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1978-06-12 City Council Summary Minutes
Regular Meeting June 12, 1978 On this date at 7:30 p.rn., the Assistant City Clerk read the following statement: "This is the time and place normally set for holding regular meetings of the Council of the City of Palo Alto. This is also the time and place set for the public hearings on: 1) Assessments for University Avenue District and California Avenue Parking Bonds - Plan G 2) Assessments for California Avenue Area.Offstree Maintenance District 3) 1978-79 Budget The Council, at its meeting of June 5, 1976, ordered this regular meeting to be adjourned to 7:30 p.m. on Wednesday, June 14, 1978. It appears that all members of Cie Council are absent from this regular meeting. Therefore, pursuant to the authority vested in me as Clerk of the City Council by Sactions 54955 and 54955.1 of the California Goes►e- ment Code, 1 hereby de'lare this meeting adjourned to 7:30 p.a. on Wednesday, June 14, 1978 and hereby continue said public hearings, each of them,to said time and place." Notice of the adjournment to June 14, 1978, was posted within 24 hours after time of adjournment. Notice of the adjourned regular meeting WAS also sent to each Counci1iember and each local paper, radio, TV station requesting notice, at least 24,hours before Wednesday, June 14. The regular meeting adjourned at 7:40 p.m., to 7:30 p.m. on June 14, 1978, ATTEST: 989 6/12/78 APPtOVE®: �-- 4:/ mayor Adjourned Regular Meeting of June 12, 1978 June 14, 1978 ITEM Oral Communications - none Consent Calendar - Referral Items Amendment to Setback Map to Eliminate Setback Certain Thoroughfares Consent Calendar - Action Items Finance and Public Works Committee Recommends Finance and Public Works Committee Reco�ioaerids Contract Ordinance Repealing Title 11 Of The Palo Alto PAGE 941 991 991 992 re Financial Audit 9 9 2 re PACCC 1977-78 992 Municipal Code 9 9 2 Lines on Policy and Procedures Committee Recommends re Procedures for Implementation of tha California Environmental Quality Act (CEQA) of 1970 Planning Commission Recommends re Variances for Second -Story Additions Ratification of Appointment to PACCC Board Public Hearings —Assessments For: University Avenue Area and California Avenue Area Parking Bonds —Plan G Public Hearing: Assessments For California Avenue Area Offstreet Parking Maintenance District Planning Commission Hearing on Sand Hill Road Updated EIR Public Hearing: 1978-79 Budget F'lnance and Public Works Committee Recommendations fur 1978-79 Budget 9 Continuation of Discussion of 1978-79 Budget Recommendations 1 Policy and Procedures Committee Recommendations re Management Audit 1 Finance and Public Works Committee- Recommends re ring Interpretive Center Policy and Procedures Committee Recommends re Procedures for California Environmental Quality Act (CEQA) Request of Councilmrmetm►ber Carey re Residential Lease --Former Arastra Property Review and Forecast of Council Meetints Cancellation of July 3, 1978 testing Finance and Public Works Committee feting Oral Communications Adjournment 990 6/14/78 992 993 993 993 995 996 996 98 007 013 1014 1015 1017 1017 1017 1017 1017 1017 Adjourned Regular Meeting of June 12, 1978 June 14, 1978 The City Council of the City of Palo Alto met on this date at 7:30 p.m. in a adjourned regular meeting of June 12, 1978, with Mayor Sher presiding. PRESENT: Brenner, Carey, Clay, Fazzino, Fletcher, Henderson, Sher, Witherspoon, Eyerly (arrived 7:45 p.m.) ABSENT: None Mayor Sher said the present meeting was unusual in that it was taking place on T Wednesday, and also that, following the passage of Proposition 13, which limited the amount of money which real estate could be taxed, a budget meeting was to take place. Palo Alto was one of the few cities which had consensually voted "no" on the proposition, from which he concluded that Palo Altans approved the City's service level and wantea to retain it. However, all citizens had heard the message given by the statewide passage of Proposition 13, and the City would try also to respond to that. ORAL COMMUNICATIONS None CONSENT CALENDAR Counci imember -Henderson asked that the matter concerning the suggested naming of theInterpretive Center and the Finance and Public Works recommendation regarding issuance of a utility revenue bond and obtaining a consultant be removed from the Consent Calendar (Items 2 and 4). Countilmember Fletcher• observed that agenda item 13M was the same es Item 4, regarding the issuance of utility bonds. She asked that the resolution on item 7, concerning Environmental Impact Procedures, he removed. The following items remained on the Consent Calendar: Referral Item AMENDMENT TO SETBACK MAP TO :302:8) Staff recommends referral of the ordinance eliminating obvious obsolete setbacks (e.g., El Camino Real, Birch Street, Monroe Drive, and the like) where no current purposes are served, to the Planning Commission. 991 6/14/78 I ORDNANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE SETBACK MAP OF THE CITY OF PALO ALTO TO REMOVE THE SETBACK LINES ON EL CAMINO REAL, BIRCH STREET AND * NROE DRIVE WHERE WIDENING HAS OCCURRED OR IS NO LONGER CONTEMPLATED Action Items FINANCE AND PUBLIC WORKS COMMITTEE Finance and Public Works Committee recommends to Council by unanimous vote, 1 absent, that Council approve the contract with Arthur Andersen and Company as independent auditor. CONTRACT AUDIT OF ACCOUNTS AND RECORDS Arthur Anderson and Company FINANCE AND PUBLIC WORKS COMMITTEE AEA 5 RE PACCC 1977-78 CONTRACT (CMR:304:8) The Fiance and Public Works Committee recommends, by unanimous vote, that Council amend the 1977-78 Palo Alto Comm ni ty Child Care City Contract, to allow use of up to $7,000 for start-up costs for Ventura program, with use of funds to be contingent upon availability of a suitable location, and upon identification of adequate operating funds and subsidies within PACCC's 1978-79 budget. AMFNDMENT NUMBER 1, TO CONTRACT 3845, COMPREHENSIVE CHILD CARE PROGRAM Palo Alto Com nuriity Child Care (PACCC) ORDINANCE REPEALING TITLE 11 urrnr-mmInmurrxr-ruE (CMR:528:7) offeidrA Staff recommends that Council Title 11, ORDINANCE 306 entitled "ORDINANCE OF THE .CNCIL OF lit CITY OF PALO ALTO REPEALING TITLE 11 OF THE. PALO ALTO MUNICIPAL CODE: " (First reading 5/15/78) POLICY AND PROCEDURES COMMITTEE A dialMINMOONIMOINI Policy and Procedures Committee recommends to Counc i l , by unanimous vote, 1 absent, adoption of the Procedures for Implementation of the California Environmental Quality Act of 1970, with the following amendments: SECTION 9.©7(a) (page 38), after "...as a part of normal planning activities," add the sentence, "This public hearing should be held at the optimum point in the project review process for public participation.' Section 9.07(b) (page 38), in the second sentence, after the words "...at anther location," add the words "...and time." ORDINANCE Of THE COUNCIL OF THE CITY OF PALO ALTO ADDING TITLE 11 (ENVIRONMENTAL IMPACT PROCEDURES) TO THE PALO ALTO MUNICIPAL CODE (First reading) 992 6/14/78 PLANNING COMMISSSION RECOMMEN1?S RE MiTarTIVITEMS11111—XirriliMs Planning Commission recommends by unanimous vote that Council direct the staff to grant variances for second story additions where the additions would not require a variance under the new Zoning Ordinance. RATIFICATION OF APPOINTMENT TO r Council approved appointment of Pamila Evans to the PP.CCC Board. MOTION: Councilmember Fazzino moved, seconded by Brenner, that Council approve the referral to committee, the recommendations, the contract and the appointment, and adopt the ordinance. The motion passed on a unanimous vote. PUBLIC HEARINGS ---ASSESSMENTS FOR: . �,U n NIA AVM - J Ni BONIZ-- TnITTM7277711 Council€member Eyerly said he would not participate in the discussion because he had some financial interest in the University Avenue area. Councilmember Carey said that becaisc of his business thterests he would not participate in the discussion on the topic now before Council. Mayor Sher said that it was the time and place for the annual assessment levies necessary for the payment of principal and interest on bonds issued in the following projects: University Avenue area --Civic Center parking project 66--08; Project 75-63. For the California Avenue district the parking garage was project 65--09, znd off-street parking 71.63. The purpose of the public hearing is to afford property owners the opportunity to object to the rithematicai computation of the assessment, and whether or not it was correctly applied to the property, such computation to include building square footage, the number of private spaces provided, and the computation of the credit. Since the bonds have already been issued Council must levy the assessment; protests against the levy, as such, are not legally significant. Mayor Sher declared the hearing open, and he asked Assistant City Clerk, Shirley.Poitras, if any written protests had been filed. City Clerk Shirley Poitras said she had received five written protests, the first from Howard 8. Crittenden, Jr., on parcel 120-25- 831; another from Doran and Diane May on parcel 124-29-0005; one from Vernon Braman on parcel 124-28-007; one from N. Takamoto regarding Co-op Grocery at California Avenue, and from Frank Lee Crist, Sr., regarding parcel 120-15-015 and parcel 120-03-032. Victor St. Martin, PIO H rbor Drive, Sausalito, represented Doran and Diane May on parcel 124-29-005. The Mays had objected to the computation of the area of the building at 299 California; there were 14,950 usable square feet in the building, not the 19,577 square feet determined through the assessor's formula. The reason for the difference lay in the usage of the assessor's formula which determined the gross square footage of the building with a factor of 82 percent usable space -- ...that high level of efficiency has not been achieved," Mr. St. Martin said, in this particular building. The basement, the Mays said, was "...untenantable, unrentable, and unusable." Mr. St. Martin confirmed the Mays' statement, saying it had no air conditioning or lights, and was space only. For that reason he did not think it could be used as a factor in costing square footage of useable space. 