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Home My WebLink About1983-04-25 City Council Summary MinutesCITY COUNCIL MI N1JTEs Regular Meeting Monday, April 25, 1983 ITEM Oral Communications Item #1, Resolution of Appreciation to Jack S. Nelson upon his retirement Item #2, Resolution re Tenth Anniversary of Resource Center for Women Consent Calendar Action Item #4, Front and Rear Easement Power Line Clearing Item #5, Agreement for Recruitment Advertising Services Item #b, Seismic Hazard Study Agenda Changes, Additions and Deletions Item #7, Foothills Park Erosion Control Project Item #8, PUBLIC HEARING: Planning Commission Recommendation re application of the City of Palo Alto to extend the (P) Pedestrian Shopping Combining District Item #9, PUBLIC HEARING: Planning Commission. 3 2 0 0 Recommendation re Change of Zoning for Parking Lot Q CITY OF - Mt 0 �i.IC) PAGE 3 1 9 5 3 1 9 5 19 6 3 1 9 7 3 1 9 7 3 1 9 7 3 1 9 7 3 1 9 7 3 1 9 7 3 1 9 9 Item #10 PUBLIC HEARING: Resolution Ordering 3 2 0 5 Changes. and Modifications for University Avenue Offstreet Parking Project No. 52-13 Item #11, Second Amendment to Option Agreement 3 2 0 5 Parking Lot Q Air Rights Project Item #12, Issuance of Utility Revenue Bonds 3 2 0 5 Dewatering and Cogeneration Project Phase I Item 03, PUBLIC HEARING: Draft Cable 3 2 0 7 Television Minimum Requirements ITCH Item #13, Request of Vice Mayor Fazzino and Counciimernber Cobb re Study of Midtown Area Amortization Item #14, Request of Vice Mayor and Councilmentber Cobb re Transient Occupancy Tax Adjournment PAGE ' 2 2 G - 3 2 3 8 3 2 3 9 Regular Meeting Monday, April 25, 1983 1 he City Council of the: City of Palo i 1 to net on this day in the Council enambers at City Ha 1 1 , l5U Hamilton Avenue, Palo Alto, at /:30 p.m. I'RLSLU i : Bechtel, Cobb (arrived 7:50 p .rn. ) , Fa zz i no (arrived /:42 fletcner, Klein, Levy, Witherspoon MSLNI: Lyerly, Menzel ORAL COMMUNICATIONS Jack Morton, Certified Public Accountant, 2343 Webster. Street , and Trustee for the Trust for Community Skatiny, presented a letter to the rGOlincil from Mr. Peery, the owner of the propert)e where the present "Winter C ub facility was - located, in accordance with Counci h ember Klein's motion ate the nieetin'y of April_ 19, 1983. mr. Peery- asked that his memorandum of understanding, be presented reyardiny a lease -of' the Winter Club faci 1 ity, and that while the Sell Station amortization problems were not a condition of- the lease, they were still a concern. Ile believed that all Middle- field area businesses would express their concerns later tonight, and emphasized ii?at from the Trust's viewpoint, the Shell Station was a partial issue. it appeared to be clear that it would be easier tur the Trust if- there were some way to have the Shell Station€:operable. Representatives of the Trust spent the past week working out the details of Mr. Peery's communication, and next week, 'Would_ prepare the agreements for the transfer of the ecru i ment from Mr. Duncan Wi l l is€ns to the Trust. Further, he advised that the YMCA Board Directors passed a motion author- izing the "Y" staff to prepare a report reyardiny what role it miynt play with the future operations of a facility like the Winter Club. The representatives of the [rust had communicated with City staff and a n€eeti r;y was scheduled for next week at which time further documents would be presented. IIt.M ;r1, RLSULUTIOH OF APPRECIATION TO TACK S. NELSON. UPON HIS lit iti MUTLUM: Vice Mayor Fazzinv moved, seconded by Klein, approval of the resolution. of appreciation to Jack 5. Nielson upon his retirement. MUIIOti PASSEL) unanimously, Cobb, Eyerly, Menzel absent. Mayor Bechtel asked Mr. Nelson: to come "forward, and. presented him with the resolution of appreciation. Sergeant Jack Nelson retired on April 2., 19B3,"a.s a police -officer after 27 years of continuous service with the Palo Al to -.Police department. He maintained an overall high level of product'i vity and attention to detail. Hit .fief loan _employee's were impressed with ehis honesty, high ethical t'tandards, and dedication to the field of law enforcement. He was -tpromoted to the rank of sergeant i'n' 19t 6 . The Council was proud' of his work performance and appreciated -his efforts and dedica t.ian, -and recorded'its appreciation on behalf'of theecitizees- of Palo Al t.o for faithful service rendered to the City. She extended the Council's best wishes for a long and happy retirement.' Ser.yeant Jack Nelson thanked the Council. Chris _ #0urktn, Assistant, Police Chief of Palo --Alto-, joined_ they ,,Counci l in : recoyni zing. Jack - Nel son ,.far 21 years of service with theePa l b Alto Po 1 ice Deportment. He added that Jack Nelson joined the Police Department on :_Auyust- 2t , 195ti, utter - serving with the Santa Cruz yol ice depart ent since —;95.1.-- in the' past 2T years, Jack served in virtually ail areas of the department. in 1962, Jack Served as the Police Department Juvenile Uf f i cer i n -1964, WaS pro+.oted to the rank of Polite Specialist; and in 1966, was promoted to the rank of sergeant. As d seryeant, Jack served with distinction in tree field services division. His duties included total responsibility for the shift activities, supervision of personnel,e and the ability to make spot decisions. Which rotten involved complicated criminal situations. In 1919, Jack was reassigned to the investigative Services division where he. assumed supervisor responsibilities for the Youth •Service, Fraud, and School Resource Uffi_cer Programs. Jack received his Bachelor of Science degree in Administration of Justice from California State University_in 19/3. Jack's original job application for employ- ment with the Police Department distinguished him as a middle- weiyht boxer at San Jose State College in 194/ and 1948. Later during J.ack's tour in the Navy, his "riyht cross" was instrumental in winning tne West Coast Pacific Fleet's Championship Title. Jack'S .boxing career included involvement in the C4lden Gloves in the Diamond Belt Tournaments Ono' the Olympic boxing Trials of 1948 and 1952. Jack was born and raised in the Palo Alto -area and he and his wife, Lorna, presently resided within walking distance of the Police Department. • His close proximity _would be helpful our; rig Jack'.s retirement because he had volunteered his time and services to assist in the preparation of an Historical overview of the Police ueparti ent. Uri • behalf of Chief Lurcher and al l of Jac.k',s friends, he thanked Jack Nelson for 27 years of dedicated service to tree citizens of Palo Alto. ITEM #2, RESOLUTION HE TENTH ANNIVERSARY OF RESOURCE CENTER FUR UEt� MOTION: Councilmember Witherspoon moved, seconded by Levy, ap- proval of the resolution re .the tenth anniversary of the Resource Center for Women. MOTION PASSED unanimously, Cobb, Eyerly, Renzel absent. Mayor Bechtel congratulated the kesaurce• Center for Worsen on its tenth anniversary on behalf of the City Council of the City of Palo Alto. She said tne Resource Center was founded in Palo Alto in 1913, as a nonprofit information and guidance center, to pro- vide •tne necessary resources for women to make informed, d isions about tne direction of their lives. The Resource Center offered a broad range Of Services including job listings service, weekly job_. search and employer forums, career information programs, resume writing, interviewing workshops, vocational counseling and ..con- su ltiny services, numerous seminars, short courses, ano an exten- sive career library and referral service. The Center currently served approximately 1,00 people per month, listed several -thou- sand: ,lobs each month for Bay Area employers, and maintained .employment information on over 35U Hay Area companies. The Center: earned national recognition as a career .center and served on advi- sory committees for two national women's employment organi zati_ons. All funding for the Resource Center for Worsen was from pr`:i vate sources with no,expense: to the taxpayer. The Center noWO come memOrated its tenth year of service, culminating in "a community celebration at the -Menlo Circus. Club on May . l3, . 1983. The Council of' the City of Palo Alto congratulated the Resource Center for Women on the occasion of its_ tenth 'anniversary and extended the appreciation of the citizens of Palo i l.to for the Center's out- standing contrir"JUti.ons to the community. Shirley Cochran thanked the City -.Council for the resolution -of appreciation on benaif of the Resource Center for Women. 1 lMYUR bLUH ILL DEFERRED THE PJi3LIC HEARING ON 1 NEM #3, CABLE:.. (UNBENT CALENDAR MOTION; Vice Mayor fazzirro moved, seconded by Klein, approval of the Consent Calendar. Referral None Action ITEM #4, FRONT AND REAR EASEMENT POWER LINE CLEARING (CMR:25U:3) Staff recommends that the Mayor be authorized to -execute a con- tract with Pied Piper Exterminators , Inc. in- the amount of 56,991, for -front and rear line clearing services. AWARD OF CONTRACT Pied Piper Exterminators Inc. ITEM #5 y -AGREEMMEN T FUR RECRUITMENT ADVERTISING SERVICES Staff recommends- that the Mayor be authorized to execute the agreement with Bernard Hodes Advertising for recruitment adver- tising services. AGREEMENT Bernard Hodes Advertising Hui yb, SEISMIC HALAi:1J SiUJY - CIP J1-45 (Ct1R:?55:3) Staff recommends that the Council authorize a contract not to exceed 415,UUU with James E. Russell, P.E.? for continued mana i,e•- ment of the Seismic Hazard Reduction Program. AGREEMENT James E. Russell MUT1UN PASS.EU unanimously, Cobb, Eyerly, Renzel absent. GENOA CJIANGES, ADDITIONS AND DELETIONS None ITEM #1, FOOTHILLS PARK EROSION CONTROL PROJECT" (Continued from r Counci !member Witherspoon said she_ had no, doubt about the amount of clean-up work to be :done at Foothii l s Park, but preferred that the matter be referred. to the Finance -dnd Public Works--..(F&PW) Committee and taken up in the budget process. She realized that staff wanted to get going with some of trae emergency stab i1ization_ aspects of the .matter, -but - could-- not firm where the emergency repair was broken. down. She .believed that funds could be found to yet yoiny on that- imrnediatel,y, and the rest could- go through the ae.siyn review process and the i~&Pi'1" Cormmittee- as was tiorMally the caise. She asked,, if €unds were in the budget to do the emergency repairs wnen the rain stopped. Director of Public Works -David Adams said no money was contained in thi r year's budget to take care of the emergency repa i rs. Staff believed that it was important to get on with . the planning of the project in order, to provide' for an orderly process. lie deferred to Uouy Pursetl, Supervising- Enyineer, Water -Gas --Sewer, to answer detailed questions regarding. the proposed design. It was important that Council know its commitment in order to prop- erly design the remedial work. If staff proposed a cheap method of repair, which was not the case, the approach to the work would be entirely different. Staff believed it was important to have the funds available and to proceed uninterrupted. Counc.i lmeiiber-- Witherspoon said that six voles -would be required for d budget amendment, and suygested that staff be authori zed to have the amount'necessary for the emergency repair wcrk,, and that the remainder- De put through the budget process. She;. --clarified that she did not mean to imply that the work should not be _done in first-class mariner, but reminded staff that the amount involved rags a lhiust 4bUU,UUU, and she did not like to spend $.5JU,000 one month before the budget process. City Manayer bi l l Laner said the concern was that any work to be done .would have to return to Council for contract authori-zatiorr. Staff wanted the design work done now for both the emergency and longer range work because the designer would do al l the work and would require, its coordination. Counci ime!iii,e.r Witherspoon asked how much money would. be necessary to start the preliminary des i =-n work. Mr. Adams said that the Utilities Department had some funding avai lable.which was earmarked fur remedial work around their util- ities wtiich had since further eroded, but that would not cover the costs of 'ttie total project. r.;our,ci liiiember Witherspoon. said she believed the project was of such d magnitude that it should be examined by the Committee. She did riot mean to imply that staff would not yet every cent re- quested, but wanted it to yo through the regular process. If staff needed jib,UUU, she was prepared. to make a notion. Mr. Laner believed that sufficient funds were available in the Utilities t3udyet, plus funds at his disposal in the General Fund, to do the preliminary design work. lie _was concerned that if Coun- cil referred the matter to HON for budget purposes, the work might not be started soon enough to beat the next rainy season and the problem would oe much worse. Uuunci lmernber Witherspoon assured Mr. Laner that they were only--- ta ikiny about,.six weeks. The design still had to be. done, and nopefully,- construction could commence at the end of June when the new .budget was adopted. MUTIITh: Counciimeinber Witherspoon moved, seconded by Levy, that;, the matter of the Foothills Park Erosion Control Project be re- ferred to th'e Finance and Public Works (F&PW) Committee during budget hearings. Counc i lr,iember 'Fletcher said she ,opposed the motion becA.use i f there was any uncertainty About .the Council ' s commitment to spend tne. money, the design work might be wasted- and the City would end up spending money for notti.ng. :She did not see any benefit by putting the item off to be discussed - in the budget process. If Council -was not committed to spend the money, it should -riot go ahead Otte ttie design work, and further, if the Council was com- mitted, there -was no point in potting off approval. i ounci member Klein said tie wanted to see the matter -g0;to to the FOP Committee, but not necessarily as part of the budget process.. It the F&PW 'Lollunittee bel ieved the matter should move forward, he wanted. the Committee to return to the Council at the first meeting in:.,June and recommend that the :matter move for -ward. He also--.-be- l eved that: a project of. the proposed magnitude should go through at least a_portion of the City's normal processes. The report contained a _lot of unanswered questions; and .:when he read the report, he was conc.erned that no alternatives were listed. 3 1 9 8 4/25/83 CUUNU!LMLMtiLR CUBIT IUUt1VLU AT /:5U N.M. l:uunci iruernber Klein _.believed there were a lot of questions to be answered dt the Committee level and that the project should re ceive fire same type of scrutiny yiven to any other significant capital project. L.ounci Inremoer Levy said he supported the motion, to refer t -he matter to the F6PW Committee, but did not believe he would vote ayai;rst the project in one form or another when it returned to the Council from the Committee-. Tie was committed .to the fact that the project needed to be carried out, but believed it deserved the scrutiny of the -aPW Committee. Ile did not believe the modest amounts of money to be spent in the interim would be wasted. Vice Mayor Fazzino said that over the past few months, he bel ieved• that more items gent "directly to the Council than those which went. to the Committees. He suyyested that time could have been saved by sending the hatter to the CorMittee first and not to. the Coun- ci l . , He asked why staff decided to briny the matter di=rectly to the Counc.i 1 rather, gran yoing through the Committee process. Mr. Laner responded that in this case, the matter was -brought to the Council in .order to establish the emergency nature of the repairs. (here were some difficulties in the park, especially with regard_ to utilities, and steps had been taken to correct them, which cunstltuted-sorne uryency. Staffs practice had always been to send items to the Council first fore referral to •one of the Committees. Uftentirrres the Committee held an item for a while, in which case staff cohtinued to send items to the Committee without t i rst yoi ny to the Council. He believed that al l matters went to Council first for referral. Mayor Bechtel c l ari t i en that the Counci 1 had been aware of the problem tor several months. Mr. Adams responded that the problem had gotten progressively worse since last Fa 1. 1 . The January storms made it tremendously uryent that something be done. MUT1O1l PASSED by a vote of 6-1, Fletcher votiiig "no," Eyerly, Renzel absent. fs11bL1C HkARI€,lU: PLANNING COMMISSION RECOMMENDATION RE` l'lanniny Commissioner John Northway said the Commission _,.unani- uously recommended the extension .of the .district, which was the result of workiny with' the Architectural Review Board (ARB) and its eyuest that .the district be extended so that with the new activlty in that part of _town, the ARB would have more leeway to request certain design proposals that would be more ,eiriented. toward --pedestrian traffic , the Commission was enthusiastic about the extension in its recommendation. ee Vice Mayor Fazzino said he recalled in 1.9.77,.. -there was great concern < about the establishment_ of the (P) zone in the downtown area, which proposal -had much more teeth than the one before the Council, He supported' the intent "to extend the .zone and believed it., was appropriate,:given that the areas represented a gateway to the downtown area., Since .,i.t had been . a,; lonyl time since he eval uated the difference between the -original (P) zone and . the exist- ing (P )° zone, tie asked for a summary of the_ . effects the extension would have on..properties in. the :area. Principal µlanner:;George:_Lirrimerrnan said the old (P.) , zone 'had -two basic functions --one of design, which required that the --ground floor• facade be pedestrian- oriented; and a land use function for wound floor Uses. -the land use function was el imninated about six 3 1 9 _9 4/25/83 1 months-. after it was originally adopted and the remaining_design tunction was sti 1 I in effect, which was what would be extended to the three gateways along Alma Street, Councilnei;ber. Fletcher said that page 3 of the analysis stated that the purpose- of the pedestrian district regulations was _to promote continuity of retail stores and display windows. She asked how that could be accomplished when the current trend was to_ build office complexes rather than retail stores. Mr. Zimmerman said the (t') District guidelines recently adopted by the Alid were -referred to 3n the Zoning Regulations for the (l') District and encouraged new developments to have facades that would be compatible for either office or retail use, Therefore-, rctai i activity i1► those areas where the (P) District was in ,ftect .would be encouraged. it:e (V) District itself did not have use regulations, Councilmember Fletcher asked it the design features referred to were all-inclusive or either/or. Mr. Zimmerman responded they were either/or and were supplemented =by the (P) District guidelines recently adopted by the ARB. MOTION: Councilmember Witherspoon moved, seconded by .Klein, to adopt the Planning Commission recommendation to extend the, (P) Pedestrian Shopping Combining District (in combination with existing CC Community Commercial District zoning to the .subject properties), finding that the rezoning will not result in a Significant environmental impact and will be in accordance with the purposes of the Palo Alto. Comprehensive Plan and Title 18 of the Municipal Code, and introduced the ordinance for first reading. OKU1NANCE FUR FIRST READING entitled "ORDINANCE OF THE i:Ul1t I. U Aa.O ALTO AMENDING SECTION 1t3.08.U4U OF THE PALO ALTO MUNICIPAL CODE (THE ZONING MAP) TO CHANGE THE CLASSIFICATION OF PROPERTIES LOCATED ALONG OR NEAR ALMA BETWEEN LYTTON AND HAMILTON. Hy EX- TENDING THE (P) PEDESTRIAN SHOPPING COMBINING DISTRICT AND APPLYING THE DISTRICT'S REGULATIONS IN COMBINATION WITH EXISTING CC COMMUNITY COMMERCIAL REGULATIONS TO THESE PROPERTIES" Mayor iaecke1 declared .the public hearing open, ,and rec.eiviny no requests froii the'public to speak, she declared the public hearing closed. MOTION PASSED unanimously, Eyerly, Renzel absent. 