Loading...
HomeMy WebLinkAbout1982-07-26 City Council Summary MinutesCITY COUNCIL M�nuT�s CITY O PALO ALTO Regular Meeting Monday, July 26, 1982 ITEM PAGE Oral Communications 2 2 8 6 Item #1, Appointment of Two Planning Commissioners to Fill Four -Year Terms Commencing August I, 1982 Item #2, Resolution in Support of Stanford University Hospital Modernization Project Consent Calendar 2 2 8 6 2 2 8 6 2 2 9 5 Referral 2 2 9 5 Item #3, Foothills Fire .Management Plan - To 2 2 9 5 Finance and Public Works Committee Item #4, Employment Intensification - To 2 2 9 5 Planning Commission and Architectural Review Board Action 2-;2 9 5 Item #5, Support of State Assembly Bill 3306 - •. 2 2 9 5 Electricity and Gas Wheeling Item #6, Resolution re Management Compensation 2 2 9 5 Plan 1 Item #7, Resolution re Confidential 2 2 9 5 1 Compensation Plan Item #8, Resolution re Temporary Compensation Plan Item #9, Resolution re Authorizing Participation in Deferred Compensation Plan Item #10, Ordinance Prohibiting Reckless Driving in City Parks (2nd Reading) Item #11, Claims Administrator for Health, Dental and Retiree Plans Item #12 Demolition of Cottage and Shed on Arastra Property (Continued from 7/12/82) Item #13, Greer Park Rest Room Facilities (Continued from 7/12/82) 2 2 9 5 2 2 9 5 2 2 9 6 2 2 9 6 2 2 9 6 2 2 9 .6 2 2 8 4 7/26/82 ITEM Item #14, Policy and Procedures Committee Recom- mendation re Proposed Amendments to the City Charter PAGE 2 2 9 9 Item #15, Resolution of Intent - Downtown 2 3 0 0 Improvement District Item #16, Resolution re Traffic Barriers Item #17, Political Sign Ordinance Item #18, Termination of Option Agreement for Air Rights Development -- Parking Lot Q, A -K PROPERTIES Item #19, Terman School Grounds Landscape Maintenance Item #20, Study to Determine Appropriate Policy for Utilities Funds Transfers to General Fund Adjournment 2 3 0 0 2 3 0 0 2 3 0 1 2.3 0 7 2 3 0 8 2 3 0 9 2 2 8 5- 7/26/82 Regular Meeting Monday, July 26, 1982. The City Council of the Clty of Palo Alto met. -on this date in the Council Chambers at City.Hall, 250 Hamilton Aveue, at 7:30 p.m, with Vice Mayor Bechtel presiding. • PRESENT: ABSENT: Bechtel Cobb, Eyerly, Fletcher, Klein, Levy, Witherspoon Fazzino, Renzel ORAL COMMUNICATIONS 1. Dr. Harvey Roth, 3422 Kenneth Drive, spoke regarding the. labeling of alcoholic beverages as being dangerous to ones health when used to excess. He said petitions were being cir- culated and the resolution, _of memori al i zati on was included. 2. Bob Moss, 4010 Orme, representing the Barron Park Association, presented a picture to Councilmember Cobb which was taken at the July 4, 1982 Fete. ITEM #1, APPOINTMENT OF TWO PLANNING COMMISSIONERS TO FILL FOUR Mayor Eyerly announced the names of the applicants: William J. Kockei man John C. Northway John D. Sutorius FIRST ROUND OF VOTING FOR VOTING FOR JOHN NORTHWAY Witherspoon, Fletcher, Eyerly, Levy, Bechtel VOTING FOR JOHN_ SUTORIUS: Klein, Cobb City Clerk Ann Tanner said that John Northway received five votes and was appointed to fill the first vacancy, FIRST ROUND OF VOTING FOR SECOND VACANCY FIRST VACANCY VOTING FOR JOHN SUTORIUS Klein, Witherspoon, Bechtel, Cobb,. Levy, Fletcher, Eyerly Ms. Tanner -announced that John Sutorius received seven votes and was appointed to fill the second vacancy. Mayor Eyerly announced that both Mr. Northway and Mr. Sutorius had served on the Architectural Review Board and .were recently appointed to fill unexpiredterms on the Planning Commission. ITEM f2, RESOLUTION IN SUPPORT .OF STANFORD UNIVERSITY !HOSPITAL t7rr�.w���wurru�r��.�r.r..r..�� r.�.�• �.rrL.._ -_-_ ra._i .r .rwr.r�.��w� Mayor Eyerly announced that Dr. Lawrence Crowley, . Vice President. for Medical Affairs, Stanford University and President of Stanford University Hospital; -Sheldon_ S. King, -Executive Vice President of. Stanford University Hospital and Associate Vice President:, for Medical Affair's; Geraldine Steinberg, Board member; and Halter L. Arons, Board ■ember and Community Physician were in attendance at the City Council meeting. 2 2 8 f 7 /26/82 Mayor Eyerly commented that Councilmember Renzel in a memo to her colleagues had indicated concerns about community access to the hospital and the costs for patients upon completion of any modern- ization. Councilmember Klein said he thought it was appropriate that the Council act first on Councilmember Renzel's. memorandum before hearing from anyone. If the matter was continued, as requested by Councilmember Renzel, he felt it would be inappropriate to hear from the representatives of Stanford University since they would be heard at a later time. He thought that when a Councilmember made a request for a continuance, generally it should be honored. He shared Councilmember Renzel's concern about the access issue, and thought that a subcommittee meeting should be held on the mat- ter before getting into the full Certi fi,cate of Need speeches and considerations. - It was inappropriate for the Council to get involved with determining Stanford's costs as suggested by Councilmember Renzel. That problem was dealt with nationally without much success. MOTION: Councilmember Klein moved, seconded by Witherspoon, that the sole issue of access by community physicians to Stanford University Hospital be submitted to a meeting of the Hospital Sub- committee to be held on Tuesday, August 3, 1982. The matter to be returned to the City Council for full discussion on August 9, 1982. Mayor Eyerly felt that since the Stanford University representa- tives had been invited to tonight's City Council meeting, and since they were in attendance, it would behoove the Council to hear from them concerning the modernization of the hospital. Councilmember Klein said he recognized the representatives were in attendance, but he thought it was more appropriate to have every- thing heard on one night. Councilmember Witherspoon said she felt that some very busy people had taken the time to attend the City Council meeting, and access by community physicians to Stanford Hospital was not the entire matter. She felt there was a lot about the modernization program that could be spoken to so that it would not have to be covered twice. Councilmember Levy said he supported Councilmember Klein's view. Councilmember Fletcher said considering that other Councilmembers would be present when the resolution was voted on, she felt it would be more productive to hear the merits of the modernization program at the later date. Vice Mayor Bechtel felt that the Stanford representatives should be allowed to speak --but briefly, realizing that the topic would be heard again. Mayor Eyerly said that with a motion for referral to Committee, the people should be heard before the Council voted. AMENDMENT: Mayor Eyerly moved, seconded by Witherspoon, that the Council hear from the Stanford persoinel as well as the public that wish to address the Council on the matter, MOTION PASSED by a vote of 5-2, Levy, Lkein voting nolo," Fazzi no, Renzel absent. 1 1 1 1 1 1 Lawrence G. Crowley, Vice President for Medical Affairs, Stanford University and President of Stanford University Hospital, said "I'd like to begin by thanking the City Council and our fellow Palo Al to neighbors for the opportunity to appear before you and tell you something about our Hospital Modernization Project here tonight.- As part of our formal presentation, joining me will be Mrs. Geraldine Steinberg, member of the Stanford University Hospi- tal Board of Directors and former Supervisor of the County of Santa Clara; Dr, Walter Arons, Clinical Professor of Medicine, a member of the Hospital Board, and a. physician who has practiced Internal Medicine in this city for more than 30 years; and Mr. Sheldon King, Executive Vice President and Director of Stanford University Hospital. "Our goal is to obtain the general support of the City Council as expressed in the Resolution on your agenda for a building project which Stanford, University Hospital (S.U.H.) proposes to undertake i,n the near future. The purpose of this project, known as Ahe Hospital Modernization Project (HMP) , is to upgrade and expand the Hospital's diagnostic, treatment and support facilities so that we can better -and more efficiently serve Palo Alto and the -surround- ing communities as a community hospital, a regional medical refer- ral center for patients with unusually serious and complex medical problems and as a rajor- teaching` hospital for the educational and training programs of Stanford Medical School. We would like to include the proposed Resolution as a part of a series of support- ing documents to our application to the County and State Health Service Administration Agencies for a Certificate of Need. We intend to seek similar expressions. of general support from other surrounding communities and many civic organizations and other health care institutions. Since Palo Alto is the home of the Hos- pital and we both enjoy a special relationship of many years' dur- ation, it is only natural that we seek support from this City Council first. "It is important for me to point out that the Resolution before you does not express or imply approval of the details of this project. Nor does it in any way formally or finally consent to the implementation of the project. A complete environmental impact report has been initiated. As you know, we are working closely with the City staff in this process and, of course, Coun-- cil,.will necessarily reserve its final judgment about this project until after the Environmental Impact Report has been completed and necessary public hearings and other analyses are carried out. Rather, this evening we are seeking only an expression from the Council that Stanford University Hospital is a valuable resource to the citizens of Palo Alto and that modernizing and expanding its facilities to better meet current and future hospital care needs is a worthy goal. "Underlying all of our concerns is the desire to provide the high- est ' quality health care possible to the public. That desire -- which perhaps more accurately can be called an obligation to our neighbors --is delivered in two broad ways. "First, there is the direct treatment of approximately 25,000 patients each year. While the quality of our medical care program attracts patients from around the world, the majority of our patients come to us from the local