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HomeMy WebLinkAbout1978-08-14 City Council Summary MinutesAugust 14, 1978 Regular Meeting ITEM Minutes of July 17, 1978 and July 24, 1978 Consent Calendar - Action Items Traffic Control Devices Inventory System Initiative Petition/Proposed Ordinance for Landlord and Tenant Rent Reform Recovery ofPrecious Materials from Sewage Sludge Incinerator Ash Initiative Petition/Proposed Qrdinance for Landlord and Tenant Rent Reform (continued) Reces s Initiative Petition/Proposed Ordinance for Landlord and Tenant Rent Reform (continued) Request of vice Mayor Henderson Regarding Buyer Selection Procedure in the Below -Market -Rate Housing Purchase Program Oral Communications Cancellation of Council Meeting of August 21, 1978 Adjourament to Executive Session PAGE 82 83 83 83 90 90 g2 93 96 98 98 98 81 8/14/78 August 14, 1978 Regular Meeting The City Council of the City of Palo Alto met on this date in a regular meeting, with Mayor Carey presiding. PRESENT: Brenner, Carey, Clay (arrived 7:50 p.m.), Eyerly, Fazzino, Fletcher, Henderson, Sher, Witherspoon ABSENT: None MINUTES OF JULY 17 1978 Councilmember Brenner referred to page 32, and asked that her vote be recorded as "no," on the motion regarding the staff, ARB or Council making decisions on mitigating measures. Councilmember Brenner asked that on page 3B, paragraph four, the first sentence read instead: ".„.since .s ince not all four of the lots were ten acres. . ." Councilmember Witherspoon asked that on page 30, third line, third paragraph, the word "affected," be changed to "effected." Councilmember Witherspoon asked that Oh page 31, ninth paragraph, fourth line, the sentence read, "She hoped each EIR would not be "hotly contested," so that very few would come to Council, and then on the matter of appeal.' Vice Mayor Henderson asked that on page 41, last line read "Council initiated letters be signed with such words "Palo Alto City Council, Scott T. Carey, Mayon." Councilmember Fletcher asked that on page 31, second paragraph, second line, the sentence read: "Most cities set the planning commissions as their first review bodies, though of two counties and 15 cities one did not." Councilmember Fletcher asked that on page 41, first paragraph, the sixth line read instead, "...from $10.00 (with the $3.00 board not charged for tile first day, however, at San Mateo County). MOTION: Councilmember Fletcher moved, seconded by Brenner, that the minutes of July 17 be approved as corrected. The motion passed on a unanimous vote, Councilor Clay absent. MI14JT£5 4F JIIt.Y 24, 1 M Coun c i l mrmeamber Brenner referred to page 46, and asked that the eighth paragraph, fifth line, read as follows: "She thought those setbacks related to planned -for street widening. She recalled both Hamilton and Lytton were to be made one-way streets, . ." Vice Mayor Henderson asked that on page 45, eighth paragraph the following sentence tie added: "He stated that he felt any staff liaison with the HRC must be responsible to the City Manager. The City Clerk's office is y,ot in a position to be working with the 411C on policy matters." !lice Mayor Henderson asked that on page 51, the ninth paragraph have the word "committee" repla.:.e4 with the word "Council." 82 8/14/78 Councilmembcr Fletcher asked that on page 52, second line of the first paragraph read instead, "...so the planning committee of the Transportation Commission. . . ." MOTION: Vice Mayor minutes of July 24, MOTION PASSED: The ORAL. COMMUNICATIONS None CONSENT CALENDAR Referral Items Henderson moved, seconded by Fletcher, that the 1978, be approved as corrected. motion passed on a unanimous vote. None Action Items TRAFFIC CONTROL DEVICES INVENTORY SYSTEM Staff recommends that Council approve the selection of TJKH as consultant for the traffic control devices inventory system, and authorize the Mayor to execute the attached agreement in the amount of $34,930. AGREEMENT --CONSULTANT SERVICES Traffic Control Devices Inventory System--TJKM MOTION: Councilmember Fazzino moved, seconded by Henderson,that Council approve the consent calendar. The motion passed on a unanimous vote. DJITIATTVF PETITIAN/PRnPfSFO OafINANCE MR.: 371:8 ) Mayor Carey observed that since item 5, concerning placement of the issue of rent relief on the November Ballot dealt with the same topic, both subjects could be discussed at the same t;me. MOTION: Councilmember Clay moved, seconded by Eyerly, that the matter of the placement of rent relief issue on the ballot (Councilmember Witherspoon's new business item) be moved up for discussion at the same time as the initiative petition issue of rent relief. Councilmember Sher said he did not favor discussing both topics at the same :time. The placement of the issue on the ballot would be predicated on Council action on rent relief. He said that his strongest reason was that rent relief was on the agenda that evening because of the initiative process: according to the City charter the Council had the options of enacting the ordinance initiated or placing the matter on the ballot. He thought that question should be dealt with singly so that there would be no confusion. Councilmember Eyerly said he would support the motion` He thought the sale issue was at stake in both matters.. Vice Mayor Henderson said he thought the issues should be separated -- they did not pose an "either/or" situation. Counc1 mbar Witherspoon agreed with Vice Mayor Henderson, but added that it would be less confusing for the audience to be able to speak on both issues at the same time. 83 8/14/78 Mayor Carey said Council would reach the new business item that evening; there was to be a somewhat lengthy discussion on personnel matters in an Executive Session, however, and he did not want to keep the audience waiting too long. He noted that Council either had to enact the initiative ordinance as it was, or place the ratter on the November ballot. Marilyn Norsk Taketa, Senior Assistant Attorney, said that Mayor Carey's statement was correct. Mayor Carey added that the matter proposed by Mrs. Witherspoon, as dealt with in item 5, could not be enacted as an ordinance that evening, for there had not been sufficient notice given. MOTION PASSED: The motion that Counciim tuber Witherspoon's new business item re placing the matter of rent relief on the ballot, be moved up for discussion at the same time as the issue of the initiative petition and proposed ordinance for rent relief, passed on the following vote: AYES: Carey, Clay, Eyerly, Fazzino, Witherspcon NOES: Brenner, Fletcher, Henderson, Sher