing that the line item re sal aries were omitted . She would
endorse the motion, because she believed that part of the deficit
was initiated by asking the DPAI to proceed with the Task Force,
which was a worthwhile process and money well spent. She was
will ing to take it out of the General Fund:
Mayor Kl ein said he would vote against the motion. Al though he
was concerned about all the comments raised, he found Vice Mayor
Levy's the most persuasive. The agreement from the start was that
no City funds would be expended. It would be a violation of that
spirit to expend moneys from the General Fund. He disagreed with
the motion, as he did not feel it was an appropriate rise of the
General Fund. He did not bel ieve the City misled anyone. On the
contrary, he bel l.eved there was insufficient erphasi s on the
expenditure of staff time in excess of what was promised at the
start and which was more than ever anticipated. The difficulties
were not in any way caused by the City. The City- bailed out the
Di strict when the earl indications of wide support turned out to
be incorrect. The City acted as a friendly conduit for the busi-
ness ,community, but it ended up with a huge problem: It was un-
fortunate, as the effort was good, but the City ended up spending
much time and effort, while it intended to spend. little. Taking
all those aspects into account, he was not in favor of expending
any City, funds to the contractor. The question of reimbursing
those who' paid into the District was different. He supported al-
locating the remaining $1,600 .pl us the value of the equipment for
paysent of the portion of the sums due to the directors and the
accountant bait, ;as a matter of principle, he did not bel ieve money
should be paid out of the General Fund.
NOTION PASSE by a vete of 5-4, Fletcher, Reuel, Levy, Melo.
v.ties moo.*
1
5 2 7 8
12/3/84
MOTION: Councilmember Bechtel norA, seconded by Levy, to adopt
the staff recommendations to:
1. Approve the ordinance to disestablish the Downtown Business
Improvement Area;
2. Authorize. upon application, refunds to those businesses which
paid their 1983 business charges to the Downtown Business
Improvement Area; and
3. Direct the City Manager to terminate the contract with Down-
town Palo Alto, Inc. for administration of the District and to
oversee the final accounting and distribution of the Dis-
trict's assets.
ORDINANCE FOR FIRST READING entitled 'ORDINANCE OF THE
COUNCIL OF T ALO ALTO DISESTABLISHING A
PARKINS AND BUSINESS IMPROVEMENT AREA KNOWN AS THE
DOWNTOWN BUSINESS IMPROVEMENT AREA ESTABLISHED PURSUANT
TO THE PART i OF DIVISION 18 OF THE CALIFORNIA STREETS
AND HIGHWAYS CODE • AND REPEALING CHAPTER 13.24 OF THE
PALO ALTO MUNICIPAL CODE'
Councilmember Bechtel commented, in response to letters received
and to some of that evening's speakers, that the idea of a Busi-
ness District was good. She hoped to see the idea brought forth
again in the not too distant future. One letter described the
parade in Los Altos the previous weekend and activities around the
holiday season Palo Alto would like to emulate if at all possible.
She commended those who worked hard. Her motion to disestablish
the Downtown Business Improvement area did not mean she did not
support such concepts. Addressiig the question of refunding busi-
nesses, she did not want to take money from the General Fund, but
believed there was an inequity situation the City was obliged to
redress. Hopefully, some businesses, in a spirit of goodwill and
support for the downtown, would not ask for it back. She hoped
the total amount would not have to be refunded.
Councilmember Sutorius obtained Councilmember Bechtel's confirma-
tion that the motion intended the refund to be made in the manner
recommended by staff --a notice then an application for the refund.
He subscribed to the comments she made about the concept of the
Oi strict and the hope that a process along similar lines would
come along in the reasonably near future. It would be an effec-
tive and beneficial process.
Councilmember Witherspoon said the staff wording was "authori e
upon application a refund." It was a good suggestion as it took
the burden off the City of chasing people down. She al so hoped
many people would not apply, for humanitarian or civic reasons, or
because they took it as an expense on their taxes the previous
year and would not want to refile.
Mayor Klein clarified the appropriate tax treatment was to take it
as income for the following year.
Councilmember Cobb said the F&PW Committee spent much time on it.
He believed they went off track in the assessment formula itself.
As was said, such a District was needed, as shown by letters
received and the absence of holiday decorations. The decorations
were virtually a single-handed effort by Tay Gallagher in previous
years. He was sorry they were not up that year. The' next time
around --hopefully not far. in the future --the Council should come
up with a better assessment formula to connect the size and .nature
of the assessment to the benefit received. If that could be made
to work better and be clearer to people, the support problems of
that yeer might no longer apply. He hoped they could go ahead
with somethieg, such as Councilmember Witherspoon's suggested
business license tax.' Instead of refunds, he wished some of the
5 2 7 9
12/3/84
money could be put into hol iday decorations to aet downtown back
to where it was the previous year, There was a lot of money to do
things to improve business, and it was unfortunate there was no
mechanism available to do so. He hoped at that point the follow-
ing year, decorations would be up and cleanups would be happening,
etc.
Vice Mayor Levy regretted he was not at the F&PW Committee meeting
and had not seen the minutes. He asked if the appl ication concept
method was being used for refunds because the City did not have
the names and addresses of those who paid.