area. Likewise, I'm sure that a large majority of Palo Al, tans who were hospitalized. during the past year were treated at their local . facility, Stanford Univer- sity Hospital. "These patients are admitted by our medical staff of over 1,200 physicians. About half of these doctors are full-time faculty members:: of Stanford Medical, School, and the other half are : physi- cians who are practicing in Palo Alto and other nearby communities 2:2 8 8 7/26/82 A very large majority of this latter group hold voluntary clinical faculty appointments and participate in the educational programs of the School and Hospital. These two groups, taking into account individual differences, have a somewhat different perspective toward their commitment to Stanford. But both groups of physi- cians share a common bond in their concern for the quality of care extended to all patients in the hospital. "The private practicing physicians with voluntary faculty appoint- ments, joining with our full-time faculty, have proven to be an integral component of the indirect or secoad broad way in which we deliver health care. This service involves the education and training of new doctors, the continuing education of practicing physicians and performing the research needed to find solutions to medical problems or new ways to ease suffering. All of us who live in the community are able to take confidence in the knowledge that the fruits of new medical techniques or drugs that are devel- oped at the Medical Center are made available to our local citi- zens just as soon as they are officially released for patient use. For example, when two distinguished faculty members, Doctors Henry Kaplan and Saul Rosenberg unfolded techniques which changed Hodgkin's disease from a nearly universally fatal to an almost always curable malady. We are proud it was the people of Palo Alto and surrounding communities who were among the first to reap the benefits. "Much of the current research of the faculty of the Medical School in such areas as recombinant DNA and monoclonal antibodies might some day provide important answers to medical questions and solu- tions to serious problems. This is an important, indeed vital, productof our Medical Center. However, it is the implementation of the best and most modern direct patient care services that remains the Hospital's major goal and obligation. "S.U.H. has long had a policy of open access to the admitting services of the Hospital for all qualified physicians in the area. The Board recently reaffirmed this policy as well as reaffirmed its commitment to the special privileges for physicians and Palo Alto citizens, which are spelled out in the City Contract. S.U.H. also has a policy of granting privileges to a limited number of physicians to its hospital based specialized services and labora- tories. This policy of limited access is similar to policies gov- erning these services in almost all hospitals since these services usually utilize costly equipment and space and require a high degree of organization to enhance efficiency and assure quality and, in the case of teaching hospitals, to provide a sound educa- tional environment. "The guidelines for and implementation of this policy of limited access is under continual review by a committee of the Hospital Board. "We have been criticized --not always unfairly --for failing in some cases to provide optimum service to the community. Our problem can be simply expressed, although, of course, implementation of its solution is more complicated. Basically, our facility does not meet the needs of hospital medical care in 1982, let alone for the coming decades. We are providing care in a hospital which evolved through dreams and immediate needs; what we now need is a hospital which is l anned to make available the increasingly com- plex and beneficia me ods for curing disease, shortening ill- ness, preventing or ameliorating disability and improving the overall quality of life. "In 25 years, the practice of medicine has changed dramatically as the result of twin developments; namely, -important new discoveries and understandings of human biology and of the trues-nature and fundamental cause of many important"diseases and, secondly, the revolutionary development of new sophisticated technol o9Y. These revolutionary developments now enable more accurate and rapid 2 2 8 9 7/26/82 1 1 1 diagnosis, more specific treatment and superior functional end results. Many patients whose illness or disability could not be treated definitively may nowregain good health and restoration of function. I'm sure there are probably several citizens in Palo Alto who have personally experienced and benefited from one or the other of two modern surgical miracles; namely, open-heart surgery or replacement of the knee or hip joint. The changes in the prac- tice of medicine have reduced the number of patients with rela- tively minor illnesses requiring hospitalization. Hospitals nowa- days, especially university teaching hospitals, house a greater concentration of sicker individuals with serious and complex medi- cal problems. To serve these patients optimally, properly -sized and designed patient rooms and service areas, modern high technol- ogy equipment with underlying sophisticated support systems, very highly -trained technical personnel and immediately available com- prehensive support services are needed. "The facility, which we have planned in conjunction with members of both the University and local communities, is expected to serve the needs of the area --as well as tertiary or referral care needs for a nearly global community --through the end of the century. Mr. King will describe the major elements of the project in his remarks. Without the project, quite simply, we will be unable to serve that need. You will have a totally inadequate hospital in your community. That is a grim promise. "I would like to briefly mention the proposed new relationship between Stanford University Hospital and the Children's Hospital at Stanford which, as you know, is a totally independent entity, which was reported in the paper last Thursday. Over a year ago, a committee jointly appointed by both institutions made a recommen- dation that Children's medical care services could be provided better and more economically if they were consolidated in one location, and secondly, that this location should be at the site of the present Stanford Hospital. After a year of further study and deliberations, the Hoards of both institutions last week voted to endorse a Statement of Principles for consolidation of these services and the development of a new hospital corporation jointly owned by Children's Hospital at Stanford and Stanford University Hospital . This new corporation would proceed to consolidate the programs by planning for the building of ,a Children's unit adja- . cent and connected to Stanford University Hospital. I believe this is a very important and extremely positive development. A final formal agreement, however, has not been acted upon by both Hospital Boards and the Trustees_ of the University, That Is anti.- cipated later in the summer and early fall. Secondly, if it does go forward, it will require another year of intense planning for the new unit. It will not be a part of the Hospital Modernization Project --it will require a separate Certificate of Need and, of course, a formal presentation would be made to the City cnd other interested bodies at some appropriate later date. "It is traditional in discussions such as this to focus eventually on financial matters. I will comply with that tradition, and tell you that the total cost of the H.M.P. is $124 million, including financing. This sum must be raised by a combination ,of revenue bonds --$80 million. hospital reserves --i29 million and, fund raising --$1S million *The responsibility for raising these funds lies exclusively with Stanford. We are not requesting any financial support from the City. However, what is the responsibility of all of us is to sup- port medical care in other ways, including such intangibles as good will. sit is the general support of the value of this institution to the City of Palo Alto and the appropriateness of its goal to modernize and expand` its facilities that we are requesting: here tonight, most immediately in the form of a resolution from the elected representatives of the City of Palo Alto. We are seeking the 2 2 9.0 7/26/82 voice of a friend and neighbor who will vouch for us as we move through the governmental approval process in the weeks, months and. years ahead. We are asking for that support so that we may con- tinue to provide optimum service to our community. With your sup- port, we will be able to serve you better." Mrs. Geraldine Steinberg, Member of -Stanford University. Hospital Board of Directors, said that when she was a Santa Clara County Supervisor several years ago, she became involved with Stanford Hospital. Santa Clara County •Supervisors were automatically Directors of Valley Medical Center County Hospital, .and as a North County Supervisor, she felt a particular responsibility for pre- serving the existing affiliations between Valley Medical Center and Stanford University Medical Center. .