993 6/24/78 Michael O'Keefe, spoke for the ^o -op Grocery at 164 California, said the Co-op was protesting the Maintenance District. That was to be the next item on the agenda. Mayor Sher asked that it be noted that the Co-op letter of protest from the Co-op was not related to this assessment levy, and so there were four written protests only. Mayor Sher asked if there were any speakers regarding the University Avenue assessment district. There being none, he declared the public hearing closed, Ben Pawloski, Director of Public Works, said that staff had not yet had time to respond to the Mays' objection to the assessment at 299 California _'Avenue; staff planned to check its own and the Mays' figures. Kew Jones, bond counsel, said that if Council was prepared to issue the resolutions, approval could be made subject to referral of the protested parcel to Mr. Pawloski for mathematical re -computation. If any question on mathematical propriety remained it could be breaght before Council again for appropriate action. Mr. Pawloski said the protest received from Mr. Crist regarding a parcel on University Avenue was directed at the location of the parking lots, which, Mr. Crist said, benefited his property at University and Cowper not at all. The assessment district had been set up in the 1950s, Mr. Pawloski recalled. The first issue in the Crittenden letter co:rcerned revenues accruing to the assessment district from parking ffes, Mr. Pawloski said. Mr. Crittenden said that he understood, '.nrough conversations with City employees, that fees collected on parking went to the general fund of the City. Mr. Pawloski said that, on the contrary, funds collected within the district went toward retirement of the bond, with some charges made to the district for maintenance expenses incurred in connection with parking facilities. Mr. Jones responded to the second point in Mr. Crittenden's letter, regarding the state's adoption of Proposition 13, and about which he said that 3im1tations of the parking bond fell within Proposition 13. Mr. Jones expiaieed"that the levies involved on University Avenue particularly, for the purpose of 'paying ,irincipal and interest on outstanding bonds, provided that the security for the bonds was the power and duty of the City to levy City assessments in order to meet paymentse Even the all- powerful citizenry of the state of California, with its ability to write the state constitution, was nonetheless limited by the federal constitution, and that constitution restricted states from interfering with the sanctity of contracts entered into ",..before the attempted invasion took place." The bonds had been issued many years ago, though tine matter of assessments might, in general, become involved in litigation resulting from the passage of Peop +si tion 13. Mayor Sher asked if there were not a specific statement in Proposition 13 about taxes to meet bond obligations. Mr. Jones replied that there was an "Express Savings" clause, but it was directed to taxes or assessments, when the word 'assessment' was used, that are necessary for principal and interest on indebtedness approved by the voters. The bonds in the University Avenue assessment district were not approved by the voters, which fan t was true of all serial assessment district projects. And so the savings feature, if it existed, was in the contract clause. 994 6/14/78 ?'. Mr. Pawloski referred to the Braman protest, the property being located at 270 Cambridge Avenue, in the California Avenue parking assessment district, parcel 124-28-00/. Mr. Pawloski said the City had made an error in counting the number of parking spaces; ten spaces were required, and credit had been given for zero spaces, whereas there should be tr€ 1 t for three spaces. The roll should be corrected to read: "For project 65-09, instead of $125.80, it should read $87.99; for project 71-63 the present roll reads $161.99, and should read $113.40." Mayor Sher asked how the difference would be made up. Mr. Pawloski said it was customary for small adjustments such as the foregoing to be made; the City would make it up next year. MOTION: Councilmember Henderson introduced the following resolutions and, Seconded by Fletcher, moved their adoption by Council, subject to the corrections as noted by Mr. Pawloski and subject to referral of the property at 299 California Avenue for re -computation: RESOLUTION 5554 entitled "A RESOLUTION CONFIRMING ENGINEER'S REPORT AND ASSESSMENT ROLL --UNIVERSITY AVENUE AREA CIVIC CENTER OFFSTREET PARKING PROJECT 66-8." RESOLUTION 5555 entitled "A RESOLUTION CONFIRMING ENGINEER'S REPORT AND ASSESSMENT ROLL --UNIVERSITY AVENUE AREA OFFSTREET PARKING PROJECT 75-63.' RESOLUTION 5556 entitled "A RESOLUTION CONFIRMING ER REER S RE 0RT AND ASSESSMENT ROLL -- CALIFORNIA AVENUE AREA OFFSTREET PARKING PROJECT 65-9." RESOLUTION .5557 entitled "A RESOLUTION CONFIRMING ENGINEER'S RE'ORT AND ASSESSMENT ROLL ---CALIFORNIA AVENUE AREA OFFSTREET PARKING PROJECT 71-63."; Councilmember Eyerly said that he would vote on the California Avenue projects if the motion, were divided. MOTION ON UNIVERSITY AVENUE ASSESSMENT DISTRICT PASSED: The motion adopting the resolutions on the assessment district on University Avenue passed on a unanimous vote, Councilmembers Eyerly and Carey not participating. MOTION ON CALIFORNIA AVENUE ASSESSMENT DISTRICT PASSED: The motion adopting the resolutions on the assessment district on California Avenue area passed on a unanimous vote, Councilmember Carey not participating. PUBLIC HEARING: ASSESSMENTS FOR :299:8) Mayor Sir said this is the time and place for a public hearing necessary on the annual assessment levy to pay cost and maintenance and operation of offstreet parking facilities in the California Avenue area. The purpose of the public hearing was to afford property owners the opportunity to object to the total amount of the assessment, to the mathematical computation of the assessment and whether or not the assessment formula had been correctly applied to the property. Mayor Sher_said he understood that staff was going to request a continuation of the public hearing to consider the assessment of these levies under the original "G" bond formula, and whether or not that formula should be changed. The public hearing for June 19, 1978, has been set to discuss the new formula. 995 6/14/78 Anyone wishing to protest or to speak to the original formula, scheduled for that evening's (June 12) meeting, may do so, or he or she can elect to do so at the public hearing on June 19. Mayor Sher declared the public hearing open. He asked Ae44ftg City Clerk Shirley Poitras if any written protests had been received.n4Ssr Ms. Poitras said that the only written protest had been from the Co-op. Mayor Sher called for any speakers en the California Avenue Area offstreet parking maintenance district. There were none. MOTION: Mayor Sher moved, seconded by Clay, that the public hearing be continued until Monday evening, June 19, at the next scheduled Council meeting. The motion passed on a unanimous vote. PLANNING COMMISSION HEARING ON SAND HILL ROAD UPDATED EIR Mayor Sher announced that a meeting was being held by the Planning Commission on the revised environmental impact report, that evening, on the Sand Hill Road project. The meting was next door in the Council Conference Room, should any of the public wish to attend. PUBLIC HEARING: 1978-79 BUDGET Mayor Stier said that anyone who wished could speak on the preliminary annual budget as set forth to the Council by the City Manager; public members could also speak on actions taken by the Finance and Public Works Committee recommending to Council some changes in the budget, or on other matters regarding the forthcoming annual budget year. Mayor Sher said that this was the time and if there were comments relating to Finance and Public Works Committee, or speak to, this is the time to be heard hearing open. and place for the 1978-79 budget, the budget as recommended by the any changes people wished to . Mayor Sher declared the public Richard Rosenbaum, 717 Garland, spoke on Item M of the Finance and Public Works Committee recommendations, about the sale of revenue bonds for the purchase of the gas and electric system and construction of the fourth floor and installation of the third elevator at City Hall. He expressed surprise that the item had not been killed by staff, in view of tie passage of Proposition 13. He gave some background regarding the fourth floor of City Hail, saying the early 1970s had been prosperous for the City, which added new programs and employees and finished City Hall, though the space on the fourth floor had not been needed. Growth had peaked in 1975 and a recession started City employment downward. The .Arastra settlement had taken $7.5 million in 1975. At present, owing to Jarvis -Gann, revenues to the City were to be slashed $2.7 million. and pay raises arks capital improvement projects were to be cancelled. Mr. Rosenbaum held that in the light of such cutbacks the proposal to finish the fourth floor was "utterly bizarre." Mr. Rosenbaum said that contrary to the idea he had received that the utility revenues to be used for the project were not "real money," the taxpayers would say otherwise. On the matter of possible issuance of revenue bonds, he referred back to. the $2 million refund of overcharges to the City from the Bureau of Reclamation. The money had not been returned to users, as'one suggestion went, but had been put into a reserve, possibly to buy out the Barron Park PG&E facilities. There was now talk of keeping the money in reserve, in order to perhaps gain more through interest earned in that way, and to sell bonds, as the most economical solution. Mr. Rosenbaum thought that the City's placement of the $2 million was perhaps short term, whereas the period of time covered by the sale of bonds would be long term. Also, interest rates for the future were not known, and ice. Rosenbaum felt the City should not "be in the business of speculating on interest rates . " Were the City to sell bonds it would be canting on the fact 996 6/14/18 Corrected see page 2. that the City is able to invest in taxable bonds wsth a higher yield, while the City itself sells tax-free bonds. That procedure brought the whole matter of tax-free municipal bonds into question --taxpayers lost through the plan to be used by the amity, "...and some involuntary revenue sharing is going on here." Mr. Rosenbaum asked that improvements on the fourth floor be suspended, and the $2 million reserve fund be used for the necessary purchase of PG&E's gas and electric facilities in Barron Park. If, because there was no revenue in the gas utility, he suggested that purchase be handled separately -the electric utility could make a loan to the gas utility, with both to be "eventually paid off." Mayor Sher commented that Mr. Rosenbaum's