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Home My WebLink About1981-06-15 City Council Summary Minutes1 CITY COUNCI L MINUTES' CITY GF PALO ALTO Regular Meeting Monday, June 15, 1981 - 7:30 P.M. I� PAGE Oral Communications Approval of Minutes Consent Calendar Support of SB 573. (Mills) re Continuation of Project Mobility Funding Site and Design Application for Emergency Access Route for the Hewlett Subdivision located off Los Trancos Road Ordinance re Revisions in the Taxicab Ordinance (2nd Reading) City of Palo Alto Independent Audit for 1980-81 - Award of Contract 8 9 1 Public Hearing: Resolution re Exchange of Property for Parking Lot E Northern California Savings Parking Assessment District No. 52-14 8 9 1 Acquisition of Vacant School Sites - Terman Working Group Proposal R 9 2 Request of Mayor Henderson re Recruitment of City Attorney 9 2 2 Adjournment 9 2 7 890 890 890 891 8 9 1 -- 8 8 9 8/15/81 Regular Meeting Monday, .June 15, 1981 The City Council of the City of Palo Alto met on this date in the Council Chambers at City Hall, [50 Hamilton Avenue, at 7:35 p.m. PRESENT: Bechtel (arrived at 7:36 p.m.), Eyerly, Fazzino, Fletcher, Henderson, Klein, Levy, Renzel, Witherspoon ORAL COMMUNICATIONS 1. William Rosenberg, 820 Bruce Drive, Palo Alto, spoke re garbage collection. Mayor Henderson advised Mr. Rosenberg that someone from staff would contact him. (CouncilmemberBechtel arrived at 7:36 p.m.) MINUTES OF APRIL 13, 1981 Councilmember Fazzino had a correction on page 775, fourth paragraph`, delete last four words, "and still have a dump," and insert instead the words, nor a dump." Page 779, first paragraph re Crime in Palo Alto, delete the last sentence, "Council had been led to believe that crime was hot a big problem in Palo Alto and he felt a report should be preparede addressing the issues." and insert the .sentence, "Citizens had perhaps been led to believe that crime is not a big problem in Palo Alto because of various factors, and he felt a report should be prepared." MOTION; Councilmember Witherspoon moved, seconded by Fletcher to approve to Minutes of April 13 1981, as corrected. MOTION PASSED unanimously. CONSENT. CALENDAR Referral None Action Councilmember Fazzino said he would "abstain" on Item 2, approval of site and design application for the emergency access route for the Hewlett subdivision. Councilmember Eyerly said he would vote " reading, of Taxicab OrOinance. on Items 3,, Second SUPPORT .OF SB 573 MILLS RE CONTINUATION OF,. PROJECT MOBILITY Staff recommends that . the Council authorize the Mayor_ to send.. a letter to Senator Garcia and. to Assemblyman Sher indicating the City of Palo Alto's support for Senate Bill 573. 8 9 3. 6/15/81 e PLANNING COMMISSION AND ARCHITECTURAL REVIEW BOARD UNANIMOUSLY M RUTTa ACCESS ROUTE FOR THE HEWLETT SUUIVISION LOCArn on L S R NC S Planning Commission and ARB recommend approval of the application subject to the following conditions: 1. All slopes cut :will be subject to replanting with the following requirement: a. The applicant will be required to hire an agronomist to prepare a report on how revegetation will be accom- plished. This report will be subject to the approval of the Planning Department and the Director of Parks and Open Space Management. .The Agronomist, will make a recom- mendation on topsoil requirements. 2. Where the emergency access road has been determined visible from Foothills Park Vista Point, the applicant will be required to provide screen planting of native vegetation along those visible sections. The final landscape screening details will be submitted for approval by the Architectural Review Board prior to the issuance of any building permits. 3. The collapsible gates will be subject to review and approval of the Fire Department, the Director of Parks and Open Space, and the City Engiee2r. 4. The applicant will be required to file maintenance agreement on the proposed emergency access with the Public Works Depai` gent. ORDINANCE RE REVISIONS IN THE TAXICAB ORDINANCE (2nd reading) ORDINANCE 3286 ent tied "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING A NEW CHAPTER 4.42 REGARDING TAXICABS AND REPEALING PRESENT CHAPTER 4.42" (1st reading 6/1/81, Passed 7-1, Eyerly voting "no," Fazzino absent) CITY OF PA 0 ALTO INDEPENDENT AUDIT 1980-81 - A RD OF CONTRACT ^ rrt�rrr�r=l�rwl�rll.r��1r AGREEMENT - ARTHUR ANDERSEN & CO, Audit of Accounts and Records MOTION: Councilmember Fletcher moved, seconded by Bechtel, to approve the Consent Calendar Action items. MOTION PASSED by a vote of 9-0, except Fazzino "abstaining" on Item 2, Site and Design approval :for the Hewlett Subdivision; and Eyerly voting "no" on Item 3, Taxicab Ordinance for second reading. PUBLIC HEARING: R SOLUTION RE EXCHANGE OF PROPERTY FOR PARKING la. 52-14 (CMR: 17 :1) Councilrember Eyerly advised "th on this item. R t he would not -be participating -Mayor Henderson declared the Public Hearing. open. Receiving no requests to speak, he declared ` the PUbl i c Hearing closed. 8 9 1 6/15/81 MOTION: Councilmember Fazzino introduced the following resolution and moved, seconded by Witherspoon, its approval. RESOLUTION 5920 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ORDERING CHANGES AND MODIFICA- TIONS UNIVERSITY AVENUE AREA OFFSTREET PARKING ASSESSMENT DISTRICT NO. 52.-14" Councilmember Renzel commented that even though the lot was cur- rently used for permit parking, she had reservations about the City exchanging a farther -out lot for a nearer -in lot and considering it an even exchange. She said she would "abstain" on the item. She felt the exchange could remove flexibility and be less advantageous expecially for shopping parking. MOTION PASSED by a vote of 7-0-2, Eyerly "not partici. pating," Renzel "abstaining. AC$UISITION OF VACANT SCHOOL SITES - TERMAN WORKING GROUP PR.P'SAL CMR: Mayor Henderson thanked the persons who had been meeting almost every week fora year to work out the proposal. On behalf of the Jewish Community Center, Kate Fei nste' n, Fred Sonenberg, Lenore Wolgelenter; on behalf of the Palo Alto Housing Corporation, Low Goldsmith, Micki Zatz; on behalf of the Terman Neighborhood, Joe Hirsch, Floyd Kessler, Don Koller, Bob Moss, Sam Sparck; on behalf of the City of Palo Alto, C&r l_ : n Bedwel l , Naphtali Knox, Ken Schreiber; Facilitator, Geoff Ball. He also offered recog- nition to the many other persons who participated at various times during the year. Mayor Henderson thought that the Council should be careful in discussing the item and if possible, the decisions concerning the Terman Site should be made without a lot of questions and com- ments. If Council agreed with the basic recommendations, espe- cially the need -for a ballot measure on the Uti 1 ity User's Tax, he thought ti-,ey should avoid negative comments or expressions of dosab[: IpecaUse anything said by Counci lmembers would be usable in ca4ai yns for or against the ballot measure. He thought other routes might be suggested, but that if Council voted to go with the recommendations they had before them, he recommended that they move on.toward a decision to put the question of funding of this matter on the ballot. City Managee,. i11 Zaner, referred to an errata sheet which had been handed out regarding minor corrections to the report. He said further that all of the chalets were correct, but that page 15 of t he Financial Report, second major paragraph on that page indicated that "one percent tax would generate $375,000,__" and should read 1460,000,'.: Councilmember Klein reported that he was a rnem5er of the Terman :forking Group prior to his appointment to the City Council, and he served as Chairman of the Long Range Planning Committee for the Jewish Community Center and in that role was a participant in the Terman Working Group. Upon appointment to the Council, he resigned all of -the positions. He had been advised by the City. Attorney's Office that'since he had no financial interest whatso- ever, legally, he had no conflict of i'tere$'t. However, he thought`:that given his prior involvement with the 'Jewish Community Center, 'it .would be inappropriate for hi :.to participate in matters which w ild directly affect the nCenter; but, since . many of the::matters affected the Jewish _Community Center indirectly, he intended to participate in those items an Correct - if possible, draw the line when they had a series of votes on the -1"-- various issues that would face them. 199g s1 8/24/81 Councilmember Eyerly asked staff about the overall financing set up contained in the report as Attachment -"C," page 1, regarding purchase price. He said that the thrust of the payments were twentyannual installments payments for amortization of principal amount. He wanted to know how the paybacks would take place from the Jewish Community Center on a portion of the property that they were interested in and whether their payments would take care of that actual cost to the City, all costs., or whether the City was to put up seed money in advance as to what their pay- ments would be. Further, regarding housing, was it the City's intention or was the Housing Corporation asking the City to fund it from landbanking funds or some other mechanism as :seed money for housing development. Real Property Administrator, Jean Diaz, answered the housing question first and said that from the beginning, the intent had been to use landbank funds and other housing funds for the housing portion and other housing funds. The sources the City would be looking at would be the CDBG funds, the general fund landbank funds which had already been allocated, the housing in -lieu funds, and the housing mitigation funds. Ile said there were sufficient existing and incoming funds within those accounts to cover this portion of the acquis,,tion. Regarding the financing of the acquisition, he said there would be twenty payments and if the City took a fifteen percent (15%) amortization rate that would work out to a little bit over $1 Million per year. He said that would fluctuate because the City's rate of return an invested funds and the District's rate on invested funds would fluctuate as time went on. He said it was anticipated to be funded from a number of sources. One would be rental payments from the Jewish Community Center, and Attachment B showed that the rental stream would be discussed in that agreement. The other sources for the Jewish Community Center portion would not cover ail of the present acquisition costs, but because they were being paid back over a period of time, and eventually would include those rental payments from the Jewish Community. Center, total funding sources significantly approach the $1 million payment that was being made for the entire site. However, the City would retain ownership of the complete site at the .end of the lease term. Although, for the first few years, there would be a significant difference between the approximately $2.6 million for the acquisition of the Jewish Community Center site and the rental income being received by the City, the rental income would increase as time went on. Councilmember Witherspoon fund a discrepancy in the figures between the June 11 and June 12 reports a'y.. to the total amount the City waseshootiny for. Mr. Diaz said that in looking at appraised values, the range between. the ,City's .:appraisal of about $10.9 million to the District's appraisal of about $11.9 million was appropriate. The staff did not feel that under the circumstances a purchase oared on appraised values would he -appropriate. Considering -the Naylor bill, which dealt with. the open space acreage,_. and tile_public benefits to be .derived;,from both the City s and the Jewieh Community Center portions of the site. Staff felt that. something . less than fair market value would be appropriate which accounted for the range in the -proposal. Councilmember Witherspoon said that philosophically. the Council wasto encourage placing on the ballot a revenue measure which would take care of the Terman site' as well as other acquisitions. However, she did not understand what the City's negative cash flow would be for the first ten years that the City would have to make up from some other source of revenue. Mr. Diaz responded that the City had the $2 million for two ;years of paymnets for the housing portion. The first ten years of the Jewish Community Center's rental payments would run from $1-37,300 per year to $250,000 in year ten. In year twenty, the payment would be $463,000. The estimate was a little over $1 million per year based on a $6.7 purchase- price, which assumed an amortiza- tion rate of 15 percent for the -next twenty years. Councilmember Klein was concerned that the City was not ready to put a Utility User's Tax.on the, November ballot. He thought there were several other aspect's which should be in place before the voters of the community could make an intelligent decision on the matter. One aspect was that the school site acquisitions involved more than ,Terman.. and that within the reasonably near future, the City wo{uld ' know what additional school __would be closed; secondly, he thought there were other ways oaf financing the school site acquisitions that were not fully developed in the staff report. He referred to the study being done on the northerly 77 acres of the Arastra property, and said he thought the community should know if that would be a viable alternative before voting on a Utility User's Tax. Similarly, he thought that they should take into account the Esther Clark property which was mentioned in the report. He felt that only -part of the total package was before the Council and thought perhaps they should wait until June of 1982 when the voters could have a more mature package on which to vote. Councilmember Levy asked staff when action would need to be taken to get ,a revenue raising measure on the November ballot. City Clerk, Ann Tanner, said that a resolution calling the elec- tion would be brought before Council on July 20. Ceuncilmember Witherspoon asked Mr. Diaz whet the recommendation was for Esther Clark Park and what price was the City hoping to receive. Mr. Diaz said that under existing Council direction, staff was asked to negotiate with other public agencies, the Town of Los Altos Hills, Midpen nsul a Regional Open Space District, etc. to keep Esther Clark Park as open space under the recapture of investment concept. He said that would reture approximately $500,000. The recommendation was to not take any action on Esther Clark Park at this time. Councilmember Eyerly had questions regarding the parameters under which Mr. Diaz was negotiating with the School District on the price of sections of the ground. He noticed a different pricing mechanism for the different sections and he wondered if any of the property was attainable separately or whether it was a total package. Further, he wanted to know when the District insisted that negotiations be .completed. Mr. Diaz said the deadline was July 31 1981 to submit an offer. If an acceptable proposal was not submitted -4y then, . the District : _. was free to put `the property on the market, put _ itout to auction and sell it to the highest bidder. Councilmember Eyerly asked if the `City was not able to complete its side of thenegotiations and wanted' extended time,. and if the District would not be agreeable to giving the City an extension of time for negotiating, would they be tied up in time for zoning of the property. Mr. Diaz _said that. the factor of delay was not involved in the sale, the sale would sti 11 take place, but that -there was the factor of delay in going through the process. He. deferred to the Di rector _of Planning and Community' Envi ronrrent for -response. Director of Planning and Community Environment, Ken Schreiber, said that if the Comprehensive Plan was: to be changed and the zoning changed,_it would `take at least two months and up to four months by the time an application was received. The total time would probably be between three to five months. Mr. Zaner indicated that he did not want Council left with the - impression that.a decision to put the matter -on the ballot could wait until July 20, 1981. That was the last date on which the Council could take formal action. There was a substantial amount of mechanics in getting a .ballot measure to the Council for approval not later than July 20. . Councilmember Levy asked if the gym; pnoI and parking areas were included in the square footage being criarged at rental rate to the. Jewish Community Center (JCC). Mr, Diaz said the rental rate of $2,04 per square foot was applied to all areas, including the gymnasium and all related building structures. He said the pool was ancillary and was part of the gymnasium structure; but that in terms of a square foot figure, it was not :pert of the rent. Councilmember Levy asked who was responsible for capital repairs. Mr, Diaz said that other than the items listed in the outline deuling with the parking lot, common area parking, the associated berm and the main access road, the JCC was responsible for all capital improvements and ,capital repairs throughout the term of the lease on their lease portion. Councilmember Levy asked if the $1 million per year included those maintenance costs that the City would be responsible for. He clarified that the total for the four schools was $1.5 to $2.2 million per year for the entire Terman program pplus Ventura, Ortega and Garland. Mr. Diaz said that was correct The total costs included an amortization of the acquisition, capital improvements, and operations costs, which include programming, maintenance and utilities. Councilmember Levy asked for clarification that the value of the JCC site was approximately $3.5 million based on a rough appraisal and the starting- rent would be four percent of that figure. Mr•. Diaz said there was two aspects. One, $3.5-$3.7 million: figure was more than the JCC portion. . It included the area where the City would have, its coimunitycenter and the main access road. The actual JCC lease area was 7.1 acres : ,plus or minus. At the CIty's figure of $496,000, . and with 75% of that added, the' total would be approximately $2.65 million.: The first year's rent would be approximately five percent of that figure. 