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HomeMy WebLinkAbout1982-03-08 City Council Summary MinutesRegular Meeting Monday, March 8, 1982 1 1 ITEM Oral Communications Approval -of Minutes February ii, 1982 February 22, 1982 Special Orders of the Day Resolution of Appreciation to Michael Cobb Resolution of Appreciation to Ray Wilbur Resolution of Appreciation to Constance Heneke Presentation by Santa Clara Valley Water District re Benefit Assessment District Vote in June, 1982 Consent Calendar Action PAGE 1 7 2 I 1 7 2 1 1 7 2 1 1 7 2 2 1 7 2 2 1 7 2 2 1 7 2,2 1 7 2 3 1 7 2 4. 1 7 ,2 5 Resolution Authorizing Amendment to Subdivision 1. 7 2 S Agreement for 600 Middlefield Road/664 Hamilton Avenue Joint Power Agency Solid Waste Stream Analysis 1 7 2 5 Ordinance re Banner Permits 1 7 2 .5 Ordinance re Counci 1 Salaries 1 7 2 .5 Ordinance re Resale Controls for Units Financed 1 7 2 5 With Mortgage Revenue Bond Proceeds Agenda _ Changes, Additions and Del eti oris 1 7 2 5 Public Hearing: Zoni ny and Subdivision Ordinance Amendments 1 .7 2 6 Report from Counci lmembers re National League of Cities 1 7 3 5 Conference in Washington, R.C. Planning £ommi ssi on and Architectural Review Board Unani - 1 7 3 worts ly Recommend Approval of the Application of Carl Hol vi ck Company for Site and Design Review for Property Located at 1870 Embarcadero Road Association of flay Area Governments_' Regional Housing Need Estimates Palo Alto Housing Corporation Birch Court Condominiums - I 7 4. 1 Approval of Ordinance Amending Budget Mandatory Issuance of Concealed Weapons Permit 1 17 3 8 I.7 4 3 Criminal Justice Grant in Support of Community Crime 1 7 4 3 Prevention Center ITEM Municipal Homeowner's Insurance -- Request fo; Counci 1 Authorization to Issue Request for Proposal_ .and Referral. to Policy and Procedures Committee PAGE 1 7. 4 4 Request of Vice Mayor Bechtel and .Counci lrnember. 1 7 5 6 Fazzino re Resolution of Appreciation to Assemblyman Byron D. Sher Request of Counci lme;nber Fazzino re Resolution of Appreciation to the Palo Alto High School Basketball Team 1 7 5 7 Adjournment 1 7 5 7 Regular Meeting Monday, March 8, 1982 1 change approval The City Council of the City of Palo Alto met on this date in the Council Chambers at City Hall, 250 Hamilton Aveue, at 7:30 p.rn. PRESENT: Bechtel (Arrived at 7:40 p.m.), Cobb, Eyerly, Fazzino, Fletcher, Klein, Levy, Renzel, Witherspoon ORAL COMMUNICATIONS 1. Ellis Jacobs, 437 Cambridge, regarding the development at Birch and Sherman, said that the Palo Alto Housing Corporation had been worki nq on the project fog over two years , but had neglected to notify the surrounding property owners of the project until four days before the City Council approved the project. He said that the mini park originally planned for the corner of Birch and Sherman was moved to the corner of Grant and Ash without full notice to the CAADA. He felt that the property owners in the area should have been consulted, 2. John Walker, 19375 Greenwood Circle, Cupertino, re dredging of Yacht Harbor, said that the BCDC Permit to dredge the 'harbor expired February 28, 1982, and had not yet been renewed. He said the dredge had been v enda1 i zeds -that someone had put steel filings into the engine. The dredge would not run, and it would cost about $10,000 to replace it. He said they were now waiting for BCDC to issue another permit, and for the engine of the dredge to be rebuilt. 3. Stephanie Sharron, 25 Churchill, Youth Council President, reported on the Youth Council 's activities which included a l etter\ of opinion against President Reagan' s proposed budget cuts in education; working with the District Attorney's Office regarding the curfew ordinance; and a Youth Governance Day suggested to be held on April 27, where students would meet with di f fervent City officials on an individual basis and spend an afternoon with them. She invited the Palo Alto City Council's participation. 4. Dan G.ernand re water running down San Franci squi to Creek from. Los Trancos Creek. He was concerned that water running down the gutters could be used for fire protection. MINUTES OF FEBRUARY IS, 1982 Counci lmember Witherspoon hadthe following correction: age , delete third paragraph. Counci lrnenber Renzel had the following .changer Page 1686, third paragraph from the bottom, fourth line the word ''places" to ,_.*cities." MOTION: Counts lmember. Fletcher moved, seconded by Levy, of the Minutes of February 8, 1982, as corrected. MOTION PASSEi<f unanimously. MINUTES OF FEBRUARY 22 1982 MOTION: Counci imember Cobb moved, seconded by Fletcher, approval of the Minutes of February 22, 1982 as submitted. MOTION PASSED Unanimously. RESOLUTION OF APPRECIATION TO MICHAEL COBB MOTION: Mayor Eyerly moved, seconded by Fletcher, approval of the Resolution of. Appreciation: RESOLUTION 6002 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO MICHAEL COBB FOR OUTSTANDING PUBLIC SERVICE AS A MEMBER OF THE PLANNING COMMISSION" MOTION PASSED by a vote of 8-0-1, Councilmember Cobb abstaining. Mayor Eyerly presented Counci lmember Cobb with the framed Resolution and a plaque. Counci lmerber Cobb said he was somewhat embarrassed to receive the recognition while he was serving on the Council, but commented that he was honored , to serve on the Planning Commission and was also honored to be a City Counci l member, and thanked the Council - members for the endorsement. RESOLUTION OF APPRECIATION TO RAY WILBUR MOTION.: Mayor Eyerly moved, seconded by Levy, approval of the Resolution of Appreciation. RE`-"1LOTION 6003 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO RAY WILBUR FOR OUTSTANDING PUBLIC SERVICE AS A MEMBER OF THE HUMAN RELATIONS COMMISSION" MOTION PASSED unanimously. Mayor.. Eyerly commented that the Resolution. of Appreciation indicated the great deal of . service given to the City by Ray Wilbur and presented him with the framed resolution. Mr. Wilbur thanked the City -Council l and 'said it had been a plea- sure to serve the City. He urged Counci lmembers to pay more attention to the Commissioners, i . e. , drop in on _their meetings, and enhance the presente and. future relationships of the Commis- sioners. He hoped the to -until would work on a better method .of selecting Human Relations Commissioners to obtain a better balance between men and women, Minorities and religion. RESOLUTION OF APPRECIATION TC CONSTANCE HENEKE MOTION. Mayor Eyerly moved Resolution of Appreciation. seconded by Cobb, approval of the RESOLUTION 6004 entitled "RESOLUTION OF THE COUNCIL OF THE "CITY OF PALO ALTO EXPRESSING APPRECIATION TO CONSTANCE >HENEKE FOR OUTSTANDING PUBLIC : SERVICE ` AS A MEMBER OF THE PLANNING COMMISSION" MOTION PASSED unanimously. 1 7-2 2 3/8/82 Mayor Eyerly commented that Ms. Heneke had left the Planning Commission -in order to work for the League of California Cities in Sacramento. i PRESENTATION BY JOHN T. O'HALLORAN, GENERAL MANAGER, SANTA CLARA VALLEY WATER DISTRICT: BENEFIT ASSESSMENT DISTRICT VOTE IN JUNE, 1982 Mr. O'Halloran ,said that_ the Santa Clara Valley Water District (SCVWD) had identified:a number of projects to be done in Santa Clara County. He said that an Assessment Benefit Program 'was adopted, and under the law, SCVWD was required to hold an election regarding it. It would be held along with the General Election on June. 8, 1982. He said the program would enable SCVWD to raise the funds in order to accomplish some of the work that SCVWD and the Flood Advisory Committee thought should be done.: He commented that Couricilmember Fenzel served' on Palo Alto's Advisory Committee to the SCVWD and they appreciated her work. He said a project was being developed which would increase an average homeowner's bill by --$11.56 annually; and the bond program in Palo Alto was being reduced which was about $4,88, - so the average house would be assessed about $6 in the City of Lao Alto. He pointed out limits put on SCVWD's proposal included that it could not increase by more than 2% per year, and a "sunset" provision which meant that it had to be either eliminated or voted on again in ten -yea; s. He said SCVWD would like to have the City Council's support for. the work. He thought it was important, and looked at the SCVWD as an arui of Palo Alto. Mr. O'Halloran understood that there were a lot of people from the San Era-nci squi to Creek , area at the City Counci 1 meeting, and he assured them that SCVWD • would attempt to take care of their prob- lem. He said that area had some major damage and erosion because of the January 4 storms, and SCVWD was trying to obtain soil con- servati on funds in order to accomplish that work. He said the funds were not programmed into the Benefit Assessment Program, but the priority was high enough that whether SCVWD received federal assistance or not., the repair work would be done this summer, Vice Mayor Bechtel clarified that the Benefit Assessment Program would require a nojori ty vote for passage. She asked if the construction projects included the Silver Creek. Area and Pacheco Pass Mr. O'Halloran responded that although the water operations and flood control were related,, financially they were separated. He said there was no money allocated for San Felipe --that it was part of SCVWD's Water Utility Program. He mentioned that the areas were broken into five zones, and that Palo Alto was in the North- west Zone which al so included Mountain View, Sunnyvale, Cupertino, Los Altos and Los Altos Hi l 1 s . Ali of the money raised in a zone had to be spent in that zone under the law. He pointed out that none of the money raised in the Northwest zone would be spent on Silver Creek. Regarding Silver Creek, he said the SCVWD was working with the Soil Conservation Service hoping to get them to provide funds for it. Vice Mayor Bechtel said she was more concerned :with the types of projects more common ten years ago, and hoped that SCVWD was, not going to put cement lined channels into . San F ranci squi to Creek. Mr. O'Halloran .said that the last tning SCVWD tiad done for the 1 ast ten years was put in any concrete unless it was a place where it had to be done, i . e. supporting bridge abutments or if -there was an erosion problem. He mentioned that the Department of 1 7 2 3' 3/8/82 As Corrected 4/5/82 Water Resources had put out a booklet which talked about. good, environmental methods of doing flood control work. He said most of the pictures and examples were methods of SCVWD. He assured the Counci 1 that environmentally SCVWD was very much in- touch and held public meetings in order to obtain input for the projects. He said that the Adobe Creek project was a good example that rather than change the creek by putting in .concrete, the SCVWD built a major diversion pipe _underground to take the overflow to meet the flood requirements and the natural aesthetics were not touched. Mayor Eyerly said regarding the comments in the brochure that "assessments were to be based upon estimated benefit..." and regarding San Francisquito Creek, whether the er.ti re City was the assessment district -or whether it was -smal 1 er than that. Mr. O'Halloran said that under the program used by the SCVWD, everyone could be assessed --even those who may not have a flood control problem. The Water District did not plan any special individual benefit assessment for any portion of the creek --they wanted to do the entire thing. N. J. Benedetti , 419 Maple Street, lived in Palo Alto on property which was located on San Francisquito Creek, He said that in 1955 there was a major storm and although they felt they were well pre- pared, the storm 'took them down the creek as though they were pin. -- balls, and it ,took until 1969 to get the riprap on part , of their property. He -said that in January, 1982, the storm .not only took about ;0 feet of their property about 200 feet, it endangered their garage and took their hack garden. He said that if there was another bad storm, their garage and the inside of their home would be swamped. He represented many people who live on San Francisquito Creek, and if something was not done, many families would lose thei r homes if there was another major storm. He di d not know what it would take, but he was doing everything in his power to gi ve the Counci 1 the message of many people who live on San Francisquito Creek that the flood problem must be cured. Councilmember Cobb asked staff whose responsibility it was to cure the erosion problem. Mr. Corbay, Flood Control Manager of SCVWD, responded that respon-. sibility to cure the specific problem referred to by Mr. Benedetti was that of the SCVWD. He pointed out that perfect pro- tection on San Francisquito Creek would take a project of about $23 million. The Corps of Engineers studied the entire project in the late 1960's and found $23 million to be the magnitude of the costs. He`said that as an alternative, a dam was proposed in the Ladera area, a Willow Road Bypass was another alternative, and a channel i zati on project was also mentioned. He said any of those alternatives were extremely costly, that the federal government had not found a federal interest, and locally they were not in a position to fund that kind of a project even with the Benefit Assessment Program, He said that given the desires of the neigh- borhood in the San Francisquito Creek area, the SCVWD felt that_ a spot erosion repair would be the best solution, and they were pre- pared to do thate adjacent- to Mr. Benedetti's property where the SCVWU owned'the right, of way. CONSENT CALENDAR Counci lmetaber Renzel' remoVed Item --#7, Site and Desi gar Review for 187U Embarcadero Road, from.the Consent Calendar. - MOTION.: Counci lmember Witherspoon .moved, _seconded by Fletcher, approval :of the Cons_ent- Cal ender. as ahierded. 1 7 2 4 3/8/82 Mayor Eyerly commented that Ms. Heneke had left the Planning Commission in order to work for the League of California Cities in Sacramento. PRESENTATION BY JOHN T. O'HALLORAN, GENERAL MANAGER, SANTA CLARA •J J 1 1 .. I• 1 V. V 11 1 T8 2 Mr. O'Halloran said that the Santa Clara Valley Water District (SCVWD) had identified a number of projects to be done in Santa Clara" County. He said that an Assessment Benefit Program was adopted, and under the law, SCVWD was required to hold an election regarding i t . It would be held along with the General Election on June 8; 1982. He said the program would enable SCVWD to raise the funds ' i n order to accomplish some of the work that SCVWD and the Flood Advisory Committee thought should be done. He commented that Counci lmember Renzel served on Palo Alto's Advi sory Committee to the SCVWD and they appreciated her work. He said a project was being developed which would increase an average homeowner's bi l l by $11.56 annually, and the bond program in Palo Alto was being reduced which was about $4.88, so the average house would be .assessed about $6 in the City of Palo Alto. He pointed out limits put on SCVWD's proposal included that it could not increase by more than 2% per year, and a "sunset" provision which . meant that it had to be either eliminated or voted on again. in ten years. He said SCVWD would like to have the City Council's support for the work. He thought it was important, and looked at the SCVWD as an Arm of Palo Alto. Mr. O'Halloran understood that there were a lot of people from the San Francisquito Creek area at the City Council meeting, and he assured them that SCVWD would attempt to take care of their prob- lem. He said that area had some major damage and erosion because of the January 4 storms, and SCVWD was trying to obtain soil con- servation funds in order to accomplish that work. He said the funds were not programmed into the Benefit Assessment Program, but the priority was hi gh enough that whether SCVWD received federal assistance or not, the repair work would be done this summer. Vice Mayor Bechtel clarified that the Benefit Assessment Program would require a majority vote for passage. She asked if the construction projects included the Silver Creek Area and Pacheco Pass. Mr. O'Halloran responded that although; the water operations and flood -control were related, financially they were separated. He said therewas no money allocated for San Felipe --that it was part of SCVWD's Water Utility Program. He mentioned that the- areas were broken into five. zones, and that Palo Alto was in the North- west Zone which also included Mountain View, Sunnyvale, Cupertino, Los Altos and Los. Altos Hills. All of the money raised in a zone had to be spent in that zone under the law. He pointed out that none of the money raised in the Northwest zone would-be spent on Silver Creek. Regarding Silver . Creek, he said the SCVWD was working with the Soil Conservati on Serv.i ce hoping to get them to provide funds_ for; it. Vice Mayor Bechtel said she was more concerned with the types of projects more common ten years ago, and hoped that SCVWD was not going to put cement line channels into San Francisquito Creek. Mr. O'Halloran said that the last thing SCVWD had done for the last ten years was put in any concrete unless it was a place where it had to be ,done, i.e., supporting bridge abutments or if there was an erosion problem.- He mentioned that the Department of. 1 7 2 3 3"/8182- 1 1 Water Resources had put out a booklet which talked about good, environmental methods of doing flood control work. He said most of the pictures and examples were methods of SCVWD. He assured the Council that environmentally SCVWD was very much in touch and held public meetings in order to obtain input for the projects. He said that the Adobe Creek project was a good example that rather than change the creek by putting in concrete, the SCVWD built a major diversion pipe underground to take the overflow to, meet the flood requirements and the natural aesthetics were not touched. Mayor. Eyerly said regarding the comments in the brochure that "assessments were to be based upori estimated benefit..." and regarding San Francisquito •Creek, whether the entire City was the assessment district or whether it was smaller than that. Mr. O'Halloran said that under the program used by the SCVWD, everyone could be assessed --even those who may not have a flood control problem. The Water District did not p1 an any speci al individual benefit assessment for any portion of tho creek --they wanted to do the entire thing. N. J. Benedetti, 419 Maple Street, lived in Palo Alto on property which was located on San Francisquito Creek. He said that in 1955 there was a major storm and although they felt they were well pre- pared, the storm took them down the creek as though they were pin - bails, and it took unti 1 1969 to get the ri pr-ap on part of thei r property. He said that in January, 1982, the storm not only took about 40 feet of their property about 200 feet, it endangered their garage and took their back garden. He said that if there was another bad storm, their- garage and the inside of their home would be swamped. He represented many people who live on San Francisquito Creek, and if something was not done, many families would lose their homes if there was another major storm. He di d not know what it would take, but he was doing everything in his power to give the Council the message of many; peopl a who live on San Francisquito Creek that the flood problem must be cured. Counci lmember Cobb asked staff whose responsibility it was to cure the erosion problem. Mr. Corbay, Flood Control Manager of SCVWD, responded that respon- sibility to cure the especi f i c problem ref e .red to. by Mr. Benedetti was that of the' SCVWD. He pointed out that perfect pro- tection on San Francisquito Creek would take a project of about $23 million. the Corps of Engineers studied the entire project in the late 1960's and found $23 million to be the magnitude of the costs. He said that as an alternative, a dam was proposed in the Ladera area, a .Willow Road Bypass was another alternative, and a channel i zati on project was also mentioned. He said any of those alternatives were extremely costly, that the. federal government had, not found .a federal interest, and locally .they were not in ..a position .to fund that kind of a project even with the Benefit Assessment Program. He said that given the desires of the neigh- borhood . i n the San Francisquito Creek area, the SCVWD felt that a spot erosion repair would be the best solution, andthey were pre- pared to do that adjacent to Mr. Benedetti's property where the SCVWD owned the right . of way. CONSENT CALENDAR Counci lmentuer Renzel _refoved Item #7, Site and Design Review for 1870 Embarcadero Road,. from the Consent Calendar. MOTION Councilmember Witherspoon moved, seconded by Fletcher, approval" of the Consent Calender as am'ended, - 1 7 2 .4 3/8/82 i Councilmember Renzel announced that she would "abstain" on Item #9 and Councilmember Levy announced that. a "no" vote be recorded for him on Item #9, Council Salaries. None Referral Action RESOLUTION AUTHORIZING STAFF TO AMEND SUBDIVISION AGREEMENT FOR 600 HIDbLEFIELD ROAb/6rHAMILTO4 AVENif£ (CMR:167:2) Staff recommends approval of the resolution. RESOLUTION 6005 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AUTHORIZING STAFF TO AMEND SUBDIVISION FOR 500 MIDDLEFIELD/664 HAMILTON AVENUE" JOINT POWER AGENCY SOLID WASTE STREAM ANALYSIS (CMR:160:2) AWARD OF CONTRACT Cal Recovery Systems, Inc. ORDINANCE RE BANNER PEA (2nd Reading) ORDINANCE 3334 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING. SECTIONS 9.48.010 AND 16.20.110 OF THE PALO ALTO MUNICIPAL CODE TO TRANSFER AUTHORITY FOli ISSUANCE OF BANNER PERMITS FROM CHIEF OF POLICE TO THE CHIEF BUILDING OFFICIAL" (lst Reading 2/22, Passed 9-0. ORDINANCE RE COUNCIL SALARIES (2nd Reading) ORDINANCE 3335 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 2.04.395 OF THE PALO ALTO MUNICIPAL CODE TO ESTABLISH COUNCILMEMBERS SALARIES AT- $400 PER MONTH FOR ALL COUNCILMEMBERS" (lst Reading 2/22, Passed 7-1-0, Levy "no," Renzel "abstaining") ORDINANCE RE RESALE CONTROLS FOR UNITS FINANCED WITH MORTGAGE ea l ng ) ORDINANCE 3336 entitled "ORDINANCE OF THE COUNCIL OF THE tTtY OF PALO ALTO ADDING CHAPTER 9.10 TO THE PALO ALTO MUNICIPAL CODE TO ESTABLISH RESALE CONTROLS FOR •UNITS FINANCED WITH MORTGAGE REVENUE BOND PROCEEDS (lst Reading 2/22, Passed 9-0) MOTION PASSED unanimously, Levy voting "no" and Renzel "abstaining" on Jtem #9, Counci lmembcrs Salaries. AGENDA CHANGES ADDITIONS AND DELETIONS. City Manager Bi l 1 Zaner announced that Item #7, Sign and Design Review for'. 