11E11 #9, PUBLIC HEARING: PLANNING COMMISSION RECOMMENDATION MOTION: Councilmember Klein moved, seconded by Fletcher, that the public hearings on Item 19, Recommended Zone Change for Park- iny Lot (l, and Item 110, Public Hearing re Resolution Ordering .Changes and Modifications for University Avenue Uffstreet Parking Project; No. 52-13, be consolidated. MOTION PASSED uneniMeusly, Eyerl y and Renzel absent. Mayor Bechtel declared the- consolidated public hearings open. - Keceivinh' no requests from the public to .:speak, she declared the public hearings Closed. f , MOTION: dice Mayor Fazzino ;moved, seconded by Klein, to adopt the Planning:;_ Commission retoa>Ymendations, to approve the proposed zone change- to (PC) Planned Co i&nity based on the following findinys: 1. The , site i s" so situated and the uses proposed for the site are of such characteristics that the .application of general dis- ' 3.2 0 0 4/25/83 MOTION CU{iT1NULD tricts or combining districts will not provide sufficient flexibility to allow the proposed air rights development in that the residential density and the floor area ratio of the PF zone or of alternative CC zoning would not allow sufficient numbers of residential units to offset the substantial costs of replacing and expanding the public parking supply in an air rights -development at this location; 1 2. Development of the site under the provisions of the PC Planned Community District will result_ in public benefits not other- wise obtainable by application of regulations of general dis- tricts or combining districts in .that the increase of density- and:floor area ratio will permit development: of residential units affordable to households that otherwise are extremely limited .in their financial ability to purchase housing in Palo Alto. The project will provide the further public benefit of an augmented supply of between 50 and 62 additional public parking spaces; _ 3. The use or uses permitted and .the site development regulations applicable within the district shall be ,consistent with the Palo Alto Comprehensive Plan and shall be compatible with existing and potential uses on adjoining sites or within the general vicinity in that the proposed residential, commercial and parking uses in this project -wilt be compatible with the two adjacent office buildings under construction as well as with the hotel and religious meeting hall across High and the SP northbound passenger platform across Alma from the project. Furthermore, the Comprehensive Plan. specifically encourages air rights projects such as this proposal. The Planning Commission further recommends that approval of the project be made subject to the following 'conditions 1. The developer shall provide nine below Market Rate units of the following description and of approximate price range. However`, the applicant is directed to work with City staff and the Palo Alto Housing. Corporation staff to determine a final set of tDlk prices that will be subject to: a) availabilty and interest rate of mortgage revenue bond funding; _ and b) interest rates under lone -term conventional financing.. Number of Units 2 3 4 Below Mar' et Rate Units Number of bedrooms 1 2 2 -Size (F1oor Area) 510 square feet 770 square feet,. 820 square feet Approximate Price Range $48,500 - 72 8380 76,260 51,500.. 75,380 79,260 2. Uses shall be limited to residential, public -parking, and no more than 805 square feet of -commercial; . Uses in commercial space shall be l iaiited _to retail and per- sonal services; 4. Width of the aisles between standard size parking :stalls shall be 27.0 feet and width of the aisles between compact. sized stalls Shall be 19.0 feet; Handicapped parking stalls _ shall be designed and :.located so that no handicapped person has to go behind other parking stalls to reach the, nearest- exit; b. Ingress and egress for the private residential parking off of Alma Street shall be limited to right turn only; 3 2 0 1 4 /26]&3 1UT10H CUN1INUEU 7. Twenty-two (22) of the public..parking.:spaces shall be made available for the project's residents from the hours of 5:00 p.m. to J:U0 a.m. weekdays and all .day on Saturdays, Sundays and holidays and that these -stalls shall- be short-term parking stalls for daytime'use and be located on the first --level (main level) of the parking facility; 8. .ueveloper shall, during the period of construction of the parking structure, provide temporary public parking on another location reasonably close to the project and acceptable to the City, or if an alternate location is not possible., pay to the City $2,960 per month for the period of time that the public parking in Parking Lot Q is not available; 9. The developer shall include adequate provision in the Cov- enants, Conditions and Restrictions for property owner main- tenance of the landscaping on the four housing levels; 10. The acoustical plan shall describe how interior 'noise levels in the residential units shall not exceed an Ldn of 45 dB; 11. The. PC plan shall include an energy conservation plan with the following elements: a) Domestic Hot Water 1. A centralized solar collection/storage/distribution system using two water heating and associated recir- culetiny systems for distribution, one for each building. 2. A sized solar heating system consisting of two sets of fifteen 4'x1(' collectors, each plumbed to an 800 gallon fiberglass storage tank with two gas -fired back-up water heaters. 3. Faucet aerators and low flow showerheads (less than $ gallons/minute) with a manual shut-off button in each unit. 4. Insulation equal to a minimum R-5 on all hot water piping. 5. Energy requirements including use of low -flow toilet tank water gadgets. b) Structural and Space Heating 1. Insulation/Weatherization. a. R-19 insulation for all ceilings exposed to the out- doors as per Title 24. b. 11.11 insulation for floor and stud wall areas exposed to the outdoors as . pey Title 24. c. Full caulking of all dissimilar material interfaces (around door jambs-, sill plates, window cases, etc.) d. Full weather stripping and gasketing of all exterior doors and windows, all outlets and light switches. 2. Space Heating - shall conform with all requirements of Title 24. Passive Solar Space ConditloA#ng- a, Full solar access to feasible. b. All windows to be multiple glazed units as , many of. the (U value . .55 or as is 32 g2 4/25, H3 MU I ION CONTINUED c. Podium level of residential floor to be insulated to an R-11 value. c) Lighting 1. Garage lighting to be fluorescent with solid state bal- lasts; Z. Hallway lighting to be fluorescent 3. Uayllghtiny techniques to be studied for use in the top floor living units. Daylighting to be used for all hallway areas where practical. d) Appliances —Energy efficient dishwashers, clothes dryers, clothes washers, and refrigerators {re to be employed. Assistance in selection will be available from the Util- ities Department Conservation staff. e) Miscellaneous 1. tiarage exhaust fan(s) to be adjustable by speed; 2. CUZ sensor to be installed for regulating fan exhaust; 3. Garbage collection area to be large enough to store three 50 gallon labeled drums, one each for.. glass, metal, and paper. 12. The applicant, prior to issuance of a building permit, shall submit for Architectural Review Board review detailed plans on the exterior colors and site elevation; 12. Construction of the project shall begin no later than December lb, 1984, and shall be completed by Uecember14, 1986; 14. Contractor shall schedule a coordination meeting with the developer and the- City Public Works, Building, and. Transpor- tation officials for the purpose of resolving_ construction details.includiny excavation, shoring, use of public right--of- ways, and similar details. No building or excavation permit shall be issued until these details have been agreed to by the City. URUINANCE FOR FIRST READING entitled "ORDINANCE OF THE CUUKUIL OF THE Ctti OF PALO ALTO AMENDING SECTION 18.081.040 OF THE PALO ALTO MUNICIPAL CODE (THE ZONING MAP) fU CHANGE THE CLASSIFICATION OF PROPERTY KNOWN AS UDiiNTown PARKING ASSESSMENT DISTRICT. PARKING LOT Q FROM PF (PUBLIC FACILITIES) TO PC (PLANNED .COMMUNITY)' Ccunci iriremoer Fletcher asked that the condition for low -flow toilet tanks be added. She realized that it might sound irrel- evant now, . but. in• years of drought, that factor was very sighi- ficant in water usage. MAKER ARO SECOND INCORPORATED CONDITION FUR 'LOW -FLOW TOILET TANKS INTO MAIN MOTION Co'uncihne,rber Fletcher _:asked whether the resale provisions nor ;►pal-ly administered )y t-ne Housing -Corporation in BMR units had 'to be incl'uded:Or: whether they were automatic. U `rector'of P-°annin.g and .Community Environment Ken . Schreiber said those --conditions -were"-automatic and would. actually.. be a part of t he tentative-suidivislon process. i 1 1 C'Juit.. i lmember fletcher etcher said .that the other staff report refated to Item 11, P rkiny Lut ll, stated that .the CC&R's would not return to the Co-unci l . She wanted- assurances that there were no restric- tivrts ayainst families with children in those CMOs. , Counci Ii;oember Levy asked whether_ approviny the chanye to the PC zone was Anteyral to approving the project as designed. Mr. timmeri>>an said -yes. Counc i I 'i ember Levy said he was opposed to -the PC zone change and to the .project as designed. Several years ,ago when the_ experiment reyardiny• the use of air rights over parking lots.was first intro- duced, the City departed from its normal process by. not . entayiny in an --'pen process to select a devel-oiler for the first site. The develv,.e'er was selected because of his reputation in other work in Palo ,AI to --anti because he owned the lot adjacent to the proposed site on the -.;niversity side. The developer's initial pbans indi- cated that his lot would remain. as. open space and-' becorye .Integral to the total development of the project, which would enable the project to be developed. in a more open . fashion. 'The City was optimistic that it could accomplish a number of things, including more affordable housiny.and more parking. In order:for.the proj.- ect- to work, the City _was_ wil l my to contribute d lot which, at today's prices, was worth about $2,000,000, and • give up its air rights, which presently provided light and open space into a heavily conyested area. Over tne years, substantial changes were made to the project. First, there was a reduction in the allow- able parking from a norm of one and one-half (1.5) parking stal 1 s per unit to one (1) parking stall per unit. Second, the adjacent vacant lot was sold by the developer and was no longer included in the project. Third, tne City found itself with little affordable huustny. Fourth, there was .little extra parking being donated to the project. Fifth-, extra commercial space was being added to the project which was not discussed or envisioned earlier. Sixth, the project contained a nigh density --in fact, the highest residential density in recent Palo, Alto history. The density was twice that of :Stanford West= and as close. to its residential _neighbors as the Stanford West -project would be to its residential neighbors. The density was SU percent nigher . than the Palo Alto maximum. Pal() Alto would not particularly benefit by more cubicle size condomin- iums added.to the downtown area where there was an abundance of condominiums at . the present time; and, in perpetuity,. the City lost its options and flexibility in .developing, the lot. The block was a desirable one and he believed it was the focus for more current construction and development in downtown Palo Alto .than any other. The air rights project had been called an experiment, and he believed the ' experiment was now concluded and could be considered a failure. He- did not believe the development over a parKiny_ lot would occur on the current basis because it was far too dense, and because there were too •few benefits to the City. [he developer hiiiiself would have a, profit of over $1,000,000 from the project., and he believed the City of Palo Alto would realize tew benefits and in fact would lose future flexibility. .He would not support the motion. Nice Mayor Fa zz i no said he could not believe how the project had been "talked to death" .ov.er the past; few years. Three years ago, he bet iev. ed the ex reriment was exciting, and he sti 1 l . did. He took exception with all of :Countilmember Levy's comments. He believed the project_,was an attractive` replacenient for Palo Alto's major example lof urban bl iyht, and anyone, who had been in. that gateway area over the- past fe ,.:years re.coyni-zed_ how ugly the =area was. the project provided res-idential ;units and BMK units, and there wa's an aaeyuate replacement, in --addition to the City'.s parking supply. _The .experiment . with respect to air rights:' -:1,0$ something the Coanci l;- needed to wrestle with, and 'he -was pleased that 1'1r. Kinney _came along with' such- an outstanding -job, espe, cially given the incredible number of -obstacles put"iri h.s patfi..by 3 .2 0 4. 4,j2 /83' tne city over the past tnree years and particularly over the past three months with regard to . the Santa Clara County Mortyaye. Pro- gram, he was pleased to 'approve the project, and hoped that once and for all , the Council could stop talking about it and let the -project be built. MUTIUN PASSED by a vote of 6-1, Levy voting 'no," Eyerly and Menzel absent. 1 ITEM #1U, PUBLIC HEARING ALREADY HELL), RE RESOLUTION ORDERING ii J k J BUT— JF F S I R L E T PARKING' I' K U U E t; ! NU. T Z- i j -Mayor Bechtel Said the public hearing on the matter was already held in combination with the Public Hearing for Item #9, Zone Change tor Parkit;y Lot Q. MOTION: Vice Mayor Fazztno moved, seconded by Fletcher, approval of the Resolution. RESOLUTION 6110 entitled 'RESOLUTION OF THE COUNCIL OF U ALTO ORDERING CHANGES AND MODIFICA- TIONS - UNIVERSITY AVENUE OFFSTREET PARKING PROJECT NO. 52-1.f' Counci (member Witherspoon asked if title would be held jointly by the owners of the condominiums and the assessment district after the project was completed and all bonds, liens and construction loans were paid. Real Property Administrator dean Diaz said technically there was no such entity, called an "assessment district." The City owned al l of the parkiny lots and would retain ownership of the public parking -portions of -the project. The tentative reap would come back as part of the planning process and would subdivide the prop- .-erty into vertical parcels. The City would retain ownership of tne puhi is parking lot, and the rest of the project --the private portions --would have the fee conveyed to Kinney and Kinney. Counci Uiernber Witherspoon asked if Mr. Kinney would -reconvey title to each of tne individual condominium owners. Mr. Uiaz said yes. MOTION PASSEU by a vote of 6-1, Levy voting "ho," Eyerly and Menzel absent.. ITEM #1I, SECOND AMENDMENT TO OPTION A(iRLLNENT - PARKING LOT Q AIR RlUET5 P. MOTION: Councjlmember Cobb moved, seconded by Fletcher, approval of the second amendment to Option Agreement for Parking Lot Q Air Rights Project. AMENDMENT NO. 2 TO OPTION AGREEMENT - PARKING LOT Q AIR RIGHTS PROJECT Kinney and Kinney. MOTION "PASSED by a vote of 6-1, Levy Renzel absent. voting 'no," Eyerly `I-TEM_ 12 ISSUANCE OF UTILITY REVENUE BONDS - DEWATER and NG AND Lounci l rrember,Levy said he rlo.ted there was a • reserve% of $575,000, which he believed to. be a sub_stant'ial percentages The "total issue wa-s. 44,/b5,'UUU, but the defeasance of the aarron Park_ bonds was -04i5,UOU, which he understood should not require: a reserve., That ,3 2 0 5 4/25/83 left :vJ,UUU,UUU tor the bond 'issue anti a reserve of : t /5,UUU. He asked tor an explanation regarding the need for the $5/5,UUU reserve. Uti l tt:ies Manager of Rates and Regulations Randy Baldschun said the amount of the reserve was based upon the maximum debt service ire any given year. E. F. Hutton, the financial consultant, deve1- uped that number based on the projected schedule of payments. Councilmernber Levy clarified the $575,UUU was the maximum in one yiven year. Mr. l3aldschun. said it would vary slightly from year to year, but P57b,UUU was the rnaximuiu amount. He said the financial consul- tants were not. asked to be in attendance until 10:00 p.m., and could. provide whatever information was required at that time. Anthony Be-nnetti , Senior Assistant. City Attorney, said that al- thuuyr+ the front chart of the ciraft official statement. was subject to revision, the principal amounts were progressively larger as the years went by, acrd the interest rate at which the bonds would be sold was not-deterrrrined. He bei ieved that any payment in .1.994 or 1995 amounting to j4UU,UUU would hame a substantial- interest cosy: associated with it such that it was- not inconceivable that. tne inaxiinu+a principal and interest-, if in fact there was one year with a s5U5,uu'i principal payment, would amount to $575,000. Counct lh enr5er Levy said he hoped that given the nature of the bond •issue, the reserve requirement could be reduced as much as pos- sible. Assistant Uirector of Utilities Mark. Harris pointed out that on any reserve issued tax tree by the City, the City could generally earn more on that reserve that what it • cost. There was no penalty for navincy that reserve in terms -of revenue to tne City. If the reserve cost the City eight percent, the City could probably -earn nine or ten percent. Councilmerirber Levy said in that case, it was ..worthwhile to have a- suostantial reserve in connection with the bond issue. Counciirnember Witnerspaon said she noticed that the resolution provided for narniny the bank of America as registrar of the issue, and asked if an underwriter were ever named. Mr. t3ennetti said E. Ft Hutton was retained by separate •contract to market the bond issue. - Luunc i irnerr;ber , F 1 etcher sa ii d sne noticed that the revenues from the tour ut t l sties were electric, water, gas and sewer, but in Attach- ment' "A," water.;. was lett out Mr: Harris said_ that wcs correct. the City proposed to pledge..the tour utilities as collateral, but_ only expected revenues from three 'to actually' cover the issue. _ There: was nothing in the pro- posed issue that would benefit ttre ..,water utility. !.ounci luefrroer Fletcher asked whether, since the sewer utility was really a dPA system and involved other jurisdictions, those other Jurisdictions needed to' be involved in the process or i f they already were. Mr. Harris said' the. other jurisdictions had -already obtained resolutions :trorn their respective councils. to Pay their share Of the debt service. HThe information was explicit Within the- curre t FA a_yreement, Out given' the projects sta,tt wanted•. the j-urisdictions to return to their -councils to get: that explicit authority. Luurrt i lmemL er• F i et crier said sne never toiled to marvel at the etticiency of City statt. MOTION: Counciiriember Witherspoon moved, seconded by Cobb, approval of the resolutions. RESOLUTION 6111 entitled "A RESOLUTION AUTHORIZING THE ISSUANCE a CITY OF PALO ALTO UTILITY REVENUE BONDS" RESOLUTION 6112 entitled 'A SERIES .RESOLUTION AUTHOR- ILING THL 1'WANCE OF A PRINCIPAL AMOUNT OF $4,765,000 CITY OF PALO ALTO UTILITY REVENUE AND REFUNDING BONUS 1983 SERIES A" MOTION PASSED unanimously, Eyerly and Renzel absent. 1 8:3U P.M. ITEM #3, PUBLIC HEARING: I1RAFf CABLE TELEVISION Assistant to the City Manager Charles .McNeely said that CMR:213:3, which was sent to Council on April 14, established the cable television niinirn.um requirements as the first step towards the selection of a cable Owner/operator. The Council was being re- quested to approve .the draft basic minimum requirements and to direct the consu 1 ta-rit to proceed with step 2 of the process. In the process of developing the minimum system requirements, the consultant =net with members of the public and potential cable system users. lllose comments were included in the draft minimum requiremeots, which were included in Cr1R:273:3 and sent to Council on April 21, 1983. Norm Sine1, Arnold and Porter, tree cable television consultant, said that the first"step was -to create -some tentative basic system objectives and nitnii3ium requirements. Then. the- consultant would prepare the ,requests tor proposal and return to the Council within the next six weeks. if the Council voted to issue tree request for proposal, the document would create- basic objectives and minimum requirements for Palo Alto's cable system. The basic objectives would set the framework for ttie applicants to submit, a bid. on the system and for City staff and Council to evaluate those bids against their capacity to meet the basic objectives. The document was made public on April 14-, and some informal sessions were held which resulted in sale accommodation of many issues. Other issues should be dealt with during the- Ra P process, and some would be decided simultaneously with the ownership structure and the., com-. pany chosen to- be the franchisee, - Vice Mayor Fazzirio said he understood the consultant was - hesitant about evaluating a City proposal, and he -asked how they intended to handle the issue and what consequences. it could have at .the end of the six or nine: months •when marry proposals were .before the City. Mr. Sine] said Arnold & Porter contemplated creating a request for proposals (RFP) to answer that question. The first part of the iaP ..would develop proposals from private companies -in a classic fashion, and the second part would outline potential •joiner .venture possibilities. The specifics had- not -yet been completed,- but ultimately, they would provide the City with a report which. eval- uated the companies which responded to the RFPs as well as the joint venture proposals. Further, the City would he provided with an opportunity to assess the risks and/or benefits -of a mun;capal. system. Fie opined that the decision about whether to have"a -.Muni_- ci pa l ly owned _systems•- was a polity decision oni._:.the part a€;: the Luunci i . Qne cou'o assume that' i f -the Count i i decided_ to -go . with nunitipal 'owners'hipi it ..c"ould create- a. system which `swou1b---serve_ the pool is wet l ., 3 2 0 7 •4 /25/83 Vice Mayor Fawn() said he had no problem with the first two parts Of the proposal. He asked how specific the proposal would be with respect to :the risks and benefits- of a municipal system. He a;,ked how.rnuch additional information would be required to decide wtretner it was feasible to yo with municipal ownership. Mr. Sines said that if -the Council decided, for policy .reasons, to create a municipal system and assessed -the risks and benefits in a general way, theoretically City staff .wou.ld be authorized to create a system and bring policy. A"ssues to the Council from ,time to time.