-Valley Medical Center was ai major participant in Stanford's teaching program. County hospi- tals have had a difficult time keeping their doors open in the last ten years, but Valley Medical Center has benefited from its rei ati:onshi p with Stanford._ by being able , to attract .very high quality doctors and to offer a high level of care. While working to preserve the County/Stanford relationship, she came to under- stand more about the internal operations of Stanford University. After retiring from the Board of Supervisors, she accepted the offer to serve as a Director of Stanford Hospital mainly. because of her interest in Valley Medical Center and the commitment she felt to maintaining Stanford's connection. Now, she -was a Director of Stanford Hospital seeking City Council support for the Hospital's Modernization Program. She believed the hospital was an important asset in the community. The state and national accreditation committees, the doctors, the administrative staff and patients, each in their own way could testify _ to the need for modernization. An issue which surfaced was one of adequate access. of community doctors to Stanford Hospital and to hospital based services. As a Member of the Stanford University Hospital Access Committee, Stanford's contractual agreement with the City of Palo Alto gave citizens of Palo Alto priority for elective admission. Further, it reserved priority for the use of Stanford residents of 370 beds by the patients of community physicians, 220 of which were located in the main center, and 150 beds located at Hoover Pavill ion. TheeModernization Project -would crate new beds at the main center, and take some beds out of Hoover, but the licensed bed capacity of the Hospital would remain essentially at its pre- sent level. She emphasized that when and if beds were moved from Hoover Paviliion and placed in the main center, a proportionate number of.Hoover beds.:allocated for community physicians use would be reallocated to the main center. All qualified community physi- cians had. access to the beds. The concern of some community doc- tors has been access to hospital based services. Over the last two years, a committee - of community physicians, faculty doctors and rehresentati ves of the hospital,. had worked persistently or devising policies which would assure present and future access to laboratory services. Last summer.-, the Hospital Board of Directors adopted those policies, and a new access committee was _formed to implement the policy and monitor the need for new -ones. As a mem- ber of that committee, --she attended _about six meetings, only to realize each time how complicated .the issues were. Use -of spe- cialized laboratories._ and services were constrained by space, -teaching Hrequiremente and __the number of"doctorseawho could be scheduled to physically use the equipment, etc." -- The prior Access Committee adopted policies Which assure community doctors will be preserved access after doctors wi th current pri vil egos retire. It established new policies for access Which the present :committee was in the process of implementing. It: eras _ the committee's inters- t-i on _to have a propoeal for the... -entire hospital board_ to adopt in the next fern months.-- She thought -they were, makieg progress.: Access and the need to modernize- Stanford Hospital were -"two dif" ferent issues. She` reaflzed- that the Council waisted .to be` respon s i ve " to the community doctors -'rho raised questions about future access, but stressed that Stanford Hospital , through a formal access committee comprised , of tammunity doctors, faculty doctors 2 2 9 1 7/26/82 1 1 1 and representatives from the Hospital Board, were presently work- ing to implement fair and workable policies. In addition, members of the Hospital Board would continue to meet with the Palo Alto Subcommittee to keep the City informed on the progress and on the implementation of the decisions. She believed that the residual questions of access would be promptly and fairly addressed. The Modernization Project was to correct code violations, to increase square foot bed ratios, i.e., today Stanford had 850 square feet per bed and the normal standard for a university hospital was at least 1,500 square feet per bed, to provide the best possible com- prehensive care for the next several decades and to increase operational efficiency. Palo Alto's support to the modernization project was important, and she requested City Council support of the Modernization Program so that Stanford Hospital could continue to offer outstanding and comprehensive care. Dr'. Walter Arons, member, Stanford Hospital Board of Directors, said he always felt that taking care of patients in Stanford's particular setting was a special privilege and opportunity. Even though Stanford Hospital functioned, in part, as a community hos- pital, it presented patient care, diagnostic and therapeutic pro- cedures that were beyond the capacity of most typical community hospitals in the country. It was not only a question of the facilities that were available, but Stanford Hospital's combined staff ofboth full-time faculty and community physicians provided an array of skill and talent. No matter how bizarre a problem a patient of his faced, a consultant on the hospital staff could be found with the knowledge and expertise in the area he needed. That was the type of backup he liked to see when members of his family went into the hospital. The HMP would provide the profes- sionals in the cometmni ty the opportunity to continue to provide the high level of care which had been furnished over the past 20 years. He thought the patient care at ,Stanford Hospital was among the finest available in the country or perhaps in the world. Regarding the access situation, while he had never counted the total hours he invested in that area, he shared most if not all the sentiments of Mrs. Steinberg. It took the access committee about three years of marathon negotiating and conversations to finally evolve the hospital board document which surfaced about one year ago. All along the way, there were doubts that any solu- tion would ever be found. Ultimately a solution was found, and while it may not have been totally satisfactory to all parties, he thought it was a fair and equitable solution. The HMP, by provid- ing more space and more adequate, sophisticated facilities, would help in reducing the areas of conflict between the two components of the medical staff. Part of the problem was that there had not been enough space for all or a reasonable number of qualified people to work . side by side. That was not to say that space alone would solve all the issues --it would not. The newly constituted committee, which had been meeting for six to seven months, was making progress. He did not think i t would take three years to settle the remaining access issues. There was a strong feeling and momentum among all members of the committee to have the issues settled by the time Daylight Savings Time was terminated at the end of October. He did not think the goal was impossible although some felt it was an overly optimistic viewpoint. He was convinced. that there was a. sincere and deep determination on the part of the University Administration, Hospital Administration, President Kennedy, Vice Presidents Crowley and King, the new Dean of the Medical School , and of the Hospital Board of Directors to see a fair and equitable and rapid solution to the issues. He hoped the City Council would .carefully cOnsi der all aspects of the HMP, and he thought the development o.f the program would have a positive impact on medical care in. Palo Alto He hoped the Council would enthusiastically support the project. 2 2 9 2 7/26/82 Sheldon King, Executive Vice President and Director of Stanford University Hospital, said he had been on the staff for nine months, and everything contained in the Plan was necessary for the hospital's future survival. The planning had been largely accom- plished, and they were proposing a plan that would provide approx- imately 325,000 square feet of new space, and would renovate about 165,000 square feet of existing space for patient care. The plan would provide 190 replacement beds, including sorely needed and sophisticated critical care bed units. Further, the plan would include a new 22 -room operating suite, which would nearly double the hospital's present capacity. He thought that should be wel- come news to anyone who may have received surgery late at night because all of the operating rooms were busy with emergency cases or previously booked surgery. A new Clinical Laboratory would also be added to the hospital, a completed Radiology Department, and a Materials Management Center. The physicial environment of almost every department would be improved based upon what could be transferred from the knowledge gained in over two years of prior experience. The number of licensed beds in the main center would increase from 474 to 564, while the number of beds in the aging Hoover Pavilli.on would be reduced to approximately 105. That had a double.. barreled advantage --not only were the first steps being taken towards phasing out a facility which predated Stanford University Hospital's presence in Palo Alto, but they were also consolidating the licensed complimented beds in a central loca- tion, which would increase the Hospital's efficiency and take a giant step toward the difficult goal of reducing the increase in the rate of health care costs. The project was not an expansion since it would increase by only six the number of licensed beds from the 663 which was currently operated. The small increase would be made in the neonatal intensive care unit to help meet the increasing demand locally for additional care for severely ill premature babies. In reality, Stanford would be making more beds available to its patients since all licensed beds would become functional and available. That was in contrast to Stanford's cur- rent situation. Among the 663 beds currently licensed, there were many which were unusable because there was no space to provide treatment to the occupants. With the modernization program, Stanford Hospital would become capable of delivering special care in a modern setting designed for that purpose. He said the proj- ect was worthy of the support of the City Council, and he was con- fident that the community would be proud of the results. Sydney P. Hecker, M.D., 300 Homer, said he was pleased that there was a motion before the Council to permit some additional hearings on the access question by a committee of the Council, and ulti- mately by the entire Council. The access question was a complex issue and was one which brought a great deal of work to both the full-time faculty and the community physicians. It was a matter of extreme importance to the "citizens, physicians and to the University to have the issues well resolved. The first three years of the process had returned the community physicians to where they were before the difficulties began. He was not a mem- ber of the committee and did not know what the deliberations entailed. Dr. Hewlett Lee was on the committee and had expressed continuity{g frustration that there was a complete lack of progress in resolving the issues. It appeared that -there was some differ- ence of perception among members of the_ committee as to how quick- ly or how successfully the problems were being resolved. He thought the matters were complex, and