8 9 5, 6/15/81;1 Vice Mayor Fletcher said that in the introduction to the _agree- ment on page I, it said that the agreement was also subject to review and approval by the Terman neighborhood, not the larger Palo Alto. community. She wanted to know the process envisioned for the agreements to be reviewed by the other groups and how would that fit into the time frame of determining_ if it should go on the ballot. Director of Social and Community Services, Carleen Bedwell, said that when the document was put together in draft form, it was used as a vehicle for a neighborhood meeting_. In essence, the review of the contents by the Terman neighborhood had occurred. The document before the Council incorporated modifications made as a result of that meeting. She thought that in general it was recognized that the larger Palo Alto community had to buy into it, and that the document could not bind specifically the Housing Corporation or the JCC because there were official actions they would have to take. She believed the official actions needed could be done within the time frame laid out. Vi'.:e Mayor Fletcher asked if she envisioned the review process of the larger Palo Alto community taking place during the actual election campaign. Ms. Bedwell said she felt the review was taking place now during this Council meeting, and would continue to take place during the electoral process. Councilmember Bechtel asked if the deadline imposed by the School District was in anyway related to State law or was it simply a School Board decision. Mr. Diaz replied that State law required that prior to disposing of any of the School District's surplus property, the School District must sake the property available to public agencies, and give them sixty (60) days ° notice to respond and make an offer, which had been done; Recently, based on the Council's request, the School District had extended the June 1 deadline to July 31. Councilmember Bechtel asked if the tax .measure were delayed somewhat, would it be possible to go ahead with the acquisition, and later put a tax measure on the ballot. She mentioned that CDBG funding would be available for a portion of the site for essentially two years' worth of payment. Mr. Diaz said that watt correct. However, the School District had made it clear that they did not want to separate tl:e property. They did not want to commit a chunk here and have a chunk elsewhere or have ,,somethi n.g happen where the City would not follow through on its commitment, which might severely limit their potential use of the property in the future in terms of economic return. The School District was very concerned about that type of approach. Given that position, the School District: would try to wait for, some agreement and use the then current market ,values as a base. tie etated that iri CMR:229:1, dated April 9 1.981, he traced the histories of the value. Any type of significant delay could -pose some serious increases in the difficulty of negotiating an acceptable agreement. Councilmember Renzel -said she assumed the School District was willing. to finance the purchase so that the City would only have to poy them the annual amount each year and the City would not need to secure a loan at the outset. She asked if that was correct.':, Mr. Diaz said that based on preliminary discussions and negotia- tions with the School District negotiator, a preliminary accept- ance of that concept had been approved. Councilmember Renzel asked for clarification that the City's problem would be that some money would be available relatively soon, but that the Utility Users Tax would not be known until after a commitment to purchase had been made, so there was a timing problem in that the City would be making a commitment to spend money that it did not know for sure it would have. Mr. Diaz said that was correct. From staff's analysis, it appeared that the City would not have sufficient funds to make that kind of commitment without a new source of revenue. Councilmember Renzel asked the City Attorney if the City did not make a contract to purchase, would the property owner acquire rights to go ahead and develop the property if they proceeded upon zoning. City Attorney, Don Maynor, replied yes, provided they had a building permit and had begun construction under that building permit. Councilmember Renzel clarified that the School District -would not get any vested rights during the zoning :process. Mr. Maynor said that if during the zoning process, and assuming there were no moratorium, the School District acquired a building. permit and commenced construction then they would have a vested right to continue under the existing zoning. Councilmember Renzel asked if the School District were pursuing a rezoning of the property -and the City had made no commitment to purchase, then would the price negotiated for the property :not relate_ somewhat to whatever the `zoning was that was being sought. Mr. Diaz said it was true that the value of a piece of property related to the existing zoning or the likelihood of a particular zone change in the immediate future. To that extent, the possibility of getting a zone change could affect the value significantly. The highest and best use was assumed if it were to be sold on the market, which in this case would be single family residential zoning. Councilmember Renzel asked. for clarification that if the City had a fixed percentage Utility User's Tax, more funds would become available for other purposes as the time progressed in the .` twenty-year period, because of the changes in rent. Mr. Diaz said that , if the Terman site solely was looked at, that would be true because as time went on, the rental payments would increase. For example, if the lease term went twenty years, and with a twenty-year extension, which was part of the Terman Working Group plan, in year 40, the lease payment was $1,630,952. From year 20 on, if : the City's 'proposal was accepted, the Citywould have no more purchase. payments due the School:,pistriet. -'The other aspect was that in the future, there would be meee. Sites that would be closing in which the° City would have an i ntk.e e`st and would need to preserve for the community and the sane plan would apply. Councilmember Renzel said that because of the news coverage, she had received a number Of _:calls from people concerned that the Tax S 9 7 6/15/81 would only cover the immediate purchases and not be available at year ten, or year fifteen, for other purchases and she wanted_ to clarify that the City's obligations relative to income would diminish and some funds would be available for the purchase of other sites in the future. Mr. Diaz said that was correct, and that previous City Council direction was not limited to acquisition of what was known, but to acquisition, improvement and maintenance of future surplus school sites it might be_necessary to preserve as well. Counclmember Klein pointed out that Mr. Diaz' report said that, "while not totally acceptable to the School District negotiators, the report reflects many of the changes. desired by them," and risked what the negotiators did not agree with. Mr. Diaz said the main point of disagreement was whether to use the City's $496,000 per acre as a base or whether to use the District's $550,000 as a base, and whether the City would receive 75% of whatever that base would be for the Community Center portions of the site as opposed to something like 100%. Councilmember Fazzino felt the'entire question was moot unless there was a better understanding of what was being bargained for in terms of a utility User proposal. He felt staff had some basic information with respect to —what the tax would actually dolt was mentioned that sixty percent of the revenue would come from nonresidential users, that each one percent of the tax meant approximately $450,000. He 'asked what the average cost for both an industrial and/or residential user would be on a monthly basis with a six percent User Tax. Mayor Fienderson said the residential 'was quoted as being $3, but he did not see anything regarding industry. Mr. Zaner said the only figures available were that an average $50 utilities bill, a six percent User's Tee, -would yield another $3. These were compi led about a year ago, and there were no figures available on the average industrial/commercial user. Councilmember Fazzino asked that staff ascertain as quickly as possible what the average cost for an industrial user would be on a monthly basis with a six percent User's Tax. Did staff have a figure it might be able to use in terms of an average monthly increase, as far as value of the site, .-purchase. cost of the Cost, should the -City wait, until early next year before exercising its desire to purchase the site end petting something before the voters? Mr. Diaz said he did not. He felt the impact of the shakey economy generally was being felt, which was why he recommended the City's $496,000 an acre be used as a base. He could not see that the higher figures would be feasible in the current economic. situation 4nd what would happen in the next 12-18 months was unknown. He sail there was, talk that the country was going through a shakey period in terms of interest, but that the general trend 'would be lower and more money would be available, and once the money started flowing again, the rate of appreciation could 'be astounding if it were pent up for a considerable period of time.' Counci lmember= Fazzino asked what the percentage; increase was in the value of the purchase price of the Ventura site --the final analysis versus the value whin the Council actually approved: • going forward with purchase of that site, which was about six months later. Mr. Diaz said if his figures were correct, the. Ventura negotia- tors wanted to increase the City's offer by $45,000. The ulti- mate purchase price was about $1.2 million which worked out to about a four percent increase in a little less than six months, but it must be realized that Ventura did not base that on actual increase in market value. They did not get another appraisal, which could possibly occur here. Councilmember Fazzino asked if with respect to the operating costs, the $181,000 figure was a 1981 figure. Mr. Diaz said yes, that all figures in the table were current dollar estimates, Councilmember Fazzino clarified that they did not include inflation or natural growth of services in the course of the years. Mr. Diaz said yes. Councilmember Eyerly wanted to know what type of interest or escalation schedule was being figured in purchasing the property for over $1 million a year, which figured out to over $20, valued today at $6.8 million. Mr-. Diaz said they figured a 15 percent rate of return in calculating the amortization and he believed that was a little high, which would significantly impact the annual payment amount. Councilmemher Eyerly said that the negotiations were predicated on a twenty-year payout, and wondered if a master payoff had been investigated. Mr. Diaz said that the reasons for a 20 -year payment schedule were to keep the annual payment low enough so that the City did not have to require a significant percent for the Utility User's Tax. They were trying to keep the Utility User's Tax fairly low because it was recognized that other acquisitions and other activities would also be funded from that revenue source eventually. Staff had adjusted that somewhat to indicate that should the City have the ability and should the District have the need, an alternate, faster payment schedule could be mutually agreeable. Councilmenber Eyerly said that the thrust of the staff report indicated that staff felt the policy should be to find revenue one way or another, hence the Utility User's Tax was the viable alternate to do that. He wondered how that decisionwas reached-. ratherthan strongly considering the assets available in the City. for example, the Arastra property. Mr. Zane r . said that first, . Council _ had not decided _. on a policy which would bring revenue from the Arastra -property; Secondly, on the Arastra property the timing was such that even if Council were to determine that a ; portion of it was to be :: improved and the proceeds then applied to. this type of project., the City would still be 4 1/2 to :5 years away from seeing any _ revenue and the problem of rising costs wou'.r : be encountered. Staff felt it was advisable to try and: acquire(the School District's property as soon as possible' and immediate sources of revenue were then investigated. The Utility User's, Tax which was identified over 8 9 9 6/15/81 a year ago as the most viable source, continued to be the most reasonable course to use. Councilmember Witherspoon was concerned that the City had to make an offer to the School District by July, 31, yet the City would not know about the revenue tax until maybe June. Was the City bound to its offer to buy if the tax measure did not pass on the ballot? Mr. Diaz said that under the proposal, the City would make_an offer now. If it were accepted, escrow would be opened and closed as soon as possible, and the City would make the first. of the 20 annual payments. However, should the Utility user's Tax be placed on the ballot and not pass in November, the agreement would be extinguished and the City would get• its money back with - interest for the period of time the School District had it. Counoilmember Witherspoon asked what if the ballot measure did not pass, and the City still wanted to purchase the site at that price, but needed to find another revenue source, was the ballot measure the only contingency available. Mr. Diaz said, yes, as presently proposed. Mayor Henderson clarified that in that sense the School District was extending the period -to November'and they could still be .left with the property and no buyer. Joseph Hirsch,- 4149. Georgia Avenue spoke partly on behalf of the .Terman Working Group. He said that the Terman site was acquired in six parcels in 1953, at a -cost of $98,500. The buildings were'. constructed in 1958 and 1960, at a cost of slightly over $1,700,000. Initial ground improvements