knowledgeability was attributable to his being a former Palo Alto Counciimember. He welcomed him to the meeting. Steve Pren+inger, 345 Forest Avenue, president of Local 715, Palo Alto Chapter, said his Local was concerned with the rollback for it had a "good faith" agreement that some would receive a 6 percent salary increase. The agreement between Local 715 members and the City said that both parties should meet and confer about possible contingencies arising from the passage of Proposition 13, and that the Local should have reasonable information from the City on contingency plans, and essocia ted data. The City did not have to roll back the 6 percent raise and instead could initiate a utilities use tax, and/or a business license tax. Julie Holiman, 1331 Stanford, said that the r.ajor-ity of voters in Palo Alto had voted against Proposition 13. She said she thought it was because the voters wanted to maintain services and the salaries of those who rendered them. She hoped that Council would not favor a rollback on salaries. Robert Moss, 4010 Orme, spoke as A amber of the Palo Alto Civic League. The League favored reducing travel budgets, contributions for membership, golf course consultant and the 11 e, as suggested by Counci 1n mrber Henderson. Perhaps Council could find another $200,000-$300,000 to cut. The Civic League did not support using $1 million of the reserve fund, bringing the fund down to only $600,000. Since there was now going to be binding arbitration for police and fire personnel he doubted the City would give "hero" raises. Speaking for himself, Mr. Moss said that Item C, on tree trimming, was a place to start saving; he did not think it was a good idea to ado $18,000 to the Fair Housing Commission this year; he hoped the use of consultants by the City would be kept to a minimum; he questioned the necessity for the full $50,000 or special outside legal fees. 5o far as income was conee- ed, he suggested a tax on apartment buildings of more than four units in the City, in the amount of 95 percent of the difference in the property tax paid after Jarvis -Gann as opposed to 1977 taxes, such tax to be forgiven if at least 65 percent of the difference were returned to renters through reduced rents. He spoke of the inventiveness of some other communities in raising tax revenues. Ken Margotpea, 224 Fernando, senior field representative for Local 715, said that if Council adopted the recommended contingency plan he would consider the City in bad faith, wally, if not legally. The contingency agreement the local had signed with the City said that the City could roll back wages after 67 days of negotiations. He was concerned what the City was going to do on August 12, both as a resident and union amber. The 67 -day period had been written in to give time to answer questions on other matters, such as how other employees were to be treated. He said he thought the Palo Alto vote meant people wanted a tax break for home owners and renters. He did not think renters would ever get a break. He expressed pleasure that binding arbitration had passed. He questioned the worth of any findings from a $15,000 audit of the City Manager's office, and he said he would tell Council, free, what the morale was at City Hall, and that it would be "lousy" if the City took back the 6 percent increase. 997 6/14/78 Maurice Beeson, 377 Stowell Avenue, Sunnyvale, said he was a City employee and member of Local 715. He said Palo Alto Local 715 members received less than adequate wages as opposed to the cost of living, and he asked that Council not approve the 6 percent wage cut. Gayle Southworth, said he was an economist for Local 715. He was budget analyst for Palo Alto and some other jurisdictions. In line with terms of the contract he wanted to pose some questions to the City's people who set the budget: why did Palo Alto have a 75 percent cut in revenue, while other cities experienced only a 57 percent cut? He thought Palo Alto's cut in revenue was $2.7 million. He woule like some documentation of the purported 75 percent cut; was there enough reserve left to avoid a wage rollback? Palo Alto could deal with Jarvis-Aann cuts, he said, which did not involve salary rollbacks. He suggested that other matters, such as the May Day parade and tree trimming should be cut instead. Mayor Sher ascertained that there were no further speakers, and then declared the public hearing closed. He said members could be heard again should amendments on the budget, not included along the Finance and Public Works Committee recommendations, be introduced. FINANCE AND PUBLIC WORKS COMMITTEE (CHR:307:8) Councilmember Carey, Chairman of the Finance and Public Works Committee, observed that the comittee had not know the outcome of Jarvis -Gann when it had drawn up its recommendations; Palo Alto had been one of the few cities which had not favored it. Ail the recommendations of -the committee now before Council had been unanimous --he thought that Acting City Manager Charles Walker and the City staff had done an outstanding job in preparing the budget. The Committee had proceeded on a hold -the - line philosophy, as presentee, also, by staff. Although the votes toward the recommendations now before Council were unanimous, some of the recon rendations had had hard debate. Staff had suggested that the contingency resulting from passage of Jarvis -Gann be met out of general fund reserves and deferral of some capital improvement projects, along with a rollback of City employee pay increases, with the understanding that those would be interim and partial solutions to the effects of the passage of Proposition 13. The Committee had thought the effects of that bill's passage would not be felt for some months, and it was the committee's thought to delay it's shock wherever possible, and so the recommendations were for one year only. One of the assuwptions of the committee was that a rebate from PG&E in the amount of about $450,000 was forthcoming, and it had not yet been paid. Another look at the general fund might be needed. Councilmember Carey saidthat because of the factors unknown at the time of the adoption of the recommendations, he would like the budget which Council adopted to be referred back to the Finance and Public Works Committee for further deliberation within the next few months. The City was required to adopt a budget by July i, at that time Jarvis -Gann took effect. MOTION: Councilmember Carey moved, on behalf of the finance and Public Works Committee, that Council approve the recommendations 13A through 13E-1, as follows: A. An increase of $15,OOO to cover costs of a management a jilt. 6. An increase of $10,000 to cover increased postal rates. C. Addition of one Tree TrimmAine Clearer position, and one Tree Trim/Line Clearer Assistant position, for street tree trimming. 998 6/14/78 r' D. Additiun of one Parks Maintenance Assistant and an increase of $1,321 for the transition of the City's flower beds from perennials to flower beds with 50 percent a;1nuals and 50 percent perennials. E. Transfer of the Senior Adult Services subprogram to the Human Services contract for Senior Coordinating Council. An increase of $2,500 for a Joint North County Outpatient Drug Clinic per Council action of May 1, 1978. An increase of $4, 000 for contract services with Fair Housing, Incorporated. F. Deletion of .67 person year for a temporary monitor for the tennis court reservations system and a corresponding decrease in the Recreation department revenues of $2,300 due to the deletion of the tennis reservation fee. G. An increase of $18,000 to provide for the golf consultant contract. H. An increase of $50,000 to provide for special outside legal fees for litigation of Central Valley Project Power Supply allocations. 1. An increase in electric utility rates to cover increased operating costs since July 1, 1976, per Council action of May 22, 1978. J. A decrease in materials for acquisition and construction activities in the Gas Division, as a portion of these will be financed as part of a utility revenue bond. K. Deletion of funding for the following projects: Civic Center lobby improvements; Eoronda Lake improvement;, Sand Hill Road landscaping. An increase of $56,815 and a reallocation of $37,000 from the Community Development Grant for the Senior Center Developments project. An increase in funding for the following projects: Foothills Fire management; District Park West of Alma study. A decrease of $50,000 for the Street Pavement Marking project. The reallocation of Co mity Development Grant funds for the following projects: Housing Acquisition, Land Bank/Lytton Gardens. L. That quarterly health premium reimbursement plan recently authorized for the SE1U representation unit should be extended to current retireees who retired from City service prior to April 1, 1978, and that retiree rates for City employees' Health Plan coverage be increased to $20 per month for retiree and an additional $46.16 per month for family .coverage to more nearly reflect plan charges. These charges, totaling $36,240, will be transferred from the Contingent account. Amend the City-Pers contract to provide 'for government Code Section 21.222.85, a 3 percent to 15 percent pension increase for safety employees who retred prior to December 13, 1973. Effective date of amendment, July 1, 1979. 999 6/14/78 M. The issuance of a utility revenue bond to provide for the purchase of the Barron Park, Silva Avenue, East Bayshore/ Laura Lane gas and electric systems; for construction of the fourth floor of the Palo Alto Civic Center; and installation of a third elevator in the Civic Center; and that the consulting services of Bartle Wells Associates and Jones, Hall, Hill & White be obtained to market a utility revenue bond. N. That Council adopt staff's Phase One Contingency Plan recommendations, using $1 million of the General Fund Reserve, coupled with a deferral of non -emergency, locally funded capital improvement projects ($1.3 million) and City employee pay increases ($1.2 million) to cover the revenue loss for 1978-79 in light of the passage of the Jarvis -Gann Initiative on June 6, 1978. 