1870 Embarcadero Road would become Item 11-A. Mayor. Eyerly commented . that • after the Council's recess, he would l i ke to have a bri of report from the Counci.Imembers who atte uded the National League of Cities Meeting in Washington D,C. MSOTION. Mayor, Eyerly moved, seconded by Levy, that Item #16, Muni cipal Homeowner's Insurance, be brought forward for consi derati on. 1 7 2.5 3/8/82 Councilmember Renzel commented that there could be people planning to come to the meeting for that item who would not know it was moved forward. Counci 1member Klein said he would vote against the motion because not much would be accomplished. SUBSTITUTE MOTION: Counci1member Klein moved, seconded by Cobb, that Item 11, Zoning and Subdivision Ordinance Amendments, follow Item 16, Municipal Homeowner's Insurance. Counci1member Renzel said she would opposethe motion because she was concerned that the Counci 1 would be doi ng zoni ng Matters 1 ate at ni ght . Vice Mayor Bechtel was concerned about rearrangi ng the agenda and thought the agenda should remain as is. SUBSTITUTE MOTION FAILED by a vote of 7-2, Klein and Cobb voting aye PUBLIC HEARING: PLANNING COMMISSION RECOMMENDATIONS RE ZONING AND t• Counci 1member Renzel announced that she had a conflict of interest with regard to #2, the Cottage Zone, and would not participate .on that item. Planning Commission Chairperson Jean McCown --Hawk es noted that on the Table of Contents 1 i st before the Counci 1 , Items 5o 6 and 10-15 were acted on by the Planning Commission without discussion i n one notion because the Commissioners concurred that those matters -were strai ghtforward and many recommended no acti on at this time. -MOTION: Counci lmember Witherspoon moved, seconded by Levy, to adopt the Planning Commission: recommendations with the exception of Item 2, Cottage Zone, and no action on Item 7) Reduction of Height .Limit for Mixed Residential and Commerci al Uses i n CAN Districts. Approval to include 1) Definitions of Take -Out - Services, Retail Services, and Walk. -up Window Limitations .I-3) Reinstatement of 1 -for 5 Daylight Plane Regulations in the RM--2 District; 4) -Temporary Parking Lots; 5) Gasoline Service Stations i n CPS Districts; 6) Fi nan-ci al Services in CN and CC Districts 8) Accessory tlwel l i ngs in the OS Zone; 9) 05 District Soils Report Waiver; 10) Reorganization of Parking :;Regul ati ons; 11) Bicycle. Parking Facility Standards; 12) Swimming Pools Within Street Setbacks; 13) Variance Recordation; 14.) Expansion of Noncomformi ng Uses; and 15) Access to Flag Lots. OROI NA.NCE FOR FIRST READING entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE ZONING CODE (TITLE 18) AND THE SUBDIVISION. CODE (TITLE 21) REGARDING CHANGES IN DEFINITIONS, CHANGES IN PERMITTED AND CONDITIONAL USES IN ZONES, CHANGES IN THE OS ZONE, REORGANIZATION, OF PARKING REGULATIONS, ACCESS TOe FLAG. LOTS, ETC:" Counci l:nember Witherspoon . said that i n Item #1, Definitions of Tak:-Out Services, Retail Services, and Walk-up Window Limitations, regarding Cookie Shops and Ice Cream Stores, she was concerned that the -City would end tap with a list about 20 pages long of things which involved eating but were actually retail - stores. 1 Chief Planning Official Bruce Freeland responded that the City already had a very lengthy list under "Ret ai 1 " which included many places where something to eat could be purchased. He said the precedent was to add to the length of that list, but it seemed like a simpler process than putting a lot of people through the complicated use permit process. He said staff .felt that those were not the types of uses which were the object of the intended controls on take-out food services. Counci lmernber Witherspoon said she was al so concerned about Item #2, the "Cottage Zone." She asked for clarification that it meant the •construction or remodeling of a building which was separated by at least 12 feet from the main residence. Principal Planner George Zimmerman said Counci lmember Witherspoon was correct, but that it world not include remodeling because in those situations where there was a second detached dwelling unit, a grandfather clause had been approved about a year ago. ,Counci ]rne€nber Klein said regarding Item #7, Reduction of the Height Limit for Mixed Residential and Commercial Uses in CN Dis- tricts, the staff report indicated that the Planning Commission concurred with the staff recommendation that the height limitation of 35 feet for mixed use developments not be further restricted, and he could not find a resolution from the Planning Commission to that effect. Director of Planning and Community Environment Ken Schreiber said that on February 10, the Planning Commission took up a second round of zoning ordinance amendments and Item #7 was covered at that rneeti ng. Chief Planning Official Bruce Freel and said if there was a ques- tion, he recommended holding Item #7 out. He said another series of zoning ordinance amendments would be coming to the Counci , which would gi ve staff a chance to double check what the action was at the Planning Commission. Ms. McCown -Hawk es said the Planning Commission's action was to not make any changes in the height limit. Counci member Renzel asked regarding Item #4, Temporary Parking Lots, whether staff had any experience about how landscaping responded after a site was entirely oiled and screened, and was it :possible to effectively landscape afterwards. Mr. Freeland responded that it was no worse than any other land which was previously used for building. He said it would require some remedial work --possibly some removal. of top soil and some conditioning. . Counci lntember Renzel was concerned that even though it' was spe . ci fi ed that a. temporary lot would end in five years, whether those dependent upon it would politically allow it to be ended at that point. Mr. Freeland said it was felt that the land would be subject to another use permit at the end of five years. Coustci lmember Levy said regarding Item 13, Varfance Recordation, the implication was that variances were not now bei ng recorded, and asked, how the City kept track of variances if they were not recorded. He asked how would the buyer of the property know that the property included a variance. Zoning Administrator Bob Brown responded that case files were kept in the Division of inspectional Services for every address in the community and copies of a variance were included -in those files. Counci lnreinber Cobb asked- staff about the history of the 20% regarding Item #2, the Cottage Zone. Mr. Zimmerman responded that the 20% was not sacred. He said staff had locked at a number which would maintain the integrity of the single family district and the single family neighborhood, it appeared that with the app l i cati on ' of all other site development regulations i nci udi ng the 35% site coverage that by requiring an additional 2i;% for the mini mum lot size' that it would be sufficient to maintain the integrity of the single family neighborhood -. i n the H-1 district regul ati ons., He said the Commission asked that staff ascertain if a reasonable number of sites existed on which the concept could be applied. It was already known that there could be several hundred lots in the City where the minimum lot size was at least 20% larger than what the R-1 District Regulations would otherwise require. He said it was not known that based upon existing development patterns i hether a. second detached dwelling: could be squeezed in within an R-1 district site. He said staff found about nine examples in the area of Crescent Park and --University Park where such could be applied. He said the figure was not exclusive and the illustrations were not sent to the Planning Commission because they were not requested. He said the Planning Commission wanted to be assured that there were some sites where the concept could be applied. _Counci lmember Renzel commented that regarding removal of mandatory variance recordation, there was nothing that prohibited the City from insisting that a variance be recorded in: order to give notice that the City was not planning to grant any further variances, She said it had been done in some cases where the City had made excepti onal vari ances and insisted that it be recorded so that there would be no question in the future if a subsequent owner wanted to develop within the normal setback. She said there was nothing contained in Item 13, Variance Recordation, that would prohibit the City from requiring recordation. Zoning Administrator Sob Brown commented that staff recommended that upon request of any member of the public, a variance would still be recorded. Vice Mayor Bechtel asked regarding the Cottage Zone. situation, if there was anything that would prevent two separate individuals from purchasing.,_ a. piece of property with the. idea of building a cottage for two separate families. Mr. Zimmerman -said he thought it would be a joint tenancy situa- tion; however, in the other situation, if someone wanted to divide -the two lots and. •have the landlanda under separate ownership, the applicants would have to go through the subdivision process. Mayor l;yerly asked for clarification regarding Item #8, Accessory Dwellings in the OS zone. _ . Mr. Brown responded that the zoning ordinance allowed either guest cottages with no kitchens, or accessory dwellings which did have kitchens, but th.ei r use was limited strictly to household employees.. Mayor Eyerly asked how staff-_ would enforce that provision._ Mr. -;Freeland responded that it would be on a complaint basis. Mayor Eyerly said that regarding the Cottage Zone, the lot size had to be :2O% larger and he understood that the _-thrust of the change would be where those lots were found that were 20% large P, the opportunity would be there for two houses on the lot. He asked for clarification that it was like a lot split. Mr. Zimmerman,, said it was different from a lot ,split because it would have to be 'under one ownership, and :where there was a lot split, there would _ be .two separate parcels ultimately under 1 7 2 8 3t8/82 separate ownership. Under the "cottage" concept, there would be one parcel, two detached dwellings under one ownership, and one dwelling could be rented. Mayor Eyerly asked for clarification that Item #4, Temporary Parking Lots was the only item on which staff and the Planning Commission did not agree. 1 1 1 Chief Planning Official Bruce Freeland said regarding Temporary Parking Lots, staff proposed two alternative solutions. One was to make temporary lots available in a variety of zones--CN, CC, CS, OR, LM, GM and PF. Another alternative was to limit it only to PE districts. Staff did not make a strong recommendation for one or the other, and indicated that if they were pressed to choose between them, their preference would be for the broader one partially because of the existing parking deficiencies and the thought that it might relieve some of them. Mayor Eyerly declared the publ i c heari ng open. Bob Moss, 4010 Orme, said that regarding the "cottage district" he observed that the staff report of January 22, page 4, indicated that the key factor in addition to larger lot size would be to find sites which could accommodate a potential single family dwelling and yet remain within the site coverage regulations of the respective R-1 district. He said a finding was made of no environmental impact, which he thought was totally unjustified because it was not established how many" iots in the City would be affected or where the lots were. He noted that Mr. Zimmerman had said nine lots were found in Crescent Park alone, and Mr. Moss said almost every house on his block would qualify. He pointed out that in districts of a 6,000 square foot lot size Minimum, if there were a number of houses with 7,200 square foot lots, and they were all developable, the density would be doubled if each of them were developed: He' thought the increase should be 35% in lot size because the first element ent of the Comprehensive Plan was to protect the R-1 districts. Further, unless the staff could identify in specific areas where the impact would be and what the traffic impact would be, they were not justified in making the finding. Mr. Moss was also concerned about .the height in the CN zones , and reminded the Council that when the height in the CN zone was first discussed, and when the regulations were established by the Planning Commission after extensive discussion and public. input, the 35 foot height limit. or relaxation for mixed use was adopted after the public hearing was closed, after the zoning ordi nance had gone to the Council on a 5-4 vote with no public_ discussion. He said it was a real problem at least in the Barron Park area. Dr. Herbert G. Zeman, 464 W. Charleston Road, Chairperson of the `Charleston Meadows Association, said he had a particular interest in the R$-2 zone, and the 1 for 5 daylight plan because of a large piece of property at the corner of Char i eston Road and El Camino Road which was rezoned by the Council :`before the latest revision of the zoning ordinance. He said there was a compromise derided on by the Counci 1 to zone the front part of the property commer- cial and the: middle part, RM-5 :(high density multi family), and the ba'tk section was zoned RM-2. He said it was brought out at that time that the reason for RM-2_ as a buffer zone between the R-1 zone where the single family homes were and the large develop- ment .whichworld eventually go in was because of the special 1 for 5; daylight plane. He -thought it was interesting that when the public was present the virtues. of -the zone were emphasized, and later when no one realized it was = happening and the public was - not 1 7 2 9 3/8f82 present, the zone got changed so that the protection no longer existed. The Charleston Meadows Association proposed that the daylight plane be put back into the zoning ordinance because it was a kind of commitment t.o his neighborhood to protect the single family homes next to the Traynor property and the commitment was violated by the change in the zone. Mi l ly Davis, 344 Tennessee, Palo Alto, requested that the vote for a . reducti on of height. limit for the. CM districts be put off to another meeting to accommodate residents who would like to add something. Regarding reinstatement of the 1 for 5 daylight plane regulation in the RM-2 zone, she commented that the rise_ indicated a one foot rise in the height for each five feet di stance from the site line. She said the regulation Was approved in the new zoning ordinance in 1978. It had occurred on the Traynor^ property at the corner of Charleston and El Camino, She said the RM-2 zone was placed at the back part of the parcel as a buffer to the single family homes at the end of Caroline and Tennessee Lane and some on Charleston. She gave several examples of whore the situation had occurred throughout Palo Alto., She said that the purpose of the request to reinstate the 1 for 5 daylight plane in the Zoning Ordinance was to snake the rise to 35 feet occur more rapidly than what was previously the case in the old Zoning Ordinance, and to help maintain the quality of life in Palo -Alto. She pointed out potential effects without the 1 for 5 daylight plane regal ati on in the RM-2 tones. Ned Gallagher, 440 Melville Avenue, for Downtown Palo Alto, Inc.., endorsed the staff's recommendations and the five poi nts made under Alternate A with regard to temporary parking lots. Mayor Eyerly declared the public hearing closed. Counci lmernber Menzel spoke with regard to the temporary parking lots andwas concerned if the Council chose Alternate A, because a false sense of security already existed with respect to downtown parking because of the many privately held parking lots. She felt that to add additional temporary lots on private -lands would make people think there was ample parking; and, when some of the lots were turned into buildings, the temporary lots would be gone and the City would have no control. However, in the PF zone, the City had ownership of the land and had control over whether the parking lots disappeared. She supported the request that _the 1 to 5 daylight plane adjacent to R-1 districts be reinstated into the Zoning Ordinance. AMENDMENT: Counci member Renzel moved that Item 3, the 1 for 5 restriction i n the RM-2 zone, be reinstated into the Zoning Ordinance. Mayor Eyerly asked what the Planning Recommendation was with regard to the 1 for 5 restriction. Planning Commission Chairperson Jean. McCown -Hawk es sai d the Commission's recommendation was to leave the 1 for 5 restriction out of the Zoning Ordinance. AMENUMENT FAILEDFOR LACKOF A SECOND. 1 7 3 0 3/8/82 1 1 Counci lmember levy said that with regard to Item 4, temporary, parking lots, he was frustrated that there were a number of temporary sites vacant in the downtown area and from time to time in the California Street area which could serve as temporary 'parki ng lots but didn't. He was not persuaded by the arguments for not using them as parking lots. He thought the temporary` nature was such that the City would not feel eit had a :permanent solution to the parking problem by including the lots. Although. the sightliness was not as nice as if it were permanently landscaped, in general they were no worse than leaving the lots vacant. He preferred Alternative A so that the vacant commercial lots could serve the community while they remained vacant. AMENDMENT: Councilmember Levy moved, seconded by Witherspoon, to approve item 4,. Temporary Parking Lots, Alternative A as recom- mended by -staff with the addition of the requirement that minimum landscaping may be required based on Architectural Review Board .