- • Four to. six months into the creation of the system, staff might have to return with the fact that .there was no finan- cing or that the economy. had changed in the area. He did not believe At was necessary to yo through the whole series of studies again, because essentially Council. Would be dealing. with .the policy issue of ownersn ip. Vice Mayor Fazzino asked about the potential for involvement and participation by Other Communities, and how the .consultant intend- ed to- handle the underlying concern that waiting for the decisions of other^ communities could create an obstacle in Palo Alto's process. Mr. Sinel said the process began at the staff level , and the con- sultant provided the City Attorney and City. Manager with a work product in order to begin to work on the policy issues. The key was to establish the number of communities to participate before issuing the RFF', and it would take between four to five weeks to work out those numbers that was included in the schedule being established tor the Palo Alto process alone. The -consultant met with staff this afternoon to discuss that schedule, and' antici- pated that it would not hold up the City's process at all. Vice Mayor Fazzino said a question was raised regardiny the 10 - year versus 15 -year issue, and he asked why tern years was chosen then he understood that most systems operated under a 15 -year Schedule. As the Council evaluated data, he asked if there would oe any basis for a cornpa ri son between the numbers ,provided for different time periods. 1r. Sinel 'responded that ten years was included in 'the preliminary set of basic objectives and minimum requirements because it was thouyht that it would be easier for the Council to move up to 15 than to decrease it frorii 15 to 1u. For a cable operator, the longer the tranchise, the= score_ secure the cable operatc,r and the financial health of his it vestrient. Tnere were coi►i-iuuriities with lU-t'e`ar franchises, communities with revokable licenses, and corn- wunities with 15- and 2U -year franchises. The policy trade-off involved' offering the people wno bid on the system a fairly long. period of time to recapture their capital versus the flexibility, dependent upon the actions. of the United States Congress and the cable legislation, of having a renewal come early enough in the system while the technology was changing so rapidly to. effect some cnanye in the system. Vice Mayor Fa°ziino asked for additional assurances that the time schedule would be adnered to. i.n , terms of the kF P going out at the end of May or early June-, and that the Council would be in: a posi- tion to niak.e a decision on or around November 1, °1g1i3. Mr. Sinel said the time schedule appeared to be moving along quite well. Staff was Working hard to turn the documents around quick- ly,- the -community aOpeared to be participating in good faith, and `ne saw no reason :,for. the schedule not to move forward.- Counci lmeuiber .Cobb said that the consultant's memorandum indicated - that discussions with potential communities would pr'4bably be con- cluded by .early May in order to incorporate that` information into the KFR. :Apparently, aiscussions were underway with Menlo Park, Atherton, and Santa Clara and San -Mateo Counties, and he asked if discussions were also underway with'Stanford. Mr. Sinel said the consultant, Stanford and other groups had discussed the basic objectives and minimum requirements, but in terms of jurisdiction, Stanford .would be represented as an un n corporated portion of Santa Clara County. r.:ounci lmember Cobb said he was concerned the timeline was too short to yet the other parties into the action before the RFPs were issued. Fortner, he was' sti l 1 iruterested in the joint owner- ship concept, which appeared to raise cornpl icated - yovernance. questions. 'He asked if the City could get other jurisdictions involved prior to the issuance of the RFPs and simultaneously have the governance questions sorted out to some degree, particularly wi *.n reyard to the potential for a jointly -owned system. Mr. Sinel said the issues,beiny raised were under consideration by the City Attorney's office, and ui_ttmately by the City Manager. He —believed that when the consultant and City _Attorney concluded the correct way in which to, structure aid address those issue., and Af they were structured as currently contemplated, the time schedule would not be held up. Councilinember Cobb said the option of municipal ownership was often discussed in the memorandum, and he hoped the RFP would require• bidders to• at least yive some response to a jointly -owned system, recoyriiziny that they rniyhi be free to take on other alternatives. He asked if bidders could be required to provide a response to that quest ion in order to be .considered responsive. Mr. Sinel said that as presently contemplated, the RFP would require bidders to respond to the question of joint ownership. r:uuncllmernber Cobb said an interesting list of various objectives was established for the system, and because some .were less eco- nomic than others, they could .impact the ultimate bids received in terms of driving up the cost. He asked if there was a way in which to discriminate between those things required to have a good system and those things tnat would be nice, but which might have such a significant impact on the -cost of the system that classifi- cation as a basic objective of the system would be reconsidered. Mr. Sinel said the consultant would attempt to structure the RFPs so as to alleviate having to crake that decision. In essence, relatively broad basic objectives would be set, and from that, the private sector was expected to know the community's needs and desires. Further, ttre private sector was obligated to decide wrsether the price .tag on the services could be met given the pro- jected penetration in the community, 'and. those questions should be answered in the responses to the RFPs. The negotiation process would take place after a company was selected, and would help to shake, out some of those issues. Counci Imer ber Gdbb 'c l ari fied •that if a potential respondent deter- mined that a particular objective was uneconomic in terms of its mpac-t on the total system, that determination was expected --to be' contained in One response to the RFP. Mr. Sinel said that was correct. Counc.ilmember Klein said he intended to participate in' the item torziyht since, in -his j;udgncent---and in the judgment of the City,, .-'`Attorney, it did not- relate to that aspect aut the cable question on which he had disqual ifiea himself in the past, H -e asked what aspects`" were ''identified in the report which' `could be dff'ecte-d, by.:• the current cable, leyi lotion. air- . Sinel said that. of SS 66 could impact the part of the•.report which dealt with possible franchise terms-ethipys like -renewal provisions would have to be added. The structure of ,the RFP, in terms of the price to the City if it opted for municipal owner- ship, public access channels and services, would have .to be changed it Sb bb became law. The bill was marked up and sent. out of comrriittee on Thursday, April 21, arrd they were not sure whether it would make it to the Senate floor and what: would happen if it did. Representatives of the House said they had no, intention of• introducin.y SB 66 or a companion. If anything, a •different bill would be introduced. 1t was_ dift,icult to answer the question at present, but he believed it made sense for the City to 'proceed with its present stage, as opposed to the RFP stage, without reyard to Sti bb, Councilmember Levy said he understood the Council was being re- quested to approve .general .objectives to be included in a specific REP. Mr. Sine! said preliminarily the RFP. would contain the -somewhat refined tentative basic objectives and minimum requirements. The Council's ultimate vote to_issue the RFP would indicate its posi- tion with respect to the minimum requirements. Tonight, Council was beiny asked for a preliminary endorsement of the document to assure that staff aed the consultant were proceeding on the right_ track and to facilitate the preparation of a draft RFP for Council review. Courici lr,►ember Levy asked i f the Council was expected to go through all the details of each objective, i .e. , the 10 -year versus 15-. year issue. Mr. Sinel responded tnat tonight was the proper. time.to consider any changes in trze document presented. It would further be appro- priate for Council to provide instructions in terms of issues and the conversations which aright take place during the public .hear- inys. Council would be provided the opportunity to review the tn1nkiny of staff and the consultant when it examined the draft REP. ( nci'raerr,ber Levy asked, regarding Sb b6 and other federal legis- lation, if the --City , coui-d drat:t an RFP which contained safeyuards against future changes in the law. If a franchise were granted, would the city's contracts take precedence since they would be exeected prior to ethe ena.ctrnent of any other laws, or would the -City be_ at the mercy of whatever carne out of Congress during `tire entire life of the franchise? Mr. Sinel said it was difficult to draft an ordinance or a con- tract that could not be abrogated by .the federal government. However, a franchise agreement could be drafted to indicate that i` any laws changed and materially affected the position of the parties, the contract would have to be renegotiated to try to put -the parties back to where they thought they were before the law was passed. Cuunc i In errrber Levy said the report generally =discussed some ques : tions 'concerning yovernance, and, page 3 mentioned that an entity would be established to administer the_ public -and institutional access channels. He asked ,i;f they,- were in„a position to discuss 'how that entity would be established. r, S.i net ,,said i t' was not necessary to d i sc. uss how.. -the entity Would be discussed at. this - poin .. ' Counci l aright desire a .separate head at `some _.future` point - to �d.iscL ss.A.if-feren.t ways in .which-_ .to-- deo1 _ With access arid_ institutional programming ,.qr 'capacities on_ the s, ste. . .--ire 'governarice issue` wau' not treated the same irr tLe R inlmum -requi=rements' and- basic objectives as :_it would be il the Counci l: was deal i.ny .:With the governance in a raun i c i pa l system The- _docum pre sented- resented` was ge'a`red ..toward the - d vel opment of an RFP r 1 tor p ivdt.e bids from private companies. Ine assumption was that the private company would essentially _operate its sytem, and an Oversight in regulatory mechanism might work from ,the City Man- ager's office, or a nonprofit organization might be established to deal with Lhe community aspects of the programming. There was a series Of ways in which the City could deal with oversight or pro- iram€niny to involve the Community,more than it might overwise be involved, but the consultant did not believe it was important to make those decisions .for purposes of the RFP to the private com» panies. i 1 1 Counci lmember Levy asked if the consultant wound: provide guidance on the questions of governance and whether the --Council would be in a position to make those decisions before making the decision of private franchise versus public ownership. Mr. Sinel said yes. Counci I€€rember Levy asked why public access and institutional access were linked together in the questions of governance and supervision. He believed that institutional access was market place access and that public access was more for nonprofit kinds of groups. Mr. Sinel clarified that as_ used in the report, public access on one level referred to the public's gaining access .on a nondis- criminatory basis to exercise a classic first amendment soap box activity. The, institutional access of the City --Stanford Univer- sity, -Foothill College, the school syterr€ etc. - referred more to the education institutional groups, while public access was con- cerned more with the individual members of the public. Councilraember Levy said he would probably ask for quite a few definitions during tne course of the evening because he wanted to make sure of tne terminology.- He asked about the term used when a large bank wanted access to the sytem. Mr. Si nel said with respect to the video part of the system, they envisioned that the system would reserve`, a certain _number of channels for lease access. It Was assumed that a business would lease channel capacity from the company. Data -type services were referred to as "-business services," and at that point, the type of service miyht not be different from the institutional use of the data access or the City's use of similar data services. Counci l€r€ember Levy said noted that page 14 of the report said, "The City is considering requiring some form of 'universal ser- vice' tor residential subscribers." He asked what was meant by "universal service." Mr. -Si_nel responded that "universal - serv.ice" meant a low-cost or free -service, generally a sraal 1 number of channels which .the City determined must be provided to the public because some might not be able to a ford those__ services. The City might provide various - community programs or governmenta=l services-- over the system - to provide ahi impetus for all households to be wired. Some. Cities chose to seek such a service and- others chose not to. It -was complicated, and if the City' decided• to test wrrether such a ser. Vice was Viable in the area-, a question would he structured__ to:.ask= tyre, bidders their views of the service, what the service would; look like, and how much, if _anything, , would be charged- for the Counci lmember Levy asked ..for the definition`., of a -public bui l d- 1rt�� " Mr. Sinel` said the City Manager would define "public _ buildings, and a schedule would be attached to the RFP containing the defini- tion. 3 2 1 1 4/25/83 Mayor Bechtel declared the public hearing open. Howard Irt. Smith, 4267 Emerson Street, represented himself, al-- thouyh he was the secretary of a large computer organization in the i3ay Are-. Mis company was excited about. cable systems that ,would cater to its needs, and he owned computers as opposed to a television. He was interested in the opportunities a cable system could afford to computer operators. Recently he wanted, to trans- fer some files from -Ili s company computer to his home computer, which took about b-1/1 hours to accomplish. He turned on his computer and contacted his company computer at -.midnight anti went to bed, and when he woke up six hours later, it was still working. The system outlined by the Viacom people recently at a meeting of his club would take something like six minutes, which would be Ell tines as fast. Me wanted to see the minimum requirements as out- lined in the Palo. Aito Weekly include a facility for two-way data services for the residential user as well as business interests. Irene' Sampson represented the League of Women Voters of Pa o -Alto. She said the League testified at a public meeting with Arnold and Porter's representative, Stephanie Phillips On April 7 and appre- ciated the reflection of two -of their concerns —the third .cable and d provision of public access programming with a separate governing board --in the April 14 draft report. However, the League wished to amplify its comments on ownership. Although the League acknowledged that advantages existed to a municipally owned system, it had not taken a position on ownership because. of insuf- ficient information regarding a municipal system. She asked about the market potential for residential and institutional cable. .. How would the City raise the necessary capital without risking unen- cumbered reserves? The League believed that to enable the Council to make a responsible decision on ownership, the .RFP must be care- fully desiyned. Specifically, it must be able to compare private franchise 'responses with various forms of joint ownership and municipal ownership. Therefore, the basic objectives which were assumed to be the criteria for evaluation must apply to all forms of ownership, and the City must respond`to the RFP. Torn Passel], 3th5 Louis Road-, President of the Cable Communica- tions Cooperative of Palo Alto, Inc., provided the City Clerk wi tti a copy of the Cable Cooperative statement of position, but advised that it was prepared before reviewing the_ Council's packet. . He also provided. the Clerk -with some fiberoptic technology papers to be distributed to Councilmembers The Council was commended for a generally forward looming system design which went somewhat beyond the more conventional ,systems being installed elsewhere. PaT- ticularly, the Cooperative eras ,p,leased to endorse the Council `s concern with allowing the growth-of'data transmission services which would be increasingly important to Palo Alto business and computer user community. The Cooperative suggested the following improvements ;;in -thee the basic: objectives and minimum requirements doC ument : Keyardiny the third or institutional. cable,,- the C-ooperative su.ge- yested that the word "not". - be removed. The -Cooperative ve 'believed - it -:Should perhaps be a shadowcable for the other two. Counci l member Cobb pointed out some of the problems of deciding what was.. d. Public building and it _was suspected that as the computer lotion continued, there would -. be a greater need for the third' cable to be available to ali.subscribers., Inv tooperati ve suggested the word . "spe,c i f i ca l ly". be- added;,° i n: the Re on page 1.,7,' Section {-`1, including the use of -optical fiber; techrioioyy... The Cooperative, believed the technology was moving so: tast that by-,the ime instal l`ation occurred, it Would . be a . costs eft'ective .way :-of `cabl in -y: the area. 1 1 Mr. Passell. suyyested the following Section (i ) be added on page 10 as fiol lows, ,reiterating the use of fiber technology. "The use of fiber 'y which' optical technoloc whi p provides services equivalent to the above requirements shall be considered and the reasons for adoption or rejection in whole or in part specifically set forth.„ 1 1 1 He suggested that a Section („i) be added on .page 10 as follows: „lo•.provide .perspective on the cost benefit considerations of various options, a comparati-ve cost evaluation of the following systems should be provided: 11 ( The standard two=cable system; "(-b) A four -cable system free to al l subscribers with the fourth serving as the third concurrent institutional cable; ) A hybrid coaxial cable fiberoptic system equivalent. to three cables with al l three serving al l subscribers; and "(d) A 100 percent optical - fiber system with a capabiliity equtva- - lent.-to' three cables serving al l subscribers." In Section (f), page 17, the Cooperative suggested rather than referring all of the oversight of the system to the City Manager, that a Coinmunity Cable Policy Board be established to make all basic decisions about the building of the system and its manage- ment. The board would consist of City. staff plus representatives of major interested groups, including subscribers. regarding the RFP process, anyone could become a member .of the Cable. Television Communications Cooperative, which tried to repre- sent the subscribers of the system although not in the same finan- cial situation as the private companies. The RFP would strain the Cooperative if it attempted to act like one of the private com- panies, and in order for the Co -bp to have a better chance at realistically bidding, it was ;requested that the Council consider dividing the RFP response process into three phases, .the fi rSt phase being completed. before the other two went ahead..,, It was suggested that -the technical decision on .the size of the system be included in the first phase;. the second phase could include the access questions; and. the third could be the ownership and manage- nient issues. lhate would give anyone in the public sector aspiring to be a semi -private cooperative with an opportunity to interact ts places_ where it could without the large -financial backing re- quired.for the standard glossy three volumes of bid. _ Stanley R. Smith, 610 Wildwood Lane,2a member of the Board of the Cable Co -Up, believed that the basic objectives set forth on page 1 were`a good start. In terms of the technical specifications and. the controversy over two versus three _cables', many pecQpte were 'F. concerned about the apparent neglect of the use of fiber optics' technology'at_present.