were -just under $250,000 for a. total site acquisition and development cost of slightly over $2 million. On November 15, 19,7, the School -Board voted to close Terman at the end of the 1977-78 school year. In April and May of 1978, the Advisory Committee for Disposition of Identified Surplus School Sites held a series ,eof public hearings'to formu- late recommendations for the future use of the Terman site. On June 20, 1978, the Advisory. Committee presented its report to the School Board. Ten out of el even members recommended as a first - priority to maintain all of the site for public recreation and community center use or maintain a portion of the site -for recreation and community center use; with the other portion being used for private industrial, recreational or community agency use. A second priority was to maintain a portion of the site for public recreation and community center use with..the remainder_ -far multi -family housing. ''-A third priority.was to maintain a portion of the site for public recreation and community center use with the remainder for single-family housing. On July 25, 1978, the School Board decided to lease the site for one year and to notify the City that it would consider selling_ the site to the City of Palo Alto. In September and October of. 1978, a local neighborhood group, The Terman Coalition, c .nducted a survey to determine how the local residents believed the Terman site should be used in the future.. A: summary report was sent to the School Board on January 9, 1979, and to the City Council on January 11,,1979. The survey showed strong favor for a community center and partial - sublease to a community service organization, and an equally strong disfavor of ease or=:sale of the site for office or industrial use or use of the entire site for single or multi -family housing. In March 1979, the School Board retained SRI as property consultants to assist the District in developing a long -range plan 'for disposition of surplus school sites. In 9 0 0 6/15/81 June 1979, City staff in a report to the City Council, recommended that five to seven acres of open space and athletic field areas at Terman be preserved and that the pool and gymnasium facilities be retained for recreational use. No cultural or community center activities were recommended in that report for the Terman site. SRI presented its first report to the School Board which in July of 1979, authorized the Di strict staff to proceed with steps prefatory to the sale or long -'term lease of the Terman site, Also, _in July 1979, the Housing Corporation and Jewish Community Canter officially presented their joint proposal for the development of the Terman site. The plan provided for eighty units of subsidized housing to be built on four acres adjacent to Adobe Creek at the rear of the site, 120 units of senior citizen housing to be built on 1.6 acres in the front of the site along Arastradero Road, purchase by the JCC of the pool, gymnasium and all of the other buildings at the Terman site with the exception of classroom wings 10, 2-0 and 30, which would be demolished to provide space for senior citizen housing, and purchase by the City of about seven acres of athletic field and playing area. This plan was presented to the. Terman community at a meeting on September 27., 1979. One basic view emerged from that meeting was that the entire Terman site should be retained in public ownership, either the School District should retain ownership of the site and lease it on a long-term basis, or preferably, the City should buy the site outright. This had remained since that time as the principal cornerstone of the neighborhood position. On September 30, 1979, representatives of City staff held a meeting at Terman to discuss cultural and recreational services desired by the residents of the Terman area. It was stressed that Terman had open space and athletic field area for soccer, softball, a pool, a g;reeaium, tennis courts for public athletic activities, a caffetorium, band room, and modular wings which could house a library and community center where classes and programs could be presented hopefully for all residents in the Terman and Palo Alto area. This position was reiterated that they wanted a community center, a library, cultural and athletic facilities and programs being offered by. the City to the public on the Terman site. This position was communicated again to the City Council and to the School District and had remained a fundamental part of the neighborhood position on the future use of the Terman site. Mr Hirsch continued that in December- 1979, and !January 1..980, City staff held a series of workships. at Loma Vista to obtain addi-tional input from the Terman residents about future use of the Terman site, and a continuing review of the joint Housing Corporation/JCC proposal. City staff at that time concluded that it would not be feasible for the City to purchase the entire Terman site, and accordingly strongly favored the joint Housing Corporation/JCC plan with City participation. Late in January 1980, SRI issued its final report to the School District on the disposition of surplus school sites in .which it. concluded, "the: primary method of disposition should be sale and that the order of site disposition should be Ventura first, Page Mill/Alexis site second, followed by Terman and then the other five properties available." 5o fir the Page Mill/Alexis site have been sold. City Council reviewed the surplus school site issue at a regular meeting in March, 1980., and at. its April 7, 1980, meeting accepted the, mixed use concept for the Terman site and directed City staff to organize. a neighborhood 'meeting for the purpose of selecting neighborhood representatives to participate in'the development of 'a patkage of mixed uses for. the Terman site.. The final rep_grt before the Council summarized one -year's effort by the Terman Working Group to develop the best mixed :ulze plans for the Terman site given the varying needs, interests', and -9 0 1 6/15/81 positions of the four parties which participated in the process. He referred to the City Manager's report, CMR:320:1, June 11, 1981, page.2, which included recommendations one and two. I) to adopt the Terman Working Group Plan as policy; and 2) instruct staff to implement the policy by developing a specific plan_ for the Terman site and carrying through public hearings, hopefully adoption. In light of the Terman Working Group's efforts, he thought it was important that the plan presented to Council be embodied in a specific plan which would be the legally binding document. The plan was important, and he urged Counc.{1 support. Kate Feinstein, 1600 Bryant Street, President of the .,,card of Directors of the Jewish Community Center, and member of the Terman Working Group, commented that the agreements represented the realization of all participants that they could attain their major objectives as individual entities only when they helped each other. She thought it was a financial reality. She summarized the JCC's objectives in entering into the discussions. The JCC was a social and community service organization, whose primary objective was to serve the Jewish population of the south peninsula. The JCC was looking for .a permanent site which would have the facilities, particularly a gym and pool ._,which they needed to attract membership. In addition, the JCC had as an objective to continue to provide the kind of services they had been providing the City of Palo Alto and its citizens, notably, day care, day camp, nursery school, a broad spectrum of services to senior citizens, and a range of recreational programs, which were open to the public. She stressed that any person could participate in JCC programs. They were a membership organization, but membership was not required to participate and being Jewish was not required to be a member or participant. Through the JCC's part in the mixed use concept, the JCC, without losing site of the objectives, had been able to help the people of Palo Alto to obtain their objectives of maximizing public open space, community services, providing affordable housing, and preserving vacated school sites within the public domain. Mrs. Feu -stein summarized the ei events in which she felt the JCC played the most part to help the citizens of Palo Alto attain those goals. First, the original objective was to purchase site, and in the course of the agreements, they had agreed to a long -,term lease and a buy-back provision and some unspecified controls by the Palo Alto Unified School District. In doing so, they allowed the City of Palo Alto to make an offer to the School District, which they may accept and in which may be below market value. Further, the JCC had accepted and endorsed the desire of the Palo Alto public for ownership of what was now a public site with some financial return for rent. As far as capital improvements being tied into the lease, they felt it was a guarantee arid assured the citizens of Palo Alto that they would improve and maintain a site that would belong to the public at the JCC's expense. The Center had also agreed to share service with the City of Palo Alto as well as to provide first come first serve parking on the site. In sharing the services', JCC recognized that the citizens of Palo Al to had the right to expect the City alone: to provide services` in addition to shared services would give the City an option to increase the ember of services provided at a decreased cost The JCC had also agreed to allow the:_ City of Palo Alto to hIve programs in the . gym and to have days orevenings when the gymwould be used by Palo Alto Recreation,Department. As; far as pool use, the JCC had agreed to a limited use by Green Acres 1 residents. This allowed the agreement to be endorsed by neighbors. The JCC felt that those. neighbors in . the iireenacres I who were most directly affected by a community center and who al so`who had expectations of using_ a . 9 0 2 6/15/81 swimming pool would continue to be able to do so. Secondly, the use would not cut into the terms being proposed Gunn Pool site, which was important to all citizens of Palo Alto to remain open, and thirdly, the limited use would still allow the JCC to attract membership and would not cut into their membership figures substantially. The JCC had offered the Terman pool to the citizens of Palo Alto, in the event that the Gunn pool was closed in the future. She added that the guarantee extended'to the point where the City of Palo Alto may not be able to afford to keep pools open, the citizens of Palo Alto would be guaranteed the use of the JCC pool by the agreement. Lastly, she emphasized that the JCC had gone out of its way to agree to various restrictions to prevent annoyance to the neighbors, and in effect, they went beyond restrictions which had been placed on other lessees in previous situations. This had helped the neighborhood and she hoped the citizens of Palo Alto would endorse the plan. She concluded that on beialf of the JCC, the City Council was urged to accept the agreements in their entirety. The JCC wholeheartedly endorsed the agreement. Ccunci lmember Levy asked if the JCC's preference was to purchase rather than lease. Ms. Feinstein said she felt the JCC realized, during -the course of the agreements, that it would be beneficial to them as well as to the citizens of Palo Alto to enter into the shared agreement, and that now,,they preferred to lease. Counci lmember Levy said that in the past the pool had been mentioned as an important factor - in the whole program for the JCC because it would be a major factor in sustaining membership for the JCC, and he asked if that was still their feeling with regard to the pool. Ms. Feinstein said definitely. The JCC had stated all along that they were looking fora site with a pool, that they operate at a considerable deficit and a pool would help attract membership dollars to offset their deficit. On the other hand, the JCC recognized that Terman School. was and had been a public site, and she thought that explained the limited Greenacres I use of the pool. Councilmember Eyerly asked if the JCC had thought about up -front money, in large chunks, and getting away from the exhorbitant interest charges in the overall. expense. Ms. Feinstein said she was got directly involved in the specific negotiations at which the figures that were before the Council` were arrived at, but it was her understanding that. the JCC was. not interested in that form of financing, that they preferred a 20 -year payout. Fllcki Zatz, Palo Alto Housing Corporation. (PAHC) said that the Housing Corporation's interest in the possibility of building affordable housing on the Terman site goes . back over three years, to when the School . District decided to close Terman. The Housing Carporati on_ had existed for 12 years, and they endeavored to foster and„ promote housing for low' and moderate income individuals and families within the community whenever and. wherever appropriate sites had become available, and the necessary below -market financial and recital assistance programs could be obtained PANC's policy was to invite neighborhood involvement in planning a new housing complex. Every ; development 9 0 3 6/15/81 1 reflected upon the PAHC's reputation and, therefore, their ability to build other projects in the community. Every effort was made to develop housing integrated into the surrounding neighborhoods with a minimum of impact. The PAHC believed that participation in the Terman Working Group had made it possible for them to deal directly with the concerns of the neighborhood. Every effort had been made to listen and respond positively to specific concerns of the neighborhood. The PAHC stressed the critical nature of the housing shortage in Palo Alto and the severe housing/jobs imbalance in the area, particularly for those persons whose incomes were insufficient to rent or buy the highly inflated housing in Palo Alto, a condition that could make Palo Alto a one economic class community. The PAHC assured the Group that they built high -quality attractive multi -family housing, indistinguishable from market rate developments, and that they employed professional management to maintain the properties up to PAHC. standards. The - PAHC tried to convince the Terman Working Group that sufficient land should be earmarked for housing on the Terman site=°toeaccommodate the 108 units that R-1 zoning on the entire site might have permitted, as directed by Council in April, 1980, but were forced to settle for 80 units. The PAHC emphasized that there were many uncertainties surrounding the development of the housing, and hoped they could build on the site shortly. Control of the land was basic and the PAHC felt that efforts would be devoted toward that purpose. Once the land availability was assured, the PAHC would be able to concentrate on obtaining the most advantageous financing package from all potential sources which would be necessary to bring the rents down to affordable levels. Ms. Zatz said that virtually all Federal, State and local government housing assistance programs were in a state of flux as they had often been; co.nsequently, when' the land was secured, the PAHC would have to be guided by whatever financing sources and programs were available at that time. Floyd Kessler, 4272 Los Palos Avenue, President of Greenacres 1 Neighborhood Association, spoke on behalf of the Terman Neighborood Representatives to affirm their position of the Plan. He said- the document represented a realistic compromise in the - interest of the Terman residents. He doubted that it was considered ideal by any of the parties since it represented compromises, but workable, viable compromises that the Terman Neighborhood Representatives felt they could support because the Plan met the objectives of that group, as follows: 1) The Plan retained the entire site in public ownership and . . provided for a) City ownership of the site and buildings which they ceuid then lease to the JCC; b) City ownership of the athletic fields; c) public housing under the auspices of the Palo Alto Housing Corporation, an organization established b the City. Council as a public entity. 