said that before the Council approved the Hospital Modernization Program, it was appropriate for the Council to become more aware of what was involved for the community and for .the . medical care of .the members of the community in the future. David Patti Cooney, M.D., 1570 Cowper Street, said he appeared at the Council meeting as an individual person and represented no group. He agreed .wl th the Hospital Modernization Program, and felt that a lot of progres's had been made in the past year with the problems of the clinical faculty with the University and the full-time faculty. He pointed out that the access problem dated back to 1976 and possibly 1975 when Bill Haden first requested access and had to file a lawsuit in order to achieve it. All the other problems which had been solved were pebbles compared - to the boulder problem of access. He believed that the access of commun- ity physicians of the clinical faculty to the hospital based lab- oratories was closely linked to the health and welfare of the com- munity and was, therefore;, a proper subject for the City Council. He thought more time was needed, and as a participant in the Com- munity Physicians for Patient Care, they had not had time to meet and prepare testimony for Councilmember Klein's committee and would like to do so. The Health Services Administration was not putting any time pressures on Stanford Hospital, and as he under- stood it, there was a built in 100 -day time lag from the submis- sion of the Certificate of Weed to its completion, and the City Council could choose to support it any time within the 100 days. He urged that the City Council postpone the matter to hear every- one in more detail before taking action on the matter. Mayor Eyerly clarified that the motion before the Council was to refer the matter of access to the Council Hospital Committee for a meeting on August 3, and return the matter along with the resolu- tion of support on August 9. It had been suggested by Dr. Crowley that the Council might desire a meeting of the Council Hospital Committee with the Stanford Hospital Committee on August 4 for discussion of the access situation. He asked whether Councilmember Klein wanted anyone at the meeting of August 3, other than the community physicians. Councilmember Klein said it was his intention to invite community physicians and representatives from Stanford and any other inter- ested persons. He did not think it would be as fruitful if the Council committee met separately with the groups. Mayor Eyerly said that he had seen a tremendous movement in the four or five years since the City Council had had a Hospital Com- mittee to make observation on the City's contract and protect it for the residents of the community. The modernization of the hos- pital was vital and the hospital was an asset that the community could not disregard or allow to become less than the standard set on a nationwide basis. He did not agendize the matter with the idea that the Council would use leverage on the contract or the access issue. He wanted the Council to get back to the resolution at the August 9 meeting, and that the matter not be delayed. He thought that whatever came out of the Committee meeting on August 3 would determine where the Council went and what further remarks were needed. Councilmember Fletcher said she endorsed Dr. Crowley's comments and the high level of care available at Stanford Hospital. She thought that what could be accomplished at Stanford Hospital was a marvel, having personally survived the open-heart surgery and. being put on a heart-lung machine. It was gratifying that the service was available to her. Further, she said space was criti- cal and the modernization program, was something that -was needed and she supported it. Regarding the access to diagnostic and lab- oratory services, she felt that needed to be worked on. Both Dr. Crowley and Mrs. Steinberg commented that space was . one of the factors 1 ieliti ng the increased access for the community physi- cians. She wanted assurances that , the modernization plans took the needs of the community physicians into account and would WP - ply the necessary space. Vice Mayor Bechtel said she supported the Motion even though she would not -be present on August 9 ; She shared the concerns' of her colleagues and those members of the public who spoke about the access issue. 2 2 9`4,. 7/26/82 MOTION PASSED unanimously, Fazzino and Renzel absent. CONSENT CALENDAR MOTION: Councilmember Cobb moved, seconded by Witherspoon, approval of the Consent Calendar. Referral ITEM #3, FOOTHILLS FIRE MANAGEMENT PLAN - REFERRAL TO FINANCE AND :suu: ITEM #4, EMPLOYMENT INTENSIFICATION -- REFERRAL TO PLANNING toPiNI4S10N Action ITEM #51 SUPPORT OF STATE ASSEMBLY BILL 3306 WItEL IP , (CMR:411 : 2) — Staff recommends that the Mayor be authorized to send a letter to Senator Garcia and Assemblyman Sher indicating the City of Palo Alto support for Assembly Bill 3306. • . ELECTRICITY AND GAS ITEM #6 RESOLUTION RE MANAGEMENT COMPENSATION PLAN (CMR:419:2) WCMR:424':2) Staff recommends that the Council approve the resolutions adopting compensation plans for Management and Council Appointees, for Con- fidential Personnel and for Temporary Employees effective with the pay period including July 1, 1982. Funding for these compensation plans has been provided in the 1982-83 Budget. Approval of these programs will complete the cycle of compensation plan adjustments for City employees, with the exception of non- management police who are in the arbitration process. RESOLUTION 6054 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING A COMPENSATION PLAN FOR MANAGEMENT PERSONNEL APID COUNCIL APPOINTED OFFICERS AND RESCINDING RESOLUTION NO. 5833 AS AMENDED BY RESOLUTION NO. 5922, RESOLUTION 5937 AND RESOLUTION 5962" ITEM #7 RESOLUTION RE CONFIDENTIAL COMPENSATION PLAN (CHR;419:2) . RESOLUTION 6055 entitled "RESOLUTION OF THE COUNCIL OF Tilt CITY OF PALO ALTO ADOPTING A COMPENSATION PLAN FOR CONFIDENTIAL PERSONNEL AND RESCINDING RESOLUTION NO. 5831" ITEM #8, RESOLUTION RE TEMPORARY COMPENSATION PLAN (CMR:419:2) TC R:42 : RE SOLUT ION 6056 entitled "RESOLUTION OF THE COUNCIL OF TIIE CITY OF PALO ALTO ADOPTING A COMPENSATION PLAN FOR TEMPORARY EMPLOYEES AND RESCINDING RESOLUTION NO. 5921" ITEM #9 RESOLUTION' RE AUTHORIZING :PARTICIPATION IN DEFERRED RESOLUTION 6057 entitled "RESOLUTION OF THE COUNCIL OF THE CITY of "PALO ALTO ESTABLISHING AN INTERNATIONAL CITY MANAGEMENT ASSOCIATION DEFERRED COMPENSATION PLAN ITEM #10, ORDINANCE PROHIBITING RECKLESS DRIVING IN CITY PARKS n ea ng ORDINANCE 3370 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING CHAPTER 22.04 OF THE PALO ALTO MUNICIPAL CODE BY ADDING SECTION 22.04,370 AND 22.04.380 PROHIBITING RECKLESS DRIVING AND UNLAWFUL RIDING AND TOWING IN CITY PARKS" (1st Reading 7/12/82, Passed 9-0) ITEM 411, CLAIMS ADMINISTRATOR FOR HEALTH, DENTAL AND RETIREE PLANS"` : 4-09 : 2 ) It is recommended that Council authorize the Mayor .to exe ute the agreement with Leonard J. Russo, Inc. for claims administration services. This action is not a project as defined in Title 11 of the Palo Alto Municipal Code, and therefore, no environmental assessment is necessary. AGREEMENT -- PROFESSIONAL SERVICES MANAGEMENT AND ADMINISTRATION OF CITY OF PALO ALTO EMPLOYEES HEALTH PLANS AND DENTAL PLAN Leonard J. Russo, Inc. MOTION PASSED unanimously, Fazzino, Renzel absent. ITEM #12, DEMOLITION OF COTTAGE AND SHED ON ARASTRA PROPERTY t an nun rom7/12782) (CMW 417:2) MOTION: Councilmember Cobb moved, seconded by- Klein, to adopt staff recommendation that the cottage and shed on the Arastra property be immediately demolished. Councilmember Klein said he toured the property, and that the house was in poor shape and it would not be a good investment of City funds to try and remodel the house. He urged that the Council support the staff recommendation. MOTION PASSED unanimously, Fazzino and Renzel absent. ITEM #13, GREER PARK REST ROOM FACILITIES (Continued from 7/12/82) Councilmember Cobb said that if the Council decided to go ahead and dove up the construction of permanent rest rooms .in Greer Park, part of the allocation for the Seismic Hazards Study would be used in 1982-83, and the landbank1ng allocation would be reduced in 1983-84. He asked why those two items were chosen. City Manager Bill Zaner said that staff reviewed the C. I .P. , and it was determined that those projects were the two lowest ranked projects the Greer Park rest rooms \projectcould be substituted for. MOTION: Councilmember Levy moved, seconded by =Cobb, to install temporary toilets in Greer Park at a cost of $3,000, and that the work on the permanent rest room be moved up one year. in the Capital Improvement Program. ORDINANCE entitled "ORDINANCE OF THE COUNCIL OF THE CITY aF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1982-83 TO ESTABLISH AN APPROPRIATION FOR CAPITAL IMPROVEMENT PROJECT NO. 82-83 'GREER PARK REST ROOM FACILITIES' AND TO DECREASE- tHE APPROPRIATION FOR CAPITAL IMPROVEMENT PROJECT NO. 82-05 'SEISMIC HAZARD STUDY" Councilmember Levy said his motion intended to follow the staff's recommendation that in 1982-83, the Seismic Hazard Study alloca- tion would be. reduced by $27,000, and in 1983-84, the landbanking allocation would be reduced by $150,000. Councilmember Witherspoon said she wanted the temporary facilities put in immediately, but she was not willing to design and Install the permanent rest rooms ahead o+' schedule. Until the Council had a program in place regarding Greer Park, she was concerned about the abuses that took place _ in public • rest rooms . in a park. If the abuses started occurring at Greer Park, and the temporary facili- ties were in place, there would be no problem to remove them. If the permanent facilities were in place, but the rest of Greer Park was not developed and the program was not in place, she did not know what could be done .except close the doors to the permanent facilities. She preferred that the Council stay on schedule with the park` Charles Scott, 3136 Genevieve Court, said that the representatives of the.West Bayshore Residents Association supported the need for rest room facilities at Greer Park. He pointed out that rest rooms were indicated in the Master Plan for. Greer Park so that no change in the Master Plan would be required. At present, a water line went into a drinking fountain and it would seem easy to get water .and run a sewer line directly to Amarillo Avenue. He agreed that to spend money on plans for a large rest room and storage building to be constructed several years down stream was not prac- tical. 