- It. was: described to him that the -present coaxial cable systems being installed'=in .the country ,were tech- .n.ological dinosaurs that would -quickly-- be. replaced- by =fiber -optic - systems., Ite suggested that —the specifications for the syster, be written in terms of .channel capacity,- number of channels, and nunber, of two-way. channel s,- etc. , rather than .:tying it to an obso- lete technologyf iegarding the free. services.to:_be provided to City departments- and public educational institutions, everyone recognized that - tho-se capabi i iries were really -not` 'free, and in essence, it was ; a . subsidy Or hidden: tax'' on the user$-' of the system. tie.:__request`ed that as a' part` o'f the RFP procedure,--tn eol l ar.. amt u::tin; involved be spelled out to 'provide .those kinds :cif services. He wa[s riot opposed to the , serv_ioes, but,: believed - the dollar amounts wore needed to fit into .the. usual _,budgetary review )-recess i:n o'rder_,for the citizens to have ` some idea -about .the orders-- of _ nagnitude.- regarding . the governance issue, -there` was `a _ 3 2 1 4/25/83 1 lot of curitr uvery uveu how the public access channels should be admini-atered, and he saw the present RFP as a technical and finan- cial document. He suyyested that all references to the governance of public access channels be left out and that the debate be allowed to continue in parallel with -the technical and financial side of the proposal, Lyn Simpson, Manayer of New Market Development for Viacom Cable - vision, believed the flexible process discussed by the consuliante -and staff was the. easiest process by which to deal with most concerns. Viacom intended to use its 'operating experience and 'technical expertise to the City's benefit. Regarding the 10 -year franchise period, Viacom described industry standard as being 15 years. Viacom operated in about 120 communities with franchise agreements, and none of the agreements were less than 15 years; sepe were 2U years and in San Francisco, Viacom recently received ' 25 -year renewal in exchange for 'significantly, expanding -Hand rebuilding the system at a cost of millions of ,dollars. Viacom understood the concern that the system -not become obsolete-, and that franchise obl iyations be met. While the length of the fran- chise period might be a way to assure compliance, it could 'also discouraye investments. Some alternative ways of working together included a periodic review -of the franchise and how the operator was liviny up to .its "'commitments, and having penalties built into the franchise agreement. They were concerned with the franchise period because they were talking about a very high tech, high capacity cable television system, and not an industry standard. It would probably cost a minimum of $1U million depending upon the circumstances of its construction, possibly more. If Viacom were to cornirit . to a 1U -year franchise period, it would no doubt mean niyher rates for subscribers. [heir financial people indicated that the rate would prooably be about 20 percent higher. If staff's on yina l rate proposal were used, that meant the basic subscriber rate would yo from $12.25 to $15.20, which was not a small amount of money for cable services. When the rates went that high, subscribers were price sensitive and fewer of them would take the cable service; then Viacom would not realize the revenue it .expected to pay off its debt. Further, it was unlikely that a system could be financed for 10 years. She hypothesized a situation where a high tech new firm in Santa Clara was going to provide home information services in an unproven markete-that is to say, that -while the particular services had great potential, they had never been offered before in that environment, It would be a 10 -year license to operate and the County of ._Santa Clara would nave the riyht to. revoke the franchise at any time and -,to pay the system operator what it determined to be a fair price. In Order to satisfy the stockholders and.financiers of.the system, tit would require a 20 to 25 percent raise in product price, which would create problems of lower penetration (fewer people buying the service) and the potential for a competitive environment--- sorneone_ else offering similar kinds of services with a different technology. If one was yoiny to invest -'in -.that company, how good a n . i n -vestment could it be considered to be? Those kinds of que-s- t;ions must be answered, and these were the kinds of problems Yiacow faced. with the 1U -year franchise period. She introduced loca:<Spike,--Viacom',s_Manager, of. Financial Planning, and deferred to miler to respond:to the hrore technical `fi-rrancial questions Councilrne,nber Levy asked what the average subscription- rate would be to .a- -resident for something like the system described in the proposal if the franchise were for.. 1U years- as -..opposed to_ 15 years -.- Ms. Simpson said using the :.$12.25. figure originally-proposed b staff, the ra`,te-Would be. $1b.20. Gouiicilmember Levy: ciari.f ed7 that: a 10-yea-r _frar►chise wo0d- r.oughly 25 ,percent, more"than_,-.a j15, -year, franchise... -cnst 1 Counci lrnumber Cobb asked what was meant by not wanting to be forced into a particular mold. Ms. Simpson said two of Viacom's concerns related to the alloca- tion of channels and a limited third cable that_ would only reach_ certain places in the community. Viacom was experimenting more with data services and now knew that a huge number of data chan- nels could be put into one. video channel. Further, with regard to download -lay a business computer to a :hone. computer and vice versa, if the institutional cable only went to, certain places, chances were that it would not pass the right home or the right business: - Viacom wanted - the flexibility to design a system to meet those kinds of needs. It now _operated three high capacity systems and was beginning. to experiment with institutional business -services and. to offer data services, Viacom was learning over time and wanted to -apply its knowledge. Counci lmember Cobb said that several members of the audience referred to a hard -wired system as di_ technological dinosaur and spoke glowingly of a fiberoptic system. He was interested' in the feasibility of a tiberoptic system and what the cost impact might be. Ms. Simpson said the engineers of >Viacom were continually evalua- ting the fiheroptic technology. She -understood it was not yet considered to be cost effective and thus added substantially to the price of the system. That was not to say that when Palo Alto's system was ready to be built, -the price would not have come down substantially. The point at which it made sense to:use fiber optics was the point at which V'iacok would do it, but there was no resistance to soMethiny that was technically sound and financially feasible. However,. in ter -it s of a coaxial cable system being a dinosaur, experience had shown that the amount of capacity on that system was immense and provided better duality and much faster transmission. It was far and away an improvement over the twisted pairs offered by the Telephone Company, and in no way a dinosaur, C-uuncilme+nber Cobb clarified that if a hard -wired, coaxial system was installed, Viacom did not foresee that it would be oDsoiete over the period of the franchise. 1 Ms. S►mpson said that was correct, and it was not in Viacom's best interests to let it be. Council -member Witnerspoon said the cost of financing contained many aspects other tha';i just the time frame `involved, and she-- asked what_ period the ilia allowed for the amortization of capital equipment. Mr. Spike said for return on investment calculations, Viacom used the tax basis, but also had an accelerated cost recovery system method of depreciation and a composite of five years for that purpose. For EPS determinatiorn, the average life for about 50 percent of their assets, which was mainly the cable plant, was 15' years; about 4b of the assets frail an eight to ten-year depre- ciation; and the remaining five percent nad about a three-year depreciation. Counciimemb'er- 'Witherspoon. clarified that _15: years would look good for Viacom's financing purposes, , but would not necessarily be a crimp= on their amortization. Mr. Spike said for purposes of trying to' determine the return on investment for a stockholder,,tony looked at the book depreciation basis of the assets. t; outrc,lsaeriber Witherspoon asked if Viacom find- an investment- tax `; Credit. 3 i 5 -4/2503- errs spike said yes, aria that Viacom had about a two-year deferral basis on ITC's. For purposes of proposals, however, it was as- suined tiro I [C's could be used the year they occurred, This gave- the appearance that -Viacom had the maximum ,advantage, although that might°not actually be the case. Councilmernb.er 'Witherspoon, suggested a more cogent -argument would be whether Viacom had enouyin cash flow to service the debt in the early years, which on paper it would. Mr. Spike said it should be taken into account that Viacom was a large organization and was able to use its ITC's against revenues incurred in other operations, which applied to the net operating losses occurring in the first few years. betty McCroskey, 4158 Oak Hill, Palo Alto, Legislative Chair for the American Association' of University Women in Palo Alto (AAUW), said copies of sthe AAUW study were contained in the Council packet. The AAUW believed many good points mere contained in. the Arnold & Porter report, such as the high number of interactive -channels, the concept of universal service, the concept.. of having the Palo Alto system serve institutional users and individuals, the importance of local programming for the cornrnunity, and the concept of leasing certain commercial channels to third parties. the AAUW concluded by its study that it was important for the system to have a charter to set forth the goals and objectives and to state safeguards such as the right to privacy. Furthermore, a Cable Communications Policy board should be established, some members of -which woulcr De elected and some of whom would be appointed to set policy for the system. Those two points should be stated in the REP so that applicants, would know what they were responding to when .sub.=witting their applications for the cable system. The AAUW study was completed in January, 1983, before serious discussion occurred regarding participation by other com- munities with Palo Alto in an REP. The concensus of the AAUW was that the potential for economic advantage existed with -a somewhat larger service area, but at the same time, there might be specific needs and desires -for Palo Alto .which other communities might not be interested in. It. was important to establish Palo Alto's exact special uses of the. system and make.:, -provisions .for them as the joint powers agreement was negotia ,ed and executed. ._Further comments regarding the report were submitted to the staff and consultants. Hollis Russo, 1143 Stanford Avenue, said it was important to cost out significant options like alternative cable configurations and extra service packages separately because comparable bids were needed and _each respondent Must respond to the. same basic system sand variations. Further, subscribers were the ones who would ultimately Pay for system variations, and the costs should be cor- pared to the kinds of benefits to be received. Each respondent should address how the community would be_,involved in the, ongoing decision-nrakiny process of _ system improvements and service offer- ings. She believed it was important for the system to include 'a large number of leased access channels. Only four or five chan- nels were being al l ocatea to. lease access under the current pro- posal, and those channels were what would spread the contrb . over progrararsiiny.e If enough use -flexible channels were' available; centralizede control over programming could be lessened --and the best ;,system for Palo Alto created. Councllmember Levy asked, •regarding the lobbying ordinance., if_: it was necessary for 'speakers to identify , themselves as members of the Cable Cooperative.. City Attorney Uiane _ Lee- said she recal led, that -the ordinance only applied to those peopi-e with ..economic .interests . and paid ' lobby- ists. if a person -representing the Cable Cooperative was -paid -to lobby, the answer :was.yes. John Kel 1y, 3/1 W. portola, Los Altos, represented, hirrrsel f only, but was the Director of the Cable Communications Cooperative of Palo Alto, lnc. and served on the working group which advised the Pot icy and procedures Committee._ He said during the course of the past lb or 21) cable .tel-evision meeting -s, he had tried to under stand the Council's position with regard to the various issues. .He commended the. proposed - minimum requirements and basic objec- tives in all their technical aspects, but said it was difficult to understand the City'.s role in the system and how JriemberS of the community -would -participate in ongoing policy decisions, regarding the operation of the cable system. The proposed minimum system desiyn and the degree to which those -questions ,were ignored dis- tressed him. It was fine to have a series of different questions anJ deal with the ownership question in a different process with a. c s -,-Brent document, but he was -concerned that the governance and ownership issues were being subsumed into the current document, which assumed that the system would primarily be a pr-ivate fran- chise. Four members of the Council expressed Anterest in a muni-: cipal system last year, and he assumed those members were sti11 interested in a municipal system. Many people in 'the community were interested in a municipal system, and the City's -participa- tion in the process` had been discussed on numerous occasions and in .many forms. He believed the Council should decide tonight whether the City would be involved, and if so, whether -the owner- ship_ question should be separated from the rest of the RFP. He did not understand how the City could put forth a proposal- for pure municipal ownership at the_ present stage, and believed the REP racist do more than ask a series of questions. If there were a joint venture or some sort of joint ownership option, it would have to be more than a one- or two-step affair. Those possible participants in the .system would have to be called upon to discuss the matter in a meaningful way. His firm repeatedly tried to meet with members of City staff and was successful to a certain extent , but where they yot down to .the nitty gritty in those discussions, antitrust objections were raised. While the objectionse were potentially meritorious, he believed it was possible to structure a public process at which bidders and other interested members of the community could yet...; together and talk about those things. He would be interested in hearing- more from City staff about how -some sort of multi-representational/multi-owner system might be devei- -. oped. He believed the best way to do that was public hearings such as those of the work` r ng group. uar i 1 Wool ley, 1685 Mariposa , said the working group was organized by, staff last November to provide feedback to the Policy and Procedures Committee concerning - 'governance. That was done, but the working group_desired-to continue to .explore those ideas and become more -specific-, and continued to meet on its own in January, February _arid March on Wednesday afternoons... Those members in attendance `at - the Council meeting" were Carol - Harrington, Paul .Kaufman, Betty "McCroskey-,_-Join Kelly and Mark Strausman. Members_ of - the group were not only interested eine a variety of cable' -aspects (two. people were interested in education, one i sub scriber participation, ogle -in subscriber- rights, and another in - data e tran_srlssion}, but also represented geographic areas from Cupertino to 'Menlo Park. Despite its Diversity-, a.rsd through a lot'--: of :'persistence on Wednesday -afternoons, the. group finally corn- pieted• a report -which `was :delivered. to the Council .over thee _past weekend; The group -.believed the report represented ,the consensus; issues soch as - community participation. and governance were ir►e'; cluded in that report, as were recommendations. concerning the, basic objecti-ves. Jav,ic; ts Harris, 455..Margarita Avenue, clarified that _ he was ,no4;.- related to the Uavid..Harris who ran total ly- fore Congre_ss. He was" active i`n a personal computer 'user group ,and some of= _his.worl was done ip data communications.. He had ` followed cable television far over 1U yearn because he was interested in the issue..of-:,howto`".get_: information 'going.' He. was` ;i±hpressed• by the proposal and "raid. a footnote at the bottom . of, page-. b of xhibit .,, indica.tec# toot access services would, include capacity for audio and data ser- vices. He suggested that the Word "interactive" precede "data services; otherwise one-way data could be received, but people would be unable to interact. A public access data channel was valuable, and all the arguments in terms of access for political groups, new ideas, experimentation in terms of peoples' bodies and pictures on video could be applied' to data forms of communica- tions. Further, regarding governance, finance, and how to manage the system, it was conceived in public hearings to be an all or. nothing system. The initial investment wou1i be high, with the chance to realize a stream of earnings over the years by selling services. He believed that those processes could be unlinked -- ownership of the wires separated --the common carriage municipal services aspect from the provision of programs. That coeld happen by the City's owning and leasing a large number of channels to .the highest bidders, which would separate the investment, from the return on investment. The people of Palo Alto were very inter- ested in citizen control, and a mechanism was needed to use some of .the profits from the leasing to subsidize valuable services -- access services, municipal services, etc. There were economic arguments that if the leasing were dome frequently, the economic response to new possibilities would be faster than under a single monopolistic owner and would tend to get the highest profit be- cause of the fast response to ,,new profit opportunities. Michael F icker was an _attorney who represented Viacom and resided at 23b Walter Hays Uriv+e. Regarding the 10- versus 15 -year fran- chise term, he reiterated that it was an investment decision and clarified that the basic rate would neceesar•i iy be increased from $12.bU to $15.50. The increase was a little more dramatic by looking at the overal I income flow that would have to be real ized order to justify that investment in a 10 -year span. The oriy- inai City consultant's report data projected $38 per month per subscriber in Palo Alto based on two pay services, etc. If the franchise was for ten years, the cost would have to be $48 per household per month. Currently, Viacom's average monthly rate for its four high tech systems was $28 to $32 per subscriber. One would seriously have to consider whether anyone would subscribe at $50 per month --he did not .think he would. Vice Mayor Fazzino asked for clarification that Mr. Flicker's figures represented a worst -case scenario since he had not heard •those rates represented as realistic. and further that those figures were intended to eliminate the entire debt through the rater charged. Mr clicker said the figures were taken from the consultant's report ort page 38. The figgres were questioned when presented, but if $231 to $32 was the going rate for other high tech systems, and if Viacom's financial people said .Vie fig}ores would have to be increased, it meant about $4U per month per Subscri ber. He cl ari - fied that $12.:.0 versus $1b per month was basic rate only; pay services, etc., were additional and the 2U percent increase app to everything. Bob Meltzer, . Vend Avenue, said he believed. that al lowing for future technical developments had been- a guideline in the prep- aration of all work to date. That was particularly important when looking at the world of techno I ogy 10 or 15 years ago and . the tremendous, acceleration of new technology since then. The firm he worked for was involved in the digital transmission of various technologieS, particularly' newspapers, U.S.A. Taaay commenced digital transmission in September, 19132, =a nd he cnii'1dd visualize. the day' -‘in the not too distant future when newspapers or documents could De received at h©me by means of the proposed cable, syste€n., He believed whatever system was --"chosen must. be structured to allow. for new Changes* and ;that a • system:, which was built by : private enterprise organized purely for : return ::.on investmentto owners was not the vehicle for changes that Other systems might be. He had lived in .Palo Alto for over 12 years and was; impressed :by the.