2) Established. a City operated community center onsite and increased the level of,City services offered in the Terman area.. The plan would provide for a City,, operated library, gymnesium..programs, and in addition some joint, City-sponsored/JCC operated program. 3) . Preserve the athletic fields as needed open space. Even with the construction of hoosing more than eighty percent of present . fields and open space would be preserved." The housing_ would be grouped into a maximum 4.35 acres ana'"the only additional green area used -would be that which would be necessary for the single entrance to the' site and the access road to get to the housing and playing field. No Additional open space would be consumed, because there wouldbe no other new building., 4) Assured that the _adequate athletic facilities aild the City -operated programs would be established and/or maintained on the Terman site for the use of the Palo Alto 9 D'4_- 6/15/81 residents. The plan contained space for two soccer fields, preserved but relocated the Tennis Courts, space for a baseball diamond, preserved the Terman pool and its gymnasium for use by Palo Alto residents. 5) Made sure that the public would have continuingaccess as in the past to a City -operated swimming pool in the Terman area. The City agreed to work with the Palo Alto Unified School District to make sure of the availablility of the Gunn Pool, and the plan discussed contingencies concerning possible loss of that pool. 6) Limit housing to a density and physical layout compatible with the nearby single-family homes. The plan sets limits for the housing by establishing zoning, an envelope, levels of traffic, parking, lighting, housing location and a number of living units, 80 to 92 depending on the ratio of family to senior -.housing, setbacks, barriers and shrub- bery buffers. Finally, Mr. Kessler continued, the Plan established conditions so that the future use of the Terman site would be compatible with and not unduly interfere .with the residential character of the Terman neighborhood. The specific plan, which was to be the implementing documents, and which would describe the allowable use of the Terman site was understood by the Terman Neighborhood Representatives to have the same status as the Comprehensive Plan or zoning. The agreements on site use established better protection for the Terman residents and their incorporation in the specific, plan would provide compatibility with the surrc'un ling neighborhood. The- Terman Neighborhood Representatives felt a task had `been .completed which began one year ago, and they also felt that the document plan was a total plan, and that if individual portions were significantly modified, removed or extracted, they could not with .any assurance guarantee that the result would have the approval of the original parties, the Terman Neighborhood Representatives and/or the Terman residents. It wes their understanding that there •were three major steps: 1) The.details of the agreement would be transformed into an official document called the "Specific Plan," which would describe the ::specified use for the Terman site. It was hoped that transcri p.t on would be accomplished with fidelity. 2) The City would negotiate the purchase of the Terman site with the Palo Alto Unified School District. 3) It was also understood that a revenue election was scheduled which would levy a tax to support not only the acquisition of the Terman site, but also the sites which efere potentially available such as Garland, Cubberley, Ortega, DeAnza and others as they were declared surplus by the Palo Alto Unified School District. It was felt that such a funding plan would be advantageous to all of Palo. Alto because it would assure that the available sites could be acquired and developed in a'manner which would consider the surrounding residents, that funds would be available for their maintenance, and:, :he open space appearance of Palo Alto could be maintained. The report plan was a consensus document and some details were probably missed,' but the Terman ;Neighborhood Representatives: felt positive -'about it, and invited critical review by the Council who, :;as the :decision -making.. body, had the task of carefully re4iewing the document. and evaluating the total package, its impact and then>making`.the final .decisidn. The; Terman Neighborhood` _Representatives war ` pleased'to have had, the opportunity to directl •. Pp Y y participate 7n the pro,cess. Naphtal i` Knox, 102.5 Forest Avenue, said his, Job onthe mixed use plan was to recap to the Council'-�and community what _was- involved. in the. document. He referred to the various land uses, housing uses being -about -4.1 to 4.35 acres and:. 120.parking spaces, public uses�bein9 approximately 10.5 acres;.:,and'=_the. JCC :area being a maSOr institution and specIll facility-at`::7.1 and a total of 9 0.5.., 6/15/81 sixty parking spaces for sports activities, and another 160 parking spaces for the JCC and the City community center area or 340 parking spaces on the entire site. Mr. Knox reminded the Council that objectives set by them at the initiation of the process were the preservation and enhancement of the cpen space on the athletic field for the City, the provision of some land to provide for the construction of affordable rental housing, and the provision of services to the community through an efficient process whereby .the City and the JCC could join efforts. Public control of the site was important in the process, operation of the community center in wings 20 and 30 was important, as well as recognizing -that three-fourthsof one wing and possibly one full wing would be used as a library. The City would offer City -sponsored programs in the other of the two wings for people of various ages, but if there was, insufficient room for the City -run programs within those two buildings, the City committed in the agreement to adding additional space between wings 20 and 30 to make up for wing 10 which was, removed by the plan. The number of athletic fields were two full-sized soccer fields, one softball diamond, four tennis courts,and one or two outdoor unlighted basketball courts. The matter of the pool was discussed by Kate Feinstein. Further, Mr. Knox continued, it was pointed out that the JCC would operate the Terman Gym, but that the City would _offer City -run programs in the gym on a mutually agreed upon evening. Mr. Knox said that the plan did not propose_ a roadway encircling the Terman buildings that was considered objectionable. There would be .a new single entrance and exit if the Plan was acceptable. It was also proposed that Glenbrook Drive would remain closed to automobile entry at the boundary to the site, that Wing 10 would be removed to accommodate the new entrance at Donald Drive, and the bicycle and pedestrian paths would be placed along the length of the entry road that leads to the athletic field area. He pointed out that there were a number of factors spelled out on pages 23 and 24 of the working agreement that would govern the housing development irrespective of the zoning that was .later applied to the site, and that these were contingent on the adoption of a specific plan constraining and overriding the zoning. Carleen Bedwell said her role was to comment on the services. She said that the Terman Working Group plan :contained significant commitment to public services, by the City, the. Jewish Community Center and by a combination of the two agencies. Some of the City services were,of direct benefit to the Terman area such as the library and comi.iunity center, while some answered City-wide reeds such as sports fields gymnasium: access, performing erformi n arts rehearsal space. The City tried to balance responsiveness to the service requests of the neighborhood, City-wide needs for services and\ facilities, the opeta tional requirements of the Jewish Community Center', the need for flexibility . in future shifts .in service patterns City-wide, and the.changed financial circumstances of the City in development of the service commitments. From a service point of view, itwas a .plan which was experimental and valuable for itself and for future applications with regard to services and sites) It was a shared resources, shared services plan as opposed 'to the City` providing all the resources and all the services. Ms: Bedwefl said that 'staff.,, had peen using this shared: services:, approach: in smal l ; ways since the passage of Proposition 13, for example, .Foothill. College providing classes at the;"City's Cultural Center. The Terman Working Group plan_`representei a fuller .developments of 1 1 that concept. Under the plan, the services portion of Terman was a City site partially used by the City to provide services, partially used to a nonprofit public service provider, the Jewish Community Center, with a commitment that they would provide services to the public on their own or in combination with the City in additional to services for their own membership. The lease agreement would require quarterly scheduling meetings between the JCC and the City so that programs and services would be regularly coordinated. The City would have priority in determining its activities on the site. The JCC and the City were interested in avoiding duplication, providing more services through combination than either agency could provide separately in responding to public needs. Ms. Bedwell considered the plan to be a challenge and an opportunity for the City and one that would develop a valuable pattern for use elsewhere. Councilmember Fyerly asked what the staff policy would be in weighing the level of usage on the services that the City might provide at Terman, for example, if all of this were consummated two or three years downstream, would the use of the library and playing fields be heavily scanned to the expense being put into the facilities and to whether they were being amply used, and if not, would staff come back with a recommendation at budget time that the City cutback. Had this been discussed at all. Ms. Bedwell responded that all of the commitments had been entered into assuming there was sufficient public response and continued participation in the programs. The City had an obligation to promote and cause people to be aware of the programs, and to provide as much information as possible about them. She said that many of the problems occurred only if people registered, and paid the fees and then did not turn out for the activities. The second point was that the section entitled "Economic Considerations," stated that the programs were subject to the annual budget process, and that the annual budget process took into account statistics of use and community interest.. The involvement any, use of the services would be continually weighed by staff. She 'felt that some time should be allowed for them to get underway. Mayor Henderson asked about the library. It would be a substan- tial investment and if it did not pay off, there would he a sub- stantial loss to the City. lis. Bedwell responded that the plans for the library were relatively modest, and that the statistics of use caused staff to anticipate that the library would be well used when they looked at how people from the Terman area used the other libraries. Bob Moss, 4010 Orme, spoke on behalf of the Terman Neighborhood Representatives. He assured everyone that a number of different ,housings:lccations were looked at and the decision to situate the site was taken after extensive discussion. In response to Councilmember Fyerly's question concerning use .of the site, extensive surveys were done on uses and the concl usi,ens were that they could support the - types of facilities proposed, and It was felt that the plan would be sel f-supporti ng, ' gi ven a fewyears to build the clientele. _ Further, it was understood that acquisition of the Site was first, and development of programs was secondary and there was to be some time allowed for the programs to prove themselves satisfactory. Mr. Moss also coia entedthat the neighborhood and community groups were involved early in the process, the comments were listened to, their objections were -taken serious1Y, and they were dealt with directly. He said there were many intelligent and talented people in the City, with ideas and viewpoints worth considering.' For example, the neighbors were. able to identify actual problems with uses of Terman that the City staff and JCC were unaware of. Once the issues were brought out and examined, justified modifications to the initial plan were made. The procedure could prevent later misunderstandings and conflicts and made it easier and cheaper to head off problems. The group was allowed to establish its own rules and procedures and notes were taken. The group was candid and frank in the meetings, but no attribution of remarks were made outside the meeting. The issues were discussed freely and fully. He said the major breakthrough occurred when the Neighborhood Representatives prepared a detailed proposed which became the basis for full discussion and debate. It would serve no useful purpose for the Council to uncritically adopt a plan or to agree without also taking a leading role in implementing the plan including positive support of funding and revenue measures. Mr. Moss said he disagreed with putting the ballot measure offbecause he was concerned that the measure would fail in November, and he, wanted the second chance available as early as possible, which would. be June, 1982. The document adateJ June 12 stated that, "if the Utility User's Tax did not pass, City shall forthwith recon.vey title to site," which would sabotage the entire project on an issue which had not really been addressed. He wanted to see that particular paragraph stricken from the report and have .the City continue with the purchase on a term -purchase basis and give additional opportunity to find additional revenue sources or go back with a better argued position to the voters with the understanding that it was not a Terman acquisition tax, but a tax for all school sites and recreation facilities, and to maintain and operate recreation and arts programs throughout the City, He was pleased with the way the group had worked out and the nature of the agreements. . Mayor Henderson said that last Sunday he had checked out the pools in Palo Alto and they were jammed. He went aver to Terman and found about six people in ;the pool, and there were eight people on the approximately eight acres of open space, and they were at a single picnic, and two of the four tennis courts were open. He wondered if this lack of use .was due to lack of publicity or knowledge. Mr. Moss said that lack of publicity was probably a cause, as well as a perception that the JCC was providing programs at Terman and some people believe it to be a JCC site. Irene Sampse:i 3993 8i bbi is Drive, spoke on behalf of the League of Women Voters of Palo Alto. She commended the City Council for establishing the Terman Working Group which involved members of the public in a meaningful role early in the planning process for use of the Terman School site. She said. the League bel ieeed that the time and effort spent by the people had produced a plan which coed work toward meeting a variety of needs in the community. She said that League members had long supported the provision of open space and recreational = facilities, libraries and other community services and an :'increase in supply of affordable lousing- in Palo Alto. Funther, they believed that the City 'should cooperate with nonprofit agencies to provide services and programs for citizens in the areas, and felt that this was an ; excellent example of such a cooperative effort She said the League found the utility _User's Tax as an acceptable source of additional revenue, and was pleased 'that annul review for the \\\: AL sdch.. tax was contempt - fed. The League urged adoption 9 O 8. 