(ARB) review and that the addition of a temporary parking facility shall remain no more than five years. Vice Mayor Bechtel was concerned about the ARB reVi ew requi rement and asked staff for a determination of the effects of it. Chief Planning Official Bruce Freel and said the ARB requi rement would probably add 1 to 1-1/2 months to the application, Since he thought the application would be simple, he didn't think there would be any other delays. He said normally the application would be for a conditional use permit, but normally ARB applications were not allowed for a use permit. The use permit applications would be the longer of the processes because it required public notices, a hearing before the -zoning Administrator, and the appeal period. Counci lmember Renzel asked staff 1 f a property owner paid to surface, or rented a vacant lot and had- it surfaced, would they, get credit toward the assessment district for those spaces provided. Mr. Freeland said it would have to be figured out in relationship to the assessment district. He didn't feel that Council's action tonight would influence it one way or the other, Counci lmember Renzel was concerned about an office building with a demand for parking, and getting pinched by the shortage of downtown parking, that if temporary parking lots were put in, it would be a long tine --as the lots disappeared --and as new development went in --before the owners of those buildings'became sufficiently aware of the parking shortage to be willing to support an assessment to produce new parking. She said that every time a new lot was acqui red, a new assessment was set up and the owners of the property -nod to vote a majority to pay into the district. If the owners did not perceive a serious enough need, they would not be willing to pay the money to buy new parking. She thought that the Council was taki nq their current nightmare, adding. a few years to it, and making it a much worse nightmare. She was not opposed to the idea of using existing vacant lots for parking, but thought the Council was asking for trouble given the fact that 40% of the parking downtown currently was privately owned and could be developed without providing any parking. Chief Planning Official Bruce Freeland pointed out that the defi- nition of "temporary parking facility" read, "temporary parking 1 7 3 '1 3/8/82 1 i facility includes parking lots which are not required under this ordinance" so that they would not be available to count as required parking, C ounci lmember Klein was concerned about commercial properties being used as temporary parking .and would vote against it. The aesthetics --bothered him because Palo Alto had hi stori cal ly done a better job with ,parking lots than most placer, and thought the City would be -taking a step backward by it. His image' of temporary parking lots which were merely oiled was basically ugly. He thought the idea of the sunset provision was ?ice, but things which were temporary had a way of Conti nuing, for years, and what would actually be created was second class parking lots of a fairly permanent nature. Councilmember Fletcher thought that, if there were vacant lots, they might as well be made use of by something which was quick and practical, She di dn't think vacant lots were attractive unless they were put into landscaping which usually was not done. She would vote in favor of the motion. Mayor Eyerly agreed with Counci l member Fletcher and saw the amendment to the mai n motion as an ,opportunity to bring some of the current vacant lots up to some type of level that would be usuabl e for parking. He was comfortable with the sunset provision that if no development occurred on the lot in five years, if the aesthetics had not been improved, staff would be in a position to see that the lot was improved. He would support the motion. AMENDMENT PASSED by a vote of 7-2, Renzel and Klein voting "no." Mayor Eyerly said regarding Item 8, Accessory Dwellings in thee OS zone, he thought it might present two houses instead of one. AMENDMENT: Mayor Eyerly removed, seconded by Renze1 , that Accessory Dwellings in the OS zone be deleted. Vice Mayor Bechtel said that she understood that the City already allowed those dwel l i ngs in the RE zone, which was a one acre minimum lot, _while the OS zone, which was ten acres, did not -presently allow it. She felt hit should remain . as, staff recommended and the change allowed unless the RE zone was also changed. It did not make sense to have the larger ten acre parcel be more restrictive than the one acre parcel. Counci lmernber Renzel poi rated out that when , % of 10 acres could be developed, it vas a lot of space compared to the lot coverage of one acre lots. She felt that more significant housing could be built without much policing of the City on a larger lot, and that the RE zone did not apply in areas of the same environmental concerns as thew:OS zOnea Counci lrnember Cobb commented that the language said "allowed accessory dwellings" and he thought "accessory" gave the necessary control, . : . He would oppose the motion 1 1 3 2 ...3/8/82 1 1 AMENDMENT FAILED- by a vote of 7-2, Eyerly and Menzel voting aye AMENDMENT: Counci lmember Cobb moved, seconded by Renzel , regarding item 13, Variance Recordation, to add the words "or the City" after the sentence, "Mandatory recordation of variances should oe discontinued with recordation done only upon the request of the applicant or the City." Counci lmember Levy felt that vari ances granted which added further restrictions on property should have mandatory recordation. Zoning Administrator strator Bob Brown commented that mandatory recorda- tion could be done at the staff level as a matter of policy. Chief Planning Offi ci 1 Bruce Freel and s'ai d he was concerned about mandatory recordation unless the variance had conditions. ons. He said it was unusual to have an absolute prohibition or conditional development because it took away the property owner's right to petition` the City for approval of the future. Counci lmember Levy clarified that he thought a potential buyer of a piece of property should know the history of that property. Director of planning and Community Environment Ken Schreiber said he thought the best way to ascertain the history of a piece of property would be to check with the appropriate Building or Planning Departments. He. said often there was a problem where there was a history of items being denied. Someone would come in with a proposal., and was told that some years ago something similar was denied on that parcel. He said the reality was that Santa Clara County and the Recorder's Office said it was very dif- ficult to try and get the Recorder to record items like variances and other site. development restrictions which were not part of a County process or some other State requirement, when thei r staffing had been cut back and it was known that they were pro- viding less service. AMENDMENT PASSED unanimously. MOTION AS AMENDED PASSED unanimously with: Renzel voting "no" on Item 3, Reinstatement of 1 for 5 Daylight. Plane Regulation of the RM-2 District. Counci lmember Klein said regarding Item 2, the Cottage Zone, he was unclear whether the Council was going to allow 9 or 900 •addi- tional homes and was not persuaded that staff had done sufficient homework to: answer the question. MOTION: Counci lmember Klein moved, seconded by Cobb, to continue Item 2, regarding Cottage Zones. Counci lmember Cobb agreed with Counci lmember Klein, and asked what the 20 percent number meant in terms _ of Counci 1 member Klein's question. He said he had raised that question when he was a Planning Commissioner, and was concerned that the City might be buying more than ,it realized with 20%, 'and requested that staff present some alternative numbers. He queried the 12 foot separa- tion, and presented an example that with a 12 foot separation, the site coverages, and the 20%, he could put a lot of housing on a 1 7 3 3. 3/8!82 7200 square foot lot. He was worried about those numbers and their impacts,. and recommended that they be considered at least in a broad brush way so that the Council had a qualitative under- standing of what was meant. Counci lmember Levy endorsed Councilrnember Cobb's and Counci lmember Klein's commej is . Director of Planning and Community Environment Ken Schreiber asked Counci 1 for clarification if the ,effort was to achi eve some sort of extensive survey of single-family lots of a certain size and a calculation of potential additional development by parcel . He. said that would be a mammoth undertaking and given other Council assignments of a considerably higher priority, it may take a long time to get to it. Mr. Freeland commented that when the Cottage Zone was on gi nal ly conceived, it was thought of as a, zoning district that would be applied specifically to individual parcels of land. He said that when the Commission first talked about it, the possibility of going on a City-wide inventory to find suitable sites was -con- sidered, and it was corrcl uc`ed that the benefit of the zone was not worth the staff effort it would take to ido that kind of massive documentati•or of all the potential lots and then assess which ones were suitable to have a cottage built on them. He feared that an assignment of that same magnitude may go back to staff. He said that in considering the matter, the Commission decided to go with an alternative process that relied on a use permit where there would be case by case application for a use permit that involved .public hearing notice, public hearing before the zoning admi ni s-- r•ator, and the appeal process. The case by case application could take care or the potential environmental and nei ghborhood impacts of the addition of the cottages. He said that for that reason the Commi ssi tii was satisfied that it did not need to ha 'e massive inventory Work done, that in fact i t; had a case by case process which would afford some protection. Mr. Schreiber said that if the Council approved the ordinance amendment, it was not approving any units or giving anyone a right to build anything. It would simply provide an opportunity to a property owner within the restrictions of the R--1 site regulations to pursue a use permit for a second unit which could only be granted after public hearing, and the required findings of no detrimental impact to the vicinity as well as general welfare. He said the use permit process would seem to be very appropriate and would be a relatively simple .gay of handling the relatively few. situations where it was likely to occur. Counci lmember Klein said he thought that proposal was remarkably unfair. The use permit system implied that the City would be fair to all people who carne before it and since the City did not have a handle of how many people could come before the. Council on the use permit process, he thought a relative sample could be taken and suggested Bob Moss' block. He did not think there was as much work involved as stuff. suggested. Vice Mayor Bechtel said that maintaining the quality and integrity of the City's single-family areas has been her concern. She said that theoretically two separate' fami l i es could acquire a piece of property with the idea of constructing, another unit. She wondered what the impacts of that would be ` in the long 'run,- and thought perhaps they were tal king ;"about the substantially large lot.; Councilmember Levy propounded "Levy's Law," which _was that all property would eventually be developed to the maximum density 1 7 3 4 3/8/82 1 1 1 permitted. He understood that about one-third of the City Council lived on pieces of property that could have a cottage added. He said his property was too smal 1 for a cottage, but it sounded to him like there was a good deal .of property in Palo Alto that if the cottage were small enough, it could be added. He was not sure he would ever support the item, but, felt that Mr. Moss was correct that a good deal of environmental impact information was needed. He would support the continuance. MOTION PASSED unanimously, Renzel "..not parti ci pats ng.'" RECESS FROM 9 50 p.m. TO 10:00 p.m. REPORT OF COUNCILMEMBERS WHO ATTENDED NATIONAL -LEAGUE OF CITIES CONFERENCE ?N WASHINGTON, D.C..- FEBRUARY 21 TO MARCH 2, 1982 Counci lmember Klein said that the four Counci liembers who attended the conference divided it up into various subjects. He said he attended the Cable TV portion, and made it a point throughout his stay in Washington to talk to as many people as possible with regard to Cable TV and the recent U. S. Supreme Court decision i n the Boulder case, and the possibilities of federal legislation which would effect Palo Alto owning or franchi si rig a cable tele- vision operation. He thought the topic of lease access where the operator of the cable television systems rented out various chan- nels an a -fixed or more permanent basis would be an avenue to explore if Palo Alto chose to operate its own municipal system. The sess i oir on cable law. and cities defending a public interest spent most of its time trying to figure out what the public inter- est was. He thought that of particular interest in the Boulder -case was the outline of the series of steps possible for a city to take to avoid the impacts of Boulder if taken at its worst. He said some time was spent on alternative forms of ownership which included municipal ownership, and the speaker was from a cable TV consulting firm in Washington and the co -speaker was a City Counci lmember from Cambridge, Massachusetts who was actively con- sidering municipal ownership at present. He obtained a t i st of major -cities throughout the country considering municipal owner- shie. He said that there was no city in America as large as Palo Alto with municipal ownership currently, but a number of the 1 arger ones were considering it. He said a session was al so hel d on protecting the information the system gained about what movies were watched and the -epeakers outlined a number of things required to maintain privacy in a cable TV .system and advocated that they be adopted regardless of who the owner of the cable TV system was. He met with key staff on Capitol Hill and a member of the Federal _Communications Commission staff who was active in cable TV matters to get a feeling of whether to expect any legislation this year or what the future was. He thought it was unlikely that any restrictions would be placed on municipal ownership of Cable TV in the near future. He said a conference was coming up in Conway, Arkansas which would deal exclusively with the issue of municipal ownership. The conference was to be held in Conway becauSee it was one of the larger areas that did have a municipally -owned system. Counci lmember Fletcher- said she attended, a session with the Transportation Policy Committee. - They. had 'a :.speaker from Urban Mass Transit Administration . (UMTA) which -allocated funding for publ tc transit systems. She said the . proposed budget for 1983 was 107;. below 1982 which h was already' .below 1981 and there was a --gradual phase out , of all toperating,subsidieS funding .from the federal- governrrrent. She said the emphasis was that _.if the local governments had to provide their own operati r1g funding-,- they woul d run a more efficient system. She said she brought up'the fact that in some cities there was a high concentration of ,seni ors who did not pay full fares which was something the federal government had not thought about because they were concerned with -cost effec- ti veness ,and running systems that made the system pay for itself. She sai d ' she was encouraged that -capitol funding priorities empha- sized maintenance and improvement of existing systems which she interpreted to mean that Palo Alto would be OK with improving the Southern Pacific commute service and would be eligible for funding. She commented with regard to the Boulder decision that it was an anti-trust case -.where a cable television franchise was awarded a loser company :On the basis of anti-trust and restraint of trade. .She said the Supreme a,ourta by a vote of 5-4, decided that it was a case where a trial should_ be held and the implica- tion was that there was a possibility of a restraint of trade. She said the implication was _ that literally dill city functions could be interpreted as being -a restraint of trade and she thought about Palo Alto's utility service, and also that :the very nature of zoning was a restraint of trade by the res.tricti ons put on developments by a city. She said there was talk 'in- Washington about the new federalism which made -her a littl-e uneasy because it was such an understatement, and she received no sympathy when she mentioned the price support for the farm program was ' projected to be $6.3 billion for the fiscal year, and she thought it was time that the new federalism be applied to the farm support program. Vice Mayor Bechtel said she attended sessions with regard- to Energy and the Environment in addition to Cable TV and Housi ng. She was fascinated to learn that members of both political parties representing ,.majority and minority members of the Energy and Commerce Committee who spoke to sections reported serious concerns with Administration Policy concerning Energy and the Environment . She said last year Congress voted almost on a strai ght party line on budget issues, but speakers this year said that would not happen. She said concerns had heen expressed for the envi ronrnent from both parties in Congress over the years, and that some things proposed in the Administration's Budget included that solar and renewable resources would be cut by two -thirds —and essentially zeroed out. Nuclear emphasis would be increased dramatically. She said that if the Administration had its way, the Department of Energy would be eliminated altogether with whatever remaining functions being turned over to the Department of Commerce. In the hazardous waste area, over -100 billion pounds of hazardous waste were dumped last year and 90% of diem were done improperly. She said at least 2,000 dumps in the United States were a problem_ She said that in 1976, the Resource Conservation Recovery Act was passed, but had not. been `funded adequately. She said it di rected the Environmental Protection Agency (EPA) to inventory dump sites, set standards and to determine what was a safe method of dumping.. The EPA was years behind in developing ,technical standards to ensure the safe disposal of- hazardous wastes. She said the Administration's Budget would cut spending for the clean. up of old .dump sites. She said the EPA had practically called , a halt to enforcement acti ons in the past year. 