0. Approval of allocation of Revenue Sharing funds for 1978-79 as follows: Police Department, Police Field Services --$280,000. P. Approval of the position title changes/reclassifications in the respective departments as listed in Exhibit B. page 6. Q through E-1 are staff recommendations for reappropriation of 1977-78 utilities funds. Q. Projected increase in legal services regarding Santa Clara allocation of Cenral Valley Project power supply. R. Projected increase in engineering and consulting services regarding Santa Clara allocation of Central Valley Project power supply ($6,500), delay of research project relative to weather -sensitivity of system demand ($4,000), and delay of transformer load management program by investigation of various methods of implementation $33100), S. Technical services for heat -pump study instrumentation and monitoring delayed by late receipt of project contract ($6,OOJ). T. Study regarding number and location of capacitor banks delayed by change in engineering personnel ($29,000), Willow Road -.r•1 tIct ` i"ture d.:1 +t!; ^.t- ty -,,...,,.�_ V 1 -nom t t i`r . �? ,. ti 7 _ � �'� `'itt:: _ s i : s �..'roji�s �ci0,1E118J) s Hanover Feeder cables and switches delayed by pending investigation of conduit obstructions ($100,000), and West Bayshore underground cables delayed by substation feeder tests and repairs ($17,000). 0. Purchase of one industrial analyzer, one regulated power supply, two pulse generators, four 5-T house jacks, and four hot jumpers delayed pending research on available equipment ($4,52$). Y. Decry of substation grounds resurfacing due to bad weather and engineering personnel change ($20030), and delay of substation load -shedding relays due to change in engineering personnel ($7,000). W. Delayed repairs to a 70 -horse power motor ($1,3110) and roof and fence repairs at two water -receiving stations ($1,500). X. Sand Hill Road improvements ($15,000), and final payments on East Bayshore frontage road water main ($50)00). 1000 6/14/78 y. Legal fees for services accrued, but not yet billed, related to PG&E rate cases. Z. Delay of safety information mailing to gas customers until requirements received from Federal Office of Pipeline Safety Operations, A-1. Cathodic Protection work on mains and services delayed because of the Cathodic Protection Engineer position vacancy ($2,365), and Tennyson Avenue 2" PVC main which will begin early in 1978-79 ($3,300). B-1. Equipment maintenance for Bird Centrifuge parts ($12,000), and Gorr Oliver sludge disintegrator parts servicing $10,000). Completion delayed past purchase order deadline. C-1. For root intrusion control chemicals in the Foothills area. The method must be changed from the "soak" method to the "foam" method because of the effects of the drought and the steep slope of some of the mains. D-1. Purchase of shelving and storage compartments for the Water Quality Control Plant delayed past purchase order deadline. E-1. Contract construction related to Sand Hill Road Project. 'ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING A BUDGET FOR FISCAL YEAR 1978-79 AND AUTHORIZING CLOSING OF THE BUDGET FOR FISCAL YEAR 1977-78" Mayor Sher suggested that perhaps the recommendations could be handled in the same fashion as the Consent Calendar--Councilmerbers wishing to discuss an item could remove it, and the b lcnte of the recomr nda tons could be passed. Those items moved would be discussed first, then Councilmembers could present other !terns for consideration. A discussion ensued on the most efficient method to use. Mayor Sher pointed out that a motion to refer took precedence --a motion to refer could be apt for new budget suggestions. Councilr ber Henderson asked that items A, D, G, M, and N be rived. Councilniember Eyerly asked that part 3 of E be removed. Vice Mayor Brenner asked that X and E -1 be removed. Mayor Sher said he would remove item C for further discussion. Corrected Counciimember Clay asked that E-2 be removed. Counc i l n r ber Henderson see page referred to a Palo Alto fiscal report from July 15, 1909, and one of 2. June 30, 1910. He read some of the anachronistic budget allocations; he pointed out that the property tax rate at that time was 95.7f, and the present rate was 754, showing that the rate had dropped. He read from his memo to Councilmembers dated June 8, 1978, which said that up to now his proposals for cutting from 3 percent to 5 percent of the total operating budget had not passed. He wrote, `.itat with the passage uf Jarvis -Gann, cuts had to be made for the f.rthcoming year. He praised the work of Acting City Manager Walker and Larry Moore for their good work in the preparation of the budget for 1978-79, of about $22 million. Councilmember Henderson said that he supported Phase One recommendations, which offset the loss of $3.5 million in property tax revenue by using $1 million contingency reserve funds, and reduction of Capital Improvement Program reductions of $1,3 million, along with a rollback on salary 1001 6/14/78 increases amounting to $1.2 million. That left the general fund contingency account at $600,000 and resulted in a budget reduction that met his goal of 5 percent, though the 1978-79 budget still represented an overall increase of about 2 percent. He said he thought the City should enter into renegotiation with SEUI, as specified in the contract with the union. He listed some proposed budget cuts, which totaled $225,000. He then addressed Item 14 in the current year's budget, now on the Finance and Public Works Committee recommendations as Item A, proposing a $15,000 increase to cover the ccst of a management audit. Councilmember Henderson said that unless there were "obvious operational problems" he did not think the $15,000 expense should be incurred, neither for the present year nor the fiscal year to come. AMENDMENT: Councilmember Henderson moved, seconded by Fletcher, that Item A, proposing an increase of $15,000 to cover costs of a management audit- for FY 1978-79 be deleted from the proposed budget.. Councilmember Fletcher said she did not remember recommending the item in the Finance and Public Works Committee. Acting City Manager Walker recalled that the recommendation had been made in the context of using $15,000 from Council's budget for the audit of the City Manager's office. He said the motion to do so had passed on a unanimous vote, Mayor Sher amplified that the audit could be for some other departmental management within City Hail, not jt t the City Manager's office. Councilmember Eyerly said he would encourage having the $15,000 carried along from year to year: "It's one of the few ways Council has to discover how different departments within the City for which we are .'esponsible are performing." Councilmember Carey said that the $15,000 had always been in the budget for Council's use as "...funs allocated to management for an audit." The $15,000 item Council was now discussing should not be confused with the financial audit recommended by the Policy and Procedures Committee. Mayor Sher said that Proposition 13 (Jarvis -Gann) had told him that the public wanted to go slow on consul tantships, particularly when there was no specific problem. He said "I think it's time we stopped putting these moi ies in there for studies --audits, whatever you want to call them, for problems that are not apparent. . . ." Councilmember Henderson said he preferred to maintain salary levels and forget about consultants. Vice Mayor Brenner said that during this "lean year" to come, the City's management was capable of analyzing problems if they arose. Mayor Sher explained that a "yes" vote indicated that the item should be deleted. AMENDMENT FAILED: The amendment to delete Item A from the Finance and Public Works Committee recommendations, concerning a $15,000 allocation for management audit, failed on the following vote: AYES: Brenner, Fletcher, Henderson, Sher NOES: Carey, Clay, Eyerly, Fazzino, Witherspoon 1002 6/14/78 AMENDMENT: Mayor Sher moved, seconded by Brenner, that item C, for the addition of a tree trimmer End assistant be deleted from the budget, and referred back to the Finance and Public Works Committee. Mayor Sher said that he did not favor filling any new positions at the present; he thought that the item should be deleted. Councilmember Clay said that citizens had complained about the lack of tree maintenance; since the entire budget would go back to the Finance and Public Works Committee anyway, he urged Councilmembers to leave the budgeting for the additional tree trimmers in. It was possible that the tree trimming services could be contracted for. Councilmember Witherspoon said the tree maintenance program was 17 months behind; the trees had barely survived the drought. The trees were a big investment, there were about 200,000 trees in Palo Alto, many needing care. Councilmember Carey said delayed maintenance meant it would be more expensive later. Councilmember Eyerly said the tree trimming had been debated at length in committee; if trees were not trimned there would be trouble with electric lines. Trimming was necessary maintenance. Councilmember Henderson said he was per:Jaded that tree maintenance would forestall some dangerous situations. Mayor Sher said that though there was discussion about the budget going back to committee, Council would, that evening, adopt a budget, and the law required that it be a balanced budget. There would be a referral back to the Finance and Public Works Committee to look at possible service cuts, and it would be possible to have amendments to the budget. A two-thirds vote was needed. He did not think new positions should be added at this time. AMENDMENT FAILED: The amendment that itern C, deletion of the position of tree trimmer and assistant from the budget, failed on the following vote: AYES: Brenner, Sher NOES: Carey, Clay, Eyerly, Fazzino, Fletcher, Henderson, Witherspoon Councilmember Henderson questioned the low cost of $1,321 ,or addition of a Parks maintenance assistant and changeovers,_ in flog beds. Mr. Walker said that the total for Item C, the two tree trimmers, would be $70,000, and -the total for Item D would be about $16,000, with the addition of $1,321 for supplies. AMENDMENT: Coenrilmember Henderson moved, seconded by Clay, that Item 0 D, for one Parks Maintenance Assistant and an increase of $1,321 for changeover in flo erbeds from perennial to 50 percent annuals and 50 percent perennials, be deleted from the proposed budget. AMENDMENT PASSED: The amendment passed on the following vote: AYES: Brenner, Clay, Fazzino, Fletcher, Henderson, Sher, Witherspoon NOES: Eyerly, Carey 1003 6/14/78 Regarding Item E, Part Two, Councilmember Clay asked how the program would wind up if all the cities removed their support. He thought the $2,500 for a Joint North County netpetieI t Drug Clinic per Council action of May 1, 1978, might be eemeeed from the budget. Regarding Item E, Part Three, Councilmember Eyerly referred to the $18,000 for contract services wth- Housing, Incorporated. He said that on page 7 of the _ . eeee and Penile wnrhe Committee minutes of May 23, 1978, said that the aiioc tie/ ef `,he eeoay to Fair Housing, Incorporated, was contingent upon ice ea-irg received a commitment of $4,000 from NAACP-MCFH Tri-County Apartment leeseciation and the Palo Alto Board of Realtors, along with a full andit repert _prior to.Council's review of the contract. The $4,000 had not been received, though Fair Housing Incorporated (FHI) had completed its audit. Councilmember Eyerly-said he did not understand how staff thought the Finance and Public Works Committee had made the recommendation. Mr. Walker said the $4,000 contingency would be included in the contract with FHI, to come before Council June 25. The item was on the budget so that the City world be prepared to meet its contractual obligations. Regarding Item G, Councilmember Henderson said he now understood the contract had been signed and so he could not move deletion. He deplored the waste involved, adding "...unless there's a way to back out of it that wouldn't get us into some kind of legal litigation, or what have you, . . ." Marilyn Norek-Taketa, Senior Assistant City Attorney, said that City Attorney Booth had informed her there was no provision for cancellation within the terms of the contract. Councilmember Carey asked how long the contract ran, saying there might be a possibility of negotiating some lesser amount or an early payoff. Mr. Walker said the contract ran through December, 1979. Referring to Item M, regarding the issuance of utility revenue bonds to acquire Barron Park electric and gas systems, and installation of a third elevator and finishing the fourth floor of City Hall, Councilmember Henderson asked Mr. Aghjayan for some background, particularly -on the elevator and the fourth floor. Mr. Aghjayan, Director of Utilities, said there had been insufficient space to run the utilities operation ever since the move to the present City Hall, and there had been four positions for -energy conservation added, as well as in the rate analysis area --tie rate analyst protected Palo Alto's position with the Public Utilities Coarmission. Energy planning had expanded; records, keeping and accounting had expanded exponentially. le don't have any place to put these people, and we need space; it's a utility that generates $30 million ennuoply and contributes over $5 million to the general Bind." The four_ utilities operations were mechanical, civil, electrical and engineering; there was no conference room, Mr. Aghjayan said, and ne engineering library. He thought one floor should -be dedicated to the utilities operation. He acknowledged that there were-stringencies with Proposition 13; he thought an alternative was to go ahead with the $1.7 million bond issue, with ":,uncil again reviewing the issue before awarding the bid to start the renovations of the fourth floor and adding the third elevator. By then it would be known just what revenues wouldbe available, A major commitment would be to have an architectdraw up 4 plan, at a cost of about $25,000--$30i000; if Council decided not -to proceed that portion of the revenue bond need not be. i ssued yet the -p1 ens would be available. 1004 6/14/78 Mr. Aghjayan said that regarding acquisition of the Barron Park facilities, staff had long planned to do it by mans of revenue bolds, for there were no funds for gas utilities elsewhere --the cost would be $400,000- 3500,000. One of the proposed uses for the reserve fund had been to purchase the Barron Park electric system,'he fund was $6 million, of which $2 million was the return from the Bureau of Reclamation; the additional $4 million had been generated by a one -mill surcharge on the electric rate. Most of the money had been dedicated to development for future power supply for Palo Alto. It had been suggested that less than 10 percent of the total, about $600,000, be financed out of the reserve fund, which could still be done. But, Mr. Aghjayan said, staff suggested that a revenue bond sufficient to cover the acquisition of the Barron ' Park electric system, a gas system, and the fourth floor finishing and the elevator, be floated, Repaymtet could come out of the reserve fund, and in that way the reserve fend would be paying for acquisition of the Barron Park.electric. One reason favoring that plan was that the. reserve fund was invested at 7 percent, and interest on the revenue bonds would be about five and one-half percent, which would save about $7,500 per year in interest. Another reason favoring the sale of revenue bonds for the purposes he listed was that it might be difficult to float a revenue bond for gas utility alone, for gas was not making any money at present --there would be a deficit of over $400,000 this year. The revenue bond would be large and diversified, and therefore more attractive for investors. Council er Fazzino said he thought the financing proposal was wise, but he had doubts about the wisdom of finishing the fourth floor and the third elevator. He asked what the outlook was for roving the -utility operation to the Municipal Service Center (I1SC). Mr. Aghjayan replied that the MSC's limited number of office spaces were already taken by supervisors. Councilremter Fazzlno said he thought Mr. Aghjayan's suggestion to defer part of the action for a few months until Isere information was provided was reasonable. Councilrrember Carey said that without a motion being before Council on the proposal he would not say ash but he respected Mr. Rosenbaum's cents. Mayor Sher asked if utility rags had to be raised in order to service the revenue bonds. Mr. Aghjayan replied that he did not think so; the net revenue from serving Barron Park would be about $100,004 for the current year. The length and teas of the revenue bonds would determine if the rates had to be raised --with a twenty-year bond .issue the annual indebtedness would be $150,000$160,000, with an additional $50,000 in expenses. That would be spree among the four utilities; the incremental effect on one utility would be "...very minimal." Mayor Sher concluded that if the rates did not have to be raised, and if a way could be found to purchase those utilities without thout issuing -a revenue bond, "...presumably there would be some monies generated that could go into the genewal fund. . . ." Mr. Aghjayan said the net effect of the issuance of $1.7 million in bonds, also, taking over the Barron Park system mould be very minor. The $100,000 revenue from Barron Park would not be dedicated toward the revenue bond. The revenue bond would become an obligation of all the utilities. The expenses of the revenge bonds were included in a cost - of -services analysis and became part or the utility's operating expenses. 1005 6/14/78 1 1 Mayor Sher said that without having to pay for revenue bonds, income from the utilities could go into the general fund. The system could be bought with the money in reserve. Mr. Aghjayen said that if the reserve fund was used the differential in interest would also be lost. Mayor Sher said it seemed to him that the utility rates Would have to be raised. He felt he was committed to bringing the Barron Park utilities into the City's system, thereby giving it the benefit of the City's rates —with the gas utility, the benefit ',3S not much but it was substantial on the electric. He recalled that people had vented to use the refund from the Bureau of Reclamation to buy the Barron Park system. He did not quarrel with the purchase being made in that fashion; he did not favor finishing the forth floor and installing the thir4 elevator in these times. He thought a rearrangement of space in the present floor space should be undertaken. AMENDMENT: Mayor Sher moved, seconded by Clay, that the ;part of Item M, concerning installation of the third elevator and completion of the fourth floor, be deleted, and that the revenue bowls necessary for the acquisition of the utilities only, be issued. Cruncilmember Clay said he had reservations about issuin4 revenue bonds -- 3 e was not sure that the differential between interest received from the reserve fund and the interest paid on the revenue bonds would be that significant. He would like to refer that question back to the Finance and Public Works Committee. Mayor Sher said that at the time the smatter was put out for bid on revenue bonds a further decision could be made. Council .had to take the first action so that bids could be sought and the rates made known. Mr. Aghjayae agreed. He said the cost of seeking bids and so on would be $40,000 445,000. If -it was found that the rates were too high the money would be committed, and it would not be recoverable. The Utility Department had cheated with same of the larger utilities within the state --most of them did not anticipate mach impact on revenue bond rates following from Proposition 13, for it was a -utility obligation, not a general obligation of the cities. Cobncil r Clay said he was concerned about the cost to learn about the interest rates. Mayor Sher said CouncilmemOer Clay cold move to amend deletion of acquisition of gas and electric, or a substitute motion to delete the entire item could be made. SUBSTITUTE N1 ..