0, J. McMillan, 1062 Amarillo Avenue, supported Councilmember Levy's motion to move the timeframe for construction of rest rooms forward. He was concerned about the scope of the rest rooms which was implied and the cost estimate, particularly as contrasted to the cost estimate contained in the Master Plan. In his opinion, given the City's financial difficulties with regard to moving on with the improvement of the park, a permanent rest room of the level implied was more than was required. He supported the increased pace, but would rather modify fy the expensive facility. Helene Smith, 3142 Greer Road, agreed with Mr. McMillan. Judy Scott, 3136 Genevieve Court, said she moved back to Palo Alto after nine years in Davis, California. When she left Palo Alto, Greer Park .had no rest room facilities. She was glad that tempo- rary facilities would be placed in the Park, but she thought it was important that the City build small utilitarian rest rooms which used stainless steel toilet facilities and sinks that were almost vandal .proof. She said that Councilmember Witherspoon's comments were well taken, but the importance of having bathrooms in a place where none currently existed was equally important. Bob Moss, 4010 Orme, urged that the Council go forward with the permanent rest rooms. He thought that the money from.. the land - banking allocation was an appropriate source of funding because the Housing Corporation had more land - than it : could afford to build on at ;this time. He commented that : the facilities in Mitchell - Park did not seem to suffer excessively from vandalism. He urged the Council to go forward with the project Mrs Zaner commented that any kind of rest room which was built must be large enough to accommodate handicapped people. Further, he did not want anyone to have the impression that the money to be used was an appropriate use of landbank funds. It was appropriate if money were diverted away _ from landbanking to , the project, but the rest rooms were not a project where it Was appropriate to use in -lieu of landbanking. Extensive vandalism was suffered in the park rest rooms,: and the ones in Greer Park would be no differ- ent. City Attorney Diane Lee reminded the Council that the budget ordi- nance would take six votes to pass. Councilmember Fletcher said she had wrestled with the problem for many years, and the need for rest rooms was great. After exten- sive review, she would oppose the motion and would support the staff recommendation to go ahead with installation of temporary facilities. Regarding landbank funds, historically the City pur- chased sites when the opportunity presented itself and did not wait for the funds to be available to put houses 'on the sites. She commented that the City had the Webster Wood site many years before the project was built, and the same was true fors all the other projects. She was under the impression that the City only had rest rooms in the parks where staffing existed, and she believed those rest rooms were locked when staff was not at the park. Putting a structure in a park which was not fully developed could attract nuisances and more than just vandalism. Director of Public Works David Adams added that the City should make certain that the lines were run to the appropriate locations in order to be tied into any future development. That was the substantial part of the cost. Vice Mayor Bechtel asked for confirmation that facilities existed currently in Mitchell Park, Peers Park, Foothills Park and Rinconada Park only. Mr. Adams said that was correct. Yice Mayor Bechtel said she was concerned about the expense involved in building and maintaining rest room facilities, and in her experience with the County she found that the modern outhouse facilities were becoming more acceptable. She would not support the motion. Councilmember Levy pointed out that the motion was to move up the inevitable by one year. He thought rest room facilities were calved for and proper at Greer Park. He understood that the larger parks had rest room facilities and the smaller neighborhood Orks were not designed to have rest room facilities because the users of those parks tended to be close to their own homes. He was concerned about the cost of $150,000, but that was something to be left for the future to analyze in terms of the constraints mentioned by Mr. Adams and Mr. 'Zaner. He felt that delaying 10c/ - banking costs by one year was not . catastrophic and: if the Council found there was a .:worthwhile land purchase during that period that would need the extra $150,000, it could be found. He did not believe that the Seismic Hazards Study' could' be seriously impacted by the appropriation. He thought propriety called for permanent rest room facilities at Greer Park. Councilmember Cobb said he was glad Councilmember Levy made the motion and he was happy to support it. Those Councilmembers who did not support the motion should join those Councilmembers that actively used the park for softball and watch the number of people out there. The use was extensive during the week, and he con- cluded that the need was now and should be addressed. He pointed out that given construction inflation, about $20,000 could be saved by doing i t now. He endorsed. Mr., Scott's remarks about pur- 5uing the program with a simple design.'_ He was .convinced that the City could put in: rest roofs for less if that approach' were taken. There' was a serious' need in Greer Park, - and the idea of temporary facilities for a, long period of time was nbt acceptable. Mayor Eyerly said he was happy 'that . the mUti on" did not call for a budget amendment frd0' the City reserves in view of the tight con- straints. He did not agree ` with - changing the priorities of the CyI.P. which were set and accepted by the Council. It was a bad 2 2 9 8 7/26/82 a bad precedent and if the Council got into that habit, they would have different pressures from all over the community for the use of those funds which were already set once during the year. NOTION DIVIDED FIRST PART OF MOTION FAILED to approve a budget amendment ordi- nance by a vote. of 2-5, Levy, Cobb voting "aye," Fazzino and Renzel absent. SECOND PART OF MOTION PASSED unanimously to install temporary toilets, Fazzino, Renzel. absent. ITEM #14, POLICY AND PROCEDURES COMMITTEE RECOMMENDATION RE 11411.11.1111.11.116 Councilmernber Levy, Chairperson of the Policy and Procedures (P&P) Committee, said that the Committee met only six days ago. He commended the. City Clerk's Office for the rapidity with which the minutes were provided. Technical amendments were proposed to the City Charter to bring the City's recall initiative and refer- endum procedures into conformance with State law, and to make the timing requirements more feasibly coordinate with State and County practice to the end that administration of the. City's election should be more orderly, systematic and uniform. The changes were drafted carefully by the City Clerk and the City Attorney, and they were adopted unanimously by the P&P Committee with a minimum of discussion. The P&P Committee discussed the Charter's limita- tion on initiative elections holding them to a maximum of one special election in a 12 month period. Two Committee members felt that the 12 month restriction should not apply for those initia- tive votes where voter approval was required by th.e Charter or by State law. They were concerned that Council might have to unduly delay submitting to voter's approval of a new tax or of a fran- chise. The motion to draft language for the current Council meet- ing was defeated 3-1, and a second motion to request Council to specifically refer consideration of such a change to the P&P Com- mittee was also defeated by a 2-2 vote. The item before the Coun- cil was approval of the charter amendments, with .corrections, as proposed by staff and placement on the ballot at a special elec- tion to be called for November 2, 1982. MOTION: Councilmember Levy moved, seconded by Bechtel for the Policy and Procedures Committee, to approve the proposed amend- ments tb the -Charter of the City of Palo Alto, with corrections, and that they be placed on the ballot at a Special Election to be celled for November 2, 1982. ORDINANCE 3371 entitled "ORDINANCE OF THE COUNCIL .OF THE CITY OF PALO ALTO CALLING A SPECIAL ELECTION FOR NOVEMBER 2, 1982, FOR SUBMITTAL OF CERTAIN MEASURES SEEKING TO AMEND THE CHARTER OF THE CITY OF PALO ALTO TO THE ELECTORATE, REQUESTING THE SERVICES OF THE REGISTRAR OF VOTERS, AND ORDERING THE CONSOLIDATION. OF.SAID ELECTION" NOTION PASSED unanimously, Fazzino, Stenzel absent. NOTION: Vice Mayor -Bechtel moved, seconded by -Cobb, that: Council submit the argument in favor of Charter amendments and authorize the Nayor to sign for to►vn i l and ask the League of Women Voters of Palo Also to co-sign, MOTION .PASSE® unanimously, Fazzino, Renzel absent. 