Ms. Rudin said staff had kept a good record of those who paid, but
in comparing the 1 ist of those who paid in November through
February with the one used when come un is ati ng with all 800 busi-
nesses in June and when the notices of the public hearing were
sent out, staff noticed a constant turnover. Staff did not want
to issue checks to the list of those who paid six eionths earl ier.
They wanted to send a notice out to receive confirmation .that the
address was correct' or giving the correct address to which the
check should be mailed. Al so as was pointed out by some Counc il-
members, the method provided an option to those who felt a moral
obligation to pay for the benefits received to leave the money
with the City.
Vice Mayor Levy had problems with the method, !1e assumed if
refunds were returned and the business was not at the same
address, the refund would be either forwarded to the proper party
or returned to the City. It would then either be forwarded and
cashed by the proper party or returned to the City.
Ms. Rodin did not share his faith. She bel ieved the method sug-
gested by staff gave a further safeguard.
Vice Mayor Levy asked if she feared a check might be cashed by
someone for whom it was not intended.
Ms. Rudin said that was not her fear, She assumed a number of
checks would be returned to the City.
Vice Mayor Levy bel ieved the Council was adding another compl ica-
tion and opportunity for :,embers of the public to get upset with
the Council by making them go through the process of making sure
they were informed, then returning to the City to ask for the
refund the Council determined was rightfully theirs. It was
improper. There were many people who wanted the fee back who
would not hear about the refund, particularly if they moved out-
side the area. If the City knew who made a payment, it should
refund it to that person. There was no question in his mind of
the checks being abused. Refunds occurred all the time. He
endorsed a direct concept rather than another cumbersome oppor-
tunity for the public to get mad at the Council. It was fair to
refund what was unfairly collected. It was improper to try to put
the onus on a business that applied for a refund. The Council
should not now go for charity, as they were telling the public
that although something happened that was of benefit to them, they
were nevertheless entitled to a refund.
Councilrsember Woolley concurred with earlier comments. PSuch work
went into the district, which was not 1n vain, One speaker asked
that the District be continued, but that was not necessary to pre-
serve the work that went into it They had the experience and the
record, which should make the second time a more successful exper-
ience. She supported making the refund to pave as smooth a way as
possiblefor an eventual successful downtown organization.
5 2 8 0
12/3/84
Councilmember Renzel saw the question of fairness differently.
She requested a procedural revision of the question with respect
to di sestabl ishment of the District and the repayment. A number
of people were billed, and some paid. Value was received by all.
The only equity issue was that a few had not paid. Value was
received, and the Council was too anxious to be fair and give
people more than their share of the refund. The Council also had
to consider fairness when citizens came in petitioning support for
various projects such as a restroom in .Greer Park but were told
the Council could not come up with $20,000. In the present issue
people received value. They would not only get the part they paid
for that someone else had not paid for, bus were also getting
their money back.
SUBSTITUTE MOTION: Councilmember Reazel moved that the refunds
should be a pro rata share of the balance as though all members
had paid in.
SUBSTITUTE MOTION FAILED FOR LACK OF A SECOND.
Councilmember Fletcher believed the project was worthwhile.
Unfortunately, the downtown businesses were no►t unified on the
purposes and manner of assessments before they requested Council
approval of the budget. She believed the City did what it could
to bail the District out after it started sinking. The groundwork
was insufficient to get it off to a good start. Thedowntown bus-
inesses now realized that, and would try to return to the Council
with a unified voice next time. She was confident it would
happen, and encouraged it as something was needed to unify the
efforts to improve the downtown and put on special events. She
did not believe it was a burden to return an application when an
individual ;new he. would get a refund in return. There were more
burdensome things than filling out a short form to verify the bus-
iness was 'still in existence and would like a refund.
AMENDMENT: Mayor Klein moved, seconded by Levy, to strike the
words upon eppl icationa from section 2 of the motion.
Mayor Klein believed a noble effort failed, and should be ended as
quickly as possible. To extend it through a further round while
people sent out an appl ication for a refund was unfair and unwi se,
and the idea that people might forego their refundswas misguided.
Those who did .would not help the downtown area because the money
would go back into the General Fund and it would be a trap for the
unwary. It was not an acceptable way of getting money into the
City coffers. People should make a positive step to contribute,
not as an act of default. The bureaucracy also concerned him r
Councilmember Witherspoon was opposed to the motion. She had more
faith in the goodwill of people in the downtown, and if the appli-
cation for a refund went astray, so would the check. She pre-
ferred to have it settled within a time period. The application
method set a time limit, and she preferred the original motion.
Councilmember Ren zel agreed with Councilmember Witherspoon. Since
value was received by many businesses, some would forego applying
for the refund. It was preferable that a letter and not a City
check end up in the dead letter office The staff procedures
should be followed. She emphasized that value was received, and
it Was a mistake to say they got nothing for their money. The
City was being overly generous. She reminded her colleagues of
the matter when they had to turn down requests from other citi-
zens.
AMENDMENT FAILED by a rote of 2-7 Klein, Levy voting 'aye.'
MOTION DIVIDED INTO THREE PARTS.