6/15/81 of the Terman Working Group plan as Council policy and that the City begin implementation process as soon as possible. Councilmember Eyerly asked Ms. Sampsom if, regarding the Utility User's Tax, the League of Women Voters had weighed whether the tax should be on all utilities and had they con sidered whether it should be on the lifeline rates. Ms. Sampson said that at the time the League talked about it, it was not connected with the particular use being discussed at the current time. . They had some provisions that it should be with the lifeline rates, but they did not discuss whether it should be all utilities. Before they would support any particular proposal, they would have to study the details of it. Judy Kramer, 373 Ferne Avenue, expressed appreciation to the Terman Working Group. She was concerned with planning for future purchases of school sites. She was sure that the School District would have other desirable sites that the City would like to purchaee. She lived near Cubberley and was aware of how heavily the site was used. The School District did not have a general plan for school sites and it was not clear when it would have a plan or if the plan now formul-ated would name particular sites. She felt that the City had an obligation to plan with this vaccuum and hoped that as the City worked on the financing for Terman, they would keep in mind the future sites and the financing that would be required. She understood that the six percent Utility Tax would not be enough to pay for the open space at Cubberley. She felt that in terms of the utility user's tax, people would look react more favorably to the ballot measure if they knew that the City was planning for fuure sites. Eugene O'Sullivan, 1547 Dana, spoke on behalf of the Steering Committee of the Civic League, who supported the general concept and implementation of the acquisition of school sites such as the Terman plan. .The idea of public ownership and community access was sound, however, they felt there was a need for an overall comprehensive plan so that in effect they could "plan for then, now." Other sites would comp up, and the planning must look to the future as well as taking care of the situations presently before Council. Funding was necessary and the concept of the Utility User's Tax appeared reasonable particularly if it could ue integrated with a comprehensive plan. I_ . was such a revenue source did not become available, alternative sources of funds would have to be sought. Ideally, the ultimate goal was not the acquisition of school sites per se, but that property be acquired in a manner which would continue to enhance the quality of life which was enjoyed in Palo Alto. Ellen .Burgess, 669 Maybell Avenue, was angered by the part of the proposal which dealt with the Terman Pool. The proposal recommended exclusive use of the pool by the JCC and residents of Greenacres I. She reminded ..the Council that Greenacres I was not a political entity, 'but a housing development. She felt residents of Greenacres Iliad no greater right to, use the pool than residents of the surrounding_ neighborhoods. She felt the Terman Pool should be - open to all residents of the community or not at 01. If it was impossible to open the pool to all. residents, then the JCC should make a pool membership avail?ble to all residents on a first come, first serve basis. She urged the Council to strike the offending sections from the proposal and to include' her alternative. Herb Borock, ``3401 Ross Road, said that when the Council con- sidered the Utility User's Tax on April 7, 1980, it had an 9 0 9 6/15/81 opportunity to consider two amendments to_ the pproposal both of which were defeated. One'would have exempted lifeline rates from the tax, and the other would have extended the tax to include telephones. Since that time, the Council- had the opportunity to amend the Comprehensive Plan and the updated Plan includes an amendments which says, "Additional taxes should be considered to restore and maintain the historical balance of tax income between the business and residential communities." That amendment was adopted unanimously by the Council on September 29, 1980, and adopted in the context of Proposition 13 having changed the historic balance between business and residential communities. He understood that the property tax before the passage of Prop 13 was about 2/3 in business, and 1/3 in residences. The Utility User's. Tax previously approved in corcept by the. Council would have taxed -residences -of more'than 1/3 and he did not think that was in the spirit of, or in keeping with the amendment to the Comprehensive Plan. He submitted. to the Council a memorandum, which is-on.file in the City Clerk's Office, giving examples of levels of service that could beexempted from both businesses and residences based on residential service levels, both lifeline rates and average rates, all of which, if adopted, would change the ratio -of the tax burden, making it lower for residences. He thought that -would increase the chances of such a measure being passed. He clarified that the intent: --of showing such things as lifeline rates was not to 'exempt lifeline customers because they were lifeline customers, but to show, as an example, a rate that could be used to shift the tax burden from residences to businesses to satisfy the language contained in the Comprehensive Plan. He recalled that when the Council previously considered the Utility User's Tax concept, it was thought that an entire meeting would be needed to structure a tax measure to determine what should be included and what kinds of exemptions should be considered, if any. He hoped the Council would take the foregoing into consideration when such a tax proposal was. framed. Janet Owens, 863 Moreno, spoke on behalf of Midpeninsula Citizens for Fair Housing (MCFH), who endorsed the plan of the Terman Working Group and urged the City Council to find ways to fund the implementation of the Plan. MCFH felt that Palo Alto residents realized the need to use the land for housing as well as com- munity center activities. The plan had citizen input and was the result of a long process of identifying needs and the modifica- tion of plans to meet those needs. MCFH felt it was the Council's responsibility to see to it that action was taken to makethe plan a reality. Dean Morgan, 4276.Los Palos, supported the Terman Group and thought they. did a good. job. He lived in Greenacres and welcomed- the JCC, but was concerned about the lease arrangements with the JCC and the value of the per square foot rental fee at $.18 per square foot. He was .a businessman and could net i i nd space in Palo Alto for less than $.50 a square foot andwondered i f the School District was getting more or less than $.18 per square foot, and was five percent on City investments adequate. He thought those questions would be asked by the voters and thought they should be faced now., Joseph Hirsch, 4149 Georgia, on behalf. of the Terman Working Group, felt it was important topresent the tax to the voters a second time in the event it did not have support the first time. He agreed that options- shoald-;_be preserved to retain the site in the public hands even if the tax measure failed, and that the entire procedure should not just be rescinded'. He felt the.. Utility User's Tax should_ also be applicable to sites other than 9 1 0 6/15/81 1 1 Terman, because there were other sites that should also be preserved in Palo Alto. The Terman Group was willing to go in with modest beginnings. They wanted to. start with the most inexpensive process. The Terman Group wanted the City, to obtain the site, and to retain it in public ownership. He felt the formulation of the Working Group to establish the mixed use concept was a bold move, which would pay off hancsomely. He emphasized that the final report was a balanced set of compromises which b.ouod the entire pion. He asked the Council to review and accept the plan in its present form. He acknowledged that the Council had a difficult task, and urged Council acceptance and incorporation into a specific plan as authorized by the State Planning Act. Council recessed from 9:45 p.m. to 10:10 p.m. MOTION: Councilmember Fazzino moved, seconded by Witherspoon to adopt the Terman Working Group Plan as Council policy, and to instruct staff to implement the adopted plan by developing and presenting a precise plan as' authorized in the State Planning Act. Councilmember Witherspoon thanked the Terman Working Group for the agreement they brought together. Mayor Henderson said that he was asked by the Terman Working Group to say that Geoff 8a11 did a remarkable job in keeping everyone headed in the right direction, which resulted in.a successful product. Councilmember Fazzino thanked everyone who had been involved in the process and thought it was an outstanding prototype for Council, staff and community involvement on a very complex issue that involved a lot of disagreement at one time. He encouraged the Council not to nitpick at the document, and to generally accept it "as is," and, get on to the revenue issue which he felt was the critical issue facing the Council. Mayor Henderson asked Mr. Kessler what the rationale was for the limitation of the use of the swimming pool to people from Greenacres I. Mr. Kessler said the Terman Working Group would have liked to have had the pool open to all the people of the neighborhood, but the Gr=oup understood the JCC's position that the pool was the cornerstone of their increased membership. Greenacres I was cri{ttr uous to the Terman Property. Previously the property was used as a school five days a week, with business over at 5:00 p.m., and with very little or no activity on weekends, and it was a very quiet residential area. The Group understood that with the JCC going in, there would be activity almost year round and into the evening. In the spirit of compromise, the JCC acquiesced. to allow the Greenacres I neighborhood in there up to a certain amount of people and, the Group convassed the neighborhood to ascertain how many people ,there would be. Mayor Henderson. asked Mr. Kessler what if . the compromise number of people .meant ._ the pool would be open tothe public, not just the .Greenacres 1 neighborhood, and : then the first of that number of people to apply at the JCC, would get:; the ,special swimming memberships. Mr. Kessllr; said he saw no problem with that;: Vice Mayor Fletcher asked the City Attorney if there would be legal restraints to the type of selective use proposed in the plan that if at least two pools other than Gunn and Terman were operated by the City, use of the pool by the public would be limited to the residence of the Terman neighborhood only when it was a City -sponsored program. She felt that the neighborhoods which were normally served by Terman should be eligible to use the Terman pool under those circumstances. Ms. Feinstein said that throughout the negotiations, the use of the pool was a considerable issue. The JCC was concerned about the number of other people who would use the pool because the JCC's existence would depend upon increased membership through use. of the pool. The Center did not have a pool or gym, and people joined the Center and paid membership because it was required by the JCC for attendance in certain programs, i.e. nursury school, day care, etc. When JCC moved to Terman, they would be able to attract other people to join because of the pool and gym. The Working Group was deadlocked until it became apparent that the School District would offer the •Gu.nn.Pool on a- long -teem lease basis to the City. Then the Group was concerned about the +iabi l i ty of the Gunn Pool. If too many people used the Terman Pool, controlled by the JCC, enough .people would not use the Gunn Pool, and the City would have .to close it. The J.CC was assured, through the poll that was taken, that there were about 88 households, and of them about 50_people indicated an interest. in using the Terman.Pool. That was graridfathered so that eventually the number of people would dwindle. If two City pools remained open, and Gunn Pool was closed, the JCC.was willing to open the Terman Pool teethe use of Terman area residents, but limited to that so that the JCC would not endanger their membership figure,. The JCC was not interested in participating in the working agreement if they could not have control of the pool and if they could not use the pool for membership. The agreement stated that the JCC would expect some type of financial consideration if the pool had to be used for Pale Alto residents. City Attorney, Don Maynor, understood the contingency on which the public use of the pool was based and from a legal standpoint any time a section of the public was singled out and was given special treatment, it was -vulnerable to attack. He thought it would sustain judicial scrutiny if there was a good rationale for it, which was what Council needed to develop. He understood that if the Terman Pool was to be open to the public at al 1 , it would have to be 1 imi tee2 to a smaller group in order to achieve economic viability and if Council feltthat was a reasonable justification, it should be made a finding, which would help in defending a legal chsllenge. Any other rationales which could be developed, would also be appropriate, but he felt the Council should make findings as to why a single group of the community was being given special privileges. Counci member .Klein. was concerned about -the danger of the plan being unraveled and reminded the Council of the tenderness of the document and the amounts of compromises given on all sides. He complimented everyone who worked onthedocument and he did not think he had ever seen a more dedicated group of people, who Were willing to "explore various alternatives, to compromise, and to consider what everyone _-else tied to say. He thought it was a remarkable performance. - He commented on the need for services in the Terman nei ehborhood and he thought the representatives of the Terman neighborhood made an excellent ,case that the area deserved more services, and the services outlined in the report 9 1 2 _ 6/15/81 were an appropriate first step toward to re -dressing the lack of balance which existed. Counciimember Renzel spoke to the amendment proposed by the City Attorney, and felt that as part of the process of working out the compromise around the swimming pool question, the City's agreement was to try and get a long-term lease on the Gunn Pool that would be available to everyone in the City. She thought that the City had agreed to lease the Terman Pool to the JCC and that it was not the City who was offering a limited use of the pool to a small group, but rather the JCC as part of their commitment for their lease agreement on the pool. She understood that if the Gunn Pool was not made available, then the JCC had agreed to make the Terman Pool available to everyone, but that the. City would then provide some financial compensation for that. She thought that becayse of the many compromises that had gone into the issue, particularly with respect to the swimming pool, it would be precarious to tamper with that provision because it was not the City who was singling out a specific neighborhood, but rather the JCC was making an exemption to their general desire to have the pool available for their membership only. The City's bargain was to try and make sure that the Gunn Pool was available on a long -tern basis for everyone. She thought that was a reasonable decision and asked the City Attorney if hers was a different inter;,retation than could be made. Mr. Maynor clarified that Councilmember Renzel's characterization was correct and appropriate. Mayor Henderson asked Ms. Feinstein for the approximate number of memberships which were anticipated to be given to the Greenacres I people, and indicated he would use the sane figure in his motion. Ms. Feinstein said she understood from the survey that was done in the Greenacres. I neighborhood that there were 17 households, consisting of 47 individuals, that would be interested in the grandfathered use of the pool. She reiterated that the JCC was concerned about jeopardizing the Gunn Pool, and about jeopardizing their membership. The special membership was offered to Greenacres I because they persistently asked for it, and because