Mayor Carey said Council's first business would be to determine eligibility of Councilmembers to participate in the discussion regarding the rent relief initiative. Marilyn Horek .Taketa said that the City Attorney's office had researched the conflict -of -interest question over the weekend. The report of August 14, with those findings was at Councilme Ebers' places tonight. The report was written before the City Attorney's office had received an opinion from the Fair Political Practices Commission (FPPC) and without FPPC input, they had concluded that neither Landlords rr tenants among Couecilmembers would have a conflict of interest. Since writing the report th$ City Attorney office had talked with Mr. Prim, of FPPC, who said that tenants would have no conflict of interest; economic interests of landlords among Councilrr bers, however, would have to be analyzed to determine material effect, and specifically, in Mayor Carey':, case. mayor Carey said that he understood that criteria regarding possible conflict of interest appeared on page 2, of the Regulations about real property in which the official has a direct or indirect interest amounting to more than $1,000, and related to whether the effect of the decision will increase the income -producing potential by $100, or five percent per month, or if the effect of the decision will be to increase the fair market value of the property by $1,000 or more or .5 percent, whichever was greater. Mayor Carey said the public understood Corrected that he had a partial ownership in buildings at 180 and 170 University see pg. Avenue. where a portion of the tenancies was with third parties. His 15O. ownership was worth more than $1,O00 and therefore he was classifiable as a landlord, as defined by the aforesaid section. The next step was to determine whether or not any action taken by Council would have a material effect on those two properties, so far as rent or value of the pi•laperties was concerned. Ms. horei; Taketa conwf i rmed his statements. Mayor Carey said he could state that with respect to (a) which he assured meant $100 or .5 percent a month, his income and interests 1n the property would both be less than those figures. He supposed there was some, question about it meaning $100 a year or $100 a month. 84 8/14/78 Corrected see pg. 11 Corrected see pg. 150. Ms. Norek Taketa said she read the regulation as meaning $100 per month with the caveat that the regulations did not give a maximum or minimum, necessarily. Mayor Carey said he was not sure if a possible decision might increase the fair market value of the properties by $1,000 or more. He did not see any possible Council action that evening as increasing the value; if anything it would decrease it, for the owner would lose potential income, and therefore, potential ealue. The question was whether or not a decrease in fair market value came within that section. He awaited Ms. Norek Taketa's answer. Ms. Norek Taketa said she had not discussed that particular question with Mr. Prim. She thought, however, that the FPPC staff would read a potential decrease through the rent initiative ordinance, as coming within the intent of that section. Those were guidelines, however, and those were not the only rules that applied. The City did not have a specific ruling on that section. Mayor Carey said that as he read the regulations he was free to participate except if the section did not include decrease in market value. If it did, there would be reason for him not to participate. He felt uncertain as to what to do. Councilmerber Sher said he would speak about his own situation. He had talked, he said, with both the City Attorney and the Fair Political Practices Commission, about his own situation with regard to conflict of interest in connection with his employment by Stanford University, that leased some land to tenants. FPPC had said that based on the sorts of leases involved and direct payment of taxes by the tenant to tax authorities there is no conflict of interest so far as his employment by Stanford University was concerned. Ms. Norek Taketa confirmed that according to her conversation with Mr. rrinvn of FPPC there would be no conflict of interest. Mayor Sher said another possible conflict arose "...because in a sense 1 am a landlord in that 1 rent one room in my house to a Stanford graduate -- ...that could be a rental unit under the initiative and also under the proposed ordinance under item 5 on the agenda." He said an FPPC staff per had reviewed the natter with Ms. Norek-Taketa and he understood that "...this rooming -in situ .ion would not represent a conflict of interest because it would not have a material, economic effect. . . ." He awaited Ms. Norek Taketa's confirmation. Ms. Norek Taketa confirmed Council giber Sher's assumption. Mayor Sher said that for those reasons he would participate in the ensuing discussion. Councilmember Fazzlno asked what Council was required to vote upon that evening -.could there be a time factor, so far as placement of the issue upon the ballot? Ms. Norek Taketa said she had reviewed the timing situation with the City Clerk,.Ms. Tanner, They had agreed there was no "absolute necessity" to take action that evening, but Council did .have to take action by its next meeting in order to meet requirements of the City Charter to set the special election within the time limit set by general law. The next meeting would be August 21, 1978. 85 8/14/78 Councilmember Fazzino wondered if one more week would give time enough for a more definitive FPPC ruling about conflicts of interest. Ms. Norek Taketa said she understood that FPPC's interim opinion could be relied upon, with respect to everyone on the Council except Mayor Carey, about whose case more information was needed. Councilmember Fazzino said that with some unresolved information he might move that the decision as to which Councilmembers could participate, be put off for one week, though the public hearing could be held that evening. Councilmember Eyerly said he was an heir to a piece of downtown Palo Alto property; the inheritance had not yet been settled, and when it was he would be half -owner. According to Ms. Norek Taketa and FPPC he would be elegible to participate in the discussions. Pis. Norek Taketa confirmed Councilmember Eyerly's statements. Councilmember Fazzino said he was perhaps the only residential renter on the Council; he had reviewed the potential conflict with his. Norek Taketa, and been assured that there was no problem. Mayor Carey said he would lose about $300 a year as a landlord and gain