5 2 8 1
12/3/84
MOTION CONTINUED.
FIRST PART OF MOTION TO DISESTABLISH THE DOWNTOWN BUSINESS AREA
PASSED UNANIMOUSLY
SECOND PART OF MOTION TO AUTHORIZE, UPON APPLICATION, REFUNDS TO
BUSINESSES THAT HAD PAID CHARGES TO THE DOWNTOWN BUSINESS IMPROVE-
MENT AREA PASSED BY A VOTE OF 8-1, Renzel voting 'no."
THIRD PART OF MOTION TO TERMINATE THE CONTRACT WITH DOWNTOWN PALO
ALTO INC. AND DISTRIBUTE THE DISTRICT'S ASSETS PASSED UNANIMOUSLY.
Mr. Laner said staff would bring back the necessary budget amend-
ment for the refunds on the Consent Calendar the following week.
RECESS FROM 9.25 p.m. TO 9:40 p.m.
ITEM #6, FINANCE & PUBLIC WORKS
ELECTRIC RATE- INCREASE TO
UTILITY RATE SCHEDULES E -I
U I
COMMITTEE
RECOMMENDATION RE
�I"WG TL1DCTRIC
- E•? ,
MOTION Councilmember Cobb for the Finance and Public Works
(F&PW) Committee moved adoption of the resolution revising the
utility rate schedules E-1 through E-4.
RESOLUTION 6332 entitled 'RESOLUTION OF THE COUNCIL OF
THEE CITY- OF PALO ALTO AMENDING SCHEDULES F-1, E-2, E-3
AND E-4 OF THE CITY OF PALO ALTO UTILITIES RATES AND
CHARGES PERTAINING TO DOMESTIC, COMMERCIAL, CUSTOMER -
OWNED GENERATION, AND STREET AND HIGHWAY LIGHTING RATES"
Councilmember Cobb referred to the F&PW Committee minutes and the
staff report, which showed the increased costs to the utility were
being passed on to the ratepayers with a two month real rate
relief. The F&PW Committee emphasized the importance of clear
explaining to the ratepayers the nature of the increase and why
occurred, as well as pointing out that there would be the t
month relief period.
Councilmember Renzel pointed out that although the consumption by
large industrial users was ten times that of commercial users, the
percent rate of increase was lower for thew. As the incremental
cost of any power over the allocation would be high, that increase
should be borne by the greatest users, as they would push the City
over the top so that everyone would have to pay much higher rates.
There was a slightly lower cost of service if only direct costs
were considered; however, factoring the rest in might constitute a
reason to change the percentage.
Director of Utilities Richard Young said the point was discussed
at the F&PW Committee and staff looked at the relativity between
demand ---the price paid by the City for the extra capacity over its
limit, and energy --a basis of whatever the City wanted to take.
The relative differences were incorporated.
Manager of Rates and Regulations Randy Baldschun said the point
was raised by Councilmember Cobb, and the report indicated the
different increases in customer classes were due to the different
load factors, which took into account the customer's demand and
energy. The residential customer was charged for energy onl
whereas an industrial customer had a demand meter in addition
the kilowatt/hour meter. The current increase included a 38 pe
cent increase in the demand charge, and an eight or nine .percent
increase in the kilowatt/hour charge for industrial customers.
The high load factors were typical for industrial customers.
Because the energy component of their rate increased by ` a lesser
rate than the demand charge, the increase in their total bill was
5 2 8 2
12/3/84
less than that of smaller or average commercial customers with
poor load factors. Staff tried Lo si9nul their customers on the
rare of use, which was translated into demand charge. There was a
175 megawatt limitation with Western Area Power Administration
(►'PAPA)-, Applying a higher increased to the demand component of
the customer' s bill sent a signal. The total kilowatt hour usage
was relevant, but not so much as the demand component of the
bill.
Councilmember Fletcher asked whether multi -family developments
such as the Greenhouse, Lytton Gardens, and Stevensen House were
considered large, residential, or commercial.
Mr. Baldschun said multi -family residential housing was determined
by whether there was a master meter or whether the residences were
separately metered. In the latter case, the residential tariff of
an 11.1 percent increase for 500 kw/hour monthly usage applied.
Common lighting and/or laundry facilities fell under the E-2 non-
residential rate schedule. Depending on usage and whether they
were on a demand meter, the increase would be from 10.9 to approx-
imately 14 percent.
MOTION PASSED unanimously.