2 2 9 9 7/26/82 ITEM #15, RESOLUTION OF INTENT - DOWNTOWN IMPROVEMENT DISTRICT I LMk:4zz: l) MOTION: Mayor Eyerly moved, seconded by Klein, approval of the Resolution of Intent. RESOLUTION 6058 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO GIVING NOTICE OF INTENTION TO ESTABLISH A PARKING AND BUSINESS IMPROVEMENT AREA IN THE DOWNTOWN AREA OF PALO ALTO; DESCRIBING THE BOUNDARIES THEREOF AND THE CLASSIFICATIONS OF BUSI- NESSES THEREIN; FIXING A DATE FOR A PUBLIC HEARING; INDICATING THE PURPOSES TO WHICH THE ANTICIPATED REVENUE SHALL BE PUT; AND DESCRIBING THE PROPOSED INITIAL CHARGES; ALL AS AUTHORIZED BY THE PARKING AND BUSINESS IMPROVEMENT ,AREA LAW OF 1979" Counc 1 l mefber Witherspoon asked how one would enforce the payment of the dues to the District. Ned Gallagher, Downtown Palo Alto, Inc., said that in those cases where action was required in order to collect the dues, it would go to the Small Claims Court. Counci lmember Fletcher asked if it was appropriate for the title of the resolution to include the word, "Parking" because the City already had a Parking Assessment District, and there was no intent to use the funds for parking. City Attorney Diane Lee said the authorizing legislation was entitled the Parking Business Improvement Area Law of 1979, and she assumed the title for the resolution was a derivative. She thought the Small Claims Court would be the most expeditious avenue for collecting unpaid dues. Vice Mayor Bechtel asked whether the title of the resolution could be changed to delete the word °Parking ," since it did not seem to be consistent with the description of the uses. Ms. Lee said she thought the authorization under the State law was to establish a particular type of area. The two terms were lumped .together as a de:►.i gnats on , and it might be better to retain the word "Parking" in the title for now. If appropriate, the title could be changed when the ordinance establishing the area was before the Council. MOTION PASSED unanimously, Fazzi no, Renzel absent. ITEM #1C, RESOLUTION RE TRAFFIC BARRIERS (CMR:421:2) MOTION: Co #ncilmember Cobb moved, seconded by Levy, approval of the resolution. RESOLUTION 6059 entitled "RESOLUTION OF THE COUNCIL OF Tom' CITY OF PALO ALTO EXPRESSING ITS DESIRE TO RETAIN CURRENT METHODS OF ,TRAFFIC CONTROLS, INCLUDING BARRIERS, ON THE STREETS OF THE CITY OF PALO ALTO" MOTION PASSED unanimously, Fazzino, !teazel absent.. ITEM #17 POLITICAL SIGN ORDINANCE NOTION: Mayor Eyerly moved, seconded by Witherspoon, approval of the ordinance . for first wadi na . ORDINANCE FOR FIRST. READING entitled "ORDINANCE OF THE COUNCIL OF TFTE CITY DP PACO ALTO AMENDING THE PROVI- SIONS OF THE BUILDING REGULATIONS REGARDING ELECTION SIGNS"_. 2 .. 3 0 0 7/26/82 MOTION PASSED unanimously, Fazzino, Renzel absent. RECESS FROM 9:25 p.m. to 9:35 p.m. ITEM #18, TERMINATION OF OPTION AGREEMENT FOR AIR RIGHTS i LI U MK:4U'L : Real Property Administrator Jean Diaz said that the revised A -K Plan which was summarized on Page 3 of CMR:402:2 indicated 50 new public parking stalls would be provided. He pointed out that the number assumed the one parking stall per residential unit. The Planning Commission, when they reviewed the first set of schema- tics, recommended 1.5 parking stalls per residential unit. If that ratio was chosen, there would be about 22 less public stalls since those would be converted to private stalls for the private development. Councilmember Klein said he did not think the Council had a par- ticular proposal before them either in the option or in the request for extension.. He thought that when and if A -K Properties were in a position to go forward, they would have to come forth with a specific plan. Mr. Diaz said there were two phases. The first concept accepted. by Council was five below market housing (BMR) units; forty market rate units; and replacement of existing public parking plus approximately fifty new public parking stalls, plus private park- ing for the housing units. Since the City could not contract away the Council's zoning authority, staff devised a phased system where the next phase would be submittal of a range of possible plans and mixes so that the Planning Commission and City Council could more appropriately choose the specific mix. Councilmember Klein asked if the charge in concept was specifi- cally before tree Council. Chuck Kinney, A -K Properties, 124 University Avenue, said the project started,,; in December 1979 when he submitted a package to the Council. Council directed staff to develop an option agree- ment to develop air rights housing on Parking Lot Q. The option took about 16 months and in March 1981, the agreement was signed by the Council. First, they developed five alternative plans within a six month period and gave the Planning Commission first review and comment on various mixes of density, heights and design. He appeared before the Council in late summer of 1981, and the concept was approved. Much more refinement was needed, and with the continuing deterioration of. t;ie market, high interest rates and buyer abilities to withstand high mortgages, the concept did not work. In October 1981, they appeared before the Council and jointly with staff requested a nine month moratorium of the option to see what the market would do. The market did not improve at the end of the nine month period, and was still stag- nated. During the nine month hiatus when the project was s held off, he attempted to modify the design to reflect_ today's market. The previous: designs were .based upon unit _ sizes of 1,200 square feet, and now were an average of 950 square feet The unit prices. in the original concepts were in the $200,000 range for the market rate units, and now were proposed at $142,500. Interest rates at the beginning of. the project were in the 1.2-15 :percent range, and now were about 18,5 percent. The public benefits had changed in terms of the a number of BMR units and free and clear public park- ing. With the:. current market, he was unable to provide benefits everyone had hoped -for in the beginning. Mr. Kinney said his request was not for an acceptance or rejection of. - a proposal. He hoped thate in the spirit of cooperation he would be allowed to continue working toward achieving a successful housing project. He further hoped that the opt!oning fees, which had been suspended, would continue to be suspended until the option could be activated. He hoped the ,Council could receive 2 3 0.-1 7/.26/82 other proposals from developers for other air rights projects. Everyone was faced with a series of great opportunities bril- liantly disguised as insoluble problems. He believed air rights housing was a viable project for downtown Palo Alto, and' he hoped he would be backed by the Council. Councilmember Witherspoon asked what the quarterly option payments were.. Mr. Diaz responded that in the two quarters the option was in existence, a total of $3,700 was paid.. The quarterly payments which increased each quarter if the option went the full two years, the total payments would be about $23,800. Councilmember Witherspoon clarified that they had been suspended because the project was not moving forward. Mr. Diaz said that was correct. Councilmember Witherspoon asked regarding the original proposal, if the interest rates came down, or new financing methods were available, if it was feasible that the project could be built within the next three to four years. Mr. Kinney said he believed so. He had come to understand a lot about air rights, how to put it together and what banks were look- ing for, and to terminate it now could present problems in getting going again in the future. Councilmember Cobb clarified that the most recent project was a benchmark for where the market is today, and wasn't something Mr. Kinney was serious in pursuing, unless the market conditions changed significantly and the public benefits could be achieved, Mr. Kinney said that was correct. Mayor Eyerly said Mr, Kinney indicated he would like to have assessment district financing on the 58 new public parking spaces to the amount of 42 percent, and if the Council were to take a proposal as of today, what would the Assessment District say. Mr. Kinney said he understood they would like to see the 50 spaces free and clear and not have parking funds be expended for those. Mayor Eyerly asked about Mr. Kinney`s property en High Street, and if the City would realize any benefit from that. Mr. Kinney said that A -K Properties had developed the Paris Theater as part of their financial equity position. They sold an option to a party on that property. He added that the option price was fwar times the income they would have received for the project. Councilmember Fletcher said she thought the option period had quite .a way to go yet. Mr. Diaz said that was correct. Theeffective date of the 'option agreement --the Council action --was on March 23. By the time the agreement ` was actually signed, the effective date of the option was April %4, 1981. The optionwas for tWo years from that date, and by the Council action in October, 1981,' it was extended another nine months. Councilmember Fletcher asked why they were concerned now. Mr. Diaz said a lot must transpire during the option period. After the nix was ' decided, the developer had to have the plans prepared, go through the zone change, go through Assessment Oi s-,. trlctrmodification proceedings, get financing and permits. All of, those : activities came. muchlater and took a much greater portion of time than the initial phase the City was stuck in. Mr. Diaz said the option agreement called for the developer to make quarterly payments to the City each quarter the option was not exercised, and the payment increased each quarter, except dur- ing the nine month extension granted by the Council in October. Councilmember Fletcher asked what purpose the fee served. Mr. Diaz responded that it was to compensate the City for encum- bering . the piece of property for the period of time, and because Mr. Kinney had an exclusive option on that piece of property for as long as the option existed. He agreed that it was not now nec- essary to discuss the specifics of the project because he doubted that a significant change in the economy would occur during the next six months, in spite of the revised mix suggested by Mr. Kinney. The real estate market --especially long term financing -- was undergoing fundamental changes which would not be resolved in the near future. While the revised concept looked like it may work on paper, he was concerned. He was not sure that if $140,000 units were put on the market now, they would sell. He could not foresee any significant improvement in the economy to justify extending the option at this point. If the Council wanted to grant an extension, the developer should be required to pay the option dollars. Councilmember Witherspoon asked what purpose cancelling the option would serve since no one else would come forward with a proposal. Mr. Diaz said the particular lot had problems --it was a relatively small parcel, and had a funny shape. When the additional 5,000 square feet of the adjacent_ property was to be included, he could see the benefit, but that was no longer a part of the project. Another project on another site --and one which was larger and tied in with some adjacent properties -,-might work, but no one was breaking down the City's doors trying to develop that project. Councilmember Witherspoon could not see that the City had anything to lose by letting the option sit. She could not