the JCC was assured that the number of people 'was limited. The JCC did not wish to discri:r•.inate in favor of or against any group of people. They were interested in limiting the number of people who would have the grandfathered use. Mayor Henderson indicated concern about the business of public versusa private limitation. Vice Mayor Fletcher said she wanted the area served by Terman opened in the event -Gunn Pool was closed. She was concerned about the community west ,of Alma, especially the Ventura area ' people because that area was cut off from the rest of the City. Bob Moss, 4010 0rme said that people involved in the process - recognized that the only public facility, the only City program which existed west of Alma, south of Page Mill, had been the Terman Pool. In the past, it served the entire community and the question of defining the Terman-area was left nebulous intentionally, but whenever discussed, it was generally cotraidered to mean Foothill Green, Barron- Park, Loma Vista and Ventura neighborhoods, but they did not intentionally try to circumscribe a specific location, and they did not talk about numbers. . Their general, thought was that if Gt nn closed, they 9 13 6/15/81 would have to renegotiate the entire pool issue, and at that time, the City would have to be a party to deciding what neighborhoods would have primary access. It was always the intent that it would be those neighborhoods who have historically used the Terman Pool. It would not be City-wide and it would not take in the other areas, because the other areas presumably would continue to have their own pools. The Terman Working Group:d i d not try to nail down areas. Vice Mayor Fletcher said she was satisfied and that it would leave it open to a wider,area than just people right around Terman School. She thought that perhaps some language ought to be included as to why in both the sections the number of people was being restricted to residents .in the closeby areas. Mayor Henderson asked if it needed to be written in or would the statements made support her concerns sufficiently. Mr. Maynor suggested that the Council could adopt certain findings and he thought some factors had already -been mentioned such as the fact of historic usage by the neighborhood, prox- imi.ty,-and the fact that the Terman neighborhood would probably be imposed with a greater burden or hardship than the rest of the community. In add tion, the factor mentioned by- Councilmember Renzel that at least with Greenacres I, this was something- -bargained for between the Greenacres people` and the JCC, as opposed to a condition imposed by the City.. AMENDMENT: Vice Mayor Fletcher moved, seconded by iii therspoon, : to adopt the following findings re use of pool (1) historical usage by neighborhood; (2) proximity, (3) Terman neighborhood is imposed with greater hardship than result of community as result of Terman Project. AMENDMENT PASSED by a vote of 8-0, Klein "abstaining." Councilmember Witherspoon reiterated that the document was a very delicate one and she preferred that Council move ahead without amendments. MOTION AS AMENDED PASSED by a vote of 8-0, Klein "abstaining." MOTION: Councilmember Renzel moved, seconded by Flet'cher, regarding School Site Financing to: 1. Reaffirm April ]", 1980 policy to fund acquisition of vacant school site, arts, recreation and libraries, from a Utility. User's Tax. 2. Direct staff to place a Utility User's Tax of 6% maximum on the November 1 981.: ballot. 3. Establish ,a policy that the City Council.: l l i review the need for use of a -Utility User's Tax annually, and at that time establish -(he " amount of the tax to be levied (up to 6% maxima ). Mayor Henderson ,commented on an argument presented earlier that if Council delayed until. June of 1982, they might have difficulty in having=the time extended by the School District, and simul- taneously the Working Group wanted the Tax measure placed on the November ballot so if it failed, it could -have another chance in June. He thought Council would have better grounds for postponing now because it was €el t there's would be a better chance 9 1 4 6/15/81 1 1 for a positive outcome in June. If the measure was put on the November ballot and it failed, and they tried to talk the School District into extending the time period and trying again in June, he thought it would a pretty long shot that it would happen. Councilmember Renzel said they had until July 31 to respond.to the School District -as to whether the City wished to purchase the property and at that point a commitment would be made to pay the money. The only contingency on that commitment was wh',;:her the tax passed in November. She understood that in the ealgotiations the School District, was willing to allow that contingency in the sale based on a November election. She did not think staff or the School District had said whether the School District would be willing to make a sale contingent on a June 1982 election or some later election,. She thought that the momentum was there to proceed with acquisition of the sites, and the -public was well aware that it was a major issue ,for the City. The focus of a November election would allow the issue to be discussed fully and would get the voters out to support it. She thought it was a very important issue for -the City, and to allow it to flog along until next June would lose the current momentum. She felt it was essential to proceed in November. Councilmember Eyerly fe't the November date was available whether the City went to a Utility User's tax or not as far as consumma- tion of a deal with the School District. The School District was holding it open for the City until an election presumably in November. If the City did not go with the Utility User's Tax on the ballot in November, Councilmember Eyerly did not think the School District would object to holding the natter of financing open until November. Councilmember Eyerly's thinking focused around payment for the Terman site and he thought it should come from the sale of City assets and a pay-as-you-go method rather than a Utility User's Tax. He thought there was a good chance that a Utility User's Tax would be defeated in November, and if it was, the City would be back to square one. He did not think the School District would extend the'. same prices to a June, 1982 election, he expected they would be higher. He also thought even if the Utility User's Tax went on' the ballot a second time, the way the Group had worked around the Terman plan, they would be back to Council for funding in some other way. The situation with the Utility User's Tax was that the City was taking a considerable amount of money out of Utilities to balance the operating budgt of the City. The figures he remembered went up over $5 million in transfer for the next budget year. The City was gaining about $2 million in interest from their reserves, which would go into the general fund, and about $1.5 million in inter -fund transfers from Utilities which showed what a major revenue producer it was for the City. He felt proposing a Utility User's Tax should-; F e held in abeyance for a more severe need of money, like not being able to meet service levels that the City had been offering the residents. He did not think the transfer from the genera; fund, percentage wise, could be increased without endangering i awsui t , which some cities had already experienced because of too much transfer to the general fund from Utility profits. He felt the City had to look at return on capital investments and he thought the City was at a maximum already. The future would show much higher electr ; rates, due to government regulations, and thedraw from Account_. No. 2 in the situation with WAPA He felt that indicated the City woulo" not .always be able to transfer the moneys that were currently being_ transferred. That would be the time when -a Utility -User's. Tax would be needed, which- was a clean way to take money from Utilities anduse it 'for the general fund and continue to provide services. He thought the:: City had assets that had not' Correct SeenPg. 1199 8/24/81 9 1 5 6/15/81 been tapped, and the staff spoke in their report of the Clark Park, which would be discussed later and which was $500,000. He understood from staff that the Arastra consultant report would probably be through the Planning Commission and back to Council by October sometime, which would give the City another avenue of resources to bring the money for this acquisition and probably more money than was needed when looking at the demand for other schoe' financing. He said the City had over $2 million in landbankirig, and over $5 now, in uncommitted reserves in the City, not including insurance reserves and utility reserves. The, only problem with using those reserves was that the School District did not want a big chunk of money right now. They needed it to come in spread out over a period of time. From the City's ,standpoint, he could not support paying over $20 million for a $6.8 million cost, which actuallymeant that 1.5 percent of the Utility User's Tax would be taken to pay the interest on the Terman site alone as he understood it. Councilmember Eyerly thought the City could develop some type of a fund, whether it be an escrow account or whatever, to pay the School District the money_ as desired by them. Councilmember Eyerly said he would vote against a Utility User's Tax, but would support other methods of obtaining the money to go ahead with the Plan. Councilmember Klein said he opposed a Utility User's Tax for many of the same reasons as Councilmember Eyerly, and also because he thought the City was going into the tax without appropriate study of alternate means of financing. He did not think the City had momentum going at the present tme. The Terman Working Group had been a fantastic success, but their energy had not turned to an election campaign. If, and when, it was necessary to go to the people for an increased tax, every last question possible as to why an increased tax was necessary when taxes should be lowered rather than increased, should have been answered to the Council's satisfaction so that it could be explained to the citizens. He felt that any action to place a tax on the ballot at this time was premature. Councilmember Witherspoon agreed with Councilmembers Klein and Eyerly and also opposed the motion for a Utility User's Tax. Councilmember Fazzino thought it was important to go forward -and disagreed with Councilmember Klein, in that. he thought there was some momentumin the community. Simultaneously, he was willing to consider what kinds.>of marketable issues could be pulled together over the next few weeks and make a final decision in_ mid -July as to whether the issue belonged on the November- 1981 ballot, or in June, 1982. He thought ait was clear that the only way the issue would be approved .was if the issue was marketed well and there was a clear and Well-defined need for dollars. Councilmember Fazzino said At was easy to get caught up in enthusiasm for the program and forget that a two-thirds vote was necessary. Councilmember Fazzino also reminded the Council that 45 percent of the voters in Palo Alto voted for Proposition 13 in 1978, and that group of people would have to be cracked in order to be successful with the election. He believed that any issue before. the voters must include a mechanism to purchase additional school sites beyond Terman as they become available. Since the passage of Proposition 13, he said that the City had informally explored many ways in which to assist the School District with revenue sources. He . believed that the Utility User proposal was one of the few ways in which local citizens could help support Palo Alto 9 1 6 .6115/81 educational programs and should be marketed as such. He warned against attaching a number of services to the proposal unless there was a specific need for revenue.- He said that during the last Finance and Public Works Committee process, it was found that there would be a need for additional money over the next few years to pay for City infra -structure needs, such as .resurfacing of streets, utility undergrounding, additional sources of power, etc. He thought the =potential was there to pull together information during the next month to at least re-evaluate whether the proposal- could go before the voters in November. He was concerned about the additional cost of the site next June, and of lost momentum, but he did want to caution that .the City did not have two or three chances to --go to the voters. He thought the first time around was it and either it would be won then or not at all.. He did not want to forego the possibility or opportunity to go on the November ballot if the figures. regarding specific service need and the nee6 to enhance and protect Palo Alto educational programs and purchase additional sites could be pulled together. He would support the motion. Councilmember Renzel said she did not agree that there had not been enough study of alternate means of financing. `The report received by Council went through considerable analysis of the variety of alternative financing mechanisms available, including general obligation bonds, revenue bonds, special benefit districts, lease revenue financing, pay as you go, which had been the City's traditional means, and included many of the suggestions offered by Councilmember Eyerly. For a variety'of reasons, most of the alternatives suggested were not satisfactory, which meant teat the City was down to the Utility Correct- User's Tax and it might well be that there vlas some other kind of ion mechanism that could be developed, but that a lot of thought had See Pg. been given to financing mechanisms. She thought there was an 199 interest in providing a long-term means of acquiring the school 8/24/81sites. She thought the Utility User's Tax provided the flexibility for future contingencies. Councilmember Renzel said there was a broad mandate within the tax that it be used for acquisition of school sites, for recreation, for libraries. She pointed out that the tax was not limited to school sites, and if necessary could be used for l ibraries,_ etc., which -!ore currently financed out of the general fund. Those funds would `then be available for the types of infra -structure needs and other unforeseen obligations the City may have in the future. She said staff had advised that it was expected that the revenues from Terman would begin to equalize the cost and in around ten years, the City would begin to have some freed -up money to use for other purchases and she thought that was important. She was in favor of the City using alternate means - if available, but the Utility user's. Tax should be used as a--cusion. She felt approval of the tax was enabling _legislation which< al lowed the City to use it if necessary. Councilmember Bechtel indicated that she was in favor of the Utility User's tax being placed on the November ballot because Palo Alto had a tradition of affording parks, open space acquisition, and recreational community . services much more so than other communities. She --believed that . there.. would be support and , there was a need for it. The money woulct;. enable the City to purchase other sites and there was the potential . of another middle school closing, and maybe three to five,elementary schools, '; hich would all provide valuable open space. Because of the need ,.to maintain these school sites as open space, and: because the .City. would be .able,. to evaluate each year whether' to set the percentage at six percent or lower, she felt : Council should support putting the tax on the November ballot. 