ITEM #7, FINANCE & PUBLIC WORKS COMMITTEE RECOMMENDATION RE POLICY
UIDELINES FOR 1985-86 AI NUAL BUDGET (FIN 1-16-1)
MOTION: Council ember Cobb for the Finance and Public Works
Committee coved adoption of the Policy Guidelines for the 1985-86
Annual Budget with modifications as underlined:
1. No overall increase in City operating expenditures (adjusted
for inflation) is anticipated, and existing service commit-
ments should generally be maintained;
2. Prudent levels of reserves should be included for the City's
several funds;
3. Continue to investigate new sources of revenue necessary for
future needs of the community;
4. The 1985-88 Budget and 1385-86 CIP should focus on:
a) implementation of legally mandated services/facilities;
b) City Cosncil policies regarding service levels;
c) coati need implementation of parts of the adopted Covapre-
Aeas1vePlan;
S. The adopted 'CIP should be recognized es a priority plan for
the development and implementation of capital projects. New
projects skoald be carefully iot.grete4 into existing plans;
5. Departments sbobld continue to examine and implement ways to
mate City -sponsored programs aid act1 v 1 tl es mere sel f-
sspporti ng,
7. The eudeet should accommodate the continued implementation of
energy pleasing add development pojects;
8.. The Iedgft should accomredete cootieued inteoration of
computer -based data systems to acme economies and
efficiencies;
9. The Widget should 'Peke provisions fgr the coati aced. execution
of the City Council Surplus Scheel Site Policy Plan, plus
incl ode filter. plans for middle schools. and Cgbberl e, ;
10. The Widget shoal d o.aedate CATV i n whatever form it might
be implemented la Palo Alto;
5 2 8 3
12/3/84
MOTION CONTINUED
11. The Budget should accommodate accelerated infrastructural
renewal and identify incremental costs;
12. The Budget should. target and implement long-term savings and
productivity through more efficient use of City staff and
resources;
13. The Budget should be developed to conform with Article XI I I of
the California State Constitutions the appropriations limita-
tion measure enacted by the voters of Cal i fernia 1n November,
1979.
Gouncilmemb.er Cobb said the Council did not have the minutes of
the FSPW Committee as the Committee meeting was long and it was
not 'real istic to expect staff to have all the material ready. The
Committee discussed policy issues, which . was a new, useful and
important step in the budget p•ocess and covered many things,
including the need to accelerate the improvement of the infra-
structure. Also, more emphasis was placed on implementation as
against things that needed to be done, and staff underlined the
changes. In item 1, the word "operating" was inserted because
the new item 11 implied the possibility of additional funds for
the infrastructure. The Committee wanted operating expenditures,
cost -adjusted for inflation, to ba held, while holding the door
open for possible extra expenditure on the infrastructure. Item 6
had the words "and implement" added to indicate that effort should
be made to make the City' s programs more se1 f -supporting . In item
8, the Committee emphasized the computer should pay for itself
through the economies and efficiencies computers were supposed to
provide. Item 11 emphasized the need to move ahead more rapidly
on infrastructure renewal and identify the associated costs. The
addition to item 12 showed the Committee desired not only long-
term savings and productivity as a goal , but al so made to work.
Councilmember Fletcher referred to Item 1, which said there should
be no overall increase in City operating expenditures. Just that
evening they discussed increased staffing for the auditor` s
office. When cable TV started, staff time would be devoted to it.
She asked whether it was a realistic pol icy to adopt. Since staff
suggested the policy, she asked what would be dropped in order to
make room for the increased staff.
Mr. Zaner said the word "operating' was inserted by the Committee
as a result of Item 11. Ue understood it meant regular ongoing
operating departments should not increase in their service level
beyond inflation costs, and that economies should be sought el se -
where to accommodate additional costs for infrastructure. It was
only reasonable to expect that if the City wanted real work done
on . infrastructure --road, sewers, and major capital expend-
i tur'es-- i t should expect to spend more money and possibly , get more
people. If capital contracts only were involved, it would mean
mostly money, but additional staff might be needed to \support
those contracts.
Councilmersber Fletcher said she meant staff in ongoing operational
areas.
Mr. Zeiler did not foresee many increases .in that area. They were
working om the budget process, and that day the departmentswere
given rough numbers as targets for the following year. If depart-
ments exceeded that sum, he would immediately look for the reason.
Departments would meet with him before December 21, 1984 to dis-
cuss new personnel. They were early in the game; and he did not
anticipate the addition of many staff --some extra employees in the
p 1 ice department and a few others scattered throughout the organ-
ization, but not a massive number.
Vice Mayor Levy said no priorities were listed among the 13 items
and he asked if any emerged at the F&PW Committee meeting. Item 1
said "no overall increase was anticipated," in contrast to the
other items, which outs fined what should not happen.
Councilmember Cobb said Vice Mayor Levy was reading more into the
different wording than the Committee had, but he did not recall
any discussion of priorities. The items were presented to the
Committee as set f-consi stent, and the Committee's addition of Item
11 led to the insertion of the word in Item 1 to keep them sel f-
consi stent..
Director of Finance Mark Harris agreed. Wherever priorities were
set, specific items were mentioned. ..The first guidelines were
general and covered most budget areas. Items 9, 10 and 11 dis-
cussed specific areas and so expressed some priorities in the
General Fund $40 mill ion budget that had many programs. No par-
ticular order was shown.
Vice Mayor Levy wanted to see_ Items 1, 9, 10, and 11 emphasized on
the spending end of things, and any of the short and/or long-term
savings in improvements in efficiencies referred to in the guide-
lines should also be given high priority. Referring to item 10,
CATV, Mr. Zeiler indicated that the expenditures should come
directly out of revenues, and that there should be no CATV expend-
itures in excess of revenues. He asked if that was a fair state-
ment, and if it should be added to the gui del Ines.