see charging Mr. Kinney if no one was going anywhere, and the City staff was not spending any time on it. If another more viable project came along for air rights, the Council could address that at the time. Mr. Diaz said that was correct. The Council could always address another air rights project on another parcel, but as long as an option existed on the air rights over Parking Lot Q, that lot could not be touched. He recommended that since development of the project in the foreseeable future looked doubtful, the devel- oper should back the project with his own dollars and not be granted a free extension. He felt that if an extension was granted, the developer should pay the quarterly option payments in accordance with the agreement. Councilmember Witherspoon said Mr. Kinney had already paid a large sum to pidneer the concept with the City, and everyone was dis- appointed that it had not gone further. NOTION Councilmember Witherspoon moved, seconded by Fletcher, to di'ect staff to amend the option to exclude the former -::A -K Properties lot adjacent to Parking Lot Q and continue option until expiration date plus 11 months and suspend quarterly payments until such time as there seems to be potential for development. Councilmember Witherspoon said that once the City started activity on the project, she expected the developer to start paying the quarterly. payments. She clarified that the City's existing agree- ment -with Mr. Kinney continued through April, 1983. Mr. Diaz responded that it . originally continued through April, 1983, but was extended for nine months by the Council to January 1984. He pointed out that the option period was not just 2 3 0 3 7/26/82 1 approving the concept, but included developing the plans, obtain- ing the rezoning, obtaining financing, going through an assessment district change and modification proceeding. All of that would take a long time, which was why the initial period was for two years. That period was extended for nine months, but even if Mr. Kinney started today, it was likely that it would take all of that time if the Council approved the concept it desired right now. Councilmember 'Witherspoon clarified that if the Council wanted to give Mr. Kinney more time to see what the market conditions were like in two years, the option period would have to be extended to allow for development plans. Mr. Diaz said that was correct. The Council took a similar action in October to suspend processing of the option for nine months, and if the Council wanted to make it six months, that was fine too. Councilmember Witherspoon said she did not understand what lead time was necessary. Mr. Diaz said staff anticipated a two year process to complete everything necessary from the beginning until the time they were ready to begin construction. Councilmember Witherspoon said she intended to give Mr. Kinney almost four years from today. Mr. Zaner said he was concerned that if the Council chose to extend the option, it would be extended for a reasonable period of time to allow Mr. Kinney to do all the things necessary if a change occur-'ed in the market in the next six months. Mr. Kinney was gambling that the market would look good in the next six months so he could get cranked up again. It would take Mr. Kinney about two years ----after getting cranked up again --to get his proj- ect moving. Mr. Zaner recommended that Council retain the option in its current form, and if the market changed in six months, Mr. Kinney would run out of time getting his project done the way -the option existed. Mr. Kinney requested another six months at the far end, let him have until July 1984, so that within the next six months if things got better, he could start up and would have enough time to. finish. Staff did not want to see Council give hire an unlimited time to finish because City property would be tied up indefinitely. Councilmember Witherspoon said that helped, but she was not as optimistic as Mr. Kinney and thought he needed more than six months. She clarified that she intended to extend the option through December 31, 1984. The option payments would be suspended unless the option proposal was reactivated. Mr. Zaner commented that extending the option through December 31, 1984 tied up a valuable asset too long. Staff realized that they knew of no one coming in behind Mr. Kinney. Councilmember Witherspoon responded that Mr. Kinney had more at stake in the project than anyone else, and if anything changed, he would be the most motivated to go forward. Further, the point was well taken . that anyone who started from scratch on the project would be further behind in the process than Mr. Kinney. Mayor Eyerly suspected that if the Council approved the extension for Mr. Kinney,,and the market did not change, Mr. Kinney would be back for the Council to approve what he could have done today. The City did not hive the High Street koperty, only 5O new public parking spaces, a big share of which- would be paid by the assess- ment district, and few other things which were not near the origi- nal concept in his opinion. Vice Mayor Bechtel said she was prepared to argue that Mr. Kinney had to work with staff for 16 months to develop the option, and the Council should at least be courteous enough to extend the option for some period. She was not prepared to extend the option without payments for an additional 12 months, but would extend it for an additional six months at no cost. AMENDMENT: Vice Mayor Bechtel moved, seconded by Cobb, to extend the option to the expiration date (1/84) plus six months (to 7/84) with no payments during this period, Councilmember Fletcher said she seconded the motion because she was concerned that if the property were put out for additional project proposals, proposals for office buildings would come in, and that was the last thing the City needed to encourage on City property. That type of development was financially profitable judging by all the activity taking place in the University Avenue area, and the only possibility would be a parking structure. The housing proposal was the best proposal the City could hope for and the Council did not have much to lose since other proponents would be unlikely to propose housing at this time. She understood that a three percent drop in interest rates would make the project viable. Mr. Kinney responded that it would take a 3% increase in projected income, or a drop from 18.5% to 16% in interest rates on the con- struction. Councilmember Fletcher felt the Council could take that gamble -- there was just as much chance that it would happen as it would not. Mr. Zaner clarified that the amendment was a 12 month option with the first six months free, or was it a six month option free. Vice Mayor Bechtel clarified that the option was as proposed by the optionee. Essentially, the Council was suspending payment during the six month period with the option running, Mr. Diaz said that i.f the City went under the second six month period where the payments started again, the two additional quar- terly payments had to be ,addressed. He clarified that the motion would extend the schedule, and that an increase was cranked into the quarterly payments which would continue for the following two payments if Mr. Kinney went into the second six month period. Vice Mayor Bechtel said that was correct. Councilmember Klein said he favored the motion as it was before the Council. He thought the Council was getting unnecessarily confused about the extension. He understood that the motion would set back all of the schedules in the option by 11 months. Cur- rently the option expired in .January 1984, and the motion would move everything back by 11 Months. If Mr. Kinney had a payment due in October 1982, that payment would be due in September 1983. Whether the Council used the six months suggested by Vice Mayor_ Bechtel, or the 11 months . contained in the main motion, at some point, Mr. Kinney had to start coming up with some money or the option would expire, which was precisely the current situation. He supported the main motion, but opposed the amendment because . he felt six " months was an unrealistic period of time and he did not want to debate the issue again le six months. Mr. Kinney was talking about a significant drop in interest rates in order for the project to be viable, and he questioned: whether interest rates would' drop ' 2.5% in six months. He supported the main motion because he did not `think anything else would happen with Parking Lot Q, , and it was only fair that since Mr. Kinney had devoted so much time and energy, that he be given one more chance to see whethera the project was realistic. 2 3 0 5 7/26/82 Ned Gallagher, Downtown Palo Alto, Inc. (DTPA), said the project was neither considered by the Board nor the Executive Committee. The original project was embraced with enthusiasm particularly in view of the fact that the Assessment District would be getting 50 additional parking spaces from the development and from the air rights. That was gradually reduced through one factor or another, and finally it was down to 23 parking spaces. Currently, Mr. Kinney indicated that the additional` 50 parking spaces would have to be constributed mostly by Assessment District funds. He did not think that would be a favorable factor with DTPAi He sympa- thized with the request for an option, and recommended that the Council seriously consider the request because of Mr. Kinney's sincere, honest and. long-standing endeavors with the City. Mr. Kinney had expended a lot of time and money, and deserved that consideration. If the market was not estimated to be improved in the near future, he did not see why Mr. Kinney should not be entitled to enjoy an option during that period of time without a fee. Councilmember Cobb said although he seconded Vice Mayor Bechtel's amendment, he found Councilmember Klein's arguments persuasive. He would vote against the amendment and support .the main motion. He commented that he personally did not want to support a project of the type of the last offered by way of an example because he did nut think there were sufficient public benefits. If the City was going to do it, he wanted to see the public benefits be like those originally anticipated when the project was undertaken, and it would not happen in six months. Mayor Eyerly supported the amendment. To