'She said the Housi ng area. was equally bleak --the Administration's Budget called for drastic changes in existing fedeheal housing assi stance virtually eliminating all new constructionT .ande.substanti al ly rehabilitated units under the Section 8 and Public Housing Programs and replaced them with` a voucher system. . Further, other housing funds Would be drastically reduced. She said one speaker emphasized that it: had been. a long standing policy that the federal government had an obligation to provi de nousi ng, , and .Went on to say that ."if, you believed there -was_ -a federal responsibility for housing and employment, then you could not support the - new .federalism." Fortner, if local governments too over the_ , responsi bi l i ti es those items 'would tend to go _ to the bottom of . the list st behind police, fire rand public works. because it:woul,d not _ ".go - to the back permitted. He understood that about one-third of the City Council lived on pieces of property that could have a cottage added. He said his . property was too small for a cottage, but it sounded to him like there was a good deal of property in Palo Alto -that if the cottage were small enough;°, it could be added. He was not sure he would ever support the item, but felt that Mr. Moss was correct that a good deal of environmental impact information was needed. He would support the continuance. MOTION PASSED unanimously, lzenxel "not participating." RECESS FROM 9:50 p.m. TO 10:00 p.m. REPORT OF COUNCILMEMBERS WHO ATTENDED NATIONAL LEAGUE OF CITIES t Tt HTR R, iI.C. - F1:B 2, 1g$2 Counci imember Klein said that the four Counci lrnembers who attended the conference divided it up into various subjects. He said -he attended the Cable TV portion, and made it a point throughout his stay in Washington to talk to as many people as possible with regard to Cable TV and the recent U. S. Supreme Court decision in the Boulder case, and the possibilities of federal legislation which would effect Palo Alto owning or franchising a cable tele- vision operation, _He thought the topic of lease access where the operator of the cable television systems rented out various chan- nels on a fixed or more permanent basis would be an avenue to explore if Palo Alto chose to operate its own municipal system. The session on cable law and cities defending a public interest spent. most of its time trying to figure out what the public inter- est was. He thought that of particular interest in the Boulder case was the outline of the series of steps possible for a city to take to avoid the impacts of Boulder if taken at its worst. He said some time was spent on ai ternat i ve forms of. ownership which included municipal ownership, and the speaker was from a cable TV consulting firm in Washington and the co -speaker was a City Counci lrnember from Cambridge, Massachusetts who was actively con- sidering municipal ownership at present. He obtained a list of major cities throughout the country considering muni ci pal owner- ship. He said that there was no city in America as large as Palo Alto with municipal ownership currently, but a number of the 1 arger ones were. consi deri n'g.. it. He said a session .was also held too protecting the information the system gained about what movies were watched and- the speakers outlined a number of things required to maintain privacy in a cable TV system and advocated that they be adopted regardless of who. the owner, of the cable TV system was. He met with key staff on. Capitol. Hilt and a member of the --Federal Trade -Commission who was active i n cable TV matters to get a feeling ofwhether' to expect any l egi sl a.ti on. this year cw what the future was. He thought it was unlikely . that any restrictions would be placed on muni-cipal ownershi p of Cable TV in . the near future. . He said conference. was scorning up in Conway, Arkansas which would deal exclusively with:the owner- ship. The conference Was to be held in ,Conway . because it was one ':of the larger areas that did have a municipally -owned system. Counci member Fletcher said she attended a session, with the Transportation Policy Committee. They had a speaker from Urban Mass Transit Administration (UMTA) which allocated funding for public transit systems. She said the proposed budget for 1983 was 10% below 1982 ; which was already below 1981 and there was a gradual phase out of all operating subsidies funding from the federal government. She said the``emphasi s_ was that if the local governments had to provide their own operating funding, : they would rim a more efficient system. She said she brought up the fact that, in some:cities there was a high concentration of seniors who 1 1 1 did not. pay full fares which was something the federal- government had not thought about because they were concerned with cost effec- tiveness and running systems that made the system pay for itself, She said she was encouraged that capitol funding priorities empha- sized maintenance and i mprovenent of existing systems which she interpreted to mean that Palo Alto would be OK with improving the Southern Pacific -commute service and would be eligible for funding. She commented with regard to the_ Boulder decision that it was an anti-trust case where a cable television franchise was awarded a loser company on the basis of anti-trust and restraint of trade. She said the Supreme Court, by a vote of 5-4, decided that it was a case where a trial should be held and the implica- tion was that there was a possibility of a restraint of trade. She said the implication was that literally all city functions' could be interpreted as being a restraint of trade and she thought about Palo Alto's utility service, and ;also that the very nature of zoning was a -restraint of trade by the restrictions put on developments by a city, She said there was etalk. in Washington about the new federali am which remade her a little uneasy :because it was such an understatement., and she received no sympathy when she mentioned the price support for the farm program was projected to be $6.8 billion for the fiscal year, and she thought it was time that the new federalism be applied to the farm support program. Vice Mayor .Bechtel said she attended sessions with regard to Energy and the Environment in addition to Cable TV and Housing. She was fascinated to learn that members of both political parties representi ny majority and minority members of the Energy and Commerce Committee who spoke to sections reported -serious concerns with Administration Policy concerning Energy and the Environment. She said 1-ast year Congress voted almost on a straight party line on budget issues, but speakers this year said that would not happen. She said concerns had been expressed for the environment from both parties in Congress over the years, and that some things proposed in the Administration's Budget included that solar and renewable resources would be cut by two -thirds --and essentially zeroed out. Nuclear emphasis world be increased dramatically. -'the said that if the Administration had its way, the Department of Energy would, be eliminated altogether with whatever remaining functions_ bei ng turned over to the Department of Commerce. In the hazardous waste area, over 100 billion pounds of hazardous waste were dumped last year and 90% of them were done improperly. She said -at least 2,000 dumps in the United States were a problem. She said that in 1976, the Resource Conservation Recovery Act was passed, but had not been funded adequately. She said it directed the'Environmental Protection Agency (EPA) to inventory dump..sites, set standards and to determine what was a safe method of dumping. The- EPA was years behind in developing techni cal standards to ensure the safe disposal of hazardous wastes. She said the >,dmi ni strati on' s Budget would cut spending for the clean up of old dump sites. She said the EPA had practically called a halt to enforcement actions in the past year. She said the Housing area was equally bleak --the Administration's.- Budget called for drasti c changes in existing federal housing assistance virtually,. eliminating all new construction and substantially rehabilitated units under the Section 8 and Public Housing Programs and replaced them with --a voucher system. Further, other housing funds-, would be drasti cal ly -reduced. aShe said one speaker --emphasized, that it had been a longt standing' -pal icy thaat the federal government had an obligation to provide :housing, and went_ on to say that. f .X:ou- bel i eved, there was a federal_. responstbilitya fora housi ng and employment,- then' you_ -could not support the new' federalism." - F urther, if local governments took over ;the" eerespohsibilittet, those items would. ter#: to ego,*to the .bottom of the list beh`ind. police, --fire and pub -11C works because -it would not "go to the back burner, but rather would fall off the stove because there were not enough burners to go around." Counci lmember Fazzinqa said he was the token Republican to go to Washington but admitted that he had some of the same reactions as his colleagues. He focused eon the area of employment and training, and attended the sessions on CETA and urban enterprise. He said that with respect to CETA, it would probably be funded, but it would, be a smaller budget. There would be no public funds avai i abl a for direct use by public agencies. He said the focus would be on the private sector and job training: The City would probably' be in a position to work with private -industry council and to allocate moneys in a particular area. He thought it was important that the City monitor that development during the :course of the year. With respect to urban enterprise, the Administration would be designating 75 areas around the country for tax credits and job training to help locate plant sites over the next three years. Given Pale Alto's concern about the jobs/housing imbalance: and some local areas which were economically disadvantaged and desperately needed additional plant sites, he thought it would be important for Palo Alto to monitor the Urban Enterprise Program. Overall , , his impression -about other domestic prograczms such as health care, welfare, etc. was that the Administration had adopted a very piecemeal approach toward those programs. The new fed- eralism .was really only a concept as yet without a well-defined sense of how cities, states, and the private sector would deal with problems heretofore handled by the federal government. He thought the greatest frustration was that not much thinking was put into those areas, and there was certainly a lack of good domestic advisors in this Administration:, and as one who generally supported budget cuts in the past, he was concerned that the Administration did not have a plan when it did involve the private sector and cities as to how the programs could best be handled. He said the country had seen a tremendous' amount of indiscriminate budget cutting in order to bring about what was considered to be a relatively low budget deficit in order to account for the neces- sary defense budget. He said he had heard a rather unenthusiastic keynote address on the part of the Vice President that evt0 though he was generally supportive of the President's programs, it was more of a message that "nothing else has worked, so let's try this .for a couple of years. PLANNING COMMISSION AND ARCHITECTURAL REVIEW BOARD UNANIMOUSLY RECOMMEND APPROVAL OF THE .APPLICATION OF CARL HOLVICK COMPANY FOR SITE AND DEIGN REVIEW FOR PROPERTY LOCATED AT 1870 EMBARCADERO ROAD 1 Counci lmember Renzel said she removed the matter from the Consent Calendar because there was a program in the Baylands Master Plan that was something to the .effect of reducing additional industrial incursion into the Baylands. She said that since the Plan was adopted, the Council had voted to rezone an agriculture conserva- tion piece of property at 1766 Embarcadero. Road for light rnanufac- turi ng, and the Pearson Electronics Building was being built on Embarcadero Road. She was concerned whether any of the programs in the Baylands Master Plan were being heeded. Another program of the Master Plan was that there should be park quality lighting at the entrance to the Baylands, an.d on the staff report she noted that the Resource Conservation . Department made a recommendation that regarding Energy Conservation, the project should _ use high efficiency lighting.' She said that particularly since the property was across from the ITT .-property which was eventually scheduled to be a park, she was .concerned about the high intensity lighting. 1 7 ,3 7_ .3/8/82 - As Corrected 4/5/82 MOTION: Councilmember Renzel moved, seconded by Fletcher, to adopt Planning Commission recommendation that the project will not have a significant environmental impact and approve the mitigated negative declaration as well as the site and design application as being a development harmonious with other` uses in the general vicinity, compatible with environmental and ecological objectives, and i ri accordance with the Palo Alto Comprehensive Plan, and refer the site and design application to the Architectural Review Board subject to the following conditions: - 1) The parking lot is to be designed _as a retention basin; _2) A complete drainage plan shall be submitted to the City Engineer for approval prior to the issu- ance of any building permits;, 3) Automatic fire sprinklers wi 11 be required; 4) Existing street trees are to remain; 5) A soils report wi i l be required prior to the issuance of a building permit with the amendment 6) that lighting be of park -like quality and that the source of the lighting be obscure (not visible). Councilmember Fletcher said she was concerned that the requirement that "an Energy Conservation Plan shall be submitted..." was not actually listed as a condition. Chief Planning Official Bruce Freel and responded that the ARB approval included those requirements with the ARB files. When it came in for a building permit, it would have to conform to the ARB approval. Councilmember Renzel asked staff to what extent the City con- trolled whether utilities were used at night. Mr. Freeland responded that unless it was specifically condi- tioned, it was available for use at the pleasure of the property owner. MOTION PASSED unanimously. ASSOCIATION OF BAY AREA GOVERNMENTS' REGIONAL HOUSING NEED ESTIMATES (MR:156:2) Councilmember Renzel said she realized that the Association of Bay Area Governments (ABAG) had grossly underestimated the housing needs in Palo Alto, and asked about the legal effect of ABAG's projections. How would ABAG funnel federal funds and would it affect Palo Alto's.:.eligibiiity for federal funds. She was con- cerned that when Pia14 Alto was obliged to adopt a conforming housing element to satisfy ABAG, a great _deal of detail about spe- cific projects was incorporated, and even those legal effects were unknown -because they were incorporated into the Palo Alto Compre- hensi ve .Plan, but yet were basically in- -a level of detail much greater than would.be included for long term planning. She won- dered if the Council was boxing themselves in by going to the high side of what the housing need may be. Mr. Freeland said he thought it was something -to consi der since Palo Alto was not obliged tt, have any ` rel.ati o.nshi p• -,to the ABAG numbers because Palo Alto's numbers had . been certified -under the old guidelines_ . In about three years when . the housing element would have :to be revised, numbers that ABAG re:.ogni z.ed would have to be incorporated, He said that when numbers were finally set- tled with ABAG, Palo Alto would want to be as c;are_fd 1 - not to ov er- state them as to avoid understating them.te- Counci lmember WitherSpOdne could see .:advantages of being -under- stated. burner, but rather would fall off the stove because there were not enough burners to go around." 1 1 e Councilmember Fazzino said he was the token Republican to go, to Washington, but admitted that he had some of the same reactions as his colleagues. He focused on the area of employment and training, and attended the sessions or► CETA and urban enterprise. He said that with respect to CETA, it would probably be funded, but it would be a smaller budget. There would be no public funds available for direct use by public agencies. He said the focus would be on the private sector and job trai ni ng. The City would probably be in a position to work with private industry council and to allocate moneys in a particular area. He thought it was important that the City monitor that development duri ng the course of the year. With respect to urban enterprise, the Administration would be designating 75 areas around the country for tax credits and job training to help locate plant sites over the next three years. Given Palo Alto's , concern about the jobs/housing i.'bal ance and some local areas which were economically disadvantaged and desperately needed additional plant sites, he thought it -would be important for Palo Alto to monitor the Urban Enterprise Program. Overall, his impression about other domestic programs such as health care, welfare, etc. was that the Administration had adopted a very piecemeal approach toward those programs. The new fed- eralism was really only a concept as yet without a wel 1-aefi ned sense of how cities, states, and the private sector would deal with problems heretofore handled by the federal government. He thought the greatest frust eati on was that nut much , thi nki ng was put into those areas, and there was certainly a lack of good domestic advisors in- this Adnii ni strati on, and as one who generally supported budget cuts in the past, he was concerned that the Administration did not have a p1 an when it did involve the private sector and cities as to how the programs could best be handled. He said the country had seen a tremendous amount of indiscriminate budget cutting in order to bring about what was considered to be a relatively_ low bodget deficit in order to account for the necese sary defense budget. He said he had heard a rather unenthusi astic keynote address on the part of the Vice President that even though - he was generally supportive of the President's programs, it was more of a message that "nothing e1 ee has worked, so let's try this for a coups e' of years." PLANNING COMMISSION AND ARCHITECTURAL REVIEW BOARD UNANIMOUSLY L REVT"EWTUR PROPIATT1 COCA1i1J AT TWfU tMBARGAUtKU Counci liiember Renzel said she removed the matter from the.: Consent Calendar because there was a program in •the Day1 ands Master Plan that was something to the effect of reducing additional industrial i ncdrsi on into the Bayl ands. She said that since the Plan was adopted, the Council had voted to rezone an agriculture conserva- tion piece of property at 1766 Embarcadero Road for light manufac- turing, and the Pearson Electronics Building was being built on Embarcadero Road. She was concerned that any of the programs in the Mater Plan were being heeded. Another program of the Master Plan was that there should - be part quality lighting at the entrance" to the Baylands, and on the staff report she noted that the Resource Conservation Department made a recommendation that regarding Energy ConservatiA, the project should use high effi- ciency lighting. She said' that particularly., since the property was across from the ITT property which was eventually scheduled to be a park, she was concerned about the high intensity lighting. MOTION: Councilmember Renzel moved, seconded' by Fletcher, to adopt Planning Commission recommendation that the project will not have a significant environmental impact and approve the mitigated negative declaration as well as the site and design application as being a development harmonious with other uses in the general vicinity, compatible with environmental -and ecological objectives, and in accordance with the Palo Alto Comprehensive Plan, and refer the site and design application to the Architectural Review Board subject to the following conditions: 1) The parking lot is to be designed as a retention basin; 2) A complete drainage plan shall be submitted to the City Engineer for approval prior to the i ssu- ance of any building permits; 3) Automatic fire sprinklers will be required; 4) Existing street trees are to remain; 5) A soi 1 s report will be required prior to the issuance of a building permit with the amendment G) that lighting be of park -like quality and that the source of the lighting be obscure (not visible). Councilmember Fletcher said she was concerned that the requirement that "an Energy Conservation Plan 'shall be submitted..." was not actually listed as a condition. Chief Planning Offi ci al Bruce Freeland responded that the ARB approval included those requirements with the ARB files. When it came in for a building permit, it would have to conform to the ARB approval. Councilmember Renzel asked staff to what extent the City con- trolled whether utilities were used at night. Mr. Freel and responded that unless it was specifically condi- tioned, it was available for use at the pleasure of the property owner. MOTION PASSED unanimously. ASSOCIATION OF BAY• AREA GOVERNMENTS' REGIONAL HOUSING NEED Counci lrnember Renzel said she realized that the Association of Bay Area Governments (ABAG) had grossly underestimated the housing needs in Palo Alto, and asked about the legal effect of ABAG's -projections. How would ABAG-funnel federal funds and would it affect Palo Alto's eligibility for federal funds. She was con- cerned that when Palo Alto was obliged to adopt a 'Confor'ming housing element to satisfy ABAG, a great deal of-. -detail about spe- cific projects was incorporated, and even those legal effects were unknown because they were i ncorporated into the Palo Alto Compre- hensive Plana an, but yet were basically in- a level of detail much greater than would be included for long term planning. She won- dered if the Council was boxing themselves in by going to the high si de, of .what the housing feed may' be. Mr. Freeland said he thought it was something to consider since Palo Alto was not -obliged to have any relationship to the ABAG numbers because Palo Alto's numbers had been certified under the old guidelines. In about three years when the housing element would have to be revised, numbers that ABAG recognized would have to be incorporated. He said that when numbers were finally set- tled with ABAG, Palo `Al to would want to be as careful not to over- state them as to avoid understating them. Councilmember Witherspoon did not see advantages of bei ng under- stated. 