Mr. Zaner said it was a fair statement, with the caveat that at
present there were no CAT' revenues. As they geared up, expendi-
tures would be necessary for . staff and other costs. Once the
system was in operation and generating revenue, he intended that
the fees it returned to the City and the partners be sufficient to
cover the costs.
Vice Mayor Levy obtained Mr. Zaner' s concurrence that in fiscal
1985-86, as CATV would not be up and running, it would.: not be
appropriate to limit it, although in subsequent years it would.
Councilmeaber Renzel referred to item 7 re energy planning and
development projects. She understood the City .had to seek: alter-
native energy sources , but asked what kind of .commitment - was made
by setting such a budget criterion. any things in the budget
were not 1 isted specifically, whereas that one was.
Mr. Zaner believed the Council was not making a commitment on any
of the items, but were providing him with some guidance as he pre-
pared the budget he was required to give the Council under the
provisions of the charter. It gave him some idea of the things
the Council considered important and on which he should spend
extra _time or emphasize with department heads. Such items as Item
"r were included in the budget. In the past the Council _ gave
prioe ty to energy conservation, projects and devel opment. The
guidel fine was further reinforcement, not only to him but to others
who reed the document. The staff would understand the ` need to
think and work on those matters. It did not commit the Council ,
as it would have the option of adding or deleting an item when the
budget came before it.
Council►aember•. Renzel obtained confirmation from Mr. Zaner that
energy planning ` Included energy conservation. . She presumed that,
as individual budget items were tapprpved individually, if an
undesirable project showed up. later, Council would not be told it
set it as a priority.
Mr. Zeiler : said the Council would not find an undesirable project,
but it might find an inappropriate one and remove it. He would
not use the guidelines,. which were general and only a direction
pointer, to say the Coencil had told him to, put an undesired
project into :the budget.
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MOTION PASSED unanimously.
ITEM #F8, AMENDMENT TO THE DOWNTOWN MORATORIUM TO PREVENT SUB-
UiVISIdNS AHD MERGERS OF LAND (PLR 3 -IC -If {S IR:59O:4]
Chief Pi anning Official Bruce Freel and said the staff report
explained the item closed a loophole inadvertently left open in
the existing Downtown moratorium.
Councilmember Cobb referred to page 2 of the staff report
(CMR:590:4) concerning the exception process, and obtainers Mr.
Freeland' s confirmation that the same exception process was evail-
abl a to anyone who wanted to apply, and it would work in the same
way, with the same kinds of criteria.
Counc it mew. ber Witherspoon asked how long the _ rsoratori um ran.
Mr. Freeland bel ieved it ran until September, 1985,
Councilmember Witherspoon said there would not be a lengthy period
for lot mergers, and it was unrealistic to worry about it hap-
pening. However, subdivisions were mentioned, and condominiums
and office/housing units were technically subdivisions. The ordi-
nance would preclude any subdivision of an office building or a
residential structure.
Mr. Freeland said if a residential condominium came in, it would
be easy to find the exceptions under presently existing provisions
re public benefit in the exception process, and if there was no
adverse impact whatsoever on employment or traffic, but instead it
added to the viability of an office building, it would be a candi-
date for an exception. He was unaware of any office/condominium
proposals. The few they had were in connection with new building
projects.
MOTION: Councilmember Menzel united, seconded by Bechtel, adop.
tins, as an urgency actin'', of the ordinance amending the Downtown
Moratorium.
ORDINANCE 35$9 entitled 'ORDINANCE .OF THE COUNCIL Of THE
CTTY-""FALQ ALTO AMEMDIN THE ORDINANCE IiIPlSIMG MORA-
TORIA IN THE DOWNTOWN AREA TO PREVENT SODDI-IISIOM OF
LAND AND DECLARING AN EMEROENCT2
Councilmeraber Renzel said the moratorium was approved to preserve
the City's. planning options in the first place. It was clear from
the staff report that there was reason for the City's enncerns
that its planning options might be significantly reduced, espe-.
cially with respect to largely vacant land, if. subdivisions' were
not included in the moratorium. She urged her colleagues to sup-
port. the motion as all wanted the downtown to be somewhere citi-
zens liked to go end not be overwhelmed by massive office build-
ings and insurarountabl e traffic. It was important to preserve
every possible option.
Chop Keenan, 3000 Sand Hill Road said staff advised him one week
earlier there would be -a public . hearing on the potential *ora-
torios, which ran counter to views on downtown parking and traffic
when an ordinance requiring on=cite parking for offices and retail.