about $100 as a tenant the first year, so he would have a net loss of about $200. He was concerned about the technical interpretation of the section mentioned earlier. In view of that risk, he would not participate in the discussion or the decision -making. He said directl;, he would not participate. Councilmember Fletcher mentioned a communication from Palo Alto Citizens for Rent Relief (PACRR) about the legality of item 5 having been brought before Council, when it did not, according to PACRR, meet the legal deadline. Mayor Carey explained that item 5 was not before Council as an ordinance, and it was clear it could not be enacted as an ordinance, though it could be discussed and motions about it could be made, including a resolution to place the matter on the ballot. Ms. Norek Taketa said that Mayor Carey'.s statement was correct, but the reasons for that situation were not those given in the communication from PACRR. Ordinances had to come before Council in a certain way, and this ordinance had not; it could be considered but not acted upon until the next meeting. So far as meeting of deadlines regarding submission of ordinances, they were observed more in the breach than in reality, MOTION: Councilmember Fazzino moved, seconded by Clay, that Council hold the public hearing on the rent relief issue that evening, with consideration and decision by Council on items 2 and 5 to be deferred until the next meting. Vice Mayor Henderson asked if all Councilmembers would be present at the August 21 meeting. Mr. Sipel said he had understood two Counciimembers would be missing, and so he had thought the August 21 meeting would be cancelled. Councilmember Eyerly ascertained the date of the deadline for placing the rent relief measure on the ballot --was it August 21? Ann Tanner, City Clerk, replied that the deadline set by the Board of Supervisors was August 25, awl the measure could be discussed and acted on by Council on any date prior to that, providing that the Board received the resolution by August 25. 86 8/14/78 Vice Mayor Henderson said that in view of the rather surprising information that some members would not be present, he would rather not vote on the deferral of the date of consideration to August 21; He had not thought that one of the Councilmembers would be ineligible. Mayor Carey said he had also been surprised --he had learned it only late that afternoon. MOTION WITHDRAWN: Councilmember Clay said he had seconded the motion for deferral; since two people woe1d not be participating on August 21 he would withdraw his second. Councilmember Fazzino withdrew his motion to defer the date. Mayor Carey turned the chair over to Vice Mayor Henderson. Vice Mayor Henderson presided. Carlton Stewart, 660 Forest, said he felt both homeowners and renters were at fault. He had rented at the above address for twelve years. The owner had raised the rent only twice. He outlined his financial position as a landlord in Ohio, and, calculating sale price and interest on borrowed money, he concluded that many rent raises were financially unavoidable. Don Surath, 1930 Ivy Lane, read a statement with answers to the opening question it posed, are renters and homeowners equal under the law? Some assurance hadbeengiven renters that after the passage of Proposition 13 some of the taxes saved by the landlord would be passed along to renters in the form of reduced rents; that had not occurred, and, in some cases, rents had instead been raised. "Creed," Mr. Surath sari, "on the part of the landlords resulted in tenants and homeowners...becoming outraged." He outlined the history of Palo Alto renters' to problems thus generated. PACRR had been formed, and a rent relief ordinance had been written. PACRR's measure used June 6, 1978 rent as a base, with rents to be reduced according to the net property tax savings resulting from Proposition 13, with rents raises limited for one year, if needed by documented hardship. He emphasized that the initiative was not rent control, but rent relief. He showed graphs on rent relief, and rent control, as proposed by landlords; with rent relief when costs increased rents increased, and vice versa. Rental Housing Mediation Task Force, (R `F) could help monitor the rent relief ordinance. Mr. Surath claimed that the ordinance proposed by the landlords (Mrs. Witherspoon's proposal) was, first of all, an attempt to split the vote. He stated that 55 percent of Palo Alto voters favored rent relief. but if four out of five voters vote for PACRR both measures would still be defeated. The landlords' ordinance proposed to rebate a portion of the rent to renters, and if voluntarism was wanted, Mr. Surath said, an ordinance was not needed. The renter would have to spend money in court to obtain rebates in most cases. He pointed out other shortcomings to the renter in the landlords' proposed ordinance. He held it was deceitful and in bad faith, an eleventh hour attempt to split the vote. Councilmember Clay said that all of the relief accruing from Proposition 13 to the landlord would revert to the tenant. He asked why PACRR used such a formula. Mr. Surath replied that tenants paid landlords' property taxes, with landlords acting "...as a conduit between the renter and the government." ent." For that reason the money coming back from the government should not be withheld from the renter. 87 8/14/78 Councilmember Clay suggested there might be some overhead associated with acting as a "conduit." Mr. Surath said that the proposed PACRR initiative had provision in it to cover such documented extra costs to the landlord. There was to be no expense to the City at all --tenants could withhold 25 percent of their rent if the landlord did not comply; rent relief was to be worked out between tenant and landlord, for one year_ Vice Major Henderson asked if the ordinance intended that industrial renters be included. Mr. Surath said the ordinance intended just as it said --that question could be asked of the man who had written the ordinance, (Herb Borock, of PACRR, who would speak later) . Councilmember Fazzino referred to page 4, item d), and also Section 23.04.708, stating that the requirement that the landlord had to document the rate of return by June 6, 1978, was less than just and reasonable. The court remained was the jurisdiction of last resort: was the tenant's assent to the correctness of the landlord's figures needed? Mr. Surath said that Mr. Borock, who had written the ordinance, would respond. Herb 8orock,'424 Lytton Avenue, Palo Alto Citizens for Rent Relief, said he would speak first about conflict