1 1 7 3 8 3/8/82r Mr. Freeland responded that staff was concerned that Palo Alto had a number of housing programs being implemented, and among other things, they were asking for housing mitigation payments from industrial developers, below market rate contributions, and if the City had an unrealistically low estimate of housing need, it would erode the strength of those kinds of programs. Councilmember Witherspoon said that if the City was not mandated to respond, she thought the City should lay low. Principal Planner George Zimmerman responded to Councilmember Wi therspoon's first question that the Palo Alto Comprehensive P1 an estimated that Palo Alto develop between 1980-1990 substantially more housing units than ABAG would anticipate because Palo Alto anticipated that during the 1180 to 1990 housing unit increase, 75% would occur between 1980-1985 which was exactly the same period that ABAG came up with their housing need estimates and their s would be substantially lower than what Palo Alto's Comprehensive Plan would anticipate. Councilmember Witherspoon said she appreciated that Palo Alto did not think ABAG's figures were accurate, but her instincts were to let sleeping dogs lie and maybe they will wake up, and maybe they won't. Councilmember Cobb said he did not see why the City had to invite problems, and did not see any problem with being able to report to the State and/or ABAG that Palo Alto was doing better than the estimates given by ABAG and was proud of it. He did not think the letter was necessary. Mr. Schreiber pointed out that the dog was no longer sleeping -- that the ABAG executive board had already directed its staff to work with local agencies in developing new numbers for the 1984 process. He said they were doing it in response to the flood of complaints theY were getting from local jurisdictions from both the nigh and low sides. . He said the City of San dose would like to shi ft any number of units in the ABAG estimates to the Northern part of the County so there was going to be a. very complex process taking place in reallocating those numbers. He felt Palo . Alto would rather get into that process rather than having ABAG tell Palo Alto in the future what its number would he. City Manager Bi 1 l Zaner said he recogni zed the tendency to try and not rock, the boat especially when the numbers in some respects --looked better for Palo Alto. He thought Palo Alto would be better served in the long run to rely upon its own Comprehensive Plan and. the data ite had developed. He said it was certain that ABAG would revise its numbers, and there .would be an attempt to move numbers from high cities to low cities, and Palo Alto was cur- rently one .of the low cities. He thought' Palo Alto Would find 1tself i n the reverse -position trying to defend against the high number. He thought the City should stand: on its own ground, and say -that our Coraprehensi ve Plan makes sense and was the basis on which Palo Alto did its own planning, mitigation measure work. and the below market rate work, and there was no excuse':..for .i'BAG to be either high or low -they should be with Palo Alto's Comprehensive Mao, . and that was the figure Palo Alto should defend. Councilmember Levy agreed with Councilmembers Cobb and Witherspoon that therewas no need to respond. He said it was . nice to take the high road and from the start say that Palo Alto>'s Compre- henst. * P 1 an was correct. He did not think that the high road was necessarily the road to be taken and was often a pressure road, and the starting point became a preesdre point from which 1 T 3 9 3/8/82 to -be moved up or down as the situation demanded. He was not clear about the use to which the numbers would be put, and thought the best course of action for the time being was to let ABAG's numbers stand and'when ABAG wanted to revise them, then respond to the revision dependent upon what purposes those numbers would serve. 'Mayor Fyerly said he had .similar questions about why the letter and why the telephone wasn't used to ascertain whether the numbers were correct and why such a disparity.' He said that was al ready done, and staff felt strongly that the figures contained in, Palo Alto's Comprehensive Plan were correct and could be substantiated. if Palo Alto did not go on record to ABAG that its figures were right, then other people within the community that looked at Palo Alto's Comprehensive Plan and ABAG' that saw the difference would wonder who was right, and the problem of trying to support what Palo Alto was trying to .ado would occur. He said staff convinced him that Palo Alto's figures were right, and the record should be set straight now. He had no problem with the letter in view that staff had already communicated with ABAG by phone. ABAG already understood that and would be working on it over the next year. Councilmember Fletcher agreed that Palo Alto should be open about its, needs. She was concerned that "housing needs" was the wrong terminology because if the number of housi ng units were looked at and compared with the number of jobs in town and the number of automobile trips into town every day, Palo Alto's "needs" would be in the upper thousands somewhere. Mr. Schreiber said that what staff would like to pursue with ABAG was a realistic number of units given the zoning and the Comprehensive Plan. It was feared that the next round of numbers would be no more realistic but in a much different direction. Vice Mayor Bechtel concurred that Palo Alto needed to be up front, and it would be foolish to keep our head in the sand and hope no one noticed that Palo Alto had a greater need than ABAG said. She concurred that staff should communicate with ABAG and did not feel Palo Alto would be penalized when Palo Alto wrote its revised housing element in a few years because a need would be like a goal and how would Palo Alto get there. Counci lmember Renzel said she was satisfied that staff was not talking about putting in unrealistic goals in their work with ABAG and she thought it was appropriate for Palo Alto and. ABAG. to search for some moderate truth in the housing needs. She would support the staff letter. Counci lmen ber Cobb said he was prepared to vote against the letter, but staff had made a persuasive argument. He suggested 1 anguage which basically said that Palo Alto had a Cornprehensi ve Plan which was certified by the St ate as a good one, and a great deal of effort had gone > into it, and Palo Alto believed it reflected the accurate target and goals for Palo Alto and would like to discuss it with ABAG He thought the adjustment should be approached in a positive way. MOTION: Counci lrnember Cobb b moved, seconded by Levy, to approve the staff recommendations to 1) authorize staff to transmit the attached letter on the regional housing need estimates to ABAG, and 2) to direct staff to work with ABAG to develop a more realistic set of housing need estimates for.,. Palo Alto by 1983 when ABAG will prepare its final set of regional and housing need estftiates for Bay Area cities and eounti es, with the amendment that the sentence in the draft letter that reads; "We find 1 7 4 0 3/8/82,r ABAG's 'housing need' numbers for Palo Alto to be 'unrealistically low'' be changed to a positive tone as well as the tone of the entire letter and that staff clarify the term "housing need." Councilmember Levy said he was uncomfortable with the phrase "housing need," because he thought someone would come back and insist that Palo Alto fulfill its "housing need." Mr. Freel and responded that the term "housing need" came from the State Housing Element Guidelines and legislation which sought to have a number for "housing need" identified. He said staff could make sure that the term "housing need" was used when referring to that requirement from the State which ARAG was seeking to fulfill and perhaps use other language when expressing what Palo Alto felt it could accomplish. He said staff could be sensitive -to the term "housing need" when rewriting the letter and keep the term in quotes. Counci lmember Fazzi no asked if any State or Federal dollars _wore Lied into the 'particular housing element. Mr. Freeland said that theoretically State dollars were tied into it. He said there was a reimbursement clause for work done on "housing needs" relative to the bill, but the State had not yet decided whi ch costs were recoverabl e. Counci lrnember Fazzi no encouraged the Council to let City staff write their own' 1 etters and not try to become a cornrni ttee in doing such for them. MOTION PASSED unanimously. PALO ALTO HOUSING CORPORATION BIRCH COURT CONDOMINIUMS - APPROVAL City Planner Glenn Miller directed Council's attention to Attach- ment b, regarding the environmental review on the project, and said that Section 3 was ialcorrect. He noted that an ordinance which recommended a budget amendment was a project; however, the environmental staff ruled that an exchange of funds would not have a significant environmental impact. He said Section 3 should read, "An exchange of funds does not constitute a significant envi ronmental impact. An environmental assessment has al ready been'done for the proposed development at this site and this docu- ment addresses the potential impacts from the development. The EIA was approved by the. Architectural Review Board on February 18, 1982." Bob Moss, 4010 Orme, Palo Alto, commented that regarding para- graphs 3 and 9 of Attachment C, it 'was difficult to identify what property was being talked about and from where the 75% of the total units was being drawn. He understood that the property was a portion of the o''eral l Birch -Grant property.. Furthe r, that the Community Uevel opment grant money was that which went 'to purchase the -entire project Areal He did not think the -present Wording was sufficiently 'clear.. Mr. Moss further , said that the costs involved to the City of making the loan were not specifically stated. He felt that every- one should understand what kind of an obligation the City was incurring in adopting this type of ' subsidy for. housing. He thought that the reason it was a problem was because of the experiences had by some. of his relatives at the Ferne Court Apart- ments. He said that when those apartments were originally going to be purchased based on totally unsubstantiated figures from 1 7 4 I 3/8182 the owner, it was estimated that anywhere from six to nine of the units would be below -market. It ended up that three of the units were for below -market -rate people, and the market -rate people subsidized, at a very high rate, the three 8MR people. He thought the City should exercise caution in spending its- money, because if the City continued to commit large sums of money for affordable housing, there would be no'money left for. anything else. Vice Mayor Bechtel said that regarding Attachment C, she- under- stood that the Council would not vote on Attachment C --that it was a =staff prerogative to work out ' the final agreement. Further, she hoped the agreement would be appropriately clarified. She said it was correct that the program would benefit the Housing. Corporation, but it would also meet the Ci ty.'s goals for providing some affordable housing. She said that by reducing the costs in all ways possible, and by the City's providing this kind of help, each of those three units would cost $3,000 less than, the other units, which ultimately helped the City's goals. Further, she said the City had housing mitigation -, funds which could be set aside and used for housing as they accumulated --thereby not necessari ly requi ring the use of General Fend moneys. Councilmember Witherspoon said she thought that the.cost of the money the City was lending to the Housing Corporat on depended upon its source, i.e,, in..•lieu payments, and other payments made specifically earmarked for housing and which the City had been earning interest. She also thought that some of the City's Land Banking Funds were Community Development Funds from the government which were actually given to the City speci f cal l y for the housing purposes. City Manager Bi 1 I Lefler wanted to make certain that the Council understood that these sources were committed to the purchase of Terman, and that the funds for this program would come from the General Reserves. Mayor Eyerly said he had also asked where the money would come from. He had no _problem with the recommenaati on as far as providing the money ,\ but was concerned about taking it from the General- Fund. He reiterated that the City had committed all of its Land Banking. Funds for Terman and there would be in -lieu moneys coming in. He thought that if the Counci 1 approved the ordinance, a contingency should be added that the money taken from the General Fund would be replaced by Land Banking Funds as they became available. He felt strongly about that because when housing moneys were budgeted at the start of the year; he would not accept a policy of taki ng money for housing from the General Fund without replacing it' from the Land Banking Funds as the moneys became available. MOTION: Mayor Eyerly moved, seconded by Cobb, to approve the Budget Ordinance with proposed amendment to Section 3, "An exchange of funds does not constitute a significant environmental impact. An environmental review has already been .,done for the. proposed development of this site and this document addresses the potential impact from the development. The EIR' was approved by the '.Architectural Review Board on February 18, 1982." Further, that the moneys that are taken from the General Fund be , replaced by in -lieu or land banking funds as they are available. ORDINANCE 3337 entitled "ORDINANCE OF THE COUNCIL OF THE CITY or PALO ALTO AMENDING THE : BUDGET FOR THE FISCAL YEAR 1981 82 TO PROVIDE FUNDING FOR CAPITAL IMPROVEMENT PROJECT NO. 81-93 : 'PALO ALTO 'HOUSING CORPORATION (PAHC) ACQUISITION OF BIRCH -GRANT PARCEL' AND TO PROVIDE FOR RECEIPT OF REVENUE FROM COUNTY COMMUNITY . DEVELOPMENT BLOCK GRANT (CDBt) ` FUNDS" \e 1 1 1 Councilmember Levy said he would_vote 1n favor of_the motion, and thought that Mayor Eyerly's suggestion as to policy was good. He also thought there should be a policy regarding the interest on the City's funds that all City loans carry an interest rate com- parable to the City's average rate of return on its investments. He said that currently interest on City funds, which included housing funds the interest of which Went into. the..City's General Fund, was Palo Alto's thi rd hi ghest source of income. He agreed with Bob Moss that interest free.loans Were a hidden subsidy; and, as a Matter of policy, any kind of hidden expenses were inappro- priate and should be out in the open. MOTION PASSED unanimously. MANDATORY ISSUANCE OF CONCEALED WEAPONS PERMIT (CMR:173:2) MOTION: Councilmember Renzel ?roved, seconded by Fletcher, that staff be authori zed to oppose AB 2480. MOTION PASSED unanimously. Councilmember Levy suggested that staff communicate the Council's action to the surrounding Bay Area comnnuni ti es asking there to follow suit. CRIMINAL JUSTICE GRANT IN SUPPORT OF COMMUNITY CRIME PREVENTION Vice Mayor Bechtel commented that she would support the staff's recommendation, but was not prepared to support it beyond one year. Unless some outside funds could be used, City funds would have to be used again, and she would have to be convinced to spend the money. Councilmember Cobb asked staff to elaborate on the statement in the staff report that :"As part of the Grant Agreement, the City of Pai o Alto was obligated to propose a plan for assumption of costs if operation is successful." Lt. Robert Harvey of the Palo Alto Police Department, Project Director, responded that the obligation was that the City of Palo Alto would come up with a financing plan that could be presented to the State and the appropriate bodies. He said that if a plan was presented to the private sector, the City would have to come up with the details, the specific organizations to be approached, and the amount of funding w O ch would be requested.. He said that the Police Department could also approach the City Council for a financing plan. Councilmember Fletcher commented that one condition under which grant moneys were received was that the program would be carried on. Lt.._ Harvey responded that Councilmember Fletcher was correct. He said the element was contained i n the Crime Prevention Program and was primarily an expansion of the Neighborhood Watch concept --a concept that could be kept going with current program staff. The major cost item in the grant was the idea of the Crime Prevention Center. He said that the Police Department could maintain its effort with the State beyond the grant, exclude those ;" unds, work out of -existing municipal facilities with the regular crime prevention staff, and not incur the costs.. Councilmember Witherspoon hoped the concept proved to be suc- cessful $he was concerned that almost as much was being spent on office furniture as in publishing the news watch organ. She thought that the City must have a few desks and chairs around City Hall which could be used if there was an option to allocate those costs to publication and advertising, and she thought some square footage could be found in the basement: at City Hall She thought that both of those items could be eliminated next year if the con- cept proved to be successful. Counci lmember Cobb asked if the State deemed the program suc- cessful, and for whatever reason the Council couldn't come up with the incremental funding, could the obligation to the State be satisfied by going back to where they are now. Lt,. Harvey said yes. He said the Neighborhood Watch Program would be brought in-house, worked out of existing space, and some volun- teer staffing would be brought in. MOTION: Mayor Eyerly moved;' seconded by Fletcher, to, adopt the staff recommendation to approve the budget amendment necessary to conduct the programs, and authorize the City Manager to -enter into contract with the State Office of Criminal Justice Planning, as outlined in the grant