9 1 7 6/15/81 Councilmember Levy said the concept of a Comprehensive Plan for acquiring the surplus school sites was of utmost concern to him. As a resident of Palo Alto, he was concerned that the School District ,had not, in his opinion, planned in a comprehensive way for the closing of its school. He thought Council found them- selves reacting to the School District, in a piecemeal way, discussing the firet school site, as discussed, then the second, etc., without the overall picture being looked at. He was convinced that as each individual school was looked at, the best use would be for the City to acquire the site and to keep as much as possible for open space and to control the community use of the entire site. He felt the City needed to act in a comprehensive way or the City would run out of money. At this point, he opposed putting the tax measure on the ballot in November. However, he was not opposed to placing it on . the ballot several months later, i.e. june, 1982. He felt Council should start to look comprehensively at what sources of funds the City had and what expenditures would be in connection with other schools as well as Terman. He would vote against putting the tax measure on the ballot at this point. Mayor Henderson was concerned if the measure did not pass, in November, and the Terman program was lost. Councilmember Renzel felt that Council realized there were limited resources which could be drawn on right now. If the tax measure failed, they would be where tti.y are now. She thought that acquiring Terman was endangered if Council did not try to pass the Utility User's Tax because she did not think the School District would continue to wait on the City. She thought it was unfortunate that the City was put in a reactive position by the School District, and further she felt the City could not make a comprehensive plan for school sites, because they did not know what the School District would do. She felt the Council was faced with immediate decisions, and that they could guess what the School District might do down the line. She said the District was aware that the City's resources were limited and they would have to start accommodating the City if they wished the City tc purchase some of their sites. She felt that there was a fair amount of interest in the community in acquiring the sites which had already been identified by the City, and they should try to go for it, and that a tax measure would pass if everyone was behind it. Mayor Henderson said his problem was that if it did fail, it could be partially because the people of Palo Alto did not want to spend additional money for a new library, or new recreational services. He did not see how Council could take money from its reserves and go ahead anyway i.f the ballot measure,:failed. He thought a safer route would be to look at the alternatives like the Arastra property and be able to assure the public that the the ballot measure was the last source. Councilmember Renzel asked staff to comment on 'what the City's negotiation position was with the.. School .District in terms of ability:to keep them on the hook until the City could afford to buy the site. Mr. Diaz_..responded that the City's negotiations with the School District had relied on previous Council actions which included the concept of the Utility User's Tax, and the.. timing, which had already been delayed. He sensed that there were some members of the School Board who were anxious and would like the deal to be willing and whether they were wil .ing . o extend it, he did not know, but that negotiations had proceeded along the lines of 9 1 8 6/15/81 arriving at an agreement soon. He felt this was one of the school sites where the District was aware of what they wanted to do with it. He was not sure whether another delay would be acceptable to. the School Board. Councilmember Fazzino said it was clear that the Utility User's Tax would be defeated by Council. In supporting the motion, he was not making a formal commitment,to a November vote, but by voting against i t, he felt Council -vas foreclosing any .oppor- tunity to go ahead with a vote in November.e He said Council had one month before something had to be put on the ballot, and in delaying they would face potentially rising- costs with .respect to the site. The Council would be going.through the- budget discussions next week, and hopefully Council would have a greater grip on what the service needs would .be over the next --couple of years. He felt Council should. evaluate the situation in the next couple of weeks, and then make a final decision. eHe .was asking for an'extra month in order to do some rationale -research and encouraged support of the motion, _Counci ]member Renzel suggested that the three parts of the motion be votd-on separately. Mr. Maynor, Acting City Attorney, commented that if the Council wanted his office to draft the ordinance and ballot measure right away and defer their final decision, that would be fine, but -.they would need Council input on the wording of the ballot measure and Council would have to make some decisions about what the Utility User's Tax ordinance would look like. He felt the substantive issues would have to be dealt with before the Utility.User's Tax could be put on the ballot. He said he could come up with appropriate wording on a week's notice, but that in the process Council should reserve time for themselves -to deal with the substantive issues as far as the content of the measure. Counciln;ember Levy said that on July 20, the final wording of the ballot measure would have to be approved by Council which would give them a couple of weeks to look into the substantive matters. City Manager Bill Laner said ;le was not sure what Council would gain by waiting a couple of weeks, staff would not have additional data beyond the analys s Council had. There would be nothing new on Arastra, and also he reminded Council that they were not committed to development on Arastra, but only the possibility. At this point, it was not a real source of revenue. Staff listed all sources of revenue they could think of, in the report prepared a few weeks ago and Council had that report. The same =study .was also done a year ago and the same conclusions were arrived at, namely, the Utility User's Tax. Mr. Sipel studied it two years ago and arrived at the same,< cone] usi on -that anther source of revenue was needed, and that the Utility User's Tax locked like the most logical way to go. Mr. Zaner said he was not sure what staff could do in thenext couple of. weeks that would give new information that Council did- not now have. Councilmember._Uechtel : felt that by voting for it now., staff could proceed, and Council could always change their_ minds, if necessary. Her reasons for wanting. to. proceed now were that no matter what was done, they would still not have;'enough money to purchase surplus school sites. She urged -those Counci 1rnembers who indicated they. would vote against the Utility User's Tax being - on the November ballot to reconsider. '9 1 9 ,6/15/81 Councilmember Klein felt that the more discussion he had heard, the more he thought that a "yes" vote was inappropriate at this time. He felt it was inappropriate of government to pass what in effect would be perceived by the public as a tax measure without a commitment that that was what Council really wanted. If the motion was defeated, Council should go ahead and direct staff to make a formal offer to the Palo Alto Unified -School District for purchase of the Terman School and propose to them that Council would come to a final decision by November 30, 1981, with the possibility of an election in June, 1982, and see whet the School District's reaction would be. Also, he felt Council should direct the Finance and Public Works Committee to consider the financing of the acquisition of Terman and future available school sites and report back to Council as soon as possible with a package approach on it. He thought this would occur sometime in the fall, when the Arastra report would be at Council's disposal. He felt the foregoing was the appropriate way to go. Councilmember Eyerly was not persuaded to change. his vote. He- had thoughts similar to what Councilmember Klein stated and felt. the Finance and Public Works Committee would spend indepth discussions and report back to Council on the pay-as-you-go moneys available from the budget now as well as the sale of assets. Staff should be given an assignment toworkout a shorter pay -out schedule, using some special type of fund for the School District: if necessary. MOTION FAILED to acquire vacant school sites from a Utility Users Tax, to place a Utility Users Tax on the November, 1981 ballot; and to establish a policy of reviewing the Utility Users Tax annually by the following vote: AYES: Renzel, Fletcher, Fazzino, Bechtel NOES: Eyerly, Klein, Henderson, Levy, Witherspoon MOTION: Councilmember Klein moved, seconded byWitherspoon, to direct staff to make a formal offer to the Palo Alto Unified School District for purchase of Terman School; and further, the final decision by City to be made by November 30, 1981, with the possibility of a June 1982 election and further, that methods for financing acquisition of the Terman School, site and future available school sites be referred to the Finance and Public Works Committee to consider .all available means, including pay-as-you-go, available assets of the City, utility users' taxes, and other means that the F&PW may decide. Councilmember Witherspoon asked for clarification that the City would continue with their July 31 deadline for making a final offer on the basis of the negotiations which had been concluded by Mr. Diaz to date, with the hope that the site would be acquired at the price indicated, by Mr. 'Diaz, and further, as indicated by.M'. Diaz that the City:, might have to open an escrow account to keep the option through November 30, 1981 or June, 1982. If the foregoing was : true, she would . support the Motion. Councilmember Klein responded that was true, that the motion was a commitment: to buy subject to the coneitians contained in the staff ;report, and: would just` extend the deadline. Councilmember Renzel asked for clarification . on'the- motion that the City --would make a firm: offer .p July 31, witha firm' ecision by November:30,: subject to an election in June 1982. she pointed "out that the Council could not. make a firm decision subject to an election. Councilmember Klein clarified that the only contingency to the City's offer would be a. June '82 election rather than a November '81 election, but that if Council did not call a June election by December 31, then the Council's decision would_ be final. If an election were called for June, then the offer would be subject to the results of that election. MOTION PASSED unanimously. Mr. Maynor asked that a finding be made that "public lands in the vicinity of the school site are inadequate to meet the existing and foreseeable needs of the community for playground, playing field or other outdoor recreational and open space purposes." He said the finding was a requirement before the City= could make an offer or attempt to purchase school property sites. MOTION: Mayor Henderson moved, seconded by Levy, that the above motion incorporate finding of Acting City Attorney, Don Maynor (Education Code 39397) that public ends in the vicinity of the school site are inadequate to meet- the existing and foreseeable needs of the community for playground, playing field, or other outdoor recreational and open -space purposes. MOTION PASSED unanimously. Councilmember Levy was concerned that the Terman Working Group did not give a dollar amount for, the JCC lease. Mr. Diaz pointed out that the June 12, 1981 staff report dealt with specific staff recommendations regarding Esther Clark Park, the JCC lease, and the proposal to the School District. Counci lsnember Levy did not feel the dollar amount was adequate and felt staff should review the figure and return to Council. Ccuncilmember Bechtel asked if the reason the dollar amount figure •for the first few years was relatively low was because various improvements were expected to be made by the JCC. Mr. Diaz summarized some of the economic considerations contained in the package submitted to Councils He said that at present the School District had a number of closed school sites, and in the interim, the sites had been leased out by the :District. Since the properties were zoned PF, there were very .few organizations which could operate consistent with the zoning. Those kinds of uses were generally private,.. nonprofit corporations and generally operated at a deficit and greguired some outside funding. The rental range for the school sites varied considerably. Mr. Diaz said that the current range was somewhere between $.17 to $.34 per square foot per month, and that the range varied dependent upon the size of the building area involved. He said that the primary reason for the •variance : was that those at the $.17 per square foot level_ were sites which had been leased out as a whole. The ones at the higher end of the range were those where they had been broken up into small pieces and rented out in small chunks. On that basis there was. a "much larger effective demand pool, and, therefore, a 'much higher potential income. The pool of effective' demand decreased significantly when larger sites were discussed: Mr Diaz said that staff looked at -what the JCC was paying at the Ortega .site. The .JCC recently sut i teed a bid for a two-year extension at the Ortega site which would take effect July 1, at a rental, of $.17'" per .square foot per month. .- Mr. Diaz reported that the Ortega site was 'about 22,000 ;=square feetof'building area. At Termarr, the JCC would :be leasitg ,about 67,000, a-,signi-ficant increase in `building square footag. • From ;that base:, Mr. .0iisr said significant differences in the °o-peratiod provided =.at =Yermari from that at Ortega must be realized. Mr. Diaz said there was a \general rule that the larger the leased area, the larger the purchase area, the smaller the per unit rental, or sales price. Additionally, he said that Terman contained much more, less productive, and higher maintenance costs Areas than did ,0rtega, i.e. the caffetorium, gymnasium and the pool. 9 2.1 6/15/81 Mr. Diaz said that at Terman, with the much larger site, and under the conditions of the Terman Working Group Plan, the JCC would provide more public programs, and public access to the programs, than at Ortega. The JCC was also providing restrooms for the athletic field users. Further, Mr. Diaz said there were significant restrictions on the JCC's use of the site, i.e. hours of operation,'no exclusive parking, and responsibility for all capital improvements and repairs, which includes the roof and boiler systems. The School District lease specified that. the School District maintained major structural repairs. With regard to market situations and the statement that a businessman could not find space for $.17 a square foot, Mr. Diaz said that was true, that for this type of use, there was a limited market especially 67,00.0 square feet of.area available to private. nonprofit corporations. The type of use was not the economic revenue generating kind of use that a business would be. Mayor Henderson felt that if there was not a motion to change the lease, it should not be discussed at great length. MOTION: Councilmember Bechtel moved, seconded by Renzel, that staff negotiate JCC lease under terms of Attachment "8" of memo dated June 12, 1981. MOTION PASSED by a vote of 8-0, Klein "snot participating." Mayor Henderson said if Council wanted to follow the staff recom- mendation regarding Esther Clark Park, then no action heeded to be taken and he thought that was wise. REQUEST OF MAYOR HENDERSON RE RECRUITMENT OF CITY ATTORNEY Mayor Hendersop felt it was extremely important that a time schedule be established and that Council move immediately toward selecting a new city attorney. He pointed out the proposed schedule whic'a had been distributed to the Council. The first item on F.he schedule to was to develop a profile of desired characteristics, and to review and update the job description. Mayo.reHenderson- had no problem with. He said that .during the problems involved during the last six months, he never heard any Councilmember or staff member express any desire to change the responsibilities of the City Attorney or to lessen the independence of that office, that the problems dealt with personalityand working relationships. Mayor Henderson felt that the legal service received by the Council ..over the' last