of interest: he thought Mayor Carey was in conflict of interest when he voted on ,moving item 5 forward on the agenda, and he would also be in conflict of interest were he to vote on any procedural motions arising from discussion of either of the two items. If he was found to be in conflict by FPPC and had he voted, he would have been in clear violation of the law. Mr. Borock continued. He read an excerpt from the Palo Alto Municipal Code which said: "All ordinances to be submitted to the Council at its regular meeting shall be delivered to the City Clerk not later than twelve noon, on the preceding Wednesday. The clerk shalt prepare the agenda with all such matters, and no matters other than those on the agenda shall be finally acted upon by the Council," Mr. Borock said, in the matter of Councilme*nber With° poon's memorandum regarding the rent relief initiative, that he had submitted to Council tonight a four -page memorandum addressing all the same points. He enumerated them. He quoted the Code section giving the way in which the ordinance could be repealed. He said all ordinances, whether passed by Council or by a voters at the polling place, were ordinances passed by the people --Article V1, Section 2. He quoted en excerpt from the Oakland municipal code, (Oakland was another rt arter city) in substantiation. There were no alternatives to either adopting the ordinance or placing the ordinance on the ballot, he said. He noted that Councilmember Witherspoon "forgot" to ask staff about placing the landlords' initiative on the ballot. He stated ways in which the constitutionality or non -constitutionality of Berkeley's rent control issue did not relate to the rent relief initiative before Council. He continued that about 10,757 properties would be affected by the ordinance. He concluded that no City staff had to be added nor did any staff time have to be given to the matter. -City staff would be responsible for administration of rent relief only when there would be willful violations, and in that case the City Attorney's office would be involved: He thought RETF and the Human Relations Commission (HRC), would be best for handling landlord -tenant disputes, but not in the specific cases.' He said that democratic interests weld not be best served by Placing* the issue on the ballot, for there were already many issues on the ballot for voters to decide. Democratic interests would therefore be best served by having the Council enact the ordinance. 88 8/14/78 Councilmember Witherspoon asked Mr. Borock to explain 23.04.030C of the proposed ordinance, the section that menticned commercial leases. It referred to gross sales of a retail establishment --was it monthly or yearly? Mr. Borock said the section referred to "...the baseline shall be the monthly rent due according to the terms of the lease." Councilmember Witherspoon asked if there were any particular reason for the ordinance not having a sunset law. Mr. Borock replied that the teeth in any law was in the enforcement provision. Councilor Witherspoon asked how the rent relief ordinance could be continued past the one-year limit. Mr. Borock said that amending or repealing an ordinance could be only through a vote of the people. The operative language of the proposed ordinance l imi ted it to one year. Councilmember Witherspoon said the ordinance would be in effect until repealed --what action -would be necessary to continue this clause? Mr. Borock explained he was not an attorney, but his understanding was that amendment or repeal required a vote of the people. If Councilmember Witherspoon was talking about having rent relief for longer than one year that would be "...a completely different ordinance," another chapter with the same title, perhaps. Councilmember Witherspoon said But you're saying it doesn't take an initiative after the one-year of the Council action:" Mr. Borock said "I don't think so, but I'm not a lawyer." Mabel Deer, 732 Sutter, said she was a trper,ber of the Palo Alto Citizens for Rent Relief (PACRR). She said that the base rent, as of June 5, 1978, ...could increase any time after January 1, 1979, by any amount. She gave the ways in which increases could be justified: and the dates on which rebates would be made, according to the landlords' rent relief tax rebate initiative, The landlords' initiative stated no need to prove higher costs. She covered varied sections of both landlords' and renters' initiatives, stating that the provisions of the landlords' initiative did not afford equitable treatment of renters. She held that the renter's initiative with 5200 signatures showed that it would receive broad support in the community. ty. Roland Loge, 4098 Laguna. spoke on behalf of himself, and therefore the landlords, he said. He spoke of the 'tragedy' of community ors having to move owing to i ncrea sed rents or taxes. He responded to the "rhetoric' of earlier speakers, and he said that the owner of property took risks; those risks, such as liability for taxes whether or not the property was occupied, were taken by the propertyowner. He saw the renter taking no such risk. Re opposed both utters before Council --he thought rebates resulting hue the enactment of Proposition 13 belonged to the risk -taker. Jot J. Grosher, 801 Middlefield Road, said his $270 monthly rent had risen $105 in three years. He wanted Council to adopt the initiative and ordinance save the City money. Rita Gann, 340 Ventura Avenue, said she thought both young people and old people suffered from unexpected inflation and high rentals --she thought their welfare should be considered. 