award contract. RESOLUTION 6006 entitled _"RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ACCEPTING GRANT FUNDS MADE -AVAILABLE THROUGH STATE GENERAL FUNDS FOR THE 'PALO ALTO COMMUNITY CRIME PREVENTION CENTER" ORDINANCE 3338 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE. BUDGET FOR THE FISCAL YEAR 1981-82 TO PROVIDE FUNDING FOR A COMMUNITY CRIME PREVENTION CENTER AND TO PROVIDE FOR RECEIPT OF GRANT FUNDS FROM THE OFFICE OF CRIMINAL JUSTICE PLANNING MOTION PASSED unanimously. MUNICIPAL HOMEOWNER'S INSURANCE REQUEST FOR COUNCIL AUTHORIZATION A prrartTrsCQMl+11TTEL (CM:R: . a City Manager Bill Zaner commented that the program faced the same kind of test as any. other .program of whether _ i t was in the pub- lic's interest. He said that the purpose of the program was to reduce the. hazards .faced . by homeowners in their homes. He said the City had already spent substantial sums of money worki ng on those problems, i.e , a Fire Department which included a ' Fire Prevention Bureau, a Fire Marshall, some hazardous chemical studies -to reduce those kinds of hazards were -recently autnorized, and a Burglary Prevention Program. He said this program attempted to do the same thing and tended to reduce the hazards located in the home. He proposed that the City be available- to go into .the single-family owner -occupied hones and do a professional, thorough, and extensive inspection of those homes. He said that was already being done i n the City by burglary inspections, fire inspections, etc., the City had staff w,ho were professionally capable of doing it, and the City was good at it. He said it was not proposed that the City go into the insurance business. He said the City's business was in the inspection end of the busi- ness. Staff felt that it thdy could ., go into a homeowner's dwelling and demonstrate to that homeowner that by allowing the City ,to conduct an inspection, and by ohaving the homeowner follow-up on the inspection and make the necessary corrections, that homeowner would reduce the hazards of his home, and thereby reduced the risk the insurance -carrier would face, and that should be worth : somethi na. 1 7 4 4 3/8/82 Mr. Zaner said staff felt that the insurance companies' would recognize the City's inspection program, and Would reduce the homeowner's premium in recognition of the reduction in those hazards. In addition, the reduction experienced by the insurance carrier would be significant enough that part of the savings recognized by the insurance company would be passed along to the City. 1 -le said those funds would be channeled back in the City's Public Safety Program., He noted that in the Request for Proposal (RFP) there was a request as a part of the RFP that the insurance companies quote the City a figure if .the City retained part of the 1 oss. He said it was not a requi rement--the City .did not have to retain a loss --but the City was interested in what the figures looked like. In effect it was a deductible, and when the bids were returned, staff would look to determine whether it made sense for the City to retain .a loss, but it was not a necessary or man- datory part of. the program. He said the program was voluntary --no person An the community was requi red to subscribe. ,The program Was set up so that it was not exclusive --insurance agents and brokers in the community would have access to the program along with their access to al 1 other insurance companies upon which they could write. He said it was different from the other. municipal insurance program in Mill Valley, California, which was done with an exclusive arrangement. Mr. Zaner directed Council's attention to the 'Tact that staff was making two recommendations. First, that staff be allowed to pro- ceed with the RFP. He said staff needed to collect data from the insurance industry to determine whether the program was feasible. He said the report contained staff's best estimates and figures, but the real question was if the program was put on the market, would the insurance companies buy into a program of intensive inspection by the City and reductions of premiums to the client. Staff did not know that answer. Mr. Zaner said that simultaneously with the first recommendation, staff recommended that the program be referred to the Policy and Procedures Committee. When the bids were returned, and when the City had the dollars, staff could go directly to the Policy and Procedures Committee and lay the whole issue, including the bids, out on the table for discussion-. At that point, the Council could decide whether to pursue the program. He said Counci 1 was not committing themselves tonight to move ahead with the program. Staff was requesting to be allowed to develop the data further, and move the matter to the Policy and Procedures Committee for a frank and thorough public discussion. Mayor Fyerly asked. why the Request for Proposal needed to go out in advance and not be critiqued by the Policy and Procedures Committee. Mr, Zaner responded that the program was fairly researched and caruful ly desi ?ned to hit a particular market --the owner -occupied, single-family market in Palo Alto. He said that market was purposely chosen because .staff contained the . data. The City had the information on fire losses, burglaries, etc., and the RFP was designed by professionals in the insurance business to capitalize on that data, target on the market thereafter, and get a result. He said that eventually, if the program was -successful, it could be expanded to other risks. He thought the proposal was very comprehensive and fit the market very well. Councilmember Klein asked about the legal situation with regard to a municipality being in the insurance business. Mr. Zaner responded that _ Palo Alto staff had done some research on that question, and the League of California Cities had done a substantial amount of research. He said State law currently did 'not permit. Palo Alto to be in the insurance business, which was why the City was staying in the inspection business. 1 7 4 5 3/8/82 Counci lmember Klein asked how the insurance busi ness eras defined. - He understood that being liable to pay claims , and the inspection and adjusting of the claims, meant one must be in the insurance business. Lane Sickles, the City's insurance broker, responded that when the League of California Cities began the program as a statewide pro- ject, a civil investigation was done On cities . i n the insurance business A monopolistic program would not. be approved, but a .City -sponsored program, where the City sponsored a program and offered certain_services like inspections, premium collection, and other such services, but did not bear any risk, would be approved., Counci lmember Klein Stai-d that as he understood from the staff report, the City was taking some ri sk, and in the RFP was asking for proposals on a system. where the City would pay claims up to a certain amount.. Mr. Sickles responded that the City would pay no claims under the proposed program. The City wanted to consider a retention of the: risk as was currently done in the City's self-insurance program. Staff felt that with the success of the self-insurance program, similar results could be achieved in this program. In considera- tion of ho"idinu a certain loss, certain premiums would be set aside, but that was strictly an option -in the proposal. Counci lmember Klein understood that it was an option, but thought that if it were included in the proposal and. enacted, the City would be taking a risk. Mr. Sickles said that was correct. He said the City proposed that there be a third party claims administrator who did not work for the company or the City. Counci lmember Klein said that if the City were taking some risk, it would be in the insurance business. Mr. Sickles said that if 20% of the premium represented 50% of a lawsuit through the projections, the insurance company would oper- ate a certain amount of collected premiums through the City. Using $100,000 as a number, the City would pay the first $100,000 out of the loss fond as an aggregate, once it went to $100,000, the insurance company stepped in and the City would disburse no more moneys from that account, The City would never spend More money than it received back .as a premium ;redit; however, if the exper.i ence was favorable, the City would benefit through the retention of loss. Loss Control Manager Don West commented that . the State Insurance Commissioner reviewed the program and defined an insurance company as someone who was a producer. In this case, the City was not the producer --the insurance company would produce the document or policy. He said the concept was before the present Commissioner, , dnd he found that it was .not a level where the municipality would be in the insurance business. Councilmember Fletcher asked for clarification that the program would not be an exclusive arrangement :with one insurance company. She thought the City would contract ..with one insurance company to handle t)iose residences which chose to join. Mr. West responded that the City would have one company which would be the master insurance company,' but as the proposal called for, all of the local insurance' people would be allowed to write for that company. Mr. Sickles expanded.. that the companies did not sell the insur ance. They had agents or brokers who sold the insurance. An agent represented the company, a broker represented _ the client, and with a brokerage license could sell for that company if the company accepted it. He said certain companies had exclusive agencies, and the agents could not sell for any company other than that for which they were appoi nted. He said other agents who were referred to as "independent agents" represented a number of com- panies. Someone would go to them and they would select what they felt was the best marketplace. He said that the RFP stated that the companies which_ allowed all agents and brokers in the City to sell the program would be more favorably considered. 1 1 1 Vice Mayor Bechtel said that according to .the statistics, the main extent appeared to be that of burglaries or other kinds of theft rather than fire, which seemed to be very small, and she asked if a substantial burglary and crime prevention inspection system would be needed, Mr;. Zaner responded that there was no question that under the plan the City would have to increase its expenditures for the inspec- tion program across the board,. and the program .was expected to pay for it. Councilmember Witherspoon said she assumed a cost benefit estimate was done regarding staffing needs to support the program, and what would be recei ved in revenues, but did not see the fi gures in the report. She asked what staff thought of the ratio. Mr. Zaner believed that the ratio would work out and that the inspections themselves could be an inspection for fee. Counci 1mernber Witherspoon clarified that -the Council. would not get -any concrete figures until bids from the. i nsurance companies were received. Counci lmember Cobb commented, that regarding the language i n the request. for proposal, he realized that the form was the City's standard form, but felt that it implied that the program had been approved. He asked what .:kind of commitments the City would be involved .with if the Council decided not to go through •with the program Mr. Zaner did not feel that the document implied to any bidder that the program was approved or that the Council would make any award.. �. Counci lmember Cobb was not cl ear on why a Request for Proposal was necessary to collect the data as opposed to simply going out to the various large companies in the field and collecting it. Mr. Sickles responded that the insurance market was so volatile now, and that there were about 10,000 licensed insurance companies in the State of California. He did not think they could even touch the market for a viable way to meke a decision. He said they were talking about $b. million to $7 million worth of premiums for the City. Further, he said that' hi s fi rm was recently involved in a $1,000,000 premium, reduced the pri c.e to $600,000, and another company came in and wrote it for $360,000. He did not think there was any way to tell without testing the market. Mr. Sickles commented that there was one municipal homeowner's program in the State of California and at this point it was hard to tell what underwriters were willing to provide. For example, earthquakes were a big problem, and an underwriter would have to have a large capacity for earthquakes in order to write a 1 7 4 7 3/8 /* 2 reinsurance. He pointed out that a local source could not be asked to go to London and line up $100 million worth; of earthquake coverage. Councilmember Levy reiterated that in order to lower the insurance costs, the City -provided the inspection service. He asked staff if there were any other elements required by the City to lower the insurance costs or to provide better insurance. coverage. Mr. Zaner responded that tied to the inspection was the follow up, and that the inspection was no good unless the person who had the inspection followed up with the remedial work that was supposed to be donem Councilmember Levy was concerned that th-e City was providing an inspection service, but was actually getting into the insurance business. He wondered if the City had to get into the insurance business in order to provide the community with the benefit of the inspection service, and asked if it could be handled as a separate function. Then, because a home was inspected, any homeowner could go into the insurance market on a more favorable basis. Mr. Zaner said there was . no question that the Council could autho- rize funds for an inspection program that could be made available to anyone in the community that wanted it. He was not sure about what incentive people would have to do it other than going to his insurance broker and asking for the best rate possible. He sai d that was precisely what was being proposed --have the inspection done, go to your own insurance agent that you normally deal with, have him place your homeowner's insurance, and in the process there would be a program in place that recognized the inspection effort by the City, that the insurance agent would have access to. He would be able to use that program to -the homeowner's benefit, and to the City's benefit. Councilmember Levy •clarified that the agent would be limited to that company or those companies which the City was contracting. with. . Mr. Zaner responded that the agent' was not limited to any company. Re could continue to place the insurance with any company he was licensed to represent; but in addi ti an , would have access to the: speci al program put together by the City by virtue of the RFP. :if the insurance could be placed with that company at a lower rate, as a good insurance agent, he would do that on behalf .of his client. Councilmember Levy asked if a homeowner's insurance was placed with a company with which the City had not contracted, would he still get the benefit of the City's inspection services. Mr. Zaner responded that nothing prevented a homeowner from having the inspection done and deciding not to engage in the remedial work. Councilmember Fazzino asked if any potential legal problems with the program only applying to occupied single-family homes were foreseen. Senior Assistant City Attorney Tony Bennetti responded that based, on the explanation given by . Mr. West and Mr. Zaner, the Council had a good.basi s for drawing a line on the __City's. first expert ence. He said i t was Council's prerogative to carve out a group if they did not want to tackle the entire field at one time. He thought that single-family homes would be a _ reasonable group .on which to draw a distinction ----to try that group and see what happened before tackling anything else. He didn't feel that the City would be under any .obligation to provide the program to all residents or all businesses because it was not supported by City funds, but rather by the revenues of the program itself. He -sai d that even if there were some residual amount left over for ,the City, all residents may receive the benefits of that rnoney.- Counci lmember Fazzino said that wi th respect to the Request for Proposal (RFP), he thought it was clear that the volatile nature of the industry and the numbers would exist whether a for ii al RFP process were engaged in or not. He could not understand why strong informal i nqui ri es could not get the necessary kinds of information. Mr. Liner said he thought the, necessary information could be obtained, but staff was concerned that it would not be firm and would not hold. Because of the volatility of the market, staff could get some quotes or some information, provide it to the Counci 1 , and within a reasonably short period of time it could change. Counci irnember Fazzino did not feel that the information needed had. to be firm in order to make a policy- decision. He felt that when staff approached Council with fi rrn numbers, it would be to award a specific contract. He said the programer -was a- major new policy area, and - asked if the Finance and Public Works- Committee and/or the City Council had approved the issue in concept last year to justify the amount of money that had already been spent on the project. Mr. Zaner responded that the item. was not speci fi cal ly approved -- it had been mentioned twice in the- budget process , but ` no specific approval was given by the Counci 1 to pursue it. Mr. Zaner said the project was pursued at his direction and it was mentioned ' i n the budget. He• said the program was a valuable one, and he fel t staff had an obligation to return to the Council with those pro- grar:is they felt were important for Council review. Counci lmernber Fazzi no asked how much money had al ready been spent on the project, and asked if decisions of that nature were gener- a i ly made by the City Council-. - Mr. Caner said that some of those decision& were made by the Council , but that there were a great many decisions made by the senior, staff to pursue projects and to bring them to a poi nt where they would have some validity in order to bring them to the Council. 1 Counci lnember Klein clarified that in theory the City would pro- vide the: inspectional. services, and that a homeowner would call the City and ask for the service. He asked if a certificate was issued after someone had had an inspection and complied r:ith the conditions. He asked how someone got in touch with an insurance company, and where were the savings, Mr. Sickles sai d the program would work primarily as an insurance program where the resident would make an application to the City program, which would go to the insurance company. -The insurance company would request an inspection from the City through .the inspection process set up _ on that' -dwelling. He said that based on the report received by the company, the risk would be either accepted or denied by the company. When the report was completed, the insurance Company would pay for the inspection. 