- City's yoverninent. If any city could take charge and build a good system, Palo Alto was it. Palo Alto was the center of the Si l icon Valley --the heart of the world's technology. The combination of having a dynamic and irinov-at i ve city governinent staff and being the center of technology should enable Palo Alto to push forward its own system to allow tor the technical advances inevitably. to come. • Kecel wry no further requests from the public to speak, Mayor Bechtel declared the public hearing closed. 1 K.LCI: � FKUM J:bO to lu:Ub p.rn. Counci lrnember Klein asked the consultant to respond to the series of comments related to fiberoptic technology and the breaking out of financial data with regard to various "subsidy" items. Mr. -Sinel said the RFP would be drafted to determine whether come panits met the capacity requirements, and if that could be done. with fiberoptics rather than cable, companies would be asked to explain how and why .that- was believed to be possible. He did not see, any inconsistencies with the way the RFP would bee developed .. and: some of the comments with respect to a fiberoptic system. Councilmesnber Klein asked what the City would gain by -requiring tiberoptic technology. Mr. Sinel said nothing would be gained and it. was not economically ✓ iable to have a fiberoptic system in. every Palo Alto- household at this point. It could become viable, but the key was the capacity on the system and how much capacity was needed. It was hoped that a number of responsible bidders would examine the City's potential needs and bid systems based upon their assessment of that need. Tne consultant and engi.neeriny firm could then evaluate those bids, and make an analysis available to the Council about whether a ✓ iable system had been proposed for the City. One section of the KIP would also deal with the. financial makeup of the system broken down into various cost components and various anticipated revenue components, and certain specific items, could be broken out indi- ✓ idually if the Council desired. counciimember Klein said he would later move that certain items be uroken down individual ly because he was concerned that the City be able to determine at' some po-i,nt in the analysis that things looiGed tub costly, and which items -'Were absolutely necessary_ . If cuts - had to be made, it would be beneficial to know where those costs were located.'-- He asked if that system was plausible. Mr. -Sinel said it depended upon whether the City built the system - Or whether the system was franchised. (.ouncilrnember.Klein said if the system were franchised, and if .the - best bidder indicated the minimum monthly rate would have to be and,. if . everyone agreed that was too high and .would have to be lowered to $32 per month, the 'capital costs would': have tbe be reduced and it -would _ be helpful-- to know ,where they could_ be ree cluced; ea l.t could happen -that a particular service which the City desired to have the applicant supply at ro change would cost the applicant $4UU,UUU or $5UU;UUU in capital and the City could do without it in exchange for .a lower monthly rate to subscribers. 14Ir. Si nel said the companies realized. the City 'would look at their, rates `and Arnold and Porter, with its financial' consultants, would' Zook _carefully at ° how revenges were projected. ire. -could not.. con-- -ceiv.e that -the City would ask for anything, ,in terms o.f available services`* --which would have a. -_significant _impact on either._-----Th re-- couid be_ significant impact$_ -on system design, and"there would be ,._a.. basic ,question as to whether the- number of households in the area could support a very sophistocated, high .capacity. inter-., acti-ve system. He did -not believe the City Council would_ be - forced to make fine, tuning judgments. - The companies would be forced to make those judgments when the Council's desires were clear about what it would like to see in the system and what rates could be tolerated for the community. The required financial data would -allow the Council to test _the answers received. For exam- ple, it a company said that in order to provide the City'_s desired rate of X9.95 rather than $11.9_S, the following seven services .would no longer be provi-ded, the financial portion of the RFP was structured in such a way that -the Council could make those test- inys. NOTION: Councilmember Klein moved, seconded by Cobb, that. the Council adopt the following: 1. The Arnold and Porter recommended process with a separate break out of financing -costs of the various services that the 'system applicants ,will prcrfde to -the City, School District and community, as well as to cost out the subsidy or hidden tax of all free or below cost services, and 2. The franchise period be for 15 years. Mr. Sigel asked for clarification, with regard to the break out of separate services, about whether it referred to the services that the City ;night require as a benefit to the City. Councilmember, Klein' said yes. Cuuncilmember Witherspoon asked for clarification about whether the -City -was-requiring two-way data transmission to residences. Mr. Sinel said that was included in the RFP. Councilmember Witherspoon said she understood that Viacom proposed that the two-way -data transmission not be done by a third cable, but by splitting a video channel. Mr, Sinel clarified the minimum requirements. called for two sub- scriber cables and an institutional cable which perhaps only went to certain buildings. Viacom was pleased the Council would let them buy ld three cables -instead that would pass every subscriber. Counci.lmewber Levy said he was concerned that the RFP would have too -Many variables for comparison purposes. The comment regarding fi-beraptics indicated At was all right if one respondent wished to use a fiberoptic system and the other wished to use a coaxial cable system. The Council would then have to analyze. a series of variables related to the strengths and weaknesses., of each tech- nica 1 . system. that., sounded as if the -Council would end up with an array of different proposals rather than an RFP structured to provide only a handful of differences the Council could analyze. ter. Sinel said on one hand the Council wanted to force the appli- cants' responses into. a pattern which would allow an evaluation .•about whether the applicant could deliver what the City asked for, but_on=the other hand, -. it should not stifle the creativity of the comp nies who would bid. 7fie doubted that the bids:.: -would be all that different_ ,in the end, but -it would not behoove the Council to:: su.gyest- that everyone_ must bid a. fiber optic system-, ori that ,'no -one Could b i d t i ber opt i.c s in the system. Once the; Counc i t corn-- -p_leted a, number ,of ascertainment studies and -decided the _needs for - the. next ten years, i f a company wanted to over-bui,l d by a factor of 10 or ZU, this was ,not relevant to the Council- in terms.- of capacity, although it could load.- their-- system -with: a :.financial burden iohich could not be -matched. He believed' the' system. would -- 'shake itself and arose variables'wo ld not be di.f:ficult ones -with which to deal . Cuunci:liirerriber' Levy asked it the consultant would crake the pluses anc.rminuses of each variable clear to the Council in its analysis of each tiid Mr. Sinelesaid yes. 1 1 1 Counci lmember Levy cornrrented the consultant directed his state-. iiien_ts to a Counci 1 with no technical knowledge of which to speak, and although:the Councilrneinbers al l intently studied the area, .too many unanalyzed technical variables would make it difficult for the -Council to make the proper decisions. He supported the motion to request that the oiarieus elements be costed out, particularly those related to free services. He supported the 15 -year fran- chise and . bel ieved that a 10 -year payout would put an undue burden on the system operator which would. pass the higher costs onto the users. Counci_lmember Levy said the Working Troup proposed ,that the phraseology of Section 1(4) on Page 1 of the Cable System Basic Objectives/Minimum Requirements, dated -April 14, be changed to read as followSe' "4. Creative uses of cable technology to foster participation in local government and community activities and to heighten the sense of community". Counci lr'iember Cobh said he believed it would be better for the consultant to have a sense of where the Council was going, because wnen the RFP was ready for ti na l approval, the Council would have the opportunity to make detailed and precise amendments. Mr. Sirrel agreed with Councilmernber Klein's suggestion, and added that speci.tic wording changes could be given to staff and reviewed by the consultant to he pl uyged ' into the draft RFP. Counci lmernber. Levy commented that a basic objective of the cable system should be to foster a sense of community which involved community identification and involvement. Further, he believed the word "reliable" should be used because the City wanted a tech- nically sound and flexible system, but also wanted a reliable one. He did -not want to see the City yo so far down the line of state of the art and be in danger Of systems failing in individual homes fairly often. Further, the City should be careful in its language not to talk about a franchisee when in fact an owner. and operator were meant. . The: City should not include anything which would preclude a municipally owned system, a partnership between the City and a cooperative, or the partnership between the City -and a private contractors- He added that he was not -one of the four people who voted earlier that the Council should -immediately opt for a municipal system. He wanted to assure that the wrong lan- yuaye was not rise€ : in that regard. He bei ieved. brat, a glossary should be attached -to the RFP to define the various terms which people were presumed to know. The April 14 memo indicated, in early ray.; decisions would have to be made about the geographic size o€ tfe. area. Mr. Sinel said it was clear that decisions with respect 'to the yeoyraphic size should be made before the RFP was issued, .which looked to be the end of May or early June Councilmember:Levy said overall he was pleased with the report and the way it responded to the need for data usage -and the-- flexibil ity involved, -:The questions of governance would be important and he 'agreed OttLther several.,speakers and -consultant who suggested that :governance be left' aside at ,the present time as the RFP was. considered. Counci lmember:`*Cob-b said, governance was where he was concerned about the:RFP. Expanding the physical size of the system to in - c i ude other commune ties Invol veci complicated governance questions, arru he wanted to know how those things would be dealt with. He believed the answers could. impact the costs, ownership derision, etc. He as-ked if the RFP could be structured -to deal with goner- Hance. He was leaning towards a jointly owned system, but asked whether- it was- possible in ea multi -jurisdictional system. He believed those questions must be raised in the RFP for the _Counci 1 to make an intelligent decision - The more people involved, the more complicated it bec.. Hie, which ultimately;, impacted how the system performed, what it cost, how it would be run and how deci- sions would be made. He respectfully disagreed with Councilrnember Levy and did not see how the Council scould yet at its decision from -the material acquired by the RFP unless At dealt. with the governance question in some way. He believed Counci lriembe► Klein had asked yood questions on technology and ;he hoped the RFP would dear with the issue's of technology and provide the Council with the alternatives' it needed to make decisions about whether it was buying something that would last for the 15- year life of the system. Page 18 of the memo talked about the five percent or more franchise fee. He asked if the Council could extract specific language .fron a potential franchisee that the contract could not be undone' by St bb it it or similiar legislation passed. He believed that should be included so that the City could get out of the system what it wanted regardless of what .went on in Washington to the greatest degree possible. He agreed that community .partic- ipation was important and that there was a tremendous desire in the community to actively participate An certain areas of the system operation. He believed the -respondent must be able to address those questions in as much detail as possible. Regarding proyramming, he believed some commentary or response was necessary reyarding how to insulate the Council from First Amendment issues. He believed that the language on Page 19 dealing with the owner- ship question was too soft in suggesting the City might deal with joint ownership, etc. He wanted a very specific 'response to the question of joint ownership, how it would work, what it meant economically, and all the rest. Regarding the glossary suggested by Councilmember Levy, lots of people read different things in the phrase "institutional uses," and he hoped that could be defined clearly. Some interpretations of institutional uses included public sector uses, the, private sector, who should manage those, etc.. the recornrzrendations made by the working group included a number of good suygestions; some were already incorporated and he believed others should be considered. Likewise1 the League of Women Voters made some excellent comments, many of which dealt with the broad question of having the public involved, -particu- larly with regard to public access and other public area's. He encourayed that those things be covered by the RFP at least -to the extent that it impacted the economics and the decision to be made by the Council later. Vice Mayor Fazzino_ agreed with most of the comments made by his colleagues Fcr the most part, he bel ieved the consultant did an excellent job putting together the basic objectives and minimum requirements for the RFP, and that the council finally -.made some progress towards the —establishment of a ,.cable system. Scime of. his concerns were-. addressed, and he was. pleased that the 15 -year time frame ryas accepted by .the Council because it was a far more real:- istic approach based uptrn financial-, viability and history. He continued to be-.-cohcerned about how City management and its pro- posa1 wou1d`be :_ba:ndled by the. consultant. He supported the League - of --Women Voters su,gyestion that City staff mast --and--should respond to the REP.1 fhe:`: consultant might well deal with the risks and benefits of :municipal own"ershi_p, .but without' a specf'ic proposal , the consultant .would- be grasping at,, straws;. and setting :_up :an entirely separate process wherein ' staff would spend many, more months putt n,g together .thei.r own --system and additional new--;engi neeriny,and financial f_igur. £S: tie firmly: believed, that lJ ity- staff should. be forced "to provi-ie.. a pr0pdsal , .and .made that :comment,- to the consultant:.in—Oecembet..I Ate bel ievr:d it was not `c rrent-ly before- the Council as part -of the objective* -because the , consul, 1 tants felt. they were beholden to City staff and could not objec- tively and fairly deal with a separate :City staff proposal. Fur- ther, he believed it was important to remember that the consultant was working for the City Council and not the City 'staff. The Council was makin'j- a[ serious mistake by not getting a forrnal' pro- posal from City staff on the issue, and if At were nothing more than a compilation of the $15U,0UU amount already spent in terms of enyineeriny and financial data, it would be important to poll that toyether along the JineS of what other private franchisers were required to -put together. Jle agreed with Counci lmember Cobb's comments regarding the first amendment -issues and the ap- propriate insulation of the City Council from the decision -making with regard to proyramming and ongoing .governance of the system. Ile believed it was appropriate for the Council to -adopt a general principle reyardiny governance, the need for public involvement, and the need for institutionalization of the installation as pointed out by Counci lrneinber Cobb. He recognized that it would occur on a de :facto basis, but believed the Council was making a mistake by not includiny it as part of the preliminary RFP and rnakino it clear to those who would offer proposals what the City's requirements would be. Regarding the need for other cornniuO ty involvement, he supported and encouraged other communities, par- ticularly Stanford, to yet involved in the system. At the same time, he did not want the City to be delayed .while waiting for Atherton, Menlo Park and other communities which had -had many years to yet involved with the process and had not shown much interest until Palo Alto decided to move ahead with a .consultant. He hoped those communities' consideration of inclusion in the system would be considered early in the RFP process so that the Council would not be forced to go back and add -a number of months to •the schedule. lie .believed the consultant had done an excellent job with regard to the minimum requirements and, supported the motion. City Attorney Diane Lee said if tne consultant was beholden to anyone, it was the Council, which approved the contract. Vice Mayor Fazzino said he fi rrn y agreed, but he believed the minutes in December, 1911, reflected some very specific comments by the consultant about the difficulty o>~ analyzing a separate City staff proposal. Mr. Sinel ci ari f i ed •that in December, he suggested that the proceee dure and posture of the City --not staff --was such that he believed it would not niale a .lot of sense for the City Council to review, ,with tne consultant's evaluation, a City staff proposal. The con- sultant's job was to point out the benefits of municipal ownership aS opposed toa private system.- The issue then, and now, Was the best_ process to ' br i ny before the City Counci i . He believed that best process w s not to nave the City staff respond to d specific detailed proposal, but for facts to be brought before the City - Council on the issues raises by municipal ownership and why muni- cipal, ownership may or may not be better for the City than private ownership, .Vise Mayor Fazzino thanked Mr. Sinel for the comments, but said he still di:sayreed. •Counci lineinber Klein believed it was -necessary to make a ;few brief. comments reyardiny the" -Working ir-oup's .=report of Apri i 22. Modi- fication t4, regarding _ the creative uses of, cable :technology to foster participation {n. -_Local government and community activities:', did not make much -dif:ference in, his opinion. ice: _liked the mo-difi ,cation to Item, 17, regarding the-- interconnection of the.- system to cable systems thr-ougnout; thee region -and to external: sources- :of. . programs and - seravices, but`= won.d.ered whether it was° feasible. acid what it woo -1d: do` to the costs. He most strongly ,supported: the proposed chaos e to Iteu #1U` .-for an "economically. Viable' .-cab;le system," rather than an economically viable franchise system, and believed it echoed .some: of."the :comments to keep the; language as -3. 2 2 3 4/25/83- neutral as •possible with' regard to the ultimate ownership of the system. He had trouble with Item #11 for "an ownership structure that enhances community control and maximizes the services..." because it appeared to presuppose that the City would have some form of municipal or -joint ownership.