tie the project up for a longer period of time was not realistic because the Council could not see what other developers had in mind. Further, he was con- cerned that the Council was not addressing .the total needs of the downtown area. Mr. Kinney had put forth a lot of effort, and he empathized with his endeavors, but another 12 months was longer than he cared to tie up the property. AMENDMENT FAILED by a vote of 3-4, Fletcher, Cobb, Witherspoon and Klein voting 'no,' Fazzino, Wenzel absent. Councilmember Levy was against any extension of the option. He admired Mr. Kinney and the work he had done in the downtown area. He asked the Council to remember that Mr. Kinney initiated the program over a year ago --the applicant came to the City, requested the optionand proposal and laid out certain terms. The fact that the option period encumbered Mr. Kinney with difficulties and that changes occurring in the market did not indicate that, in a free marketplace the Council should then have sympathy with an appli- cant who came to the Council, and made the option agreement with the City. He agreed with Councilmember Cobb that the City would not realize enough public benefit from what was now proposed. The proposal included .three BMR units, and 39 market rate units in a high density development. According to the Planning Commission, there would be 25 extra parking spaces of which 21 would be paid for by the Assessment District., That was not nearly enough public benefit. The Council ,granted the option on a .noncompetitive basis one and a half years ago, because .i t would have been the City's first air rights proposal and the Council wanted some experience with air rights. He was sceptical: about whether. ;the Council needed the experience on a noncompetitive basis, but it was proven. Further, the Council .was sympathetic. because of the existence of the extra 5,000 square feet. In the, initial presen- tations, that 5,000 extra square feet towards University Avenue was not going to be developed --it was going to be open space, which would provide a much nicer and open feeding to en otherwise high density development. That appeared to be eliminated although it was possible_ that the option granted on that property would not be Picked up. The question was , what would happen if " the Council ended the option. Councilmember .Witherspoon mentioned that the City would lose nothing, but continuing to encumber the property 2 3 0..6 7/26/82 meant the City lost the opportunity for others to come forward with proposals. Just because this proposal was not attractive does not mean that others could not come forward with proposals which would be attractive. He thought times had changed --one and a half years ago, the Council was looking strongly for housing in the downtown area. Since that time, a good deal of housing was built and a fair amount of it was not occupied. He thought it was worthwhile to reconsider the. City's needs for housing. At the same time, the Council realized that there was a tremendous park- ing shortage and was considering a parking structure on another lot, and building a couple of parking areas in the periphery of the downtown. He thought that space could be used in ways other than what the option called for with more public benefit. On that basis, the Council already extended the option nine months, and to extend further was uncalled for. He recommended ghat the Council terminate the encumbrance upon the City's property. Mayor Eyerly agreed with Councilmember Levy. He thought the Coun- cil needed to address other options. Councilmember Levy mentioned the amount of housing which had been built downtown, and housing on the air rights development was questionable.. in view of that fact, The Council was concerned about parking downtown, and maybe the property should be held for a major parking lot for the Assessment District over the long haul. Further, a grocery store or high priority services were needed in the downtown area, and air rights was the only place he could see that the City could attain that goal . If the Council went for housing on that lot, parking and serviices would be precluded. He would not support the motion, and did not think the Council should be extending options because of market conditions. MAIN MOTION PASSED by a vote of 5-2, Levy, Eyerly voting "no," Fazzino, P nze1 absent. Mayor Eyerly said he did not receive the guidelines for air rights development which were approved by the Council on January 7, 1980, and commented that perhaps the Council should reanalyze those guidelines for air rights. He would like to have a copy to study and perhaps would agendize the item. He thought the Council would have to come to grips with the height issue if they decided to put a grocery store into_ air rights. ITEM #19, TERMAN SCHOOL GROUNDS LANDSCAPE MAINTENANCE (CMR:413:2) City Manager Hill Zaner commented that the item was not covered in the current budget and related to Terman. A budget amendment was included. In future years, as items came up for Terman, they would be included in the City's regular budget and the Finance and Public Works (HOW) Committee would review them. This would be the first of the operational expenses incurred at that location. MOTION: Vice Mayor Bechtel moved, seconded by Levy, to approve the staff recommendation as follows: 1. The Mayor be authorized to execute the contract with Greenleaf Landscape Management in the amount. of $15,540; and x • Approve the budget amendment transferring $190000 to the Parks Division of Public Yorks for this contract end for irrigation, repair, custodial services and swila1ng pool maintenance. ORDINANCE 3372 entitled "ORDINANCE OF THE COUNCIL OF TAT- CITY -OF PALO ALTO AMENDING THE ,BUDGET FOR THE FISCAL YEAR 1982-83 TO PROVIDE FUNDS 'FOR- MAINTENANCE OF TERMAN SCHOOL SITE" 2 3 0 7 7/26/82 Councilmember Levy asked why staff could not handle the mainte- nance. i 1 Director of Public Works David Adams responded that the department was at its limit in staff particularly for grounds maintenance. Councilmember Levy asked if it would not be more appropriate to have a budget amendment for that purpose rather than to go outside with a separate contractor. He commented that if the City had to go to outside bids, it was another indication of the value of com- petitive bidding where the winning bid was $15,000, and the second bid was $28,000. Councilmember Cobb said he wondered about the same set of numbers. He asked if staff had any concerns about the disparity of the bids ---could it be done for $15,000. Mr. Adams said he was informed that the contractor who was the low bidder was currently under temporary contract there doing the same thing and would continue doing what he had been doing. Staff was confident that the City would get the work contracted for, and was happy with that work. Councilmember Witherspoon asked if the maintenance cost was the beginning of a number of operational expenses the City would accumulate on the Terman site during the coming fiscal year. Mr. Zaner responded that this was the only operational cost fore- seen by staff at this time. Other moneys were set up in the C.I.P. to do Phase I of the Terman School Site Plan. MOTION PASSED unanimously, Faxzino, Renzel absent. ITEM #20, STUDY TO DETERMINE APPROPRIATE POLICY FOR UTILITIES FUNDS TRANSFER -S T tRAl. FUNDS TCMR:392:2) Councilmember Witherspoon asked when the \Council would get some definitive answers. Assistant Director of Utilities Mark Harris responded that the contract itself should take about ten weeks to complete, and assuming it commenced the early part of August, something would be done by early December at the latest. He said staff intended to incorporate any recommendations in time for budget hearings and sooner if necessary. Mayor Eyerly said he was glad to see the request. He thought it was long overdue for the City to analyze all the implications of the transfer from Utilities to the General Fund. MOTION: Councilmember Cobb moved, seconded by Witherspoon, to approve the staff recommendation and agreement to authorize the Mayor to executethe agreement with •Price Waterhouse to perform a study to determine the appropriate policies for Utilities fends transfers to the General Fund. The study will be financed from funds budgeted for the electric utility. AGREEMENT -a PROFESSIONAL CONSULTANT SERVICES CONCERNING THE CITY'S UTILITIES FUNDS Price Waterhouse Councilmember Cobb asked about the likelihood that the recommenda- tions from the consultant would be that the City was putting way too much into the general coffers of the City and should cut back. Mr. Harris said he thought the likelihood was high that the con- sultants would find that the transfers were high in comparison to what other municipal Utilities transferred to the General Fund, but would give the -City some guidelines in order to maintain that 2 3 0'-8 7/26/82 level, and keep it predictable and stable in the future. Councilmember Levy said he agreed with Countilmember Cobb. He was concerned that sometimes consultants gave back what those who hired them wanted to hear. He was also concerned with the phrase in the staff memo that stated, "in recent years staff had empha- sized the need for the General Fund to become less dependent upon utilities transfers." Other language mentioned that staff had indicated to . the Council that transfers might be lower in the future. He thought it was in the City's best interests to develop rationales for the highest possible legitimate utilities transfers in the future, which would give the Council broader discretion on whether the utilities should be greater. AMENDMENT: Councilmember Levy moved, seconded by Klein, that the consultant should be advised that utilities transfers are expected to be signi•.ficant in maintaining Palo Alto's historical municipal service levels in the future; and that the Council desires to have the flexibility to allow for maximum possible transfers in the future. Mr. Zaner said he saw no problem with that statement. The con- tract designated the City Manager, and as the City's representa- tive he was happy to incorporate the statement in a letter to the consultant. AMENDMENT PASSED unanimously, Fazzi no, Renzel absent, MAIN MOTION AS AMENDED PASSED unanimously, i:azzino, Renzel absent. ADJOURNMENT Council adjourned at 10:46 p.m. APPROVED: 1