was passed. As a minority among the downtown property -owners, he
supported the ordinance. A• moratorium on any future building"
downtown until the situation was assessed Was passed. Now there
was a: lot merger and subdivision moratorium. . A 15,000 to 20,000
square foot lot was necessary for on -site parking. There were few
such lots in the downtowns and few opportunities to create them
due to current`,econoreics and highcosts. On -site parking and . lot
conglom®ration• was. an ongoing, risky business. People should:
allowed' to take advantage of oppertunitiee'. _. At 300 Hamilton
parcel -Tines that were• never *raised ran through • the middle of the
building. He wanted to rearrange the lines to create a parcel . out
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i
of the parking lot which might in the . future be developed into
subterranean parking of a viable size. The Council would control
the ultimate use of what was erected on the property. The future
floor area ratio and the parking requirements were not being
judged. Staff was overreacting to his request and another on Alma
Street. The Wells Fargo building at 400 Hamil ton was five
individual parcels before the merger, without which its 400 car
parking garage would not have been possible. The floor area ratio
was not 3:1 but 1:2 or 1:3. It did not push the limits of avail-
ability, but accomplished a civic objective-- more parking for
downtown buildings. The building was 95 percent occupied by
companies and partnerships already in downtown Palo Alto. He
wondered what effect the opening of the garage on February 1, 1985
would have on Palo Alto`s parking, as most of the tenants current-
ly collected tickets or moved their cars in the downtown. The
Wells Fargo building allowed successful buildings to expand and
stay in the downtown. The price of prosperity was not having to
move out. of town. They accomplished something by virtue of being
able to accumulate lots and create on -site parking. He said the
Council had sufficient safeguards in the current moratorium. The
ordinance was overkill and in ..contradiction to everyone's goal to
create on -site parking 1n downtown Palo Alto .
Councilmember Fletcher said the existing parking ordinance did not
cover the entire need for the buildings as it exempted the ground
floor, and therefore, intensified the parking shortage. It was
the concern of the City to not intensi fy the jobs/housing im-
bal ance. The more jobs created_ put more pressure on housing and
increased traffic entering the City as there was insufficient
accomi odati on to house the new workers. Furthermore, the major
concern of the citizens of Palo Alto was not only the parking
downtown but the massiveness of the buildings that recently sprung
up. She found them offensive, and could not accustom herself to
their si ze . The staff report recommended the action to not al ter
the pattern of future developments in ways that could compromise
the effectiveness of the downtown study. If the lot mergers were
allowed to occur with continued . large buildings, the downtown
study options were limited . The study might finally recommend the
Council continue in the same vein; however, she wanted to leave
the options open. It was important to keep them open and put the
1 invited time frame moratorium into operation.
Councilmember Witherspoon opposed the ordinance.. She found it
neither particularly appropriate nor relevant to the purpose of
the original moratorium', with which she had major problems. She
hoped the report would be back in less than eight months, and she
did not see that allowing a property owner to combine lots was a
threat to an 'eventual decision about what the Council wanted the
downtown to be like. ho matter how many lots were assembled, no
one could build. They would probably only, be allowed to build
under conditions the Downtown Committee and. the Planning . Commis-
sion determined were in the best interests of the City.
Vice Mayor Levy was not enthusiastic about the degree of the mora-
torium in place although he agreed with the concept that a, mora-
torium of some sort was called for -while the downtown was studied.
The staff arguments about subdivisions and mergers were appro-
priate. The purpose of the moratorium was to create- a static
situation that could be studied and actions taken. It was another
element of holding things constant to allow the necessary overall
study to be grade and a plan conceived that was Intel I lgent with
much forethought; one could carry the City through many - years to
come.
Council*e*ber Renzei der led that prohibiting lot mergers reduced
the impacts of what the Downtown 'Study chose,. but once the lots
were created, the Council had to deal with them as they existed.
The ordinance would prohibit subdivisions during the period of the
moratorium only, and there was -no urgency in getting a subdivision
5 2 8 7
12/3/84
as no building could be done during the moratorium. It was sensi-
ble to f irst
e see the r=e;o +a of uacions of the Downtown study. When
businesses moved within the downtown, the vacated premises did not
remain empty. There was an overall net increase in activity down-
town. It was symptomatic that Hamilton Avenue in Crescent Park
beyond Seneca and Hale had double sets of reflective markers and a
double line beyond Chaucer. The double yellow line changed the
character of the fine residential neighborhood, and suggested
traffic could go faster and that it was no longer a quality neigh-
borhood, That impact came from the intensification downtown. The.
Council should preserve its remaining options.
Counc ilmemher Sutori us said when the Downtown Study recommenda-
tions went through the Planning Commission and Council process,
they would have to show imagination, flexibility and challenge.
The City would look to people such as Mr. Keenan to take maximum
advantage and express creativity. It would be nice to support him
at that time, but the Downtown Study was so all -embracing and
explored so many different concepts that it was probably sound to
act on the recommendation from staff. There was an exception
process in the moratorium for subdivision control . If a project
had overriding public benefit, it could go through on the excep-
tion process. He supported the motion,
Mr. Freeland said the map of the moratorium should be marked
Exhibit "A."
NOTION PASSED ON At EMERGENCY BASIS by a vote sf 8-1,
Wi tfrsrsposs a . °
ITEM #9, ORDINANCE RE HOT TUB, SAUNA, AND MASSAGE PARLOR ESTAB-
LISHMENTS ` LEG 662:�t�
Chief of Police Jim Zurcher said the staff report recommended a
change of operating hours for the existing Body Therapy Center and
the Watercourse Way sauna establishment to provide for closing
between 2:00 a .m . and 6:00 a ;m .
Councilltember Cobb understood that the ordinance would..give the
Chief of Pol ice the authority, after an operation was in existence
for one year, to rule such hours of operation appropriate. The
proposed ordinance appeared to have been drawn up for a specific
operation that was a complement to the community. He asked if
such a rul ing would be automatically rescinded or only in response
to public outcry, or would such longer hours be allowed in per-
petuity if, after a .longer period, an operation became less
acceptable to the community.