89 8/24/78 Hal Plotkin, 2015 Edgewood Drive, spoke for himself, and stated he was a member of the Santa Clara County Youth Commission. He spoke of the hardships of students and other young people, saying they were at an economic disadvantage compared to their parents, He thought the problems addressed in the rent relief initiative could be solved, Peter Burke, 3050 South Court, spoke of the Behr bill, Proposition 8, an attempt to appease the initiative movement, he said. He said he thought Proposition 13 asked that there be relief from real estate taxes, which, he thought the proposition was saying, taxed the wrong people. Only those who owned real estate would receive benefits, and there would be other forms of taxation to bring in revenues. That would be helped only if landlords were forced to pass on their tax savings. He, himself, had received a 15 percent increase in rent as of July 1. He felt it was important to protect those on limited and fixed incomes. With respect to the "Witherspoon proposal," item 5, he thought it "...one big loophole." It would dilute rent relief or rollback measures. He felt there was no risk for 4 lendlord here in Palo Alto at the present time. Though the Witherspoon proposal promised immediate relief, it was not substantial or permanent. He asked that Council vote for the rent relief initiative. Vice Mayor Henderson ascertained with Ms. trek Taketa, Senior Assistant City Attorney, that the sewage sludge item could be brought fors,ard at the present tine for the purpose of continuance. RECOVERY OF PRECIOUS MATERIALS FR* SEWAGt SL IEI r ASH MOTION: Councilmember Fazzino moved, seconded by Clay, that the matter of sewage sludge incinerator ash be brought forward for continuance. The motion prised on a unanimous vote. MOTION: Councilor Fazzino moved, seconded by Brenner, that the matter of sewage sludge incinerator ash be continued to August 28, at 8 p.M. Councilor Sher asked that staff try to find answers to as many of the questions raised on the topic as possible, for the meeting of August 28. NOTION PASSED: The motion that the matter of sewage sludge incinerator ash be moved to August 28 at 8 p.m. passed on unanimous note. Mr. Sipel said that the City would make sure that all the potential contractors get copies of the written report, if there was one, that Countiiorder-S er had requested. INITIATIVE PETITI * PROPOSED ORDINANCE ontinued Frank Manfredi, 219 Addison, suggested that if the rent relief initiative did not pass that renters put rent money in escrow and "starve out" landlords. He said the money to be returned from tax rebates was "the people's money,'" and should be distributed equally, Marvin Sheppard, 130 Lowell, said he and landlords' initiatives go to the rental units and he was a reasonable many others were as well. 90 8/14/78 w u 1 d like to see both the tenants' ballot. He said he owned some and just landlord, and he t ougA 1 1 1 Dale Denson, 1068 University, said he guessed the people in the Councilchamber were assembled there that evening because everybody had wanted some relief to come to them from Proposition 13, but it had not provided for renters to have any relief. He held that tile initiative was a rent control. He said that, like New York apartments, much of Palo Alto's "housing stock" was old homes that would sooner or later be condemned and condominiums would be built. He thought that those who complained about rents were mistaken because everything was inflated; prices of commodities had quadrupled, but rents had only doubled. Inflation could not be legislated out. Rent control would hurt Palo Alto more than it would other localities. He thought Pala Alto a good place --tax savings should be passed on to renters, and the town should stay the way it is. Terri Owen, 3081 Emerson, said tenants allowed landlords to maintain landlords' properties, and for that reason tenants were valuable to landlords. She said mortgagors took riskon landlords' buildings. Proposition 13 was designed, she said, to help the housing crunch and ease of the problem of massive expenses to homeowners. Margaret Ash, 3083 Emerson, said that she had two children, and, since she would never be able to afford to buy a home, the place she rented was her home. She held that renters like her were pushed from one place to another, usually downhill. She said divorced women with children needed a solution to the emotional problem of finding suitable housing with their children. Jeff Johnson, 954 Van Auken Circle, said he would have to pay, in this coming September, a 10 percent increase in rent, though heretofore his landlord had always justified rent increases on the basis of increased taxes. He supported the rent relief initiative. Lam Merrill, 954 Van Auken Circle, said it was clear to her that the landlords' initiative had been written by someone wh.o was not a tenant. Kermit Knopf, 930 Palo Alto Avenue, said he thought something was needed to keep the situation resulting from Proposition 13 more equitable for both renter and landlord. He did not like the element of rent control irherent in the rent relief initiative. He said he would want both issues to be placed on the November ballot. Gary Grant, 575 North California Avenue., represented an association of apartment owners, known as the California Housing Council. His association had opposed Proposition 13 and that evening's protests confirmed its reasons. Members of his association had been urged to pass all Proposition 13 savings on when it was clear how much those savings would be, perhaps by the end of the year. He thought it unrealistic to expect lower rents immediately. Some landlords, he knew, would not voluntarily follow that request. Rent controls, studies showed, rarely ended. He favored returning all Proposition 13 savings back to renters in a 1 umip sum, with "simple proof" that that pass -through had occurred. He wanted both measures on the ballot. Corrected Vice Mayor Henderson ascertained that Mr. Grant favored the Witherspoon see ©age 15oDrdinance. 1 C.ouncilmember Sher satd that one of the rent relief proponents' positions was that landlords would merely raise rents in the amounts that landlords paid tenants in the pass -thi gh of tax wings. He asked Mr. Grant what his response to that argument was. 91 8/14/78 Mr. Grant replied that proponents of rent relief proposed conditions for January 1980, that his group proposed for January, 1979. That is, increases should be controlled by market forces. Councilrnember Sher replied that in that case rebating tax savings was meaningless. Mr. Grant answered that -in the Witherspoon alternative at least two years of tax saving would be rebated to tenants in a lump sum. Apartment owners were aware of the pain that rent increases caused tenants. He did not think that kind of pained response would go away, and therefore apartment (earners would exercise some constraint on themselves. His organization would like to test that. -If it didn't take place Council was free to pass a rent control measure at any time. The amount of the rent rebate could not be charged tenants in the form of higher rents because the landlords' initiative froze the rents for the balance of 1978. Ray Kramer, 550 Melville, said he thought much of the response to this very complex question of rent relief had been naive; he thought the matter should be voted on in November. Matters of new ownership, increased insurance and increased cost of repairs, had to be calculated. Rental housing was a business as was a retail store or grocery, and he thought it should be controlled by the market in the same way. He said new laws caused as many problems as they corrected. Sam Webster, 335 Lowell, said rent relief should unquestionably go to renters. The measure should be divorced from rent controls. He favored having both issue3 on the November ballot. Robert Moss, 4010 Grme, emphasized that the initiative was not rent control but rent relief. Neither of the two initiatives could take effect until after the November election. He pointed out the advantages to the landlords from their proposed ordinance. The landlords` method of tax rebate would give them the advantage of interest earned on money until the time of rebate. Roger Smith, 328 Kipling Street, spoke as a member of the local chapter of Campaigns for Economic Democracy, and he spoke also, he said, as a Palo Alto Renter. He said tenants comprised half the population of Califc.'