couple of years was outstanding and he, .thought the Council would be fortunate to find someone who could equal that technical competence, but that that sheeld be their goal. First, he thought the Council had to hire a search firm, and pointed out a change in the fees quoted by Korn -Ferry International. The amount would be $8,000, plus expenses, ;not $12,000 as first quoted. He fe:l-t. •the figures were close enough that all three firms should be. interviewed. He suggested that Council look at their schedules with an eye toward meeting .with -Mr. Roberts of Korn -Ferri a.id Mr.. Hughes of Hughes-Hei ss that :week, and with Mr. Anderson of Ralph Pnderson & Associates, and make :_a decision on which firm to use some time next week. MOTION: - mayor Henderson monad, : seconded_ - oar Fletcher,, ;that - (1) Coun it accept the Profile of Desired Characteristics and Job Descri p'ticn as submitted; (2 ) Council list the position as °salaryopen!' and, during the search period, determine -present CAO4 s' salaries for a 1983.82, receive a l i st.:of comparative salaries for city attorneys ,in the area, and establish a range for a neA city attorney basted on those comparative salaries and 1 the experience of the person selected; (3) Council recognize the local housing problem and inform the selection firm that Council will discuss the problem based upon a candidate's specific situation; and (4) Council meet on Thursday, June 18, to interview Korn Ferry International and Hughes, Heiss and Associates, and meet on Thursday, June 25 to interview Ralph Andersen and Associates and to make the consultant selection, seconded by Fletcher. Councilmeraber Eyerly commented that in the last selection pro- cess, Council had a list of qualified applicants, and he thought that list might be an avenue to pursue in conjunction with what Mayor Henderson had laid out, and might help to speed up the process. He thought perhaps staff could see if the top three to five applicants would be interested in an interview. Mayor Henderson said he had looked into those names, and that they had all been eliminated for one. reason or another. He did not think there was any problem with whatever search firm was chosen, that those names could be given to the firm and that they be sought out further. AMENDMENT: Councilmember Witherspoon moved, seconded by Levy, that item (3) of the Profile of Desired Characteristics, Item (1) of the ;notion, be reworded to read: "Ability to maintain the integrity and the independence of the City Attorney's office while still appreciating the necessity to establish and maintain productive and positive working relationship with other City staff. 11 AME'IDMENT PASSED on a unanimous vote George Gioumousis, 992 Loma Verde, stressed the importance of an independent City Attorney. He reminded the Council that the City Charter stat.i that the City Attorney was under the City Council not the City Manager. He remembered issues of flagrant conflict of interest issues, which arose in the past that the City Attorney ruled for special reasons were acceptable, and which rulings were in some cases, overruled by the Courts and in some cases by the Fair Political Practices Commission. Ale thought the question of conflict of interest and propriety had to be looked at :arefully. Specifically, he understood that one of the consulting firms was the same one used to hire Mr. Abrams and Mr. Laner. He had a question with regard to; the relationship of the principal of that firm with. Mr. Zaner. Was Mr. Zaner`s relationship a close personal relationship with the principals of the firm and if so, he thought that firm would be inappropriate. Also, he understood'' that one of the o :her firms included a principal who was a former Palo Alto City Manager, and he raised the question whether that firm would be appropriate. • David Jeong, 4056 Park Boulevard, shared Mr. Gioumousis' con- cerns. He felt that the selection of the firm to recruit a new City Attorney should be given careful consideration. He felt that the City < Attorney must notbe in fear of his job if he found some elected, appointedor hired member of the City staff to be in conflict of interest. He must be given that independence:.. COuncilmember Fazzino.commented that six: months ago when the issue came" before Council, he was one: of those which: post. strongly supported -total autonomy .and total_ independence of the City Attorney's Office. He advised that he still felt that way and felt the job'deacription guaranteed that. He _reiterated that the diffi- telt:: issue. the \CoFanci l faced previously: had abso'htely: nothing to do with the issue of autonomy.: With reSpect to .the consulting firms, he did ` not. see a need to go 'through the song- and dance of having - three or four consulting firms come in and be interviewed. He felt :Ralph -Andersen and Associates had done anoutstanding job. in recommending both Mr. Abrams and Mr. Zaner and did not think, there were any issues of conflict of interest involved. He felt that Mr. Andersen knew Mr. Abrams and Mr. Zaner just as he knew a number of other public officials in the state, and he thought that was the nature of the consulting game. He felt if that relationship was something that needed to be addressed in public, he was willing .to do that, but did not see the need to spend a lot of hours and dealing with other consulting firms. He would support the first three parts of the motion, but would not support the last. Councilmember Renzel said that regarding the Profile of Desired Characteristics, the Council, in Executive Session, determined that the City Attorney would be the sole source of legal advice for the City, and that only the City Council could .overrele that -advice and "arbitrate" it. She thought that should be included as a condition under the profile since it was a Council decision and was something; that may offer some assurances as to any new applicant that the Council would stand behind the legal advice given. AMENDMENT: Councilmember Renzel moved, seconded by Eyerly, an amendment to Job Description = that the City Attorney shall be the sole source of legal advice except that legal advisors may be retained by that office; and ary dispute can only be arbitrated by the Council, it cannot be disputed by staff. Acting City Attorney Don Maynor thought that might be. confusing to a potential City Attorney. City Manager, Bill Zaner, said there was no question that the Council made that -statement. and that obviously it would be trans- mitted to any City Attorney who to©k office. He was not sure that it was a characteristic. He thought the Council was trying to set out characteristics of the kind of person they were looking for, and he thought it would be appropriate in the Council's discussion with a prospective City Attorney to indicate the Council's position that they would fully support the City Attorney's ability to make decisions and be the sole source of legal advice, but he did not think that policy fitted into the characteristics. Councilmember Klein said the City Charter had provisions which covered therole of the City Attorney and ,he could not understand why there was any discussion. Councilmember Renzel wanted to include in the characteristics what was passed by Council in January, at a Council meeting. She felt there were enough Councilmembers there, it was discussed, and was voted on. She said at that time the statement was conveyed to the City Manager and to the City Attorney. Cou tc i l member F'a ri no had no problem with the first part of the motion, but. did riot like the, second part. He felt it implied that the employees were being treated like children, He did not think it shouldbe stated directly, he thought it was inherent. If _there were specific problems, if a City employee did not e follow the advice of the -City Attorney and lack of following that' advice placed the City in trouble,' then that person would be fired. He encouraged Council to reject the second part of the Motion. AMENDMENT TO AMENDMENT Councilmember. Klein moved, seconded by Fazeino, to delete the second part of the above amendment, 9 2 4 6/15/81 1 regarding any dispute being arbitrated by Council and legal advice not being disputed by staff. Councilmember Eyerly felt that in view of what the Council had been through the last six months, it behooved the Council to ,,retain the second part of Councilmember Renzel's amendment. He did not understand why Council should be sensitive about it, it was something that the Council decided and it should be clearly understood by staff that the Council was there to supervise the Council Appointed Officers. AMENDMENT TO AMENDMENT PASSED to delete second part of amendment by a vote of 6-3 as follows: AYES: Bechtel, Fazzino, Fletcher, Henderson, Klein, Witherspoon NOES: Eyerly, Levy, Renzel . MOTION AS AMENDED passed unanimously. Councilmember Renzel thought the Council should bear in mind, with regard to Councilmember W i therspoon's amendment to item (I) of the main motion, that the City Attorney's office would occa- sionally give staff advice that they would not want to hear and she thought . productive relationships might not be possible. Councilmember Witherspoon said that her amendment meant an ongoing good relationship not that the City Attorney could not tell someone what to do or not to do. MOTION AS AMENDED PASSED to approve the Profile of Desired Characteristics and job description unanimously. MOTION PASSED to list po tion as "salary open," to determine present CAO salaries for 1981-82, and..to receive a list of comparative salaries and establish a range for a new City Attorney based on those comparative salaries -and experience, unanimously. Councilmember Levy recognized the local nousing.problem, but felt it was inappropriate to recognize it in a formal way because he felt it would give the prospective City Attorney the opportunity to bargain harder. He felt the prospective _City Attorney could live within the same type of commute range of other City employees and that while housing on the Peninsula was generally higher than other areas of California, he Was uncomfortable going on record in that regard. He was :willing to look at ' housing as another element in the total employment picture, but did not like to single it out and flag it. Mayor Henderson was concerned that if the search firm was not told that the Council was willing to discuss the housing problem, they may not attract some of the applicants they wanted. 'He felt the ,Council was looking' for. a top notch person and the housing concernwas among the top questions asked ' by. candidates, He; did not want to deter an candidates earridida�es because they did not,. discuss the problem. He wanted the problem stated in a positive City Manager Zaner added that Council was looking- for .a: prime person acrd.., a .major problem would be the ' housing.--_ If the .andidate` talked to the: consultant.--and-the consultant :sal:€ the Council wits not interested in taikingabout housing, some Land idate_s- who the _Council may wart.: to _. tail k to and might. want to make are attractive offer to, would be turned off- immediately. He. suggested Council be willing to discuss housing. MOTION PASSED recognizing the housing problem and to inform the consultant that the Council would be willing to discuss the problem based on a candidate's specific situation by.a vote of 8-1, Levy voting "no.'' Counciimember Bechtel asked how long Council would spend with each consulting firm and had the consultants .been contacted to ascertain availability on those evenings. She asked if the Council could meet with the consultants prior to the meeting of June 22 rather than in a separate meeting. Virector of Personnel Jay Rounds said that Korn -Ferry and Hughes- kleiss were available that week, The Andersen firm was not available that week and would have to be interviewed the following week. He said no dates had been confirmed and that whatever Council decided would have to confirmed. He understood that there was a general availability for Korn -Ferry and Hughes- Neiss this week and Andersen the following week. Councilmember Bechtel said she had spoken to previous, long-time Councilmembers who had expressed surprise that the City Council was going through the consultant method, that previously the Councilmembers had gone through the resumes themselves, and that advertising, etc. had been done by the Personnel Department. She wondered if Council wanted to be limited to a consultant firm, and if so, she wanted to make sure all resumes were available to them, Mayor Henderson advised that all resumes would be available to .the Council, and if the Council handled the mutter themselves, the procedure would take a lot longer. He thought that one _thing about a consulting firm was that they had had many .of the applications before and had already done tne calls, :and the information was readily available to them. Councilznember Fazzino agreed with Mayor Henderson, and did not think the Council had the expertise to _-handle the entire process. He felt the strength of using consultants in the past had beee that they weeded out people obviously not qualified and al lo>tied the Council to see perhaps- the top 20 resumes. This allowed the Council total independence to do the leg work necessary to. determine which of those candidates would be -the.. best choice. He thought that was - a rational process end felt it shouldbe continued. He would not support having the consultants return to Council with one or two r•ecomnendations.. He felt it was - important to allow someone to initiate the process and find the top candidates. Simultaneously, he did not think the Coun .il -needed to consider three conso;l ti ng firms. He thought they should goTwith someone who had `'served them very well in the paste Vice Mayor Fletcher felt Council did not have the time necessary to do background checks on the applicants, and did not want to hire someone `without .extensive research into previous experience in other situations. - She.. felt the consultant was experienced to do that job and she would be uncomfortable with Council trying to divide the work up and make calls. CounCilre fiber Eyerly supported the motl;on to interview the three consultants. He would be uncomfortable selecting Ralph Andersen at the present time in view of theconcerns raised by the public and some of his own feelings. 9 2 6 61581 Councilmember Renzel did not mind interviewing the consultants, but was aware that Ralph Andersen was one of Mr. Zaner's best friends, that their families went camping together every summer, and under the circumstances, she felt it would be unwise for the Council to select a consultant who was partisan in that way. Mayor Henderson wanted to interview all three consultants and hoped the Council would support that, MOTION PASSED to approve consultant interview schedule by a vote of 8-1, Fazzino voting "no." Councilmember Renzel thought that the selection process for the City Attorne was accelerated from the schedule used in 1978, and wondered if Council was allowing enough time to -find qualified applicants. She pointed out that in 1978, there was about two months for the closing date for receipt of resumes, and this time there was a two -month period for candidate interview completion. She felt it .was important to allow ample time for the information to be disseminated abort the position and for people to get their applications in. She thought two months would be needed for that function alone. Mayor Henderson pointed out that the circumstances were different in 1978. He said the urgency was great this time in terms of backup in the Department. Also there was delay in 1978 in terms of the actual first and second choices. This time the person was needed on board as soon as possible and a senior assistant would also be needed. Mayor Henderson said he was told the schedule was workable. Councilmember Fazzino did not think the schedule needed to be decided then. He felt it could be discussed and evaluated with the consultant. ADJOURNMENT Council adjourned At 12:15 a.m. ATTEST: Cit Clerk/ -1\-A-e4 APPROVED: _aireatatiej4n...iknidgemoiruL Mayor 9 2 7 6115081