• He believed that Items #12 and X1:3. regarding' the governance structure and an independent local programming board were premature. Gounc-til lmember Fletcher also • suggested the specific wording recom- mendations be' considered and -evaluated by the consultant.. She was uncertain about how. a homogeneous -System would be designed_ for some diverse communities which would probably join in the system. She referred to the • San Mateo County area which _might have differ- ent heeds and desires. for their cable system and how that Would be determined. Pato Alto completed. a cursory penetration survey and she did not believe that was done.in the other areas which were now considering joining An. She saw the process lasting into next year's general election and was -unsure about whether staff envi- sioned holding a special election in June or wditing until the general election in November, assuming a franchise had to be voted urt. Regarding. a City response to the RFP, she waffled on the issue, but felt comfortable at this point in going along with the recommendation of the consultant that City staff not try to put together a • competiny document. Her decision partially related to her worry from the beginning that City staff did not have the resources or public relations expertise that a commercial company had and staff's response might not appear to be comparable, al- though the suostance might be. She was still uncomfortable that the Council was going through a process, possibly resulting in the consideration of a franchise, which could later be preempted if Congress enacted legislation stating clearly that all franchises must conform to the legislation by. Year X. She did not think any protection could be built into a franchise. Cuunci lrnember Levy said he understood that essentially the consul- tant would analyze_.rnunicipal ownership in the abstract and without a concrete proposal from City staff. That was not at all what he had in mind. If it were an analysis it the abstract, then he be- lieved it could be done without soliciting bids from the outside. Council wanted to put up what the City could do versus what the •private sector could do. in order to do that, he believed the Council must have specifics from the public- sector. Mr. _Sine' said he understood that the process _for putting on an RFP _for private bid, since the Council's decision was open as to whetter to. go with a `private company, .would have before- it a half dozen very responsible bids from some large and small companies as to what they believed Palo Alto was and how they believed they could serve the City. Ultimately, policy judgments would have .to be made because there would be a dif€.erence in the way .the Ci-ty and a company interested in return on investment would treat , ser- vice. That did not mean the City's system was not economically viable or would not nave to be concerned with profit, but_ he believed the consultant would have enough information to provide the Council with the general framework of what a municipal system would do for -Palo Alto in order`.. to make that judgment. then,. it wou l a becor e a development project --someone , would be appointed-:: to yo build the system. As with a private. cable operator, when his bid and .franchise WdS signed, . ne` Would build a system an& some changes would. occur -as the system; went in because the world ef- tected changes as it went along. Ile._ did -not--believe the Council needed:a, specific -proposal from the City staff --=however, the Conn- cil would have to know how to _govern the -system -and' have ve some n, sese about that it wanted to acrompl i.sh from the system4 A group -wo-uld then be chosen to_ develop the systemr, rh_ch ,=-group wool d cone back. fraiir ti e, to time 1wi_th - some ptit icy judgments ` tti lade. He believed- the> Councfl would have -some tiling_ very different from an abstract. analysis of.-wha►t =a mun tipal system woul'd_`'look like" iri "a hyp►othet-i ca 1 city but Wool d not; Ae:cessa rf. l x have as ; f.i ne : tune -d_. -an., analysis:cis might be the core if: _tlie_ next seven months were. spent simply 'designing a system: Councilmember Levy asked at what point the Council would be able to 'determine the cost of. the City's system, how it would be ti-nanced, and the cost to the subscribers —not the policy issues, but just the doI Iars and cents issues as to whether it made more financial sense for the City to go rnunicipal. Mr.. Sinel bel ieved the Council would have the dollars and cents provided as part of its basic decision. The cable operators would provide pro torrnas as to what they bel ieved the se'stern would cost to construct, what revenues could be realized, and what subscrib- ers would be charged. The Council would be able to see the types of cost analysis fo.r a municipal system, and the big variation would be the way it was financed. Ultimately, the Council would come close to seeiny a chart ..that al lowed a test of how the two would perform. The real decision r:riyht be more than simply an econ{umic one --it could be a service decision which was in effect,a pill icy judgment. That decision would have to be made in consider- ation of what the private operators offered the City. The better and more exci tiny the bids to the City, the less likely the Courr- ci 1 was to nave policy judgments drove the City .into municipal ownership, although it aright move into a joint venture structure because that mi yht be a more economic trade-off than a policy/ service trade-off. Counci lmember Cobb said he had a lot of sympathy for the general question raised by Counci lerember Levy and Vice Mayor Fazzirio. He tried to structure what he would be comfortable with in making that kind of decision and believed he would need a matrix in which some of the columns included things like risks. An abstract would say that it was no risk with a franchise, maximum risk to the City with nrunicipa 1 , and somewhere in, between with a joint system. Another example was the degree of community involvement. There could be zero risk with a franchise system but minimal community involvement, whereas cornEEiunity invol:vernent would be maximized with a .municipal system, he said he could construct the matrix in the abstract, and wanted to see enough information on the comparison to municipal systems for the Council to quantify some of those answers. Then if some members of the Council wished to pursue a municipal system or those currently lobbying for a joint system, they would at east know what they were aeaIiny with in fairly specitic quantiflab le terms so that a decision was based on numbers and not opinions. Vice Mayor Fazzino said he believed the fatal flaw in the staff and consultant aryument about whether the staff should offer a proposa I was that the Council was not opposed to the idea of municipal ownership in the abstract. The Council had serious concerns about the specific proposal which proported to be both abstract and specific in nature, and problems with the financial enyineering data received. If the Council did not get the answers to financial proposals offered a few months ago, the municipal option would continue to be a fatally flawed proposal and.. would heifer get. proper consideration. It was important: for the consul- tant and staff to know that as they moved into the RIP process, and this was why he still believed it was a terrible mistake not. to have staff respond to: the RIP. Mayor Bechtel disayreed with Counci lmembers Fazzino, Cobb and Levy. She` believed it would'_ to an incredible waste of staff time and substantial amounts of money because she did not think the_. answer woold miraculously appear Dy having a bid proposed by staff. The Council would receive the 'kind of information neces- sar^y and when the. RFP's from the private frarichisers were received and the puss::lbi1 _itles reviewed, the Council would ;"then be able.. to evaluate thee possibi l"itjes for =Palo Alto with_. the_ help of the consultants he said :„she appreciated : thee -input recetved f`;tni members of the public and Tea l lied that some members spent week after week evaluating the proposals and coming up_ with, valuable recommendations. •Situ_agreed with comments rnade':by Councilmet;!bers that. ,tne issue"- of.,._ governa nce needed to be deferred -and could be picked up at- a later date when some final decisions were made. 1 1 MOTION RESTATEU: TO ADOPT THE ARNOLU AND PORTER RECOMMENDED PROCESS WITH THE SEPARATE BREAK OUT OF FINANCING COSTS OF THE VARIOUS SERVICES THAT THE SYSTEM APPLICANTS WOULD PROVIDE TO THE CITY, SCHOOL DISTRICT AND COMMUNITY, AS WELL AS TO COST OUT THE SUBSIDY Ok HIDDEN TAX OF ALL FREE Ok BELOW COST SERVICES; AND THAT THE FRANCHISE PERIOD BE FOR 15 YEARS. Councilrnember Levy said he undirstood Councilmember Klein's amend- ment as a request to cost out the subsidy or hidden tax involved in_ all free or below cost services --not merely to the .:public agen- cies, but to subscribers as rel 1, COU$CILMEMBER LEVY'S SUGGESTION, .WAS ACCEPTED BY MAKER AND SEC- OND, AND INCORPORATED INTO MAIN MOTION. MOTION PASSED unanimouslyy Eyerly and Renzel absent. Counci.lmember Cobb suggested that it might simplify when the RFP's were finally ready for approval if could get the draft RFP a few weeks in advance and ruarg ina l markings were necessary and return them to taut. the process the Council do whatever the consul - 1 TLM #,1:i, REtpJLST OF VICE MAYOR FAZLINU AND CUUNC1LMEMBER COBB RE 5TUi1Y OF M Ft Vice ?Mayor Fa zz i no said everyone received cards and telephone calls about the Midtown area amortization, which issue had been discussed in one form or another for some time. He and Council - member Cobb had had long discussions- with residents and 5usiness owners in trle area regarding the amortization schedule coming up An May and the schedute ending in 1992. He believed the primary concern, short of any specific recommendations as to how to deal with the issue, was that Council and perhaps the Planning Commis- sion needed one fina 1 opportunity to evaluate the zoning decision ;made 15 years ago. They had to decide whether that zoning deci- sion, based on much different circumstances, was' still appropriate g i ven the uses of the businesses in the area and . the people who occupied the Midtown area He clarified that the intent was not to open up the entire issue of amortization, but to encourage Coun.ciimeinbers to decide once and for .all the proper uses for businesses in that area. It Was believed the Planning Commission was the best approach, but alternative approaches would be wel- comed. MOTION: Vice Mayor Fazztnp moved,, seconded by Cobb, to refer consideration of the Midtown amortization and the need for a study of .the Midtown area to the Planning Commission. Counciliiember Levy said normally Vice Mayor Fazzino _ liked to assiyn a time certain -for an item to be returned to the Council and asked what ti -one frariie he had in mind. Vice Mayor Fa.zzino said he appreciated the fact that the Planning Commission and planning staff were overwhei.med with items over the .next. ;coiuple of months, _and- asked Mr. Schreiber:Sthreibert how quickly the matter -could be handled. Uirector of Planning and Community Environment Ken Schreiber said the question was hard to ,answer because he was not sure about the levei of analysis the Council expected. If the issue was simply being referred for the Planning Commission to „hold some type of public meeting and then return with, little if any staff analysis other than, a compi 1 Lion of the history, current zoning, etc., it could probably go on. a Plannfng Commission agenda sometime in May. or June. - -If the Council's intent:. was to-, have a -more in-depth stoidy with- alternatives., .e`tc..,: by the Planning Commission, then the process,. would be much ,different and much longer. 'Guidance from the Council would also be necessary in terms ef. what other work shouldfbe delayed while plunging into the assignment. 3 6 1 i 1 Vice Mayor Fazzino said he believed the data was already in place to make the decisions regarding the amortization schedule of busi- nesses in that area, and he did_ not ask that much staff time be used because he was primarily asking for a public hearing or a reading by the Planning Commission. Councilmember Cobb believed whenever approximately 2,000 or more citizens in the community submitted a petition and asked that the Council consider something, the Council had an obligation to do so. That did not mean he would -change his mind on any of the particular properties --such as those: commercial properties along Loma Verde --that their amortizations should be changed from the present schedule. He did think when that many people said some- thing needed to be considered, it must be considered and the people given the chance to express themselves. Those, decisions were made 15 years ago; circumstances ct;anged, times changed, needs changed, and he did not believe the Council should be afraid to look at the issue. The Council might not change their minds, or might change on one or two properties, but believed the obliga- tion was there to take one last look before it was locked forever into the future. He agreed with Vice Mayor fazzino that a cursory overall look was necessary without a great deal of staff work because the data was available. Information about whether there were places that should be looked at more carefully .would emerge from the Planning Commission's taking a generalized look with virtually no staff input other than to simply agendize it and collect the appropriate information that already existed. If something specific emerged from that process, the Council should take a closer look at it, but the people should: be given the chance to express their opinions before the Council locked the matter in concrete forever. Councilii1ember Witherspoon said she was concerned that the Council was setting itself up for a major disappointment. The Council could not guarantee the results in terms of the citizen' con- cerns. The issue ;could be discussed from a number of viewpoints -- whether there was enough commercial zoning in the Midtown area to provide enough services to make it viable for those who used it to shop, and whether the Council should zone more property commercial or whether the amortization should be reversed. Even if the Coun- cil zoned certain properties commercial, it could not guarantee that the services people specifically wanted would be there in five years. She was concerned that by opening up the matter with a vague Planning Commission assignment, everyone would be frus- trated and disappointed. There should be more commercial zoning in the area to allow a good mix of services. She preferred _a neighborhood commercial type of zoning rather than PC and would be amenable to zoning the front part of the Hoover School property commercial in order to have more contiguous commercial concen- trated in the traditional Midtown area rather than going all the way down to Loma Verde. She believed that would be before the Council in due time as the school district considered what to do with the Hoover School site, Many neighbors who called her were concerned that the Standard station was now vacant, but the Coun- cil could not control that. The Council could not force the owner to put up something where the Standard station was. She realized: that people were also concerned about the Shell station and the amortization schedule on the :Arco station because they wanted to keep one gas station in the Midtown area. She agreed and said only one gas station was left in the downtown area, but did not believe it needed.. to ..ga through the; 'lanhing Commission. The Arco station would be there until 1991. She could not support the motion without something specific for the Planniny Commission to analyze. She asked whether they were talking about more commer- cial zoning or the fact that the .Midtown area might be zoned too heavily residential. This ryas -another .,issue and a concern to many, People, but the Planning- Commi ssi on" must: be told what to study. There :;were too many burning planning issues. coming down the. road In .,.the next three month_ s for them to be diverted : by, the : proposed 'request.. '.She had only received a lot of comment With: regard :to. 1 the Shell station and that was out of the Council's hands. The person who owned the Shell franchise was not about to reverse his decision to move, and unless she knew exactly what the Planning Commission would study, she would not support the motion. Councilmember Fletcher said she was also opposed to the motion because she did not believe it was. the'proper function of the Planning Commission to make policy decisions for the Council. Either the Council wanted to go back to commercial in the area or not. The Planning Commission had, on several occasions, been put in the position of making a recommendation which turned out to be a policy decision which the Council did not agree with, and all their work was done for naught. She believed if the Council wanted to rezone to commercial, it was up to them to give direc- tion to the Planning Commission The property in question was the veterinary emergency hospital, which she understood was too small for the occupants of the building, who were looking for larger quarters regardless of the zoning. Further, the veterinary hos- pital took over the building with the . full knowledge of the amortization schedule. The gas station was not a neighborhood commercial use and she did not want to zone that property back to regular commercial. If a shortage of gas stations was the prob- lem, she had ridden around her neighborhood this weekend and counted nine gas stations going from Middlefield and Charleston to Fabian and Charleston, San Antonio and Charleston, Middlefield and San Antonio and Leghorn and San Antonio. One could not say it was really a neighborhood facility .which one rode a .bicycle to or walked to with rare exceptions. She believed the ballet school was telling the Council that it would be expensive for them to move to another facility. She did not consider the ballet school to be a neighborhood use; letters received came from everywhere, with a few from the neighborhood. Recently, a dancing school was opened on California Avenue and she believed. something similar could be done in the situation of the ballet school. Further, if the Council gave cer.tain properties the right to stay after others had moved with the understanding that it was the law, those other people would have a very good basis for legal action against the City. She did not want to give the residents false hopes by holding hearings, continuing the item over a number of meetings and coming down with a decision that the zoning would stay. If other properties were involved, she might perhaps reconsider, but she saw no reason to rezone to commercial for those particular parcels she mentioned. Councilmember Klein clarified that the motion referred to the Midtown amortization and asked for a definition of "Midtown." Vice Mayor.Fazzino said he was speaking to the specific list of properties which would be forced, under the zoning decisions made 15 years ago, to amortize out in 1983 Or ,i n 1992. Councilmember Klein said he was troubled by the inclusion of all the properties. Councilmember Cobb said he was specifically, referring to the Mid- town strip along Middlefield Road. Mr. Schreiber . said i f Council made the assignment, it was impor- tent to discuss the,, questions. The Ballet Center on Middlefield was about seven blocks _ from Loma Verde and, by almost any staff definition, would not _ be included as part of Midtown. The 1968 use list included Ekins Body Shop od Churchill, but he was not sure whether the Council intended to open that. issue. He pre- sented a transparency of the current Palo Alto Comprehensive Plan which showed the area often referred to as the . key Midtown area. Some multiple fantily�an'd„some..single family land was "designated along Middlefield therestwas planned multiple family except for the Century Liquor site, which - was, recently changed to neigh- borhood' commercial. The parcels subject, to termination of the 3 2 2 8 4/25/83_ Corrected 7/25/83 current uses were outlined in red,. and all sites were, beyond Matadero Creek toward. Lorna. Verde. Within the area from Matadero. to Loma Verde, the Chinese Community Center was scheduled for termination in March, 1984, and the Arco station together with a couple of other. ,sites in the 1990's. That area —included two ser- vice stations, the veterinary clinic and the Chinese Community Center with the related commercial use -s; the area along Loma Verde included the piatiny company, wholesale electronics, warehousing and manufacturing. i 1 1 Mayor Bechtel clarified that the amortizati-ohs being discussed dated back to 1968 and that the zoning ordinance change in 1978 affected other properties. She asked which properties would :be affected. ,Coning Administrator Bob Brown said two .properties in the Midtown area were affected by the 1978 City-wide rezoning. -- one was a cleaners on Colorado, which was now under. the CH zoning. That cleaners was allowed to operate a dry. cleaning outlet —simply a pickup and delivery outlet for dry cleaning ---not a dry cleaning plant, which was currently on site. That portion of