.rnia. Tenants of many communities had organized to obtain renter relief following the passage of Proposition 13. He stated that rents had risen 40 percent faster than inflation during the past five years. Petitions signed demonstrated the "graundswel1 of the right to renter relief in our community," he said, and landlords should pass through rent relief as surely as they had passed on their real estate tax increases. Arcate Alden, 558 Lincoln, said that Palo Alto was a very desirable place to livers he had lived here three years. He said his landlady was reasonable and would pass on tax savings to him and other renters. He hoped that the ordinance proposed by the rent relief initiative would be passed. Ida M. Lee, 3351 Alma, observed that a number of Palo Alto renters had not wanted to sign the petition for which she was gathering signatures. They had felt their landlords were just and fair. For such equitable landlords the proposed ordinance presented no problems, she said, Her own rent, in a large complex, continued to rise. RECESS Council recessed from 10:20 to 10:40 p.m. 92 8/14/78 INITIATtYE PETITION PROPOSED ORDINANCE T R:371 :8) (consUnuedr Councilmember Sher observed that the initiative gave Council a difficult choice between Council enacting the ordinance or placing it on the ballot. He had not wanted to bring the "Witherspoon measure" forward for discussion at the same time as the rent relief initiative. Havi..j done so, the simple choice afforded by the initiative had been confused. If the Council put the initiative ordinance on the ballot it had to also consider putting the Witherspoon measure on the ballot. He referred to paragraph 24.16.010 that provided that, should there be more than one measure on the November ballot concerning renter property tax relief, the measure receiving the greatest Wooer of "yes" votes would prevail. That gave him concern, he said. If the rent relief measure were placed on the ballotta1one and got more "yes" than "no" votes, it would become law; if both measures were placed on the ballot it was possible both measures might become law. He said he was therefore unalterably opposed to putting the landlord measure on the ballot as an alternative. He equated the possible placing of both issues on the ballot with the state legislature having placed both Propositions 8 and 13 on the ballot in June, for that, as one speaker had said, was a clear legislative effort to provide competition for an initiated matter; Councilmember Sher Said that had done more harm than good. Proposition 8 had stated that it would not hecome law, however, if Proposition 13 got a majority of the votes, and did become law. Councilmember Sher said he thought Proposition 13 grant, to him, that savings realized by landlords should oe passed through to renters, and that it should not rely on voluntary action on the part of landlords. If Council did not place the matter on the ballot the City would save a minim of $17,500. he thought there were some attractive features to the otherwise complex and long measure that was, in effect, a refinement on Proposition 13. Councilmember Sher announced that, should Council vote to place this matter on the ballot, he would vigorously oppose adding any amendments whatsoever°, for he thought it should rightfully go on the ballot in the form in which it was initiated. For Council to "clarify" or "modify" the icasure through amendments would subvert the initiative process, in the same way that placing an alternative measure on the ballot would lead to confusion and dilution of the initiative effort. MOTION: Councilmember Sher introduced the following resolution, and seconded by Fazzino, moved teat the rent rel Ref initiative tow before Council be set down for 6 special election, to be consolidated with the General Election on November 7 1978: RESOLUTION 5583 entitled "RESOLUTION OF THE iCY 5F ME" CITY OF PALO ALTO SUBMITTING AT A SPECIAL ELECTIONS A PROPOSED INITIATIVE ORDINANCE TO ADD TITLE 23 (LANDLORD AND TENANT RENT REFORM) TO THE PALO ALTO MUNICIPAL CODE AND REQUESTING THE COUNTY OF SANTA CLARA TO CONSOLIDATE SAID SPECIAL ELECTION WITH THE GENERAL ELECTION TO BE HELD NOVEMBER 7, 1978." Councilmember Brenner asked if Ids. Tanner, City Clerk, could tell about how many votes, in round numbers, were cast if a general election. Ms. Tanner replied that in Nove r 1976 there had been three local measures on the ballot in Palo Alto; 31,253 ballots had been cast. There had been a turnout of voters of 83.76 percent. 93 8/14/78 Corrected see page 150. Councilmember Brenner calculated that the signatures on the initiative represented about one -sixth of the electorate. She agreed with Councilmember Sher that whether to pass the ordnance or place it on the ballot was the issue before Council. Having the Witherspoon measure before Council at the time of discussion of the rent relief initiative measure had perhaps been helpful for comparison, though it had obscured the main question. She thought the initiative was the most important privilege the citizenry had, and Council should not take that lightly. She opposed amendment of the initiative by the Council, either now or later. She thought most would favor having the measure pass with more than one - sixth majority. She would vote for the motion along with opposing having two items on the November ballot, for that would cloud the subject of the initiative. She thought landlords should also collect signatures and place the matter on the ballot as a parallel. Councilmember Henderson said he was not having a difficult time choosing. He did not think the matter worth arguing about, for he saw no way to have the ordinance adopted that evening. He said he thought the landlord