€ENT: Councilmember Clay moved, seconded by Sher, that all of . Item !i, concerning purchase of revenue bonds for acquisition of the Barron Park utilities, and completion of the fourth floor and installation of the third elevator, be removed from the current budget, and be referred back to the Finance and Public Works Committee. Councilmember Carey asked if the motion implied that the Baru Park facilities would not be purchased, or did it min that if it was to be prebend the purchase old be made with funds in reserve? Mayor Sher said that the motion implied that the purchase would be made with funds in reterve, Mr. Sayan said that deletioe of the ideas of revenue bonds meant the total acquisit1m of the Barron Park electric utility would have to be done through ese of the fry in ; that was not ai. problem —the diem was that there was no maw to buy the gas wti l i ter. 100 6/14/78 !,. Councilmember Carey said he would oppose the motion or he thought there would be another opportunity later, when there would be more information. He did not favor finishing the fourth floor or installing the elevator. Vice Mayor Brenner said she did not approve'of investing the reserves while issuing revenue bonds, yet, in view of Palo Altan's non-support of Proposition 13 she favored purchasing the Barron Park system. She thought that the maintenance of the fourth floor, without making it available for use, was inefficient, nor would it "...become less expensive fo finish it." She said she would oppose the motion. Councilmember Eyerly said he opposed the motiqn. He observed that the utility department paid no rent for its use of space. It was not customary among utility departments "to ha ee a free ride." through paying rent the utility department could pay something in rent to offset the expense of capital improvements. The general fund ,was, in effect, subsidizing the utility department by not charging rent. He did not And having the utility department pay for something that was needed. While the City could pay for the acquisition of the Barron Park electric facility, the reserve fund was needed for a long-range power search. If the money were taken from the reservefundfor the purchase, it would probably be necessary to raise the eleetrrc rate to replace the mogiey to carry out policy toward searching fer alternate power sources. For that reason, and also the matter of not having the money to purchase the gas utility, the proposed revenue bond made good sense. Council could consider that question within three to five months, however. Councilmember Henderson said that he concurred with Councilmember Eyerly's corrrpents. Possible rearrangement of floor space to accommodate the utility department made good sense. The City was a $30 million business, and much money could be saved through increased efficiency of operations. He would oppose both motions. SUBSTITUTE AMENDMENT FAILED: The substitute amendment, that all of Item M on issuance of revenue bonds to complete the fourth floor, install the third elevator and purchase Barron Park utilities, be deleted, failed on the following vote: AYES: Clay, Sher NOES: Brenner, Garet', Eyerly, Fazzino, Fletcher. Henderson Wi therspoon AMENDMENT FAILED: The amendment that the'portion of Item M concerning installation of the third elevator and completion of the fourth floor be deleted, failed on the following vote: AYES Clay, Sher' NOES: Brenner, Carey, Eyerly, Fazzino, Fletcher, Venderson, .s Witherspoon RECESS Council recessed from 10:05 p.m. to 10:25 p.m. CONTIBVATION OF DISCUSSION TIONS Regarding Item N, Councilor Henderson reviewed the Finance and Public Works recommendations, singling out the statement "$1.2 million to be saved through deferent of City employee pay increases.' He said he did not want to go against the SEIU Leal 712 contract stipulation that the contract, if chard, was to he reopened for negotiations. The 1007 6/14/78 Corrected see page 2. 1 Corrected see page 2. 1 $1.2 million was to come out of the contingency account, as shown on page V of the Budget, and the contingency account of $1.8 million would then be reduced to $690,000. He proposed a change in wording. AMENDMENT: Councilmember Henderson moved, seconded by Witherspoon, to change the wording "...and City employee pay increases ($1.2 million)." to add the words '...to reduce the contingent account of the budget by $1,2 million." Mayor Sher said that the effect of the motion was to refrain from making any comments about the SEIU contract or possibility of change, but at the same time permitting the Council to adopt a balanced budget. Councilmember Carey said he did not want to prejudice negotiations with SEIU, yet he felt that if City revenue was cut way back employees as well as services would have to have some cutbacks. He would support the motion. Councilmember Fazzino ascertained that the Finance and Public Works Committee would consider the Jarvis -Gann issue during the next few weeks. He wanted to be certain that that kind of a discussion would take place before he voted on the amendment, Mayor Sher answered that Acting City Manager Walker's suggestions had been that Council take t.,me to consider service cuts. Mr. Walker had given the Finance and Public Works Committee 126 items, that the Committee could consider cutting back on. The public would be heard on those proposed cuts. Councilmember Fazzino said that he would then support the amendment. Councilmember Clay said he would support the motion with the understanding that it was to return to the Finance and Public Works Committee. He said that passing the budget w=th the current figures was a stop -gap measure to pass a balanced budget, but more cutting had to be done so that the City's expenditures did not exceed income. Mayor Sher said he had not agreed with Councilmember Clay's statement, but he wanted to get on with the voting. AMENDMENT PASSED: The amendment that the wording of the recommendation regarding the employees' pay be changed to read as follows: "...and City employee pay increases ($1.2 million)" to "reduce the contingent account of the budget by $1.2 million," passed on a unanimous vote. Councilmember Fletcher said she wanted to take off the list of suggested deletions in Capital Improvements expenditures the van -pooling program for employees, to which $10,000 had been allocated. She thought the program paid for itself; also, theoretically, the program would free several parking spaces from the parking assessment district for other uses. AMENDRENT: Councilmember Fletcher moved that the removal of $10,000 for the van -pooling program for City employees be deleted from the list of Capital improvement projects to be cut. Mr. Walker said that a oy money that was needed that was not in the proposed budget would have to come from the unappropriated balance. He said he thought it would be best if Council considered the budget in its totality, as a response to Jarvis -Gann, before it started putting deleted items bark into i t . AMENDMENT DIED: The amendment died for lack of a second. 1008 6/14/78 AMENDMENT: Councilmember Fletcher moved that the proposed solar hot water heater system for the fire station and Civic Center be put back into the budget. Councilmember Fletcher said that the solar hot water heating systems would pay for themselves. AMENDMENT DIED: The amendment died for lack of a second. Vice Mayor Brenner ascertained that further changes could be made in the budget as time went on. Mayor Sher assured that changes could be made; sometimes there was switching of money among accounts on a simple majority vote. Money for new items would have to come from the reserve fund. Councilmember Witherspoon spoke of the Veterans' Building, as listed as a project not to be completed --the city's share of the $67,000 project was $40,000. Would the -City lose the federal funds it had been awarded for preservation of national landmarks? Kr. Walker said there were two phases in federal funding; at present the City had funds to replace the roof, and the project would go forward. In the cuing year additional federal grants totaling $57,470 would have to be foregone if the City did not make the appropriation for its share of the cost. AMENDMENT: Counc i lmerber Witherspoon moved, seconded by Fa.zino, that. the $40,000 allocated to completicn of work on the Veterans Building not be deleted from Capital Improvements projects. Counc i l member Witherspoon said that the City had been trying to get the federal part of the funding for that project for three years, she thought the $40,000 had to be in the budget to get the federal funds. Councilmember Henderson said he thought it was everyone's obligation to save money at all government levels, and "tt's bad enough to have the citizens of Palo Alto having to waste $40,000 on this building, but I don't think we shoult. ask the other citizens of the United States to put up even $57,000." The building had been thought by many not to be worth the expense of renovation. He would no;; support reinstatement of the project. • Councilor Eyerly protested that the detailed discussion taking place at the present was not timely; he thought the Finance and Public Works Cemmittee siould go over the list of capital improvements with staff, item by item_ Council should accept the budget then refer it back to the Finance and Public Works Committee for further work. He asserted he would vote against any motions pertaining to capital improvements until they had been looked at by the Finance committee. In response to a question frpm Councilmember Carey Mr. Walker said that. federal funding would not be available to Palo Alto on the Veterans Building until the City had actually spent its money. He did not know how long the funds would be held for the project at the federal level. AMENDMENT FAILED: The amen that the $40,000 allocated for completion of work on the Veterans Building not be deleted from Capital Improvements projects failed on the following vote: AYES: Fazzino, Witherspoon fJES: Brenner, Carey, Clay, Eyerly, Fletcher, Henderson, Sher 1009 4/14118 Turning to Items 13-X and 13 -El, Mayor Sher explained it involved the Sand Hill Road improvement project; he would not participate. Vice Mayor Brenner said she had only wanted to register a "no" vote. AMENDMENT: Vice Mayor Brenner moved that Items 13-X and 13 -El be deleted from the list or capital improvements to be eliminated. AMENDMENT FAILED: The amendment failed for lack of a second. Councilmember Carey ported out that abstaining votes on the Sand Hill Road matter could not be listed as abstentions on the general vote approving the 1978-79 budget. Mayor Sher confirmed with Ms. Taketa, Senior Assistant City Attorney, that abstaining Courcilmeibers could vote on the budget in its entirety, but that if there were separate votes they would not participate. hjs. Norek-Taketa said that had been the practice in the past; if there :re'any question the abstentions could be recorded. Councilmember Carey said he would abstain and he wanted the record to show the abstaining votes on items concerning Sand Hill Road. Mayor Sher observed that the finance and Public Works budget recommendations had now been fully considered by Council. Councilmember Eyerly said that he thought Council could be raking a mistake if it were to include further- cuts in the budget- because there was not staff input on cuts which might be proposed. He recylled budget cuts of a couple of years back amounting to about $1 million; there had not been citizen complaints because Council had proceeded slowly, with the help of staff_ He wanted the Finance Committee to go over the budget with Mr. Walker, and then have the budget come back to Council. Mayor Sher said he would give time to Councilmember Henderson to present his proposed budget cuts, Councilmember Henderson said the proposed budget cuts he would make were not simply an outgrowth of Jarvis -Gann. AMENDMENT: Councilmember Henderson moved to reduce Council travel and meeting allowances from $11,500 to $7,500, leaving an average of $800+ for each Councilmember. AMENDMENT DIED: The amendment died for lack of a second. AMENDMENT: Councilmember Henderson moved that the $12,000 allocated for Palo Alto's memberships be reduced to include only the League of California Cities (LCC) at $4,000, and $4,000 for ether rships, a total of $8,000. AMENDMENT DIED: The amendment died for lack of a second. AMEN NT : Counc i lr ber Henderson raved, seconded by Witherspoon, that the City Manager's office budget be reduced by $58,000 to eliminate the title of Assistant City Manager, and the secretary. Counci /member Henderson said that when City Manager Sipel returned Mr. Walker would return to being Assistant City Manager. Mr. Walker had also been performing the functions of a couple of department heads. With the money remaining after the $58,000 cut the City Manager could continue Mr. Walker's position. 