the business would have to cease in 1993, Exquisite Cleaners had two years to request an exemption from the termination. Mayor Bechtel asked if that was done. Mr. Brown ' said no exemption had been requested to date, but the cleaners had been notified and. had about 1-1/2 years' remaining in which to apply for that exemption. Mayor Bechtel clarified that the cleaners would only have to sub- mit a formal application to go through the Planning Commission and City Council. Mr. Brown said the second business in the Midtown area rendered noncorforrsiing in 1978 was the Elite Letter Company Corporation, a pr_intiny establishment at 2710 Middlefield Road. That general business service was not allowed in the Cif district and would terminate in July of 1993. rir. •.Schreiber noted that neither site was affected . by the 1968 rezoniny. Mayor Bechtel said the cleaning establishment and printing shop received strong opposition from th neighborhood as ---not being compatible with adjoining -residential areas because -of the fumes, - etc. Mr. Schreiber said there was -quite a bit of public testimony to that effect during the preparation of the zoning ordinance. Mayor• Bechtel said a number of people were concerned about saving Midtown and `clarified that the establishments noted were Elite Letter Shop,.Exquisi.te Cleaners_ and three -locations in -the Midtown area -.a .service station, veterinary clinic, and the Chinese Com- munity Center. Gloria Brown, 1706 Fulton Street, said she represented the more :than:,14040 people who . sieed .petitions at- various Midtown estab- 1 ishments.. She provide rrd the City. Clerk with an additional -1,150 -- signatures collected during the past week of people who wanted to-- preserve the doomed areas between Safeway' and Century Liquor's. the 14-,,ODU-plus signatures broke down into 6,000 for Century ., Liquors, : 3,000 fur` the Winter_: Club; about 2,500 for the —emergency v.e,Ler rar,y ctitict0Ous 3,100 She turned °#n. The dance studio and i3a'11"fit Arts- tenter' gathered ..about -2,500 si gnatures e;Ach;-:. she believed those numbers translated into overwhelming evidence that people cared deeply about retaining their businesses and not having then replaced by condominiums.. She commented that the circumstances-which:led up to the lgbd rezoning no longer existed, and that -the situation and sentiments were totally reversed. The once proposed_ car wash was prevented from going in and the exten- sive industrial businesses on Loma Verde were either. gone or -on their way out. The four •gas stations previously in the area were down to one, which was doomed, and the area could easily keep two stations busy. Midtown was pretty Much self-contained and most people .completed errands within _two blocks. eThe people were also blessed with wholesome recreation and nearby dance facilities which had served Palo Alto families for decades and became local institutions. The emergency veterinary clinic had been -a Godsend to grateful animal owners for over 20 years. Most businesses and services were flourishing because so many people depended or, the services provided. Midtown was the only place she _could think of with Mom and Pop operations or where personal service was still offered. . She emphasized that the Midtown residents -cared deeply about the area and did not want it changed. Energy apd care was given to -ensure the preservation:of the Foothills and Baylands, and the --.new focus seemed to be on putting condominiums on every other possible piece of land. For people who liked to live in 'Palo Alto, there were already too Many new condominiums sitting empty with more on the way. She believed the current residents were being given little consideration of their wants and needs. Tne outpouring -of support from the thousands of people who ,signed the petitions demonstrated that they wanted to preserve the Mid- town business community which had been enjoyed and relied upon for so many years She asked the Council to take another look at the area in the light of 1983 and to grant a reprieve for the busi- nesses doomed to be closed down= on May 1, 1913. She further requested a moratorium or whatever it would take to preserve the services provided in Midtown or new zoning to allow the present businesses to remain and allow other appropriate services to locate in the area. She urged the Council to give consideration to the Midtown community before it was too late. Wilson F. Nicholls, 2615 Middlefield Road, said he and his wife owned the Baskin -Robbins in Midtown north of Colorado., They were not directly affected by the ordinance, but 'he pointed out that they were-affected indirectly. If the ice rink closed, his bus- iness would . ire hurt indirectly because his sales would drop. To survives a business fed on other businesses --and if businesses started closing, it was a= matter of time before individual owners started .hurting. A shopping area could not be viable if the diversity of services was reduced, and he requested that the Coun- ci l consider the indirect effect to the existing businesses if 10 businesses dropped out- of the area. Mayor Bechtel c i ari f i ed than the 17 -businesses were City-wide and not Just in the Midtown area. Counci lmeraber Fletcher asked the speakers to be specific as to what businesses they were- concerned with, because she believed there had been a lot of exaggeration about what might be zoned out Of \existence. Marilyn Norek laketa , a partner in Finch, Sauers, Player: & Bel l , attorneys, 7b5. Page Mill Road, represented Beatrice LaBianca She said Mrs. Labianca owned the property at 3U#5 Middlefield Road upon which the emergency veterinary clinic was located, and -that it 'Was. -Surrounded by the Winter Club and Chuck-Thompson's to the rear, the Chi`rnese°Community Center next to the cl:inic-, and the two se ,vice stations on the other -side. Mrs.` LaBianca:eras concerned about the clinic and ` had ,put forth d lot of effort collecting. signatures on;:.be,half of the =;Clinic because she 'realized the "boon it was for the coamunity. There was impressive-- community support. with - over`1,bQO..signatures on behalf .,of .the -Clinic itself, and she. believed the ,'.clinic wanted to stay on that __property if.:poss#Ale.,. Mrs. Labianca eras_ also concerned -about. hey' -property. -- The various properties in the area were being amortized at different times, which left those properties 'scheduled to amortize this year in a somewhat funny positions if the properties around them remained commercial for several years to come. She believed the problem of different amortizations all around that area should be looked at so that the properties could at least be amortized together. Mrs. Ladianca was born in Palo Alto and moved to the Midtown area in the 193U's, and saw it develop in the late 1940's. She had strong feel inys about wanting it to rerhain the community asset it has been. Beatrice LaBianca, 1721 Banff Drive, owned the property at 3045 Middlefield Road where the South Peninsula Emergency Veterinary Clinic provided emeryency care for sick or injured pets when other clinics were closed. 0n February 24, 1983-, she presented' a peti- tion to the City with 1,500 signature3-.-and she had 300 more to add. The petitioners desired that the clinic continue at its present location. A veterinary clinic had served the comme,nity at that location for 20 years and now most -leave. She asked why key services were forced out of the City. The services were all bene- ficial and the people wanted them. 0n May 1, 1933, another parcel of uninhabited land and eyesore would be added to,.what was already witnessed next door to her property at 3011 Middlefield where. the Luz Shell service station once was. The Arco -station would not be Amortized until 1992,- and she asked what she should do with her property until then. The problem was the result of a piecemeal approach. A ghostlike atmosphere would prevail with blind ad- herence to an unequal amortization schedule and an urproducti ve outdated zoning ordinance. She urged the Council to listen to the heartbeat of a vibrant city and not curtail service and merchan- dising businesses in the Midtown -area. Middlefield Road busi- nesses flourished because they were needed and supported by the Palo Alto residents, which was recognized when the Council allowed Century Liquors to remain, The Midtown merchants were vital to the community and provided services which were an integral part of Palo Alto. She suyyested it be kept that way. Kate Cole resided at 3064 Middrefield Road, located directly across the street -from the animal hospital and eras station. She had livid in Palo Alto since 1958, attended Jordan Junior High, Palo AI t'o H i gn School and Stanford University. Her parents also resided in Palo Alto and her entire- family voted in every elec- t i on. Palo Alto was an unusua l - study ,with a variety of people-- rich, poor, young and old. She worked for Palo Alto Community Child Care arty did not want to be priced out of living in her home town.. Further, she did not want to try to get her 20 -year old car to San Antonio Road for emergency service, which had been provided by the man who ran the Arco station and who had also been helpful with her old car. The emergency pet clinic satisfied a need between San:. Mateo 'and San Jose; its location was excellent and centralized to a good portion of Palo Alto. She was advised --by the - operators of the Emergency Pet Clinic- that they desired to remain at the present Iocat i on if poss i bl e. She objected, to con- dominiums across the street from her because there would be too many, more people acrd too much '`more not se. -She preferred keepi ng the human and animal - serv.,ces. Francine Fehl, 7Jb East Meadow, was born. and raised in Palo Alto. - She lived in_ Pao Alto and specifically- Midtown° because of offered. The. 'Midtown area was downtown Palo AI to "to the - res.idents in that area. She had. used the veterinary 'clinic many times .and -did not .k -now anyone in her area without at least one, dog or cat. ,clinic was- forced -to close, she was not sure -where _the closest flu$pital was that was open through -'-the night. Having the cl,; nic in- that_, very.. centralized iocation could -save the life:, of sorheon'e's -.pet. c'h She grew up with the.Winter Club, enjoyed it and wanted her iyldren tv also. Gary, who ran: the Shell -station for -y ears,`: said\ at -one point the Counci l- did not .know Whether the gas station could stay. -The--"Station- had been- there fob, a long tire -,- arid --"(awry: basically= .felt °-forced--uut -because. 'he had- to snake a deci-- sion to take another piece -_of- property or to. "stay at the . present location and be forced out in a -short time with no place to go. He would have stayed -and possibly would return. One could.go in to Century Liquors, the veterinary clinic or the gas station and know and trust,the.people. The people had.been around since she had been alive, and she returnea to Palo Alto_ after living eI se- where because it was comfortable. She could go into the -place and not feel like She was just part of a _ herd moving in and out of the shops. She believed the Council needed to re-evaluate'the area and not as of 15 years -ago. Stella_ Lamvil, 821 Thornwood Drive, said her family came to Palo Alto in 1951 and had seen a lot of changes in the town. _ When her husband returned from Korea in 1953, two chestnuts still grazed,on Amarillo and Lewis. The chestnuts could not be brought back, but she wanted to retain some open space and the small town feel of the City: That made Palo' Al to culturally and intellectually fan- tastic, as well as comfortable and neighborly with beautiful land- scapiny. She used, the vet clinic many times this year with a hemorrhaging post -operative eshepherd there last month, and her Scottie dog spent the night there with intraveneous feedings. The clinic was marvelous and she was very pleased with the setup. Her family missed (Gary and the Shell station and would welcome him back. They liked dealing with the -small .businesses and it was an important part of their existence. Diosdado Ortiz, 2993 Addison, said he was prepared to speak, but after listening to Councilmember Fl etcher, his thoughts changed. He believed she implied that the little area was loaded with gas stations. That might have been the case in 1968, but in 1991 that would not be the case. The Shell vas station on Charleston would be_ unable to continue because of economics, and the same was true of. the Mobil station on San Antonio and Middlefield. A Texaco station was located on Fabian and Charleston, and a Chevron on Alma. His Arco station was located at. 2995 Middlefield Road and was one of the few stations in the area that could withstand economic pressure. ,He believed it was. unfair to ask the Midtown community to travel two or three miles away from their community just to yet a tankful of gasoline. He pointed out , that ' no one could project what vas would cost in eight years. If' the Counci l was concerned about helping Midtown, the citizens should be asked their desires -personally. Mayor t#echtel asked for clarification that- his station could remain economically. viable eight or ten years from now, and why his station would be viable and others would not. Mr. Ortiz responded that presently his monthly volume, was 150,000 gallons. Five years. from now a station could not survive if the volume was not that high. Mayor tiechtel said that if other stations closed, those who re- mained who would, have an increased volume. Mr. 0rti-z said that meant that most of the customers would be forced to ,yo away from the Midtown area because of the price of yasol ine. He was the least expensive in town which was why he ,had 50_ madly customers, Marilyn Morel( Tak'eta , 755 Page -Mill Road, represented the Bat l et Arts Centers' and said she previously Submitted a letter to the Council setting forth the magnitude of support for that business Changing, the zoning of some'of the properties to CN was an attrac-- Live. prospect, 'but: another option was to inst.itut' an` exception .procedure similar -to the .:one instituted in 1978. Then, when the .touncil,:was faced with a decision X15 years down the line, it would have_ a mechani sm by :.which to ,look -at -the-.mna:tter. again :in terms of an individual use. Itwould also -be an inexpensive and recurrent- -way to look',; at something-. every five Years to make .:sure that-- a decision :,was correct In- light, of •cha_ng°t,ng cl rcumstances. - That alternative .cqu i d=—aiohieve : a 'pal -ante between _.:tale communi Ly' $ 1 which were accomplished through rezoning and current needs. In that way, everyone would have a chance to show that because of changed circumstances, perhaps they should be allowed to stay. 1 1 Mayor Bechtel clarified that Ms. Taketa represented the people at the Ballet Arts Center and asked if she also represented the owner of the building. Ms. laketa responded that her actual client was the owner of the building on behalf of the operators of the Center. The owner wanted the Center to remain and was himself a previous dance teacher. He believed the school was excellent and a viable one for the community, and would do anything necessary to have the Center remain. Jack Morton, 2343 -Webster Street, was a Certified Public Accoun- tant and a member of the National Federation of Independent •Busi- nesses and the Chamber of Commerce.: He pointed out that studies by both organizations showed that nationally small businesses employed twice IS many individuals as larger corporations, and believed that people in the Silicon Valley tended to forget that statistic. He believed that Council's genuine concern for housing might result in the unnecessary depletion of the City's pool of small business employers because' the City might end up with the anomaly of providing BMR's or affordable housing in Palo Alto, but reyuiriny that the spectre of those residents commute to other communities to find jobs at the level of their skill. Although it was true that the Council could not guarantee the survival of a business by a zone change, it was also true that the businesses would nut be there unless they were permitted. It might be advis- able for the Council to consider the feasibility of separating the residentially compatible business enterprises that actually fronted Middlefield from the industrial enterprises that might have motivated the original zoning. As a CPA whose clients in- cluded a iot of small businesses, he uryad that Council focus their attention on that possibility. Balls Katwan, 908 Colonial Lane, owned a business located at 2741 Middlefield, He believed everyone was forgetting the senior citizens. A lot of his customers were senior citizens and Midtown was their place to go. The Council was taking the -gas stations and the veterinary clinic, and the revenue was being given to another city. He loved Palo Alto and did not think it was fair to take the -services provided in --Midtown from the senior citizens. Many of those citizens never went farther than Midtown, and it was not fair to:take,that away. - Cauncilmember Levy clarified that the map indicated four sites -- two gas station's, the veterinary clinic, and the Chinese Cultural Center. He also asked for., clarifii'ation that in terms of zoning the Winter Club could stay, as could Chuck Thompson.'s. ' He asked Vice Mayor a zzi no and CounciT'member Cobb for clarification that those four parcels were ..the subject of the motion. He . asked if sOO of the ether. sites- further down on Middlefield _were -included in the referral to the Planning Commission. Vice Mayor Fazzino said the purpose of the proposal --although somewhat general in nature= -was to give the Council and Planning Commission a final. opportunity_ to, respond to some deeply:. felt -pub-: 1)c concerns about the amorti.Won schedule in thate area. Both he and Counc i l member-. Cobb were `concerned that' 1 e•g it,i mate 1 oca,l cournn.ercia l _uses would' soon be replaced` by- unattra'cti-ve lots for a period --of tiine and- eventually, be <t-eplaced by high priced housing: t45dt -wouild cause many additional . prob.l.ems to lac:al: residents -,:The moving of _Wi-1 l is Labs, the loss_ of "the Shell''station, the. lack 0 - the wi i 1 inyness of. the City to use -thy S#iel'1 :station as 'ai` Lever to. perhaps save the; --ice, rink, :and the. -lack: -of good plan_ning for - joining: properties in -the _area .had al ready- had -a: negative impact on the area.-' Neither he` PlodAounci lmember Cobb want'_ed to see the -situation continue.-_ As -°an aside, he believed the- reason the issue 1 1 1 was generally before Abe Council was because he and Councilmember Cobb- shared a lot of frustration that the issue was not adequately dealt with over the years and that there was no one to blame but the Council, City staff and people in the area. When --Century Liquors was last discussed, it was a piecemeal effort for- politi- ca l reasons because of a strong_ feeling that there was no way the City could save any other use in that area except for the Century Liquor Store, and the Council had no interest in looking at other uses in the area. Five or six years ago, a better job should have teen done reviewing the Wi l 1 is Lab, its situation arrd other uses in the,: area, but that was. not the case. iHe made the following suggestions: 1. that the Exquisite Cleaners apply for the exemption, which he believed to be the cleanest way of dealing with the zoning issues of that property; Z.. That his colleagues place on the agenda within the next couple of weeks or send to the Planning Conrniss.ion .the issue of the Ballet Arts Center and consideration of Ms. Taketa's neighbor- hood commercial zone amendment proposal; 3. lhat the manufacturing uses on Lorna Verde be amortized because he believed those uses clearly were incompatible with the area; 4. That the Planning Commission•be asked to evaluate .the continu- ance of the veterinery clinic and the Shell station, particu- larly in 1 ight Of the ice rink developmnents. Councilmember Klein said .he was completely confused. He believed a specific motion shoulC be before the Council and not just vague language. He believed there was a problem, but did not think it wa3 to the degree stated. He supported referring a much more pre- cisely defined study of the Midtown area to the Planning Commis- sion and believed it should be -limited to the service station sites, the veterinary clinic and the dance studio, although he did nut believe the dance studio was in the Midtown area. He agreed with the .comments of Councilmember Cobb that anytime a large number of citizens suggested that the Council look at something, the Council had the obligation to do so, but a look did not mean that he or any ogler Councilmember would agree. Everyone knew that petitions could be easily obtained-, and in the subject case, he believed that many people who signed the petitions understood the facts, but that many did .net. Midtown was not threatened by the - City_ of Palo Alto or any actions taken in 1968 or 1983, and there was no attempt to drive out businesses or anything of. that nature. He believed that the testimony heard tonight indicated that most of the Midtown businesses would continue far into the future. The fact that there would be, and had been, changes was good for the comraura`'ty, The , 1958 actions with regard to the parcels along Loma Verde were correct then and in -1983. Those parcels did not provide neighborhood uses and the area was far better off with -...the residential uses that would occur in the futUrea Further, h.e dicL not believe staff could be faulted because they. brought, the ` amortization issues to the Council's attention on; several - different occasions over the past _couple of years. The C-ouncil, ways aware_, of what parcels were to be amor- -tized, not only An that area but .in the rest of the community for some time.