ordinance was "clearly designed to subvert the initiative ordinance and the initiative process." He outlined some points of the landlord ordinance to which he objected. Ile would support Councilmember Sher's motion, and he would not support any proposed amendments. MOTION PASSED: The motion to adopt the resolution and place the rent relief initiative on the ballot for November 7, 1978, passed on a unanimous vote, Mayor Carey not participating. Councilmember Witherspoon asked Ms. Taketa to ccrrrent on the legality of Councilmember Sher`s assumption that if the landlords' proposed ordinance received one more vote than the renters' initiative, it would prevail. Ms. Taketa replied that it was a general rule in state law that the people themselves could pass the measure with the h�ahest number of votes. She said that though it might be confusing it was mot illegal. Councilmember Witherspoon asked i r`", should the state pass a measure ore the same matter, which ordinance would prevail, state or municipal? Ms. Taketa reel ied that if the state law were enacted and it were pervasive it would probably preempt the field, Councilmember Witherspoon explained that her stand arose because there were many serious reservations on the part of many people about the renters' initiative. She had thought it best to give a choice to that initiative, rather than working to defeat it. She had not thought two measures on the same issue would confuse the vote; voters did not have trouble deciding between Propositions 8 and 13 in June. She did nit see it as an attempt to subvert the initiative. Several issues on the renters' initiative needed clarification. She said the basic difference between the two proposed measures was that with the renters' initiative no pass -through savings would be forthcoming until January whereas the landlords' measure put on a six-month freeze of rents, with a cash rebate to follow. She preferred to have both measures on the ballot, with the voters to choose between them, iTlOfi: Countilmenber Witherspoon introduced the following resolution, and, seconded by Eyerly, moved that the Palo Alto Renters Tax Rebate Act for 1978.80 be placed on the ballot, adding Title 24 to the Palo Alto Municipal Code: RESOLUT I ON OF THE COUNC I L OF THE CITY OF PALO ALTO SUBMITTING AT A SPECIAL ELECTION A PROPOSED ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO TO ADO TITLE 24 TO THE PALO ALTO MUNICIPAL CODE ENACTING THE PALO ALTO RENTERS TAX REBATE ACT FOR 1978-80 AND REQUESTING THE COUNTY Of SANTA CLARA TO CONS L 1 DAT€ SAID SPECIAL 9 4 ELECTION WITH THE GENERAL ELECTION TO BE HELD 8/14/78 DER 7, 1978. Councilmember Fletcher said she opposed the motion; in the proposed ordinance there was nothing to prevent landlords from raising the rent. The law was not in effect between now and November, so landlords were "very likely to raise their rests in anticipation of having to make the rebate at a later date." Tenants might not be able to bear the cost of bringing suit against landlords in iatndlards' places of residence. Phone calls on a State hotline had indicated' that about 2000 tenants were having their rents raised each day; Governor Brown had found it was impossible to move more than a handful of landlords to reduce rents according to the amount of Proposition 13 savings. Councilmember Fazzino said the item was before Council that evening because the state had not acted quickly enough to initiate relief for renters and also the voluntary pass -through program from landlord to renter had not been successful enough, though he said he thought most landlords had been sincere in their efforts to pass on Proposition 13 savings. The problems of rents and inflation had been met with a rent control issue some four years ago, which had been defeated on the ballot. He said he had voted to place the matter of rent relief on the ballot for he thought there was substantial opposition to the issue. Had an ordinance been evolved that evening with a cost -of -living factor and other criteria he would have supported it. He expressed dismay at such charges as "subversive" being leveled at the proposed lan!.'lords' ordinance. He did not know how the proposed ordinance had been written, though he thought responsible people had participated in drawing it up. Though those who had gathered signatures might well feel frustrated at another issue coming forth, they could view that alternate issue as a result of the feeling generated peripheral to their efforts, which, Councilmerber Fazzino said, could be viewed by them as a "victory." Councilmember Sher said he had made his feeling about the rent relief initiative clear. He said he was opposed to rent control. He had opposed it four years ago, also. The measure now before Council undoubtedly contained a rent control feature, for all rents would be frozen for six months. If the Council passed the motion the issue of rent control would be presented to the electorate. For that reason and for other reasons, he did not want to support and place the measure before Council now, on the ballot, as a Council -generated measure. Councilmember Eyerly said he thought Council and the community as a whole agreed that renters needed relief by way of tax rebate. Renters feared landlords would not rebate taxes in the form of reduced rents, for they had not yet done so. He thought that when landlords received their reduced tax bills their action (toward rebate) would be stimulated. He thought that if only the rent relief initiative appeared on the ballot it would set in motion a strong resistance movement —for that reason he thought Council should place the landlords' proposed ordinance on the ballot as well. He would support the proposed ordinance before Council. Councilor Clay said the question was not whether or not the renter should obtain relief, but how he would obtain that relief. He favored offering both issues to voters, and he thought "...it may enhance the likelihood of success of some measure." 