Mr. Zurcher expected any evidence that warranted rescinding such
an exemption would. come to his attention, after which the hours
would be returned to the 11:00 p.m. closing,
Councilmember Cobb said the ordinance was silent on the subject.
City Attorney Diane Lee said there were prow isiorrs' in the Code for
revocation or suspension of licenses for cause, It would depend
on the quality of the unacceptability to the community whether
there could be a backing away from the hours in a particular case.
It would have to meet the criteria established in either Chapter
4.04 or the Chapter governing hot tubs or saunas.
Cauncilme*ber Witherspoon also -noted there was no -time limit in
the ordinance. After one year's good behavior, she understood the
Chief of Police granted an operator -the new hours' indefinitely.
She believed it better to extend the Aour:s fors _a certain period of:
time, after, which the appl icetion for continuance would -have to be
renewed. She asked i f i t woul d be,.1 ess of . a • burden ` on the City to
have cause for not granting- _an. extesion,
52 88
12/3/84
}s .co tic id presently the ordinance reeu 1 r ed every license be
renewed annually when, depending on the situation, the hours could
be pulled back to a i esser number.
Counc ilmember Witherspoon pointed, out cause would have to be shown
to do so. Once the extended hours were granted, .a good reason
would be required for withdrawing them.
Councilmeraber Bechtel believed sufficient cause could easily be
shown. If the.. permit hard . to .be renewed annually through the
Poi ice Department, violations o.f the ordinance --a inappropriate
activities or noise .or any other. nuisance --would be..sufficient
protections to :change the hours. Ultimately, the ordinance could
be revised at a future date: ;if it was -found the Pol_ic.e Department
was not as tight in enforcing the regulations or in issuing per-
mits as the Council would like. She was approached several years
earl ier by some of the groups listed and found it reasonabl e to
extend their hours to provide early morning massage or hot tubs.
Co unc i i m ember Renzel said al though people in the neighborhood
might not object to the ordinary noise of shutting car doors at
10:0D p.m., they might well object at midnight or 2:00 a.m. It
might be hard to distinguish, but for purposes of revocation, the
noise was . more " disturbing at 2:00 a.m. than at 10:00 p.m. It
might not be so easy to determine cause if, the ,kinds. of noises
that during the day were acceptable were made at night. The.
nuisance might . not be boisterous or unruly clients, but simply
unwelcome noise long after neighbors had gone to bed. She was
concerned, and suggested the Chief of Police increase the hours
incrementally to see what .happened. She asked if it was possible
to structure into the ordinance some easier process .by . which the
hours would have to be reaffirmed.
Ms. Lee said incremental increases could .be structured into the
ordinance, ue the Council could pass an ordinance that evening to
do so legislatively, by allowing the hours to change by one hour
in either direction. • It was always easier to deal with an• issue
1eeislativo1y, as there was not the same due- process arguments
that arose with an individual applicant, who could claim prejudice
or `reliance and the other things the Council was accustomed to
hear of: in tha.t:context. _
Donna. Gerry, 718 Maplewood Avenue, was a partner. of the Body
Therapy Center. They asked for an extension of the `hours: to _give
yoga and exercise c1 asses in the morning. Regarding noise, she
pointed out the law forbade message and hot tub .establishaents to
open within 2.50 feet of .a• residential district or :a .school = Al so ,
by the nature of their. establishment, they. wan ted .to maintain a
peaceful, quiet atmosphere. Noise would not be of _service to
them. It would benefit the. community to • have. their services
available • during non -working hours.., . The . community was . heal th
conscious, :and wanted to: relax with hot tubs . and - mas.sages and
exercises outside of regular working hours.
Susan Nightingale, t65 Channing Avenue, was an owner of Water-
course Way. They - were in business for four years without com-
plaint about noise or disturbances. The staff found that out. when
researching them and: reeking them° recommendation.
Councilhember Cobb wanted •tco add an amendment -making the _hours,
once granted, subject at the annual 1 1censin9 , , to .continued
Main.tenanc"e of the criteria of the ordinance.
Ms. Lee had no objection,. but .preferred ._ta present. the appropriate
1 anguage to the Council at a later date.
oT!o1z Mahar mein : moved, seconded bar'tiny, to approve the
•r4Ireenc• . in concept.
ra 2 : 8 9
12/3/84
moTIOP. Co T1NUEU
ORDINANCE IN CONCEPT entitled "ORDINANCE OF TKE COUNCIL
o ALTO AMENDING TITLE 4 (011SIMESS
LICENSES AND REGULATIONS CODE) REGARDING Tl#E PERMISSItLE
HOURS OF OPERATION FOR NOT TUR, SAUNA, AND MASSAGE
ESTAILISMNENTS"
AMENDMENT: C•incilasaber Cobb moved, seconded by Fletcher, t•
add Section 3 'that; these boors once granted geoid be sabsect at
the meal liceasiag to contused maintenance of the criteria of
the ordi nance.'° CI ty Attorney to prepare precise language and
bring back to Comacil for f{rst reading.