- -- Midtown was not ,si_ngl.ed out, and, a lot of other pa -r- cels were being amortized but had not made the papers because they were just yoiny through. The, Council must keep its perspective as to what was viable and what was not, and what had happened .and what. had' _not happened. In response to -an. earl i-er comment as to why the- matter should be referred t"o the Planning _.Commission, he believed the. City Charter required the' Planning Commission`9 s Input on possible rezoning, --items. AMLNUMLNT: Counci lmernber Klein moved, seconded by fazzino, that the Planning Commission study of the Midtown area be limited to the service station parcels outlined on the map presented by staff, the veterinary clinic as outlined on the map, the dance studio located at 3805 Middlefield Road, and the Chinese Cultural Center for consideration of land use and' appropriate zoning. - 1 Counci lrner'rber wrtherspoon said she believed .the amendment went a long ways towards the problem, but that the Council must first address whether its decision in 1968 was at fault in light of today and whether -there was too much residential ,zoning in the area and whether commercial was preferred. The referral could be narrowed to the smal I strip and specifically request whether the community needed and could support a neighborhood commercial zoning for those -commercial uses. R number of people complained about the amortization schedule and the fact that it worked a hardship on owners and created an eyesore -in the neighborhood. She did not know whether the Council could legally alter the amor- tization, schedule', but believed it would be a cogent argument, especially if the Planning Commission- decided not to change the zoning to residential- eand recommended in lieu that everyone be aMorti zed on the same schedule: City Attorney Diane Lee said she believed the matter should be looked at because she had some concerns particularly about those running up against the May 1 deadline where there might not be anything to extend. With respect to the other properties, there could be a possibilIty,i and if the matter was referred to the Planning Commission there would be ample opportunity to do so and present recommendations at that point. Cuunc i I r:remher Witherspoon said she had a problem with taking a broad zoning issue and trying to apply it to specific uses. She preferred that it be taken back to the universal for a decision about whetner there should be neighborhood commercial on the site. That would be nice because the uses there could probably stay and other uses could come in the future, but it would not look as though the Council was trying to pick and choose among different uses on properties. Councilrnernber Klein said his motion described the businesses al- ready there as a shorthand for identifying the particular sites. He believed that Councilmember Witherspoon described how the Planning Commission should determine whether thee sites were more suitable for residential or commercial or any other use. - As sev- eral speakers pointed out, the Council could not dictate the ,particul«r use made of the property and his amendment intended that the Planning.Commission look in the.more general terms. Mr. Schreiber said he bel ie_ ved .- the Council had now •moved into a detailed planning study. He asked what type of questions the .Council wanted answered with little -staff involvement and quick Planning Commission turnaround, COoncilmember' Klein said a simple analysis would include how much .residential :a_nd. how-Much:,commercial. was currently in -that area. lie. did not anticipat.e that a lot of staff time would, be required and he did -not bei eve Vice -Mayor ,Faz2ino or C.ouncii.member Cobb did -.elf trier. Counci lmernber Witherspoon - said said i,t :would . be -interesting to know what: the potential .residential build out would be as zoned, and a}pproxi ately how. many people lived in the area, Mr.: Schreiber' said the assignment differed -:if the Planning Commis- sion was to determine whether the _ problem.was:. worthy of further investigation or whether it should evaluate alternatives. Eval- ` uating'. lternatives rapidly presented options-, and if.lthe analysis . _::;wac ciuic k and dirty, the questions• and::con.cerris started to mush- roam, and by the time it returned to the Council it had either turned into'a bid study or was still -quick and dirty but there was dissatisfaction with the level of analysis because it, wanted to know whether. build out was logical, or what-- would likely hap- pen. The answer to those questions did not involve a quick and dirty study. Mayor Bechtel said she did not want the , study to mushroom into something -that that was much bieyer than necessary in terms of Other priorities. Councilmember Levy basically ayreed with Councilmember Cobb's comments that when sO many members of the coramuni.ty asked that the Council take another look, another look should be taken,, but was no more- eager than some of his colleagues to actually change the zoni.ny at this point. He was wi a 1 ing to take one last look to see if` Mistakes were made in 1968.', He believed that Councilmember Kiein''s change in the -wording was correct, but asked for assur- ances .that all of the commercial properties on Aiddl of i el d between Colorado and East Meadow were included. He clarified that he did not want to skip over some properties by singling Out others because he believed the entire strip should be considered from Colorado down to wherever. - Mr. Schreiber said that -would -have to -include Adobe Creek to pick up the Ballet Arts Center. • Councilmember -Levy asked if - Adobe Creek would include every property subject to the amortization between Colorado and Adobe Creek. M'r. Schreiber said yes. Councilmember Levy said he was satisfied that the Council had the ri yht definition of the area to be covered. He believed that one issue was the planning issue of whether the zoning was proper and the other was whether the amortization should be extended on some of the parcels. those were the two questions he ,would refer to the Commission, and he asked whether the issue of amortization could be referred. Ms. Lee said she believed the -re -were some problems with extending an amortization when it. would have run out, by the time anyone took any actions_ and- that wase the case for some of the.. properties.. However, ,sfe would_,.iooic'into'\that and advise the Planning Commis- sion of her decision.7eShe,wanted to alert the -Council that there might be problems with doing so. Counci lmember Levy asked if the Council could take action tonight to extend the amortization period such that it would not run by the time it went to the Planning Commission. Ms. Lee said not without an ordinance.. Counci member Levy said he did not iivint to -have-a massive study of what amoirnted to a handful: of'_parcel s. ,. He slid. not_ :,believe the -Council should.- do :anything dirty in -Palo Alto, but could do some- thing- quick. The study should-.b.e--quick and with. -all of that-= in mind, he -111641d ,support the -amendment. .Counci l_uember.. Fletcher said - she was sonrewhat uncomfortable with the !notion 'be cau"se - basica i ly the ' planni-ng Commission' was being asked whether there was s,ti-1 1,__a need -..for housing in Paio Alto, and there war; no question but that- thgr a was. if the condominiums were --hew, they -were„ l i ke ly Lo be" expensive,- but_ would :.make other. housing- avai l_abl_e wht,n people: moved-:- out to move pinto the condo= mi.niums.. -GOunciimeinbr. Witherspoon mentioned that the Planning Commission should: look at the possible :b uild outfor the residential lots -and if the _properties were rezoned back to commercial, she would want i to.know that build -out potential. The Council heard tonight that the veterinary. clinic wanted »to expand, and she believed -the Coun- cif was previously advised that the particular facility was too small. She, believed the zone change requ-est for a new site for the veterinary clinic would be before the `Council shortly and she did not know-how that would be handled when the future of that site was -unknown. She believed the Council was down to the speci- fic businesses people wanted to save, and basically there were four, not counting, the Chinese Community Center which was basic- ally_ an office 'complex. eShe believed the study would only confuse matters. Councilmember Cobb believed Councilmemher Klein's motion properly clarified -and focused what he and Vice Mayor Fazzino had in mind, and he would support it. He reiterated that his purpose was to. 'y.et a quick look at the. area and if something came out which demanded a more in-depth study on the part of the staff, it would be known after -the nea ri ngs. It was not his intent to create any staff work. The data existed and the Council was dealing with a concept and overview which --could be handled by the Planning Com- niission based upon public input. Advice could -be provided to the Council and the Council could .set the policy. Mayor Bechtel said that the attorney who represented the Ballet Arts Center and.the veterinary clinic wrote a letter which de- scribed a possible mechanism by which to delay the effects of the amortization period and she asked the City Attorney to respond. Ms. Lee did not believe those sections were ever intended to apply to the subject situation, but rather to apply to things like Christmas tree lots and things that were seasonal and short term in duration and not as a mechanism to extend expired or almost expired amortization districts on nonconforming uses. She be- lieved that was the long-standing administrative construction of the Planning Department, which had great weight in interpreting the zoning ordinances. Mayor Bechtel said she was uncomfortable about looking at the matter again because she was afraid the Council Would hold out a hope that changes would be recommendedw She was wi l 1 ing to take a look, but wanted people to realize that the Council might ulti- mately decide that the original -decision was correct. Further, the Council must realize tnat it could not zone for a particular use. -- or business- and must' look at whether it should be zoned straight commercial, residential or neighborhood commercial. Just because the Council might change the zoning for -one of those par- cels to allow gas stations to continue, it did, not necessarily mean that those particular gas stations or any gas stations would necessarily remain. Some kind of commercial might remain, but riot necessarily those particular uses. The same was true of the vet- erinary clinic, which` was certainly an admirable use. If the Commission recommended a change in zoning, - it did -not necessarily mean tnat the vet clinic would remain henceforth because there might be a dispute with the owner of the property,.or the clinic might reyui re. a larger tact l ity._. and have to move somewhere el se. Mr, Llaner suggested that ,the following wording might-. catch the essence of the: .Council's -desires: 'Request the -Planning Cornmissiort to review the existing zori.ng --on properties between 1r_o1orada and.Adobe Creek, and based on existing information -and data recommend to. -the City Council whether a study of the subject, is -warranted." Mayor .iiecitt i sa:id._that _language went too far. Ms Lee suggested that "properties scheduled to amortize within the next year" be added, which would potentially :.cover the prop- erties of concern to the Council. Counci lmember Klein said he was concerned about Mr. Laner's lan- guage because it suyyested a study leading to a study, and the Council wanted the matter back from the --Planning Commission. Mayor Bechtel 'said she was concerned that planners liked to plan and wanted to. get things bigger and bigger. The Council was try- -i ray to, say that the study did not need to be made bigger. It could take one meeting of the Planning Commission, one public hearing, and make a recommendation tor the Council . The. Council hoped, that recommendation could be. done with a. one page staff report prior to that meeting. Mr. Laner said having that in the record and knotting 'that the Planning Cvmrnissi,on read the record carefully prior to' delibera- tions, staff understood Council's direction. If the Planning Coriswission had any doubt, staff would produce the record if the scope .of the study could not be limited. AMENDMENT PASSED by a vote of 6-1, Fletcher vot!ing -"no," Eyerly and Wenzel absent. MUTIUN AS AMENDED PASSED by a vote of 6-1, Fletcher voting *nci," Eyerly and Menzel absent. ITEM #14, REQUEST OF VICE MAYOR FAllINO AND COUNCILMEMBER COBB RE City Attorney Diane Lee said that as a caveat before commencing discussion on the proposed visitors and .convention bureau, the Farrell decision and Proposition 13 stated that if the proceeds of IrTrrivere limited or earmarked for a specific purpose, a special tax was made which required a two-thirds vote. She asked the Council to consider that fact in the discussions of the item; Counci lmernber Cobb said he was struck during last week's discus- sions by the comments made Jay a number of people in the hotel business that business was not good on the weekends. He believed that if any steps could be taken by the-_ City analogous to those taken in other communities to create some type of convention bureau for a short period of time to help encourage more --business, both the City and they would benefit. He did not intend to tie it to a particular, tax in any ;gay, whatsoever, but to consider whether it might be in the City's interest, on some type of short term basis, to encourage and provide support for convention bureau, to tryeto do something about the low weekend occupancy. The City would obviously benefit eif occupancy was up., as would businesses in the community. MOTION: Counci lueaber Cobb moved, seconded by Faxzino, to refer the matter of establishing. a convention bureau on a trial basis to the finance and Public Works (F&PW) Committee. Counci lmernber Fletcher said *he did not want to get into a rut of hieing negative, but could not agree with the last two' item;. The visitors and convention bureaus referred to were those in San Jose -. and San Francisco. She did not know whether.they existed in a city the size of ,Palo Alto or what Palo Alto could `invite them to: see. People could be invited to the City's parks, but -they were already overloaded on weekends to the extent that. res_idents could not get in. There -was nothing to" .prevent the Chamber of Commerce froth taking action in that" regard, but she believed ---it was inap- propriate for the City Counci 1 , t,o sponsor . Craig Kassell, bbO C-himalus,' worked -for: Hyatt•Hotels in Palo Alto: as sales manager. His ..responsibility eras to bring business__into_ the community, which -could be either local- nor.: from a nationwide corporation. In terms of attracting businessthroug,h, -a : convention bureau, -Palo Alto would not attract the -business too-` look at,-Pa.lo Alto, but. rather to look -at Palo Alto as a“destination. Palo Alto could be = a place for . associations,-wnichi' was the large weekend business. Those, associations could come and have Meetings and not be there necessarily to see Palo Alto. He believed Hyatt Hotels would wholeheartedly support_ an oryani zation of that nature, and it could only do well for Palo Alto. Counci lmerber Levy asked what the City could do that the' hotels uryariiziny among themselves could not do. Mr. Russel 1 believed working wi_t;h other convention bureaus and getting referrals from those organizations cou d bring business into Palo Alto. Presently, the hotels were doing their best to oryanize.- Councilr:reoeber Witherspoon agreed with Councilmember Fletcher. She could not understand why the Chamber of Commerce was not doing something. It did not make sense to enact a tax and turn around and spend the proceeds. Supposedly the City was already broke, which was why the tax was raised in the first place. She believed the issue was not appropriate. Vice Mayor Fazzino believed that given the fact that the Council stuck it to the hotel , owners with respect to the special tax, he would like to see a- two-thirds vote on the --issue and it was unfor- tunate that it would not occur. ,The Council could at least move forward and study the possibility of using part of that revenue to see whether it could be used to help them attract business in Palo Alto. They were not talking about the kind of business that would overrun Palo Alto 'parks or other amenities, but rather business conventions and other use of the main hotels in the area. He was sure that the main hotels in the area were doing that type of thing to the degree possible, but obviously it needed to be better coordinated to pull it off. That was not to say he would support the subject tonight, but was simply asking the Council, in consid- ering the tax which was adopted,_ to grant the request of those people and ask that the issue be studied by the F&PW Committee to determine its feasibility. Mayor Hechtel believed it was a mistake to study:something -just to study it, and she would oppose the motion. counci lmember Cobb said he believed Vice Mayor Fazzino put the Council back to the 'veal difficulty by.tying it -to the tax, which he had not intended. If that was the motion before the Council, he would rather withdraw. it than to pursue it in that way. He said he _would pursue the matter throuyh the Chamber of Commerce to see if something could be done throuyh them, and if necessary Would bring it back without the tax linkage. He did not intend to tie the motion to the tax in -any way. NOTION WITHDRAWN AL )URNMLNI Council adjourned at 12:30 a.m. ATTEST: APPROVED: e FINAL CITY COUNCIL AGENDA CITY of PALO ALTO Reguler Meeting Monday, May 2, 1983 - 7 30 p.m. Corinut pnocedun.e tate 'be in aecon.dance with PAMC Chapte,t 2.04, as oute-i.ned on' the .iron- 'nation sheets avac,tabte in the Chamber. PacketA containing suppon.ti.ng matenia bon ate Agenda .items may be ne►iewed at the Libna r.i.es oh. the City Mh .'s o66 -ice. Fon. the convenience ()lc those attending .the meeting, aft packet mate iat. cs posted on the watt at the iaa side o6 the CcuncLe Ciurmbe/ Persons wishing to address the City Council are requested to: 1. Fill out a card, available at the rostrum, and submit it to the City Clerks Z. When. recognized by the Mayor, come to the .rostrum, speak clearly into the:microphone, and state your name and address for the record before making comments; 3. Limit remarks to five minutes; 4. Conserve time and avoid_ repetition by selecting a single spokes- person to represent a group with similar views. At 10:30 p.m. the City Council determines by vote whether it will commence any new items after 11:00 p.m. ROLL CALL: 7:33 p.m. - Mayor Bechtel called the meeting to order, 8 absent 7:33 p.m. - Meeting adjourned for lack of a quorum URAL COMMUNICATIONS (Persons may speak to any item not on the agenda; five minutes per speaker.) APPROVAL OF MINUTES SPECIAL URULRS OF THE UAY *1, Stanford West Uraft Environ mental Impact Report (APPLICANT KEtUESTS THAT THL_ ITEM BE POST-. PUNEU) CUNSENT CALENUAk (Items will be voted on in one motion unless removed from.the calendar ikv a Courcllmember.-) Mef erra l Action ACTION TAKEN *This City .Council Meeting was originally reserved for Item 11 end era other business was schedul"A. since the applicant ' v ,^^! lent of this matter, it is likely that this meeting will be cancelled.. 5/2/83 PALO ALTO CITY COUNCIL MEETINGS ARE BROADCAST LIVE.. VIA KZSU - FREQUENCY 90,1 ON FM DIAL 4 AULNiUA CHKNUES, AUUITIUNS ACTION TAKEN ANU UELETIUNS UNFINISHED BUSINESS PUBLIC HEAR1N(S lit REPORTS .OF COMMITTEES ANU COMMISSIONS RESOLUTIONS UKUINANCES KIPUKTS OF OFFICIALS COUNCIL MATTERS AUUUUHNMENT { Mayor Bechtel adjourned the meeting at 1:33 p.m. for lack of a quorum -2-