1 Vice Mayor Henderson asked if there was anything in the proposed measure before Co Council to prevent landlords from raising rents by the aunt of the tax raise, or, perhaps, even more. Councilmember Witherspoon replied that there was not. g5 8/14/78 MOTION FAILED: The motion placing the Tax Rebate Act for 1978-80 on the ballot failed on the following vote: AYES: Eyerry, Clay, Fazzino, Witherspoon NOES: Brenner, Fletcher, Henderson, Sher NOT PARTICIPATING: Carey Ann Tanner, City Clerk, observed that the Election Code provided for an arguments procedure for City measures, and also, for the Council to direct the City Attorney to prepare an impartial analysis of the measure. Since Council had taken the action calling a special election and placing the initiative on the ballot, Council should"consider if it wished to direct the City Attorney to provide an impartial analysis, not to exceed 500 words? In addition, Council should indicate if the City Council or any bier or members of the Council, wished to write an argument against the proposed measure. Those arguments were to be filed by the deadline of 5 p.m. on Tuesday, August 29, 1978. She said there was also the possibility of having rebuttal arguments; she understood that unless Council wanted to change the policy of allowing for rebuttal arguments, that policy would apply to this forthcoming election. The deadline for the rebuttal arguments to be filed would be Friday; September 8, 1978. MOTION; Councilmerrber Sher moved, seconded by Fan -in°, that Council direct the City Attorney's office to prepare an impartial analysis of the rent relief initiative. The ra tion passed on a unanimous vote, Mayor Carey not participating. Vice Mayor Henderson asked if Council, or any rember of the Council, wished to submit an argument. Ms. Tanner confirmed that arguments should have no more than five signatures. Ma for Carey presided. EST OF VICE MAYOR HENDERSON PROCEDURES Vice Mayor Henderson said he was concerned about priorities given by Council to the Housing Corporation in establishing priorities of applicants for below -market -rate (BMR) housing. Priority was given first to applicants who are and have been Palo Altn residents for Po years and/or employees of the Palo Alto Unified School District (PAUSD) or the City of Palo Alto; second were appl scents who l i.ed OT worked in Palo Alto; third were all other applicants. Vice Mayor Henderson said he thought first priority should be given to all applicants who live and/or work in Palo Alto. MOTION: Councilmember Henderson moved, seconded by Fletcher, that the buyer priority policy for the Below Market Rate housing purchase program be changed to establish the following: First priority: All applicants who live and/ or work in Palo Alto; second priority: all other applicants who are eligible according to family size, income, and assets criteria. Councilmember Clay asked if the mousing Corporation agreed with the priorities set by the motion. Vice Mayor Henderson said the Housing Corporation was happy to follow any policy set by Coon: i l . 96 8/14/78 Councilmember Fazzino said he would support the motion. He asked how the present waiting list of unsuccessful applicants would affect the lisp; of new applicants. Would there be new applicants? Sue McPherson, 376 Diablo Court, spoke as president of the Palo Alto Housing Corporation (PAHC). She said PAHC received inquiries constantly PAHC was trying to serve those people who, ever the past few years, had tried time and again, and lost in the drawing. There had been about 150. There would not be outreach until those 150 applicants had been served. Councilmember Sher said that the current priority of being two-year residents and employees of either PAUSD or the City of Palo Alto was not consistent with current Housing and Urban Development (HUD) policy, So far as HUT grants and relationships with HUD, what impact had that current priority had? Vice Mayor Henderson said that BMR programs did not involve HUD --he had mentioned that to show that Palo Alto had something beyond that required by HUD. Councilmember Witherspoon asked if some applicants now on the waiting list would be eliminated. Ms. McPherson said that no one in the first priority would be affected. The category would be broadened, if the proposed motion passed. Councilmember Brenner asked how many applicants there were for the "Palo Alto residents for two or more years" classification, as well as the School District and City employees classifications. Mayor Carey said he thought all of those classifications were one classification only. Ms. McPherson said the applicants for a group of sales were divided as follows: 3 City employees, 7 PAUSD employees, of a total of 32 qualified applicants. In another sales situation there had been 44 applicants, with 5 being City and school district employees. Counc i t mt ber Brenner said that if the base for qualifying were broadened those who had been waiting aoould be i'shouldered aside." Ms. McPherson pointed out that those people in the second priority had been waiting also, and with the classification broadened it would be more equitable. Councilmember Brenner said the number of sales per year was very low, and so under that circumstance she would oppose the motion, Mayor Carey said he would support the notion. Mr. Sipel said he thought the motion raised the question asto whether or not City employees should be favored. Councilmember Sher said that people who had resided for two or more years in Palo Alto were in the first priority class, and that was not restrictive in effect. City and school employees were already in the first priority. MOTION PASSED: The motion that buyer priority policy for Below Market Rate housing purchase program be changed to establish the following: First priority: All applicants who live and/or work in Palo Alto; second priority: alt other applicants who are eligible according to family size, income, and assets criteria, passed on the following vote: 9T 8/14/78 AYES: Carey, Clay, Eyerly, Fazzino, Henderson NOES: Brenner, Fletcher, Sher, Witherspoon ORAL COMMUNICATIONS 1,: Herb Borock, 424 Lytton Avenue, said that on Tuesday, August 8, a landlords' tax rebate measure had been submitted in Mountain View. The letter said that it had been submitted "On behalf of a coalition of owners of 25 percent of the rental apartments in the City of Mountain Vier. . . ." This rent relief measure differed from the measure submitted in Palo Alto in that it was not codified, and applied to residential properties only. Mr. Borock said that the Mountain View proposal was identical to the landlords' initiative submitted in Palo Alto. It had clearly been written by landlords, contrary to Coun ilmember Wi*herspoon's assertion that the measure she submitted had not been. Councilor Witherspoon replied that she had not so stated. CANCELLATION OF COUNCIL MEETING OF AUGUST 21 1978 MOTION: Councilmember Fazzino moved, seconded by Witherspoon, that Council cancel the meeting of August 21, 1978. The motion passed on a unanimous vote. ADJOURNMENT TO EXECUTIVE SESSION Council adjourned to Executive Session at 11:50 p.r. ATTEST:: ,? �`' APPR0V • ty er 98 8/14/78