Councilmember Cobb did not intend to create an onerous situation
for a positive contributor to the community. It was a simple
protection against someone who did not operate his establishment
o►e the same basis, and it gave an easy way to return them to the
hours initially given. It would not put the City into a difficult
process.
AMENDMENT PASSED snasiasesly.
MOTION AS AMENDED PASSED neaaim•usly.
ITEM #10, REQUEST OF MAYOR KLEIN RE RESOLUTIONS FOR DOWNTOWN
CHARS pARTIC1rA4 TS (PLA 1-2)
Mayor Klein suggested that staff prepare resolutions of apprecia-
tion for Professor Paul Neel and the students who participated in
the Downtown Charette on November 2-4, 1984, the designs for which
were on the walls of the City Hall lobby, and to Virgil Carter for
his leadership role and assistance in the Downtown Charette. The
students from Cal Poly in San Luis Obispo did a fine job. Members
of the City staff, George Zimmerman, in particular, did yeoman
service in bringing their ideas to the City's attention. He hoped
the Charette would continue in the future.
MOTION: Mayor Klein erreved, seconded by Cobb, that the fol-
lowing moieties* •f appreciation be prepared fifer the December
10, 19$4, agenda.
1. Professor Pail Neel and the students who participated in this
event, and
Z. Virgil Carter for his leadership role and assistance in the
U#elstown Charette.
Vice Mayor Levy believed it would be helpful for the discussion
the following week if 15 minutes could be set aside for a presen-
tation in more detail of the drawings, so that those who had
difficulty in reading architectural renderings could get a better
idea of the concepts involved.
Mr. Zaner said staff was preparing a brief presentation and sum-
mary for those who had not seen them.. He was not sure It would be
reedy for the next week, but it would be cal endared.
Coenc iimember Fletcher said she attended the students presenta-
tion in november, , and was most impressed. They came up with
innovative ideas, some of Which she heartily endorsed. She hoped
the project would not be forgotten after it was looked at, as the
City should pick up on some of the ideas.
MfTISW PASSED raasi*eess!y._
5 2 9 0
12/3/84
ITEM *11, REQUEST OF COUNCILMEMBER RENZEL RE SUPPORT FOR GOLDEN
GATE COUNCIL OF Wit A
HE CALIFORNIA PARK KM) RTCRTITTU
FAC1L -TIES BONI ACT -Or 1984 -.(PLA -9-2-2)
Councilmember Renzel said that when the plans for the Arastra
property were considered, the Council conceptually approved a
Youth Hostel in the house there, subject to Nan conditions. The
Golden Gate Council of American Youth Hostels applied for a non-
profit organization grant under the California Park and Recreation
Facilities Bond Act --Proposition 18 on the last ballot. They were
told informally by the staff reviewing' the proposal s that, due to
the large number of -conditions the Council had put on the item, it
was not considered supportive of the hostel . She suggested a
letter be sent to the Director of Grants Administration showing
Council support of the grant, with any additional language about
the conditions under which the hostel was approved. She assumed
it would be for a hostel development consistent with the Council's
approval .
NOTION: Coencilmember Rem] sieved, secesded by Bechtel to
direct the Mayorto send a letter ea behalf •f the City Council 1 to
Russell Porter, Director of Grants AMministratiau, State Depart
pent of Parts and Recreation, Sacramento, advising the State that
the City -of Palo Alt* is seppertl ve of the Golden Gate Coaac l l' s
application for fends to place a youth hostel on the Arastra
property.
David Stewart, 1550 Middlefield Road, chair of the Youth Advisory
Council, asked the Council to support the motion as the proposal
fell under the jurisdiction of the Youth Council He also thanked
the City Council, the Police Department and the School District
for considering the Council's recommendations regarding substance
abuse.
Councilmember Renzel was pleased with the Youth Council ' s
interest in the proposal , but was concerned about the urgency in
getting the letter off as there was a time deadline associated
with the applications for grants. As the detailed plans for the
hostel would return, she offered to include directions into her
motion to refer them to the Youth Council for input.
MAKER AND SECOND AGREED TO ADD LANGUAGE TO DIRECT THAT PLANS .FOR
A HOSTEL ON THE A*ASTRA PRIWERTY, IIMEYi RECEIVED, DE GLYEiI TO TILE
TOU'TR AOYIS4RY COUCH. FOR INP$.T.
Tice Mayor Levy said when the matter was originally discussed, he
had _ not voted in favor because he believed it was an inappropriate
expenditure of money. The value of the property on the site was
approximately $1 million, and would serve a fairly small number of
persons coming through each year. For a portion of that sum, an
alternative situation for the hostel could be found, and the site
could be maintained in a way not inappropriate for the Arastra
space. The Council would have o substantial sum to move ahead
with plans for Arastra more rapidly. . He` still believed it inap-
propriate to devote the site to a Youth Hostel% although he agreed
with the wisdom of having a hostel in Palo Alto. He would, there-
fore, vote against the measure.
NOTION PASSED by .a vote of 7-2, Levy, Y1 thersprew r•tiap mms"
ADJOURNMENT
Council adjourned at 10:45 p.m.
ATTEST:
APPROVED:.
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