1010 6/14/78 Councilmember Witherspoon asked if the Assistant City Manager had a secretary for the Assistant City Manager's office only. Councilnlember Henderson replied that the City Manager had an administrative secretary, and there were,two other secretaries; administrative secretary and Secretary A --confidential. He said he assumed there was secretarial assistance in the budget, and building and services departments, and in personnel. "Mr. Walker has been handling it since it came about, but at the moment it's obvious the City Manager can operate, when he has the caliber of the department heads that we have, without having that assistant position." Councilmember Witherspoon said she was sympathetic "to a number of these things. I'm hesitant to second them because I'm not sure just exactly the form to go into. Would you consider making a blanket motion of referring consideration of deletion of these items from the budget to the Committee? I think some of the rest of us may have some other things:that may be cut. We're Also inte'ested in the 17 pages of identified possible cuts that Charlie has given us." Mayor Sher said all the items listed in Mr. Walker's memo were still in committee to be considered, and so there was no need to refer the same items. He said that he intended that all of the items in Councilmember Henderson's memo not already in committee to be referred to committee. He thought that Councilmember Henderson wanted to "build" these deletions into the budget at this point. Councilmember Henderson said he and other Councilmembers ham tried repeatedly to introduce items that they thought should be deleted from the}budget. Delays in asking for deletions made the deietior:s less likely. He thought these suggested cuts would be for the year after the present one. Councilmember Witherspoon said she thought the Committee was going to make further cuts in this year's budget. Mayor Sher explained that Council was going to adopt a budget; and the committee was going to consider, along with possible service cuts contained in Fir. Walker's memo, those referred by Council. if the Finance and Public Works Cormi ttee decided to recommend those cuts, and if the Council agreed, the items would be deleted from the current budget and the money saved would produce reserves, or perhaps ego into capital improvement projects if that was also part of the committee's recommendation which was approved by Council. At the present moment, hover, the Council was working on adopting a budget, and if no changes were made by Council during the coming year it would be the budget for 1978-79 fiscal year. Councilmember Carey said he was sympathetic with most of the items on Councilmember Henderson's list. He knee others had their own lists. He assumed Council would vote on the proposed cuts item by item, and he would support deletion of those items he also favored as cuts. He was, however, quite sure the budget would be amended within the year. He thought most of Nr. Walker's items on that list in committee, were for the 1979-80 fiscal year. The assumed $450,000 rebate from PG&E Wright not be forthcoming. If it was not he mould perhaps suggest even more stringent cuts, but, without more information he was hesitant to take specific action. MOTION TO REFER: Councilmember Carey soared, seconded by Eyerly, that Council refer the matter of eliminating the $58,000 for the position of Assistant City Manager and secretary to the Finance and Public Works Cowen ttee. 1 -1 6/14/78 Vice Mayor Brenner remarked that she thought all personnel cuts should include management cuts. She did not want all personnel cuts to be among the lower pay scale employees. MOTION TO REFER PASSED: The motion, that Council refer the matter to the Finance and Public Works Committee, passed on the following vote: AYES: Brenner, Carey, Clay, Eyerly, Fazzino, Fletcher, Sher, Witherspoon NOES: None ABSTAIN: Henderson Councilmember Henderson said that he thought, in view of the foregoing vote, he would go along with the referral of his list of suggested cuts to committee. He hoped that they would be looked at. MOTION TO REFER: Vice Mayor Brenner moved, seconded by Carey, that all items on Councilmember Henderson's list of suggested budget cuts, dated June 8, 1978, be referred. to the Finance and Public lofts Committee. Vice Mayor Brenner said that restraint had been used on picking particular items apart during that portion of the Council meeting devoted to adopting a budget; she preferred that particularization be done in committee. MOTION TO REFER PASSED: The motion to refer Councilmember Henderson's list of suggested budget cuts to committee passed on a unanimous vote. Councilmember Eyerly said he intended that all Cour1cilrr bens' suggested cuts be talked over in committee. Part of the cutting action depe ded on receiving the gas rate refund, with no assurance that it would take place; some money might be coming on the county paramedics program also. He intended that cuts take place right now, with staff cooperation. MOTION TO REFER: Councilmember Fazzino moved, seconded by Witherspoon, that the positions of Affirmative Action/Economic Employment Opportunity (EEO) and Organizational Development manager, be referred to the Finance and Public Works position for review. Councilmember Fazzino said he would like the Affirmative Action/ Economic Employment Opportunity (EEO) position, in the purchasing department, to be reviewed. He had remarked about that position about six months ago at the Policy and Procedures Committee meeting; he was not sure it was needed, particularly in the lighd. of Jarvis -Gann. Pe thought it could be handled through the Personnel Department. The other program he would like to have reviewed was the Organizational Development program in the City Manager's office. MOTION PASSED: The motion to refer the positions of AA/LEO and Organizational Development officer passed on a unanimous vote, MOTION TO REFER: Councilor Fletcher moved, seconded by Henderson, that the method for the assignment of the use of City_ cars by management be referred to the Financeand,Pubaic Works Committee. Counc i lmember Henderson suggested that the motion be worded so that the use of City vehicles be reviewed. Mayor Sher clarified that the motion had been broadened by both mover and seconder to mean that the use and assignment of C.tt i. uehicles be review LION PASSED: The motion that the use and assignment of City vehicles be reviewed in the Finance and Public Works Committee passed on a unanimous vote. 1012 6/14/78 Mayor Sher said the motion moved by Council ember Carey on behalf of the Finance and Public Works Committee,- including ite recommendations, as amended by Council's motion that evening, along with the ordinance, now remained to be voted on. Acting City Manager Walker said that passage of the motion adopted a budget for the forthcoming 1978-79 fiscal year and closed accounts on the current year. MAIN MOTION AS AMENDED PASSED: The motion that Council approve the budget and recommendations for the fiscal year 1978-79, as amended by Council, along with the ordinance, passed on a unanimous vote. Not participating on the matters relating to Sand Hill Road improvement and X and E-1, were Countilmeinbers Carey and Witherspoon and Mayor Sher. Through passage of that motion the following ordinance was adopted: ORDINANCE 3062 entitled "ORDINANCE OF THE COUNCIL OF `"HE CITY OF PALO ALTO ADOPTING A -BUDGET FOR FISCAL YEAR 1978-79 AND AUTHORIZING CLOSING OF THE BUDGET FOR FISCAL YEAR 1977-78.x" MOTION TO REFER: Councilmembsr Carey moved, seconded by Henderson, that items G, M, and N, be referred to the Finance and Public Works Committee for further analysis. Councilmember Carey said that the items had been adopted, but, in his opinion, those items might be affected by events occurring apart from the fact of budget adoption over the next 90 days, perhaps through union negotiations, non- payment of the gas refund, or other. MOTION PASSED: The motion passed on a unanimous vote. MOTION: Vice Mayor Brener moved, seconded by Fletcher, that the Finance and Public Works Committe give special consideration to capital improvement projects on the solar water heating projects for fire stations and the Civic Center; Trails and Pathways; Trails system; Bicycle Routes, and the Veterans Building, and those projects for which matching funds were available. Vice Mayor Brenner said that those capital improvement projects for which watching dollars could be obtained deserved serious consideration. They haft been given on the contingency response list of May.10, .i n Exhibit A. MOTION PASSED: The motion passed on a unanimous vote, with Counci merrrber Fazzino out of the cba r s. Mayor Sher thanked both Acting City Manager Waalker. and City Treasurer Al Mitchell fer the fine groundwork they had done, which had facilitated the budget hearings. € OLICY AND PROCEDURES NOTION: Vice Mayor Brenner mowed, on behalf of the Policy and Procedures Committee, that Council approve that the budget allocation of $15,000 unwed from FY 1977-78, be added to the budget of FY 1978-79, for the purpose of a management audit. 