1 1 4 9 3/8/82 Counci lmernber Klein said if the homeowner decided that he wanted to change insurance coverage in the second year, and switched insurance companies, how could that company be officially notified that the homeowner had done all the things recommended by the City. Councilmember Klein- asked if there would be ar-y additional payment to the City if it turned . Out that the loss experi ence was less than what the insurance company anticipated. Mr. Sickles said that the Request for Proposal asked for a fixed retention by the underwriting company. He said that on the pool of premiums, the company would hold a fixed percentage to- cover their expenses for underwriting, inspections, etc., and added to that would -be the losses, underwriting. costs of the program, and agents, commissions. The excess would be returned to the City, in the form of a dividend, which would be reinvested in the program. Chris Roden, 443 Waverley, an independent insurance agent for State Farm --an exclusive agency company --said he would not have the right to place any business through the City program, and that any business lost .through his agency to homeowner's within the City would be a reduction of his income. He felt that the program flew directly into the face of a lot of people in the City who were in pri vate business. He said that al though he represented only one organization, he was an independent contractor, and employed staff .who lived in Palo Alto. Ilis income would be reduced through this program, and the jobs of his employees might be endangered. He made a thorough analysis of the RFP and had soriie serious questions regarding the accuracy and completeness of the data, and the assumptions and conclusions. Ken Croft, 1955 Fl Camino, said he represented a co-op mutual service insurance and was a nonprofit organization. He said if they could form a consortium with two or three other cooperative insurance companies, he would be delighted toewri to the policy for the City, but wouldn't do it because it would destroy a basic relationship between him and his clients. He thought the City might have a problem in confusing wholesaling utilities and also wholesaling insurance. His company's slogan was "people helping people." He said that if the government got involved in that kind of business, it would destroy the agent/client relationship. Me said agents were in a unique situation in that - they were i n the middle and represented the company and the client. I f they goofed up, the agents were responsible. If the City goofed up, everyone would be responsible. jack S. Reynolds, Chairman of the Board of the Palo Alto Chamber of Commerce, Two Palo Alto Square, said that as a recognized voice_ of business in Palo Alto since 1910 the Chamber of Commerce was obliged to express concern whenever it learned of a proposal which suggested unnecessary- government intrusion-- on restraint of free Competition into the proper arena of private_ enterprise. He sai d that Palo Alto's suggestion to develop a program of municipal homeowner's insurance •triggered substantial_ and justifiable re=sentment from the local business community in general and on the insurance industry in particular. The notion of generating addi- tional revenues for the City would gain , support" from many, and the thotighte of reducing homeowner.' s insurance premiums held egreat appear for those who. might realize -a benefit. He said that if the program was as successful in practice as in theory, such motiva- tion ryas understood, but the Chamber of commerce did not believe a 1 7 5 0 3/8/82 1 1 convincing case had been made_ as to how or why the City could offer any alternatives superior to those already available in the highly competitive marketplace in which all insurance business was conducted. He said that the staff report of February 48, raised far More questions than answers. The Chamber of Commerce sug- gested that there were a number of hard assumpti ons made based upon soft data. He thought the document attempted to justify a foregone conclusion.- it. appeared that the cost of establishing and operating such a program was understated, and projected reve- nues were not based on any .concrete experiences in any other come muni ty. He said that since there appeared to be no urgent mandate to rush into such a program, the Chamber of Commerce believed that the Council would "be well advised to proceed very slowly on the matter, if at all. He said there were many unanswered questions raised by the staff report, and a great deal more information should be gathered and analyzed by all interested persons con- cerned before the City decided to depart _from traditional systems and procedures that had served society well for hundreds of years. The Chamber of Commerce recommended that the Matter be referred to the Policy and Procedures Committee where it could be scrutinized by the public in detai 1 and where answers to many specific, ques- tions -could be obtained before a commi tment was made one way or another. They believed that the issuance of any request or pro-- poSal at this time was_ not only premature and unwise,- but sug- gested a pr'eco'nmitment to an unknown program and an untried con- cept. He said that as a result of testimony this evening, the Council may decide to reject the proposal completely at this time just as several Cali forni a cities had al ready done. He thought the. Council should be aware of the primary concerns expressed by many members of the Chamber of Commerce with regard to the pro- posal. Fi rst, municipally -owned homeowner's insurance programs were an unnecessary intrusion into the business and imposed unfair competition in the marketplace. Two, the proposal discriminated against certain established local agents, their affiliated under- writers, and certain cl asses of homeowners. rhi rd, it was not clear whether California insurance law permitted the offering of this type of group insurance coverage. Public safety operati ons were traditionally financed for benefit . by all sectors of the com- munity through general property taxation. He said that Method afforded equal protection to homeowners, business and industry, and community institutions and had permitted the resident, voter, taxpayer to retain unlimited control over both the standards and costs of police and fire protection. He said municipal homeowners insurance had been advanced by the City Manager's Office in the City's Annual Report published January 27, 1982, in the Palo Alto Weekly. He said the basic principle was to tie the cost of fire and burglary protection now ` funded by taxpayers through the General Fund to the premiums paid by -homeowners when their home- owner's insurance was obtained. He said that both police and firefighters unions in Palo Alto now enjoyed a binding arbitration clause in their contracts with the City. If and when a stalemate was reached over wages and benefits requiring additional revenue in the City's budget; a strong case could _ be mace to simply raise_ insurance premiums to produce more money. He asked . i f the Council wished to concede such an adv-antage to _the unions. He said that under such a scenario, any theoretical surplus whi ch was anti ci - pated from operations would be short-lived. : He said -the concept ,hard not been tested in any other community and there was, no urgency for Palo Alto to be among the first cities_to. to. take the plunge into the unknown:. The C°,_arnber of Commerce believed that the City was engaged in enough._programs at this time requiring staff attention at municipal _.expense, and faced with the oncere t ai nti es of the economy this=.year, it was not the time to take on additional • 1 7 5 3/8/82 As Corrected 4/5/82 programs particularly in areas where expertise was questionable and chances for success were vague. The Chamber of Commerce had serious reservations about the exposure to increase liability that would be assumed by the City on a such a municipal insurance scheme and the potential threat to the financial stability to the City in the event of a major disaster, or claims against the City by those suffering losses or denied coverage enjoyed by their neighbors. He said there were many other questions with regard to the proposal, and submitted that the insurance industry was per- forming competently and capably and homeowners were enjoying fair and reasonable rates in Palo ,Alto under an extremely favorable fire insurance rating predicated upon a long-standing fire prevention program. Unless overwhelming, evidence could be pre- sented that a municipally sponsored program would provide better coverage at a consistently lesser cost, there was no reason to change. Sally Si egl e, 4290 Ponce Drive, said she was impressed with the studious:, attentive efforts of the City Council. She said -that even if she did not agree with the Council's final decision, she thought they were terrific and enjoyed the Council's questions and scrutiny. She was shocked, appalled and flabergasted over this item. The proposal included a r^ecommendati on of providing a ser- vice in an unequal fashion to the single-family dwelling and excluded the townho;use owners, condominium owners and the renters of Palo Alto She thought the motivation was simple —to seek a new source of revenue without ,a sensitivity or understanding that it also provided a disregard to the area of a private sector. She believed the proposal was an error in judgment. She deplored the idea of refer=ring the matter to committee. She urged that the City Council recognize the inappropriateness of the proposal and that it be nipped in the bud. Grant Spaeth, an attorney, Two Pain Alto Square, referred to a letter submitted to Council which suggested that the Council await the outcome of pilot projects elsewhere. As he -listened to Counci lmember Klein and municipal ownership of cable TV, he thought it was obvious that there .had been a lot of study. In the alternative of waiting for pilot programs to test out the ideas, he suggested that the Council wait for some really _thoughtful research. He agreed that if there were some benefit between some -sort of private/public collaboration, it should be looked at, but it should not be loaded up with the RFP. If the Council wanted to take on such a massive assignment, it should be referred to Committee. He agreed with Counci lrnembers Cobb and Fazzi no that an RFP was a way . of doing businest and was an invitation to do a deal. He clarified that he felt it was incomplete to say that the .City's .sole performance was i nspecti one:. The RFP stated._, that ,.sales, assistance and endorsement would be provided by the City, and that the City had the ability to bill and coi l ect premiums. He made a number of _comments, and thought there. were too many unsubst'anti ated and unanswered questions regarding the program to move ahead. Andy Duncan, Insurance Broker at Town and Country Village, Palo Alto, said that many times new insurance companies came into the marketplace and cut their rates in order to get new business. He said that when the City goes into the insurance business, quite possibly the existing company would cut its rates in order to com- pete with the City's, and almost be driven out of business. A few years later the rate would be increased and be right . back where it was. He said the way insurance companies rate was such that each community was divided up and charged a particular :,premium based 1 7 5 2 3/8/82 As Corrected 4/5/82 convincing case had been made as to how or why the City could offer any alternatives superior to those already avai l abl e in the highly competitive marketplace in. which all insurance business was conducted. He said that the staff report of February 18, -raised far more questions than answers. The Chamber of Commerce sug- gested that there were a number of Jiard assumptions made. based upon self -data. He thought the document attempted to justi:fy a foregone conclusion. It appeared that the cost of establishing and operating such a program was understated, and projected reve- nues were not based on any concrete experiences -in any other come muni ty,, He said that since there appeared to be no urgent mandate to rush into such a program, the Chamber of Commerce believed that the Council would be well advised to proceed very slowly on the matter, if at a11. He said there were many unanswered questions raised by the staff report, and a great deal more information should be gathered and analyzed by all interested persons con- cerned before the City decided to depart from traditional systems and procedures that had served society well for hundreds of years. The Chamber of Commerce recommended that the matter be referred to the Policy.and Procedures Committee where it could be scrutinized by the public in detail -and where answers to many specific ques- tions could ,be obtained before a commitment was made one way or another. They believed that the issuance of any request or pro- posal at this time was not only premature and unwise, but sug- gested a precommitment to an unknown program and an untried con- cepts He said that as a result of testimony this evening, the Counci 1 may decide to reject the proposal completely at this time just as several California cities had al ready done. He thought the Council should be aware of the primary concerns expressed by many members of the Chamber of .Commerce with regard to the_ pro- posal. First, municipally -owned homeowner's insurance programs were an unnecessary intrusion into the business and imposed unfair competition in the marketplace. Two, the proposal discriminated against certain established local agents, their affiliated under- writers, and certain classes of homeowners. Third, it was not clear whether California insurance 1 aw permitted the offering of this type of group insurance coverage. Public safety operati ons were traditionally financed for benefit by al 1 sectors of the com- muni ty through genes al property taxation. He said that :method afforded equal protection to horn, wners, business and industry on community institutions and had permitted the resident., board, or taxpayer to retain unlimited control over both the standards and costs of police and fire protection. He said municipal homeowners insurance had been advanced by the City Manager's Office in the_ City's Annual Report published January 27, 1982, and the Palo Alto Weekly. He said the basic principle was to tie the cost of fire and burglary protection now funded by taxpayers to the General Fund to the premiums 'paid by homeowners when their homeowner's insurance was obtai ned. He said that both police and firefighters unions in Palo Alto now enjoyed a binding arbitration clause in the contracts with the City. if and when ',a stalemate was reached over wages and benefits requiring` additional revenue in the City's budget, a strong case: could be mach to simply raise insurance premiums to produce more money.' He' asked i f the Council wished to concede such an advantage do the -onions. He said that under such a scenario, any theoretical —surplus which was anticipated from operations would be short-lived.- He said the concept had not been tested in any other.• community and —there was no urgency for :Palo Alto to be among the first cities to take the plunge into the ,unknown. The -Chamber of Commerce believed that the City was engaged in enough programs at this time requiring_ staff attention at municipal expense,- and faced with the uncertainties :of the economy this year, it was not the time to take, on addi ti ona\i. 1 7 5 1 3/8/82 programs particularly in areas where expertise was questionable and chances for success were vague. The Chamber of Commerce had serious reservations about the exposure to .increase 1 i abi l i ty that would be assumed :by the City on a such a municipal- insurance scheme and the potential threat to the fi nanci ai stability to the City in the event of a major disaster, or claims against the City by those suffering losses :or .denied coverage enjoyed by their neighbors. He said there were many- other questi ons with regard to the proposal, and submitted that the insurance industry was per-, forming competently and capably and homeowners were enjoying fair and reasonable rates in Palo Alto under an extremely favorable fire insurance rating predicted upon a long-standing fire prevention program. Unless overwhelming evidence could be pre- sented that a municipally sponsored program would provide better coverage at a consistently lesser cost, there was no reason to change. Sally Si egl e, 4290 Ponce Drive, said she was impressed with the studious, attentive efforts of the City Council. She said that even if she did not agree with the Council's final decision, she thought they were terrific and enjoyed the Counci 1's ,questionz. and scrutiny. She was- shocked, appalled and f l aber gasted over this item. --The proposal included a recommendation of providing a ser- vice in an unequal fashion .to the single-family dwelling and excluded the townhouse owners, condominium owners and the renters of Palo Al to. She thought the motivation was simple ---to seek a new-- source of revenue without a sensitivity or understanding that it also provided a disregard tothe area of a private sector. She believed the proposal was an error in judgment. She deplored the idea of referring the matter to committee. She urged that the City Council recognize the inappropriateness of . the proposal and that it be nipped in the bud, Grant Spaeth, an ettorney, Two Palo Alto Square, referred to a 1 etter submitted to Counci 1 which suggested that the Counci 1 await the outcome of pilot of projects elsewhere. As he listened to Counci l member Klein and municipal ownership of cable TV, he thought it was obvious that t,here__,had been a lot of study. Tn the alternative of waiting for pilot Programs to test out the ideas, he suggested that the Counci 1 wait for some really thoughtful research. He agreed that if there were some benefit between some sort of private/public collaboration, it should be looked at, but it should- not be .loaded up with the RFP ' If the Council wanted to take on such a massive assignment it should be referred to Committee. He agreed with Counci lmernbers--Cobb and Fazzino that an RFP was a way of doing business and was an invitation to do a deal . He clarified that he felt it was i ncohrpl ete to say that the City's sole performance was inspections. The RFP stated that sales, assi stance and -endorsement would be ptovi ded by the City, and that the.City had the ability to bi 1 l and collect premiums. He made a -number of comments, and thought there were too many unsubstantiated and unanswered questions regarding the program to move ahead. Andy Duncan, insurance Broker at Town and 'Country Village, Palo Alto, said that many times new insurance companies came into the marketplace and cut their rates in order .to get new business. He said that when the City eo.es .into the insurance business, quite possibly the .existing company would cut its rates in order to com- pete with the City's, and almost be driven out of business. A few years later the rate would be increased and _ be ri ght back where it was. He said the way insurance companies rate was such that each community was divided up , and charged . a particular premium based 1 7 b 2 3/8/82. upon fire response time, burglaries, etc. He said his income would be affected because he was under contract with a direct writing company which meant he could only write homeowner§ insur- ance for that particular company. He did not support the program and urged that it be rejected by the Council. Hobert Mack, r•eprepresented Mutual Service, which was a coopera- tive insurance company, and he operated out of his home in Palo Alto. He thought Palo Alto was highly sensitive to any kind of discrimination, and felt that the proposal was discriminatory in term, of who could benefit. He thought, it discriminated in terms of who could be the agents, because any agent who was tied by con- tract to a particular company could not do the kinds of things that the independent broker could do. Unless he were appointed by a particular company, which company at this point was unknown, he could not participate in the program. He thought the program dis- criminated against insurance agents, homeowners, and the kinds of benefits to be realized. Further, he thought that a City which prided itself on nondiscrimination, the only alternative was for the Council to kill the proposal. Tempe Javitz, State Farris Insurance Companies Agent, said she had sold `insurance in Palo Alto for about 5-1/2 years. She said it had been stated that the only reason the City of Palo Alto wantee to Sell insurance was to reduce hazards to homeowners. She Sug- gested that n;st insurance companies were already parti ci nati ng in a program which gave discounts to homeowners who had smoke alarms, dcadbolt locks, burglar alarms, etc., and that it was the agents who inspected for those discounts. Further, with regard to the City being in the insurance business, whether, or not the Department of Insurance stated that it looked all right to proceed with the proposal, she suggested that the final decision would be made by the courts of California when a lawsuit was filed because a City staff member had "bound `coverage" on a home and not col- lected money, and not filled out the endorsement. If the house burned down, the City would probably be sued along with the company. She suggested that the courts could possibly bankrupt the City with such a lawsuit if the City did not have the proper reserves set aside. From what she had read in the study, it did not appear that was looked at. She said the study quoted some statistics on page 29 from data obtained from insurance offices. and as far as she knew, State Farm, which had something like 20% of the market, did not contribute information to' the study. She suggested that other exclusive agent companies like Allstate and possibly Farmers who had about 50% o,f the market had not contri- buted their statistics. She thought those statistics might severely affect whether Palo Alto had a less loss ratio than the rest of California. She questioned why a person in Palo Alto would pay for an inspection from the City, and also pay for the necessary improvements just to qualify for a policy that may save $40 per -year. Mayor Eyerly closed the public heari n9 having no further requests to speak. Mayor Eyerly felt that staff had properly looked at the need far revenues within the City's Ludget. He was sure everyone khew that Proposition 13 had tied the City's hands as far as an easy sources. for new revenue, and that increased revenues were necessary in order to continue the current level of services. He said that the proposal on insurance needed a lot more public exposure, and that _1 7 5 3 3/8/82 the Request tor Proposal, as well as the general subject of muni- cipal insurance, should go to the Policy and Procedures Committee for further input. MOTION: Mayor Eyerly moved, seconded by Fletcher, to refer the Municipal Homeowner's Insurance Request for Proposal to the Policy and Procedures Committee; SUBSTITUTE MOTION: Councilmember Fazzino moved, seconded by Renzel, to table the issue. SUBSTITUTE MOTION FAILED by a vote of 4-5, Levy, Bechtel, Eyerly, Fletcher, Klein voting Counci lrnember Fazzino said that before the City plunged into a new service area policy, it was important to ask whether the City could provide the service more cheaply, whether a service void existed in the community) and whether the service .could be provided equitably to all citizens. He was not convinced that a municipal insurance program made sense because the insurance community in Palo Alto -was broadly based and the marketplace was 1 arge enough to provide different levels of service, with widely differing rates for Palo Alto residents. He did not think single-family residents should be singled out for speci al treatment and become a special group of citizens, and felt that apartment dwellers and townhouse owners should have the same degree of access to any -City service as anyone else. Further, given the vast extent of the insurance marketplace, he was not convinced the City could provide the service more cheaply. He did not wait the City to seek out monopoly positions in areas such as this in order to find a quick -fix revenue raising approach. He was disturbed that the City staff went ahead with the concept without prior Counci 1 approval. He thought that Council had already been placed in an uncomfortable position of having to undo precious staff research time which had cost a fair amount of money. To move ahead with a formal RFP process would increase the pressure upon the Council to approve the program on at least a trial basis --which would ultimately lead to a permanent basis. He believed that the information exi sted on an informal basis to provide the Counci 1 with the necessary information to make an informed policy decision; and, al though he preferred to see the issue tabled for all time, he was willing to go ahead and have the Policy and Procedures Committee consider the matter. HEM reiterated his concerns regarding the lack of equi tabi l i ty of the issue and the fact that the. service was already being provided in the community. He hoped future policy issues of this type were discussed and a decision made by the City Council before so much staff time was expended. Counci lmember Renzel said that independent of the insurance: aspects, she was .concerned about whether it was an appropriate governmental function to get involved with something which seemed to be handled rather wel 1 by the pri vate sector. She was al so concerned about who was covered, and.. that by selecting the cream of the ri sk--the single-family, owner -occupied homes --the City was removing the low risks from the overall risk pool, and leaving the high risks and high premiums for communities like East Palo Alto and Menlo Park. She felt that Pali Alto residents were better able to afford the premiums than some of the . other communities. 1 7_ ,5 4 3/.8/82 Corrected 4/5/82 upon fire response time, burgl.ari es, etc. He said his income would be affected because he was under contract with a direct writing company which meant he could only write homeowners insur- ance for that particular company. He did not support the program and urged that it be rejected by the Council. Robert Mack, reprepresented Mutual Service, which was a coopera- tive insurance company, and he operated out of his home in Palo Alto. He thought Palo Alto was highly sensitive to any kind of discrimination, and felt that the proposal was discriminatory in terms of who could benefit-. He thought it discriminated in terns of who could be the agents, because any agent who was tied by con- tract to a particular company could not do the kinds -of things that the independent broker could do. Unless he were appointed by a particular company,, which company at this point was unknown, he could not participate in the program. He thought the program dis criminated against insurance agents, homeowners, and the kinds of benefits to be realized. Further, he thought that a City which prided itself on. nondiscrimination, the only alternative was for the Council to ki l 1 the proposal Tempe Javitz, State Farm Insurance Companies Agent, said she had sold insurance in Palo Alta for. about 5-1/7 years. She said it had been stated that the only reason the City of Palo Alto wanted to sell insurance -was to reduce hazards to homeowners. She sug- gested that most insurance companies were already participating in a program Which gave discounts to homeowners who had smoke alarms, deadbol t locks, burglar alarms, etc., and that it was the agents who inspected for those discounts. Further, with regard to the City being in the insurance business, whether or not the Department Of Insurance stated that it looked all right to proceed with the proposal, she, suggested that the final decision would be made by the courts of California when a lawsuit was filed because. a City staff member- had "bound coverage" on a home and not col lected money, and not filled out the endorsement. If the house burned down, the City would probably be sued along with. the company. She suggested that the courts could possibly bankrupt the City with such a .lawsuit if the City did not have the proper reserves -set aside. Frorn what she had read in the study, it did not appear that was looked at. She said the study quoted some statistics on page 29 froaLdata obtained from insurance offices. and as far as she knew, State Farm, which had something. like 26% of the market, did not contribute information to the -study. She suggested that other exclusive agent company es . 11 ke Al 1 state and possibly Farmers who had about 50% of the market had not ccntri - buted their statistics. She thought those statistics -might seVereiy affect whether Palo Alto had a less loss ratio than the rest of California. She questioned why -ea person -in Palo Alto would pay for an inspection from the City, and also pay for the necessary improvements just to qualify for a policy that may save $40 per year. Mayor Eyerly closed the public hearing having no further requests to speak. 1 Mayor Eyerly felt that staff had properly looked at the need for revenues within the City's budget. He was sure everyone knew that Proposition 13 had tied the City's hands as far as an easy source ior new revenue, and that increased revenues were necessary in , order to continue the current level of services. He said that the proposal on insurance needed a lot more public exposure, and that the Request for Proposal, as well as the general subject of muni- cipal insurance, should go to the Policy and Procedures Committee for further input. MOTION: Mayor Eyerly moved, seconded by Fletcher, to refer the Municipal Homeowner's insurance Request for Proposal to the Policy and Procedures Committee. SUBSTITUTE MOTION: Councilmember Fazzino moved, seconded by Renzel, to table the issue. SUBSTITUTE MOTION FAILED by .a vote of 4-5, Levy, Bechtel , Eyerly, Fletcher,, Klein voting "no." Councilmember Fazzino said that before the:City plunged into a new service area • policy, it was important to ask whether the City could provide the service more.. cheaply, whether- a void existed in the community, and whether the service could- be provided equitably to all citizens'. He was not convinced that a Municipal insurance program Made sense because the insurance community in Palo Alto was broadly based and the marketplace was large enough to provide different levels of service, with widely differing rates. for Palo Alto residents. He did not think single-family residents should be singled out for speci al treatment and becone a special group of ci ti zens , and felt that -apartment dwellers and townhouse owners should have the same degree of access to any City service as any- one else. Further, given the vast extent of the insurance market- place, he was not convinced the City could provide the service more cheaply. He did not want the City to seek out monopoly posi- tions in areas such .as this in order to find a quick -fix revenue raising approach. He was disturbed that the City staff went ahead with the concept without prior Counci 1 approval. He thought that Council had al ready been placed in an uncomfortable position of having to undo precious staff research time which had cost a fai r amount of money. To move ahead with a formal RFP process would increase the pressure upon the` Council tay approve the program on at least a trial basis --which would ultimately lead to a permanent basis. He believed that the information existed on an informal basis to provide the Council. with the necessary -information to make an informed policy decision; and, although he preferred to sea the issue tabled for all- time, he was willing to go ahead and have the Policy and Procedures Committee consider the matter. He reiterated his concerns regarding the lack of equitability of the issue and the fact that the service was already being provided i n the community. He hoped future policy issues of this type were discussed and a decision made by the City Council before so much staff time was expended. Councilmember Renzel said that independent of the insurance aspects, she, was concerned about whether it was an appropriate governmental function to get involved with something which seemed to be handled rather well by the private sector.- She `was also concerned about who was covereda and that by selecting the cream of the risk --the single-family, owner -occupied homes -:-the City was removing the low risks from the overall risk pool, and leaving the high risks and high premiums for communities like East Palo Alto and Menlo Park. She felt that Palo Alto residents were. better able to afford the premiums than some of the other cornmuni:ti es. i i Counciimember Renzel said .she supported the motion to table the issue primarily because she was not certain the Council would ever move ahead with it,. but since the committee members were willing to review i t , she was willing to support sending it to Committee. As a Councilmember, she could not envision the Committee. coming back with a recommendation to support the program that she could also support from a public benefit point of view, Counci lmember Klein said he voted against the motion to table because he did not like to' see the Council cut off discussion on a major issue so abruptly. He was hot in favor of sending the issue to Coiurnitteee-he was in favor of Oiling it right now. He thought, it was important whether the program was an extension of the proper efforts of the City to. inspect homes and thereby partially carrying out its obligations -to its citizens to reduce fire hazards and burglaries, or whether it was an effort for the City to get into the insurance busi ness. Regardl ess of the 1 egal niceties of the situation, he felt the City would be in. the insurance business. He did not think that role was appropri ate for the City. He felt that i f the Councilmembers could not justify the -City of Palo Alto being An the insurance business, the Council had no business wasting staff's time and the public's time considering the matter at the Policy and Procedures Committee 1 evel or at any other, 1 eves . He felt the City played an appropri- ate role when it carried out its municipal functions, and it played an appropriate role when it engaged in bus nesses which were natural monopolies, such as, utilities and cable TV. However, it was not the .City's role to engage in a business where there was not a natural monopoly and where the free marketplace gave the consumer a free and adequate choice. He saw no com- pelling need for the City to be in the insurance business. Councilmember Fletcher commented that a couple of years ago she attended a presentation by the League of California .Cities, Peninsula Di vision, where there was a discussion about municipal fire insurance. -She said, it 'was pointed out that hi stor.i cal l yi. those who provided the servi ces were given the premiums directly from the people who were protected by the fire- insurance, The point was that the insurance company was the collector of the premiums from the citizens, but the cities were the ones that proe vided the service. She said an in depth study was done for the League of Ca1 i.forni a Cities, and she had mentioned the concept to Mr, laner at that time. She said he was already familiar with the concept and said he was investigating it and would bring it to the Counci 1 at some .later time. In the meantime, it had been expanded to cover more than just fi re insurance. She said she saw a lot of problems with the concept, and it was not her intention to drive any. of the insurance agents out of business, If the City could not overcome the problems, she was sure the City would not go ahead. She thought more information was needed,. and poesi bly it was already done in the stuoy for the .League of Ca3i forni a Cities, i r order to have a meaningful discussion at the Policy and Procedures . 1 evel . She did not want to cut the idea off, . she realized it had many problems, but thought it had some merits. Counci l member Cobb felt that the Council should not lose track of the possibility of delivering to the people of Palo Alto a better situation in terms of their homeowners insurance. On the other hand, he understood the concerns of Councilmembers Fazzino and Klein. He would vote in favor of the motion to discontinue, but commented that the challenge to those at the meeting was to find the Council a way to deliver a . better deal - i n terms of homeowners insurance to the people of Palo Alto. Counci lmember Levy commended staff for its work. Staff had taken a risk in investigating a new area, realizing that whenever a new 1 7-5 :5 3/8/82 area was investigated, there was always the risk of meeting oppo- sition. He thought City staff should be commended. for doing the work for that kind of thing whether he voted in their favor or not. He said, there were services provided by the City that reduced risk- =fire protection, more intense home inspections, and more intense burglary prevention work. He thought it behooved the citizens of Palo Al to if the City engaged i n those ki nds ,of risk reduction work at an- optimum level. He thought it also served the insurance industry if the risks in the City of Palo Alto could be reduced. On the other hand, the City was not in the insurance business and there were no complaints among the Palo Alto citi- zenry about insurance coverage or service, and there was no indi- cation that the City could provide the ,services 'better than the public -sector. He thought the question was whether to kill the concept or send i t to committee. He thought the issue should he sent to Committee for further exploration because as indicated by Councilmember Cobb, the opportunity was there to rethink the &he-. ments of what was being discussed to the end that the city could provide an appropriate and proper public service and could engage in a more extensive system of risk reducti can. > At the same time, the :insurance community could use it not to reduce their profits or income to its brokers, but t� reduce the premiums to the ci ti - tens of Palo Alto because the citizens of Palo Alto would be bet. - ter risks, Vice Mayor Bechtel said in defense of the City staff that when the issue was mentioned bri efly at the budget discussions last year, it was thought of as a way that homeowners could reduce their costs and maybe there would be some revenue for the City. She said the matter was not thought through and was not discussed thoroughly. She knew that the League of California Cities staff and the City Manager had been discussing the concept, and maybe they were moving too fast and that Palo Alto was just: not ready for it yet. She was not ready to ki l 1 the concept , and was not ready to widely .endorse the it either, but would support the motion to send the matter to committee. Mayor Eyerly said staff had not been able to answer all of the questions because all of their people had not attended the Council meeting, and he. did not think they had had a fair shake on the proposals they were trying -to bring to Council. He wanted staff to have the opportunity to speak to the concept in further. depth and answer the questions brought to the meeting: by the insurance people. MOTION FAILED BY A VOTE OF 4.5, Fazzi no, Renzel , Cobb, Witherspoon, Klein voting "no." MOTION: Councilmember Klein moved, seconded by Witherspoon, that staff take no further action with regard to municipal insurance at this time, MOTION PASSED by a vote of 8-1, Fletcher voting "no." R._ E ilEST OF VICE MAYOR BECHTd L AND COUNCILMEMBER FAllINO RE Councilmember Fazzi no said that he wanted to recognize Assemblyman Sher for the outstanding work he had done in a very nonpartisan manner to try and regain Palo Alto's State Senate representation. MOTION: Councilmember Fazzi no moved, seconded by Bechtel, that staff prepare a resolution thanking Assemblyman Sher and commending him for his efforts on the City of Palo Alt's behalf. i 7 5 5_ - -3/8/82 MOTION PASSED unanimously. REQUEST OF COUNCILMEMBER FAllINO RE RESOLUTION OF APPRECIATION TO lIE PALO ALTO HIGH SCHOOL BASKETBALL TtAM MOTION: Counci lmember Fazzi no moved, seconded by Levy, to direct staff to prepare a Resolution of Appreciation commending the Palo Alto High School Basketball Team on their victory. MOTION PASSED unanimously. 1 ADJOURNMENT Council adjourned at 12:35 a.m. ATTEST: 1 1444,1 ty Cl APPROVED: 9 tMayer