1©1►3 6/14/78 Vice Mayor Brenner, chairwoman of the Policy and Procedures Committee, said that the Comittee recommended, by a vote of three to one, that Council appropriate ,515,000 to be spent on a management audit, and that the subject of that :.tudy be primarily to look at the process of City government management, from the standpoint of the City Manager. She said that the purpose of the item was to carry over a $15,000 allocation from the 19/7-78 budget into the 1978-79 fiscal year. The committee intended to hold the rest of the item in committee for more leisurely discussion. The scope of the City Manager's office, and a list of possible directions, was intended to have been included in the Conv ittee's minutes, so that it would be possible for Councilrembers to make any further suggestions. However, that portion had been retained in committee. Her motion, then, she emphasized, included only that matter described in her first explanatory paragraph. Couucilmember Henderson said he thought, in view of the fact that with this year's appropriation there would be a total of $30,000 for audits of management, Council should be very sure that there was a problem in a department before an audit was ordered --fiscal restraint was especially nec.e4ed at this time. Councilrnemher Fazzino said he supposed the Policy and Procedures Committee world talk with the consultant about the matters the Committee wanted covered. Vice Mayor Brenner said she would be reluctant to talk over the miter with a consultant without having it understood that the consultant was to be paid. The Committee would have to have a clear idea of what the consultant was to do before one was engaged. Counc i lr' eb`-'r Witherspoon said she thought the purpose of the study (audit) was to deternine not that a problem existed, but that the system was as effective and efficient as possible. Counci1reriber !•'enderson said he had many suggestions to add to the things that should be clarified aboutthe office of the City Manager. Vice Mayor Brenner urged him to present them at the Policy and Procedures Committee meeting. Mayor St -:r said he saw no need for the proposed audit and he would vote against it. Counci1rnember Eyerly said he thought the study would give Councilmembers a clearer idea of the components of the City Manager's office when and if they were faced with hiring another City Manager. Council ember Carey said he thought some of the proposals to cut back were a form of politicking; he thought that the proposed audit would help assure that goerrent dollars were bringing the best value. MOTION PASSED: The motion that Council approve the budget allocation of $15,300 unused from fiscal year 1977-78, be added to the budget of 1978-79, passed on the following vote: AYES: Carey, Clay, Eyerly, Fazzino, Witherspoon NOES: Brenner, Fletcher, Henderson, Sher FINANCE AND PUBLIC WORKS COMMITTEE avrr Corrected MOTION: Counc i 1member ilea, on behalf of the Finance and Public see page t. Works Committee, introduced the following ordinance for first reading, 1014 6/14/78 and, seconded by Council, moved that the Interpretive Center be named "The Lucy Evans Nature Interpretive Center." ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 22.05.020 TO NAME THE INTERPRETIVE CENTER IN HONOR OF LUCY EVANS Counci nember Henderson said he had removed tha item from the Consent Calendar so that he could acknowledge the friendship of Marie Kelly for Lucy Evans, and also because he wanted to read a statement of Nancy Holmes, president of the Santa Clara Audubon Society, as follows: The proposal to name the Baylands Nature Interpretive Center for Lucy Evans has the unanimous and enthusiastic support of the board f directors of the Santa Clara Valley Audubon Society. Working with a contributing, active member of our organization, Miss Evans was a fine citizen of this community. Her wealth of knowledge and concern for our baylands began with her early efforts to save the marshes from construction, and her efforts continued with every phase of development and every public meeting until the day she died. We relied a great deal on Lucy for information --dates, facts, figures --in our Society's guest to retain some semblance of the naturalness of the Baylands. We shall miss her; we already do. Some of our most vocal advocates for preserving the Baylands were using Lucy's facts and figures and her historical knowledge, and were spurred on by her enthusiasm to publicly participate in the changes made in those lands. She was a dedicated -teacher, she was a i nderful ht torian, shrT+3s a caring citizen. We find it highly appropriate to name the Baylands interpretive Center for Miss Lucy Evans. (signed) Nancy Holmes, Santa Clara Valley Audubon Society MOTION PASSEO: The motion to name the Baylands Interpretive Center "The Lucy Evans Nature Interpretive Center" passed on a unanimous vote. POLICY AND PROCEDURES COMMITTEE RECOMMENDS Councilr er Fletcher said that she had been concerned that some significant projects sometimes went through the building application procedure without ever reaching Council or Planning Commission. She felt any project requiring a CEQA report should go to Planning Commission and Councils the Architectural Review Board was not aged to deal with other than architectural concerns. MOTION: Ccuncilaaember Fletcher moved, seconded by Brenner, that Council ask the City Attorney to draft a provision making the Planning Commission the appropriate body to review Environmental Impact Reports (FIRS) along with empowering both the Planning Commission and Council to impose mitigating measures. Council or Faazino asked about haw march work would be involved for either Council or Planning Commission. Cauncilme er Fletcher said the work load old not be increased very much, for most projects already vent through the Planning Commission. Councileer Fauino asked if tho provision neoposed in the motion might violate other provisions elroodyfat code; one case in point was that Stanford Shopping ng motor, *virtue of the code, had -not been required to go through the Planning COMMISOOR. 1016 6/14/18 Marilyn Norek-Taketa said she had discussed the matter with Councilmember Fletcher, and said that there was some question of legality in making all projects subject to suc requiremer's. Also, some study would be required on how the implementation would come about. The City Attorney's office would like to know the goals anticipated by Council if it passed the motion. MOTION TO REFER: Councilmember Fazzino moved, seconded by Sher, that the matter of reviewal of Environmental Impact Reports by both Planning Commission and Council be referred to the Policy and Procedures Committee. Vice Mayor Brenner said that the Policy and Procedures Committee would have to have the information requested by Councilmember Fletcher's motion, in order to consider the matter. Councilmember Fazzino said his motion to refer intended that staff provide the information Councilmember Fletcher's motion proposed, and also, that the motion to refer not block passage of the resolution adopting CEQA procedures. Vice Mayor Brenner said she hoped that any Councilmember interested in the proposed provisio1 would attend the Policy and Procedures Committee meeting when it was discussed. Councilmember Carey said he opposed the motion to refer and the motion, because review processes did exist, even in the form of a negative declaration (of environmental impact), for such review was performed by any of the steps covered in the Comprehensive Plan. Corrected see page 2. Councilmember Fletcher- held that not all projects required EIRs, and Council could impose mitigating measures should a project not requiring an EIR come before it. She foresaw no added expense resulting from that MOTION TO REFER PASSED: The ration to refer passed on the following vote: AYES: Brenner, Fazzino, Fletcher, Henderson, Sher NOES: Carey, Clay, Eyerly, Witherspoon MOTION: Vice Mayor Brenner, on behalf of the Policy and Procedures Committee, introduced the following resolution and asked that Council adopt it and approve the Committee's recommendations for procedures for implantation of the California Enviro ntal Quality Act (CEQA) for 1970, be accepted with amendments on Section 9.07(a), page 38, after ...as a part of normal planning activities,' the sentence "This public hearing should be held at the optimum point in the project review process" forpublic participation, be added; and Section 9.07(b page V3, in the second sentence, after the words "...at another location," the wards "acrd time." be added. RESOLUTION 5558 entitled "RESOLUTION OF THE COUNCIL OF THE Et -PALO ALTO ADOPTING PROCESS FOR IMPLEMENTATION OF THE CAL I FOIE@ IA ENV I RO NTAL QUALITY ACT OF 1970. Vice Mayor Brenner said she thought the resolution could stand until such time as Council wished to rake additions or changes. Councilmember Fletcher said she would vote against the motion for -she did not want to approve matters which were going to be discussed further in committee. 1016 6/14/78 MOTION PASSED: The motion that Council accept the Policy and Procedures Coninittee recommendations and approve the resolution passed on the following vote: AYES: Brenner, Carey, Clay, Eyerly, Fazzino, Henderson, Sher, Witherspoon NOES: Fletcher REQUEST OF COUNCILMEMBER CAREY Pt IOENTIAL TEAtE--FORS! continue Trom June 6,—T178) MOTION: Councilmember Carey moved, seconded by Witherspoon that staff be directed to give immediate notice cf termination of lease to the present tenant on the Arastra property. Councilmember Carey said that the City had "`cnheri ted" the present low rental rate when it acquired the Arastra property. He said he understood ninety days' notice was required in the terms of the lease. Then the lease could be re -negotiated. The motion passed on a unanimous vote. REVIEW AND FORECAST OF Mayor Sher said Council had completed the major tasks of approving the Inning map and the 1978-79 budget during the last two meetings. On June 19 there would be Planning Commission items and a hearing on the California Avenue Assessment District.. On June 26 further items needing action in June could be dealt with. Election of new Piayor and Vice Mayor was to take place on the first meeting in July, in this case, July 3; he suggested that perhaps Council could cancel that meeting and hold its first July meeting on July 10. CANCELLATION OF JULY 3, 1978 MEETING MOTION: Mayor Sher roved, seconded by Fazzino, that Council cancel the scheduled meeting of July 3. The motion passed on a unanimous vote. FINANCE AND PUBLIC WORKS COMMITTEE MEETING Councilmember Carey, Chairman of the Finance and Public Works Committee, announced that the Committee would meet June 27, 1978. ORAL COMMUNICATIONS None ADJOURNMENT MOTION: Councilor Carey moved, seconded by Fazzino, that Council adjourn, The motion passed on a i nenitous vote. Council adjourn at 11:5S p.m. / 6/14/78